Court Opinion

ID: 2828832
Source: CourtListenerOpinion
Date Created: 2015-08-20 12:02:34.455287+00
Date Added: 2024-06-11T13:40:08.228622
License: Public Domain

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31:: the ﬁlim’teh States Qtuurt of erheral QEIaimg

 

No. 15-1930
Filed: August 19, 2015 

AUG 19 2015

* * * * * * * * * * * * 'k * *

ROBERT MILGROOM AND NADA

* U.S. COURT OF
MARTL, * FEDERAL CLAIMS
Plaintiffs, * _
V. * m 2; Res Judicata; Lack of
* Subject Matter Jurisdiction; Due
UNITED STATES’ * Process; Judicial Taking; Tort.
Defendant. *

* * * * * * * * * * * * * * *

Robert B. Milgroom and Nada Martl, Miami Beach, FL, m s_e_.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, DC. for the defendant. With
him were Robert E. Kirschman, Director, Commercial Litigation Branch, and Benjamin
C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Washington, DC.

OPINION

HORNI J.

Plaintiffs, Robert B. Milgroom, and Nada Martl, both m g, filed a complaint
together in this court on March 2,2015. Together, plaintiffs allege violations of the Fourth,
Fifth, and Tenth Amendments to the United States Constitution, and claim that the United
States District Court for the District of Hawaii took their real property and personal
property without just compensation. The co-plaintiffs are seeking $9 million in damages,
$8 million for the real property allegedly taken in Hawaii, and $1 million for personal
property, allegedly contained within the real property. Plaintiff Martl previously has filed
two substantially similar complaints to the instant complaint in this court. The first
complaint, filed on May 12, 2009, was dismissed, based on a lack ofjurisdiction in this
court to review decisions of the United States District Courts. S_eg Martl v. United States,
No. 09-299L, 2010 WL 369212, at *2 (Fed. CI. Jan. 29, 2010) (unreported decision)
(Martl l). The second complaint, filed on May 7, 2014, similarly was dismissed based on
the lack ofjurisdiction of this court to review decisions ofthe United States District Courts,

 

as well as under the doctrine of collateral estoppel, barring Ms. Martl from bringing claims
that she had already brought before the court in Martl |. E Martl v. United States, No.
14-391L, 2014 WL 1912645, at *2 (Fed. Cl. May 13, 2014) (unreported decision) (mil
ﬂ). Plaintiff Martl, joined by plaintiff Milgroom in the instant complaint, again alleges the
same causes of action that she alleged in Martl ll, based on the alleged wrongful taking
of property located in Hawaii.

 

 

FINDINGS OF FACT

Plaintiffs’ allegations currently before this court arise out of four prior court
proceedings: two lawsuits filed against Mr. Milgroom in the Massachusetts Superior
Courts, Mr. Milgroom’s bankruptcy proceeding in the United States Bankruptcy Court for
the District of Hawaii, and a lawsuit brought against Mr. Milgroom and Ms. Martl in the
United States District Court for the District of Hawaii. In April 1987, Mary Valvanis, John
Valvanis, and George Valvanis, commenced litigation against Mr. Milgroom in the
Superior Court for the County of Norfolk in the Commonwealth of Massachusetts. ﬂ
generally Valvanis v. Milgroom, No. 87-997, 2007 WL 5954517 (Super. Ct. Mass. July 3,
2007). The Valvanis family alleged that Mr. Milgroom had wrongfully used his influence
as an attorney and an accountant for the Valvanis family business to misappropriate real
estate interests and business assets. The action was stalled for many years, but moved
fonNard again in the early 20003.1 On October 18, 2005, the Superior Court for the County
of Norfolk entered a defaultjudgment against Mr. Milgroom after he failed to appear for a
pre-trial conference.2 On July 3, 2007, the Superior Court for the County of Norfolk
ordered judgment and damages in favor of the Valvanis family, totaling $3,881,612.14.3

1 It is unclear from the record what caused the delay in the Massachusetts Superior Court
for the County of Norfolk litigation between the Valvanis family and Mr. Milgroom. In their
complaint filed with the United States District Court for the District of Hawaii in 2006, the
Valvanis family stated that it was due to an “overcrowded court docket.” SE Pls.’ Compl.
at 4, Valvanis v. Martl, No. 06-144 (D. Haw. Mar. 10, 2006).

