Power of Attorney Case Remanded to State Court

Elder Law Answers case summary.The United States District Court remands a power of attorney dispute to state court because the principal cannot feasibly join the case in federal court. In Neal v. Neal (W.D. Va. 1:23CV00021, December 13, 2023).

Within a 14-year period, Linda Neal created several power of attorney (POA) documents. The first named her son, Jeffrey Neal, as her agent. Subsequent directives named her daughter, Cynthia Neal.

Arguing that his mother lacked mental capacity when she named his sister as an agent, Jeffrey Neal sought a declaratory judgment to determine the validity of his mother’s power of attorney and to clarify his rights.

Cynthia Neal removed the case to federal court because she and her brother lived in different states. She lived in North Carolina, while her brother and mother lived in Virginia.

To determine whether it has subject matter jurisdiction, the district court considers whether Linda Neal is a necessary party.

Under Federal Rule of Civil Procedure 19(a)(1), a nonparty must claim an interest to be a necessary party. But this does not require the nonparty to seek to join the litigation. Fundamental interests are presumed to be claimed. Competency is a fundamental interest. Since Linda Neal’s competency is at issue, she is a necessary party.

Still, she cannot join the action. She is neither a plaintiff nor a defendant. Because nothing suggests she is arguing against her mental capacity, she cannot be joined as a plaintiff. Joining her as a defendant would counter the diversity requirement for federal jurisdiction.

The parties to a power of attorney are like the parties to a contract. The case could substantially prejudice Linda Neal because her son had a separate guardianship proceeding pending. Since this decision could affect her guardianship case, she is a necessary and indispensable party.

The court remands the case to state court for lack of subject matter jurisdiction because Linda Neal, a necessary party, cannot feasibly join the action.

Read the full opinion.