Roger Silk v. Baron Bond ( 2023 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROGER D. SILK, No. 21-56286
Plaintiff-Appellant, D.C. No.
2:21-cv-03977-
v. ODW-JPR
BARON BOND; HOWARD B.
MILLER, in their capacity as Personal OPINION
Representatives of the Estate of Frank
Bond,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Argued and Submitted January 10, 2023
Pasadena, California
Filed April 10, 2023
Before: Paul J. Watford, Michelle T. Friedland, and Mark
J. Bennett, Circuit Judges.
Opinion by Judge Bennett
2 SILK V. BOND
SUMMARY *
Personal Jurisdiction
The panel reversed the district court’s judgment
dismissing for lack of personal jurisdiction Roger Silk’s suit
alleging breach of contract.
Silk provided Frank Bond tax- and estate-planning
services. When Bond died, Silk filed a claim in Baltimore
County Orphans’ Court against Bond’s Estate for fees
allegedly due under contracts. After the Estate disallowed
the claim, Silk sued in federal court.
Following the U.S. Supreme Court’s decision in
Marshall v. Marshall, 547 U.S. 293 (2006), this Court held
that the probate exception bar to federal jurisdiction was
limited to cases in which the federal courts would be called
on 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.” Goncalves v. Rady
Children’s Hosp. San Diego, 865 F.3d 1237, 1252 (9th Cir.
2017).
The panel held that none of the Goncalves categories
applied to Silk’s suit against the Estate. First, neither party
contends that Silk was seeking to annul or probate Bond’s
will. Second, this suit does not require the federal courts to
administer Bond’s Estate. Valuing an estate to calculate
contract damages is not administering an estate. Third, this
suit does not require the federal courts to assume in rem
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SILK V. BOND 3
jurisdiction over property in the custody of the probate
court. If Silk were to prevail at trial, he would be awarded
an in personam judgment for money damages. Also, the fact
that assets under control of the Orphans’ Court might
ultimately have to satisfy a federal court judgment or a
federal court order to pay court expenses does not mean that
any such judgment or order is an order disposing of assets
under the control of the Orphans’ Court. Finally, this
decision is consistent with authority from other circuits.
The panel held that Silk made out a prima facie case of
personal jurisdiction. Under California’s long-arm statute
for the exercise of personal jurisdiction, the Estate had
“minimum contacts” with California. During his life, Frank
Bond established purposeful contact with California via his
contacts with Silk, then a California resident, for services. In
doing so, Bond created a muti-year business relationship
with Silk in California. The panel held that it was reasonable
for California courts to exercise specific personal
jurisdiction over Bond’s Estate. The panel rejected the
Estate’s challenges to the exercise of personal jurisdiction.
The panel held that the district court erred in holding that
Silk’s suit was barred by the probate exception to federal
jurisdiction. Because at this stage of the proceedings Silk
has made a prima facie case for personal jurisdiction over
the Estate, the panel reversed and remanded for further
proceedings.
4 SILK V. BOND
COUNSEL
Paul Fattaruso (argued), Adina Levine, and Jason Cyrulnik,
Cyrulnik Fattaruso LLP, New York, New York; Sara Colón
and Ethan J. Brown, Brown Neri Smith Khan LLP, Los
Angeles, California; for Plaintiff-Appellant.
Jeffrey E. Nusinov (argued), Nusinov Smith LLP,
Baltimore, Maryland; Gary A. Nye and Joseph C. Gjonola,
Roxborough Pomerance Nye & Adreani LLP, Woodland
Hills, California; for Defendants-Appellees.
OPINION
BENNETT, Circuit Judge:
As the Supreme Court has reminded us, “[i]t is most true
that this Court will not take jurisdiction if it should not: but
it is equally true, that it must take jurisdiction if it should . .
. We have no more right to decline the exercise of
jurisdiction which is given, than to usurp that which is not
given.” Marshall v. Marshall, 547 U.S. 293, 298–99 (2006)
(ellipsis in original) (quoting Cohens v. Virginia, 19 U.S.
264, 404 (1821)).
Plaintiff-Appellant Roger Silk provided Frank Bond tax-
and estate-planning services. Under contracts between Silk
and Bond, part of Silk’s compensation was to be based on
savings realized by Bond’s Estate. These “incentive fees”
were intended to align Silk’s financial interests with Bond’s,
and due to their nature, could be paid only after Bond’s
death. When Bond died, Silk filed a claim in a Maryland
SILK V. BOND 5
probate court 1 against Bond’s Estate for fees he contended
were due to him under the contracts. After the Estate
disallowed the claim, Silk sued in federal court. 2 The district
court dismissed Silk’s suit for lack of subject matter
jurisdiction, finding that the suit was barred by the “probate
exception” to federal court jurisdiction. But because the
probate exception does not strip federal court jurisdiction
over this routine contract dispute, and because at this stage
of the proceedings Silk has made a prima facie case for
personal jurisdiction over the Estate, we reverse and remand
for further proceedings.
