Milgroom v. United States

• Decision Date: 19 August 2015
• Docket Number: No. 15-193C,15-193C
• Parties: ROBERT MILGROOM AND NADA MARTL, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Claims Court

ROBERT MILGROOM AND NADA MARTL, Plaintiffs, v. UNITED STATES, Defendant.

No. 15-193C

United States Court of Federal Claims

August 19, 2015

ORIGINAL

Pro Se; Res Judicata; Lack of Subject Matter Jurisdiction; Due Process; Judicial Taking; Tort.

Robert B. Milgroom and Nada Martl, Miami Beach, FL, pro se.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. for the defendant. With him were Robert E. Kirschman, Director, Commercial Litigation Branch, and Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Washington, D.C.

OPINION

HORN, J.

Plaintiffs, Robert B. Milgroom, and Nada Martl, both pro se, filed a complaint together in this court on March 2, 2015. Together, plaintiffs allege violations of the Fourth, Fifth, and Tenth Amendments to the United States Constitution, and claim that the United States District Court for the District of Hawaii took their real property and personal property without just compensation. The co-plaintiffs are seeking $9 million in damages, $8 million for the real property allegedly taken in Hawaii, and $1 million for personal property, allegedly contained within the real property. Plaintiff Martl previously has filed two substantially similar complaints to the instant complaint in this court. The first complaint, filed on May 12, 2009, was dismissed, based on a lack of jurisdiction in this court to review decisions of the United States District Courts. See Martl v. United States, No. 09-299L, 2010 WL 369212, at *2 (Fed. Cl. Jan. 29, 2010) (unreported decision) (Martl I). The second complaint, filed on May 7, 2014, similarly was dismissed based on the lack of jurisdiction of this court to review decisions of the United States District Courts,as well as under the doctrine of collateral estoppel, barring Ms. Martl from bringing claims that she had already brought before the court in Martl I. See Martl v. United States, No. 14-391L, 2014 WL 1912645, at *2 (Fed. Cl. May 13, 2014) (unreported decision) (Martl II). Plaintiff Martl, joined by plaintiff Milgroom in the instant complaint, again alleges the same causes of action that she alleged in Martl II, based on the alleged wrongful taking of property located in Hawaii.

FINDINGS OF FACT

Plaintiffs' allegations currently before this court arise out of four prior court proceedings: two lawsuits filed against Mr. Milgroom in the Massachusetts Superior Courts, Mr. Milgroom's bankruptcy proceeding in the United States Bankruptcy Court for the District of Hawaii, and a lawsuit brought against Mr. Milgroom and Ms. Martl in the United States District Court for the District of Hawaii. In April 1987, Mary Valvanis, John Valvanis, and George Valvanis, commenced litigation against Mr. Milgroom in the Superior Court for the County of Norfolk in the Commonwealth of Massachusetts. See generally Valvanis v. Milgroom, No. 87-997, 2007 WL 5954517 (Super. Ct. Mass. July 3, 2007). The Valvanis family alleged that Mr. Milgroom had wrongfully used his influence as an attorney and an accountant for the Valvanis family business to misappropriate real estate interests and business assets. The action was stalled for many years, but moved forward again in the early 2000s.¹ On October 18, 2005, the Superior Court for the County of Norfolk entered a default judgment against Mr. Milgroom after he failed to appear for a pre-trial conference.² On July 3, 2007, the Superior Court for the County of Norfolk ordered judgment and damages in favor of the Valvanis family, totaling $3,881,612.14.³

In addition to the Valvanis litigation in Massachusetts Superior Court for the County of Norfolk, on January 10, 2002, the D'Ambrosio family, the family of Mr. Milgroom's first wife, filed a suit against Mr. Milgroom in the Superior Court for the County of Suffolk, also in the Commonwealth of Massachusetts. See D'Ambrosio et al. v. Milgroom et al., No. 02E-0003 (Super. Ct. Mass. May 14, 2007). The D'Ambrosio family alleged that Mr. Milgroom fraudulently used his power of attorney, which he obtained from his terminally ill wife, to change the names on several bank accounts that were intended for his wife's family after she passed away. The D'Ambrosio family alleged that Mr. Milgroom changed the name on the accounts so he could withdraw the money for himself. The Massachusetts Superior Court for the County of Norfolk found that Mr. Milgroom had misappropriated $2,072,101.03 from his deceased wife's estate, even though at the time he was estimated to be worth between $8 and $10 million. See "Findings of Fact, Rulings of Law and Rationale" at 26-29, D'Ambrosio et al. v. Milgroom et al., No. 02E-0003 (Super. Ct. Mass. May 14, 2007). The Massachusetts Superior Court for the County of Suffolk's decision stated that Mr. Milgroom's actions were "reprehensible and shameful," and that his violation of his deceased wife's trust "can only be characterized as outright mendacious greed." Id. at 29. On July 5, 2007, the Massachusetts Superior Court for the County of Suffolk ordered him to reimburse the funds he had wrongfully taken from his deceased wife's estate. See "Judgment" at 5, D'Ambrosio et al. v. Milgroom et al., No. 02E-0003 (Super. Ct. Mass. July 5, 2007).

