APPLEBAUM v. FABIAN

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

EDITA APPLEBAUM,

Plaintiff,

v.

WILLIAM P. FABIAN, LAURENCE W.

GOLD, LEAH E. CAPECE, EFRAIM Civ. No. 18-11023 (KM) (JSA)

“FRANK” RAJS, CECILIA KEH,

THOMAS D’AMBROSIO, MAXINE OPINION

MELNICK, MICHAEL LACKEY,

GERALD MACKO, DEREK

SCHUMACHER, JIMMY SAMAYOA,

GARRETT APPLEBAUM, YOUSSEF

ABDULAH YOUSSEF, JOHN DOES 1-

10, and ABC CORP 1-10, ET AL.,

Defendant.

KEVIN MCNULTY, U.S.D.J.:

This matter originated with the 2012 death of Todd Harris Applebaum,

the late husband of the plaintiff, and owner of the companies and properties at

issue in this suit. Plaintiff has litigated matters related to Todd Applebaum’s

estate in state court for nearly a decade. Having achieved no success there, she

brought this federal action, in which she accuses defendants, including the

estate administrator and various employees of Todd Applebaum’s companies, of

various crimes and torts. Defendants move jointly to dismiss the Second

Amended Complaint. (DE 130.)1 Plaintiff opposes the motion to dismiss and

1 Certain citations to the record are abbreviated as follows:

DE = docket entry number in this case

2AC = Second Amended Complaint (DE 124)

Mot. = Defendants’ motion to dismiss brief (DE 130-1)

Opp. = Plaintiff’s corrected brief in opposition to the motion to dismiss (DE 134.)

cross-moves to amend the complaint for a third time. For the following reasons,

the motion to dismiss is GRANTED and the cross-motion to amend is DENIED.

I. BACKGROUND

a. Todd Harris Company and the Will

Todd Harris Applebaum died testate on November 4, 2012. (2AC at 31.)2

He was survived by the plaintiff, his wife, and their three children, including

their oldest son, Benjamin Applebaum. (App. Op. at 2.) Before his death,

Applebaum was the sole owner of the Todd Harris Company (“THC”) a pool

supply store with approximately 55 employees and, at the time, more than $10

million in annual revenue. (Id. at 3; 2AC at 23.) His estate consisted of two

other significant assets, a 51% share of Toben Investments, Inc. (the remaining

49% of which was owned by his son Benjamin) and a condominium in New

Brunswick. (App. Op. at 3.) Toben’s sole asset was a commercial building in

Linden, NJ. (Id.) In addition, Todd Applebaum had approximately $100,000 in

a 401(k) plan, which did not list plaintiff as a beneficiary. (Id. at 10.)

Todd Applebaum’s will was executed in 2010. It bequeathed 60% of his

stock in THC to a trust with the remainder of his assets, including 40% of the

stock, going to the plaintiff. (Id. at 3–4.) The will explicitly allowed the executor

“to sell, convey, mortgage, lease, invest, reinvest, exchange, manage, control,

retain or otherwise deal with any and all property, real or personal, comprising

[Applebaum's] estate, . . . and to make distribution under [the] Will wholly or

partly in kind or money.” (Id. at 4, emphasis added.) The trust was to be

managed for the benefit of plaintiff and her children, and the trustees were

App. Op. = Opinion in In the Matter of the Estate of Todd Harris Applebaum

Superior Court of New Jersey, Appellate Division, No. A-3948-18, April 22, 2021

(DE 130-3).

Ch. Op. = Opinion in In the Matter of the Estate of Todd Harris Applebaum,

Superior Court of New Jersey, Chancery Division-Probate Part, Middlesex

County, No. 238799, (DE 130-5)

2 I cite page rather than paragraph numbers in the 2AC because the paragraphs

are not numbered sequentially. At times I cite to the Appellate Division’s opinion for

factual matters, because the 2AC is extremely long, repetitive, and confusing.

Benjamin Applebaum and defendants Frank Rajs and William P. Fabian. (Id at

3.) Thus, after Todd Applebaum’s will was probated, the trust was to be the

majority shareholder of THC. The will also named Fabian as executor of the

estate. (Id. at 4.)

Rajs was a good friend of Todd Applebaum’s and a longtime employee of

THC. (Id. at 3.) Fabian was also a close friend who claims to have loaned

Applebaum and THC considerable sums of money over the years and worked

as a consultant for THC. (Id.) Under a 2010 employment agreement, Fabian

was to be paid $2,000 weekly for ten years as a “Business Manager and

Consultant” for THC, though he did not receive any pay before Todd

Applebaum’s death. (Id. at 5.) Fabian claimed that the employment agreement

was essentially a way for him to be paid back for loans he had made to THC in

the 1990s and that at the time of Applebaum’s death he was owed $231,700.

(Id.) The directors ratified the agreement on the advice of Leah Capece, the

attorney for THC and the estate. (Id. at 6.) The Middlesex County Surrogate

admitted the will to probate on December 4, 2012. (Id. at 4.) Four days later the

shareholders of THC met and the conflicts that eventually resulted in this case

began.

At that meeting, which plaintiff attended, Rajs and Fabian were elected

directors of THC and Rajs was appointed as president and CEO. (Id.) The next

day the directors agreed to increase Rajs’s annual salary from $100,000 to

$150,000 given his new role. (Id. at 4–5.) The winter is a slow season for pool

sales in New Jersey, and in the months after Applebaum’s death Cecilia Keh,

THC’s controller, requested three separate drawdowns on THC’s line of credit

with Sun Bank. (Id. at 6; 2AC at 32.) This was a problem, however, because the

line of credit was personally guaranteed by Todd Applebaum, and his death

was an event of default under the agreement. (App. Op. at 6.) Sun Bank

claimed that Applebaum’s signature had been forged on the documents

requesting drawdowns. (Id; 2AC at 36.) When it learned of Applebaum’s death

in June 2013, Sun Bank filed suit against the estate, THC, Rajs, and Keh. (App

Op. at 6.)

A special meeting of the board of directors of THC and Toben was held on

June 27, 2013 (the “crisis meeting”) to discuss the lawsuit. It was attended by

plaintiff, Fabian, Benjamin Applebaum, Capece, Laurence Gold (THC’s

accountant), and Todd Applebaum’s mother. (Id. at 7.) Capece, the attorney,

informed those gathered that success in the lawsuit against Sun Bank was

unlikely, but that the bank had agreed to drop the lawsuit if it received a

payment of approximately $350,000. (Id.) THC did not have that much cash on

hand (one reason it had drawn on the line of credit in the first place), so the

directors began to search for ways to raise the money, including using Todd

Applebaum’s life insurance payout and having plaintiff borrow against her

home equity. (Id. at 7–8.) Fabian eventually agreed to lend THC the $350,000

and the directors agreed to sign a promissory note from THC in exchange for

the loan, with plaintiff and Benjamin Applebaum as the guarantors. (Id. at 9–

10.) Fabian also admitted that his previous loans to THC had been kept off the

books, which likely allowed THC to qualify for the Sun Bank line of credit in the

first place. (Id. at 8–9.) The new promissory note was also kept off the books

and not reported when Gold applied for, but did not receive, a line of credit

from Wells Fargo for THC. (Id. at 22–23; 2AC at 8, 11.)