BACKGROUND
For more than two decades, Roger Silk provided tax- and
estate-planning services to Frank Bond. 3 Bond, who died in
July 2020, had approximately $40 million in liquid assets at
the time he retained Silk―monies he amassed by launching
a health and fitness business, U.S. Health, Inc., which he
later sold.
Bond hated paying income taxes, and he retained Silk for
various financial services, including to legally shield his
assets from the taxing authorities. From approximately 1991
to 1995, Silk worked exclusively for Bond, supervising his
investment portfolio, addressing issues regarding insurance
1
Baltimore County Orphans’ Court (“Orphans’ Court”).
2
No argument has been made on appeal that the determination of the
Orphans’ Court is somehow entitled to preclusive effect as to the merits
of Silk’s claim for fees.
3
As the Estate brought a facial challenge to jurisdiction, we accept all
plausibly pleaded facts in the Complaint as true. See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009); Wolfe v. Strankman, 392 F.3d 358, 362 (9th
Cir. 2004).
6 SILK V. BOND
and philanthropic entities, and “quarterbacking the team” of
professionals who also advised Bond on tax issues. In the
early 1990s, Silk developed a private variable annuity for
Bond, which would lead to tax savings for Bond through
deferral. In exchange for the creation of the annuity, Bond
agreed to pay Silk 15% of tax savings attributable to the
annuity strategy. The two agreed that the incentive payment
would be paid at the earlier of the end of the tax deferral
period, or Bond’s death. 4
Silk and Bond also made other deals involving incentive
fees. In 1998, Silk provided Bond with tax planning
involving an existing Grantor Retained Interest Trust
(GRIT) related to Bond’s interest in a shopping center
limited partnership. In June 1999, Bond and Silk signed a
contract that set out the work Silk was to do. The contract
provided that the incentive fee would “only become payable
upon [Bond’s] death,” and, based on the formula in the
contract, would be “computed in good faith” by a named
accounting firm “or any other independent accounting firm
selected by [Bond’s] personal representatives.” The contract
also provided that the incentive fee would “constitute a valid
and binding obligation on [Bond’s] estate,” and Bond agreed
to “alert [his] personal representatives to” the agreement.
In the same year, Silk and Bond also signed a contract
concerning certain apartments. Silk, again, provided tax
planning services, and, again, his compensation was to be an
incentive fee based on a contractual formula. And again, the
incentive fee would only “become payable upon [Bond’s]
death.” This fee, too, was to be “computed in good faith” by
the same named accounting firm “or any other independent
4
Bond’s death occurred prior to the end of the tax deferral period.
SILK V. BOND 7
accounting firm selected by [Bond’s] personal
representatives.” The contract also provided that the
incentive fee was a “valid and binding obligation of [Bond’s]
estate,” and that Bond would alert his personal
representatives to the agreement. 5
After Bond died in 2020, Silk filed a $3.1 million claim
against the Estate in Orphans’ Court. The Estate disallowed
the claim, and the notice of disallowance stated that Silk’s
claim would “be forever barred unless within 60 days after
the mailing of this notice you file a petition for allowance of
the disallowed amount in the Orphans’ Court or a suit
against the personal representative.”
Silk sued Baron Bond (Bond’s son) and Howard Miller,
the personal representatives of the Bond Estate. 6 Silk sought
breach of contract damages based on the unpaid incentive
fees arising from the three contracts described above. The
suit alternatively sought damages based on unjust
enrichment and promissory estoppel. Under all theories,
Silk also sought an accounting sufficient to calculate the
incentive fees.
The Estate moved to dismiss under Federal Rule of Civil
Procedure 12(b)(1), arguing that the suit was barred, in its
entirety, by the probate exception. The district court granted
the motion and dismissed the case. The court held that,
5
The copy of the contract appended to the Complaint contains a
handwritten notation reading: “Explained 8/26/99 Howard B. Miller.”
Howard Miller was Bond’s longtime attorney and is one of the personal
representatives of Bond’s Estate.
6
Because Silk does not seek relief from the defendant personal
representatives in their personal capacities, we refer to them as the
Estate.
8 SILK V. BOND
because the claim “cannot be resolved without first
determining the value of the Estate,” the court would be
required to take control of the appraisal process, which
“would amount to the administration of Decedent’s Estate—
a right reserved to the state probate court.” It also held that
as the contracts required the Estate to pay the cost of any
appraisal, ordering an appraisal would “improperly interfere
with the probate court’s authority and dispose of estate assets
in its control.” While the district court did not apply the
doctrine of “prior exclusive jurisdiction,” 7 it noted that “Silk
acknowledged the probate court’s jurisdiction by first filing
his claim in the Baltimore County Orphans’ Court.” Silk
appeals from the district court’s grant of a motion to dismiss
for lack of subject matter jurisdiction, which we review de
novo. See U.S. ex rel. Hartpence v. Kinetic Concepts, Inc.,
792 F.3d 1121, 1126 (9th Cir. 2015) (en banc).
I.
