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Sutton v. Sutton

October 13, 1999


The opinion of the court was delivered by: Simandle, District Judge:


The instant case arises from a series of transactions and various lawsuits dating back to 1985 and it requires this court to explore the limitations upon its ability to entertain newly pleaded federal claims relating to a seemingly endless series of matters previously litigated in the state courts. As discussed herein, all of the claims and issues within this have been, or could have been, decided in the three previous federal lawsuits and other state court actions that this estate debate has engendered. Pro se plaintiff Roy F. Sutton filed this lawsuit against Ronald W. Sutton, individually and as personal representative of the Estate of Co-Trustee Loretta E. Sutton; Philip J. Perskie, Esq.; Goldenberg Mackler Sayegh & Mintz, a PC ("Goldenberg"); Frederic L. Shenkman, Esq.; George L. Seltzer, Esq.; City of Atlantic City, by and through Sidney Magen, Yvonne Preston, Sidney Trusty ("the Alcoholic Beverage Commissioners" or "ABC Commissioners"); and the Estate of Roy C. Sutton ("the Estate").

According to the Complaint, filed February 8, 1999,

* defendants Ronald and Loretta Sutton ("the Co-Trustees"), Perskie, Goldenberg, Shenkman, and Seltzer, conducted the affairs of the Estate as a racketeering enterprise that has violated the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961, et seq.;

* the Co-Trustees, together with Perskie, Goldenberg, Shenkman, and Seltzer conspired "to maintain... control of [] the Estate, through a pattern of racketeering activity such as mail fraud and retaliation against a victim, within the meaning of" 18 U.S.C. § 1962(d);

* defendants City of Atlantic City, the ABC Commissioners, Ron Sutton, the Estate of Co-Trustee of Loretta Sutton, Goldenberg, and Shenkman are liable under 42 U.S.C. § 1983 for acting under color of state law to deprive him of his property right in a liquor license (or, in the alternative, that the allegations underlying this claim are predicate acts of mail fraud);

* Ron Sutton and Seltzer breached their fiduciary duties to plaintiff under state law;

* the Estate breached its fiduciary duty to plaintiff in 1974 when Roy C. Sutton purchased land for the benefit and use of his corporation but put it solely in Roy C. Sutton's name; and

* the Estate was unjustly enriched by plaintiff's services without reasonable pay. (See Complaint, Cts. I-VI.)

Plaintiff seeks an accounting of, and constructive trust for, the Estate; imposition of equitable liens; indemnification of losses payable from the Estate due to defendants' conduct; inheritance disbursement under Roy C. Sutton's will, trebled; pay for services; a return of a sanction against plaintiff in another case; and other damages.

Now before this Court are motions filed by each of the defendants to dismiss the plaintiff's complaint. Because the parties attached exhibits to the moving papers, and because all parties and the court rely upon these documents, the motions will be converted to motions for summary judgment so that the exhibits may be considered. Defendants argue that plaintiff's claims are barred by res judicata and collateral estoppel, that the complaint should be dismissed due to the Rooker-Feldman doctrine, and that plaintiff has failed to state a claim under § 1983 because none of the defendants acted under color of state law. For the reasons stated herein, this Court agrees with defendants, and this case will be dismissed.


Roy C. Sutton ("the Decedent") owned a piece of real estate in Atlantic City and a liquor license, in which he gave plaintiff a 6.7% interest. Decedent also owned an abutting tract of land, known as Hahn Place, which was used as a parking lot. In early 1985, the Decedent purchased with some of his own money and with other money that he intended as gifts for his children, an additional abutting tract of land to be used as a parking lot; each of his children had a 1/6 interest in this land (hereinafter referred to as "the Parking Lot"). When the Decedent died later that year, 93.3% of the Melody Lounge and the liquor license passed to the Decedent's wife, Loretta, 6.7% of the Melody Lounge and the liquor license passed to plaintiff, 100% of Hahn Place passed to Loretta, and each of the six children still owned a 1/6 interest in the Parking Lot.

Most of Decedent's children believed that their interest in the Parking Lot should be treated as partial satisfaction of bequests made to them in the will, but plaintiff disagreed. After an informal agreement failed, a formal accounting application was filed with the Bankruptcy Court. The Estate and its Co-Trustees were represented by Philip J. Perskie. Plaintiff, through his attorney George Seltzer (now a judge), filed an exception. A consent order dated May 6, 1988, placed on the record by the parties, settled the matter: instead of the $6,400 to which the informal agreement would have entitled him, plaintiff would receive $75,000 "without offset" (in addition to his interest in the Parking Lot and his 6.7% interest in Sy Cur, Inc., the corporation which owned the Melody Lounge and its liquor license) in exchange for a release of any further claim against the estate. The consent order also noted that the six children would sell the Parking Lot for $650,000.

Sometime thereafter, plaintiff came to believe that the defendants engaged in a conspiracy to violate tax laws; he wrote the Atlantic County prosecutor, the New Jersey Attorney General, and others about it to no avail. He then went to the Probate Court to vacate the consent order, but that was denied, as was reconsideration. Plaintiff did not take an appeal. Instead, on May 29, 1990, he filed a lawsuit in federal court ("First Federal Suit") against Perskie, Perskie's law firm, the Estate's accountants, the Estate's attorney, the Estate, and the Co-Trustees, alleging violations of tax laws and plaintiff's First Amendment rights. Judge Joseph H. Rodriguez granted a motion to dismiss, holding that the Rooker-Feldman doctrine, discussed infra, bars review of the state court's approval of the settlement and that the First Amendment claim is inextricably intertwined with the validity of the consent order. Sutton v. Estate of Roy C. Sutton, No. 90-2090 (D.N.J. Aug. 6, 1990). The Third Circuit affirmed, Sutton v. Estate of Roy C. Sutton, No. 90-5772 (3d Cir. Jan. 25, 1991), rehearing en banc was denied, id. (3d Cir. Feb. 26, 1991), and the U.S. Supreme Court denied certiorari), Sutton v. Estate of Roy C. Sutton, No. 90-7593 (U.S. May 28, 1991).

Unsatisfied, on August 11, 1991, plaintiff filed another suit in federal court before Judge Rodriguez (the "Second Federal Suit"), based on the same facts but with two judges, the New Jersey Attorney General, and the Atlantic County Prosecutor as additional defendants, and with additional claims based on ยง 1983 and RICO. Judge Rodriguez dismissed the matter sua sponte for lack of subject matter jurisdiction, noting that this was just an attempt to attain federal jurisdiction in what was essentially relitigation of the adjudicated state court action; merely alleging that federal questions are involved, he said, is insufficient to convert a state law claim. Sutton v. Estate of Roy C. Sutton, No. 91-2694, mem. order at 4 (D.N.J. April 30, 1992) (memorandum order dismissing case). The ...

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