Junco Mulet v. Junco De La Fuente

• Decision Date: 22 October 2002
• Docket Number: No. CIV. 02-1825(SEC).,CIV. 02-1825(SEC).
• Citation: 228 F.Supp.2d 12
• Parties: Maria Ofelia JUNCO MULET, Plaintiff, v. Ramon Jose JUNCO DE LA FUENTE, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

228 F.Supp.2d 12

Maria Ofelia JUNCO MULET, Plaintiff, v. Ramon Jose JUNCO DE LA FUENTE, et al., Defendants.

No. CIV. 02-1825(SEC).

United States District Court, D. Puerto Rico.

October 22, 2002.

Jesús E. Cuza-Abdala, Goldman Antonetti & Cordova, San Juan, PR, for Plaintiffs.

Pedro Jimenez-Rodriguez and Michael E. McCall, Correa Calzada Herrero Jimenez

& Fortuño, San Juan, PR, for Defendants.

OPINION AND ORDER

CASELLAS, District Judge.

Before the Court is Defendants' motion to dismiss for lack of subject matter jurisdiction (Docket # 9). Plaintiff has opposed said motion (Docket # 20), and Defendants have filed a reply to the opposition. Having considered all the arguments, the Court finds that the probate exception to diversity jurisdiction is applicable in this case. Therefore, Defendants' motion will be GRANTED and the case will be DISMISSED WITHOUT PREJUDICE.

Factual Background

This case involves an ongoing probate and partition process in Case No. KGV 1999-1832(604) before the Superior Court of San Juan, relating to the division of the Estate of a Puerto Rico decedent, José Manuel Junco Abarca (the Estate). The Estate is composed exclusively of residents of Puerto Rico and consists principally of stock in Puerto Rico corporations. Plaintiff has filed the present action for damages against the Executor of said Estate, Ramón José Junco de la Fuente, charging him with negligence and recklessness in the management of the affairs of the Estate. The Complaint alleges that the negligent and reckless conduct of the Executor has caused severe damages to the Estate, and that by failing to protect the Estate's assets he has also exposed the Estate to liability.

The decedent executed a will dated January 13, 1999 (the Will) in which he designated his widow and two daughters as heirs. The Will appointed Defendant as both executor and partitioner¹, and provided for an initial period of two years, extendable for two more years, to effect probate and partition. This total period of four years has not yet elapsed. Defendant accepted the duties of executor and obtained from the Superior Court of San Juan the power to act as such.

Defendant had informed the heirs that he would be shortly making the final submission of his report in the local probate proceedings, when he was served with the present complaint. On October 1, 2001, Defendant presented a report in the probate proceedings and scheduled a meeting for the approval of the division ("cuaderno particional"). Plaintiff requested postponement of the scheduled meeting and refused to participate in such meeting. The meeting went forward and the "cuaderno particional" was finalized subject to court approval.

On November 9, 2001, Plaintiff presented her formal objections to the report in the probate proceedings. The report was specifically objected to by Plaintiff on the grounds that the Executor had not taken the necessary steps to protect the Estate and had failed to identify assets of the Estate. Plaintiff also asserted that Defendant had been negligent in performing his duties. She further requested permission to take depositions in aid of her objections. The Superior Court held a hearing to determine the procedure to be followed to resolve Plaintiff's objections, and provided for a period of discovery. Once discovery has been completed, a hearing will be held to consider evidence on such matters, and the Court will proceed to rule on all objections.

Applicable Law and Analysis

The duties of Defendant as an Executor are governed by various provisions of the Civil Code of Puerto Rico, 31 P.R. Laws Ann. § 2081 et seq.; and of the Puerto Rico Code of Civil Procedure of 1933, 32 P.R. Laws Ann. § 2241 et seq.; Crehore v. Registrar of Property, 22 P.R.R. 30, 32-34 (1915); and Mollfulleda v. Ramos, 3 P.R.R. 239, 245 (1903). The executor acts as a representative of the heirs; his executorship is considered "but an administration accompanied by a right of representation to perform specific functions relating to the conservation of the hereditary estate until the inheritance is accepted by the heirs ..." Paine v. Secretary of the Treasury, 85 P.R.R. 787, 790 (1962). He cannot resign without the consent of the local court upon a finding of just cause. 31 P.R. Laws Ann. § 2518; Ex parte González Muñiz, 128 D.P.R. 565, 574, 1991 WL 735311 (1991); and Mollfulleda, 3 P.R.R. at 245.

Moreover, under applicable Commonwealth law, the executor is bound to render a detailed final account to the Superior Court for its analysis and approval, and for issuance of a final order approving the account after notice to the heirs. 32 P.R. Laws Ann. § 2512-2514. If any objection is presented by any of the heirs, such as Plaintiff has done in the local probate proceedings, the Superior Court will hold a hearing to determine whether the final account should be approved; proof may be presented therein by the heirs in support of their objections. 32 P.R. Laws Ann. § 2513; Marchese Vivó v. Marchese Vivó, 81 D.P.R. 729, 1960 WL 14009 (1960). The issuance of a final order by the local court regarding the final account of the executor is then subject to an appeal. 32 P.R. Laws Ann. § 2514; Mercado Riera v. District Court, 71 P.R.R. 739, 751 (1950), reversed on other grounds, 72 P.R.R. 232 (1951).