In Marshall v. Marshall, the petitioner sought review in
the Supreme Court of a decision from our court dismissing
an action under the probate exception. We had held that
although tortious interference claims arising out of the death
of J. Howard Marshall, II did “not involve the administration
of an estate, the probate of a will, or any other purely probate
matter,” the probate exception still applied because the
7
The “prior exclusive jurisdiction doctrine holds 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.” Chapman v. Deutsche Bank Nat’l
Tr. Co., 651 F.3d 1039, 1043 (9th Cir. 2011) (internal quotation marks
omitted) (quoting Marshall, 547 U.S. at 311). Because we conclude that
the federal district court would not be required to assume in rem
jurisdiction were Silk’s case to proceed, we hold that the prior exclusive
jurisdiction doctrine does not apply.
SILK V. BOND 9
claims raised “questions which would ordinarily be decided
by a probate court in determining the validity of the
decedent’s estate planning instrument.” In re Marshall, 392
F.3d 1118, 1133 (9th Cir. 2004), rev’d sub nom. Marshall v.
Marshall, 547 U.S. 293 (2006). The Supreme Court
reversed. The Court first emphasized the narrowness of the
probate exception, 547 U.S. at 305, and then held that while
“the probate exception reserves to state probate courts the
probate or annulment of a will and the administration of a
decedent’s estate” and “precludes federal courts from
endeavoring to dispose of property” in the custody of the
state probate court, “it does not bar federal courts from
adjudicating matters outside those confines and otherwise
within federal jurisdiction,” id. at 311–12. The Court also
stated: “We hold that the Ninth Circuit had no warrant from
Congress, or from decisions of this Court, for its sweeping
extension of the probate exception.” 8 Id. at 299–300.
Following Marshall, we have since held that the probate
exception is limited to cases in which the federal courts
would be called on 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.” Goncalves v. Rady Children’s Hosp. San Diego, 865
F.3d 1237, 1252 (9th Cir. 2017) (quoting Three Keys Ltd. v.
SR Util. Holding Co., 540 F.3d 220, 227 (3d Cir. 2008)).
None of the Goncalves categories applies to Silk’s suit
against the Estate.
8
Justice Stevens, concurring in part, and concurring in the judgment,
referred to the “so-called” probate exception and wrote: “I do not believe
there is any ‘probate exception’ that ousts a federal court of jurisdiction
it otherwise possesses.” 547 U.S. at 315, 318.
10 SILK V. BOND
A. Probate or Annul a Will
Neither party contends Silk is seeking to annul or probate
Bond’s will.
B. Estate Administration
This suit does not require the federal courts to administer
Bond’s Estate. Yet the district court reasoned that hearing
Silk’s claim would require it to “assume control over an
estate appraisal” in order to “determine what portion of the
Estate” is due to Silk under the incentive fee agreements.
The court reasoned that taking “control of the appraisal
would amount to the administration of [the] Decedent’s
Estate.” On appeal, the Estate likewise argues that Silk’s
lawsuit would require the district court to administer Bond’s
estate. But valuing an estate to calculate contract damages
is not administering an estate.
The Estate urges us to repeat the mistake we made in
Marshall. It argues that by valuing estate property, the
district court would be interfering with the Maryland probate
proceedings. 9 This so-called interference allegedly occurs
because “Maryland’s Estates & Trusts Article establishes a
comprehensive framework for estate appraisals.” According
to the Estate, the fact that the contracts would obligate it to
also pay for an independent appraisal to calculate Silk’s fees
9
The Estate’s brief claims that “in contrast to Marshall where the
adjudication of a tortious interference claim implicated no special
proficiency available in state court, the case at bar entails operations for
which the probate court is emphatically the best suited forum.” We
disagree that the probate court is the “best suited forum” for resolving a
contract dispute like the one here. But even were that not so, just like
there is no “interference” category of the probate exception, there is
similarly no “best suited forum” category.
SILK V. BOND 11
moves this case into the province of estate administration.
And as noted above, the district court adopted the Estate’s
view, finding that entertaining this action would “improperly
interfere with the probate court’s authority.”
Although appraisal is a component of estate
administration, Maryland’s regulation of appraisals as part
of the probate process has no legal bearing on whether a
federal district court may order an appraisal as part of a
contract action. And in the context of this case, an appraisal
is specifically contemplated by the contract between the
parties. For purposes of Silk’s breach of contract action, an
appraisal of the Estate’s value is a matter of contract
interpretation, purely incidental to the task of the probate
court in administering the estate. To be sure, there is an
overlap between any Orphans’ Court estate appraisal and
any other estate appraisal. But the Supreme Court in
Marshall rejected the notion that such factual overlap
implicates the probate exception.
As the Supreme Court stated:
In the Ninth Circuit’s view, a claim falls
within the probate exception if it raises
“questions which would ordinarily be
decided by a probate court in determining the
validity of the decedent’s estate planning
instrument,” whether those questions involve
“fraud, undue influence, or tortious
interference with the testator’s intent.”
547 U.S. at 304 (alterations omitted). Indeed, we had held
that the exercise of federal jurisdiction over tortious
interference claims would “interfere with the Texas probate
12 SILK V. BOND
court proceedings.” In re Marshall, 392 F.3d at 1134. But
the Supreme Court made clear that our view was wrong:
In short, [courts should] comprehend the
“interference” language in Markham [v.