2 The Massachusetts Superior Court for the County of Norfolk had ordered Mr. Milgroom
to appear for the final pre-trial conference scheduled for October 18, 2005, and warned
him that his failure to appear in person or through counsel would result in a default
judgment against him. SE “Order” at 2, Valvanis v. Milgroom, No. 87-997 (Super. Ct.
Mass. Sept. 7, 2005).

3 Although the Massachusetts Superior Court for the County of Norfolk entered the default
against Mr. Milgroom on October 18, 2005, the court did not enter a decision on damages,
including the amount of monetary damages, until July 3, 2007. E “Memorandum of
Decision on Damages Trial and Orderfor Judgment” at 19-20, Valvanis v. Milgroom, No.
87-997 (Super. Ct. Mass. July 3, 3007). Following the entry of default against Mr.
Milgroom, on or about October 18, 2005, the court held a hearing on the defaultjudgment,
but declined to vacate its decision. §ﬁ id_. at 2. The court held an assessment of damages
trial in February 2007, and issued its findings in July 2007, awarding the Valvanis family
$1,500,000.00 in damages, along with attorneys’ costs and fees, and interest on the

2

asserting a claim for money damages for the alleged wrongful taking of her property in
Hawaii by Judge J. Michael Seabright of the United States District Court for the District of
Hawaii. ﬂ generally Martl I, 2010 WL 369212. Ms. Martl claimed she was in Germany
for health reasons, and did not participate in the court action regarding the Hawaii
property. Ms. Martl alleged that no “fraudulent transfers” occurred between her and Mr.
Milgroom, and argued that the Valvanis family “were unable to produce any evidence that
Mr. Milgroom owed them money priorto my divorce . . . . Mr. Milgroom had none of their
property and did not owe them any money prior to my divorce, he could not have made
‘fraudulent transfers’ of their property to me.” Pl.’s Compl. at 15, Martl |. Ms. Martl further
stated, “I don’t see any legal reason why that case against me should have been allowed
to continue, unless there was substantial Public Corruption that prevented the Court
from following the law.” Pl.’s Compl. at 16-17, Martl l (emphasis in original).

 

 

 

The Court of Federal Claims dismissed Ms. Martl’s complaint in Martl l, stating that
despite her repeated assertions that she was not bringing a collateral attack against the
judgment entered by the District Court for the District of Hawaii, “there is no other
interpretation of her suit. Her complaint is replete with allegations of wrongdoing and
errors of law committed by the district court to the exclusion of any other averred basis
for relief.” Martl l, 2010 WL 369212, at *2. The Court of Federal Claims found that it did
not have jurisdiction to review the actions of a District Court, and dismissed the plaintiff’s
complaint, without prejudice. & id_.

 

 

On May 7, 2014, Ms. Martl filed a second complaint, also Qrg g, in the United
States Court of Federal Claims which is substantially similar to the present complaint. Ms.
Martl alleged violations of her rights under the Fourth, Fifth, and Tenth Amendments to
the United States Constitution, and requested money damages for an allegedly unlawful
taking of her property in Hawaii.16 ﬁe Pl.’s Compl. at 5-6, Martl II. The Court of Federal
Claims also dismissed the Martl || complaint, finding that the court lacked jurisdiction over
Ms. Martl’s claims, and that her claims were barred by the doctrine of collateral estoppel.
E Martl II, 2014 WL 1912645, at *2. In addition, the court stated that it lacked jurisdiction
to entertain claims under the Fourth and Tenth Amendments because those amendments
do not mandate the payment of money damages. ﬂ id_. Further, the court stated that it
lacked jurisdiction under the Due Process Clause of the Fifth Amendment because that
clause does not mandate the payment of money damages. SE it; The court also stated

