CARROLL v. FEIN et al
Filing
40
MEMORANDUM AND ORDER. SIGNED BY HONORABLE GERALD A. MCHUGH ON 9/27/16. 9/27/16 ENTERED & E-MAILED.(fdc)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
STEPHEN CARROLL, ESQ., AS
ADMINISTRATOR DBN-CTA OF THE
ESTATE OF LEONARD J. MOSKOWITZ,
DECEASED
Plaintiff,
v.
BERNICE S. FEIN and MICHAEL B. FEIN
Defendants.
:
:
:
:
:
:
:
:
MCHUGH, J.
CIVIL ACTION
No. 15-01720
September 27, 2016
MEMORANDUM
This case involves a dispute over the assets of an estate. Plaintiff Stephen Carroll is an
attorney appointed by court order to serve as the Administrator of the Estate of Leonard J.
Moskowitz. Mr. Carroll was appointed by the Orphans’ Court Division of the Delaware County
Court of Common Pleas because of concerns about transfers of assets both before and after the
death of Mr. Moskowitz. Plaintiff claims that Defendant Michael Fein abused his authority as
the holder of a Power of Attorney (POA) for the late Mr. Moskowitz when he transferred
ownership of certain assets from Mr. Moskowitz to his mother, Defendant Bernice Fein, 1 and
himself. Plaintiff further contends that both Mr. Fein (an attorney) and his mother wrongfully
converted assets of the estate. The claims raised here essentially mirror those being pursued in
Orphans’ Court, albeit under different legal theories.
Despite some hesitation because of the pending state court proceedings, I granted the
parties leave to conduct discovery. As this matter proceeded, the underlying state case
1
Ms. Fein herself has passed during the pendency of this action, but her estate has not yet been substituted as a
party.
1
progressed as well, to the point where the Pennsylvania Superior Court has issued a ruling
affirming the initial decision by the Orphans’ Court. Both parties now move for summary
judgment - Plaintiff seeking preclusive effect from the state court ruling, and Defendants arguing
that the estate’s legal claims are time-barred and that no equitable remedy is available in this
court.
It seems clear that to a great extent this case is in the nature of a protective action, with
the estate seeking to blunt Defendants’ arguments that the Orphans’ Court lacked the power to
grant the relief Plaintiff sought. With the state court proceedings at an advanced stage, including
the decision from the Superior Court, I am convinced that the prudent course as of this point is
to abstain from further rulings, and place this action in suspense until termination of the related
action.
This is an unusual case for a federal court sitting in diversity. The Orphans’ Court has
already ordered Defendants to return all wrongfully transferred assets to the estate—precisely the
relief that Plaintiff seeks from this Court based on his unjust enrichment claim. At first blush,
this would seem to dispose of the matter because “[i]f full relief is accorded by another
tribunal[,] . . . a proceeding seeking the same relief is moot.” 13B Wright, A. Miller and E.
Cooper, Fed. Prac. & Proc. Juris. § 3533.2.1 (3d ed.). But Defendants continue to appeal the
Orphans’ Court order, and, under federal practice, the appeal of a final judgment in a parallel
state proceeding is sufficient to avoid dismissal on mootness grounds of claims for the same
relief in federal court. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291, n.7
(2005).
In placing this matter in civil suspense, I am guided by Third Circuit decisions that have
counseled deference to Orphans’ Court proceedings under similar circumstances. In Reichman v.
2
Pittsburgh National Bank, concerns about comity, federalism, and judicial efficiency led the
Court of Appeals to uphold a district court’s abstention from a suit against trustees when an
identical claim was pending in a parallel Orphans’ Court proceeding. 465 F.2d 16 (3d Cir.
1972). See also Ryan v. First Pa. Banking & Trust Co., 519 F.2d 572 (3d Cir. 1975) (applying
Reichman to uphold a district court’s abstention under similar circumstances). The Reichman
court based its holding on three grounds. First, the court noted “the substantial identity of the
issues raised” in federal and state court. 465 F.2d at 18. Next, the court cited “the special ability
of the Orphans’ Court to decide those issues in view of its exclusive state jurisdiction over trusts
and estates.” Id. Finally, the court concluded that “efficiency and convenience would best be
served” by allowing the matter to proceed in Orphans’ Court. Id.
I find that the policy rationales articulated in Reichman are applicable here. As in
Reichman, Plaintiff’s action in federal court raises substantially identical legal issues as his
action for accounting in Orphans’ Court. Specifically, both forums must consider whether
Plaintiff’s claim is time-barred and whether equitable relief is available notwithstanding the
existence of a legal damages remedy. Also as in Reichman, these issues arise out of a matter
committed to the Orphans’ Court’s exclusive state jurisdiction—in this case, a fiduciary breach
by an agent acting under a POA. 2 Therefore, rather than muddy the already clouded waters of
this case by deciding matters within the Orphans’ Court’s “special expertise,” I heed the Third
Circuit’s guidance and defer to the state court proceeding.
Finally, as in Reichman, the interests of efficiency and convenience are best served by
allowing the state court proceeding to run its course. As previously noted, Plaintiff seeks the
2
Reichman concerned a suit against trustees while this case involves a suit against an agent
acting under a POA. Pennsylvania law grants the Orphans’ Court exclusive jurisdiction over
both trusts and agents acting under POA. See 20 Pa. Cons. Stat. Ann. § 711.
3
return of the same assets in state and federal court. The Orphans’ Court has already enjoined
Defendants from transferring, disbursing, or otherwise dissipating all wrongfully acquired
securities and real property, ordered these assets returned to the estate, and threatened a writ of
attachment pending Defendants’ appeal. It is unclear what relief I could grant without either
interfering with the Orphans’ Court’s ongoing control over the assets at issue, or risking Plaintiff
recovering twice for what amounts to the same cause of action. Under these circumstances, the
potential for conflict between federal and state tribunals is high and deference to the state court
proceeding is therefore warranted.
Rulings on the cross motions will be deferred, and this matter will be placed in civil
suspense pending resolution of the related state court action.
/s/ Gerald Austin McHugh
United States District Judge
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?