Rothberg v. Marger

MICHAEL S. ROTHBERG and THERESA ROTHBERG, Plaintiffs,

v.SARANNE ROTHBERG MARGER

(individually and as Administratrix of The Estate of Sidney Rothberg),

THE ESTATE OF SIDNEY ROTHBERG NELLIE INGRAM,

ALAN MARKOVITZ, MARK JONES, WELLS FARGO BANK,

GEORGE BRANDT, CAPITAL ONE BANK, JOHN and JANE DOES 1-20,

and ABC CORPORATIONS A through Z Defendants.

LYNN ROTHBERG KEARNEY, Intervenor Plaintiff,

v.SARANNE ROTHBERG MARGER, et al., Intervenor Defendants.

Civil No. 11-5497 (RBK/KMW)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

Dated: March 28, 2013

NOT FOR PUBLICATION

(Document Nos. 120-21, 123, 125-26)

OPINION

KUGLER, United States District Judge:

This matter arises upon Plaintiffs Michael Rothberg's ("Michael") and Theresa Rothberg's ("Plaintiffs") Complaint against Defendants Saranne Rothberg Marger ("Saranne," "Marger" or "Defendant Marger"); Nellie Ingram ("Ingram" or "Defendant Ingram"); Alan Markovitz, Esq. ("Markovitz" or "Defendant Markovitz"); Mark Jones ("Jones" or "Defendant Jones") and Wells Fargo Bank as successor to Wachovia Bank, NA; and George Brandt ("Brandt" or "Defendant Brandt") and Capital One Bank as successor to North Fork Bank (collectively, "Defendants") concerning the estate of Sidney Rothberg. Currently before the Court are Defendants' motions to dismiss Plaintiffs' Amended Complaint (Doc Nos. 120-21, 123, 125-26). For the reasons expressed below, the Court will grant Defendants' motions to dismiss.

I. FACTUAL AND PROCEDURAL BACKGROUND¹

On May 13, 2008, Sidney Rothberg died at eighty-three years of age, leaving behind an estate ("the Estate") allegedly worth up to $200,000,000. Am. Compl. ¶ 22. Sidney and his wife raised two children: Michael S. Rothberg and Saranne Rothberg Marger. Id. at ¶ 23. The essence of Plaintiffs' claims is that Michael Rothberg is entitled to a 50% share of the Estate, and that Saranne Marger, working individually as well as in concert with the other Defendants, used unlawful means to cause Sidney Rothberg to execute two testamentary instruments (first in 1994 and then again in 2002) which conferred the vast majority of the Estate to Saranne's exclusive control while leaving only a relative pittance to her brother. The Amended Complaint also alleges that Saranne breached obligations under an agreement with Plaintiffs concerning Plaintiffs' home. Given the nature of Plaintiffs' claims, and the Court's basis for grantingDefendants' motions to dismiss them for lack of jurisdiction, it is necessary to recount in some detail the allegations in Plaintiffs' 229-paragraph Amended Complaint.

A. Count One: Breach of Fiduciary Duty by Saranne Marger

In the mid-1970s, Sidney Rothberg prepared a will that left the entirety of his estate in equal shares to his two children: Michael and Saranne ("1970s Will"). Am. Compl. ¶ 25. Then, in 1994, Sidney fell ill, having to undergo a coronary angioplasty procedure. Id. ¶ 33. He went to stay with Saranne at her New York apartment. During this stay, while Sidney was "heavily medicated, sedated, vulnerable and susceptible," Saranne caused him to modify the 1970s Will with a new one ("1994 Will"): this version left only a certain work of art to Michael Rothberg, while everything else, save a small sum of money for Sidney's housekeeper Nellie Ingram, who witnessed this testamentary modification, went to Saranne. Id. at ¶ 35.

Some years later, in 2002, Saranne hatched a scheme to create new fraudulent will. She had Sidney sign a blank piece of paper, had his doorman provide a witness's signature, and then subsequently typed onto that piece of paper the new will's terms. Id. at ¶ 53. This 2002 Will had the following terms: $5,000 to Nellie Ingram; a particular painting or cash equivalent as well as interest and principal on $120,000 worth of bonds to Michael Rothberg; and the remainder of the Estate to Saranne Marger ("2002 Will"). Id. at ¶¶ 41-42.

In 2007, Sidney's declining health resulted in his moving to the Russ Berrie Home for Jewish Living in Rockleigh, New Jersey, so that he could receive more constant medical care. Id. at ¶¶ 63-65. Michael Rothberg visit his father frequently during this time. In the course of their conversations, Sidney promised Michael a number of testamentary gifts, including certain real property in New York city and the contents of a UBS brokerage account. Id. at ¶¶ 77-80. Atthis same time, Saranne, without Sidney's knowledge or consent, transferred out of Sidney's possession almost $3.75 million in cash. Id. at ¶¶ 82-84.