The estate controlled a 51% share of Toben Investments and Fabian, as

the executor, determined, with Benjamin Applebaum’s support, that it was in

the best interest of the estate to sell the Toben property to raise money for

taxes and administrative expenses. The property was sold in October 2013 to

its tenant for $800,000. (App. Op. at 9.) From the proceeds of the sale Toben

Investments paid Fabian $97,000 (which was the remaining balance on his

$350,000 loan to THC), and also lent money to THC to prepare it for the next

season. (Id. at 14.) Plaintiff complains that the Toben property was sold for less

than its true value, characterizing this as a form of self-dealing by Fabian. (2AC

at 120–30.) Applebaum’s condominium was sold in February 2017 for

$515,000. (App. Op. at 14.)

After the June 27, 2013, crisis meeting, plaintiff, who had no ownership

stake in THC, retained counsel, began to question how the business was being

run, and also began working at THC full time. (Id. at 10.) Plaintiff was fired

from her position at THC on December 4, 2013, and was escorted from the

property by the police. (Id.; 2AC at 14, 172–74.) At some point after plaintiff

was fired, Fabian decided to distribute plaintiff’s 40% share in THC in cash

rather than in kind, proposing to sell the 40% to Benjamin Applebaum. (App.

Op. at 24.)

On March 31, 2014, plaintiff filed an eleven-count complaint in New

Jersey Superior Court, Chancery Division, Probate Part, Middlesex County (DE

130-4), accusing many of the defendants in this case, including Fabian, Rajs,

Gold, and Keh of various torts against THC, including breach of fiduciary

duties and fraud. (App. Op. at 11.) In addition, plaintiff accused defendants of

various torts against herself, including intentional interference with her

inheritance and intentional infliction of emotional distress. (Id.) She also

accused Fabian of breaching his fiduciary duty by voting to sell the property

owned by Toben. (Id.) Plaintiff also filed an order to show cause seeking

emergent relief to remove Fabian as the executor, to remove Fabian and Rajs as

officers of THC and Toben and trustees of the trust and to replace them with

herself, to compel Fabian to distribute 40% of THC’s stock to plaintiff in kind,

and to compel Fabian to distribute 51% of the Toben stock to plaintiff in kind.

(Id. at 11–12.) That case involved many of the same factual allegations as this

one, including the allegations of fraud regarding the Sun Bank line of credit,

allegations of payroll fraud related to Fabian’s loans and employment

agreement, the sale of the Toben property, and intentional infliction of

emotional distress. (DE 130-4.)

b. State Court Rulings

With one minor exception, plaintiff has not prevailed in any of the prior

litigation over Todd Applebaum’s estate. The Chancery Court, finding that

plaintiff did not show a likelihood of success on the merits, denied all

temporary restraints and emergent relief. (App. Op. at 12.) In the subsequent

years, plaintiff tried repeatedly to achieve her goals of removing Fabian as

executor and compelling her 40% share of THC to be distributed to her in kind.

(Id.) Fabian also filed a complaint seeking to approve accountings of the estate

and to approve the sale of the 40% of THC stock to Benjamin Applebaum, with

plaintiff receiving the cash value of the shares. (Id. at 12–13.) Throughout this

process, the Chancery Court repeatedly refused to remove Fabian. (Id. at 13.)

Plaintiff also alleged that defendants had mismanaged THC and sought control

of the company, even though she did not own a majority interest (or, in fact,

any interest) in it. (Id.) It was during these disputes that Rajs and Fabian

submitted affidavits from THC employees praising their management of THC

and discussing plaintiff’s disruptive behavior while employed at THC. (Id. at

14.) Plaintiff alleges that these affidavits were defamatory. (2AC at 25, 156–63.)

In October 2018, Fabian sought approval of his final accounting for the

estate. His accounting claimed that 40% of the stock (i.e., 40 shares) in THC

had a value of $273,000. Fabian proposed selling Benjamin Applebaum as

many of those shares as Benjamin could afford at fair market value, and

allowing THC to redeem the remainder of the stock at $6,825 per share. (App.

Op. at 15.) After expenses, this left a proposed distribution to plaintiff of

$168,504.98. (Id.) Plaintiff disputed Fabian’s power to distribute the shares of

THC in cash rather than in kind, disputed his entitlement to fees, and alleged

that the 40% interest should be valued at $1.54 million rather than $273,000.

(Id. at 16.) Plaintiff also filed a counterclaim alleging that Fabian had breached

his fiduciary duty, and soon also moved for the judge’s recusal. (Id. at 16–17.)

On April 30, 2019, the Chancery Court approved the final accounting.

(Ch. Op.) In that decision, the court ruled against plaintiff on every issue,

finding that there was no evidence of fraud by Fabian, dismissing all claims

against him and the other defendants, approving the stock sale to Benjamin

Applebaum and cash distribution to plaintiff, and closing the estate. (Ch. Op.

at 6–8.) Plaintiff’s attempts to obtain a stay of the Chancery decision were

denied and she appealed to the Appellate Division of the New Jersey Superior

Court. (App. Op. at 18.)

In its April 2021 opinion, the Appellate Division summarized plaintiff’s

arguments as follows:

She asserts that the Chancery court erred by (1) denying her

applications for temporary restraints and injunctive relief; (2)

denying her motions to remove the executor; (3) approving the in-

cash distribution of the THC shares to the residual Estate; (4)

refusing to compel the deposition of Gold; (5) denying her recusal

motion; and (6) failing to conduct an evidentiary hearing regarding

her exceptions to the executor’s final accounting.

(Id. at 18–19.) The Appellate Division ruled against plaintiff on all but the last

issue, remanding the case to the Chancery for a limited additional hearing on

plaintiff’s exceptions to the final accounting on issues plaintiff raised, except

for the sale of the Toben property and the cash distribution of THC shares. (Id.

at 33–34.) Importantly, the Appellate Division held that the Chancery Court

“properly did not accept plaintiff’s contention that there had been a showing of

‘clear and definite proof of fraud.’” (Id. at 20.) It also found that the Chancery

was correct not to remove Fabian because plaintiff’s allegations consisted of

conjecture, rather than “evidence of fraud being committed by Fabian, or upon

anyone, least of all plaintiff.” (Id. at 23, cleaned up.) The Appellate Division also

upheld Chancery’s approval of the sale of THC stock to Benjamin Applebaum

and the distribution of cash to the plaintiff. The Appellate Division reasoned

that the will specifically authorized the executor to “make distribution under

the Will wholly or partly in kind or money” and that New Jersey law’s general

preference for in kind distributions, did not overrule the will’s clear grant of

discretion to the executor. (Id. at 26, citing In re Estate of Hope, 390 N.J. Super.