Allen, 326 U.S. 490 (1946)] as 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.
547 U.S. at 311.
So the question is not whether we would somehow be
duplicating the function of the probate court, or deciding a
question the probate court will (or might) need to decide.
And as the Supreme Court has also told us, the question is
not whether we would be “interfer[ing]” with the probate
court. See id. If the district court would neither be probating
or annulling a will (it wouldn’t be here), or administering a
decedent’s estate (and again, it wouldn’t be here), the only
question is whether it would be assuming in rem jurisdiction
over property that is in the custody of the probate court,
including by endeavoring to dispose of such property. See
Goncalves, 865 F.3d at 1252.
C. In Rem Jurisdiction/Disposal of Property
1. In Rem Jurisdiction
This suit does not require the federal courts to assume in
rem jurisdiction over property in the custody of the probate
court. Though “[w]e recognize that the distinction between
in rem and in personam is often as elusive as the boundary
lines of the probate exception,” Three Keys Ltd., 540 F.3d at
229, this suit involves the standard exercise of in personam
SILK V. BOND 13
jurisdiction over the personal representatives of Bond’s
Estate. Accordingly, the third Goncalves category does not
apply.
“An action is in rem when it determines interests in
specific property as against the whole world.” Goncalves,
865 F.3d at 1254 (internal quotation marks and alteration
omitted). If the action seeks “merely to determine the
personal rights and obligations of the parties,” on the other
hand, it is in personam. Id. (cleaned up). In assessing
whether an action is in rem or in personam, courts “look
behind the form of the action to the gravamen of a complaint
and the nature of the right sued on.” State Eng’r v. S. Fork
Band of the Te-Moak Tribe of W. Shoshone Indians of Nev.,
339 F.3d 804, 810–11 (9th Cir. 2003) (internal quotation
marks omitted).
The “nature of the right sued on” here is purely
contractual. Silk’s claims against the Estate are for breach
of contract or, in the alternative, unjust enrichment and
promissory estoppel. The “gravamen” of Silk’s complaint is
that Bond breached a series of contracts, and Bond’s Estate
now owes him money. Actions for breach of contract are in
personam claims because they are, by their nature, claims
between discrete entities and not between individuals and the
world at large. See 20 Am. Jur. 2d Courts § 80 (2d ed. 2023)
(“When the cause of action is based on a contract and the
action seeks damages on the ground of breach of contract,
the action is transitory in nature and may be adjudicated by
any court which has jurisdiction in personam of the
defendant . . . .”); see also In Personam, Black’s Law
Dictionary (11th ed. 2019) (“A normal action brought by one
person against another for breach of contract is a common
example of an action in personam.”). Thus, even though an
estate is a res, see Marshall, 547 U.S. at 310–11, and even
14 SILK V. BOND
though the Estate is in the process of probate administration,
Silk’s claims that Bond breached their contracts are not
claims against the world: They are claims against Bond as a
contracting party who has now died.
The Estate argues that Silk’s suit would “require[] the
district court to assume core probate functions” were it to
calculate the damages Silk seeks. But the limited accounting
called for in the contracts does not somehow transform an in
personam action into an in rem action, nor otherwise bring a
suit within the ambit of the probate exception, particularly
when the accounting is contemplated by the very contracts
Silk is trying to enforce.
As noted in Goncalves, Commonwealth Trust Co. of
Pittsburgh v. Bradford, 297 U.S. 613, 619 (1936), held that
an action for determination of rights to trust funds was an
action in personam, not in rem, because it sought “only to
establish rights” rather than to “deal with the property and
other distribution.” 865 F.3d at 1254. In Bradford, the
defendant argued that “no adjudication was possible in the
absence of an accounting” of the trust and that “to enforce
the remedy sought would necessarily interfere with
possession and control of the res in the custody of the
Orphans’ Court.” 297 U.S. at 618. Unpersuaded, the
Supreme Court reasoned that whatever control the Orphans’
Court had over the trust
did not materially differ from that exercised
by probate courts over such fiduciaries as
guardians, administrators, executors, etc.
The jurisdiction of federal courts to entertain
suits against the latter is clear, when instituted
in order to determine the validity of claims
against the estate or claimants’ interests
SILK V. BOND 15
therein. Such proceedings are not in rem;
they seek only to establish rights; judgments
therein do not deal with the property and
order distribution; they adjudicate questions
which precede distribution.
Id. at 619 (emphasis added).
If Silk were to prevail at trial, he would be awarded an in
personam judgment for money damages. As Goncalves
notes, a “federal court may proceed to judgment in
personam, adjudicating rights in the res and leaving the in
personam judgment to bind as res judicata the court having
jurisdiction of the res.” 865 F.3d at 1254 (internal quotation
marks omitted) (quoting Jackson v. U.S. Nat’l Bank, 153 F.
