Opinion
1957-2386/B.
Decided May 10, 2010.
Philip L. Burke, Esq., Lorisa D. LaRocca, Esq., Woods Oviatt Gilman, LLP, Rochester, New York, Attorneys for Petitioner Thekla Stein Nordwind.
Robert M. Shaddock, Esq., Hiscock Barclay, LLP, Rochester, New York, Attorneys for Respondent Dr. Michael Gauger.
This case primarily comes before this Court to determine which of the parties is entitled to seek restitution for assets that were confiscated by the Nazi party in Germany in 1939. The Decedent, Gabriella Jacobsen, and her sister, Marianne Reitz Baer, were each entitled to half of the estate of Clara Kirstein, their mother, upon Clara's death in Leipzig, Germany in 1939. However, upon Clara's death, those assets ("the Kirstein Assets") were confiscated from the estate, and therefore did not pass to Gabriella and Marianne. Gabriella died on December 8, 1957 in Monroe County, New York survived by her husband, Erich Jacobsen, an infant son, Godfrey Jacobsen, and other family members, including the Petitioner, Thekla Stein Nordwind, and the remaining surviving distributees, Greta Hoerman, Peter Franke-Ruta and Michael Franke (collectively "the Nordwind Parties"). Gabriella's will, which left her estate to her husband, Erich Jacobsen, was admitted to probate on January 21, 1958. Erich Jacobsen died on December 16, 1977. Pursuant to Erich's will, his residuary estate passed to his son, Godfrey Jacobsen. Godfrey Jacobsen died on August 10, 1980, and left his residuary estate to Christel Gauger, who was not a blood relative of Godfrey or his parents, Gabriella and Erich Jacobsen. Christel Gauger died on September 23, 2008, a resident of Germany, and Dr. Michael Gauger ("Dr. Gauger" or "Respondent") was appointed as the German equivalent of her Executor and residuary beneficiary. Thekla Nordwind was appointed administrator of the Estate of Gabriella Jacobsen by this court on July 7, 2009 in order to pursue the Kirstein Assets.
Ms. Reitz Baer's descendants have assigned their potential inheritance rights to the Kirstein Assets to the Nordwind Parties in equal shares.
The instant petition seeks a declaratory judgment from this Court determining that Gabriella Jacobsen's rights to a restitution claim available under the 1990 Vermogensgesetz ("German Property Claims Act" or "GPCA") belong to the Nordwind Parties pursuant to New York Law. The GPCA created claims for restitution for individuals and their "legal successors" for property wrongfully confiscated "for reasons of racism, political views, religion or ideology," between January 30, 1933 to May 8, 1945 (GPCA § 1(6)).
No claim for restitution for the Kirstein Assets was filed by the June 30, 1993 deadline, so recovery was later sought through the Claims Conference, an organization that established a Goodwill Fund for those who did not file claims before the GPCA deadline. The Nordwind Parties retained an attorney, David J. Rowland, Esq., to file a claim with the Claims Conference on their behalf. Through circumstances that are not before this Court, in the end Mr. Rowland filed a claim on behalf of Ms. Gauger while arguably still representing the Nordwind parties, and obtained an Erbschein (a German certificate of inheritance) from the German Courts that established Ms. Gauger's rights to pursue reparations for the Kiersten Assets due to her being Godfrey Jacobsen's proper "legal successor" pursuant to the terms of the GPCA.
The Petitioners argue that because Godfrey Jacobsen died ten years before the GCPA was enacted in 1990, the claim for restitution could not have passed to Ms. Gauger through Godfrey's will because New York law prevents a statutory claim from passing through an estate until the effective date of the statute, and prohibits claims acquired posthumously from being devised by will (EPTL 3-3.1; see, e.g., Shaw Family Archives Ltd. V. CMG Worldwide, Inc., 486 F. Supp. 2d 309, 315 (S.D.NY 2007). Therefore, since the GCPA claims could not have passed through Erich Jacobsen's or Godfrey Jacobsen's wills, the claims would have passed to the Nordwind Parties through intestacy. Petitioners filed suit against Mr. Rowland in the Southern District of New York alleging legal malpractice, breach of contract, negligence, breach of fiduciary duty, and for equitable relief arising from Mr. Rowland's representation of the Nordwind Parties as well as Ms. Gauger. ( Nordwind v. Rowland, 2007 WL 2962350 (S.D.NY Oct. 10, 2007) (Pogue, J., sitting by designation) (the "Federal Court Action"). Petitioners have also sought to have the Erbschein issued to Ms. Gauger revoked by the German Courts, and in connection with that effort, seek a determination from this Court for a determination under New York Law "as to whether or not a claim that arose after Gabriella Jacobsen's death in 1957 passes under the terms of her Will [eventually to Dr. Gauger], or by intestacy [to the Nordwind Parties]." Pet. Memo. of Law in Opposition to Motion to Dismiss, at p. 2.
