{"id":2010,"date":"2006-10-27T11:48:56","date_gmt":"2006-10-27T15:48:56","guid":{"rendered":"http:\/\/resources.evans-legal.com\/?p=2010"},"modified":"2019-03-03T11:49:54","modified_gmt":"2019-03-03T16:49:54","slug":"jurisdiction-probate-federa-common-pleas-courts","status":"publish","type":"post","link":"https:\/\/resources.evans-legal.com\/?p=2010","title":{"rendered":"Jurisdiction of the Probate, Federal and Common Pleas Courts"},"content":{"rendered":"\n

[Originally published in PBA Real Property, Probate and Trust Law Newsletter, No. 62, p. 16<\/a> (Fall 2006).\u00a0 Some citations have been updated.]<\/em><\/p>\n\n\n\n

It\u2019s rare for the U.S. Supreme Court to issue an opinion\non an estate dispute, and still rarer when it involves a former Playboy\nPlaymate. (The latter would be \u201crarer\u201d as in \u201cnever.\u201d) The resulting opinion is\nhelpful to estate practitioners not only in understanding when we might (or\nmight not) be pulled into federal court, but also the differences between the\nOrphans\u2019 Court and the Court of Common Pleas and how each of those courts might\nhave jurisdiction over an estate dispute.<\/p>\n\n\n\n

Federal\nCourts<\/h1>\n\n\n\n

The Playboy Playmate in question is Vickie Lynn Marshall, aka Anna Nicole Smith, aka \u201cPlayboy Playmate of the Year 1993.\u201d She was one of the parties to Marshall v. Marshall<\/em>, 547 U.S. 293, 126 S. Ct. 1735, No. 04-1544<\/a> (2006).<\/p>\n\n\n\n

Were it not for the celebrity status of Mrs. Marshall, the\ndollar amount at issue ($449 million), and the interesting federal\njurisdictional issues raised by the litigation, the case would have been a\nfairly routine fight between a second wife and her step-son over the husband\u2019s\/father\u2019s\nestate, so the relevant facts can be briefly stated.<\/p>\n\n\n\n

In 1994, Vickie Lynn Smith married J. Howard Marshall, who\nwas both much older and much (much) wealthier than she, and he died a little more\nthan a year later, in 1995. Mrs. Marshall was not a beneficiary under her\nhusband\u2019s will, but filed claims against the estate which claims were bitterly\ndisputed by her step-son as executor. While the probate proceedings were\nunderway in Texas, Mrs. Marshall filed for bankruptcy in California, which is\nwhere the case gets interesting to the Supreme Court.<\/p>\n\n\n\n

For some reason, the step-son (Mr. Marshall) chose to\nfollow her to California and file a claim against her in bankruptcy court\nalleging that she had defamed him by public statements made by her lawyers in\nTexas. Having filed a claim in the bankruptcy court, Mr. Marshall was within\nthe jurisdiction of the federal court in California, and Mrs. Marshall filed counter-claims\nagainst him for (among other things) his allegedly tortious interference with\nher husband\u2019s intent to make gifts to her during his lifetime.<\/p>\n\n\n\n

Mrs. Marshall\u2019s counter-claim raises numerous issues, not\nthe least of which is whether Texas law (which is still controlling even in the\nCalifornia bankruptcy) even allows a cause of action for tortious interference\nwith lifetime gifts. However, the issue that went to the United States Supreme Court\nwas whether the federal courts have jurisdiction to hear a claim which \u201cwould\nordinarily be decided\u201d by the state probate courts.<\/p>\n\n\n\n

The \u201cprobate exception\u201d to federal jurisdiction is based\non language found in one of the first statutes enacted by Congress under the Constitution,\nthe Judiciary Act of 1789. The origin, history and evolution of the probate\nexception are described in the Supreme Court\u2019s opinion and will not be repeated\nhere, but the court\u2019s reasoning and conclusions are worth summarizing.<\/p>\n\n\n\n

