Federal Subject Matter Jurisdiction Not Found by District of New Jersey: Probate Exception Applied
Crane v. Crane, Docket No. 23-cv-01527 (D.N.J. Apr. 1, 2024)
The plaintiff, Michael Crane (“Michael”), brought claims in federal court alleging that the defendants — Michael’s sister, Jacqueline Crane (“Jacqueline”) and Michael’s nephew, Joseph Candela (“Joseph”) — unlawfully deprived him of property. He also claimed that Jacqueline breached her fiduciary duties and was negligent for failing to secure property. Michael’s claims were dismissed by the federal court for lack of subject matter jurisdiction, especially since his federal court claims followed litigation in state court.
Michael and Jacqueline were the only heirs to the estates of their mother and aunt, both of whom died in 2020. Michael and Jacqueline’s aunt owned a property (“Englewood Property”) that Michael had lawful access to and stored valuables (“Valuables”) there that were worth approximately $5 million.
Jacqueline filed a probate action in state court against Michael following the decedents’ deaths. Michael filed a counterclaim alleging conversion of property and fraudulent concealment by transferring assets between Jacqueline and Joseph, including the Valuables. Michael also crossclaimed against Joseph for conversion of money and unjust enrichment. Michael sought monetary damages and did not seek for the Valuables to be returned to him.
Michael’s probate court pleadings were ultimately dismissed with prejudice as a result of Michael’s noncompliance with court orders. Judgment was entered accordingly in 2022.
In May 2023, Michael filed the subject claims in federal court. Jacqueline moved to dismiss for lack of subject matter jurisdiction (1) under the Rooker-Feldman doctrine or (2) the probate exception to diversity jurisdiction. Jacqueline also argued that Michael’s claims should be barred by res judicata and the entire controversy doctrine because he already litigated them in probate court.
The federal District Court found the Rooker-Feldman doctrine inapplicable. This doctrine is rarely used and may be applied where: (1) the federal plaintiff lost in state court; (2) the plaintiff complains of injuries caused by the state-court judgments; (3) those judgments were rendered before the federal suit was filed; and (4) the plaintiff is inviting the district court to review and reject the state judgments. Crane at *5. The District Court determined that prong (2) was not satisfied because the injuries claimed by Michael were the same as that of the state court and were not created by the state court.
The District Court was, however, convinced that it lacked subject-matter jurisdiction as a result of the probate exception. This exception is a carve-out from federal diversity jurisdiction that applies when a court seeks to: (1) probate or annul a will; (2) administer a decedent’s estate; or (3) assume in rem jurisdiction over property that is in the custody of the probate court. Crane at *7. The District Court found that prongs 2 and 3 applied. Prong 2 applied because Michael’s claims center around deprivation of the Valuables, which were stored at the Englewood Property. Likewise, prong 3 applied because Michael asked the Court to assume jurisdiction over property in the custody of probate court — i.e., the Englewood Property.
The District Court was not persuaded by Michael’s argument that subject matter jurisdiction was proper because the probate court would not have subject matter jurisdiction over the claims. The District Court reasoned that the probate court may exercise ancillary jurisdiction over legal claims stemming from the estate claims.