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August 16, 1983

Hildegarde Badenhausen KING, Otto A. Badenhausen Jr., Walter Badenhausen, Otto Peter Badenhausen, Michael Badenhausen, Dorothea S. Badenhausen, Henry Wesselman III, J. P. Christopher Wesselman and William M. Lefevre as Trustee for Hildegarde Badenhausen King, Plaintiffs,
Jeanne See LASHER, Alfred W. Lasher, Jr., E. Lisk Wyckoff, Jr., Kelley Drye & Warren (a partnership), John S Doe, Jane S Doe, and Jeanne See Lasher as Fiduciary of the American and Bahamian Estates of Hildegarde W. Badenhausen and of the Azura Chemical trust, Defendants

The opinion of the court was delivered by: WERKER


 WERKER, District Judge.

 This action was commenced under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. The case is before the court on the defendants' motion to dismiss the complaint.

 On January 21, 1983, defendant Kelley Drye & Warren (Kelley Drye) moved on behalf of all defendants to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) and for other relief. At a conference held in chambers on January 28, 1983, the court ruled that it would treat the defendants' motion to dismiss as a motion for summary judgment and allowed plaintiffs 30 days to conduct discovery. Since that time, the law firm Shea & Gould has been substituted as counsel for defendant Alfred W. Lasher, Jr. and for defendant Jeanne See Lasher, individually and in her fiduciary capacities. Subsequently, Kelley Drye submitted additional affidavits and memoranda on behalf of it and defendant E. Lisk Wyckoff. Shea & Gould submitted a memorandum of law on behalf of the Lashers and the plaintiffs also submitted additional papers.


 Defendant Jeanne See Lasher was the niece of Hildegarde Badenhausen (Mrs. Badenhausen). During her lifetime, Mrs. Badenhausen placed certain of her assets in a revocable inter vivos trust, called the Azura Chemical Trust (the Azura Trust) and named Jeanne See Lasher, as co-trustee, with her of the Azura Trust. Mrs. Badenhausen died on January 24, 1980, and since then, Jeanne See Lasher has served as the sole trustee of the Azura trust. Affidavit of E. Lisk Wyckoff, sworn to January 19, 1983, paras. 4-7.

 Mrs. Badenhausen also owned property in the United States and in the Bahamas and executed two wills -- one disposing of all her property located in the Bahamas (the Bahamian Will) and a second will (the American Will) disposing of all of her other assets. Mrs. Badenhausen appointed Jeanne See Lasher the sole Executrix under both wills and appointed Jeanne's husband, Alfred W. Lasher, as her successor, if Mrs. Lasher were in any way incapacitated. Mrs. Lasher has qualified as Executrix and serves presently in that capacity. The American Will was admitted for probate in the Surrogate's Court of New York County on February 1, 1980. The Bahamian Will was filed in the Supreme Court of the Bahamas on or about February 2, 1980. (Wyckoff aff. para. 5) (Bahamian Will para. 4, American Will para. 14).

 Following Mrs. Badenhausen's death, Mrs. Lasher retained defendant E. Lisk Wyckoff, a member of the law firm of Kelley Drye & Warren, to advise her in the administration of the Decedent's estate, which had a gross date of death value of about $6,300,000 (Complaint para. 32). Mr. Wyckoff had acted as decedent's attorney since 1977 and had drafted both wills and the trust agreement setting up the Azura Trust (Complaint para. 13).

 The assets of the Bahamian Estate, following administration, are to be distributed in 13 shares, 12 shares to individuals, and one to a trust for Hildegarde Badenhausen King, Decedent's adopted daughter and a plaintiff in this action (Wyckoff Aff.Ex. B). The residuary assets under the American Will are bequeathed or "poured over" into the Azura Trust, which in turn has the same 13 beneficiaries (Wyckoff Aff.Exs. A and C).

 The assets of both the American Estate and the Bahamian Estate have the same single administrator, Mrs. Lasher, and the same 13 residuary beneficiaries. As the complaint alleges (para. 22), it was the intention of Decedent that her assets, after her death, be administered in conjunction with each other.

 Plaintiffs include eight of the beneficiaries of the Azura Trust and William M. LeFevre. Mr. LeFevre, the only non-beneficiary plaintiff, is a stockbroker who performed recordkeeping functions for Decedent. He was authorized to have access, and did have access, to Decedent's safe deposit box and the safe deposit box held by the Azura Trust (Wyckoff para. 15). In 1979, the Decedent executed a general power of attorney in favor of Mr. LeFevre.

 After Mrs. Badenhausen's death, Mr. LeFevre entered Decedent's house in New Jersey. This entry was made even though LeFevre's power of attorney from Decedent had terminated as of her death. During this unauthorized entry, Mr. LeFevre was accompanied by Gerald Fogerty, who is the attorney for the plaintiffs in the instant action. (Id. P 15).

 Under the terms of the American and Bahamian Wills and the Azura Trust, Mrs. Lasher was given broad discretionary powers to carry out her duties in administering Decedent's estate (Bahamian Will, paras. 9-13; American Will para. 12). The Trust Agreement provides:

[The Trustees shall have the power to:] . . . in their discretion . . . do all acts . . . and exercise all rights and privileges which could be done . . . or exercised . . . if they were the absolute owners of such property, including, but not by way of limitation, power and authority, in their discretion . . .
(A) to retain any such property for such length of time as they shall deem advisable, . . .
* * *
(C) to sell and convey at public or private sale, to lease for any term . . . exchange, dispose of, and generally to deal with, any such property at such time or times, and on such terms and conditions, . . . as they shall deem advisable;
(D) to invest and reinvest any money at any time forming a part of the trust estate in any securities or other property, real or personal, of whatever kind and wherever located, . . .
(E) to manage any real property at any time forming a part of the trust estate in the same manner as if they were the absolute owners thereof;

 Ex. C to Wyckoff Aff., para. 6; Ex. A to Wyckoff Aff., para. 12.

 As Executrix, under the American Will Mrs. Lasher was granted broad discretionary power. (Ex. A to Wyckoff Aff.) Under the Bahamian Will, the Executrix has similarly broad powers. (Ex. B to Wyckoff Aff.)

 Following Mrs. Badenhausen's death, Mrs. Lasher began administering and liquidating the Badenhausen Estate. Included in the Estate's assets were Mrs. Badenhausen's estate in Morris Township, New Jersey known as Hilsfarm, Decedent's residence in the Bahamas, known as Moongate, extensive personalty and jewelry at each house, and stocks, bonds and currency in ...

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