OPINION
The issue sought to be determined by this Court, i.e., whether the Nordwind Parties are entitled to the right to pursue reparation under German Law, has been previously decided by the United States District Court for the Southern District of New York, in Nordwind v. Rowland, 2007 WL 2962350 (S.D.NY Oct. 10, 2007) (Pogue, J., sitting by designation) (the "Federal Court Action"). The Southern District's decision was later affirmed by the United States Court of Appeals for the Second Circuit ( Nordwind v. Rowland, 584 F.3d 420 (2d Cir. 2009), and the Nordwind Parties' petition for panel rehearing before the United States Court of Appeals for the Second Circuit was denied (Order, Docket Number 07-4862-cv, (Dec. 10, 2009)). Despite the fact that the issue currently before this Court was raised in the context of the malpractice action against Mr. Rowland, the District Court fully addressed, under both German and New York law, whether the Nordwind Parties had an entitlement to the Kirstein Assets that originally would have gone to Gabriella Jacobsen.
The District Court's held that the GPCA "causes the claim for restitution to originate with the legal successors [as defined by German Law], and not, as the Nordwind Parties argue, to be passed down from the estate of the injured party as of 1990." Federal Court Action, at 23. Furthermore, the District Court opined:
[A]s a matter of German Law, the claim [for restitution] first comes into being with the legal successor of the injured party (if that injured party is deceased), and that the legal successor is determined by a legal analysis of who would have inherited the asset, had it not been confiscated. Only then is New York law consulted, to determine who would have inherited the assets, had they not been confiscated, but rather, passed through the chain of heirs.
Federal Court Action, at 24.
Therefore, the District Court held that Dr. Gauger, as the beneficiary of Christel Gauger's estate, rightfully holds the right to the restitution claim for the Kirstein Assets under New York law. Accordingly, the instant petition is barred by collateral estoppel.
Collateral estoppel is a doctrine intended to reduce litigation and conserve the resources of the court and litigants, and is based, "on the general notion that it is not fair to permit a party to relitigate an issue that has already been decided against it." Kaufman v. Eli Lilly and Co., 65 NY2d 449 (1985). The party seeking the benefit of the doctrine of collateral estoppel has the burden to show that "[t]he issue in the present proceeding [is] identical to that necessarily decided in a prior proceeding." Allied Chem. v. Niagara Mohawk Power Corp., 72 NY2d 271 (1988). Petitioners have failed to meet their burden of establishing that they were not afforded a full and fair opportunity to litigate the issue in the District Court proceeding.
Petitioners argue that because the District Court concluded that the Nordwind parties have no rights to a restitution claim in the Gabriella Jacobsen line of descent "pursuant to the German Property Act," that this Court may still decide this case based on New York law. However, this characterization is inaccurate. The District Court clearly delineated the dual analysis of both German and New York law which must be conducted in order to determine the proper entitlement to the claim for restitution, specifically stating:
The Nordwind Parties are correct that New York law governs the identification of the legal successors, as New York is the lex successionis for Gabriella Jacobsen. Thus, the claim for restitution arose directly and originally in the legal successors of Gabriella Jacobsen and Marianna Baer. New York probate law has already determined that Gabriella's property was passed intestate to Erich Jacobsen, whose residual beneficiary was Godfrey Jacobsen, whose residual beneficiary, in turn, was Christel Gauger.
Federal Court Action, at 23.
The District Court completely determined the issue presented by the instant petition based both on German and New York law such that there is no ruling this Court could make on this matter that would not be barred by collateral estoppel.
Furthermore, as an Erbschein has already been issued by a German Court, and the matter of whether that Erbschein was properly issued continues to be pending in Germany, any determination of the proper disposition of the Kirstein Assets by this Court would be purely advisory. "It is fundamental that the "function of the courts is to determine controversies between litigants . . .They do not give advisory opinions." Zimmerman v. Abrams, 101 AD2d 691, 476 NYS2d 29 (4th Dep't 1984).
Accordingly, no other issues raised need be addressed by this Court.
Therefore, in accordance with the above decision it is hereby:
ORDERED, ADJUDGED and DECREED that the Nordwind Parties' Petition seeking a Declaratory Judgment is dismissed, and that the appointment of Thekla Nordwind as Administrator of the Estate of Gabriella Jacobsen is vacated.