Finally, Sidney died on May 13, 2008. For seventeen days, Saranne did not reveal his death to anyone. Instead she took action in conjunction with her attorney Defendant Alan Markovitz to misappropriate and conceal certain assets of the Estate. Id. at ¶ 100. Next, she ordered Defendant Ingram to destroy all of the documents that Sidney kept in his two-story condominium in Philadelphia, while herself destroying any other documents she could find regarding Sidney's properties, interests, assets, and intentions. Id. at ¶ 102.

From these allegations, Plaintiffs claim that Saranne Marger breached her fiduciary duty to Plaintiffs.

B. Count Two: Tortious Interference with Payment of Estate Obligations by all Defendants

Plaintiffs' tortious interference claim rests upon similar allegations as those presented in Count One. That is, they charge all defendants with taking action to frustrate the testamentary intent of Sidney Rothberg by siphoning off his assets before and after his death, destroying documents, including the 1970s Will, and committing other fraudulent acts.

Specifically, Saranne Marger, with the help of Defendants Brandt, Jones, and their respective financial institutions, diverted millions of dollars out of Sidney's accounts into her own control using a fraudulent power of attorney. Id. at ¶ 133. When Sidney tried to recover these funds, Saranne prevailed upon the Defendants Brandt and Jones to thwart these efforts. Id. Finally, when Michael confronted his sister about the way she was managing Sidney's estate, Saranne sought a restraining order in New Jersey state court to prevent him from receiving the gifts promised him by Sidney. Id. at ¶ 144.

C. Count Three: Breach of Assignment and Trust Agreements by Saranne Marger

Count Three of Plaintiffs' Amended Complaint concerns a home that Sidney agreed to purchase and maintain for Plaintiffs. He wrote checks totaling $350,000 to a real estate attorney to purchase a home in Woodbine, New Jersey (the "Woodbine Property"). Id. at ¶ 149. The closing was scheduled for May 30, 2008. On May 13, however, Sidney died. Given this circumstance, Saranne Marger, along with Defendant Markovitz, approached Plaintiffs with a proposal: if Plaintiffs assigned their interests in the Woodbine Property to an Irrevocable trust controlled by Saranne and her daughter, then Plaintiffs would be provided with the following consideration² :

(a) fully insuring and maintaining the [Woodbine Property] until it could be torn down and a new high quality residence, all costs and expenses for which would be covered by Marger as Administratrix of the Estate, could be built and occupied by Plaintiffs, and then fully insuring and maintaining that new home . . .; (b) an annual allowance for vacations comparable to the ones Sidney Rothberg had given Plaintiffs during his lifetime; (c) an apartment in New York City at absolutely no cost to Plaintiffs that they could use throughout their lives and that they could then, in time, give to their daughter, Tara; (d) $100,000 for their daughter Tara's wedding; (e) a $1,000,000.00 trading account for Michael Rothberg to use in his absolute discretion for commodities and stock trading for his exclusive benefits; (f) annual shopping sprees comparable to the ones Sidney Rothberg had given Plaintiffs during his lifetime; (g) new cars for Michael and Theresa (including the services of a driver for Michael when necessary); (h) medical and dental insurance for their lifetimes; and (i) all available technologies and education available for the blind for Rothberg.

Id. at ¶ 156. Saranne represented that both she and the Estate would be bound to provide this promised consideration. Id. at ¶ 157. To date, Plaintiffs have not received any of these assets or benefits. Id. at 159.

D. Count Four: Fraud and Fraudulent Inducement by Saranne Marger and Alan Markovitz

This count makes no new allegations, but simply recasts the alleged acts of Saranne Marger and Alan Markovitz as evidencing fraudulent, rather than simply tortious, behavior. See id. ¶¶ 164-170.

E. Counts Five and Six: Violations of the Federal RICO Statute

Again, there are scant new allegations found in Counts Five and Six. In an effort to state a valid claim under the state and federal Racketeer Influenced and Corrupt Organizations ("RICO") statutes, Plaintiffs allege that Defendants conspired with one another for the purpose of diverting assets from Sidney Rothberg's Estate and concealing them from the Estate's beneficiaries, including Plaintiffs. Id. at ¶ 174. Consequently, these acts include moving various tangible property and liquid assets across state lines and out of the country, fraudulently inducing Plaintiffs to assign their rights to the Woodbine House, destroying Sidney Rothberg's personal records, and failing to pay taxes owed by the Estate. Id. at ¶¶ 175-186.

F. Requested Relief

For all six counts,³ Plaintiffs seek the following relief:

[A]pplication of a constructive trust over all Estate assets, appointment of a third-party auditor and administrator of the Estate to account for assets of the Estate and distribute the funds owed to [Michael] Rothberg, for an order awarding [Michael] Rothberg the amounts owed to him for the CDs, the two trusts, his share of the value of SMR [a corporation created by Sidney Rothberg for the purpose of buying and selling artwork], continuation of the payment of all his expenses in the manner established during Sidney Rothberg's life . . .

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