First, the Supreme Court recognized that probate proceedings are \u201cin rem\u201d proceedings, meaning that the probate court determines the rightful ownership of the estate that is considered to be in the possession of the court. (In an \u201cin personam\u201d proceeding, which is the more usual kind of court action, the court determines the rights of persons against each other without necessarily attempting to control the administration or disposition of any particular piece of property.) It is therefore clear that a federal court has \u201cno jurisdiction to probate a will or administer an estate.\u201d Marshall<\/em>, slip opinion at 13, quoting 326 U.S. 490, 494 (1946).<\/p>\n\n\n\n

Second, the Supreme Court recognized the general principle\nthat \u201cwhen one court is exercising in rem<\/em>\njurisdiction over a res<\/em>, a second\ncourt will not assume in rem<\/em>\njurisdiction over the same res<\/em>.\u201d Slip\nopinion at 14. The application of this general principle to the federal probate\nexception means that a federal court should not \u201cdisturb or affect the\npossession of property in the custody of a state court.\u201d Slip opinion at 14.\nHowever, federal courts are not barred from adjudicating matters outside of the\nprobate of the will and the administration and distribution of the estate.<\/p>\n\n\n\n

In the case of Marshall\nv. Marshall<\/em>, Mrs. Marshall was seeking an in personam<\/em> judgment against her step-son for actions he had taken\nduring her father\u2019s lifetime, and she was not challenging the validity of the\nwill or the administration or distribution of the estate. The Supreme Court\ntherefore ruled that the federal courts could have jurisdiction over her claims,\nand that the state of Texas could not prevent the federal courts from hearing\nthat type of claim by reserving to one of its own courts exclusive jurisdiction\nover that type of claim. Slip opinion at 17. Because the federal courts\notherwise have jurisdiction over claims relating to bankruptcy proceedings, the\nSupreme Court held that the federal courts were not precluded by the probate exception\nfrom hearing tort claims of the type brought by Mrs. Marshall. (This is not to\nsay that Mrs. Marshall won, because there were other issues still to be\nresolved on remand.)<\/p>\n\n\n\n

Some of the popular reports of the decision made it sound\nlike the probate exception has ended, and federal courts will soon be flooded\nwith various kinds of estate disputes. Such reports of the death of the probate\nexception were an exaggeration.<\/p>\n\n\n\n

Probate\nException in Pennsylvania<\/h1>\n\n\n\n

One civil complaint that was quickly filed in the Eastern\nDistrict of Pennsylvania following the Marshall<\/em>\ndecision was also quickly dismissed for lack of jurisdiction by reason of the\nprobate exception because the property at issue was held by an executor in an\nestate which was still under administration in Pennsylvania.  The complaint was dismissed in a one-sentence\norder with an explanatory footnote, but the footnote is worth quoting in full,\nboth because the opinion is otherwise unpublished and because it is a good\nexample of how the probate exception should continue to apply to complaints\nfiled in federal court:<\/p>\n\n\n\n

\u201cIn moving to dismiss the complaint, the defendants\ncontend that this court lacks jurisdiction because the Pennsylvania Orphans\u2019\nCourt is the exclusive forum for resolving this dispute. I agree.<\/p>\n\n\n\n

\u201cAt its core, this a family dispute among three siblings\nover ownership of a religious icon that has been passed down in the family over\ngenerations. The issue is whether the icon was properly gifted  from their mother, Marsoula Economos, to her daughter,\nCleopatra Economos, both of whom have since died. Michael and Nicodemos Economos,\nCleopatra\u2019s brothers and the plaintiffs in this action, contend that the\ndefendants, Cleopatra\u2019s children, have improperly retained the icon. The [plaintiffs]\ncontend that their grandmother had conditionally gifted the icon to their\nmother, who was to transfer it to a museum in Greece the first time she had an\nopportunity to travel to Greece. Cleopatra died never having delivered the icon\nto the museum.<\/p>\n\n\n\n

