Vangarck, Axelson & Williamowsky v. Estate, Abbasi

• Decision Date: 01 May 2003
• Docket Number: No. CIV. PJM 02-2662.,CIV. PJM 02-2662.
• Citation: 261 F.Supp.2d 352
• Parties: VANGRACK, AXELSON & WILLIAMOWSKY, P.C. Plaintiff, v. ESTATE OF MEHRU ABBASI Defendant.
• Court: U.S. District Court — District of Maryland

261 F.Supp.2d 352

VANGRACK, AXELSON & WILLIAMOWSKY, P.C. Plaintiff, v. ESTATE OF MEHRU ABBASI Defendant.

No. CIV. PJM 02-2662.

United States District Court, D. Maryland.

May 1, 2003.

COPYRIGHT MATERIAL OMITTED

Aaron Robert Caruso, Esquire, Lawrence S. Jacobs, Esquire, Rockville, for Plaintiffs.

Estate of Mehru Abbasi, Rockville, for Defendants.

AMENDED OPINION

MESSITTE, District Judge.

Plaintiff VanGrack, Axelson & Williamowsky, P.C. (the Law Firm) and Defendant the Estate of Mehru Abbasi (the Estate) assert competing claims to funds which the Law Firm helped the Estate recover from the Maryland Real Estate Commission (MREC). The Law Firm has asserted an attorney's charging lien against the funds for services rendered to the Estate in recovering the funds and possibly for services rendered in connection with other aspects of the Estate's administration in the State of Maryland. The Estate seeks to obtain full possession of the funds and have the matter of the Law Firm's fees, if any, referred for decision to the High Court of Sindh in Pakistan, the domicile of the decedent, Dr. Mehru Abbasi (Decedent), at the time of her death.

The Estate removed the case to this Court from the Circuit Court for Montgomery County after the MREC filed an interpleader action in that court naming the parties as potential claimants to the funds.¹ Although the parties have filed various motions in this litigation,² neither has addressed the issue of whether the Court, in light of the probate exception to federal diversity jurisdiction, has subject matter jurisdiction over the case. The Court, however, is obliged to consider that issue sua sponte. See Mansfield, C & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884). Having done so, the Court holds that, although it possesses jurisdiction to adjudicate the Law Firm's entitlement to fees already approved by the Montgomery County Circuit Court Sitting as the Orphans' Court (the State's probate court),³ it does not at present have jurisdiction to determine the Law Firm's entitlement to fees not yet approved by that court. On the other hand, with respect to those remaining fees, and doubtless some are due, this Court will recognize the validity of the Law Firm's charging lien against the balance of the funds now in the Court's Registry and will retain jurisdiction over those funds until such time as the Law Firm may receive an additional award of fees from the Montgomery County Orphans' Court.

I.

On May 31, 1996, Decedent died testate in Karachi, Pakistan. At the time of her death, she owned extensive real and personal property located in Montgomery County, Maryland. On June 7, 1996, a petition for probate of Decedent's estate was filed in the Montgomery County Orphans' Court, and Decedent's daughter, Dr. Rafat Abbasi, was appointed personal representative of the estate.

From the outset, the Orphans' Court administered only Decedent's assets located in Maryland although, for one reason or another, it found her domicile at death to be Maryland. That determination ordinarily would have meant that the court could administer her personal property wherever located. See Persson v. Dukes, 280 Md. 194, 199, 372 A.2d 240, 243 (1977) (re-affirming that, in Maryland, "the lex domicilii governs the devolution of personalty") (citing Harding v. Schapiro, 120 Md. 541, 87 A. 951 (1913)).

Dr. Athar Abbasi, Decedent's son, took issue with the Maryland court's assumption of jurisdiction in light of Decedent's Pakistani domicile. Apparently at his instance more than two years after the Maryland probate proceedings had begun, probate proceedings were also opened in the High Court of Sindh in Karachi, Pakistan. On January 29, 1999, the Pakistani court appointed its Nazir⁴ as executor of Decedent's estate. In conjunction with that appointment, the Pakistani court issued Letters of Administration and directed Decedent's next-of-kin, including Athar Abbasi, to accumulate all of Decedent's property, real and personal, tangible and intangible, and deposit it with the High Court for distribution by the Nazir. The Pakistani Court also sought to restrain other of Decedent's relatives from acting on behalf of the Estate in Maryland.⁵

At about this time, Athar Abbasi engaged the Law Firm to attempt to have himself appointed personal representative in the Maryland Estate proceedings. Their "Legal Services Agreement," signed by Abbasi on May 21, 1999, provided, inter alia, that the Law Firm would "represent the estate in connection with estate administration and with such other matters as the Client may direct (either orally or in writing)."⁶ Abbasi simultaneously executed a personal guaranty of the fees.

