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Giardina v. Fontana

May 4, 1984


Appeal from judgment of United States District Court for Eastern District of New York, Charles P. Sifton, J., dismissing appellant's action to rescind assignment of interest in her father's estate on grounds of fraud and undue influence, to compel accounting, to impose constructive trust and to recover damages. Appellant argues district court improperly abstained from exercising diversity jurisdiction.

Feinberg, Chief Judge, Mansfield and Meskill, Circuit Judges.

Author: Feinberg

FEINBERG, Chief Judge:

This case requires us to decide whether the district court erred in abstaining from exercising jurisdiction over a claim for relief that is not directly within the probate exception to diversity jurisdiction and does not involve a controlling or unsettled question of state law, but that is on the verge of matters before a state probate court. For reasons given below, we find that the district court should not have abstained, and we reverse the judgment of the district court and remand.


Appellant Diane Giardina alleged the following in the complaint that is the subject of this appeal. She is the natural daughter of the late Joseph Fontana, who died intestate in January 1981. Appellee Adele Fontana is Diane's natural mother and the personal representative of Joseph Fontana's estate, which is the subject of proceedings in the Probate Division of the Circuit Court for Pinellas County, Florida. Two sons of Adele and Joseph Fontana, Raymond and Joseph, also survived the decedent.

According to the complaint, approximately three months after her father died, Giardina executed in New York an assignment of her entire interest in his estate to her mother. At the time, Giardina was emotionally upset over her father's death and her separation and pending divorce from her husband. According to affidavits submitted by Giardina, Fontana telephoned Giardina in New York from Florida almost daily during the three months prior to the assignment and misled her substantially as to the size of the estate. Her brother Raymond then traveled to New York at Fontana's specific request, arrived without notice at Giardina's home with the assignment and induced Giardina to accompany him to a notary public and to execute the assignment. Raymond then went back to Florida without even leaving a copy of the document with Giardina. The complaint further alleges that Giardina received no consideration for executing the assignment; she was also told by her mother that her two brothers would execute similar assignments and that eventualy the remainder of the estate would be shared by all three children. However, her two brothers did not execute such assignments, and her mother transferred a substantial portion of the assets received from her father's estate to her brother Raymond.

Giardina claims that her assignment was obtained by undue influence and fraud. Initially, she filed a complaint in June 1982 in the Eastern District of New York against her mother individually and as personal representative of the estate. Jurisdiction was based on diversity; the complaint alleged that the amount in controversy exceeded $10,000 and that Giardina is a New York citizen and her mother is a citizen of Florida. Giardina sought the following relief: (1) a declaration that the assignment was null and void and/or its rescission; (2) an accounting of all property received by Fontana that would rightfully have become Giardina's had she not executed the assignment; and (3) a declaration of a constructive trust in her favor with regard to her rightful share of any property transferred to Fontana.

The district court, Charles P. Sifton, J., dismissed the initial complaint in February 1983 because of the pending probate proceedings in Florida. The judge held that the claims for rescission, accounting and constructive trust were essentially probate matters and that the federal district court lacked subject matter jurisdiction under the probate exception to diversity jurisdiction. He also construed the complaint as possibly making out some kind of personal tort claim, such as fraudulent deprivation of an interest in an estate or intentional interference with an inheritance of gift, that could be separated from the administration of the estate. He found that the district court could exercise jurisdiction over such a claim, but he abstained from exercising jurisdiction, reasoning that "the cause of action arises on the verge of a matter in which states have an especially strong interest [and] well developed competence," citing Phillips, Nizer, Benjamin, Krim & Ballon v. Rosenstiel, 490 F.2d 509 (2d Cir. 1973).

While the motion to dismiss the initial complaint was pending in the district court, Giardina filed a petition in the Florida probate court, which set forth essentially the same allegations and which the probate court treated as an action to revoke the assignment based on fraud and duress. In March 1983, the probate court held that it did not have jurisdiction over the petition and dismissed it without prejudice to an action in a Florida court of general jurisdiction.

After the Florida probate court dismissed her petition, Giardina returned to the district court in New York; in May 1983, she moved to reargue and vacate the dismissal of her first complaint. The district judge denied the motion in September 1983. Meanwhile, during the pendency of that motion, Giardina filed a second complaint in July 1983 in the district court that was substantially the same as her first complaint. It claimed the assignment had been procured by undue influence and fraud, and it sought the same relief as the first complaint did, along with damages equal to the share of the estate due her after the voiding of the assignment and requested accounting. Judge Sifton's dismissal of the second complaint in November 1983 is the subject of this appeal.

In dismissing the second complaint, the judge held that one branch of the relief sought, rescission, was not directly within the probate exception, but that it was "so intertwined with the matters before the Probate Court, that abstention in favor of the State is appropriate, taking into account what has been said concerning inconvenience to the New York plaintiff and her fears concerning the lack of a favorable reception in the State Court for someone from outside Florida." Judge Sifton implied that the other relief sought -- an accounting, the imposition of a constructive trust and damages -- all fell squarely within the probate exception, so that the district court did not have subject matter jurisdiction over them. Because Giardina was obligated to pursue in Florida her interests in the ongoing probate litigation, the district judge apparently believed it appropriate to require her also to pursue the intertwined rescission action in Florida, albeit in a court of general jurisdiction, not the probate court. We are informed by counsel that in December 1983, during the pendency of this appeal, Giardina filed an action to revoke the assignment in a Florida court of general jurisdiction solely to preserve her rights should she be unsuccessful in this appeal.


It is apparent that the district court could have exercised subject matter jurisdiction over the most substantial part of Giardina's action had it wanted to. The heart of Giardina's complaint was her allegation that the assignment of her interest in her deceased father's estate was obtained by undue influence and fraud. This is essentially a common law tort action. The principal relief requested was a declaratory judgment that the assignment was null and void and/or a rescission of the assignment. This relief could be granted without in any way interfering with the probate proceedings in Florida or the estate being administered. Indeed, the claim was not only cognizable in an appropriate court of general jurisdiction, but the probate court held that the claim was not within its own jurisdiction. The district court was thus correct in concluding that this branch of relief did not fall within the probate exception to diversity jurisdiction. Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 43-46, 54 L. Ed. 80, 30 S. Ct. 10 (1909); Lamberg v. Callahan, 455 F.2d 1213, 1216-17 ...

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