Supp. 104, 110 (D. Or. 1957)); 10 see also Action, Black’s
Law Dictionary (11th ed. 2019) (defining an “action in
personam” as one “brought against a person rather than
property” that “can be enforced against all the property of
the judgment-debtor”). Silk obtaining an in personam
judgment against the Estate does not by itself get Silk any
money. If Silk were to prevail in federal court, he would
“need to present, in a probate court, any judgment obtained,
if he desired payment from the assets under” that court’s
control. Pufahl v. Est. of Parks, 299 U.S. 217, 226 (1936);
see also Byers v. McAuley, 149 U.S. 608, 620 (1893) (“A
citizen of another state may establish a debt against the
estate, but the debt thus established must take its place and
10
For the same reason, the Estate’s concern about “warring appraisals”
is misplaced. See also Ashton v. Josephine Bay Paul & C. Michael Paul
Found., Inc., 918 F.2d 1065, 1072 (2d Cir. 1990) (“[T]he . . . probate
court will be obliged to give full faith and credit to the district court’s
adjudication.”).
16 SILK V. BOND
share of the estate as administered by the probate court . . . .”
(citation omitted)). The “marshaling of that claim with
others, its priority, if any, in distribution, and all similar
questions [would be] for the probate court upon presentation
to it of the judgment or decree of the federal court.” Pufahl,
299 U.S. at 226; see also Dan B. Dobbs & Caprice L.
Roberts, Law of Remedies § 1.4 (3d ed. 2018) (“Ordinary
money judgments reflect an adjudication of liability but they
do not enter any command to defendant.”).
2. Disposal of Property
As discussed above, the Court in Marshall held that the
probate exception precludes federal courts from endeavoring
to dispose of property in the custody of a state probate court.
547 U.S. at 311–12. The district court here found that
because the contracts at issue require the Estate to pay for
the relevant appraisals, ordering such appraisals (which was,
in the court’s view, a prerequisite to determining damages),
would be the same as the court disposing of estate assets
under the control of the Orphans’ Court. And the Estate
suggests that entering a damages judgment against it would
do the same. But neither ordering an appraisal nor entering
a money judgment against the Estate would “dispose” of
assets in the control of the Orphans’ Court any more than
defending a lawsuit—something no one contends the Estate
is disallowed from doing. 11
11
Similarly, when the Tax Court must decide what an estate is worth, it
too is obviously not “disposing” of the property it values. See, e.g., Est.
of Kollsman v. Comm’r, 113 T.C.M. (CCH) 1172 (T.C. 2017)
(determining fair market value of estate’s paintings). Mere valuation is
not disposal.
SILK V. BOND 17
The fact that assets under the control of the Orphans’
Court might ultimately have to satisfy a federal court
judgment or a federal court order to pay court expenses does
not mean that any such judgment or order is an order
disposing of assets under the control of the Orphans’ Court.
See 13E Wright & Miller, Federal Practice and Procedure §
3610 (3d ed. 2022) (“[T]he federal courts will entertain suits
by claimants to establish a right to a distributive share of an
estate . . . or a debt due from the decedent.”); Hess v.
Reynolds, 113 U.S. 73, 77 (1885) (noting that while “[i]t may
be convenient” for “all debts to be paid out of the assets of a
deceased man’s estate” to be established in probate court,
that convenience does not deprive federal courts of
jurisdiction merely “because the judgment may affect the
administration or distribution in another forum of the assets
of the decedent’s estate”). To hold otherwise would have us
commit the same mistake we committed in Marshall—
authoring a “sweeping extension of the probate exception,”
with no “warrant” from either Congress or the Supreme
Court. 547 U.S. at 299–300.
D. Supporting Out-of-Circuit Authority
Our decision is consistent with authority from other
circuits. In Glassie v. Doucette, 55 F.4th 58 (1st Cir. 2022),
Glassie sued “favored beneficiaries” of her father’s will and
the executor of his estate under, among other things, federal
RICO laws, 18 U.S.C. § 1962. 55 F.4th at 62. Glassie’s
primary allegation was that, in concert with other favored
beneficiaries, the executor of her father’s estate fraudulently
obtained a loan guaranteed by the estate which was used to
collect interest payments from the estate, and this loan had
the effect of transferring estate assets to the favored
beneficiaries. Id. at 62–63. The district court dismissed
18 SILK V. BOND
Glassie’s suit pursuant to the probate exception, and the First
Circuit reversed. Id. at 71.
Rejecting the executor’s argument that the probate
exception applied because the federal action would require
an accounting of the estate, the First Circuit held that “the
probate exception does not apply merely because a judgment
in the federal-court action ‘may be intertwined with and
binding on . . . state proceedings.’” Id. at 67 (alterations in
original) (quoting Jimenez v. Rodriguez-Pagan, 597 F.3d 18,
24 (1st Cir. 2010)). “[A]ny damages calculation will not
preclude the probate court from approving a final
accounting, nor will it determine the distribution Georgia
will receive from the estate itself.” Id.Likewise, in Chevalier v. Estate of Barnhart, 803 F.3d
789 (6th Cir. 2015), Chevalier and Barnhart were married,
and “[t]hroughout the course of their marriage, Chevalier
made a series of loans to Barnhart, which Barnhart never
repaid.” Id. at 791. Chevalier sued in federal court alleging
contract and tort claims to recover her loans. Id. The district
court dismissed Chevalier’s action pursuant to the
“domestic-relations exception to federal diversity
jurisdiction” which “deprives federal courts of jurisdiction
to adjudicate ‘only cases involving the issuance of a divorce,
alimony, or child custody decree.’” Id. at 791–92 (quoting
Ankenbrandt v. Richards, 504 U.S. 689, 704 (1992)); see
also Marshall, 547 U.S. at 308 (describing the probate
exception as “kin to the domestic relations exception”).
