{"id":23266,"date":"2024-01-05T22:14:49","date_gmt":"2024-01-05T22:14:49","guid":{"rendered":"https:\/\/probatestars.com\/?p=23266"},"modified":"2024-01-05T22:18:09","modified_gmt":"2024-01-05T22:18:09","slug":"how-to-sue-an-estate-in-federal-court","status":"publish","type":"post","link":"https:\/\/probatestars.com\/how-to-sue-an-estate-in-federal-court\/","title":{"rendered":"How to Sue an Estate in Federal Court"},"content":{"rendered":"<p>In most states, if a creditor has a claim against an estate, the first step is to file a creditor claim against the estate, in the pending probate court matter.\u00a0 If the estate objects, the creditor has a fixed period of time, typically 30 days, within which to file a lawsuit against the estate.<\/p>\n<ul>\n<li><a href=\"https:\/\/probatestars.com\/creditor-claims-in-florida-probate-2\/\" target=\"_blank\" rel=\"noopener\">Guide to Creditor Claims in Florida Probate<\/a><\/li>\n<li><a href=\"https:\/\/probatestars.com\/creditor-claims-in-california-probate\/\" target=\"_blank\" rel=\"noopener\">Guide to Creditor Claims in California Probate<\/a><\/li>\n<li><a href=\"https:\/\/probatestars.com\/creditor-claims-in-ohio-probate\/\" target=\"_blank\" rel=\"noopener\">Guide to Creditor Claims in Ohio Probate<\/a><\/li>\n<\/ul>\n<h2>Where Do You File a Creditor Claim Against an Estate?<\/h2>\n<p>Most states have a bright line rule between claims that are filed in the probate case, and those that are filed elsewhere.\u00a0 Typically, a creditor claim based on a liability of the Decedent is filed anywhere that a court might have jurisdiction over the matter.\u00a0 For claims arising out of the administration of the Estate and not out of a liability of the Decedent, depending on the state, those claims are brought in the probate court or another court with jurisdiction.\u00a0 For claims based on a liability of the Decedent, the lawsuit can be filed in any court with jurisdiction over the matter (known as subject matter jurisdiction) and jurisdiction over the estate (known as personal jurisdiction).<\/p>\n<h2>Can a Claim Against an Estate be Filed in Federal Court?<\/h2>\n<p>Yes, a creditor claim against an estate arising out of a liability of the Decedent can be brought in Federal court, assuming that the court has personal jurisdiction over the estate.\u00a0 Although Federal courts cannot probate an estate, such courts can surely adjudicate claims against estates, as the recent case of\u00a0<span class=\"document-title-text\"><a href=\"https:\/\/probatestars.com\/wp-content\/uploads\/2024\/01\/Silk-v-Bond-65-F4th-445-9th-Cir-2023.pdf\" target=\"_blank\" rel=\"noopener\">Silk v. Bond<\/a>, 65 F.4th 445 (9th Cir. 2023), demonstrates.\u00a0\u00a0<\/span><\/p>\n<p>Silk provided Bond, during his lifetime, estate and tax services.\u00a0 Bond agreed that his estate would pay Silk at his death, based on the value of the tax savings upon his death.\u00a0 Silk filed a creditor claim against Bond&#8217;s estate in Maryland, to which bond&#8217;s estate objected.\u00a0 Silk then filed a lawsuit in a Federal District Court in California.\u00a0 The estate objected, claiming that the court did not have subject matter jurisdiction to hear the dispute.<\/p>\n<p>The &#8220;probate exception&#8221; to federal jurisdiction is an old doctrine that states that a federal court that otherwise has jurisdiction over a matter will not hear the case if it involves the probate of an estate.\u00a0 The United States Supreme Court, in Marshall v. Marshall, 547 U.S. 293 (2006), held that while &#8220;the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent&#8217;s estate&#8221; and &#8220;precludes federal courts from endeavoring to dispose of property&#8221; in the custody of the state probate court, &#8220;it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.&#8221;\u00a0 For more information on litigating probate and trust cases in Federal Court, see this <a href=\"https:\/\/probatestars.com\/how-to-litigate-an-inheritance-dispute-in-federal-court\/\" target=\"_blank\" rel=\"noopener\">article<\/a>.<\/p>\n<p>As explained by the Silk case, the probate exception has been further clarified by the Ninth Circuit, as follows:<\/p>\n<p style=\"padding-left: 80px;\">Following Marshall, we have since held that the probate exception is limited to cases in which the federal courts would be called on to &#8220;(1) probate or annul a will, (2) administer a decedent&#8217;s estate, or (3) assume in rem jurisdiction over property that is in the custody of the probate court.&#8221; Goncalves v. Rady Children&#8217;s Hosp. San Diego, 865 F.3d 1237, 1252 (9th Cir. 2017) (quoting Three Keys Ltd. v. SR Util. Holding Co., 540 F.3d 220, 227 (3d\u00a0[65 F.4th 451]\u00a0Cir. 2008)).<\/p>\n<p>The Court quickly concluded that the matter did not require the Court to probate or annul a will.