Goldman v. Estate of Goldman

• Decision Date: 29 March 2000
• Docket Number: No. 97 Civ. 2455(RMB).,97 Civ. 2455(RMB).
• Citation: 97 F.Supp.2d 370
• Parties: Carol GOLDMAN, individually and as a trustee of the Donald J. Goldman, P.C. Defined Benefit Pension Plan, Plaintiff, v. The ESTATE OF Byrdie GOLDMAN, deceased, Defendant.
• Court: U.S. District Court — Southern District of New York

97 F.Supp.2d 370

Carol GOLDMAN, individually and as a trustee of the Donald J. Goldman, P.C. Defined Benefit Pension Plan, Plaintiff, v. The ESTATE OF Byrdie GOLDMAN, deceased, Defendant.

No. 97 Civ. 2455(RMB).

United States District Court, S.D. New York.

March 29, 2000.

Barry A. Kozyra, Walder, Sonsak, Berkeley & Brogan, P.A., Roseland, NJ, for Carol Goldman.

ORDER

BERMAN, District Judge.

At the heart of this dispute is a bitter intra-family feud over the estate of Byrdie Goldman who died in 1991. The feud has given rise to multiple lawsuits in different forums. At one point, it led to the issuance of an arrest warrant for Byrdie Goldman's son Donald Goldman, a New York attorney. Mr. Goldman has been accused of violating New Jersey State court orders; of improperly (fraudulently) transferring funds out of the estate of his mother; and even of placing his sister in a nursing home without telling her other relatives (and telling her only that he was taking her out to buy an ice cream cone).

On or about April 14, 1999, Carol Goldman ("Plaintiff" or "Mrs. Goldman"), who is Donald Goldman's wife, submitted an application to this Court for Judgment by Default against The Estate of Byrdie Goldman ("Defendant" or "Estate") on the basis of the Estate's alleged failure to answer Plaintiff's Amended Complaint in this action. At the time the default application was submitted, this action had been pending (and aggressively litigated) for nearly two years.¹ On May 17, 1999, the Estate cross moved for an order denying Mrs. Goldman's application for a default and dismissing Mrs. Goldman's Amended Complaint (for lack of jurisdiction) pursuant to Federal Rule of Civil Procedure ("Fed. R.Civ.P.") 12(b),² or, alternatively, granting summary judgment to Defendant pursuant to Fed.R.Civ.P. 56. In accordance with this Court's Order, dated July 28, 1999, the parties have also submitted briefs addressing the issue of "whether the doctrine of abstention is applicable here." For the reasons set forth below, Plaintiff's application for a default judgment is denied; and the Defendant's motion for dismissal or summary judgment is denied. The Court has determined to abstain from further adjudication of this action pending the conclusion of In the Matter of the Estate of Byrdie Goldman in the Probate Part of the Chancery Division of the New Jersey Superior Court in Passaic County.

I. Background

On March 20, 1991, Byrdie Goldman executed a will leaving half of her estate to her son, Donald Goldman, and placing the other half in trust for the care of her mentally disabled daughter Carolyn Goldman.³ See Goldman v. Walder, Sondak & Brogan, P.A. [hereinafter "Goldman"], No. 97 Civ. 2455, 1998 WL 5391, at *1 (S.D.N.Y. Jan. 7, 1998). On October 27, 1991, Byrdie Goldman died, precipitating a tortuous, strife ridden intra-familial dispute that has spawned at least five separate legal actions, including this one, in at least four different federal and state courts. On one side stands the late Byrdie Goldman's Estate and her nephew, Justin Walder ("Walder"), the executor of the Estate and the guardian of Carolyn Goldman. On the other side stands Byrdie Goldman's son Donald Goldman and his wife Carol Goldman. At center stage is the Probate Part of the Chancery Division of the New Jersey Superior Court in Passaic County, New Jersey, to which the matters of the will and the Estate of Byrdie Goldman were transferred (from the New Jersey Surrogate's Court) on or about June 2, 1993—upon Walder's claim that Donald Goldman wrongfully appropriated assets belonging to his mother shortly before her death. In the Matter of the Estate of Byrdie Goldman [hereinafter "In Re: Byrdie Goldman"], No. 159574 (N.J.Super.Ct.Ch.Div. Probate Pt.)⁴

On June 21, 1994, New Jersey Superior Court Judge Amos C. Saunders—after finding that Mr. Goldman had falsely denied withdrawal of assets from his mother's bank accounts shortly before her death—concluded "that the Estate of Byrdie Goldman is entitled to the relief sought, including the issuance of a Writ of Attachment" and ordered Mr. Goldman "and his agents, servants, and employees" to transfer $382,504.20 into Walder's custody, pending resolution of competing claims to Byrdie Goldman's estate funds. See In Re: Byrdie Goldman (June 21, 1994). Mr. Goldman failed to comply with Judge Saunders' order "consistently and continually violat[ing] the orders of th[e] court." See Tr. of Mot., Sept. 16, 1994, at 8, In Re: Byrdie Goldman.⁵