533, 540 (App. Div. 2007).) Plaintiff is in the process of appealing from the

Appellate Division to the New Jersey Supreme Court, but no action has yet

been taken on her appeal.3

To summarize: Two state courts have rejected plaintiff’s claims and

found that there was no evidence of fraud against plaintiff on behalf of Fabian,

and they have approved of the decisions Fabian made as executor.

c. Procedural History

Plaintiff filed this case on June 25, 2018, before the Chancery Court or

Appellate Division had made the rulings discussed supra. Defendants filed a

motion (DE 27) to dismiss the original complaint, which was administratively

terminated after plaintiff filed a First Amended Complaint in November 2018

(DE 39, 49.) The next month, defendants filed a motion to dismiss the First

Amended Complaint, but that too was administratively terminated pending a

decision on plaintiff’s motion to amend her complaint a second time. (DE 53,

59, 64.) The original version of the proposed Second Amended Complaint

(“2AC”) was rejected by the court because of formatting issues (DE 58-1, 70),

but an acceptable proposed 2AC was submitted and the motion to amend was

granted in part by Judge Joseph A. Dickson in October 2020. (DE 72, 113,

114.) Judge Dickson allowed plaintiff to amend her complaint only to the

extent of adding a count of civil conspiracy; the remaining proposed

amendments were rejected, because the proposed claims were barred by the

probate exception, failed to state a claim, or were otherwise futile. (DE 113.)

Plaintiff appealed Judge Dickson’s decision, but in April 2021 I affirmed it. (DE

120.)

The 239-page Second Amended Complaint was filed on April 22, 2021.

(DE 124.) It asserts twelve counts against defendants and seeks millions of

dollars in damages. The claims are: 1) Federal Racketeer Influenced and

Corrupt Organizations Act (“RICO”) claims with seven predicate acts of

3 Petition for Certification and Appendix, In The Matter Of The Estate Of Todd

Harris Applebaum, Appellate Division Docket No. A-3948-18, New Jersey Supreme

Court, May 24, 2021.

racketeering, 2) common law fraud, 3) defamation, 4) claims under New

Jersey’s Conscientious Employee Protection Act (“CEPA”), 5) conversion, 6)

claims under the Employee Retirement Income Security Act of 1974 (“ERISA”),

7) intentional infliction of emotional distress (“IIED”), 8) tortious interference

with prospective economic advantage, 9) negligence, 10) John Doe Counts, 11)

New Jersey RICO, and 12) civil conspiracy.

Although the 2AC pleads all counts against all defendants, it divides the

defendants into primary, secondary, and tertiary categories. The primary

defendants are William P. Fabian and Laurence W. Gold, who are alleged to be

at the center of the conspiracy to disinherit and defame plaintiff. (2AC at 21.)

The secondary defendants are Efraim “Frank” Rajs, Cecilia Keh, Thomas

D’Ambrosio, and Maxine Melnick, who are alleged to have participated in the

conspiracy but were not central to it. (2AC at 21.) Finally, the only factual

claims alleged against the tertiary defendants, Michael Lackey, Gerald Macko,

Derek Schumacher, Jimmy Samayoa, Garrett Applebaum, and Youssef

Abdulah Youssef, who are employees of THC, are for defamation (Count 3) for

producing affidavits about why plaintiff was fired. (2AC at 25, 160.)

On June 11, 2021, defendants jointly moved to dismiss the Second

Amended Complaint. (DE 130.) Plaintiff filed an opposition and a cross-motion

for leave to amend her complaint for a third time. (DE 133.) Defendants filed a

reply and opposition to the cross motion to amend (DE 140), and plaintiff filed

a final sur-reply (DE 142.) Now, more than nine years after Todd Applebaum’s

death, this motion is ripe for adjudication.

II. LEGAL STANDARDS

Federal Rule of Civil Procedure 8(a) does not require that a pleading

contain detailed factual allegations but “more than labels and conclusions.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must raise

a claimant’s right to relief above a speculative level, so that a claim is “plausible

on its face.” Id. at 570. That standard is met when “factual content [] allows the

court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 12(b)(6)

provides for the dismissal of a complaint if it fails to state a claim. The

defendant bears the burden to show that no claim has been stated. Davis v.

Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016). I accept facts in the complaint

as true and draw reasonable inferences in the plaintiff’s favor. Morrow v.

Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (en banc). Rule 12(b)(6) can serve as

the basis for dismissal of time-barred claims. McPherson v. United States, 392

F. App’x 938, 943 (3d Cir. 2010).

“The probate exception is a jurisdictional limitation on the federal courts

originating from the original grant of jurisdiction in the Judiciary Act of 1789.”

Three Keys Ltd. v. SR Util. Holding Co., 540 F.3d 220, 226 (3d Cir. 2008). As the

Supreme Court observed in Markham v. Allen, the “jurisdiction conferred by the

Judiciary Act of 1789, which is that of the English Court of Chancery in 1789,

did not extend to probate matters.” 326 U.S. 490 (1946) (citation omitted). The

probate exception “reserves to state probate courts the probate or annulment of

a will and the administration of a decedent’s estate; it also precludes federal

courts from endeavoring to dispose of property that is in the custody of a state

probate court. But it does not bar federal courts from adjudicating matters

outside those confines and otherwise within federal jurisdiction.” Marshall v.

Marshall, 547 U.S. 293, 311–12 (2006). Specifically, the Third Circuit has held

that the exception forbids federal courts only from “endeavoring to (1) probate

or annul a will, (2) administer a decedent’s estate, or (3) assume in rem

jurisdiction over property that is in the custody of the probate court.” Three

Keys, 540 F.3d at 227. Final decisions of state probate courts are entitled to

the same preclusive effect as any other state court decision. Hills Dev. Co. v.

Bernards Twp. in Somerset Cty., 103 N.J. 1, 59 (1986).

III. DISCUSSION

I examine plaintiff’s claims individually, with the exception of the state

and federal RICO claims, which I discuss together. I find that all the claims

merit dismissal. Many are time-barred, and others fail to state a claim or are

barred by the litigation privilege or probate exception. In addition, I deny

plaintiff’s motion to amend her complaint for a third time, as any such

amendment would be futile.

a. RICO (Counts 1 and 11)

The statute of limitations for both federal and New Jersey civil RICO

claims is four years. Prudential Ins. Co. of Am. v. U.S. Gypsum Co., 359 F.3d

226, 233 (3d Cir. 2004) (citing Agency Holding Corp. v. Malley–Duff & Assoc.

Inc., 483 U.S. 143, 156 (1987)); Cetel v. Kirwan Fin. Grp., Inc., 460 F.3d 494,

509 (3d Cir. 2006) (citing Matter of Integrity Ins. Co., 245 N.J. Super. 133, 584

A.2d 286 (1990)); Lee v. Carabetta, 2014 WL 4098012, at *8 (N.J. Super. Ct.

