Estate of Martha Barotz v. Martha Barotz 2006-1 Insurance Trust

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ESTATE OF MARTHA BAROTZ, )
)
Plaintiff, )
) C.A. No.: N20C-04-126 EMD CCLD
v. )
)
MARTHA BAROTZ 2006-1 )
INSURANCE TRUST, LIFE )
ACCUMULATION TRUST III, and )
HELIX CAPITAL FUNDING, LLC )
)
Defendants. )
Submitted: October 26, 2020
Decided: December 4, 2020
Upon Consideration of Defendants’ Motion to Dismiss, or in the Alternative, for a Stay
DENIED
This is a civil action brought in the Complex Commercial Litigation Division for the
recovery of life insurance proceeds. Plaintiff Estate of Martha Barotz (the “Estate”) alleges that
Defendants Martha Barotz 2006-1 Insurance Trust (the “Trust”), Life Accumulation Trust III
(“LATIII”) and Helix Capital Funding, LLC (“HCF”) (collectively the “Defendants”) procured,
without an insurable interest, a life insurance policy (the “Policy”) for Martha Barotz. Upon Ms.
Barotz’s death, the benefits went to certain third parties. The Estate seeks recovery of those
insurance proceeds under 18 Del. C. § 2704 or, in the alternative, under the theory of unjust
enrichment.
On July 22, 2020, the Trust filed its Motion to Dismiss, or in the Alternative, for a Stay
(the “Motion to Dismiss”). Through the Motion to Dismiss, Defendants ask the Court to either
dismiss or stay this case because there is a pending action (the “New York Action”)1 in the New
1
Martha Barotz 2006-1 Insurance Trust v. Barotz ex rel. Barotz, Index No. 53912/2020 (N.Y. Sup. Ct.).
York Supreme Court that asserts the same issues raised here. The parties disagree on whether
the New York Action was first-filed, and therefore, whether the Court should stay or dismiss this
action in favor of the New York Action.
The Court held a hearing on the Motion to Dismiss on October 26, 2020 (the “Hearing”).2
At the Hearing, the Court addressed a similar motion to dismiss or stay (the “Other Motion to
Dismiss”) filed in Estate of Martha Barotz v. U.S. Bank, N.A., et al. (the “Second Case”).3 The
Defendants in the Second Case filed the Other Motion to Dismiss because a parallel case (the
“Other New York Action”) was pending in the New York Supreme Court. Prior to the Hearing,
however, the New York Supreme Court dismissed the Other New York Action.
The Court denied the Other Motion to Dismiss. The Court held that McWane Cast Iron
Pipe Corp. v. McDowell-Wellman Eng’g Co.,4 did not apply because the New York Supreme
Court had dismissed the Second Case. In addition, the Court analyzed the Other Motion to
Dismiss under Civil Rule 12(b)(3).5 The Court used a traditional forum non conveniens
framework, applying the factors set out in General-Foods Corp. v. Cryo-Maid, Inc.:6 (i) the
relative ease of access to proof; (ii) the availability of compulsory process for witnesses; (iii) the
possibility of the view of the premises; (iv) all other practical problems that would make the trial
of the case easy, expeditious and inexpensive; and (v) whether or not the controversy is
dependent upon the application of Delaware law. 7 The Court found that Delaware was a proper
forum and denied the Other Motion to Dismiss on this ground as well.8
2
D.I. No. 41.
3
C.A. No. N20C-05-144 PRW CCLD.
4
263 A.2d 281, 283 (Del. 1970).
5
D.I. No. 51.
6
198 A.2d 681 (Del. 1964)
7
Id. at 684; see also Ethica Corp. Finance S.r.L., 2018 WL 3954205, at *5 (Del. Super. Aug. 16, 2018)(applying
Cryo-Maid under an “overwhelming hardship” standard where two cases are: (i) filed contemporaneously; (ii) the
Delaware case is filed first; or (iii) there is no other pending action).
8
D.I. No. 51.
2
On December 2, 2020, the New York Supreme Court dismissed the New York Action.9
The New York Supreme Court held dismissal was appropriate for two reasons: (i) the New York
Action was not justiciable under New York law; and (ii) the interests of Delaware predominate
and the case should therefore proceed in Delaware and not New York.
The New York Action is no longer pending in the New York Supreme Court. As such,
the Court will deny the Motion to Dismiss for the same reasons it denied the Other Motion to
Dismiss. The Court set out those reasons fully on the record at the Hearing—McWane does not
apply and Delaware is a convenient forum for this civil proceeding. The Court notes that no
parallel proceeding exists in another forum. In addition, Delaware is not an inconvenient forum
for the parties under the facts present in this case. For those reasons, the Motion to Dismiss is
DENIED.
IT IS SO ORDERED.
Dated: December 4, 2020
Wilmington, Delaware
/s/ Eric M. Davis
Eric M. Davis, Judge
cc: File&ServeXpress
9
D.I. No. 57.
3