In Harhay v. Starkey, Case No. 08-CV-30229-MAP, 2010 U.S. Dist. LEXIS 45473 (May 10, 2010), a family dispute described by the United States District Court for the District of Massachusetts in Shakespearian terms, the Court addressed the "probate exception" to federal subject matter jurisdiction.
Plaintiffs alleged that the Defendants, as executrix and counsel for the estates of their mother and two aunts, swindled them of their family inheritance by misappropriating assets during the mother's lifetime with an allegedly forged power of attorney. Plaintiffs brought claims against the Defendants for conversion, fraud, negligence and breach of fiduciary duty.
Defendants moved to dismiss the claims, arguing that the Court lacks subject matter jurisdiction pursuant to the so-called "probate exception." The probate exception is a judge-made doctrine requiring a federal court to refrain from asserting jurisdiction where a federal suit is likely to interfere with probate proceedings. As the Supreme Court recently made clear, however, the probate exception is limited to cases where the federal court is being asked to engage in "purely" probate matters such as the probate or annulment of a will and the administration of an estate, or the disposal of property that is in the custody of a probate court.
The Court held that the probate exception does not apply in this case because the probate exception cannot be used to dismiss widely recognized tort claims such as breach of fiduciary duty merely because the issues intertwine with claims proceeding in probate court. Here, all of the claims sound in tort and seek damages against the Defendants themselves. As the Court noted, these claims would not even be cognizable in probate court, which does not have jurisdiction to hear tort claims or award damages.
Defendants alternatively moved to dismiss the claims for lack of standing, arguing that the Plaintiffs are not fiduciaries of any estate and thus cannot sue for the benefit of an estate. The Court rejected this argument because the Plaintiffs seek money damages for their own benefit. Moreover, even if the Plaintiffs were seeking damages for the benefit of an estate, Massachusetts law favors actions by heirs, legatees and others with "an interest in enforcement" where the fiduciary of the estate is a defendant against whom specific wrongdoing has been alleged.
Day Pitney Partner Angela Titus McEwan authored an article, "The UTC and the Duty to Inform and Report," published in Trusts & Estates.
Keith Bradoc Gallant and Rebecca Iannantuoni authored an article, "When a Client Lacks Legal Competency, Who Files for the Divorce?," for Family Advocate, a publication of the American Bar Association Section on Family Law.
Day Pitney Newsletter
Clifford Nichols wrote an article, "When Addressing Cybersecurity and Data Breach, Don't Forget eDiscovery," for New Jersey Law Journal. The article is about how companies should consider eDiscovery and litigation response issues when making policy or infrastructure changes to address cybersecurity and data breach risks.
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Rick Sanders is quoted in an article, "Business Groups Encouraged by Legislators," in NJBIZ, which addresses political activity behind a bill to phase out New Jersey's estate tax. Under the bipartisan bill, the estate tax, which currently applies to inheritances valued at $675,000 or more, would be eliminated gradually over a five-year period. "It affects such a small part of the population," Sanders said. "It just strikes me as unusual that all of a sudden, this bill came. I think it's not coincidental that the governor was campaigning for president at the time he called for the repeal. For years and years, there's been proposals to increase the exemption to $1 million and it never got any traction in New Jersey."
Boston, Mass., January 20, 2016 – Day Pitney is pleased to announce Jillian Hirsch, a partner in Day Pitney’s Litigation Practice, has been selected as one of Massachusetts Lawyers Weekly’s 2015 Lawyers of the Year. Honorees were nominated by their colleagues, clients and other legal professionals for their outstanding professional accomplishments.
Boston, Mass. November 11, 2015 – Day Pitney is pleased to announce Leiha Macauley, a partner in Day Pitney’s Individual Clients Practice, has been selected as a 2015 Boston Rising Star by The National Law Journal.
Jillian Hirsch was quoted in an article, "Trust divisible in divorce despite possible new beneficiaries," in Massachusetts Lawyers Weekly. In the article, Hirsch, who represented the wife in the matter, explains why the Appeals Court's decision of Pfannenstiehl v. Pfannenstiehl is significant.
"It confirmed that an interest in a trust with an ascertainable standard--specifically one with a history of distributions woven into the fabric of the marriage--is a vested, presently enforceable interest and therefore properly included in a marital estate for purposes of equitable division of property in a divorce," she said.