Jiménez v. Rodríguez-Pagán

Decision Date01 March 2010
Docket NumberNo. 09-1135.,09-1135.
Citation597 F.3d 18
PartiesSonia I. JIMÉNEZ; Lourdes Molina-Doval, Plaintiffs, Appellants, v. Luis Alfonso RODRÍGUEZ-PAGÁN; Alida Ramona Binet-Mieses; Conjugal Partnership Rodríguez-Binet; Federico Tomás Rodríguez-Binet a/k/a Tommy Rodríguez; Isabela Beach Court, Defendants, Appellees.
CourtU.S. Court of Appeals — First Circuit

Irma R. Valldejuli, for appellants.

Mónica I. De Jesús Santana, with whom Fiddler González & Rodríguez. PSC, was on brief, for appellees.

Before TORRUELLA, LIPEZ and HOWARD, Circuit Judges.

HOWARD, Circuit Judge.

This case calls on us to navigate the turbulent waters of Colorado River abstention. That doctrine, established in Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), allows federal courts in limited instances to stay or dismiss proceedings that overlap with concurrent litigation in state court.

The plaintiffs here originally sued in federal district court, asserting diversity jurisdiction. They later commenced an identical action in a Puerto Rico Commonwealth court during what they considered to be a burdensomely long pendency of a motion to dismiss for failure to join an indispensable party. The federal court eventually granted the motion to dismiss, leaving the action in the Commonwealth court to proceed alone. The plaintiffs appealed from the federal dismissal and now ask us to reinstate the diversity suit to its parallel track alongside the ongoing Commonwealth litigation. The defendants argue not only that we should affirm the dismissal for lack of an indispensable party, but also, among other things, that the Commonwealth-court action provides an alternative ground for disposing of the federal case under Colorado River. We conclude that the narrow conditions for Colorado River abstention are met here. We therefore stay the federal proceedings pending the outcome of the Commonwealth-court case.

I. Background

Since the district court did not reach the merits, we provide a "condensed version of the dispute." Tell v. Trs. of Dartmouth Coll., 145 F.3d 417, 418 (1st Cir. 1998). On December 22, 1998, Manuel Molina-Godinez, the plaintiffs' decedent, sold the defendants 100% of the stock in an apartment complex development known as Isabela Beach Court. Molina-Godinez agreed to manage Isabela Beach Court in exchange for a monthly fee and 18% of the proceeds after the complex's completion and the sale of all units. In addition, before construction began, Molina-Godinez verbally agreed to buy one of the penthouses in Isabela Beach Court for $220,000, and the defendants reserved the unit for him. This agreement was later confirmed in writing. For reasons unspecified at this stage, the defendants dispute the scope and validity of these agreements.

On January 3, 2003, Molina-Godinez died. Construction of Isabela Beach Court was completed at some point after his death and all of the units were sold successfully. On March 27, 2007, Molina-Godinez's widow, plaintiff Sonia I. Jimenez, commenced an action in the federal district court for the District of Puerto Rico asserting that she was entitled to half of her late husband's 18% share, which had never been paid. Additionally, she sought to exercise his option on the penthouse apartment that had allegedly been reserved for him. Because Jimenez was a Florida resident and the defendants were all Puerto Rico residents, she claimed that the district court had diversity jurisdiction over the matter.

The defendants moved to dismiss for failure to join an indispensable party under Rule 19 of the Federal Rules of Civil Procedure. They argued that the case could not proceed without Molina-Godinez's three other heirs, two of whom were also Puerto Rico residents. Because joinder of the Puerto Rico heirs would defeat complete diversity, the defendants maintained, dismissal was compulsory.

On August 10, 2007, Jimenez amended the complaint to join the one diverse heir while still excluding the non-diverse heirs. She also altered her theory of the case, explaining that she was now seeking the contractual proceeds on behalf of Molina-Godinez's estate rather than for herself alone. She claimed that she could adequately protect the interests of the nondiverse heirs and that, as a result, the action did not depend on their joinder. The amended complaint asked the court to award any judgment to the estate, where it could be allocated to heirs and creditors by a Puerto Rico probate court at some later date.

