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Abercrombie v. College

June 13, 2006


The opinion of the court was delivered by: Kenneth M. Karas, District Judge


The Complaint in this action alleges that Defendant Andrew College obtained an invalid deed to the remainder interest of Ms. Liddie Mae Murphy's residence. Specifically, it is alleged that the deed is an invalid testamentary instrument, and was otherwise obtained via fraud and undue influence. As relief, the Court is asked to impose a constructive trust over the residence and to grant punitive damages.

Andrew College brought this Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim and alleging that the Statute of Limitations had expired. However, after the Motion was filed, Ms. Murphy passed away. A niece, Nancy Abercrombie, was appointed Administratrix of Ms. Murphy's estate, and a dispute ensued between Abercrombie and Andrew College over the validity of Ms. Murphy's Will. That dispute is pending before a Surrogate's Court in New York.

Abercrombie also was substituted as Plaintiff in this action. She then moved to have this case dismissed on the ground that the probate exception to the Court's diversity jurisdiction applied. In the alternative, Abercrombie moved to have the Court abstain, in light of proceedings ongoing in New York Surrogate's Court.

For the reasons discussed below, Abercrombie's application that this Court dismiss or stay this action is DENIED, and Defendant's Motion is GRANTED without prejudice to Abercrombie to seek leave to file an amended complaint.

I. Background

A. Ms. Murphy and Andrew College

Unless otherwise noted, the following facts are not in dispute. Liddie Mae Murphy graduated in 1937 from Andrew College, a private, two-year liberal arts college in Georgia. Ms. Murphy maintained a close relationship with her alma mater and, indeed, credited the College for her successful career as an entertainer and writer. On December 14, 1967, Ms. Murphy purchased a townhouse ("the Property") in Manhattan. (Compl. ¶ 8) Over twenty years later, on or about March 23, 1990, Ms. Murphy executed a deed of conveyance ("Deed") and a Remainder Charitable Contribution Agreement ("Contribution Agreement") through which she gifted the Property, located at 45 West 84th Street, New York, New York, to Andrew College and retained a life interest for herself. (Compl. ¶¶ 9, 18; Jakoby Decl. Ex. C) Ms. Murphy was represented by counsel at the time she executed the Deed and the Contribution Agreement. (Compl. ¶ 25) Andrew College took possession of the Deed, and later recorded it in the Office of the City Register of the County of New York on March 11, 1992.*fn1 (Compl. ¶ 14; Jakoby Decl. Ex. D)

B. The Complaint and the Motion to Dismiss

This action was commenced in New York State Supreme Court on July 20, 2004 (Def.'s Mem. of Law in Support of Def.'s Mot. To Dismiss ("Def.'s Mem.") Ex. A) and was removed to this Court pursuant to 28 U.S.C. § 1441 on September 29, 2004.*fn2 According to the Complaint, Ms. Murphy did not intend to convey an irrevocable inter vivos gift to Andrew College at the time the Deed and Contribution Agreement were signed. (Compl. ¶ 23) Instead, the Complaint alleges that Ms. Murphy thought the Deed was revocable and would not have signed it otherwise. (Compl. ¶ 24) The Complaint also alleges that Ms. Murphy was inadequately counseled, (Compl. ¶ 25) that Andrew College made fraudulent statements and exercised undue influence over her by taking advantage of her "advanced age, lack of business savvy, vulnerability, [and] loneliness," as well as the "affection and esteem" she held for the college. (Compl. ¶¶ 27, 31)

Andrew College filed a Motion to Dismiss on March 2, 2005, asserting that all of the claims in the Complaint are barred by the statute of limitations, that the Deed is not subject to the testamentary formalities required under New York law, and that the fraud allegations are insufficiently particularized. Plaintiff timely responded to the Motion, but the Court held off in its decision to permit the parties to complete the mediation process they had begun in January 2005.

