von Bulow By Auersperg v. Von Bulow

• Decision Date: 01 July 1986
• Docket Number: No. 85 Civ. 553 (JMW).,85 Civ. 553 (JMW).
• Citation: von Bulow By Auersperg v. Von Bulow, 634 F.Supp. 1284 (S.D. N.Y. 1986)
• Parties: Martha VON BULOW, by her next friends Alexander AUERSPERG and Annie Laurie Auersperg Kneissl, and Alexander Auersperg and Annie Laurie Auersperg Kneissl, individually, Plaintiffs, v. Claus VON BULOW, Defendant.
• Court: U.S. District Court — Southern District of New York

634 F. Supp. 1284

Martha VON BULOW, by her next friends Alexander AUERSPERG and Annie Laurie Auersperg Kneissl, and Alexander Auersperg and Annie Laurie Auersperg Kneissl, individually, Plaintiffs, v. Claus VON BULOW, Defendant.

No. 85 Civ. 553 (JMW).

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

May 5, 1986.

On Motion for Limited Reargument July 1, 1986.

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Barrett, Smith, Schapiro, Simon & Armstrong, New York City, for plaintiffs; Michael F. Armstrong, Frederic W. Parnon, Susan Gotbetter, David J. Nathan, Carol Quackenbos, of counsel.

Schulte, Roth & Zabel, New York City, for defendant; John S. Martin, Jr., Stacey J. Moritz, Beryl A. Howell, Jonathan Barzilay, of counsel.

OPINION

WALKER, District Judge:

I. Introduction

Defendant Claus von Bulow moves pursuant to Fed.R.Civ.P. 9(b), 12(b)(1), (6), and (7), and 19(b) for dismissal of this action. For the reasons stated below, the Court denies the motion in its entirety with one exception.

This action is brought by the two children of Martha von Bulow's earlier marriage suing on her behalf as her "next friends." They allege that defendant devised a scheme to murder their mother, a woman of substantial wealth, and twice attempted to carry out his plan through the surreptitious injection of drugs. His aim, they contend, was to gain a multimillion dollar inheritance from Mrs. von Bulow's estate and attain the freedom to marry another woman. In the case of the second attempt, they allege he also sought to ensure continued receipt of payments from an inter vivos trust established by Mrs. von Bulow following her recovery from the first attempt. Mrs. von Bulow today remains in a permanent coma, which is the result, plaintiffs allege, of defendant's second murder attempt.

On July 20, 1984, the Supreme Court of the State of New York, acting pursuant to N.Y. Mental Hygiene Law § 78.01 (McKinney 1985), adjudicated Mrs. von Bulow an incompetent and appointed a committee consisting of Chemical Bank and attorney C. Sims Farr, ("the committee"), to administer her non-trust assets.

Under various legal theories in ten claims, plaintiffs seek to deny Claus von Bulow all material gain, past, present, and future, derived from his alleged misdeeds. The complaint was filed on July 19, 1985, one day less than a year following the appointment of the committee and less than two months after a Rhode Island jury acquitted defendant in his second trial of two counts of assault with intent to murder his wife. The first Rhode Island criminal trial resulted in a conviction on the same criminal charges but was reversed on appeal.

In his motion, defendant asserts that (1) plaintiffs lack standing to bring the action as Martha von Bulow's "next friends"; (2) six of the ten claims are time-barred; (3) the RICO claims are insufficiently alleged; (4) indispensable parties, citizens of New York, must be joined as defendants, thereby destroying diversity; (5) the common law fraud allegation does not state a claim and lacks particularity; and (6) the Court is without authority or jurisdiction to deny defendant support and maintenance from the assets of his comatose wife. The consideration and resolution of these motions require a somewhat detailed exposition of the allegations in the complaint.

II. The Complaint

A. The Alleged Scheme

The complaint alleges the following unhappy series of facts as the basis for its claims:

Defendant married Martha von Bulow in 1966 and was completely supported by her. He concealed from her various extra-marital affairs, including one with a woman with whom he discussed marriage in 1979 and who gave him until January 1980 to leave his wife. He helped prepare his wife's will, which she executed on December 12, 1979, and was aware that it left him tangible personal property worth approximately $4,000,000; an outright share of the testamentary estate valued at approximately $2,500,000; and income for life from a trust valued at $7,500,000, with the power to dispose of the principal at his death. The will also named him trustee of various trusts including a charitable instrument under which defendant could control the distribution of income amounting in 1979 to approximately $1,000,000 per year for 21 years.