The addition of the diverse heir as a named plaintiff did not, however, affect the substance of the defendants' argument. The defendants renewed their motion to dismiss, maintaining that Jimenez was not an adequate representative of the estate and that an adverse judgment could affect the non-diverse heirs' interests. According to them, neither the case's new posture nor the joinder of the one diverse heir would lessen the indispensability of the non-diverse heirs. The plaintiffs filed their response three days later.

Over six months passed without any further action from the court. On March 27, 2008, the plaintiffs sought to learn the status of the pending motion to dismiss, but the docket does not indicate a response from the court. On August 29, 2008, after an additional five months, the plaintiffs filed a parallel complaint in the Court of First Instance for the Commonwealth of Puerto Rico. Unlike the federal action, this second suit joined all of Molina-Godinez's heirs as parties.

On December 12, 2008, the district court granted the defendants' motion to dismiss. Jimenez v. Rodriguez-Pagan, 254 F.R.D. 151 (D.P.R.2008). This appeal followed. Meanwhile, the Commonwealth action has progressed in due course and is now into the discovery stage.

II. Discussion

The defendants-appellees present three different possible grounds to deny appellate relief to the plaintiffs-appellants. First, they argue that this case involves matters that fall within the probate exception to diversity jurisdiction and thus cannot be adjudicated in federal court. Second, they reiterate their Rule 19 claim that the non-diverse heirs remain indispensable. Finally, they ask us to abstain under Colorado River and allow the Puerto Rico court to resolve the case. Though we reject the first of these arguments and harbor considerable skepticism as to the second, we ultimately agree that this case warrants Colorado River abstention.1

A. The Probate Exception

It has been said that "[t]he probate exception is one of the most mysterious and esoteric branches of the law of federal jurisdiction." Dragan v. Miller, 679 F.2d 712, 713 (7th Cir.1982). Once more unto the breach.2

The probate exception is a judge-made doctrine stemming from the original conferral of federal equity jurisdiction in the Judiciary Act of 1789. The ambit of that jurisdiction, coterminous with that exercised by the framers' contemporaries in the English courts of chancery, "did not extend to probate matters." Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946). The Supreme Court accordingly held in Markham that federal courts have no authority to "interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court." Id.

Yet "stating the probate exception has proven easier than applying it." Umsted v. Umsted, 446 F.3d 17, 20 n. 2 (1st Cir. 2006). After Markham, just what would constitute "interfere[nce] with the probate proceedings" proved notoriously difficult to pin down. When we last had the opportunity to consider the doctrine nearly a decade ago, we acknowledged that "the precise scope of the probate exception has not been clearly established." Mangieri v. Mangieri, 226 F.3d 1, 2 (1st Cir.2000) (internal brackets omitted).

Since then, the Supreme Court has revisited the issue and illuminated matters somewhat. In Marshall v. Marshall, the Court explained that

the "interference" language in Markham [is] essentially a reiteration of the general principle that, when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Thus, the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.

547 U.S. 293, 311-12, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006) (citations omitted). Marshall made clear that the scope of the probate exception is "distinctly limited." Id. at 296, 126 S.Ct. 1735; cf. Mooney v. Mooney, 471 F.3d 246, 248 (1st Cir.2006) (noting that the Supreme Court in Marshall also emphasized the narrow scope of the domestic relations exception).

The case before us does not fall within that limited scope. "[W]here exercise of federal jurisdiction will result in a judgment that does not dispose of property in the custody of a state probate court, even though the judgment may be intertwined with and binding on those state proceedings, the federal courts retain their jurisdiction." Lefkowitz v. Bank of N.Y., 528 F.3d 102, 106 (2d Cir.2007). The only property at issue in this case is the proceeds from the sale of the Isabela Beach Court units and the penthouse apartment on which Molina-Godinez allegedly held an option to purchase. Because neither the money nor the apartment are yet part of the decedent's estate, neither are yet in the custody of a Puerto Rico probate court. Indeed, the very relief sought here is enlargement of the decedent's estate through assets not currently within it. While divvying up an estate falls squarely within the probate exception, merely increasing it does not. Gustafson v....

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