\u201cThe probate exception to federal jurisdiction limits a\nfederal court\u2019s power to grant relief in either pure probate matters or matters\nancillary to probate. See Judiciary Act of 1789, ch. 20. & 11, 1  Stat. 78. Federal courts have jurisdiction\nonly where \u201crelief can be granted without challenging the probate court\u2019s\ndeterminations or management of the res<\/em>.\u201d\nGolden v. Golden<\/em>, 382 F.3d 348, 358-359\n(3d Cir. 2004). The exception protects the state\u2019s interest \u201cin managing all\nchallenges addressing the estate res<\/em>\nlocated in that state or with which the state has some meaningful connection.\nThe interest is no less compelling if the estate res is distributed by trust\nrather than by a will.\u201d Id. at 359. The probate exception does not apply to\nactions whose subject matter is only incidental to probate and can be\nmaintained in federal court because the exercise of jurisdiction would not\ninterfere with the probate proceedings.<\/p>\n\n\n\n

\u201cThe Supreme Court has concluded that the probate\nexception reserves to state probate courts the probate of a will and the administration\nof a decedent\u2019s estate. Marshall v.\nMarshall<\/em>, 126 S.Ct. 1735, 1748 (2006). The exception precludes federal\ncourts from disposing of property that is in the custody of a state probate court,\nbut it does not bar federal courts from adjudicating outside of those confines\nand otherwise within federal jurisdiction. Id.<\/p>\n\n\n\n

\u201cAt oral argument, defense counsel represented that the\nicon is an asset of Cleopatra\u2019s estate, which is currently being administered\nin the Delaware County Orphans\u2019 Court. It was listed on the inventory of the\nestate and inheritance taxes were paid on the appraised value of the icon. The\nestate is still pending. In Marshall<\/em>,\nthe Supreme Court reiterated that federal courts lack the power to dispose of an\nestate asset that is under the supervision of a state court. 126 S.Ct. at 1748.\nThus, this action must be dismissed pursuant to the probate exception for lack\nof jurisdiction.\u201d<\/p>\n\n\n\n

Economos v. Peters<\/em>,\nNo. 06-1773 (U.S.D.C. E.D.Pa. 7\/12\/2006), note 1.<\/p>\n\n\n\n

Orphans\u2019\nCourt Jurisdiction<\/h1>\n\n\n\n

The mandatory jurisdiction of the Orphans\u2019 Court is\ndescribed in 20 Pa.C.S. \u00a7 711, and the types of cases that are listed are the\ncases that must be heard in the Orphans\u2019 Court and not in any other division of\nthe Court of Common Pleas. The in rem<\/em>\nnature of Orphans\u2019 Court jurisdiction is well illustrated by \u00a7 711(17), which\nprovides that the Orphans\u2019 Court has mandatory jurisdiction over disputes over\nthe title to personal property \u201cin the possession of the personal representative,\nor registered in the name of the decedent or his nominee, or alleged by the\npersonal representative to have been in the possession of the decedent at the\ntime of his death.\u201d  So if someone is\nalleged to have taken property of the decedent, the date the property was taken\nis important. If property is taken from the decedent\u2019s house (or bank account\nor brokerage account) after the decedent has died, the Orphans\u2019 Court has jurisdiction\nto adjudicate the proper ownership of the property and whether it should be\nreturned. But if the property is taken before the death of the decedent, any\naction by the personal representative to recover the property would have to be\nin the civil division of Common Pleas, and not the Orphans\u2019 Court.<\/p>\n\n\n\n

Civil Court\nJurisdiction<\/h1>\n\n\n\n

Generally speaking, the Orphans\u2019 Court has jurisdiction\nover the property owned by the decedent or in possession of the decedent at\ndeath, but no jurisdiction to resolve disputes over ownership or possession\nbefore death. The property owned or possessed by the decedent at death is the res<\/em> that the Orphans\u2019 Court controls, and\nall other rights of the decedent against any other person or any other property\nmust be resolved through actions in other courts, which could include federal\ncourts.<\/p>\n\n\n\n

A recent example of the kind of \u201cestate litigation\u201d that can take place in the civil division of Common Pleas is McNeil v. Jordan<\/em>, 894 A.2d 1260, 268 MAP 2003<\/a> (Pa. 2006), rev\u2019ng 814 A.2d 234 (Pa. Super. 2002).<\/p>\n\n\n\n

