Hung v. Hung

Background

Alfredo Hung sued his sister Cristina Hung, alleging that she breached fiduciary duties while serving as executor of their late father Quock Hung Leung’s will and estate. Alfredo also sought an equitable accounting—a court-supervised review of financial records—to determine what he was owed. Elisa Hung and Marilyn Hung were named as nominal defendants.

The will left Alfredo real property in Queens, New York. The will and trust generally left the remaining estate to Cristina, Elisa, and Marilyn. The Connecticut probate proceeding remained open. Alfredo alleged that Cristina delayed or interfered with payments from Citibank accounts for which he claimed beneficiary interests, failed to handle estate taxes and records properly, commingled estate-related funds with her own, and failed to promptly begin proceedings concerning the Queens property.

Cristina moved to dismiss under Rule 12(b)(1), which addresses federal subject-matter jurisdiction, arguing that the probate exception barred Alfredo’s claims. She also moved under Rule 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court considered the motion only at the pleading stage, accepting well-pleaded allegations as true for purposes of the Rule 12(b)(6) analysis.

Probate Exception and Jurisdiction

The probate exception prevents federal courts from administering estates, probating or annulling wills, or exercising control over property already in a state probate court’s custody. The court explained that the exception does not automatically bar ordinary claims such as breach of fiduciary duty merely because they overlap with probate proceedings.

The court held that Alfredo’s request for expedited access to estate funds was barred to the extent it sought funds still under the probate court’s control. His accounting claim was likewise barred insofar as it sought an accounting of probate assets. The court allowed the accounting claim to proceed insofar as it concerned non-probate assets, including accounts with beneficiary designations.

The court held that Alfredo’s claims concerning the Citibank accounts with beneficiary designations were not barred by the probate exception because the record did not show that those accounts were under the control of a probate court. The court also held that it had jurisdiction over the Queens property claims. Although Cristina filed an ancillary probate proceeding in Queens County after Alfredo filed this federal case, the court stated that jurisdiction is generally determined when the federal action begins.

Failure to State a Claim

The court applied Connecticut law to Alfredo’s breach-of-fiduciary-duty claim because the Connecticut probate court had jurisdiction over Quock’s estate. Under that law, a claim against an executor requires, among other things, a fiduciary relationship and a duty owed to the plaintiff.

The court ruled that Cristina did not owe Alfredo a fiduciary duty concerning the non-probate Citibank accounts in her capacity as executor. Listing those accounts on an estate inventory did not make them probate assets or change their beneficiary designations. The court also concluded that Alfredo had not established that Cristina owed him a duty concerning the estate generally, so it did not reach the merits of Alfredo’s allegations that Cristina caused waste to the estate.

The court did not grant dismissal of the Queens-property portion of the fiduciary-duty claim on the basis of evidence outside the complaint. It stated that such evidence generally cannot be considered on a Rule 12(b)(6) motion unless specific conditions are met, and the court did not treat the motion as one for summary judgment.

For the equitable-accounting claim, the court applied Connecticut law because the relevant assets were located in Connecticut. It held that Alfredo sufficiently pleaded an accounting claim concerning the non-probate accounts by alleging shifting beneficiary designations and difficulty accessing assets for which he claimed beneficiary status.

Disposition

The court’s conclusion states that Cristina’s motion to dismiss was GRANTED as to Alfredo’s breach-of-fiduciary-duty claim except for the claim concerning failure to institute proceedings regarding the Queens property, and as to Alfredo’s accounting claim except for the claim concerning non-probate assets. The motion was DENIED in all other respects. The opinion did not add a with-prejudice or without-prejudice designation.