Lawsuit in Federal Court Separate and Distinct From Orphans' Court Action
(November 2009) By Tamiya N. Wilkes, Associate.
For more information, contact Paul Farquharson.
Cynthia Libonati, et al. v. Dora D. Williams Ransom, et al.,
Case No.: 09-cv-1901 (D. Md. October 22, 2009)
This matter involves a dispute over the alleged fraudulent
conveyance of the financial accounts of Richard Sacker ("the Decedent").
Plaintiffs, the Decedent's family members, filed suit in the United States
District Court alleging that Defendants, the Decedent's neighbors and
attorney-in-fact, had abused a confidential relationship and fiduciary
obligations by executing self-serving financial transactions prior to the
Decedent's death. Specifically, Plaintiffs alleged that during the final months
of Decedent's life, while he was suffering from dementia and given a life
expectancy of three months, Defendants moved Decedent into their home, isolated
him from his family, and most importantly for purposes of the lawsuit, the
attorney-in-fact transferred at least $350,000 of the Decedent's assets to
herself and designated herself as the beneficiary of Decedent's bank accounts.
One month prior to filing the action in the United States
District Court, Plaintiffs filed a separate action in the Orphans' Court for
Baltimore City challenging the validity of Decedent's Last Will and Testament
("Will"). In the Orphan's Court action, Plaintiffs alleged that Defendants had
informed them that the attorney-in-fact was named as the personal representative
and sole beneficiary of Decedent's Will. Plaintiffs contended that the Will was
executed in the final months of Decedent's life, at a time when Decedent was not
legally competent to execute a Will. Therefore, execution of the Will was the
product of undue influence and fraud.
Defendants filed a Motion to Dismiss the federal action,
arguing that the lawsuit filed in the Baltimore City Orphans' Court precluded
the United States District Court's subject matter jurisdiction over the federal
action. Specifically, Defendants argued that the federal court proceedings would
interfere with the probate proceedings in Orphans' Court, because the federal
claim merely restated the same allegations set forth in the Orphans' Court
action.
While it is true that a federal court "has no jurisdiction
to probate a will or administer an estate…it does not bar federal courts from
adjudicating matters outside its confines or otherwise within federal court
jurisdiction." Marshall v. Marshall, 547 U.S. 293, 310 (2006). A federal court
may hear claims related to the probate of a will or the administration of a
decedent's estate "where the final judgment does not undertake to interfere with
the state court's possession." Markham v. Allen, 326 U.S. 490, 494 (1946). The
state court is, however, required to recognize the right adjudicated by the
federal court. Id.
Judge Motz of the United States District Court held that
Plaintiff's claim in federal court is separate and distinct from the probate
claim filed in Orphans' Court, as such, there was no danger that the federal
Court's determination would interfere with the administration of Decedent's
estate in Orphans' Court.
Furthermore, Orphans' Court has no jurisdiction over the
claims raised by Plaintiffs in federal court, namely which party holds title to
$350,000 in finances and to Decedent's bank accounts. Orphans' Court has no
jurisdiction to decide questions of title to personal property, therefore,
Defendants' Motion to Dismiss was denied.
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