Ala. Code § 6-5-440 & Abatement


Skelton v. Skelton, [Ms. 1190700, 1190917, June 18, 2021] __ So. 3d __ (Ala. 2021). In consolidated appeals, the Court, in a plurality opinion (Sellers, J.; Parker, C.J., and Mendheim and Stewart, JJ., concur; Bryan, J., concurs in the result; Bolin and Wise, JJ., recuse) affirms a judgment of the Jefferson County Probate Court terminating a trust and reverses the judgment of the Jefferson County Circuit Court which dismissed claims relating to the administration of the trust, including derivative claims asserted on behalf of a corporation which was the primary asset of the trust.

The Court first concludes the probate court properly exercised its authority in terminating the trust pursuant to § 19-3B-414(b) which provides that a court exercising jurisdiction over the administration of a trust has the authority to terminate the trust if the court believes “that the value of the trust property is insufficient to justify the cost of administration.” Ms. *14.

The Court also concludes the circuit court erred in dismissing derivative claims asserted on behalf of the corporation comprising the largest asset of the trust on the basis that those claims were abated pursuant to § 6-5-440. Section 6-5-440 provides:

“No plaintiff is entitled to prosecute two actions in the courts of this state at the same time for the same cause and against the same party. In such a case, the defendant may require the plaintiff to elect which he will prosecute, if commenced simultaneously, and the pendency of the former is a good defense to the latter if commenced at different times.”

Id. Construing this statute, the Court holds it is applicable

“... ‘where two or more courts have concurrent jurisdiction, the one which first takes cognizance of a cause has the exclusive right to entertain and exercise such jurisdiction, to the final determination of the action and the enforcement of its judgments or decrees.’”

Ms. *18, quoting Regions Bank v. Reed, 60 So. 3d 868, 884 (Ala. 2010)(quoting Ex parte Burch, 236 Ala. 662, 665, 184 So. 694, 697 (1938))(underlined emphasis in original). Here, the circuit court erred because the Jefferson County Probate Court did not have concurrent jurisdiction to adjudicate claims that did not relate to the administration of the trust. The probate court’s jurisdiction is specified in § 19-3B-201(c) and (d), but those statutes do not confer jurisdiction on a probate court to entertain a shareholder derivative action asserted on behalf of a corporation merely because the trust over which the probate court exercises jurisdiction beneficially holds shares of stock in that corporation. Ms. *21. Because only the circuit court had subject-matter jurisdiction over a shareholder derivative claim pursuant to § 12-11-31(1), the abatement statute (§ 6-5-440) was not triggered.

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