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Richard Weisz v. Farmers and Merchants Trust Company


February 29, 2012


The opinion of the court was delivered by: Rufe, J.


Before the Court are the motions of Defendants Farmers and Merchants Trust Company ("Farmers") and Union Bank, N.A. ("Union Bank"), to dismiss this action for lack of subject-matter jurisdiction, *fn1 lack of personal jurisdiction, *fn2 and improper venue, *fn3 or in the alternative, to transfer venue to the United States District Court for the Central District of California.


Plaintiff Richard Weisz, a Pennsylvania resident, filed this action to recover a $147,775.95 preliminary distribution due to him from the estate of Joseph Clementi, Jr., a California decedent. The Complaint alleges that Defendant Brian Glicker, a California attorney, and his law firm Glicker & Associates, PLC (collectively, the "Glicker Defendants") represented Mr. Weisz's interests in the Clementi Estate before the Superior Court of the State of California, County of Orange ("Probate Court"). *fn4 Mr. Glicker filed a petition on Mr. Weisz's behalf requesting a preliminary distribution from the Clementi Estate. On October 27, 2008, after a hearing, the Probate Court granted the petition and directed Defendant Farmers, the California trust company that administers and makes distributions from the Clementi Estate, to make payment in the amount of $147,775.95, "payable to Richard Weisz in care of Glicker & Associates, his attorneys of record." *fn5 Farmers issued a check made payable to "Richard Weisz, c/o Glicker & Assoc., 14945 Ventura Blvd, Suite 220, Sherman Oaks, CA 19403," which was mailed to Mr. Glicker. *fn6 Mr. Glicker then deposited the check into the law firm's client trust account at Union Bank. The back of the check was stamped: "Pay To The Order Of/Union Bank of California . . . For Deposit Only/Glicker & Associates/Prop Law Corp/Client Trust Acc," but was not signed by Mr. Weisz or Mr. Glicker. *fn7 Union Bank accepted the check for deposit. Although Farmers paid Union Bank upon the check's presentment, Mr. Weisz received no part of the preliminary distribution funds.

Mr. Weisz has asserted claims against the Glicker Defendants for conversion, breach of fiduciary duty, and breach of contract. Mr. Weisz also asserts negligence claims against Farmers and Union Bank, alleging that Farmers breached its duty of care by making the distribution check payable to Mr. Weisz "c/o" the Glicker Defendants and by later making payment upon the unsigned check, and that Union Bank failed to exercise due care by accepting the unsigned check. Finally, he brings claims against both Farmers and Union Bank for conversion of the check and the money it represents.


A. Subject Matter Jurisdiction

First, Farmers argues that this Court is barred from adjudicating this matter under the "probate exception" to jurisdiction, which limits a federal court's ability to assume jurisdiction over property that is in the custody of a probate court. The Supreme Court has long recognized a probate exception to otherwise proper federal jurisdiction; *fn8 however, the precise scope of this exception has been much debated. The Supreme Court's opinion in Marshall v. Marshall clarified that earlier language prohibiting a federal court's "interference" with a state court's possession was "essentially a reiteration of the general principle that, when one court is exercising in rem jurisdiction over a res , a second court will not assume in rem jurisdiction over the same res ." *fn9 Thus, the Supreme Court held, the probate exception "reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction." *fn10 Therefore, "[i]t is clear after Marshall that unless a federal court is endeavoring to (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, the probate exception does not apply." *fn11

Mr. Weisz does not ask the federal court to take any of these actions. The funds at issue here are not the kind of non-fungible property contemplated by Marshall ; to the contrary, Mr. Weisz seeks money which is no longer part of the Clementi Estate, and theoretically recoverable from the general assets of any Defendant. Adjudication of this dispute by a federal court would not affect previous or future decisions by the Probate Court regarding the Clementi Estate, interfere with the administration of the Estate, or alter any provision of Mr. Clementi's will. Consequently, the probate exception does not apply.

B. Personal Jurisdiction

In deciding a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the allegations of the complaint are taken as true. *fn12 However, once a jurisdictional defense is raised, the plaintiff bears the burden of proving sufficient contacts with the forum state to establish personal jurisdiction. *fn13 In evaluating the motion, while a court must construe all disputed facts in the light most favorable to the non-moving party, *fn14 the plaintiff cannot rely on general averments in the complaint or unsupported statements in his response; instead, he must "establish[] with reasonable particularity sufficient contacts between the defendant and the forum state," *fn15 by providing jurisdictional facts supported by affidavits or competent evidence. *fn16

The Federal Rules of Civil Procedure allow a district court to assert personal jurisdiction over a non-resident to the extent allowed by the law of the state in which the court sits. *fn17

Pennsylvania's long-arm statute permits the exercise of jurisdiction over non-resident defendants to the full extent permitted under the due process clause of the Fourteenth Amendment. *fn18 Due process requires that the defendant have "minimum contacts" with the forum, and that the exercise of jurisdiction comports with "traditional notions of fair play and substantial justice." *fn19

"[M]inimum contacts must have a basis in some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." *fn20

The standard for establishing general jurisdiction-that is, jurisdiction over a defendant based on its contacts unrelated to the cause of action-is demanding; contacts must be "continuous and systematic" and facts supporting them "extensive and persuasive." *fn21 Factors courts consider include, for example, "whether a defendant's activities in the state are a continuous and central part" of its overall business; the nature and quality of business contacts it initiated in the state; the amount of revenue derived in the state; whether the defendant conducts direct sales, or has a sales force, in the forum; and whether it targets advertising to forum-state residents. *fn22

