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Butler v. Ross

United States District Court, S.D. New York

July 11, 2017

SUSAN BUTLER, Plaintiff,
v.
NORMAN ROSS, Defendant.

          For the Plaintiff: Barry R. Fischer The Barry R. Fischer Law Firm LLC

          For the Defendant: Martin Druyan Martin Druyan & Associates

          OPINION AND ORDER

          DENISE COTE, United States District Judge

         This case arises from plaintiff Susan Butler's (“Butler's”) request for an accounting of funds she entrusted to defendant Norman Ross (“Ross”) from 1987 to date. In addition, Butler seeks a money judgment in the amount found to be due and owing from the accounting.[1] Butler has filed a motion for summary judgment pursuant to Rule 56, Fed.R.Civ.P. Ross has filed a cross-motion for summary judgment. For the reasons that follow, Butler's motion for summary judgment is granted in part, and Ross's motion for summary judgment is denied.

         BACKGROUND

         The following facts are undisputed unless otherwise noted. Butler is an Australian citizen and a resident of Montreal, Canada. She is the author of the “RAT Pack” workbooks and a former tenured professor at the University of Sydney. Ross is a 95 year-old American citizen and a resident of New York. Butler first met Ross in January 1987 aboard a QE2 cruise.[2]

         On August 7, 1987, Butler purportedly executed a power of attorney to Ross. Indeed, a letter signed by Butler and dated August 2, 1988 acknowledges Ross as Butler's “general agent having a general power of attorney.” When presented with the signed power of attorney during her October 18, 2016 deposition, Butler claimed that her signature was forged and that, to her knowledge, she had never executed a power of attorney to Ross.[3] Ross offers no explanation for how he came to possess this power of attorney, nor does he attempt to defend its validity.

         Ross began to manage Butler's finances in early 1988. A number of handwritten letters between August 1988 and October 1993 reveal that Ross possessed at least some of Butler's assets. For example, a letter dated August 1, 1988 addressed to Butler and signed by “Norman Ross” states in relevant part: “In the event of my death, my executors . . . will be able to assist you and answer any questions about the whereabouts of your assets that I am handling for you.” A letter dated September 8, 1989 addressed to Butler and again signed by “Norman Ross” provides in relevant part: “This is a concise description of items of your property paid for with your personal funds that I am holding for you at this time as indicated below.” Finally, an October 24, 1993 letter addressed to Butler and signed by “Norman Ross” states:

As of 24 October 1993, I am holding cash of U.S. funds of $29, 760.00 which is the property of Dr. Susan R. Butler. It is to be returned to her out of my estate in the event that it has not been returned or used for her expenses or otherwise put in a security in her name at or by the time of my death. If it is in a security in her name it is to be given to her if it is not already in her possession. Dr. Butler now possesses 4 Bonds in her name.
The above statement cancels & supersedes any and all previous statements written or oral, of monies I am holding for or owe to Dr. Butler.

         Ross can no longer recall signing these letters and therefore contests their authenticity. But, he does not dispute that both he and Butler separately produced in discovery during this litigation the following document signed by “Norman Ross”:

As of April 9, 1991, I am holding cash of U.S. funds of $11, 380.66 which is the property of Dr. Susan R. Butler. It is to be returned to her out of my estate in the event that it has not been returned to her or used for expenses or otherwise put it [sic] a security in her name at or by the time of my death. If it is in a security in her name that I am holding in amount above or so -- it is, (the security) is to be given her after my death, from my vault, together with any other securities (2) in her name in my vault.
This above statement cancels & supersedes any previous statements written or oral of monies I am holding for or owe to Dr. Susan R. Butler. In other words, I owe her $11, 380.66 in U.S. funds which I am holding for her as of 4/9/91 -- also I have in my vault at Crossland Savings 5 Ave & 89th N.Y.C. 2 U.S. securities in her name, paid with her funds and in her name which are both the property of Dr. Butler.
The above statements will be [illegible] from time to time as monies ($11, 380.66) are used on Dr. Butler's behalf for expenses, or purchases for her of any kind requested by her and new statements like this will be forthcoming from time to time to reflect changes.