App. Div. Aug. 21, 2014). A RICO cause of action begins to accrue when a

plaintiff “knew or should have known of their injury.” Cetel v. Kirwan Fin. Grp.,

Inc., 460 F.3d 494, 507 (3d Cir. 2006) (quoting Mathews v. Kidder Peabody &

Co., 260 F.3d 239, 252 (3d Cir. 2001)). This case was filed on June 25, 2018.

Thus, if plaintiff knew or should have known of her injury before June 25,

2014, her state and federal RICO claims must be dismissed as time-barred

unless the statute of limitations has been tolled.

In her complaint, plaintiff lists seven predicate acts in her “exceedingly

complex” RICO case. (2AC at 29–154; Opp. at 4.) As established below, six of

those acts clearly occurred before June 25, 2014, and Plaintiff was necessarily

aware of them at the time they occurred. The one remaining predicate act, even

if it is not time-barred, must be dismissed under the litigation privilege.

The first predicate act focuses on the allegedly fraudulent withdrawals

from the Sun Bank line of credit, the raise given to Rajs, and the salary paid to

Fabian. These withdrawals and payments took place between November 2012

and June 2013. Plaintiff was aware of these actions, and the resulting lawsuit

brought by Sun Bank, at the latest on June 27, 2013, the date of the crisis

meeting during which those actions were discussed. (2AC at 31–32.) In

addition, allegations regarding the Sun Bank fraud and the payments to Rajs

and Fabian were included in the verified complaint filed in the Chancery Court

on March 24, 2014. (DE 130-4 ¶ 26–42.) The first predicate act also includes

allegations related to the sale of the Toben property at a price below its market

value. (2AC at 40.) That sale took place in October 2013 and allegations

regarding the sale were included in the 2014 state court complaint, which was

filed on March 31, 2014, outside the limitations period. (DE 130-4 ¶¶ 108–10.)

All of the allegedly illegal activity related to the first predicate act occurred

before June 25, 2014. Plaintiff was aware of defendants’ actions as they

occurred, and further alleged that these actions had injured her in her 2014

state court complaint. The claims contained in first predicate act are therefore

time-barred.

The second predicate act also focuses on the June 27, 2013 crisis

meeting, and alleges that defendants attempted to extort money from plaintiff.

(2AC at 42.) Plaintiff alleges as part of this predicate act that the Sun Bank line

of credit had been fraudulently obtained by concealing Fabian’s loans to THC

(id. at 45–46), and that the defendants had planned to defraud Wells Fargo to

receive a loan (id. at 49.) All of the allegations of the second predicate act took

place in or before 2013, and many of the same allegations were included in

plaintiff’s March 13, 2014 state court complaint. (DE 130-4 ¶ 40–42, 142–43.)

The second predicate act references no events that took place after 2013, and

plaintiff alleged that these actions injured her in her 2014 complaint, proving

that she had the necessary awareness at that time. The allegations of the

second predicate act are therefore time-barred.

The third predicate act focuses in more detail on the attempt to obtain a

loan from Wells Fargo and other banks in 2013. (2AC at 55.) Plaintiff alleges

that the purpose of the loans was to repay the $350,000 that Fabian had lent

THC, to “the exclusion of Estate debts of higher priority.” (Id. at 64.) As

discussed in the previous paragraph, these events occurred in 2013 and were

included in the 2014 complaint, and are therefore time-barred.

The fourth predicate act focuses on the payments to Fabian, which

plaintiff alleges constitute payroll fraud. (Id. at 67.) The core of this allegation is

that payments to Fabian of $2000 per week pay were actually a repayment for

his loans, not compensation for consulting. (Id. at 71.) Because THC listed

Fabian’s compensation as salary rather than loan repayment, plaintiff alleges

that THC committed tax fraud. (Id. at 80–81.) Fabian began to receive those

payments in November 2012. (Id. at 73–78.) Plaintiff was aware of the

payments by 2013, and they were included in her 2014 state court complaint.4

(130-4 ¶ 17, 36, 61–72.) The allegations of this predicate act are therefore time-

barred.

The fifth predicate act focuses on the alleged theft of Todd Applebaum’s

401(k). Plaintiff claims that the money should be hers even though she was not

listed as a beneficiary. (2AC at 94–95; App. Op. at 10.) The proceeds of the

401(k) were paid into the estate in April 2013. (2AC at 95.) No facts pleaded in

relation to the 401(k) distribution occurred after 2013. Although the alleged

theft of the 401(k) was not included in the 2014 complaint, it is clear from the

Second Amended Complaint that plaintiff believed herself to be entitled to the

401(k) proceeds in late 2012 or in 2013 at the very latest. (2AC at 94; App. Op.

at 10.) The allegations of the fifth predicate act are therefore time-barred.

The seventh5 predicate act relates to the alleged use of Toben

Investments for fraudulent purposes. In essence, the Second Amended

Complaint alleges that the sale of the Toben property for $800,000 was

fraudulent and used as a vehicle for Fabian to self-deal, with the low price

justified by fake environmental concerns. (2AC at 117, 126–29.) Plaintiff alleges

that this fraud began in 2010, when Toben purchased the property from Morey

La Rue, a dry cleaning company with which Fabian allegedly had a connection.

(Id. at 118.) In addition, plaintiff alleges that Toben gave a “no show” job to

Raj’s wife. (Id. at 120–21.) Certain of the allegations related to the Toben

property were also included in the 2014 state court complaint, and Plaintiff

alleges that the sale of the Toben property, agreed to in 2013, actually occurred

4 Plaintiff also alleges that Fabian perjured himself in his testimony regarding the

payments, but that is not relevant to the RICO claim. (2AC at 77.)

5 I discuss the sixth predicate below.

in May 2014, which still places it outside of the statute of limitations period.

(Id. at 130.) Plaintiff was thus necessarily aware of her alleged injury before

June 25, 2014. (DE 130-4 ¶ 105-10.) The allegations of the seventh predicate

act are therefore time-barred.

Plaintiff claims that the statute of limitations on these (and other) claims

should be tolled because of duress, litigation fraud, fraudulent concealment,

and the pendency of the state court action. (2AC at 130–38).6 Those tolling

arguments are all unavailing.

“Federal courts may toll statutes of limitations for federal laws where the

plaintiff in some extraordinary way has been prevented from asserting his or

her rights. But the remedy of equitable tolling is extraordinary, and we extend

it only sparingly.” Frasier-Kane v. City of Philadelphia, 517 F. App’x 104, 106

(3d Cir. 2013) (cleaned up). Under New Jersey law, for duress to toll the statute

of limitations requires either a threat or moral and psychological pressure that

is “so oppressive under given circumstances as to constrain one to do what his

free will would refuse.” Smith v. Est. of Kelly, 343 N.J. Super. 480, 499 (App.

