Elizabeth Swatt v. Janice Hawbaker, Esq.

• Court: Court of Appeals for the Third Circuit
• Decided: January 31, 2024
• Docket: 22-2940
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ____________

No. 22-2940 ____________

*ANN MARIE SWATT, as Personal Representative of the Estate of Elizabeth Swatt; ANN MARIE SWATT, an Adult Individual and Interested Heir, Appellants

v.

JANICE M. HAWBAKER, ESQ.; KAMINSKI, HAWBAKER & SALAWAGE, P.C.

(*Pursuant to Fed. R. App. P. 43) ____________

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civil No. 4-21-cv-01025) District Judge: Honorable Matthew W. Brann ____________

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) October 6, 2023

Before: SHWARTZ, MATEY and FISHER, Circuit Judges.

(Filed: January 31, 2024) ____________

OPINION* ____________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. FISHER, Circuit Judge.

Ann Marie Swatt sued Janice Hawbaker and her law firm for mismanaging the

wills of sisters Agnes Kotran and Madlyn Blusius, both deceased, thereby affecting

Swatt’s inheritance. She appeals the District Court’s order dismissing a subset of her

claims under the probate exception to this Court’s diversity jurisdiction and staying the

rest of her claims pending the resolution of parallel state court proceedings.1 For the

reasons set forth below, we will affirm.

I.

First, Swatt claims the District Court erred in concluding that it lacked subject

matter jurisdiction to entertain three of her claims (breach of the settlement agreement,

negligence, and breach of fiduciary duty) “to the extent that [she] . . . seek[s]

administration of Decedents’ estates or probate of the correct will.”2 We exercise plenary

review over a district court’s dismissal of claims for lack of subject matter jurisdiction.3

Swatt is correct that this case meets the requirements for diversity jurisdiction; the

1 The District Court exercised jurisdiction under 28 U.S.C. § 1332. We exercise appellate jurisdiction under 28 U.S.C. § 1291. That this case comes to us partially stayed—rather than formally dismissed—does not impact our jurisdiction. See Spring City Corp. v. Am. Bldgs. Co., 193 F.3d 165, 171 (3d Cir. 1999) (“[W]hen a district court relies on the Colorado River doctrine to stay a case in federal court because it is duplicative with a state court proceeding, such a stay will generally have the practical effect of a dismissal by putting a party effectively out of [federal] court.” (internal citation and quotation marks omitted)). 2 App. 27. 3 See Solis v. Loc. 234, Transp. Workers Union, 585 F.3d 172, 176 (3d Cir. 2009) (internal citations omitted).

2 amount in controversy is more than $75,000, and the suit is between citizens of different

states.4 But § 1332(a)’s jurisdictional grant is limited by the so-called probate exception,

under which we cannot “(1) probate or annul a will, (2) administer a decedent’s estate, or

(3) assume in rem jurisdiction over property that is in the custody of the probate court.”5

The District Court correctly applied the probate exception by dismissing each of the three

counts to the extent they sought administration of Decedents’ estates or the probate of the

correct will.

Swatt argues otherwise, particularly with respect to the breach of fiduciary duty

claim, which the Supreme Court has strongly suggested lies outside the bounds of the

probate exception.6 But the District Court did not dismiss the part of that claim (or the

other two claims) that falls outside the probate exception. The claims seeking damages

that do not include funds from within the Kotran and Blusius estates remain live, and we

discuss them next.

II.

Swatt also contends the District Court improperly abstained from considering

those claims not barred by the probate exception. Federal courts have a “virtually

unflagging obligation . . . to exercise the jurisdiction given them.”7 But abstention is

4 See 28 U.S.C. § 1332(a)(1). 5 Three Keys Ltd. v. SR Util. Holding Co., 540 F.3d 220, 227 (3d Cir. 2008). 6 Marshall v. Marshall, 547 U.S. 293, 311 (2006); Three Keys Ltd., 540 F.3d at 227. 7 Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976).