On the other hand, prior to the actual partition of the estate after the approval of the final account, the heirs do not possess rights to property over any assets, but merely an entitlement over an "abstract quota" in the estate. González Tejera, Derecho Sucesorio Puertorriqueño, Vol. I, pp. 294-295 (Ed. Ramallo 1983). Where as here an heir raises objections to the proposed partition on grounds that the executor has failed to properly identify or protect assets of the estate, the issue of potential mismanagement is considered during the approval of the final account, and the Court may reserve to the heirs the right to sue the executor if, upon reviewing the final account, it finds that he may be liable to the heirs. Id. at 371-72

The Superior Court, in its recent hearing on Plaintiff's objections allowed Plaintiff to raise and assert any claims and allegations pertaining to the conduct of the Executor, although it decided to not rule on them at this time.² Although the probate proceedings do not concern the potential personal tort liability of the Executor, they will pass on all of the acts of the Executor undertaken in connection with the Estate which the parties may wish to raise.

Defendants argue that this case should be dismissed because it falls within the probate exception to federal diversity jurisdiction. Federal jurisdiction based on diversity of citizenship is "subject to a well-known judge-made exception that federal courts generally will not act in probate matters even though diversity of citizenship is present." Kausch v. First Wichita National Bank, 470 F.2d 1068, 1069 (5th Cir.1972); and Lutsky v. Lutsky, 310 F.Supp. 517, 518 (S.D.Fla.1970), affd., 433 F.2d 346 (5th Cir.1970). Accord Mangieri v. Mangieri, 226 F.3d 1, 2-3 (1st Cir.2000), cert. denied, 531 U.S. 1080, 121 S.Ct. 781, 148 L.Ed.2d 678 (2001), quoting Georges v. Glick, 856 F.2d 971, 973 (7th Cir.1988) (First Circuit recognized that "`as a general matter, courts tend to view the probate exception as extending to all suits ancillary' to the probate of a will") (emphasis added); Dragan v. Miller, 679 F.2d 712, 716-717 (7th Cir.1982); DiTinno v. DiTinno, 554 F.Supp. 996, 998 (D.Mass. 1983), citing Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946) ("There is, however, a judicially created exception which places probate matters outside of the jurisdiction of the federal courts.")

"The Supreme Court has long held that a federal court has no jurisdiction to administer an estate or entertain an action that would interfere with probate proceedings pending in a state court or property controlled by a state probate court." Howard v. Brown, 738 F.Supp. 508, 510 (S.D.Ga.1988), citing Markham, 326 U.S. at 494, 66 S.Ct. 296. Accord, Moser v. Sisko Pollin, 294 F.3d 335, 339 (2nd Cir. 2002), quoting Markham, 326 U.S. at 494, 66 S.Ct. 296 (noting "the Supreme Court's admonition that federal courts sitting in diversity may not `interfere with the probate proceedings' concurrently pending before a state court."); Mangieri, 226 F.3d at 2 citing Ashton v. The Josephine Bay Paul & C. Michael Paul Found., 918 F.2d 1065, 1071 (2nd Cir.1990); Rice v. Rice Foundation, 610 F.2d 471, 474, 475 (7th Cir.1979) ("the touchstone in applying the exception is the desire of the federal courts to avoid interference with state probate proceedings"); Kittredge v. Stevens, 126 F.2d 263, 267 (1st Cir.1942) ("If the issues presented by the complainant involve a consideration of the actual handling of the trust property by the fiduciaries, then the federal courts would appear to have no jurisdiction."); Donato v. BankBoston, N.A., 110 F.Supp.2d 42, 45 (D.R.I. 2000) quoting Kittredge, 126 F.2d at 267 ("`We have found no authority for the position that a federal court has jurisdiction over a case which would involve an examination of the general administration of [an estate] by a state probate court.'"); Reynolds v. Remick, 82 F.Supp. 281, 282 (D.Mass.1949); Flanigan v. Security-First Nat. Bank, 41 F.Supp. 77, 82 (S.D.Cal. 1941); and Ellis v. Stevens, 37 F.Supp. 488, 491 (D.Mass.1941), affd., 126 F.2d 263 (1st Cir.1942)("The long established rule is that an accounting by an administrator, or executor, is exclusively a matter for the probate court having jurisdiction over the estate.")

In Turton v. Turton, 644 F.2d 344 (5th Cir.1981), which like this case involved a suit brought against an executor personally for alleged malfeasance in administration of an estate, the court of appeals held that a federal court must look past the label the plaintiff has given to his claim and analyze the actual effect such suit would have on the administration...