On September 29, 1994, Judge Saunders entered a judgment against Mr. Goldman in the amount of $382,504.20. See In Re: Byrdie Goldman (Sept. 29, 1994). Judge Saunders further ordered "that Donald Goldman, individually, and through the law practice of Donald Goldman, Esq., an attorney at law of the State of New York, his agents, servants, and/or employees and/or anyone acting in concert with him are restrained" from transferring property in which any of these persons have a beneficial, legal or possessory interest. See id. There is no evidence in the record that Mr. Goldman ever attempted to satisfy the judgment.⁶

On February 3, 1997, Judge Saunders ruled "that Donald Goldman engaged in fraudulent conduct with respect to the assets of Byrdie Goldman, both prior to and subsequent to her death." See In Re: Byrdie Goldman (Feb. 3, 1997). Having heard "evidence that the Plan [i.e. the Donald J. Goldman, P.C. Defined Benefit Pension Plan] was being used to hide some of Mr. Goldman's assets, [and/or the assets of his law practice,] from the Estate, in violation of the restraining order of September 29, 1994," see Goldman at *6 (Jan. 7, 1998), Judge Saunders issued a Writ of Execution against the Plan account, among other accounts held by Mr. and/or Mrs. Goldman at Merrill Lynch. See In Re: Byrdie Goldman (Mar. 20, 1997).

As noted, on April 8, 1997, Carol Goldman, individually and as a trustee of the Plan, filed an action in this Court for declaratory and injunctive relief seeking to prevent the Estate from executing on the New Jersey Superior Court Judgment against Merrill Lynch accounts and for damages. (Am.Compl. at 5-6.) With respect to the Plan account, in particular, Mrs. Goldman claimed that certain provisions of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., precluded execution of the New Jersey judgment. See id. ¶ 20. On April 21, 1997, U.S. District Court Judge Robert P. Patterson (initially) stayed the execution of the New Jersey judgment against the Plan account, but did so upon Mrs. Goldman's assurance(s) that she would present her claim(s) before the New Jersey Court. See Goldman (Apr. 21, 1997). Specifically, Judge Patterson directed Mrs. Goldman to reapply for Federal relief if, "after an appearance by Mr. & Mrs. Goldman in the New Jersey Court on May 9, 1997, that Court does not order an evidentiary hearing with respect to the source of the funds in the Plan but instead orders the assets of the Plan transferred sua sponte." See Goldman (May 8, 1997). Neither Mrs. Goldman nor Mr. Goldman ever appeared before the New Jersey Court as directed by Judge Patterson. See Goldman at *3 (Jan. 7, 1998).

On May 9, 1997 (in the Goldmans' absence), Judge Saunders made the following factual findings with respect to the Plan account:

In April, 1991, Donald Goldman, a New York Lawyer and sole practitioner, had an individual retirement account at Merrill Lynch titled "The Donald J. Goldman IRA, FBO [for the benefit of] Donald J. Goldman...." As of October 2, 1995 this account had a balance of $24,279.84. This account has not been frozen at Merrill Lynch. At the same time, Donald Goldman also had a second account with Merrill Lynch, designated "The Donald J. Goldman P.C. Defined Benefit Pension Plan".... As of January 1, 1991 this account had a portfolio value of $77,508.14.

Coinciding with Byrdie Goldman's declining health, Donald Goldman opened a new "retirement account" at Merrill Lynch, "Donald J. Goldman Basic Retirement" .... Ignoring the IRA account and focusing simply on the Defined Benefit Pension Plan Account ... and the new Basic Retirement Account ..., Donald Goldman deposited almost $2,000,000 in cash into the two Merrill Lynch accounts in a period of slightly less than five years. Byrdie Goldman had mentioned to Justin Walder [now Executor of her Estate] a safe deposit box in lower New York with bearer bonds in it; Donald Goldman said there was such a safe deposit box, but that he did not know where it was in New York. Many of the deposits after April 1991 were from cashier's checks—similar to those issued when bearer bonds are cashed.... To date, we have been unable to learn from Donald Goldman through discovery (or from anyone else) the source of these substantial uncharacteristic deposits.

Donald Goldman also accumulated money in his Merrill Lynch Basic Retirement Account.... On July 5, 1995, he withdrew the balance from this account of $156,079.11.... This wrongful withdrawal was made notwithstanding this Court's Restraining Order of September 16, 1994, and a similar Order entered in New York on March 29, 1995 by The Honorable Joan Lobis. On July 6, 1995, Defendant Donald Goldman endorsed the check for $156,079.41 to his wife Carol Goldman and one of his sons, Michael Goldman, who deposited it to their joint account at Merrill Lynch.

Tr. of Mot., May 9, 1997, at 9, In Re: Byrdie Goldman (incorporating by reference Certification of Barry A. Kozyra, Apr. 23, 1997) (emphasis added). "The inference, clearly, from the conduct of everyone in this case, is that [the] $2,000,000 represents [Byrdie Goldman's bearer] bonds ..."

There's no way that Mr. Goldman or anyone can legitimately and properly argue that this De[f]ine[d] Benefit Pension Plan is protected by ERISA or anything else. Certainly the moneys can be traced. And if they are ill-gotten monies, they are not protected. And certainly, the litigants in this case have a right to trace those...