Div. 2001). Here plaintiff only alleges that she participated in high-stakes,

stressful meetings about the future of THC. (2AC at 134–38.) She does not

allege that any threats against her were ever made or that any of the

defendants pressured her not to file the lawsuit. In fact, she filed a complaint in

state chancery court in March 2014 based on many of the same facts as this

case. (DE 130-4.) There is no reason why these federal-court claims, legally

distinct but based on the same essential facts, could not also have been filed in

2014, and thus no reason to toll the statute of limitations in this case.

For similar reasons, alleged “litigation fraud” and “fraudulent

concealment” do not toll the statute of limitations here. As discussed above,

plaintiff was aware of her alleged injuries by early 2014 at the very latest. Even

if she was not fully aware of every fact, many facts relevant to the alleged

6 As discussed below, the litigation fraud predicate act must be dismissed

because of the litigation privilege.

litigation-related fraud or concealment were known to her. Disputes over, for

example, defendants’ motion to quash a subpoena of Wells Fargo had arisen.

(2AC at 140; see also pp. 15–16, infra.) Plaintiff knew of her allegedly

retaliatory firing, the alleged fraud on Sun Bank and Wells Fargo, the alleged

fraudulent sale of the Toben property, and the alleged theft of the 401(k)

proceeds well before June 25, 2014. In short, she was aware of her alleged

injury and thus the statute of limitations on these causes of action began to

run, irrespective of the alleged concealment of certain of the facts. It is clear

from the face of the complaint that the alleged concealment and litigation fraud

did not prevent plaintiff from discovering the essentials of her alleged injuries,

and therefore do not toll the statute of limitations in this case.

The implication that the pendency of the state court litigation prevented

or excused the late filing of this federal action is ineffectual. Indeed, this case

was filed while the state court litigation remained pending.

Finally, in her brief in opposition, plaintiff claims that her RICO claim

was not “perfected” until the final accounting of the estate in 2018 and thus

could not have been filed any earlier. (Opp. at 15.) Plaintiff also claims that “the

State Court discovery process constituted a grand jury without which no such

complex RICO case could be filed.” (Opp. at 19.) There is no such “perfection”

doctrine in relation to the statute of limitations, and state court discovery has

nothing to do with grand juries. Plaintiff’s claim began to accrue when she was

aware of her alleged injury, in 2014 at the latest. As discussed above, and as

demonstrated at length in her complaint, plaintiff was long ago aware that she

had suffered her alleged injuries and could sue for them. Indeed, she did sue

for them, many years before filing this case. The six RICO predicate claims

discussed above are therefore barred by the statute of limitations.

That leaves one RICO predicate claim, the sixth predicate, which involves

litigation fraud, and focuses on the actions of Leah Capece. Specifically,

Capece’s actions allegedly involve NDAs and filing “a frivolous motion, under

false pretenses, to quash a lawful subpoena which had been served to obtain

the file related to the ‘emergency’ line of credit from Wells Fargo.” (2AC at 101–

02.) In addition, plaintiff accuses defendants of trying to “disinherit” her, i.e., of

proposing to distribute her entitlement of THC’s shares in cash rather than in

kind. (Id. at 112-14.) The Second Amended Complaint alleges that

in August of 2017 and October of 2018 [Capece] filed the affidavits

in the State Court as part of a verified complaint, filed under false

pretenses, in order to frivolously support a non-sequitur, to wit,

that the plaintiff’s non-controlling 40% minority stake in the Todd

Harris Company should be sold to a third party as otherwise, they

argued, plaintiff would “destroy” the company pursuant to the

allegations set forth in the work-related affidavits.

(Id. at 114; emphasis in original.) Plaintiff also alleges widespread perjury. (Id.

at 105–07.) Many of these acts, unlike the others, are alleged to have occurred

after June 2014, i.e., within the statute of limitations period.

The litigation privilege does not categorically bar actions taken during

litigation from being pleaded as RICO predicate acts. See Giles v. Phelan,

Hallinan & Schmieg, L.L.P., 2013 WL 2444036, at *4 (D.N.J. June 4, 2013).7

Plaintiff nevertheless has failed to state a claim with respect to the sixth RICO

predicate.

First, litigation fraud and perjury are not listed as eligible predicate

racketeering acts under the RICO statute. 18 U.S.C. §§ 1961–64. Second,

despite twenty pages of rambling accusations, the Second Amended Complaint

does not set forth actual fraudulent activity in relation to these filings; it merely

asserts that standard filings in a contested probate case were nefarious. (2AC

at 96–116). Third, any claim of liability based on litigation activity in the

probate action would be barred by the Noerr-Pennington doctrine. That

constitutional defense to antitrust and tort liability entails that a party who

petitions the government for redress is immune from liability based on such

petitioning. Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S.

127 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965);

7 In that case, however, the court found that the claims were barred by the Noerr-

Pennington doctrine. Giles v. Phelan, Hallinan & Schmieg, L.L.P., 2013 WL 2444036, at

*5–*8 (D.N.J. June 4, 2013).

Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 123 (3d Cir. 1999). In

general, being on the losing side—let alone the winning side—in a contested

litigation does not support liability. To that Noerr-Pennington defense there is a

“sham litigation exception,” but it does not apply, for several reasons. To begin

with, the probate action was not filed by defendants, and was not a sham

because defendants in fact prevailed on the merits. Pro. Real Est. Invs., Inc. v.

Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993) (holding that a lawsuit is

objectively baseless only if “no reasonable litigant could realistically expect

success on the merits”). Plaintiff asserts, relatedly, that defendants’ actions

within the probate action constitute litigation fraud. The First Amendment

protects defendants’ filings in that action, however, and they cannot be the

basis for liability under RICO. See Cheminor Drugs, 168 F.3d at 128.

In short, plaintiff’s federal and state RICO claims must be dismissed.

b. Common Law Fraud

A claim of common law fraud under New Jersey law has five essential

elements: “(1) a material misrepresentation of a presently existing or past fact;

(2) knowledge or belief by the defendant of its falsity; (3) an intention that the

other person rely on it; (4) reasonable reliance thereon by the other person; and

(5) resulting damages.” Stockroom, Inc. v. Dydacomp Dev. Corp., 941 F. Supp.

2d 537, 546 (D.N.J. 2013) (citing Gennari v. Weichert Co. Realtors, 148 N.J.

582, 610 (1997)). In addition, Federal Rule of Civil Procedure 9(b) requires, “[i]n

alleging fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake.” The statute of limitations for

fraud is six years, and the allegations of fraud fall within the limitations period.

See N.J. Stat. Ann. § 2A:14-1. I therefore consider the merits.

