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Stephanie Kanter, On Behalf of the Estate of Roberta J. v. the Equitable Life Assurance Society of the United States

March 31, 2011


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


This matter is before the Court on the motion [Docket Item 37] by Defendants AXA Equitable Life Insurance Company (formerly known as the Equitable Life Assurance Society of the United States) ("AXA") and AXA Financial Inc. to dismiss Plaintiff Stephanie Kanter's Second Amended Complaint [Docket Item 35].

For the reasons explained below, the Court will grant the motion to dismiss without prejudice.


The facts set forth here are those alleged in the Second Amended Complaint or contained in undisputedly authentic underlying documents.*fn1 Plaintiff Stephanie Kanter, a resident of Florida, is one of the two beneficiaries of the Estate of Roberta Schwartz, her mother. Roberta Schwartz was intentionally killed by her husband, Stephen Schwartz on March 24, 1996. (Second Am. Compl. ¶ 14.) Mr. Schwartz was a dentist who enrolled in AXA's retirement plan for American Dental Association group members ("the Annuity") under which Stephen Schwartz made annual payments to AXA in exchange for a guaranteed monthly payment, to commence on his retirement date of September 1, 2006. (Id. ¶ 11.) The Annuity contract also provides the right to receive an accrued cash value, upon death, disability, withdrawal, or termination by Stephen Schwartz. (Id. ¶ 12.) The accrued cash value consists of contributions plus accrued interest minus the sum of withdrawals and applicable fees. (Id.) Stephen and Roberta Schwartz were married on August 18, 1985. (Id. ¶ 13.) Almost eleven years later, Stephen Schwartz intentionally killed Roberta Schwartz. (Id. ¶ 14.) The annuity was in Stephen Schwartz's name only.

AXA, a subsidiary of Defendant AXA Financial, is a financial services corporation incorporated in the state of New York with its principal place of business located at 1290 Avenue of the Americas, New York, NY. (Second Am. Compl. ¶¶ 5, 6-9.) In addition to its headquarters in New York, AXA maintains an office in Secaucus, New Jersey. (Id. ¶ 10.) On February 10, 1997, AXA received notice at its Secaucus, New Jersey, office that, pursuant to a New Jersey court order, Stephen Schwartz was temporarily restrained from withdrawing funds from his accounts. (Second Am. Compl. ¶ 15 and Ex. B.) Under cover of letter dated February 10, 1997, the Estate sent to AXA an Order to Show Cause dated February 4, 1997, that prohibited Stephen Schwartz and his agents or servants "from in any way liquidating, dissipating, transferring, encumbering or in any other way diminishing all assets in which he asserts or has any interest for any reason whatsoever without prior Order of the Court." (Id. ¶ 16.) The February 10, 1997 letter enclosed the Order to Show Cause, which included reference to a claim against Stephen Schwartz under N.J. Stat. Ann. § 3B:7-1 et seq., and the letter "specifically request[ed] that [AXA] put a freeze on all accounts in Dr. Schwartz's name, alone or with others." (Id.)

Stephen Schwartz pleaded guilty to aggravated manslaughter on July 23, 1999. (Id. ¶ 17.) The Estate then sent a second Order to Show Cause to AXA's Secaucus office, dated July 23, 1999, that similarly indicated that the Estate had brought Slayer Act claims against Stephen Schwartz and that restrained him from in any way diminishing any assets in which he had an interest, without prior Order of the Court. (Id. ¶ 18.) At least one of these notices was reviewed by an AXA employee. (Id. ¶ 19.)

The restraints imposed by the foregoing Orders of February 4, 1997, and July 23, 1999, were dissolved in an order on October 29, 1999. (Oct. 29, 1999 Order, Defs.' Mot. Dismiss Ex. D.) Neither during nor after the pendency of the restraints did AXA pay the funds into court, seek to intervene in the pending litigation, or otherwise maintain the funds. (Second Am. Compl. ¶ 20.) Approximately two months after the restraints were dissolved, on December 20, 1999, AXA allowed Stephen Schwartz to withdraw $93,750 from the Annuity. (Id. ¶ 21.)

On September 14, 2001, the Estate's Slayer Act claims against Stephen Schwartz were decided. Judgment in the case of Wasserman v. Schwartz, 836 A.2d 828 (N.J. Super. Law Div. 2001) was entered in favor of the Estate of Roberta Schwartz ("Estate") under the Slayer Act, N.J. Stat. Ann. §§ 3B:7-1.1 to 3B:7-7. (Second Am. Compl. ¶ 22.) The Wasserman court found Roberta Schwartz's Estate entitled to a distributive share of the marital estate, including the assets in Stephen Schwartz's retirement and pension plans, such as the Annuity held with AXA, even though those assets were titled in Stephen Schwartz's name alone. (Id.) The court also found the Estate entitled to an award equal to the amount of taxes that were incurred on the portion of the distribution that came from the pension or retirement accounts of Stephen Schwartz. (Id.) The court held that one half of the marital estate was $464,898 and the amount of the tax was $216,440 for a total award to the Estate of $681,338. (Id.) The Estate ultimately only collected approximately $390,000. (Id. ¶ 23.)