 

 

 

1‘5 In the case currently before this court, Ms. Martl and Mr. Milgroom likewise allege
violations of the Fourth, Fifth, and Tenth Amendments to the United States Constitution
based on the alleged wrongful taking of the Hawaii property, using much of the same
language used by Ms. Martl in her complaint in Martl II. For example, in her complaint in
Martl ll, Ms. Martl wrote under the heading “Tenth Amendment to the U.S.
Constitution,” “Defendant did not have Jurisdiction to determine ownership of Plaintiff’s
privately owned real estate that was located in Hawaii.” (emphasis in original). Pl.’s
Compl. at 7, Martl II. In the instant complaint, currently before this court, under the heading
“Amendment X,” plaintiffs wrote, “[t]here is no provision in the U.S. Constitution that
grants jurisdiction to Defendant to determine ownership of privately owned real estate
that is located wholly within a State." Q (emphasis in original).

 

 

 

11

that, while it has jurisdiction to consider claims under the Takings Clause of the Fifth
Amendment, it may only exercise jurisdiction when the plaintiff concedes that the
government’s actions in taking the property were legitimate, and that in her complaint,
however, Ms. Martl contended that the government’s actions were not legitimate. §e_e id_.
The court further found that Ms. Martl was attempting to challenge the District Court for
the District of Hawaii’s decision, and stated that it lacked jurisdiction to review decisions
of District Courts. ﬁe id_. Finally, the court in Martl ll stated that the Court of Federal
Claims had already ruled on Ms. Martl’s claims in Martl l, and that she had a full and fair
opportunity to litigate those claims in her first action before the court. See id_. The court
found that Ms. Martl was barred by the doctrine of collateral estoppel from bringing her
claims before the Court of Federal Claims for a second time. ﬂ id_. On May 13, 2014,
the court dismissed Ms. Martl’s complaint, without prejudice. ﬂag a at *3.

 

 

In the current complaint filed in this court, plaintiff Nada Martl is now joined by co-
plaintiff Robert Milgroom. They allege violations of the Fourth, Fifth, and Tenth
Amendments to the Constitution, and assertthat the District Courtforthe District of Hawaii
violated the Bankruptcy Court’s automatic stay, therefore, rendering the District Court for
the District of Hawaii’s decision regarding the Hawaii property void. Plaintiffs claim that in
the District Court for the District of Hawaii action, the Valvanis family filed a First Amended
Complaint adding Mr. Milgroom as a defendant on May 23, 2006,17 and that the District
Court’s decision is void because these actions violated the automatic stay. Plaintiffs
further allege that, in their complaint, the Valvanis family asked the District Court to
“determine ownership of personally owned real estate that was located wholly within the
State of Hawaii.” Plaintiffs assert that the District Court “did not have legal jurisdiction to
take Martl’s said real estate, supervise its auction and distribution of the proceeds.”
Plaintiffs argue that “[t]he State of Hawaii had exclusive jurisdiction to auction privately
owned real estate located wholly within its State,” and that “[t]he US. Constitution did not
grantjurisdiction to Defendant to auction privately owned real estate located wholly within
a State.” Plaintiffs claim that “Defendant’s willful violation of the automatic stay gives the
Court of Federal Claims jurisdiction under Section 362th) of the Bankruptcy Code to
determine the amount of actual damages, including costs and attorneys’ fees, punitive
and other damages including damages for emotional distress, to be paid to Plaintiffs.”
(emphasis in original). Plaintiffs also assert that “filing this Complaint in the US. Court of
Federal Claims is not a collateral attack of the Defendant’s null and void Judgments.”
Plaintiffs request “recovery of actual damages, including costs and attorney’s fees,
punitive and other damages including emotional distress, and such other and further relief
as the Court deems just and proper.”18

17 Plaintiffs also list the date May 26, 2006 as the date that the Valvanis family filed their
first amended complaint in the District Courtforthe District of Hawaii. The record indicates
that the first amended complaint was filed on May 23, 2006.