Nowhere in the Second Amended Complaint does plaintiff allege with

specificity that any of the defendants made a material misrepresentation to her,

or that she relied on any such statement.8 By her own account, plaintiff was

wholly skeptical of the motives and actions of defendants from the beginning;

the 2AC alleges that she “suspected rampant fraud” throughout 2013. (2AC at

134.) In the section of the complaint that alleges common-law fraud, plaintiff

makes a number of repetitive and irrelevant accusations about bad behavior at

THC. (2AC at 154–58.) Nowhere, however, does she point to a specific

misrepresentation made by an identified defendant that she reasonably relied

upon to her detriment. Indeed, far from relying on any representations by

defendants, plaintiff has aggressively contested them. Plaintiff has therefore

failed to state a claim for common law fraud, and this count must be

dismissed.

c. Defamation

The statute of limitations for defamation under New Jersey law is one

year. N.J. Stat. Ann. § 2A:14-3 (“Every action at law for libel or slander shall be

commenced within 1 year next after the publication of the alleged libel or

slander.”). “Publication” of defamatory matter is its “communication

intentionally or by a negligent act to one other than the person defamed.”

Restatement (Second) of Torts § 577(a); 30 River Ct. E. Urb. Renewal Co. v.

Capograsso, 383 N.J. Super. 470, 479 (App. Div. 2006); Mangan v. Corp.

Synergies Grp., Inc., 834 F. Supp. 2d 199, 206 (D.N.J. 2011).

Plaintiff’s allegations of defamation stem from the circumstances of her

firing in 2013 and the affidavits produced by defendants (including the tertiary

defendants) in 2014. (2AC at 156–58.) The publication of these statements is

clearly well outside the one-year statute of limitations. Plaintiff alleges,

however, that the later attachment of the affidavits to court filings in late 2017

revived her defamation claim. (2AC at 158.) Considered as part of court filings,

however, the allegedly defamatory statements are protected by the litigation

8 Plaintiff alleges that defendants defrauded or attempted to defraud Sun Bank

and Wells Fargo. Those alleged frauds, however, did nothing to injure plaintiff and she

does not have standing to bring claims based on them.

privilege; they do not constitute new acts of defamation within the limitations

period.

The litigation privilege provides complete immunity from liability and

grants an absolute privilege to a defamatory statement made in the course of a

judicial proceeding, so long as the statement is relevant to the proceeding.

Hawkins v. Harris, 141 N.J. 207, 213–15 (1995); Erickson v. Marsh &

McLennan Co., Inc., 117 N.J. 539, 563 (1990). The court must analyze whether

the communication was “(1) made in judicial or quasi-judicial proceedings; (2)

by litigants or other participants authorized by law; (3) to achieve the objects of

the litigation; and (4) that have some connection or logical relation to the

action.” Hawkins, 141 N.J. at 216 (internal quotation marks omitted). Here, the

allegedly defamatory affidavits were attached to filings in the probate lawsuit by

defendants and were successfully used to defeat plaintiff’s claims in the

probate court. Because the submission of the affidavits in 2017 was privileged

and therefore not a defamatory publication, and because the original

publication of the defamation occurred more than a year before the

commencement of this action, plaintiff’s defamation claim is time-barred and

must be dismissed.

d. CEPA

CEPA states that “[u]pon a violation of any of the provisions of this act,

an aggrieved employee or former employee may, within one year, institute a

civil action in a court of competent jurisdiction.” N.J. Stat. Ann. § 34:19-5. New

Jersey Courts have confirmed that, in cases of firing, the accrual date for a

CEPA claim is the date upon which plaintiff was actually terminated. Keelan v.

Bell Commc’ns Rsch., 289 N.J. Super. 531, 540 (App. Div. 1996) (finding that

the date of accrual was the date plaintiff was actually terminated, not the date

upon which he was notified that he would be terminated in the future). That is

the point at which the one-year CEPA statute of limitations begins to run.

Plaintiff was fired from THC and escorted from the premises by the police

on December 4, 2013, more than four years before filing this lawsuit. Her CEPA

claim is thus time-barred and must be dismissed.

Plaintiff also brings a wrongful discharge claim (known as a Pierce claim),

a permissible alternative strategy at the pleading stage. Rubin v. Sultan

Healthcare, Inc., 2009 WL 1372272, at *3–*4 (D.N.J. May 15, 2009). The

statute of limitations for a Pierce claim is more complicated than for a CEPA

claim, because an employee allegedly discharged in violation of public policy

can proceed on a contract theory, a tort theory, or both. Pierce v. Ortho Pharm.

Corp., 84 N.J. 58, 72 (1980); Day v. Wells Fargo & Co., 2018 WL 1891476, at *2

(D.N.J. Apr. 20, 2018). The statutes of limitations for a Pierce claim thus may

invoke either of two statutes of limitations: two years for a tort claim and six

years for a contract claim. Lavin v. Bd. of Educ. of City of Hackensack, 90 N.J.

145, 149 (1982) (“The statute of limitations applicable to a ‘recovery upon a

contractual claim or liability’ is six years.” (quoting N.J.S.A. 2A:14–1)); Montells

v. Haynes, 133 N.J. 282, 292 (1993) (applying two-year personal injury statute

of limitations, N.J.S.A. 2A:14–2, to NJLAD claims). Plaintiff’s Pierce claim is not

properly viewed as a contract claim. She does not allege that she had an

employment contract of any kind with THC, or that the defendants breached

any type of implied contract. Instead, she alleges an abrupt, “immediately

known” injury, consisting of being fired and escorted from the premises by the

police.

Viewed, as I think it must be, as a personal injury claim, the Pierce claim

is subject to the two-year statute of limitations, which began to accrue the day

she was fired. Alexander v. Seton Hall Univ., 204 N.J. 219, 228 (2010). Because

plaintiff was fired from THC in December 2013 and did not file this suit until

2018, her Pierce claim is time-barred.9

9 I note in the alternative that even if they were timely, plaintiff’s Pierce

allegations would fail to state a claim. The complaint does not identify the public

policy that was allegedly violated by plaintiff’s dismissal. Pierce, 84 N.J. at 72 (“[A]n

employee has a cause of action for wrongful discharge when the discharge is contrary

Finally, plaintiff attempts to save her claims from the statute of

limitations by alleging a “continuing violation,” based on the subsequent

proceedings in state probate court regarding distribution of her THC shares in

cash rather than in kind. (2AC at 179–82.) This claim, however, is barred by

both the litigation privilege and the Noerr-Pennington doctrine, both of which,

as explained above, disallow actions taken in court proceedings as the basis for

civil liability. Plaintiff also alleges in her complaint, without factual support,

that various post-discharge acts of defendants should toll the statute of

limitations, but she fails to offer a foundation for any such argument.10 (2AC at

193.) Thus, plaintiff’s baseless assertion of a continuing violation cannot save

her CEPA and Pierce claims

The CEPA/Pierce claims are therefore dismissed as time-barred.

e. Conversion

Under New Jersey law, conversion is “the intentional exercise of

dominion and control over chattel.” Meisels v. Fox Rothschild LLP, 240 N.J. 286

to a clear mandate of public policy. The sources of public policy include legislation;

administrative rules, regulations or decisions; and judicial decisions.”) (emphasis

added) The reasons that plaintiff lists for her firing are related to internal company

policy, not public policy. She states that she complained about a variety of internal

company matters, such as THC’s reimbursement policy for employee gas usage. (2AC

at 169). Such complaints do not amount to whistleblowing under Pierce because they

do not involve the public good, but rather the financial health of the company. The

closest plaintiff gets to alleging whistleblowing related to public policy is her refusal to

provide a “personal guarantee” for the allegedly fraudulent Wells Fargo loan. (2AC at

176.) Her complaint, however, does not allege that she was fired for refusing to serve

as a guarantor of that loan application, which occurred months before she was fired.

