Court Opinion

ID: 4710320
Source: CourtListenerOpinion
Date Created: 2021-08-10 19:01:05.188692+00
Date Added: 2024-06-11T09:02:08.429235
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 20-3302
                                       __________

                              THOMAS LAMONT DYNO;
                                  JULIA DYNO,
                                         Appellants

                                             v.

               ALBERT DYNO, JR., in his official and personal capacity
               as Executor of the Estate of Rosemarie Sterchak, deceased
                     ____________________________________

                     On Appeal from the United States District Court
                         for the Middle District of Pennsylvania
                         (D.C. Civil Action No. 3-19-cv-01966)
                     District Judge: Honorable Malachy E. Mannion
                      ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                   August 5, 2021

               Before: AMBRO, PORTER and SCIRICA, Circuit Judges

                             (Opinion filed: August 10, 2021)

                                      ___________

                                       OPINION*
                                      ___________

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM

       Pro se appellants Thomas Dyno and Julia Dyno appeal from the District Court’s

orders granting the defendant’s motion to dismiss and denying their motion for

reconsideration. For the following reasons, we will affirm the District Court’s judgment

with a modification.

                                              I.

       As we write primarily for the parties, who are familiar with the facts, we will

discuss the details only as they are relevant to our analysis. This case derives from a

dispute over the estate of Rosemarie Sterchak. Sterchak died in October 2015, leaving a

will that named the defendant, Albert Dyno, Jr., as her executor. In the will, Sterchak left

bequests of specific corporate stocks and cash to several individuals, including both

plaintiffs. The executor, through counsel, represented to the beneficiaries of these

bequests that the residual estate lacked sufficient liquid assets to pay the inheritance taxes

and administrative expenses of the estate. He assigned each beneficiary a share of the

estimated deficit and sought agreement from each beneficiary to either pay this share to

the estate in cash or permit the executor to liquidate sufficient stocks from the

beneficiary’s bequest to cover the share.

        The plaintiffs refused the executor’s proposed agreement and filed a petition for

inventory and accounting with the county Orphans’ Court. The plaintiffs allege that the

executor’s proposals did not follow applicable Pennsylvania law regarding inheritance

                                              2
taxes and estate expenses. They also allege that the executor and his counsel improperly

sought payments and fees for their own benefit. The executor filed a first inventory and

accounting in late 2016, and the plaintiffs objected. Litigation before the Orphans’ Court

and the Pennsylvania appellate courts continued through the filing of this action in

November 2019. At that time, the administration of the estate remained pending before

the Orphans’ Court and the plaintiffs had filed a petition to the Pennsylvania Supreme

Court concerning certain motions, which was later denied.1

       The plaintiffs filed a complaint against the executor in the District Court.2

Invoking 42 U.S.C. § 1983, they claimed that the executor was violating their rights

under the Due Process Clause of the Fourteenth Amendment by depriving them of their

specific legacies. They also asserted state-law claims for fraud and breach of fiduciary

duty. For relief, the plaintiffs essentially requested a declaration that they were entitled to

immediate possession of the stocks in their bequests and an order requiring the executor

to turn over the stocks, along with associated dividends, interests, and costs. Adopting a

1
 The administration of the estate still remains pending before the Orphans’ Court. The
executor represents that this is because of the plaintiffs’ continued litigation. Appellee’s
Br. 4, 3d Cir. ECF No. 26. The other beneficiaries appear to have accepted the
executor’s proposal or otherwise reached agreement and received the remainder of their
bequests.
2
  The plaintiffs relied primarily on federal question jurisdiction and supplemental
jurisdiction, but argued that diversity jurisdiction applied “if necessary.” Compl. ¶ 5,
ECF No. 1.

                                              3
Magistrate Judge’s Report and Recommendation over the plaintiffs’ objections, the

District Court granted the defendant’s motion to dismiss for lack of subject matter

jurisdiction and later denied the plaintiffs’ motion for reconsideration. The plaintiffs

appealed both rulings.

                                             II.

       We have jurisdiction under 28 U.S.C. § 1291. Our review of the District Court’s

dismissal of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) is de

novo. In re Horizon Healthcare Servs. Data Breach Litig., 846 F.3d 625, 632 (3d Cir.

2017). Since the defendant’s motion is a facial, rather than factual, attack on jurisdiction,

we consider the allegations of the complaint as true. Id. We review “a denial of a motion

for reconsideration for abuse of discretion, but we review the District Court’s underlying

legal determinations de novo and factual determinations for clear error.” U.S. ex rel.

Schumann v. AstraZeneca Pharms. L.P., 769 F.3d 837, 848 (3d Cir. 2014) (quoting

Howard Hess Dental Labs. Inc. v. Dentsply Int’l Inc., 602 F.3d 237, 246 (3d Cir. 2010)).

                                             III.

       The District Court determined that it lacked jurisdiction under the Princess Lida

doctrine. Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456, 466 (1939). We

agree. The Princess Lida doctrine “prevents a court in which an action is filed from

exercising jurisdiction when a court in a previously filed action is exercising control over

the property at issue and the second court must exercise control over the same property in

                                              4
order to grant the relief sought,” even where the property has not actually been seized.