C. Mediation and Guardianship

At a pre-motion conference held in December 2004, the Parties expressed a willingness to pursue mediation, which the Court ordered. (Hr'g Tr. 7, Aug. 22, 2005) It had been the Court's (and Andrew College's) expectation that the Parties themselves would participate in the mediation. However, counsel for Plaintiff advised the mediator and counsel for Andrew College the day of the first mediation session on January 14, 2005 that Ms. Murphy apparently had been hospitalized and that she would not be attending the mediation. (Hr'g Tr. 8, Aug. 22, 2005; Certification in Resp. to Def.'s Documentation Submitted to the Court on Aug. 22, 2005 ("Pl.'s Certification") Ex. 10) At the end of that first session, Andrew College requested a supervised visit with Ms. Murphy, an idea that the mediator evidently endorsed. Within an hour of that session, however, counsel for Plaintiff notified counsel for Andrew College that Abercrombie had determined that "it would not be advisable" for even a supervised visit with Ms. Murphy.*fn3

(Def.'s Timeline, Ex. 3) A second mediation session was held on March 8, 2005, but again, Ms. Murphy did not attend.*fn4 (Hr'g Tr. 9, Aug. 22, 2005)

The mediation thereafter stalled, in large part it appears, due to Abercrombie's efforts to be appointed as Guardian for Ms. Murphy. In fact, Abercrombie submitted the Petition seeking her appointment as Guardian, pursuant to Article 81 of the New York Mental Hygiene Law, on April 5, 2005. (Def.'s Timeline, Ex. 6) While counsel for Ms. Murphy/Abercrombie notified the mediator of this filing, he did not notify the Court or counsel for Andrew College, until he sent a one-sentence letter on June 7, 2005.*fn5 (Pl.'s Certification, Ex. 15-18; Def.'s Timeline, Ex. 7) Nor did Counsel provide notice of Ms. Murphy's initial opposition to Abercrombie's efforts to become her Guardian. In Ms. Murphy's words: "While I once had a close relationship with NANCY ABERCROMBIE, I no longer maintain such a relationship with her, and do not trust her to manage my affairs." (Def.'s Timeline, Ex. 8 at 2) Instead of Abercrombie, Ms. Murphy proposed Segundo More be her court-appointed Guardian. (Def.'s Timeline, Ex. 8 at 1-2, 6) Ultimately, it appears that there was some resolution of the dispute, whereby Ms. Murphy consented to the appointment of: (i) Segundo More to be her Guardian; (ii) Segundo More and Abercrombie to be co-Guardians of Ms. Murphy's property; and (iii) Abercrombie as Special Guardian of the case against Andrew College.*fn6 (Pl.'s Certification, Ex. 23 at 2)

D. Ms. Murphy's Declining Health and Demise

On August 1, 2005, Ms. Murphy was critically injured in an apparent fall. (Hr'g Tr. 11, Aug. 22, 2005) For this she was hospitalized at Roosevelt St. Luke's and listed in critical condition. (Hr'g Tr. 12, Aug. 22, 2005) Sometime soon thereafter, Abercrombie, though not appointed as Ms. Murphy's Guardian, sought a health care proxy to remove Ms. Murphy from life support. (Hr'g Tr. 12, Aug. 22, 2005; Def.'s Timeline, Ex. 10) An attorney for Segundo More, the court-appointed Guardian for Ms. Murphy, made an emergency, ex parte application to restrain St. Luke's Hospital from removing Ms. Murphy's life support and to declare any health care proxies to be declared null and void. (Def.'s Timeline Ex. 10) On August 15, 2005, the Honorable William J. Davis, Justice of the Supreme Court of New York, who had been presiding over the guardianship proceedings, revoked all previously-issued health care proxies.*fn7 (Def.'s Timeline, Ex. 11 at 10)

Ms. Murphy never recovered from the fall and passed away on September 25, 2005. The cause of death was determined to be "[b]lunt impact injury of the head with multiple complications including sepsis following bowel perforation by ventriculoperitoneal shunt." (Letter from Jakoby to the Court, Ex. D, February 7, 2006) Eventually, without the opposition of Andrew College, Abercrombie was substituted for Ms. Murphy as Plaintiff in this case.*fn8 (Order, Feb. 22, 2006)