         Several financial documents produced by Ross during discovery further demonstrate Ross's access to, and control over, Butler's assets. For example, Ross produced a notice from HSBC dated March 21, 2005 and addressed to Susan R. Butler at P.O. Box 58 Cooper Station, New York -- Ross's P.O. Box address.

         The notice requests that Ms. Butler submit a completed Form W- 8BEN, which is a “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.” Attached to the letter is a completed form with Butler's alleged signature. Butler claims that her signature is forged and that she has never before seen this letter.

         Ross also produced an introductory letter from the Merrill Lynch Financial Advisory team. The letter is dated April 3, 2006, and is addressed to “Mrs. Butler” at P.O. Box 58, Cooper Station, New York. Enclosed is an account statement for “Susan R Butler c/o Norman Ross.” On September 16, 2016, counsel for the plaintiff subpoenaed Merrill Lynch for all of Ms. Butler's account records. On September 30, Merrill Lynch responded to the subpoena, noting that it had “conducted a thorough search of [its] business records for responsive documents, ” but that “[n]o such records have been found under the name(s) and/or social security/taxpayer identification number(s) provided.” With the defendant's permission, plaintiff's counsel subsequently subpoenaed Merrill Lynch for accounts in Ross's name or social security number. The responsive account statements show an account in Ross's name that was opened in March 2006 and that peaked at over a million dollars in 2010.

         Ross has provided no response to the above-mentioned communications from HSBC and Merrill Lynch, or to Butler's contention that her signature on the W-8BEN form is forged. Nor has Ross explained how he came to accumulate over one million dollars in his Merrill Lynch account.[4]

         In 2012, after learning that Ross had amended his will and reduced her bequest by half, Butler orally demanded that Ross return her money. When Ross did not return the money, Butler wrote to Ross requesting that the defendant inform her of the location of her securities.[5] On September 5, 2014, the plaintiff's brother -- Anthony Butler -- wrote a follow-up letter demanding that Ross return Butler's securities. On September 24, 2015, Butler's counsel wrote a letter to Ross explaining that he had been retained to conduct a “thorough investigation” into Ross's handling of Butler's financial and business affairs and to recover whatever assets Ross was holding on Butler's behalf. The letter warned that Butler would file suit against Ross if he did not voluntarily comply with her investigative efforts within two weeks.[6]

         Butler filed this lawsuit on February 19, 2016. The complaint pleads only one count seeking an accounting. On April 12, Ross filed a motion to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. The motion to dismiss was denied on June 14. On November 17, Butler filed a motion for summary judgment. In addition to an accounting, Butler seeks a money judgment in the amount found to be due and owing from the accounting. Specifically, Butler asserts that the documents produced in connection with this motion prove that she is entitled to $721, 257.53. A cross-motion for summary judgment was filed on December 14, 2016. The motions became fully submitted on January 18, 2017.

         DISCUSSION

         Summary judgment may not be granted unless all of the submissions taken together "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "Summary judgment is appropriate when the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Smith v. Cty. Of Suffolk, 776 F.3d 114, 121 (2d Cir. 2015) (citation omitted). The moving party bears the burden of demonstrating the absence of a material factual dispute. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 456 (1992); Gemmink v. Jay Peak Inc., 807 F.3d 46, 48 (2d Cir. 2015).

         Once the moving party has asserted facts showing that the non-movant's claims cannot be sustained, “the party opposing summary judgment may not merely rest on the allegations or denials of his pleading; rather his response, by affidavits or otherwise as provided in [Rule 56], must set forth specific facts demonstrating that there is a genuine issue for trial.” Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (citation omitted). “[C]onclusory statements, conjecture, and inadmissible evidence are insufficient to defeat summary judgment, ” Ridinger v. Dow Jones & Co. Inc., 651 F.3d 309, 317 (2d Cir. 2011) (citation omitted), as is “mere speculation or conjecture as to the true nature of the facts.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted). “An issue of fact is genuine and material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016).

         I. Accounting Cause of Action

          Under New York law, [7] a party seeking an accounting under must ...


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