Section Review

"Probate litigation" can be a misnomer

A common perception is that all "probate litigation" is heard in the probate court, but a recent superior court decision reminds us of the importance of distinguishing lore from the law.

It is not true that any action involving a trust or an estate must be brought in the probate court. In fact, the exclusive jurisdiction of the probate court is somewhat limited. Many trust and estate disputes can be filed in either the probate court, the superior court, the Supreme Judicial Court, or even federal district court. There may be advantages and disadvantages in bringing a trust or estate action in each of the courts. When choosing the proper court, a practitioner should be mindful of these considerations and make an informed decision that maximizes the chances of success.

Rutledge v. Chaprales

In Rutledge v. Chaprales,1 the Middlesex Superior Court addressed the question of whether the superior court has jurisdiction to hear equitable claims concerning assets of an estate brought by the plaintiff, as the personal representative of the estate. The plaintiff sought equitable relief in the form of a declaration that certain real property is property of the estate, an accounting of funds collected in connection with the property, and an order that all funds identified in the accounting be paid over to the estate. The defendants filed a motion to dismiss, arguing that the probate court has exclusive subject matter jurisdiction over the action.

The superior court denied defendants' motion. In so doing, the court issued a concise decision, reciting the codified principle that the superior court has concurrent subject matter jurisdiction with the probate court and the Supreme Judicial Court over matters of equity relative to the administration of estates of deceased persons. The court also noted that it has subject matter jurisdiction to issue declaratory judgments.

As the Rutledge decision makes clear, it is important for practitioners to know which types of trust and estate disputes can and cannot be heard in superior court. An awareness of these jurisdictional rules not only precludes the filing of an ill-fated motion to dismiss, but it also can serve as a strategic tool to maximize the client's chances of success. Depending on the nature of the claim, certain actions must be brought in the probate court, while other actions may be commenced in either the probate court, the superior court, the Supreme Judicial Court, or even federal district court. Making a considered and strategic decision about where to file at the outset of a case can pay dividends down the road.

Overlapping jurisdiction

Despite its reputation as a clearinghouse for everything relating to trusts and estates, the probate court's exclusive subject matter jurisdiction is actually limited. Under G.L. c. 215, § 3, only the following matters must be brought in the probate court: the probate of wills; administration of estates; will contests; appointment of guardians and conservators; petitions for the adoption of children; and name changes.

All actions over which the probate court does not have exclusive jurisdiction may be brought in other courts. Most notably, the probate court shares concurrent jurisdiction with the superior court and the Supreme Judicial Court. Under G.L. c. 215, § 6, the superior court and Supreme Judicial Court can hear all cases and matters of equity cognizable under the general principles of equity jurisprudence. As the superior court noted in Rutledge, this broad and inclusive language applies to all cases and matters in which equitable relief is sought relative to administration of estates. It also applies to actions seeking equitable relief in connection with wills and trusts, whether created by will, other written instrument, or parol. These general categories of equitable actions encompass many of the most fundamental trust and estate claims, such as complaints for instructions and trust reformation actions.

It is also common to assert claims for declaratory judgment in connection with a trust or other testamentary instrument. As with actions seeking equitable relief as defined in G.L. c. 215, § 6, the probate court, the superior court, and the Supreme Judicial Court have overlapping jurisdiction to make binding declarations of right, duty, status and other legal relations under G.L. c. 231A, § 1.

It is not only state courts that have jurisdiction over trust and estate disputes. Federal district court is another possible forum for bringing a trust or estate action, assuming subject matter jurisdiction exists, either by diversity of the parties or the existence of a federal question. In Marshall v. Marshall,2 a.k.a. the Anna Nicole Smith Case, the U.S. Supreme Court took the occasion to clarify the ability of federal district courts to hear trust and estate matters. Under the longstanding "probate exception," federal district courts have no jurisdiction to probate a will or administer an estate, and cannot dispose of property that is in the custody of a state probate court. The Supreme Court noted, however, that some lower courts have used the probate exception to block federal jurisdiction over a range of matters well beyond probate of a will or administration of an estate. While upholding the probate exception, as properly defined, the Supreme Court ruled that a federal district court can adjudicate matters outside its confines, as long as they otherwise fall within the court's subject matter jurisdiction.

In light of the foregoing principles, the inevitable question becomes which forum offers the greatest chance of success. Although success can never be guaranteed, some general guidelines are readily apparent.