After the Wasserman judgment, the Estate attempted to collect pursuant to the judgment by serving AXA (which was not a party to the Wasserman action) with multiple writs of execution. (Second Am. Compl. ¶ 27.) In response, on October 24, 2002, AXA entered into a Consent Order with the Estate. (Id.) This Consent Order contained an agreement by AXA to pay to the Estate certain assets held by AXA in the name of Stephen Schwartz if the Wasserman judgment were to be affirmed on appeal, which was pending at the time. (Oct. 24, 2002 Consent Order, Defs.' Mot. Dismiss Ex. E ¶ 3.) The judgment was not affirmed on appeal, however, but was instead voluntarily settled between the Estate and Stephen Schwartz's estate on March 14, 2003.*fn2 (Second Am. Compl. ¶ 27.) In the settlement agreement, Stephen Schwartz's estate agreed to "take all necessary steps to transfer all of the assets previously held by Stephen Schwartz" to the Estate. (Order Enforcing Settlement, March 14, 2003, attached to Defs.' Mot. Dismiss Ex. F.)

AXA thereafter paid to the Estate funds titled to Stephen Schwartz in an amount not more than $390,000, though the Second Amended Complaint does not specify precisely how much. (Id. ¶ 23.) The Second Amended Complaint is also silent on the mechanism under which AXA paid the Estate: whether it was pursuant to the October 24, 2002 consent order or whether it was at the direction of Jodie Chance, Executrix of the estate of Stephen Schwartz, acting pursuant to the settlement of March 14, 2003. (See Defs.' Mot. Dismiss Ex. F.) Regardless, AXA did not repay to the Estate the $93,750 that Mr. Schwartz withdrew on December 20, 1999. (Id. ¶ 24.) AXA also did not surrender to the Estate approximately $68,000 held in an account titled in the name of Stephen Schwartz that it claims to have only recently discovered during the pendency of this action. (Id. ¶¶ 24-25.)

Plaintiff Stephanie Kanter and Stacey Rosen, the two beneficiaries of the Estate, entered into an agreement dated February 13, 2007, under which the Estate's remaining claims, if any, were assigned to them. (Id. ¶ 28.) The agreement provided that, as between Plaintiff Kanter and Rosen, whichever beneficiary filed a proceeding of any kind to pursue any such claim of the Estate would have the exclusive rights, title and interest to that claim and any and all recovery thereon, but that party would also be exclusively responsible for all fees and costs incurred in pursuing that claim. (Id.) Plaintiff Stephanie Kanter brings this action pursuant to the assignment, under the agreement, of the Estate's interests in the Annuity.

On August 1, 2007, Plaintiff brought this action against AXA in the Superior Court of New Jersey. AXA removed the action to this Court on September 11, 2007, invoking this Court's diversity jurisdiction. In October of 2007, Defendants moved to dismiss the Complaint as untimely [Docket Item 7], which the Court granted in an Opinion and Order on April 30, 2008. [Docket Items 13 & 14.] The Third Circuit Court of Appeals subsequently vacated that Order on March 4, 2010 and remanded the action to this Court. [Docket Item 19.] The Third Circuit held that the six-year statute of limitations had not run as of the date this action was filed (August 1, 2007) because Plaintiff's injury did not accrue until the New Jersey Superior Court's September 14, 2001 Wasserman decision had been issued. Kanter v. Equitable Life Assurance Society of the United States, 363 F. App'x 862, 867 (3d Cir. Feb. 5, 2010). Specifically, the Third Circuit decided that the cause of action became complete (and thus the statute of limitations began to run) when plaintiff obtained an enforceable legal interest in the annuity by virtue of the Wasserman ruling. . . the Estate had no legal interest in the annuity until the September 14, 2001, decision.

Kanter, 363 F. App'x at 867 n.1. On June 30, 2010, Plaintiff filed her Second Amended Complaint. The Defendants thereafter moved to dismiss the Second Amended Complaint for failure to state a claim upon which relief can be granted. [Docket Item 37.]

Plaintiff seeks recovery on four counts. Count One alleges negligence. (Second Am. Compl. ¶¶ 30-34.) Count Two alleges violation of the Slayer Act, N.J. Stat. Ann. §§ 3B:7-1 to 3B:7-7, which provides a cause of action to the estate of a decedent to recover property that the killer acquired as a result of killing the decedent. The version of the Act in effect in 1999, when Stephen Schwartz made the withdrawal,*fn3 provided, in part:

Any insurance company, bank, or other obligor making payment according to the terms of its policy or obligation is not liable by reason of this chapter unless prior to payment it has received at its home office or principal address written notice of a claim under this chapter. P.L.1981, c. 405 (C. 3B:7-7); N.J. Stat. Ann. § 3B:7-7 (1999).

Count Three alleges a Consumer Fraud Act violation, pursuant to N.J. Stat. Ann. § 56:8-2. (Second Am. Compl. ¶¶ 53-55.) In Count Four of the Amended Complaint, Plaintiff asserts that AXA breached its fiduciary duties in the performance and enforcement of the Annuity contract when it allowed Stephen Schwartz to withdraw $93,750 and when it lost track of and failed to disclose the remaining $68,000 account. (Id. ¶¶ 57-58.)


A. Standard of ...

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