Rather, the complaint focuses on plaintiff’s internal complaints and alleges that this

“digging for dirt” was the reason she was fired, not any reasons related to the Wells

Fargo loan application. (2AC at 178.) Similarly, her brief statement claiming that the

post-discharge retaliatory actions of defendants violated public policy by seeking to

“prevent plaintiff from utilizing the Courts to seek redress” is illogical and cannot form

the basis of a plausible Pierce claim. (2AC at 193.)

10 Plaintiff does not mention the CEPA/Pierce claim in her brief in opposition to

the motion to dismiss.

(N.J. 2020). Conversion can be alleged over money if the plaintiff can point to,

not just a legal claim for money, but a specific, segregated sum that defendant

has wrongfully acquired. Dougherty v. Drew Univ., 2021 WL 1422935, at *10

(D.N.J. Apr. 14, 2021). To state a conversion claim, plaintiff must allege that

she maintains the “right to immediate possession” of, as opposed to a mere

claim to, the property. First Nat. Bank of Bloomingdale v. N. Jersey Tr. Co.,

Ridgewood, 14 A.2d 765, 767 (N.J. Sup. Ct. 1940).

Here, plaintiff alleges that defendants are liable for conversion because

they were aware that the money in Todd Applebaum’s 401(k) should have gone

to plaintiff, but instead distributed it to the estate. (2AC at 94, 195.) She does

not, however, allege that she was listed as the beneficiary on the 401(k)

account or that she had any immediate right to the funds for any other reason.

(Mot. at 10.) Thus, plaintiff may be alleging a claim that should be satisfied

from such funds, but she has not plausibly alleged that she had an immediate

right to those particular funds in the 401(k). The claim for conversion is

therefore dismissed.11

f. ERISA

Plaintiff makes conclusory allegations that two actions violated ERISA:

Fabian’s “deferred compensation scheme” and the payment of the 401(k) funds

to the estate. (2AC at 196–98.) Plaintiff is not able to demonstrate that she has

standing with respect to either claim.12 Without a concrete, particularized

injury that is traceable to the defendant, a plaintiff does not have standing and

her claim must be dismissed. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560

(1992). First, plaintiff alleges no injury whatever that is directly related to the

nature of Fabian’s compensation. Second, as discussed in the previous section,

11 Whatever right plaintiff may eventually have to the funds under Todd

Applebaum’s will are not relevant here, as the allegation is that the funds should have

been paid immediately to plaintiff rather than to the estate.

12 In addition, insofar as plaintiff seeks to have this court overturn the decisions

of the probate court regarding Fabian’s actions as executor, I am barred from doing so

by the probate exception.

plaintiff does not allege that she was listed as a beneficiary of Todd

Applebaum’s 401(k). She had no ERISA rights or legal claim to the funds in the

401k, and she cannot allege that she was injured by the transfer of the funds

to the estate. Whatever rights she may have had to the funds qua assets of the

estate do not implicate ERISA. Therefore, plaintiff lacks standing to bring her

ERISA claim, which is dismissed.13

g. IIED

Plaintiff brings a claim of intentional infliction of emotional distress

(“IIED”) based on the stressful June 2013 meeting, alleged harassment during

her time working at THC, her firing in December 2013, events related to a 2015

deposition, and the attempt to distribute her shares of THC in cash rather than

in kind. (2AC at 198–202.) The statute of limitations for IIED is two years, and

it begins to accrue when the distress occurred. Fraser v. Bovino, 317 N.J.

Super. 23, 34 (App. Div. 1998). Thus, all claims related to distress that

occurred before June 25, 2016, are time-barred.

The only claim that arose within the limitations period, then, is the claim

that defendants intentionally caused plaintiff distress by (successfully)

requesting, in the probate matter, to distribute the shares in cash. For the

reasons explained in Section III.c, supra, claims based on legal filings in that

case are barred by the litigation privilege. Insofar as plaintiff seeks to overturn

the decision of the Chancery Division approving the distribution of the shares

of THC in cash, such a request is barred by the probate exception. In addition,

being on the losing end of a judicial decision regarding distribution in cash

rather than in kind simply does not approach the level of outrageousness

required to support an IIED claim. See Buckley v. Trenton Saving Fund Soc.,

111 N.J. 355, 366–67, 544 A.2d 857, 863 (1988) (tort requires conduct “so

outrageous in character, and so extreme in degree, as to go beyond all possible

13 Defendants argue that plaintiff fails to state a claim under ERISA because she

has not properly alleged that Keh was a fiduciary of the plan as required by ERISA.

(Mot. at 39.) I do not reach this argument, whatever its merits.

bounds of decency, and to be regarded as atrocious, and utterly intolerable in a

civilized community.”)

Plaintiff’s IIED claim must therefore be dismissed.

h. Tortious Interference

Under New Jersey law, the tort of interference with a prospective

economic advantage has four essential elements: “(1) a protectable interest; (2)

malice-the defendant's intentional interference without justification; (3) a

reasonable likelihood that the interference caused the loss of a prospective

gain; and (4) resulting damages.” D’Agostino v. Gesher LLC, 2014 WL 7475209,

at *5 (N.J. Super. Ct. App. Div. Jan. 7, 2015) (citing Printing Mart-Morristown v.

Sharp Elecs. Corp., 116 N.J. 739, 752–53 (1989)). Plaintiff’s claim of tortious

interference is based on the same underlying events as most of her other

claims: the 401(k) funds being paid to the estate, the payments to Fabian from

THC, the sale of the Toben property, and litigation fraud.14 (2AC at 202–04.)

The protectable interest need not be a fully executed contract, because

“[t]he law protects also a [person’s] interest in reasonable expectations of

economic advantage.” D’Agostino, 2014 WL 7475209 at *5. Even so, plaintiff

has not plausibly alleged that she has a protectable interest in the funds from

the 401(k), Fabian’s payments, or the Toben property. Plaintiff does, of course,

have an interest under the will in receiving a portion of the estate’s assets. As

the Chancery Division held, such rights are subject to the provisions of the will

itself, which grants the executor discretion to determine how the estate’s affairs

are handled. When the will is finally probated, plaintiff will receive a

distribution from the estate, but, as discussed supra, plaintiff has never had

any ownership interest, or any concrete protectable interest, in THC or Toben,

and was not the beneficiary of Todd Applebaum’s 401(k). Because she has not

alleged that she had a protectable interest in the property at issue, plaintiff has

failed to state a claim of tortious interference.