E. The Fight over Ms. Murphy's Will

The day after Ms. Murphy's death, Abercrombie, assisted by the same counsel originally representing Ms. Murphy in this action, filed a Petition in Surrogate's Court in New York seeking the issuance of Letters of Administration. (Letter from Jakoby to the Court, Ex. B, Feb. 7, 2006) In this application, Abercrombie asserted that Ms. Murphy died without a Will. (Id.) She also claimed that Ms. Murphy's estate included the Property, which she represented had a value of approximately $4,000,000, as well as Ms. Murphy's interest in this action, which she described as being brought to "rescind a deed" based on undue influence and fraud. (Id.) However, Abercrombie did not mention in the application that the contested deed related directly to the very property that she claimed was already part of Ms. Murphy's estate. Nonetheless, Abercrombie was appointed Administratix of Ms. Murphy's estate on December 23, 2005. (Letter from Jakoby to the Court, Feb. 24, 2006)

Abercrombie's claim that Ms. Murphy died intestate may be inaccurate as Andrew College claims knowledge of a Will allegedly executed on February 11, 1998 by Ms. Murphy. This Will names former Andrew College president Kirk Treible as executor (and a neighbor as Alternate Executor). (See Letter from Jacoby to the Court, Feb. 7, 2006, Ex. C) Indeed, after discovering that Abercrombie had asserted that Ms. Murphy died intestate, Andrew College initiated proceedings for the probate of the purported Will on January 26, 2006.*fn9 (See Letter from Jacoby to the Court, Ex. D, Feb 7, 2006) It has been estimated that these proceedings could take several years. (Hr'g Tr. 37, Feb. 16, 2006)

F. Abercrombie's Application to Dismiss the Action

When the Court first learned of Ms. Murphy's passing in October 2005, it asked the parties to submit a schedule to brief the question of whether the Court had jurisdiction over this case. Instead of a schedule, the Court received a series of letters in February and March 2006 outlining the Parties' positions regarding jurisdiction. In these letters, Abercrombie asserts that the Court lacks jurisdiction under the probate exception, or, in the alternative, contends that the Court should abstain until the proceedings in Surrogate's Court are completed. Andrew College asserts otherwise, claiming that this action presents issues separate from those before the Surrogate's Court.*fn10

II. Discussion

A. Abercrombie's Jurisdictional Objections

Originally, neither Party challenged this Court's jurisdiction to hear this case. The Parties are from different states, and the amount in controversy is far over $75,000. See 28 U.S.C. § 1332. However, now that Ms. Murphy has passed away and a battle has ensued in Surrogate's Court over her Will, Abercrombie asserts that this Court has lost jurisdiction because of the probate exception. In the alternative, Abercrombie urges the Court to abstain from further presiding over this case, in deference to the recently-begun proceedings in Surrogate's Court. This Court rejects both arguments.

1. The Probate Exception

"The probate exception is 'one of the most mysterious and esoteric branches of the law of federal jurisdiction.'" Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1071 (2d Cir. 1990) (quoting Dragan v. Miller, 679 F.2d 712, 713 (7th Cir. 1982)). It is a "judicially created doctrine[] stemming in large measure from misty understandings of English legal history." Marshall v. Marshall, -- -- U.S. -- --, 126 S.Ct. 1735, 1741 (2006); see also Peter Nicolas, Fighting the Probate Mafia: A Dissection of the Probate Exception to Federal Jurisdiction, 74 S. Cal. L. Rev. 1479, 1501-20 (2001). The uncertain history notwithstanding, the Supreme Court long ago defined the core of the exception to mean that "a federal court has no jurisdiction to probate a will or administer an estate . . . ." Markham v. Allen, 326 U.S. 490, 494 (1946). Under this exception, federal courts "have jurisdiction to entertain suits 'in favor of creditors, legatees and [heirs]' and other claimants against a decedent's estate 'to establish their 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." Id. (quoting Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 43 (1909)); see also Moser v. Pollin, 294 F.3d 335, 340 (2d Cir. 2002).

Owing perhaps to its murky past, the probate exception has been "expansively" interpreted by the courts. Marshall, 126 S.Ct. at 1741. Markham represented the Supreme Court's first "endeavor[] . . . to curtail the 'probate exception.'" Id. To address yet another wave of overly-elastic application of the exception, the Supreme Court recently and unanimously reminded the lower courts in Marshall that the probate exception is "narrow," and should not be used as an excuse to decline to exercise jurisdiction over actions merely because they involve a "probate related matter." Id. at 1741, 1744.

In Marshall, the Ninth Circuit "read the probate exception broadly to exclude from the federal courts' adjudicatory authority 'not only direct challenges to a will or trust, but also questions which would ordinarily be decided by a probate court in determining the validity of the decedent's estate planning instrument.'"*fn11 Id. at 1741 (quoting Marshall v. Marshall, 392 F.3d 1118, 1133 (9th Cir. 2004)). The Ninth Circuit also held that a "State's vesting of exclusive jurisdiction over probate matters in a special court strips federal courts of jurisdiction to entertain any 'probate related matter,' including claims respecting 'tax liability, debt, gift, [or] tort.'" Id. (quoting Marshall, 392 F.3d at 1136). In reversing, the Supreme Court held that "the Ninth Circuit had no warrant from Congress, or from decisions of this Court, for its sweeping extension of the probate exception." Id. In particular, the Supreme Court held that the Ninth Circuit erred in applying the probate exception to a case where a party made a claim of tortious interference with a gift or inheritance and sought an in personam judgment, and not the probate or annulment of a will.*fn12 Id. at 1748. In reaching this result, the Court reiterated that "the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court." Id. However, the exception "does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction."*fn13 Id.

With this backdrop, the Court now turns to the application of the probate exception to this case. Determining whether a case falls within the probate exception requires a two-part inquiry. First, the district court sitting in diversity must determine if it is "being asked to directly probate a will or administrate an estate." Markham, 326 U.S. at 494; see also Moser, 294 F.3d at 340. If so, the action is outside of the court's jurisdiction, as such actions are "purely probate" in nature. Markham, 326 U.S. at 494. Second, if the first question is answered in the negative, the court must determine if the case at hand would require the district court to "interfere with the probate proceedings, [] assume general jurisdiction of the probate[,] or control [] property in the custody of the state court." Moser, 294 F.2d at 340; see also Markham, 326 U.S. at 494. In any of these situations, the district court must dismiss the case for lack of subject matter jurisdiction. See Moser, 294 F.3d at 340.

Abercrombie argues that this case is covered by both prongs of the probate exception analysis. First, she claims that this Court "is now being asked by Andrew College to determine the validity of the purported Will, and to administer the estate [of] Liddie Mae Murphy, which includes the claims made in this lawsuit." (Letter from Matthew Dollinger ("Dollinger") to the Court, Feb. 10, 2006) However, this is clearly not the case. As noted in Moser, since "few practitioners would be so misdirected as to seek . . . letters testamentary or letters of administration from a federal judge, the first prong of the probate exception is rarely, if ever, violated." Moser, 294 F.3d at 340. Andrew College has not submitted the Will to this Court in an attempt to have it declared valid; additionally, even had it done so, this Court would decline to make such a determination. Jurisdiction thus cannot be denied on this ground.

Plaintiff Abercrombie next asserts that "by adjudicating Andrew College's motion to dismiss . . . the District Court would improperly take control of property now in the custody of the Surrogate's Court and would directly interfere with ongoing estate proceedings." (Letter from Dollinger to the Court, 4-5, Feb. 10, 2006) The Court is unpersuaded.

