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As long as our state probate courts remain underfunded and overworked (see here), there’s going to be an incentive to move inheritance cases into the relatively better funded and better staffed federal court system. As explained here, to get into federal court these cases need to qualify for diversity jurisdiction, which brings us to the subject of the linked-to case above.

Mostly, in order for diversity jurisdiction to apply, complete diversity is required, in other words, none of the plaintiffs can be from the same state as any of the defendants. Two points to keep in mind when considering if you have complete diversity. First, as discussed here, the “estate” is not a party. If you’re suing an estate, your defendant is the personal representative (PR); so focus on the PR to figure out if you have complete diversity. Second, if you’re going to sue a PR, and you want to claim diversity jurisdiction, you do not look at the PR’s home state, it’s the decedent’s home state that counts.

Case Study

Leyva v. Daniels, — Fed.Appx. —-, 2013 WL 5313600 (11th Cir. September 24, 2013)

For example, if one of the plaintiffs is from the same state as the decedent (Florida), but not from the same state as the PR (Texas), do you have diversity? That was question presented to the trial judge in this case.

Marliene Hardman died in 2012, leaving behind two children, Christopher Daniels and Leyva, and several grandchildren, including Zakrzewski. In her will, Hardman named Daniels, Leyva, and Zakrzewski beneficiaries of her estate and named Daniels personal representative. Leyva and Zakrzewski sued Daniels in federal court, alleging that he breached his fiduciary duty to them as beneficiaries, mismanaged the estate, engaged in self-dealing, and generally did not fulfill his obligations under Florida probate law. Leyva and Zakrzewski argued the district court had diversity jurisdiction because they are citizens of Florida and Colorado, respectively, and Daniels is a citizen of Texas. See 28 U.S.C. § 1332(a)(1). The district court, however, concluded that because the complaint alleged claims against Daniels only as the legal representative of Hardman’s estate, he was treated as a citizen of Hardman’s home state, Florida. Thus, the court determined it lacked diversity jurisdiction. Leyva and Zakrzewski now appeal.

Right answer says the 11th Cir, it’s the decedent’s home state that counts, not the PR’s — back to state court you go! Here’s why:

“The existence of jurisdiction is a question of law we review de novo.” Travaglio v. Am. Express Co., 735 F.3d 1266, 1268, No. 11–15292, 2013 WL 4406389, at *2 (11th Cir. Aug. 19, 2013). Federal courts have diversity jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). “Diversity jurisdiction requires complete diversity; every plaintiff must be diverse from every defendant.” Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir.1998). Under 28 U.S.C. § 1332(c)(2), “the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent.” A legal representative can retain his personal citizenship only if the suit concerns him acting in a personal capacity. See Palmer v. Hosp. Auth. of Randolph Cnty., 22 F.3d 1559, 1562 n. 1 (11th Cir.1994).

Leyva and Zakrzewski argue the district court erroneously found that Daniels was a Florida citizen because their allegations concerned Daniels acting in his personal capacity. But the complaint alleges only that Daniels acted improperly as the representative of Hardman’s estate. Any potential liability Daniels faces arises out of actions he took as the estate’s legal representative, not as an individual. Thus, Daniels is deemed a Florida citizen for purposes of this suit. See id.; 28 U.S.C. § 1332(c)(2). [FN1] And because Leyva is also a Florida citizen, the parties were not completely diverse and the district court correctly dismissed the complaint. See Triggs, 154 F.3d at 1287; see also 28 U.S.C. § 1332(a)(1).

[FN1]. Leyva and Zakrzewski argue that Daniels retains his personal citizenship because he could be held personally liable under Florida law, but they cite no case indicating that personal liability cannot be imposed on an individual when he acts in a representative capacity.