18 On August 12, 2015, plaintiffs submitted anotherfiling, a one page Reply to Defendant’s
Response in Opposition to Plaintiffs’ Motion for Leave to File an Amended Complaint.
This filing, however, appears to have been untimely, as plaintiffs’ reply was due on August
10, 2015. Plaintiffs’ appear to have dated the document as filed on August 10, 2015,

12

DISCUSSION

The court recognizes that plaintiff Martl is proceeding m g, without the
assistance of counsel, and that plaintiff Milgroom is technically proceeding m g,
although he is an indefinitely suspended attorney.19 When determining whether a
complaint filed by a grog plaintiff is sufficient to invoke review by a court, mg: plaintiffs
are entitled to liberal construction of their pleadings. ﬂ Haines v. Kerner, 404 US. 519,
520—21 (requiring that allegations contained in a pg g complaint be held to “less
stringent standards than formal pleadings drafted by lawyers”), ﬁg denied, 405 US.
948 (1972); ﬁg alﬂ Erickson v. Pardus, 551 US. 89, 94 (2007); Hughes v. Rowe, 449
US. 5, 9—10 (1980); Estelle v. Gamble, 429 US. 97, 106 (1976), ih’g denied, 429 US.
1066 (1977); it‘ﬂatthews v. United States, 750 F.3d 1320, 1322 (Fed. Cir. 2014); Diamond
 United States. 115 Fed. Cl. 516, 524 (2014), m, 603 F. App’x 947 (Fed. Cir.), in.
denied, 135 S. Ct. 1909 (2015). “However, “‘[t]here is no duty on the part of the trial court
to create a claim which [the plaintiff] has not spelled out in his [or her] pleading.”’” Lengen
v. United States, 100 Fed. Cl. 317, 328 (2011) (alterations in original) (quoting ﬁeeig'in v.
United States, 33 Fed. Cl. 285, 293 (1995) (quoting Clark-v. Na-t’l Travelers Life ins. Cm,
518 F.2d 1167, 1169 (6th Cir. 1975))); ﬁgrliunssie v. United States, 96 Fed. Cl. 89,
94, afj’g, 443 F. App’x 542 (Fed. Cir. 2011);.Minehan v. United Stati, 75 Fed. Cl. 249,
253 (2007). “While a m g plaintiff is held to a less stringent standard than that of a

 

 

 

however the filing was not received by this court until August 12, 2015. More significantly,
the Reply asserts essentially the same plaintiffs had alleged in their previous filings in this
court, and adds nothing new for the court’s consideration.

19 Mr. Milgroom was indefinitely suspended as an attorney in the Commonwealth of
Massachusetts in 1998 for unethical conduct and for intentionally depriving a client of
$100,000.00 in funds, which he had misappropriated. §e_e In re Robert B. Milgroom, No.
BD-96-037 (Mass. Feb. 26, 1998) (affirming Mr. Milgroom’s indefinite suspension from
the Commonwealth of Massachusetts’ state bar). The court notes that in the District
Court’s “Order Entering Default Against Defendant Robert B. Milgroom," the District
Court noted that:

In this Order, the court focuses only on Milgroom’s actions that have
significantly prejudiced Plaintiffs and/or delayed trial. The court is aware,
however, of Milgroom’s myriad other violations of court orders and Local
Rules. Milgroom, a disbarred attorney, affirmed to the court that he would
follow the Local Rules, but nonetheless filed repetitive motions and
documents without permission, sent numerous faxes to court chambers
despite being instructed on the proper way to file documents, and even
asserted that he represents other Defendants despite his status as a
disbarred attorney.

“Order Entering Default Against Defendant Robert B. Milgroom” at 4 n.4, Docket Number
615, Valvanis v. Milgroom, 06—144 (D. Haw. Dec. 30, 2008). Nonetheless, in this litigation,
Mr. Milgroom argues that “the Official Commonwealth of Massachusetts Records show
that Mr. Milgroom was never disbarred!” (emphasis in original).