Specific jurisdiction, on the other hand, may be found where the defendant had "the minimum contacts with the forum necessary for the defendant to have reasonably anticipate[d] being haled into court there." *fn23 First, the defendant must have "purposefully directed its activities" at the forum. *fn24 Second, the litigation must "arise out of or relate to" at least one of the defendant's activities in the forum state. *fn25 But "[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the [contact] requirement," rather, "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State . . . ." *fn26 Finally, if the prior two requirements are met, a court may consider whether the exercise of jurisdiction otherwise "comports with fair play and substantial justice." *fn27

1. General Jurisdiction Over Moving Defendants

Farmers is a trust company in the business of administering estates and trusts and managing fiduciary assets. *fn28 Farmers is incorporated in and licensed by the state of California, and is not licensed to do business outside the state. *fn29 Its principal place of business is in Long Beach, Los Angeles County, California. *fn30 The company does not have an office, own or lease property, have employees, have assets, pay taxes, advertise or regularly transact business in Pennsylvania. *fn31

Union Bank is headquartered in San Francisco and maintains branch offices in California, Oregon, Washington, and Texas. *fn32 Like Farmers, Union Bank does not have an office, own or lease property, have employees, advertise, pay taxes, or transact business on a regular basis in Pennsylvania. *fn33

The Court finds--and Mr. Weisz does not appear to dispute *fn34 --that these contacts are insufficient to establish general jurisdiction over either moving defendant.

2. Specific Jurisdiction Over Defendants

Although Mr. Weisz argues that "a substantial part of the events or omissions giving rise to this claim occurred in this district," *fn35 he fails to point to any activity conducted within Pennsylvania by Farmers or Union Bank which might establish specific jurisdiction as to those defendants. *fn36 Rather, Mr. Weisz argues that Farmers and Union Bank are subject to specific jurisdiction here pursuant to the "effects test" delineated in Calder v. Jones . *fn37 In Calder , the Supreme Court found personal jurisdiction to be proper over defendants whose contacts with the forum did not otherwise satisfy due process where the defendants had committed an intentional tort outside the forum, the unique effects of which caused damage to the plaintiff within the forum. *fn38

The Third Circuit has held that the Calder effects test requires (1) an intentional tort; (2) that plaintiff "felt the brunt of the harm in the forum such that the forum can be said to be the focal point of the harm suffered;" and (3) that the defendant "expressly aimed tortious conduct at the forum such that the forum can be said to be the focal point of the tortious activity." *fn39 Only if the last of these elements is met does a court need to address the first two. *fn40

Although there is no doubt that Mr. Weisz felt the brunt of the harm in Pennsylvania, it cannot be said that the focal point of the alleged activity was here. Mr. Weisz has "alleged only that defendants harmed him while he happened to be residing in Pennsylvania" which is insufficient to establish personal jurisdiction." *fn41

The tortious and negligent conduct alleged here took place entirely within the state of California: the preliminary distribution check was authorized by a California probate court, issued and funded in California by a California trust company from a California estate to the care of a California attorney, and deposited at a California bank in an account held by that attorney. *fn42

Although Mr. Weisz was deprived of the use of those funds in his home state, the funds never left California, and the moving Defendants had no contact with Pennsylvania until well after the alleged conversion.

Even if either moving Defendant was aware that Mr. Weisz was a Pennsylvania resident, "the foreseeability of harm being suffered in a forum is insufficient to establish personal jurisdiction under Calder ." *fn43 A defendant must not only know that a plaintiff would suffer harm in a particular forum, but also aim the tortious conduct at that state. *fn44 And in fact, the record does not suggest that either Farmers or Union Bank knew Mr. Weisz's lived in Pennsylvania at the time the check was issued and accepted. Nothing in Mr. Glicker's Petition for Preliminary Distribution, the order of the Probate Court, IRS Form W-9, or the check itself (which appeared on its face to be between California parties) would have alerted Farmers or Union Bank to the fact that Mr. Weisz was a Pennsylvania resident. All of these documents list only the Glicker law firm address in California as contact information for Mr. Weisz. *fn45 Because the conduct alleged neither occurred within Pennsylvania, nor suggested any consequences in Pennsylvania, the Court finds that the moving defendants' conduct was not focused on, expressly aimed toward, or intentionally targeted at this forum. Notions of fair play and substantial justice do not permit this Court to exercise personal jurisdiction over Farmers or Union Bank. *fn46

C. Venue

Because the Court cannot exercise personal jurisdiction over the moving defendants, it is not necessary to discuss the parties' arguments regarding improper venue. However, even where a court does not have personal jurisdiction over defendants, 28 U.S.C. §1406(a) allows transfer to a jurisdiction where venue is proper, to facilitate the "expeditious and orderly adjudication of cases and controversies on their merits." *fn47 Courts have long recognized that "the interest of justice may require that the complaint not be dismissed but rather that it be transferred in order that the plaintiff not be penalized by . . . time-consuming and justice-defeating technicalities." *fn48

Farmers and Union Bank agree that venue is appropriate in the Central District of California, where all Defendants (including the non-moving Glicker Defendants) maintain a physical presence. Personal jurisdiction may be exercised over all Defendants in California, where all have principal places of business and substantial contacts, and where the majority of the events from which this action arose occurred. Therefore, the Court finds that justice requires a transfer to the Central District of California. *fn49


Having concluded that this Court lacks personal jurisdiction over Farmers and Union Bank, and that venue is proper in the Central District of California, the case will be transferred to the United States District Court for that District. An appropriate Order follows.

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