Chevalier appealed, and while the appeal was pending,
Barnhart died. Chevalier, 803 F.3d at 792. The Sixth Circuit
reversed the district court, holding that neither the domestic-
relations exception nor the probate exception stripped the
federal court of jurisdiction over Chevalier’s claims. Id. at
804.
SILK V. BOND 19
In addressing the applicability of the probate exception,
the Sixth Circuit used the test relevant here: “whether
Chevalier seeks to reach the res over which the state court
had custody.” Id. at 801 (cleaned up). It held she did not, as
“[h]er first four claims—for breach of contract, default,
unjust enrichment, and fraud—are in personam actions.” Id.
at 802.
Finally, in Lefkowitz v. Bank of New York, 528 F.3d 102,
104 (2d Cir. 2007), the plaintiff asserted claims against
estate administrators for the administrators’ own alleged
wrongful conduct. Unlike here, no claims were based on the
actions of the decedent. The district court, relying on law
preceding Marshall, held that the claims were barred by the
probate exception. Id. at 106–07. The Second Circuit, based
on Marshall, reversed in part, distinguishing claims
including breach of fiduciary duty, aiding and abetting
breach of fiduciary duty, fraudulent misrepresentation, and
fraudulent concealment—which it held were not barred by
the probate exception—from claims including conversion,
unjust enrichment, and payment for monies allegedly owed,
specific performance, and declaratory relief confirming
entitlement to estate assets, which it held were barred. Id. at
104, 107. The court reasoned that in the former category of
claims, the plaintiff “s[ought] damages from Defendants
personally rather than assets or distributions from [an]
estate.” Id. at 107–08. In the latter category of claims,
however, the plaintiff sought, “in essence, disgorgement of
funds that remain under the control of the Probate Court” and
that she was attempting “to mask in claims for federal relief
her complaints about the maladministration of her parent’s
estates, which have been proceeding in probate courts.” Id.
at 107.
20 SILK V. BOND
To the extent that Lefkowitz suggests that the prospect of
a damages award paid by an estate itself rather than the
personal representative of an estate deprives the federal
courts of jurisdiction, see id. at 107–08, that suggestion is
incompatible with Marshall and Goncalves for the reasons
explained above. 12 The question under Marshall and
Goncalves is not whether a money judgment would need to
come from an estate; it is whether a case requires a court to
annul or probate a will, administer an estate, or assume in
rem jurisdiction over property within the custody of a state
probate court. Marshall, 547 U.S. at 311–12; Goncalves,
865 F.3d at 1252. This case does not require the court to
perform any such impermissible function.
II.
The Estate also moved to dismiss for lack of personal
jurisdiction. The district court did not reach this argument,
but the Estate advances it on appeal as an alternative ground
for affirmance. As “[w]e may affirm the district court’s
dismissal on any ground that is supported by the record,
whether or not the district court relied on the same ground,”
we exercise our discretion to reach this argument. 13
12
The Eleventh Circuit’s opinion in Fisher v. PNC Bank, 2 F.4th 1352(11th Cir. 2021), likewise suggests that federal jurisdiction would be
inappropriate were damages to be paid by an estate rather than by a
defendant in its individual capacity. Like the claims the Second Circuit
held were not barred in Lefkowitz, the claims in Fisher sought damages
from a defendant personally, rather than from an estate. Id. at 1357. To
the extent that Fisher implies that seeking damages from an estate would
be inconsistent with federal jurisdiction, it is similarly at odds with
Marshall and Goncalves.
13
The Estate submitted declarations and affidavits to the district court in
support of its motion to dismiss. Silk submitted a declaration in
SILK V. BOND 21
Hartmann v. Cal. Dep’t of Corr. & Rehab., 707 F.3d 1114,
1121 (9th Cir. 2013).
During the relevant period, Silk lived in California and
Bond lived in Maryland. Bond did not travel to California
to do business with Silk; the two instead conducted business
by phone, email, fax, and mail. Under the agreements at
issue here, Silk supervised the liquid portion of Bond’s
investment portfolio from California, and when Silk worked
for Bond, he did so primarily from California. According to
Silk, Bond paid into Silk’s California bank account for his
work, and Bond mailed Silk “substantial paper copies of his
portfolio” for review “every month until he died.” Silk also
declares that he “retained California counsel on behalf of
Bond in connection with some of his investments,” that
Bond “sometimes sent his son” to California to discuss
business on his behalf with Silk, and that at one particular
meeting between Silk and Bond’s son in 2013, the two
opposition. The Estate suggests in its briefing that some facts are
disputed. When a district court acts on a defendant’s motion to dismiss
without first holding an evidentiary hearing, “the plaintiff need only
make a prima facie showing of jurisdiction to avoid the defendant’s
motion to dismiss.” Harris Rutsky & Co. Ins. Servs., Inc. v. Bell &
Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). And “conflicts
between the facts contained in the parties’ affidavits must be resolved in
[the plaintiff’s] favor for purposes of deciding whether a prima facie case
for personal jurisdiction exists.” Id. (internal quotation marks omitted).