13

plaintiff represented by an attorney, the pr_og plaintiff, nevertheless, bears the burden of
establishing the Court’s jurisdiction by a preponderance of the evidence.” Riles v. United
States, 93 Fed. Cl. 163, 165 (2010) (citing Hughes v. Rowe, 449 US. at 9 and Taylor v.
United States, 303 F.3d 1357, 1359 (Fed. Cir.) (“Plaintiff bears the burden of showing
jurisdiction by a preponderance of the evidence”), @hjg gm ih’g Q m denied (Fed.
Cir. 2002)); g E Shelkofsky v. United States, 119 Fed. Cl. 133, 139 (2014) (“[W]hile
the court may excuse ambiguities in a pro se plaintiff’s complaint, the court ‘does not
excuse [a complaint’s] failures.” (quoting Henke v. United States, 60 F.3d 795, 799 (Fed.
Cir. 1995)); Harris v. United States, 113 Fed. Cl. 290, 292 (2013) (“Although plaintiff’s
pleadings are held to a less stringent standard, such leniency ‘with respect to mere
formalities does not relieve the burden to meet jurisdictional requirements.” (quoting
Minehan v. United States 75 Fed. Cl. at 253))-,.

 

 

As described above, prior to the instant complaint, Ms. Martl previously had filed
two complaints in this court alleging that the United States District Court for the District of
Hawaii wrongfully took her property. In both prior proceedings in the Court of Federal
Claims, the court found that it did not have jurisdiction over Ms. Martl’s claims. ﬂ Martl
1, 2010 WL 369212, at *2; Martl II, 2014 WL 1912645, at *2. The court in Martl II also
found that Ms. Martl’s second complaint was barred by the doctrine of collateral estoppel.
The complaint filed in Martl II is substantially similar to the instant complaint, and alleges
the same causes of action under the Fourth, Fifth, and Tenth Amendments to the United
States Constitution. This court reaches the same conclusion as the court in Martl | and
especially in Martl ll. Ms. Martl’s claims have been previously litigated in this court and
are barred by the doctrine of issue preclusion.20 The United States Court of Appeals for
the Federal Circuit has stated that in this circuit: “Claim preclusion requires (1) an identity
of parties or their privies, (2) a final judgment on the merits of the first suit, and (3) the
later claim to be based on the same set of transactional facts as the first claim such that
the later claim should have been litigated in the prior case.” Bowers lnv. Co. LLC v. United
States, 695 F.3d 1380, 1384 (Fed. Cir. 2012) (citing Ammex Inc. v. United States, 334
F.3d 1052, 1055 (Fed. Cir. 2003)).

 

 

 

 

 

 

 

 

In addition, the United States Court of Appeals for the Federal Circuit has indicated
that “[ojn procedural issues not unique to this Circuit's exclusive jurisdiction, we apply the
law of the regional circuit. . . .“Dana v. E.S. Ori inals Inc, 342 F.3d 1320, 1323 (Fed.

20 E iudicata, also known as collateral estoppel, has been interpreted to include both
claim preclusion and issue preclusion. E Taylor v. Sturgell, 553 US. 880, 892 (2008)
(“The preclusive effect of a judgment is defined by claim preclusion and issue preclusion,
which are collectively referred to as ‘res judicata."’). Although the terms are often used
interchangeably, claim preclusion serves to foreclose “‘successive litigation of the very
same claim, whether or not relitigation of the claim raises the same issues as the earlier
suit,” whereas issue preclusion “bars ‘successive litigation of an issue of fact or law
actually litigated and resolved in a valid court determination essential to the prior
judgment,’ even if the issue recurs in the context of a different claim.” Q (quoting Nﬂ
Hampshire v. Maine, 532 US. 742, 748-49, Le_h_’g denied, 533 US. 968 (2001)). For the
purposes of clarity, the court will address each in turn because Ms. Martl asserts both the
same claims and the same issues as those that she asserted in Martl l and Martl ll.

