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Date: 05-12-2023
Case Style:
Case Number: 23-CV-52
Judge: Gregory K. Frizzell
Court: United States District Court for the Northern District of Oklahoma (Tulsa County)
Plaintiff's Attorney:
Defendant's Attorney:
Description: Tulsa, Oklahoma civil litigation lawyers represented Plaintiff who sued Defendants on (1) civil conspiracy; (2) unjust enrichment; (3) negligence; (4) negligent supervision; and (5) constructive trust.
Decedent John Horton Dayan married defendant Kathryn Dayan on September 2, 1994. [Doc. 2-2, p. 2, ¶ 12]. John owned at least two Merrill Lynch accounts, one account number ending in 6219, and the other ending in 6384. [Id. ¶ 13]. On or about July 7, 2016, John designated Kathryn as the beneficiary of the Merrill Lynch account ending in 6219; however, plaintiff alleges that “[i]n examining the handwriting . . . it appears that Kathryn signed, dated, and submitted this document acting as John.” [Id. ¶ 14]. On or about March 11, 2017, John designated Kathryn as the beneficiary of the Merrill Lynch account ending in 6384. [Id. at p. 3, ¶ 15].
On or about May 21, 2019, Kathryn filed for a dissolution of marriage against John in Napa County, State of California. [Id. ¶ 16]. On July 12, 2019, John and Kathryn were divorced by virtue of their filing a Marital Termination Agreement. [Id. ¶ 17].
John passed away on January 10, 2021. [Id. at p. 4, ¶ 22]. On January 11, 2021, Kathryn filled out, signed, and dated a State of Oklahoma Death Certificate Information Form, in which she listed herself as John's spouse. [Id. ¶ 25]. As a result, the Certified Death Certificate, issued by the State of Oklahoma, listed the “Informant's Name” as Kelly Dayan, her “Relationship to Decedent” as “Wife,” and herself, “Kathryn E. Brehm” as the “Surviving Spouse.” [Id. ¶ 27].
Plaintiff alleges that Merrill Lynch's IRA Disclosure Statements provide that, if you are divorced, any IRA beneficiary designation will be void unless the Decree of Divorce designates the spouse as beneficiary, you re-designate your spouse as the beneficiary, or such spouse is redesignated to receive proceeds or benefits in trust for, on behalf of, or for the benefit of your child or dependent. [Id. at p. 7, ¶ 45]. As a result, plaintiff asserts that “Kathryn . . . knew that by virtue of Merrill Lynch's own policies and procedures, she must obtain the falsified death certificate listing herself as the surviving spouse in order to ensure she could take the funds [from the Merrill Lynch accounts] into her own possession, custody and control.” [Id. ¶ 47].
On February 8, 2021, Kathryn instructed John's brother, Michael, to send the certified death certificate copies to “Merrill Lynch Attn: Will Bertron, 3700 Buffalo Speedway, Houston, TX 77098.” [Id. ¶ 48]. Between March 19, 2021 and March 29, 2021, Merrill Lynch executed the relative roll-over and transferred certain monies into Kathryn's name, exclusively. [Id. ¶ 49].
In or around March 2021, Kathryn rolled the IRA over into the custody and control of Stifel, “presumably to be managed by Ms. Ellen Harless.” [Id. ¶ 50].
Ellen Harless is alleged to be an investment advisor employed at Stifel as of January 2021. Prior to her employment at Stifel, Ellen Harless was employed at Merrill Lynch from approximately October 2001 to January 2021. [Id. at p. 8, ¶ 54]. Plaintiff alleges that Ellen Harless managed the assets for both John and Kathryn until her departure from Merrill Lynch. [Id. ¶ 55].
Plaintiff further alleges that Ellen Harless and Kathryn shared a close relationship “insofar as she is apparently willing to testify on behalf of Kathryn.” [Id. ¶ 56].
In a pleading in the California probate case, defendant Dava Dayan stated, “While much has been made of John and [Kathryn's] divorce decree and that it might prevent [Kathryn] from receiving the account as the designated beneficiary, at least one witness from the brokerage that managed John's account will testify that John specifically told her, in response to more than one inquiry she made after his divorce, that he intended [Kathryn] to remain the beneficiary of the account.” [Id. ¶ 57]. Dava previously attempted to depose Mr. Harless, “presumably to obtain testimony regarding the ‘intent' of the Decedent.” [Id. ¶ 58]. A Notice of Deposition on behalf of Dava was sent to plaintiff's counsel on or about September 21, 2021 in the Napa County probate matter. [Id.].
Ellen Harless knew that John and Kathryn were divorced. [Id. at p. 9, ¶ 60]. Ellen Harless knew or should have known Merrill Lynch's own policies and procedures in relation to beneficiary designations and the revocation of the same resulting from a divorce. [Id. ¶ 61]. Ellen Harless, acting as a Stifel employee, took over the management of these assets knowing that they were wrongfully and fraudulently obtained and knowing that John never revised his beneficiary designation. [Id. ¶ 62]. Plaintiff alleges that “Ellen Harless conspired to and with Kathryn to defraud the estate of John Horton Dayan for the benefit of having the funds rolled into Kathryn's name and under Ellen Harless's management.”
Outcome: The Motion to Dismiss Plaintiff's Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) of defendant Stifel, Nicolaus & Co., Inc. is granted in part and denied in part. The motion is granted as to the civil conspiracy and negligent supervision claims, and those claims are dismissed without prejudice. The motion is otherwise denied.
Plaintiff Mary Ellen Dayan-Varnum, Administrator of the Estate of John Horton Dayan, Deceased, may file a motion to amend to remedy the deficiencies identified herein on or before May 26, 2023.
Plaintiff's Experts:
Defendant's Experts:
Comments: