Court Opinion

ID: 9473725
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:38:01.221855+00
Date Added: 2024-06-11T17:43:42.299883
License: Public Domain

ENGEL, Circuit Judge,
dissenting.
I respectfully dissent. I am not convinced that Starr v. Rupp, 421 F.2d 999 (6th Cir.1970), governs the outcome in this case.
Although federal courts have no jurisdiction to probate wills or administer estates, the Supreme Court has held that federal courts do have jurisdiction “to entertain suits ‘in favor of creditors, legatees and heirs’ and other claimants against a decedent’s estate ‘to establish claims’ so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court.” Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 298, 90 L.Ed. 256 (1946).
The boundaries of the judicially created probate exception to federal diversity jurisdiction are quite imprecise. Generally, the courts consider several factors in determining whether particular suits fall inside or outside the exception. Among those generally considered important are (1) whether the action attacks the validity of a will, (2) whether the suit can be characterized as in personam, in rem or quasi in rem, (3) whether the state court proceeding has been closed and (4) whether the suit could be brought in a state court other than the probate court. See, e.g., Sutton v. English, 246 U.S. 199, 38 S.Ct. 254, 62 L.Ed. 664 (1918); Rice v. Rice Foundation, 610 F.2d 471 (7th Cir.1979); Ewald v. Citizens Fidelity Bank & Trust Co., 242 F.2d 319 (6th Cir.1957); Spears v. Spears, 162 F.2d 345 (6th Cir.), cert. denied, 332 U.S. 768, 68 S.Ct. 78, 92 L.Ed. 353 (1947). Some authorities assert that the determinative factor in actions seeking to impose personal liability on an executor or administrator for wrongful conduct in administering the estate is often whether a final accounting has been approved by a state probate court. See annot., 12 A.L.R.Fed. 292, 301 (1972); cf. 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3610 (1984) (Actions against administrators seeking a personal judgment for damages for fraud or mismanagement “may be brought in a federal court only if a final accounting has been held in the state probate court and the administrator has been released from further responsibility to that court.”).
Starr v. Rupp, 421 F.2d 999 (6th Cir. 1970), is the most recent case in our circuit dealing with the probate exception. In Starr, beneficiaries and trustees of a trust created by the decedent’s will brought suit in federal court against the executor of the estate in his individual capacity for breach of fiduciary duty in administering the estate. The state probate court earlier had rejected the plaintiffs’ claims of mismanagement following a full hearing. The *308Ohio intermediate appellate court had affirmed the probate court’s decision, and the Ohio Supreme Court had denied a motion to certify the record. The executor had not yet made a final accounting in the Ohio probate court when the plaintiffs filed suit in federal court. Judge Weick’s opinion for our court rejected the plaintiffs’ argument that the federal suit was solely an in personam action for damages over which the federal district court had concurrent jurisdiction with the state probate court. Judge Weick emphasized that to grant the relief requested not only would interfere with the prior jurisdiction of the state probate court but also would conflict with that court’s decision.
The case at bar is different from Starr in two important aspects. First, the plaintiffs here allege that they have had no opportunity to present their claims to the state probate court because they received no notice of the accountings filed by the executrix. Second, the state probate proceeding in this case had been closed for several years when the complaint was filed in federal court. The latter fact is especially important because there are indications that under Ohio law the jurisdiction of the probate court may not be exclusive when this type of suit is brought after the probate proceeding has been closed. For example, in the syllabus of Neidecker v. Neidecker, 63 Ohio App. 416, 26 N.E.2d 929 (1939), the Ohio case relied upon by Judge Weick in Starr, the court stated:
The Common Pleas Court has no jurisdiction to hear and determine an action by a legatee against an executrix of an estate for converting a legacy to her own use, unless there has been a settlement of estate accounts, an order of distribution by the Probate Court and the expiration of thirty days, as provided in Sections 10509-100 and 10509-266, General Code. Until such conditions have been met the Probate Court has exclusive jurisdiction to hear and determine such action including any matters of fraud.
(emphasis added). Moreover, the plaintiffs have cited several Ohio decisions holding that an action to redress fraud in the administration of an estate brought after the estate has been closed can be prosecuted in an Ohio court of general jurisdiction. Jacobsen v. Jacobsen, 164 Ohio St. 413, 131 N.E.2d 833 (1956); Morton v. Petitt, 124 Ohio St. 241, 177 N.E. 591 (1931); Seeds v. Seeds, 116 Ohio St. 144, 156 N.E. 193 (1927); Alexander v. Compton, 57 Ohio App.2d 89, 385 N.E.2d 638 (1978). Because each of these cases involved express allegations of fraud, I am uncertain whether Ohio courts would apply the same rule to this case in which the plaintiffs appear to allege breach of fiduciary duty rather than fraud. Under the circumstances, I think that it would be wise to remand the case so that the district judge, who is familiar with Ohio state law, may have an opportunity to decide this issue with the benefit of complete briefing and argument by the parties.