3 sometimes appropriate under principles of “wise judicial administration, giving regard to

conservation of judicial resources and comprehensive disposition of litigation.”8

Abstention under Colorado River is governed by a two-part inquiry. The court

first considers whether there is a parallel state proceeding that “involve[s] the same

parties and substantially identical claims, raising nearly identical allegations and issues.”9

To be considered parallel, two actions need not be a straightforward copy-and-paste job;

rather, they must only involve the same parties and “substantially identical” claims.10

This is a legal question we review on a plenary basis.11 If the proceedings are parallel, the

court considers whether abstention is warranted under a six-factor test.12 We review for

abuse of discretion a district court’s decision to abstain under this test.13

Three actions are pending in state court: probate litigation over the Kotran estate,

probate litigation over the Blusius estate, and a civil action. They involve the same parties

as this federal case: Swatt as the plaintiff and Janice Hawbaker and her law firm as the

defendants. They also involve the same claims. Swatt’s two tortious interference with

inheritance claims are copied word-for-word from her state-court complaint, while her

8 Id. (internal quotation marks, alteration, and citation omitted). 9 Yang v. Tsui, 416 F.3d 199, 204 n.5 (3d Cir. 2005) (internal quotation marks and citation omitted). 10 Id. 11 Ryan v. Johnson, 115 F.3d 193, 196 (3d Cir. 1997). 12 Nationwide Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571 F.3d 299, 307– 08 (3d Cir. 2009). 13 Ryan, 115 F.3d at 196.

4 breach of fiduciary duty claim is the same in substance, largely repeating her state-court

allegations. The factual allegations are also essentially the same. At bottom, Swatt

believes that Hawbaker and her firm reduced Swatt’s inheritance through an interwoven

series of incompetent and sometimes malevolent actions. The only allegations unique to

the federal claims relate to the breach of a 2018 settlement agreement, which the Court of

Common Pleas has ordered to be addressed at mediation.

Swatt argues that the mediation is not evidence of a parallel state-court proceeding

because “mediation . . . cannot be considered filing a claim.”14 While it is true she has not

filed a standalone state-court claim for breach of the agreement, the substance of the

claim is under active consideration in her state-court action.15 It follows that Swatt’s

state-court suit runs parallel with this action.

Having established that the two actions are parallel, we next “look to a multi-

factor test to determine whether extraordinary circumstances meriting abstention are

present.”16 Those factors are: “(1) which court first assumed jurisdiction over [the]

property; (2) the inconvenience of the federal forum; (3) the desirability of avoiding

14 Opening Br. 12. 15 See App. 92. Moreover, although the federal complaint identifies the claim as one for “breach of settlement agreement,” Swatt’s actual claims relate to estate expenses, the correctness of her inheritance, and the probate of the Kotran and Blusius wills. See App. 74–83. In other words, Swatt’s breach claim asks us to do just what the probate exception bars: to probate wills and administer estates. Three Keys Ltd., 540 F.3d at 227. 16 Nationwide Mut., 571 F.3d 307–08 (internal quotation marks and citation omitted).

5 piecemeal litigation; (4) the order in which jurisdiction was obtained; (5) whether federal

or state law controls; and (6) whether the state court will adequately protect the interests

of the parties[.]”17 “No one factor is necessarily determinative.”18

As the District Court concluded, each factor either favors abstention or is neutral.

(1) Which court first assumed jurisdiction over the property. Swatt argues this

factor weighs against abstention because the state court “does not have a claim for breach

of Settlement Agreement filed by Appellants.”19 But this factor does not focus on the

congruity of the claims. Rather, it is mainly concerned “with avoiding the generation of

additional litigation through permitting inconsistent dispositions of property.”20 Here, the

Franklin County Orphans’ Court has already assumed jurisdiction over the Kotran and

Blusius estates, but we note that the District Court properly attached little weight to this

factor because the probate exception prohibits it from exercising jurisdiction over the

estate property.

(2) The inconvenience of the federal forum. This factor is neutral. Both the

federal and state fora are convenient for the parties and counsel.