In deciding whether the plaintiff was entitled to\ndiscovery after filing a summons and before filing a complaint (or before\nfiling an amended complaint), the Supreme Court referred to the action as \u201cwill\ncontest litigation,\u201d and the action did relate to a will and a decedent\u2019s\nestate, but the action was filed in the civil division of Common Pleas and not\nthe Orphans\u2019 Court. The complaint was filed in the civil division because the\nplaintiff was alleging that the defendant had tortiously prevented the decedent\nfrom executing a new will that would have benefited the plaintiff. The decedent\nhad admittedly never signed a new will, so there was no new will to probate and\nno will contest for the Orphans\u2019 Court to hear, and there was no legal basis\nupon which the Orphans\u2019 Court could distribute the estate except in accordance\nwith the will that was actually probated. Under those circumstances, the\nplaintiff\u2019s only remedy was to sue the defendants for the damages suffered by\nthe plaintiff because of their tortious actions. (Whether the plaintiffs should\nhave such a cause of action is a different question for a different article.)<\/p>\n\n\n\n

So the civil division can have jurisdiction to hear actions that look and sound like estate litigation that would ordinarily be heard in the Orphans\u2019 Court. But, just like a federal court does not have jurisdiction over an action that would \u201cdisturb or affect\u201d an estate administration in state court, the civil division of Common Pleas cannot hear an action that would have the effect of overturning or reversing an adjudication of the Orphans\u2019 Court. Section 3358 of the Probate, Estate and Fiduciaries Code, 20 Pa.C.S. \u00a7 3358, prohibits any \u201ccollateral attack\u201d on any decree entered in accordance with the code if the court which entered the decree had jurisdiction to do so. So, in Kern v. Kern<\/em>, 2005 PA Super 422<\/a>, 18 WDA 2005 \u00a0(12\/19\/2005), rearg. den. (3\/6\/2006), app. den. 903 A.2d 1234, No. 200 WAL 2006 (8\/1\/2006), the Superior Court upheld the dismissal of an action in Common Pleas against the beneficiaries of an estate for a wrong alleged to have been committed by the decedent, holding that the action was a prohibited collateral attack upon the decree of distribution in the estate. P.E.F. Code Section 3521 allows petitions to correct \u201cerrors\u201d in adjudications of the accounts of personal representatives if the petition is brought within five years of the confirmation of the account, and the court shall \u201cgive such relief as equity and justice shall require.\u201d The Superior Court agreed that the remedy in section 3521 was the sole remedy available to the plaintiff, and that the failure of the plaintiff to utilize the procedure set forth in 20 Pa.C.S.A. \u00a7 3521 cannot be rectified by the imposition of a \u201cconstructive trust.\u201d Kern v. Kern<\/em>, 2005 PA Super 422 at paragraph 22.<\/p>\n\n\n\n

Conclusion<\/h1>\n\n\n\n

Estate practitioners are used to litigating \u201cestate\nmatters\u201d in the Orphans\u2019 Court, and actions for tortious interference with\ninheritance or donative rights look like the kind of disputes over estates and\ngifts that should be resolved in the Orphans\u2019 Court. But actions for torts are\nbased on in personam<\/em> jurisdiction and\nnot in rem jurisdiction, which means that they can (and sometimes must) be\nlitigated in Common Pleas, or even in federal court if there is diversity of\ncitizenship or other grounds for federal jurisdiction.<\/p>\n\n\n","protected":false},"excerpt":{"rendered":"

Jurisdiction of the Orphans’ Court is primarily “in rem” jurisdiction, which means that other courts cannot exercise jurisdiction over the administration of an estate or trust that is being administered under the jurisdiction of the Orphans’ Court.<\/p>\n Continue reading →<\/span><\/a>","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","footnotes":""},"categories":[32],"tags":[],"class_list":["post-2010","post","type-post","status-publish","format-standard","hentry","category-articles","pmpro-has-access"],"_links":{"self":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/2010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2010"}],"version-history":[{"count":5,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/2010\/revisions"}],"predecessor-version":[{"id":6742,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=\/wp\/v2\/posts\/2010\/revisions\/6742"}],"wp:attachment":[{"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/resources.evans-legal.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}