Six months after his first wife passed away, on September 11, 2001, Mr. Milgroom married his co-plaintiff in the above captioned case, Nada Martl.⁴ Prior to their marriage, Mr. Milgroom and Ms. Martl worked together in two Florida real estate investment companies. See Valvanis v. Milgroom, 2009 WL 1561575, at *2 n.5. In 2002, Mr. Milgroom began transferring money to Ms. Martl, allegedly pursuant to an agreement prior to their marriage that Mr. Milgroom would give Ms. Martl $5 million if she married him. See id. at*2 (The District Court for the District of Hawaii noted that "[i]n lieu of giving Martl $5 million, Milgroom asserts that he added her name to all of his financial accounts."). On March 1, 2002, the same day that Mr. Milgroom was served with the D'Ambrosio complaint alleging that he had misappropriated funds from his first wife's estate, Mr. Milgroom transferred $1.05 million from his bank account, and $950,000.00 from an account jointly held by Mr. Milgroom and Ms. Martl, to Ms. Martl's Bank of America checking account. Ms. Martl then transferred the resulting $2 million to a bank account she had in Germany. See id. at *3. During that same month, Mr. Milgroom sold several of his Treasury Direct securities, totaling over $4.5 million, and transferred those funds to Ms. Martl's German bank account. See id. On April 23, 2002, Ms. Martl transferred an additional $2.7 million, traceable to Mr. Milgroom's funds, into her German bank account.⁵ In total, Mr. Milgroom transferred approximately $9 million to Ms. Martl, who subsequently placed the funds in her German bank account. See id.

On August 2, 2002, Mr. Milgroom and Ms. Martl purchased real property in Hawaii for $5.2 million in cash. See id. Mr. Milgroom and Ms. Martl allegedly created title to the Hawaii Property as "tenants by the entirety." See id. at *2. The record from the United States District Court for the District of Hawaii shows that the money used to purchase the Hawaii property came from funds that originated in whole or in substantial part from Mr. Milgroom's accounts.⁶ On July 12, 2002, Ms. Martl transferred $6,499,982.00 from her German bank account, the same account into which she had previously deposited the $9 million from Mr. Milgroom, to a checking account she shared with Mr. Milgroom at First Hawaiian Bank. See id. at *3. Mr. Milgroom then drew a check from this account for $7,125,000.00, payable to himself, and deposited it into their joint savings account. These funds were then used to purchase the Hawaii property. See id.

From January through May 2003, Mr. Milgroom continued to transfer assets to Ms. Martl. Mr. Milgroom liquidated $6.3 million in Treasury Direct investments and transferred those funds to Ms. Martl's checking account in the United States. Ms. Martl subsequently transferred $6 million from that account to her bank account in Germany. Mr. Milgroom also transferred his interest in the Hawaii property to Ms. Martl through a quitclaim deed. The deed stated that Ms. Martl paid Mr. Milgroom "consideration in the sum of TEN DOLLARS" for his interest in the property. Valvanis v. Milgroom, 2009 WL 1561575, at *4 (capitalization in original). According to the United States District Court for the District of Hawaii, following the transfer of his property interest to Ms. Martl, Mr. Milgroom had a negative net worth of approximately $2 million.

According to documents filed in the United States District Court for the District of Hawaii, on June 14, 2005, Ms. Martl filed a Complaint for Divorce against Mr. Milgroom in Family Court, Circuit Court of the First Circuit, in the State of Hawaii. In the divorce action, Mr. Milgroom listed no income, no expenses, no debts, and no assets. Ms. Martl similarly listed no income and no expenses, and listed a 2005 BMW vehicle and the Hawaii property as her only assets. On June 15, 2005, Mr. Milgroom filed a "RELEASE OF MARRITAL [sic] INTEREST IN REAL ESTATE LOCATED AT 253 PUUIKENA DRIVE: HONOLULU; HI 96821," (emphasis and capitalization in original), with the Family Court in the Circuit Court of the First Circuit of Hawaii, trying to establish Ms. Martl as the "sole owner of the property." See Docket Number 339, Exhibit 7, Valvanis v. Milgroom, 06-144 (D. Haw. Mar. 5, 2008). Mr. Milgroom purported to release all of his marital interest in the property "for consideration paid," and asserted that "the assets and debts of one spouse shall not be the responsibility of the other spouse." Docket Number 339, Exhibit 7, Valvanis v. Milgroom, 06-144 (D. Haw. Mar. 5, 2008). Two weeks later, on June 28, 2005, a divorce decree was entered. See Martl v. Milgroom, No. 05-1-1994 (Fam. Ct. 1st Cir. Haw. June 27, 2005). According...