On June 4, 1999, the Law Firm succeeded in having Abbasi appointed successor personal representative in the Maryland proceeding, after obtaining the consent of Rafat Abbasi, who resigned as personal representative.⁷

In October 1999, as one of its initial acts on behalf of the Estate, the Law Firm filed a motion with the Orphans' Court to change Decedent's domicile from Maryland to Pakistan. The Orphans' Court would not act upon the motion until July 2001. In the meantime, the Law Firm undertook to represent the Estate in a variety of matters.

One of the Firm's principal engagements was to attempt to recover funds that managers of Decedent's real estate in Montgomery County had embezzled from Decedent during her lifetime and during the initial stages of the Estate's administration. To that end, the Law Firm obtained a judgment in excess of $329,000.00 against two especially culpable individuals. The Firm also continued to pursue an action that Abbasi's predecessor personal representative had brought before the MREC seeking damages for the same fraud from the Real Estate Commission Guaranty Fund.⁸

This MREC claim, which is particularly relevant to the litigation now before the Court, was originally filed on November 24, 1998, by Rafat Abbasi. In January 2000, after succeeding her as personal representative, Athar Abbasi filed an amended claim against the Fund. On January 24, 2001, an administrative hearing was held in the matter. At the hearing, Jeffrey M. Axelson, Esquire, on behalf of the Law Firm, appeared as counsel for the Estate while Athar Abbasi appeared as the Estate's sole witness. A decision would not be rendered in the matter until May 10, 2001.

In the meantime, the Law Firm continued to accrue substantial billable time on behalf of the Estate, which the Estate readily acknowledged. Thus, pursuant to Section 7-602 of the Estate and Trusts Article of the Maryland Code,⁹ the Orphans' Court, by Order dated December 21, 2000, authorized Athar Abbasi to pay interim counsel fees to the Firm in the amount of $46,291.35, and by Order dated January 17, 2001, authorized payment of an additional $30,318.80. Those fees, which Athar Abbasi has apparently never paid,¹⁰ are the partial subject of the litigation presently before the Court.

Events broke fairly quickly thereafter. On May 10, 2001, the administrative law judge who heard the Estate's claim against the Real Estate Commission Guaranty Fund issued an opinion recommending an award to the Estate of $168,426.46. On June 10, 2001 the MREC affirmed the award. Then, in July 2001, following a hearing and briefing, the Orphans' Court for Montgomery County entered an order changing the Decedent's domicile from Maryland to Pakistan. Although the Law Firm continued to perform miscellaneous services for the Estate over the next few months, by October 2001 the Firm was preparing to file a lien for its fees against the MREC award.

By July 12, 2002, the Law Firm did so. In accordance with Section 10-501 of the Business Occupations and Professions Article of the Maryland Code ¹¹ and Maryland Rule of Civil Procedure 2-652(b),¹² the Firm notified the MREC and Abbasi of its claim to an attorney's lien in the amount of $134,749.94. The MREC's interpleader suit, ultimately removed to this Court by Abbasi, followed.

The Law Firm claims to have logged over 900 hours of uncompensated attorney time representing the Estate and Abbasi.¹³ It seeks $134,749.94 (which includes the $76,610.35 already approved by the Montgomery County Orphans' Court, plus interest at 18% per annum plus disbursements).¹⁴ Abbasi, who apparently never objected to the manner in which the Firm handled the legal affairs of the Estate, has refused any and all payment.

The matter is before the Court on a number of motions, but principally the Estate's Motion for Summary Judgment.

II.

The parties make several arguments as to why each is entitled to the disputed funds. The Estate argues that the Law Firm should not receive the fees because, among other things, the Montgomery County Orphans' Court's orders awarding the fees are void ab initio. The Estate reasons that, because the Orphans' Court ultimately concluded that it did not have primary jurisdiction over the Estate and because Maryland has purportedly abolished ancillary jurisdiction in probate cases, the court's orders are without effect. The Law Firm contends that the Orphans' Court's orders are enforceable and that it has a valid charging lien on the funds.

Because the nature of the relief sought appears to implicate the probate exception to federal diversity jurisdiction, the Court must determine whether it can properly adjudicate this action.

III.

To begin, the Court considers the Estate's claim that the Montgomery County Orphans' Court's orders are void because Maryland has purportedly abolished ancillary estate administration. This argument is seriously flawed. Maryland may have "abolished" the need for a foreign personal representative to obtain local letters testamentary before exercising his power to transfer property located within this State. See Md.Code Ann., Est. & Trusts § 5-501 (2001) ("A foreign personal representative is not required to take out letters in the state."). It may also no longer be...