We conclude that Silk has made a prima facie showing of personal
jurisdiction and leave any further proceedings on this issue to the district
court.
22 SILK V. BOND
discussed “sensitive aspects” of Silk’s tax- and estate-
planning services. 14
As “California’s long-arm statute allows the exercise of
personal jurisdiction to the full extent permissible under the
U.S. Constitution,” Daimler AG v. Bauman, 571 U.S. 117,
125 (2014), the question is whether the Estate had
“minimum contacts” with California “such that the
maintenance of the suit does not offend traditional notions
of fair play and substantial justice.” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (internal quotation
marks and citation omitted). The answer is yes. Our court
has “set forth a three-part test, derived from the Due Process
Clause, that examines the defendant’s purposeful conduct
towards the forum, the relation between his conduct and the
cause of action asserted against him, and the reasonableness
of the exercise of jurisdiction.” S.E.C. v. Ross, 504 F.3d
1130, 1138 (9th Cir. 2007).
As discussed above, during his life, Frank Bond15
established purposeful contact with California via his
contracts with Silk, then a California resident, 16 for services.
14
The Estate disputes this allegation, stating that when Baron Bond met
with Silk in California, they merely “discussed shared interests including
weight lifting, science fiction, and classical liberal political philosophy
and religion.”
15
A court may exercise personal jurisdiction over the representatives of
an estate if it could have done so over the decedent. Mitsui
Manufacturers Bank v. Tucker, 199 Cal. Rptr. 517, 519 (Ct. App. 1984).
16
Silk declares that he lived in California during the relevant time period,
but Howard Miller, one of the co-personal representatives of the Estate,
declares that Silk lived in Maryland from 1991 to 1995. As factual
conflicts from affidavits are resolved in the plaintiff’s favor at this stage,
SILK V. BOND 23
In doing so, Bond created a multi-year business relationship
“that envisioned continuing and wide-reaching contacts”
with Silk in California. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 480 (1985). Moreover, by contracting with
Silk, Bond created “continuing obligations” to Silk. See
Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d
1474, 1478 (9th Cir. 1986). That conduct gives rise to this
action: When Silk performed financial services for Bond he
did so from California, and the relevant contracts list Silk’s
California address. Claims arising out of the alleged breach
of those contracts therefore arise out of forum-based
activities. See id. at 1480. Finally, even though Bond did
not travel to California to conduct business with Silk, it is
still reasonable for California courts to exercise specific
personal jurisdiction over his Estate given Bond’s retention
of a California-based financial advisor who performed all the
contracted-for services from California. Cf. Burger King,
471 U.S. at 476 (recognizing that the absence of physical
contacts does not alone defeat personal jurisdiction, as “it is
an inescapable fact of modern commercial life that a
substantial amount of business is transacted solely by mail
and wire communications across state lines, . . . obviating
the need for physical presence within a State”).
The Estate contests the exercise of personal jurisdiction.
It first argues that “a contract alone does not automatically
establish minimum contacts in the plaintiff’s home forum.”
Boschetto v. Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008)
(citation omitted). While this is true, the contacts here go
beyond the “lone transaction for the sale of one item” at issue
in Boschetto. Id. Moreover, Boschetto confirms that
we treat Silk as a California resident. See Harris Rutsky, 328 F.3d at
1129.
24 SILK V. BOND
business activity constitutes purposeful availment when that
activity reaches out and creates “continuing relationships
and obligations” in the forum state. Id. (quoting Travelers
Health Ass’n v. Commonwealth of Va., 339 U.S. 643, 647
(1950) (emphasis in original)). The yearslong business
relationship between Silk and Bond was significantly more
extensive than the purchase of a single item in Boschetto.
Indeed, the Complaint alleges that Silk worked for Bond for
“over two decades.” A decades-long business relationship17
with a California-based service provider clearly constitutes
purposeful availment of the privilege of doing business in
California. The Estate’s arguments that payments for a
contract alone do not constitute “the deliberate creation of a
substantial connection with California,” and that unlike in
Burger King, the contracts at issue “did not require Bond to
subjugate his business affairs to a California operation,” do
not change our analysis.
The Estate next argues that Silk’s focus on his own
California ties is misplaced because it is Bond’s contacts
with California that matter for the purpose of personal
jurisdiction. This misses the mark. No party contends that
California has general personal jurisdiction over the Estate
by virtue of Bond establishing residence or property
ownership in California. Instead, Silk argues that Bond
availed himself of Silk’s California-based services in a
manner “sufficient to establish the required minimum
17
While the Estate argues that Silk’s suit is for “two discrete contracts
for tax planning allegedly performed in 1998 and 1999,” this ignores that
Count One of the Complaint alleges breach of contract for the private
variable annuity incentive fee Silk alleges he earned from 1991 to 1993.