17 Spring City Corp., 193 F.3d at 171. The District Court considered ten factors in its analysis, drawing from factors identified by “[o]ther circuits.” App. 32. Consistent with this Circuit’s precedent, however, we consider only the “six factors referred to in Colorado River . . . and Third Circuit cases.” Spring City Corp., 193 F.3d at 171 (internal quotation marks and citation omitted). 18 Colo. River, 424 U.S. at 818. 19 Opening Br. 23. 20 Colo. River, 424 U.S. at 819.

6 (3) Avoiding piecemeal litigation. This factor favors abstention. Our cases require

a “strongly articulated congressional policy against piecemeal litigation” to justify a stay

under Colorado River.21 Here, there is a strongly articulated congressional policy. The

probate exception, which is drawn from the Judiciary Act of 1789, exists—among other

reasons—to create “legal certainty concerning whether probate matters and will contests

should be in state or federal courts,” and to allow “questions as to a will’s validity [to] be

resolved concurrently with the task of estate administration.”22 In other words, the

probate exception is highly concerned with avoiding piecemeal litigation.

(4) The order in which jurisdiction was obtained. This factor is of paramount

importance and favors abstention. Here, Pennsylvania state courts obtained jurisdiction in

2006, when probate litigation over the Kotran estate began; 2013, when litigation over

the Blusius estate began; and 2014, when Swatt filed her other civil claims against

Hawbaker and her firm. All this far predates 2021, when Swatt filed this action in the

Middle District of Pennsylvania.

We are mindful that “priority should not be measured exclusively by which

complaint was filed first, but rather in terms of how much progress has been made in the

two actions.”23 Here, the progress in state court has been substantial. Discovery has been

completed; dispositive motions have been filed by both parties; and other motions

21 Ryan, 115 F.3d at 198. 22 Georges v. Glick, 856 F.2d 971, 973–74 (7th Cir. 1988). 23 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 21 (1983).

7 practice and several hearings have occurred. Comparatively, the federal action has seen

the filing of a complaint, once amended, and several minor motions with no bearing on

the issues presented to us. Indeed, the only substantive motion on the federal docket is the

motion to dismiss under the probate exception that we consider here. Proceeding in the

Middle District of Pennsylvania would thus “waste the parties’ resources, risk duplicative

rulings and reward a strategic gamesmanship that has no place in a dual system of federal

and state courts.”24

(5) Whether federal or state law controls. “Although in some rare circumstances

the presence of state-law issues may weigh in favor of [absention], . . . the presence of

federal-law issues must always be a major consideration weighing against [it].”25 The

issues Swatt raises are purely state-law claims, and this factor thus favors abstention.

(6) Whether the state court will adequately protect the interests of the parties.

Swatt worries that she will be forever left out of court if her breach of settlement

agreement claim is stayed, as she has only raised it in federal court. But, as noted, the

alleged breach of the settlement agreement is being considered as part of the state-court

mediation. And in any event, the sixth factor is “normally relevant only when the state

forum is inadequate.”26 We cannot see any reason that the state court would be unable to

properly adjudicate any claim based upon a breach of the settlement agreement. So, this

24 Tyrer v. City of S. Beloit, 456 F.3d 744, 756 (7th Cir. 2006). 25 Moses H. Cone, 460 U.S. at 26. 26 Ryan, 115 F.3d at 200.

8 factor is neutral.

Taken together, these factors favor abstaining while the Franklin County Court of

Common Pleas adjudicates Swatt’s parallel civil action and related probate matters. The

District Court thus did not abuse its discretion in electing to do so here.

III.

Finally, Swatt argues for the first time on appeal that a change of venue is

warranted because “more evidence exists in Franklin County,”27 and that a change of

judge is appropriate given the “bias” exhibited by the District Court.28 While we may

effect a transfer of venue by direct order, we may do so only where “unusual

circumstances” require “extraordinary action.”29 No such circumstances are present here,

and no bias of any type is evident on this record.

IV.

For these reasons, we will affirm.

27 Opening Br. 33. The existence of evidence in Franklin County, if anything, reinforces the propriety of abstention in favor of ongoing litigation in the Franklin County Court of Common Pleas. 28 Id. at 33–34. 29 Koehring Co. v. Hyde Constr. Co., 382 U.S. 362, 364–65 (1966).