14 The facts pleaded in relation to “litigation fraud,” in particular, do not seem to

bear any plausible relation to tortious interference. (2AC at 204.)

i. Negligence

A claim of common law negligence has four essential elements: “(1) [a]

duty of care, (2) [a] breach of [that] duty, (3) proximate cause, and (4) actual

damages.” Polzo v. Cty. of Essex, 196 N.J. 569, 584 (2008). The few facts

pleaded in relation to negligence involve the alleged fraudulent drawdowns on

the Sun Bank line of credit. (2AC at 205–06.) Plaintiff does not explicitly allege

what defendants’ duty was or how that duty was breached. The only duty that

may plausibly be extracted from the allegations is Fabian’s fiduciary duty as

executor of the estate, owed to plaintiff as a beneficiary of the estate. In re Est.

of Folcher, 224 N.J. 496, 511 (2016). The claim that Fabian committed fraud

and breached his fiduciary duty, however, has already been reviewed on the

merits and rejected by New Jersey state courts. (App. Op. at 20.) Plaintiff is

appealing the Appellate Division’s decision to the New Jersey Supreme Court,

as is her right, but for this court, the Chancery and Appellate Division

decisions are final and have both claim- and issue-preclusive effect. See Hills

Dev. Co. v. Bernards Twp. in Somerset Cty., 103 N.J. 1, 59 (1986). I am thus

bound by the state court decisions finding that Fabian did not breach his

fiduciary duty at all, and I therefore must dismiss any claim that he breached

it negligently.

j. John Does

The tenth count of the Second Amended Complaint seems to be no more

than a placeholder. It purports to plead all claims against “ABC-Corp 1-10. and

John Does 1-10.” (2AC at 207.) Because all of plaintiff’s claims are being

dismissed against all defendants, and no fictitious defendant has been further

identified, Count Ten will be dismissed.

k. Civil Conspiracy

The twelfth and final count in the Second Amended Complaint is for civil

conspiracy. New Jersey law defines a civil conspiracy as “a combination of two

or more persons acting in concert to commit an unlawful act, or to commit a

lawful act by unlawful means, the principal element of which is an agreement

between the parties to inflict a wrong against or injury upon another, and an

overt act that results in damage.” Banco Popular N. Am. v. Gandi, 876 A.2d 253,

263 2005) (internal quotation marks omitted) (quoting Morgan v. Union County

Bd. of Chosen Freeholders, 633 A.2d 985 (App. Div. 1993)).

The allegations included in this section of the complaint, however, largely

focus on the defendants’ alleged conspiracy to conceal facts from the state

court regarding whether Sun Bank had actually filed a lawsuit against THC.

(2AC at 220–231.) It is difficult to see what relevance this allegation has to any

civil conspiracy affecting the plaintiff. It is clear, moreover, as noted by the

Appellate Division, that the existence of the lawsuit was not actually concealed

from the state court. (App. Op. at 6.) Count 12 will be dismissed for failure to

state a claim.

In addition, plaintiff attempts one more time, as part of her civil

conspiracy claim, to overturn the decision to allow distribution of the THC

shares in cash rather than in kind. (2AC at 231.) As I have noted several times,

the probate exception bars this court from overturning that decision of the New

Jersey state courts.

l. Motion to Amend/ Dismissal with prejudice

Plaintiff moves to amend her complaint for a third time. The proposed

changes are minor, primarily related to statute of limitations tolling arguments,

and plaintiff has added some illustrative flow charts. (DE 133-1 at 2–5.)

Federal Rule of Civil Procedure 15(a) governs a party’s request for leave

to amend a complaint and states, in pertinent part, that a party may amend its

complaint after obtaining the Court’s leave. Fed. R. Civ. P. 15 (a)(2); see also

Rivera v. Valley Hospital, Inc., 2017 WL 916436 at *2 (D.N.J. March 8, 2017).

The Rule directs that the Court “should freely give leave when justice so

requires.” Fed. R. Civ. P. 15 (a)(2). This standard ensures that claims are

decided on their merits rather than on mere technicalities. See Dole v. Arco

Chem. Co., 921 F.2d 484, 487 (3d Cir. 1990).

While district courts are vested with the broad discretion to grant or deny

a motion for leave to amend under Rule 15(a), Arab African Int’l Bank v.

Epstein, 10 F.3d 168, 174 (3d Cir. 1993), they must exercise that discretion in

light of “Rule 15(a)’s mandate that amendments are to be granted freely in the

interests of justice.” Voilas v. General Motors Corp., 173 F.R.D. 389, 396 (D.N.J.

1997) (cleaned up). One appropriate reason to deny a motion to amend is

futility. Grayson v. Mayview State Hosp., 293 F.3d 103, 106 (3d Cir. 2002).

Here, plaintiff’s attempt at amendment is futile. As discussed above, the

majority of her claims are barred by the statute of limitations, the litigation

privilege, or the probate exception. No amount of artful pleading will

circumvent those bars, and the minimal changes of the proposed third

amended complaint certainly do not do so. The proposed third amended

complaint does nothing to improve plaintiff’s meritless tolling arguments. There

is no lack of factual content in the complaint; if anything there is too much.

Even as supplemented by the motion to amend, it does not add up to a viable

claim. Plaintiff’s cross-motion to amend her complaint is denied.

The plaintiff responded to this motion to dismiss—as she did two times

previously—with a motion to amend the complaint, which I have now denied as

futile. That denial sets the scene for the decision whether this dismissal should

be entered with or without prejudice.

The Third Circuit has liberally permitted pleading amendments to ensure

that “a particular claim will be decided on the merits rather than on

technicalities.” Dole v. Arco Chern. Co., 921 F.2d 484, 487 (3d Cir. 1990).

Indeed, where a complaint is dismissed on Rule 12(b)(6) grounds, “a District

Court must permit a curative amendment, unless an amendment would be

inequitable or futile.” Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004)

(emphasis added); accord Phillips v. Cty. of Allegheny, 515 F.3d 224, 236 (3d

Cir. 2008) (citing Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir.

2002) (citing Shane v. Fauver, 213 F.3d 113, 116 (3d Cir. 2000)).

I have already entertained three motions to amend in this action, which

were filed with full knowledge of the defendants’ asserted grounds for

dismissal. Plaintiff’s allegations cannot remain a moving target indefinitely.

Further amendment would be futile. As noted above, the majority of the bases

for dismissal have already been the subject of unsuccessful attempts to cure,

and, by their nature, are not readily curable. After nearly ten years of litigation,

there is no reason to think that, given another chance, the plaintiff may amend

her way around her failure to state a claim, let alone such formidable barriers

as the statute of limitations, Noerr-Pennington, or the litigation privilege. This

dismissal will therefore be entered with prejudice.

IV. CONCLUSION

For the reasons set forth above, defendants’ motion to dismiss the

Second Amended Complaint is GRANTED, with prejudice, and plaintiff’s cross-

motion to further amend her complaint is DENIED. A separate order will issue.

Dated: December 9, 2021

/s/ Kevin McNulty

___________________________________

Hon. Kevin McNulty

United States District Judge