First, this Court is not "assum[ing] general jurisdiction of the probate" of Ms. Murphy's estate. Moser, 294 F.3d at 340. A federal court only assumes jurisdiction of the probate where "'the federal district court . . . entertains a cause of action that under state law . . . would be cognizable only by the probate court.'" Estate of Genecin v. Genecin, 363 F. Supp. 2d 306, 312 (D. Conn. 2005) (quoting Moser, 294 F.3d at 341); see also Wells Fargo Bank, N.A. v. Stern, No. Civ. 02-5126 SI, 2003 WL 22114268, at *2 (N.D. Cal. 2003) ("'The standard for determining whether federal jurisdiction may be exercised is whether under state law the dispute would be cognizable only by the probate court.'" (quoting Lamberg v. Callahan, 455 F.2d 1213, 1216 (2d Cir. 1972)). Very little actually falls into this category in New York, as "the Surrogate's Courts share concurrent subject matter jurisdiction with the state's court of general jurisdiction . . . ." Moser, 294 F.3d at 341. Despite the wide jurisdiction of the Surrogate's Court, a New York State Supreme Court would not need to refrain from exercising jurisdiction over this case.*fn14 See Pollicina v. Misericordia Hosp. Med. Ctr., 624 N.E.2d 974, 977 (N.Y. 1993) ("Although the Surrogate's Court is the primary forum for proceedings involving estates and intestacies, the Supreme Court's inviolate authority to hear and resolve all causes in law and equity unquestionably extends to such matters as well."); In re Burns, 731 N.Y.S.2d 537, 539 (App. Div. 2001) (holding that Supreme Court had concurrent jurisdiction over question of inter vivos charitable donations, even after donor's passing); People v. Ekinici, 743 N.Y.S.2d 651, 656 (Sup. Ct. 2002) ("[T]he Supreme Court has concurrent jurisdiction with the Surrogate's Court on all matters relating to a decedent or the estate."); Berger v. Ickovicz, 669 N.Y.S.2d 488, 491-92 (Sup. Ct. 1998) (declining to transfer case to Surrogate's court where Surrogate's Court was not in an "unique position" to hear the case, and the disposition of the estate was not directly affected by the case). Indeed, this action was first filed in New York Supreme Court, so it is difficult to understand how Abercrombie, purportedly acting in the interests of Ms. Murphy's estate, could believe that only the Surrogate's court should adjudicate this case.*fn15 Thus, because this dispute would note be solely cognizable by the New York Surrogate's Court, this aspect of the probate exception does not apply.

Second, this Court is not controlling property in the custody of the state court. Abercrombie argues otherwise, claiming that under Byers v. McAuley, 149 U.S. 608 (1893), the possession of a decedent's property by the administrator appointed in state court "is a possession taken in obedience to the orders of [the state] court; [and the property] is the possession of the court, and it is a possession which cannot be disturbed by another court." Id. at 615. Abercrombie contends that since she has been appointed Administratrix of Ms. Murphy's estate by the New York Surrogate's Court, all of Ms. Murphy's estate (including the Property) is now in the possession of the state court.*fn16

This reasoning is flawed on multiple grounds. To begin, Abercrombie's reliance on Byers is misplaced, because in that case the state court had already carried out a good portion of the administration of the estate, and the jurisdiction exercised by the federal circuit court interrupted that administration. See Byers, 147 U.S. at 612, 620 (noting that debts of the estate had been paid and estate was ready for distribution under administration of state court). Here, the record is devoid of any evidence that the Surrogate's court has taken any affirmative action regarding the Property, which appears to be an element of control. Cf. In re The Thomas & Agnes Carvel Found., 36 F. Supp. 2d 144, 150 (S.D.N.Y. 1999) ("The Surrogate's Court clearly has taken control of the property subject to this claim for injunctive relief by restraining its transfer or encumbrance.").

More importantly, however, the property at issue in Byers remained in the decedent's full possession until her death, and was thus considered an asset of the estate. See Byers, 149 U.S. at 608. Indeed, the question in Byers was not whether an inter vivos transfer was valid, but instead, whether a written instrument containing instructions for the sale of the property was valid as a will. Id. at 608, 618. In Byers, the property at issue automatically became part of the estate which was before the state court upon the decedent's death, whereas here, there is no basis in law to ...

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