The opinion of the court was delivered by: David G. Larimer, Chief Judge.
Plaintiff brought this action seeking to impose a constructive trust
pursuant to New York Banking Law § 675 over certain of defendants'
bank accounts. Plaintiff alleges that funds in these accounts came from
joint accounts that defendant Roger Goodman had with his grandmother,
Doris E. Goodman, now deceased. The complaint seeks a declaratory
judgment that these bank accounts do not belong to defendants but are
part of Doris Goodman's estate, which currently is the subject of probate
proceedings in Surrogate's Court in Seneca County, New York.
There are three motions currently pending before this Court: 1)
defendants' motion to dismiss or stay based on abstention principles, or
to dismiss or transfer for improper venue; 2) plaintiff's cross motion
for summary judgment; and 3) defendants' cross motion for summary
judgment. As discussed below, this Court will abstain from exercising its
jurisdiction, and this action is stayed pending resolution of the action
now pending in Seneca Surrogate's Court. Under the Brillhart abstention
doctrine, Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942), a district
court may exercise its discretion not to entertain a declaratory judgment
action even though it has jurisdiction to hear the matter. The Second
Circuit in Youell v. Exxon, 74 F.3d 373, 375-376 (2d Cir. 1996), recently
described this doctrine:
The Brillhart abstention doctrine . . . gives the
district court broader discretion to determine
`whether and when to entertain an action . . ., even
when the suit otherwise satisfies subject matter
jurisdictional prerequisites.' Witlon, 115 S.Ct. at
2140. Hence, under Brillhart, the question for a
district court presented with a declaratory judgment
suit, is `whether the questions in controversy between
the parties to the federal suit, and which are not
foreclosed under the applicable substantive law, can
better be settled in the proceeding pending in the
state court.' Id. (quoting Brillhart, 316 U.S. at
495). Although Brillhart did not exhaustively catalog
the factors governing a district court's exercise of
its discretion to hear a declaratory judgment suit,
"it did provide some useful guidance in that regard."
Id. For example, in determining whether the claims
before it `can better be settled' in the state
proceedings, the district court should examine the
scope of the parallel state litigation and the nature
of the defenses available there. Brillhart, 316 U.S.
at 495. It should also consider `whether the claims of
all parties in interest can satisfactorily be
adjudicated in that [state] proceeding, whether
necessary parties have been joined, whether such
parties are amenable to process in that proceeding,
The Supreme Court in Wilton v. Seven Falls Co., 515 U.S. 277, 283
(1995), articulated several factors to be considered in the application
of Brillhart abstention. A review of these factors suggests that
abstention is appropriate here.
One of the factors that a federal court should consider in deciding
whether to abstain is the nature and scope of the pending state court
proceeding. The Court should determine "whether the claims of all parties
in interest can satisfactorily be adjudicated in that proceeding." 515
U.S. at 283 (quoting Brillhart, 316 U.S. at 495). The Seneca Surrogate's
Court now has proceedings pending concerning the estate of Doris
Goodman. Plaintiff has filed objections to probate in that court alleging
that defendant Roger Goodman exerted undue influence on the decedent.
Plaintiff also advised the Surrogate's Court that he would be seeking the
entire balances of all joint accounts pursuant to section 675 of the
Banking Law of the State of New York. See John H. Goodman Objections to
Probate, Docket No. 6, Ex. B.
It is clear that the Surrogate's Court, a court with broad jurisdiction
to resolve the rights of decedents, has jurisdiction to hear this claim.
See N.Y. Const., Art 6,
§ 12(d); In re Estate of Dicosimo,
687 N.Y.S.2d 592, 593 (N.Y.Sur. 1999) ("if the proceeding falls within
its area of specialization, the [Surrogate's Court] has broad
jurisdiction to resolve all of the issues raised.") (citing Matter of
Piccione's Estate, 57 N.Y.2d 278 (N.Y. 1982)); see also Matter of
Antoinette, 2002 N.Y. Slip Op. 01553 (3rd Dept. Feb. 22, 2002)
(demonstrating that Surrogate's Courts entertain questions under Banking
Law § 675); Matter of Stalter, 703 N.Y.S.2d 600 (3rd Dept. 2000)
(same). Questions concerning the accounts challenged here have already
been presented to that court. Moreover, in considering the objections to
probate, that court will adjudicate the question of Roger Goodman's
influence over the decedent.
The Court should also consider "whether necessary parties have been
joined" and "whether such parties are amenable to process in that
proceeding." 515 U.S. at 283 (quoting Brillhart, 316 U.S. at 495).
Although Gwen Goodman does not appear to be a party to the Surrogate's
Court proceeding, the plaintiff has not argued that the Surrogate's Court
could not exercise jurisdiction over the accounts in question. Roger
Goodman is before the Surrogate's Court because he is named as Executor
of Doris Goodman's will.
This case is similar to Fay v. Fitzgerald, 478 F.2d 181 (2d Cir.
1973), where the Second Circuit applied Brillhart to an action which
sought to determine plaintiff's rights to an estate while a separate
action was pending in the Surrogate's Court. In Fay, the Court found that
federal courts may properly abstain from exercising jurisdiction where:
"The questions are not federal; preparations to determine them have gone
forward in the Surrogate's Court; the trial is even now impending there
. . .; the state tribunal has jurisdiction of the rival claimants . . .
while the federal court does not." Id. at 183. As was the case in Fay,
the legal questions here are not federal in nature. The action in the
Surrogate's Court is well underway, and that court can exercise
jurisdiction over the defendants named here. It would be "`uneconomical
as well as vexatious' for the federal court to proceed in this
declaratory judgment suit raising precisely the same issue which will
necessarily be decided by the Surrogate's Court." Fay, 478 F.2d at 183;
see also see also Matter of Thomas and Agnes Carvel Foundation,
36 F. Supp.2d 144, 152-154 (S.D.N.Y. 1999) (Applying Brillhart and Fay,
and determining that Surrogate's Court best suited to resolve claims to
the estate). Because the Court has abstained from exercising its
jurisdiction here, it will not consider the parties' motions for summary
Defendants' motion to dismiss or to transfer (Dkt #4) is granted in
part and denied in part. Plaintiff's cross motion for summary judgment
(Dkt #10) and defendants' cross motion for summary judgment (Dkt #15) are
denied. The Court will stay this action pending the outcome of the
proceedings in Surrogate's Court. The parties are directed to inform this
court in writing of the resolution of those proceeding, within 10 days of
the conclusion of that action.
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