Where to file

Probate court remains the default option for trust and estate disputes, and for good reason. Judges in the probate court have the most experience hearing these types of matters and possess expertise in trust and estate law. Accordingly, if a case involves esoteric questions of trust or estate law, filing in probate court increases the likelihood that the judge will more readily recognize the questions presented. In addition, filing in probate court may be the most efficient way to resolve the dispute. Consider, for example, when heirs at law wish to contest a will and to challenge a trust. The will contest must be brought in the probate court but the trust matter could be brought as an equity action in the probate court or elsewhere. By commencing both actions in the probate court, the actions can then be easily consolidated and the practitioner can avoid duplicative efforts and the attendant wasted time and expense.

Another possible advantage of filing in probate court is that an exception to the "American Rule" - pursuant to which each party bears its own fees and costs in litigation - exists in probate court. Under G.L. c. 215, § 45, the probate court has broad discretion to shift the reasonable fees and costs of the prevailing party to the losing party. As the Supreme Judicial Court recently held in Estate of King,3 the probate court has discretion to shift fees and costs pursuant to this statute even when the claims or defenses of the losing party were not wholly insubstantial and frivolous, as would be required under G.L. c. 231, § 6F.

Superior court - including the Business Litigation Session, which provides the advantage of having the same judge during the pendency of a case - may be desirable when the trust or estate questions are relatively straightforward, but other questions or the underlying facts implicate other areas of law or expertise. One recurring situation involves a closely-held family company and a trust in which the shares of the family company are held. Oftentimes, family members will serve as both trustees of the trust and officers of the company. In these circumstances, the plaintiff may contend that the family members have breached their fiduciary obligations as trustees and as officers. To the extent that laws governing corporate governance and the fiduciary duties owed within a closely-held corporation (or partnership or limited liability company) will carry the day, filing the action in superior court could make good sense.

Notwithstanding the Supreme Court's clarification of the probate exception in the Anna Nicole Smith case, practitioners ought to use caution when bringing trust and estate actions in federal district court. Even if doing so is technically proper - say, for example, because diversity jurisdiction exists - a plaintiff runs the risk that the federal judge will not be as familiar with the vagaries of the commonwealth's trust and estate laws. There is also the perception that the action is better suited to state probate court. Hence, although the predictability and speed with which matters can move through federal district court can be attractive, including the mandatory disclosure rules that can streamline the discovery process, it is generally only when a matter also involves questions of federal law, such as alleged federal securities violations, that federal district court should be considered as a viable alternative to probate court or superior court.

Likewise, practitioners ought to avoid commencing actions in the Supreme Judicial Court under its original, general equity jurisdiction. This jurisdiction is not exclusive in the Supreme Judicial Court, but it is concurrent with that given to the probate and superior courts. Even if a trust or estate dispute properly invokes the original jurisdiction of the Supreme Judicial Court, as a practical matter, the Court may transfer the action to a lower court for trial or other action, and the court to which it is transferred will have jurisdiction over the action, subject to appeal, under G.L. c. 211, § 4A.

One exception is a trust reformation action seeking to give effect to a settlor's tax planning objectives. For the Internal Revenue Service to recognize such a reformation, it must be allowed by the Supreme Judicial Court.4 If there are no factual disputes, these so-called Bosch actions perhaps should be filed in the single justice session of the Supreme Judicial Court. Doing so obviates the need to jump through several procedural hoops, including having the probate court reserve and report without decision and filing an application for direct appellate review.

Consider the options

A practitioner should use care when selecting a forum to bring a trust or estate action. Sometimes the decision will be easy - will contests, as noted, must be brought in probate court. Other times, however, an action may be filed in multiple courts with overlapping jurisdiction. Deciding where to file can be just as important as deciding what to file, and perhaps the former decision might influence the latter. The point is that there may be options and so the knee-jerk decision to file in probate court may not always be the best decision strategically.

Notes

1.    No. 09-2953, 2009 Mass. Super. LEXIS 367 (Dec. 2, 2009).

2.    547 U.S. 293, 310-12 (2006).

3.    455 Mass. 796 (2010).

4.    See Comm'r v. Bosch, 387 U.S. 456 (1967).

The Authors

Mark E. Swirbalus is a partner at Day Pitney LLP and leads the firm's Probate Litigation and Controversies Group in Boston. He represents individual and institutional clients in trust and estate matters, and he speaks and writes frequently on issues relating to trust and estate litigation.

Douglass C. Lawrence is an associate in the Boston office of Day Pitney LLP and a member of the Probate Litigation and Controversies Group. Prior to joining the firm, he served as a law clerk to the Hon. Edward F. Harrington of the U.S. District Court for the District of Massachusetts and to the Hon. Robert G. Flanders Jr. of the Rhode Island Supreme Court.

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