Lawsuit in Federal Court Separate and Distinct From Orphans' Court Action

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.