\u00a0 With respect to whether the Court was called upon to administer the estate, the Court held it was not, reasoning as follows:<\/p>\n<p style=\"padding-left: 80px;\">This suit does not require the federal courts to administer Bond&#8217;s Estate. Yet the district court reasoned that hearing Silk&#8217;s claim would require it to &#8220;assume control over an estate appraisal&#8221; in order to &#8220;determine what portion of the Estate&#8221; is due to Silk under the incentive fee agreements. The court reasoned that taking &#8220;control of the appraisal would amount to the administration of [the] Decedent&#8217;s Estate.&#8221; On appeal, the Estate likewise argues that Silk&#8217;s lawsuit would require the district court to administer Bond&#8217;s estate. But valuing an estate to calculate contract damages is not administering an estate.<\/p>\n<p style=\"padding-left: 80px;\">Although appraisal is a component of estate administration, Maryland&#8217;s regulation of appraisals as part of the probate process has no legal bearing on whether a federal district court may order an appraisal as part of a contract action. And in the context of this case, an appraisal is specifically contemplated by the contract between the parties. For purposes of Silk&#8217;s breach of contract action, an appraisal of the Estate&#8217;s value is a matter of contract interpretation, purely incidental to the task of the probate court in administering the estate. To be sure, there is an overlap between any Orphans&#8217; Court estate appraisal and any other estate appraisal. But the Supreme Court in Marshall rejected the notion that such factual overlap implicates the probate exception.<\/p>\n<p>The Court also concluded that it was not being asked to assume in rem control of the estate&#8217;s assets, reasoning as follows:<\/p>\n<p style=\"padding-left: 80px;\">The &#8220;nature of the right sued on&#8221; here is purely contractual. Silk&#8217;s claims against the Estate are for breach of contract or, in the alternative, unjust enrichment and promissory estoppel. The &#8220;gravamen&#8221; of Silk&#8217;s complaint is that Bond breached a series of contracts, and Bond&#8217;s Estate now owes him money. Actions for breach of contract are in personam claims because they are, by their nature, claims between discrete entities and not between individuals and the world at large. See 20 Am. Jur. 2d Courts \u00a7 80 (2d ed. 2023) (&#8220;When the cause of action is based on a contract and the action seeks damages on the ground of breach of contract, the action is transitory in nature and may be adjudicated by any court which has jurisdiction in personam of the defendant . . . .&#8221;); see also In Personam, Black&#8217;s Law Dictionary (11th ed. 2019) (&#8220;A normal action brought by one person against another for breach of contract is a common example of an action in personam.&#8221;). Thus, even though an estate is a res, see Marshall, 547 U.S. at 310-11, 126 S.Ct. 1735, and even though the Estate is in the process of probate administration, Silk&#8217;s claims that Bond breached their contracts are not claims against the world: They are claims against Bond as a contracting party who has now died.<\/p>\n<p style=\"padding-left: 80px;\">The Estate argues that Silk&#8217;s suit would &#8220;require[ ] the district court to assume core probate functions&#8221; were it to calculate the damages Silk seeks. But the limited accounting called for in the contracts does not somehow transform an in personam action into an in rem action, nor otherwise bring a suit within the ambit of the probate exception, particularly when the accounting is contemplated by the very contracts Silk is trying to enforce.<\/p>\n<p>Listen to the <a href=\"https:\/\/probatestars.com\/wp-content\/uploads\/2024\/01\/21-56286.mp3\" target=\"_blank\" rel=\"noopener\">oral arguments<\/a> in the 9th Circuit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In most states, if a creditor has a claim against an estate, the first step is to file a creditor claim against the estate, in the pending probate court matter.\u00a0 If the estate objects, the creditor has a fixed period of time, typically 30 days, within which to file a lawsuit against the estate. Guide [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7310,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[101],"tags":[2527,4107],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.6 (Yoast SEO v22.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Sue an Estate in Federal Court<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/probatestars.com\/how-to-sue-an-estate-in-federal-court\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Sue an Estate in Federal Court\" \/>\n<meta property=\"og:description\" content=\"In most states, if a creditor has a claim against an estate, the first step is to file a creditor claim against the estate, in the pending probate court matter.\u00a0 If the estate objects, the creditor has a fixed period of time, typically 30 days, within which to file a lawsuit against the estate. 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