Dailey v. Nat’l Hockey League, 987 F.2d 172, 175 (3d Cir. 1993). It is a “mechanical

rule” that “applies when: (1) the litigation in both the first and second fora are in rem or

quasi in rem in nature, and (2) the relief sought requires that the second court exercise

control over the property in dispute and such property is already under the control of the

first court.” Id. at 176. We apply the rule based on the circumstances at the time the

action was filed. Id. at 177; Chevalier v. Estate of Barnhart, 803 F.3d 789, 803 (6th Cir.

2015).

         Here, the Orphans’ Court exercised control over the estate property, including the

bequests at issue. See In re Estate of Craig, 109 A.2d 190, 198 (Pa. 1954) (per curiam)

(“[T]he accounting and distribution of a decedent’s estate” is “a proceeding in rem.”);

Three Keys Ltd. v. SR Util. Holding Co., 540 F.3d 220, 227-229 (3d Cir. 2008)

(concluding that a decedent’s stock shares remained within the jurisdiction of the

orphans’ court until approval of any transfer).3 The plaintiffs argue that they were

3
  Three Keys applies the “probate exception to federal courts’ diversity jurisdiction.” 540
F.3d at 222. But the third prong of that exception, applied in Three Keys, is a restatement
of the Princess Lida doctrine. See id. at 227 (applying the principle that a federal court
may not “assume in rem jurisdiction over property that is in the custody of the probate
court”); see Goncalves ex rel. Goncalves v. Rady Child.’s Hosp. San Diego, 865 F.3d
1237, 1253 (9th Cir. 2017) (noting that this aspect of the probate exception is “an
application of the prior exclusive jurisdiction [or Princess Lida] doctrine”); Chevalier,
803 F.3d at 803 (“The prior-exclusive-jurisdiction doctrine is similar—if not identical
to—the probate exception.”).

                                              5
entitled to their specific legacies immediately upon Sterchak’s death and that, absent

proof of a deficiency in the residual estate, their legacies are not properly part of the

estate or subject to the jurisdiction of the Orphans’ Court, relying on Beatty v.

Hottenstein, 112 A.2d 397, 399-400 (Pa. 1955) (ultimately quoting In re Robinson’s

Estate, 24 Pa. C. 588, 589, 591 (Huntingdon Cnty. Orphans’ Ct. 1901)). But neither

Beatty nor Robinson’s Estate addresses the jurisdiction of the Orphans’ Court and here,

unlike in those cases, the executor represents that the residual estate is insufficient to pay

debts and expenses. See Beatty, 112 A.2d at 400; Robinson’s Estate, 24 Pa. C. at 589.4

       To grant the relief sought by the plaintiffs, the District Court would have had to

exercise control over the shares of stock at issue. See Three Keys, 540 F.3d at 229

(determining that a request for declaratory judgment sought “a federal court

determination of [the plaintiff’s] ownership interest in” stock and “would dispose of

Estate property under the jurisdiction of the Orphans’ Court”); Lefkowitz v. Bank of New

York, 528 F.3d 102, 107 (2d Cir. 2007) (concluding that providing requested specific

performance and declaratory relief would require the federal court “to assert control over

property that remains under the control of the state courts”). The practical effect of the

relief, rather than the precise labelling of in rem or quasi in rem, is dispositive. See

4
  Furthermore, both cases predate significant statutory revisions, and Beatty, to the extent
that it relies on the broad language of Robinson’s Estate, does so only within in the
context of entitlement to interest and proceeds. Beatty, 112 A.2d at 399.

                                               6
Dailey, 987 F.2d at 177. The plaintiffs asked the District Court to order the distribution

of specific property subject to the jurisdiction of the Orphans’ Court. The District Court

thus lacked subject matter jurisdiction under the Princess Lida doctrine.

         The District Court, adopting the Recommendation and Report of the Magistrate

Judge, further considered whether the plaintiffs should be given leave to amend their

complaint in order to seek money damages under § 1983.5 It determined that any such

amendment would be futile.

         While we agree with the District Court’s decision to dismiss this case for lack of

jurisdiction, and to deny reconsideration of that decision when the plaintiff’s motion

merely stated their disagreement with the District Court's analysis, see Max’s Seafood

Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999), the dismissal

should have been without prejudice. See N.J. Physicians, Inc. v. President of U.S., 653

F.3d 234, 241 n.8 (3d Cir. 2011) (explaining that dismissals for lack of subject matter

jurisdiction are “by definition without prejudice”); cf. Thorne v. Pep Boys Manny Moe &

Jack Inc., 980 F.3d 879, 896 (3d Cir. 2020) (“The specter of serial litigation cannot imbue

the District Court with jurisdiction it otherwise lacks.”).

5
    The District Court did not consider any other potential amendments.

                                               7
                                            IV.

       Accordingly, we will affirm except that we will modify the judgment to reflect

that the dismissal of the plaintiffs’ complaint was without prejudice.6 7

6
  As modified, the judgment no longer adopts the portions of the Magistrate Judge’s
report and recommendation concerning futility. Under the circumstances of this case, it
was unnecessary to consider whether amendment was futile. See Figueroa v. Buccaneer
Hotel, Inc., 188 F.3d 172, 182 (3d Cir. 1999) (explaining that a dismissal for lack of
subject matter jurisdiction is not an adjudication on the merits).
7
 The plaintiffs move for permission to file additional copies of their brief on DVDs, in
order to include hyperlinks. Mot., 3d Cir. ECF No. 22. We grant this motion.

                                             8