The Complaint also alleges decades of work related to, but not
constituting, the relevant breaches of contract.
SILK V. BOND 25
contacts for specific personal jurisdiction.” Silk’s focus on
his own California address and bank account are relevant
because it is Bond’s contacts with him that support the
exercise of personal jurisdiction.
Finally, the Estate argues that even if Silk has made a
prima facie case for the exercise of personal jurisdiction in
California, exercise of that jurisdiction would be
unreasonable. We disagree.
We employ a multi-factor balancing test to determine the
reasonableness of exercising personal jurisdiction over a
non-resident defendant, assessing:
1) the extent of the defendant’s purposeful
interjection into the forum state’s affairs; 2)
the burden on the defendant; 3) conflicts of
law between the forum and defendant’s home
jurisdiction; 4) the forum’s interest in
adjudicating the dispute; 5) the most efficient
judicial resolution of the dispute; 6) the
plaintiff’s interest in convenient and effective
relief; and 7) the existence of an alternative
forum.
Roth v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991)
(citations omitted). No single factor is dispositive. Id. And
as we conclude that at this stage of the proceedings, Silk has
established that Bond purposefully availed himself of the
privilege of doing business in California and that this suit
arises out of that contact with California, the Estate “must
come forward with a ‘compelling case’ that the exercise of
jurisdiction would not be reasonable.” Boschetto, 539 F.3d
at 1016 (quoting Burger King, 471 U.S. 476–78).
26 SILK V. BOND
The Estate has not presented a compelling case that the
exercise of jurisdiction would be unreasonable. See Caruth
v. Int’l Psychoanalytical Ass’n, 59 F.3d 126, 129 (9th Cir.
1995) (“Neither party is clearly favored in the final balance.
However, given the closeness of the factors, we conclude
that [defendant] has not presented a ‘compelling case’ that
exercising jurisdiction over it would be unreasonable.”).
First, Bond’s interjection into California is analogous to
his purposeful availment and, accordingly, the first factor
favors jurisdiction. See Sinatra v. Nat’l Enquirer, Inc., 854
F.2d 1191, 1199 (9th Cir. 1988). Next, although defending
a lawsuit in California is surely burdensome to the Estate,
the Estate has not “presented evidence that the
inconvenience is so great as to constitute a deprivation of due
process,” and so this factor just “barely” weighs against the
exercise of personal jurisdiction. Freestream Aircraft
(Bermuda) Ltd. v. Aero L. Grp., 905 F.3d 597, 608 (9th Cir.
2018) (internal quotation marks omitted).
The Estate speculates that Silk filed in California instead
of Maryland to avoid Maryland’s “Dead Man’s Act,” which
prevents interested parties in civil actions from testifying
about conversations or transactions with the deceased. Even
if true, and even if California wouldn’t apply a similar rule,
this does not by itself render the exercise of jurisdiction in
California unreasonable. Different forums have different
rules, and parties often pick the one they perceive to be most
favorable to them. We reject the Estate’s contention that
exercising jurisdiction would conflict with Maryland’s
“sovereign prerogatives,” because, as we have previously
observed, “any clash between a forum’s law with the
fundamental substantive social policies of another state may
be resolved through choice of law rules, not jurisdiction.”
Haisten v. Grass Valley Medical Reimbursement Fund, Ltd.,
SILK V. BOND 27
784 F.2d 1392, 1401–02 (9th Cir. 1986). The fact that
“California might apply its own law against the [Estate]
should not complicate or distort the jurisdictional inquiry.”
Id. at 1402.
As for the remaining factors, although California has an
interest in providing an effective means of redress for its
residents, Silk is no longer a California resident. Efficient
judicial resolution of the controversy is neutral, as it focuses
on the location of the evidence and witnesses, see Harris
Rutsky, 328 F.3d at 1133, which are split between Nevada
and Maryland. And, in any event, “this factor is no longer
weighed heavily given the modern advances in
communication and transportation.” Id. (internal quotation
marks and citation omitted). California also serves Silk’s
interest in convenient and effective relief: Even though Silk
now lives in Nevada, California is a more convenient forum
for him than Maryland, and he was a California resident
when he entered the contracts and did the work at issue in
this dispute. Finally, “[w]hether another reasonable forum
exists becomes an issue only when the forum state is shown
to be unreasonable,” and the Estate has made no such
showing here. CollegeSource, Inc. v. AcademyOne, Inc.,
653 F.3d 1066, 1080 (9th Cir. 2011) (quoting Bauman v.
DaimlerChrysler Corp., 644 F.3d 909, 929 n.19 (9th Cir.
2011), rev’d on other grounds, 571 U.S. 117 (2014)).
For the foregoing reasons, we hold that Silk has made
out a prima facie case of personal jurisdiction.
CONCLUSION
Because federal jurisdiction over this case is not barred
by the probate exception, and because at this stage of the
proceedings Silk has made a prima facie case for personal
jurisdiction over the Estate, we reverse the judgment of the
28 SILK V. BOND
district court and remand for further proceedings.
REVERSED and REMANDED.