In: Economics
Federal Courts are a part of judicial branch of United States which interpret and apply National Laws. Also, it has trial and appellate levels. It has jurisdiction over the cases which involves questions related to Federal issues. On the other hand, State Courts are also a part of judicial branch of U.S. which interpret and apply state & local laws. Like Federal Courts, it also has trial and appellate levels.
Since, Pat & Dorothy Case (as you asked above in this question) is a case involving real estate dispute. So, here Pat may/will file this case in State Trial Courts. It means only State Court has jurisdiction to entertain the Trial, because Federal Courts has limited jurisdiction & can entertain only cases which mostly/primarily involves Federal issues.
So, in this case, only State Courts i.e., State Trial Court of general jurisdiction can only has jurisdiction to entertain this case.