During the night of December 26-27, 1979, defendant attempted to murder his wife by surreptitiously injecting her with insulin and other drugs. He caused her to lapse into a coma, did nothing to help her, and tried to conceal her condition from those who would assist her. Finally, her condition became apparent to others who demanded that a doctor be summoned.

Mrs. von Bulow survived, and defendant lied to her doctors and family about his knowledge of and responsibility for her condition by creating the false impression that alcoholism caused her coma. He also concealed his murder attempt from Mrs. von Bulow. As a result of these misrepresentations and concealments, Mrs. von Bulow was induced to establish a $2,000,000 charitable remainder trust giving defendant a lifetime income of $120,000 per year.

Defendant and his wife discussed divorce in late 1980. On the night of December 20-21, 1980, he again attempted to murder her by the same means, this time putting her into a permanent coma. He again lied to her doctors and family concerning his knowledge of and responsibility for her condition and tried to persuade her family to remove her from life support systems and allow her to die.

The complaint alleges diversity jurisdiction under 28 U.S.C. § 1332, federal subject matter jurisdiction under 18 U.S.C. § 1964(c), and pendent jurisdiction for the state law claims.

B. Theories of Recovery and Relief Sought

The complaint alleges ten claims: assault and battery for the two alleged murder attempts (Claims I and II); negligent withholding of care on each occasion (Claims III and IV); common law fraud (Claim V); a claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and a similar state claim under Rhode Island law (Claims VI and VII); unjust enrichment from the fraudulent scheme (Claim VIII); mistake resulting in the creation of the 1980 inter vivos trust and unjust enrichment (Claim IX); and a declaratory judgment of defendant's non-entitlement to maintenance payments pursuant to the New York Mental Hygiene Law (Claim X). Plaintiffs bring Claims I-IX as "next friends" of Mrs. von Bulow. They bring Claim X both individually and as "next friends."

The complaint seeks relief in the form of money damages on Claims I-VII. It also asks for equitable relief as follows: a constructive trust on money and property wrongfully received; recission of the 1980 trust or, alternatively, excission of defendant's interest and acceleration of the charitable remainder; an accounting of funds wrongfully received from Mrs. von Bulow and restitution (Claims VIII and IX); and a judgment barring defendant from receipt of safekeeping, support, or maintenance from Mrs. von Bulow or her committee (Claim X).

III. Discussion

A. Plaintiffs' Capacity to Sue as "Next Friends"

Defendant challenges the capacity of plaintiffs to bring their ten claims against him as the "next friends" of Martha von Bulow.¹ He argues that under New York law the existence of a court-appointed committee, administering her non-trust assets, precludes a suit on her behalf by her children from a previous marriage. He contends that they may not bring the action as "next friends" without demonstrating a conflict of interest between the committee and the incompetent. Defendant argues further that the committee's decision not to bring this action after being requested to do so by plaintiffs, conclusively precludes plaintiffs' right to sue as "next friends."

This Court's analysis begins with Fed.R. Civ.P. 17(c) which states:

(c) Infants or Incompetent Persons.

Whenever an infant or incompetent person has a representative, such as a general guardian, committee, conservator, or other like fiduciary, the representative may sue or defend on behalf of the infant or incompetent person. If an infant or incompetent person does not have a duly appointed representative he may sue by his next friend or by a guardian ad litem. The court shall appoint a guardian ad litem for an infant or incompetent person not otherwise represented in an action or shall make such other order as it deems proper for the protection of the infant or incompetent person.

Rule 17(c) is permissive, not mandatory. It gives the Court power to authorize someone other than a committee to sue on behalf of an incompetent where the committee is unable or refuses to act or its interests conflict with those of the incompetent. 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1570; 3A J. Moore & J. Lucas, Moore's Federal Practice, ¶ 17.26 (2d ed. 1985). Professor Moore states:

Under the second sentence of subdivision (c) an infant or incompetent person who does not have a duly appointed representative, may sue by his next friend or by a guardian ad litem. Even though the infant or incompetent has a general representative, if the representative is unable or refuses to act or his interests conflict with the person represented, the infant or incompetent may sue in federal court by his next friend or by a guardian ad litem. Courts have always had the power to appoint special representatives under such circumstances, and this power should be considered retained by the federal court in Rule 17(c). The fact that the first sentence is permissive is an implicit recognition of that power; and, in any event, a guardian ad litem probably can be appointed in such cases under the third sentence of subdivision (c).

Id. at 17-275 to 276 (footnotes omitted).

The power to appoint a guardian ad litem notwithstanding the existence of a committee is also rooted in the history of Rule 17(c). That Rule is...