14

 

 

Cir. 2003); ﬁelﬂAspex Eyewear, Inc. v. Zenni Optical Inc., 713 F.3d 1377, 1380 (Fed.
Cir. 2013). Because the Ms. Martl’s allegations are based on a United States District
Court’s decision from the District of Hawaii, the court also refers to the law of the United
States Court of Appeals for the Ninth Circuit. The Ninth Circuit has stated that “[c]laim
preclusion is appropriate where: (1) the parties are identical or in privity; (2) the judgment
in the prior action was rendered by a court of competentjurisdiction; (3) there was a final
judgment on the merits; and (4) the same claim or cause of action was involved in both
suits." Rein v. Providian Financial Corp, 270 F.3d 895, 899 (9th Cir. 2001).

In the instant case, the parties, Ms. Martl and the United States, remain identical
to the parties in both Martl l and Martl II, with only the addition of plaintiff Mr. Milgroom to
the case currently before the court.21 The current case also is based on the same set of
transactional facts raised in Martl land ML”, which involved the alleged taking of the
Hawaii property by the District Court for the District of Hawaii. In the instant complaint,
the plaintiffs, including Ms. Martl, try to argue that the two previous dismissals were not
final judgments on the merits, and had “nothing to do with the facts," and, therefore, the
complaint cannot be barred by claim preclusion. Plaintiffs, including Ms. Martl, are correct
in stating that under the Rules of the United States Court of Federal Claims (RCFC), a
dismissal for a lack ofjurisdiction is not a final judgment on the merits. ﬂ RCFC 41(b)
(2015) (“Unless the dismissal order states otherwise, a dismissal under this subdivision
(b) and any dismissal not under this rule—except one for lack of jurisdiction . . . operates
as an adjudication on the merits”) (emphasis added); ﬁﬂ Lowe v. United States, 79
Fed. Cl. 218, 229 (2007) (“Unless the judgment ordering dismissal specifies othenrvise,
however, the mere dismissal of a claim for lack of subject matter jurisdiction does not
operate as an adjudication of that claim on the merits") (emphasis in original). A
jurisdictional determination by the court, however, may still have a preclusive effect to bar
those matters that have been actually litigated in previous actions if the plaintiff fails to
cure the jurisdictional defect in a subsequent court action. E Lowe v. United States, 79
Fed. Cl. at 230 (“[A] prior dismissal does preclude the same action based on the same
facts unless the jurisdictional flaw that necessitated dismissal of the first suit has been
cured”) (emphasis in original). Ms. Martl has failed to cure the jurisdictional defect in her
claims before this court. Ms. Martl, who was a party to the two previous actions in this
court, continues to allege identical claims to those that she alleged in prior proceedings
in the Court of Federal Claims. Therefore, even though the previous dismissals of Ms.
Martl’s claims were not “an adjudication on the merits" as defined in RCFC 41(b), Ms.
Martl is precluded from again bringing those claims before this court, a court of competent
jurisdiction, which she has chosen for all three of her lawsuits, because she has not

 

 

 

21 The court notes that the United States was not a party to the District Court case,
however, collateral estoppel is available as a defense by the United States, even though
the United States was not a party to the original suit, assuming the party to be bound by
the preclusion had a full and fair opportunity to litigate the precluded issue. & Parklane
Hoisery Co. v. Shore, 439 US. 322, 326 n.4 (1979) (“Defensive use occurs when a
defendant seeks to prevent a plaintiff from asserting a claim the plaintiff has previously
litigated and lost against another defendant”).

15

asserted any new claims, and because she has failed to cure the jurisdictional defects
identified in Marti | and _Martl ll.

 

Ms. Martl’s claims also are barred by the doctrine of issue preclusion. As
articulated by the Supreme Court, the rule of issue preclusion precludes a party from re-
litigating an issue that was “litigated and resolved in a valid court determination essential
to the priorjudgment.” New Hampshire v. Maine, 532 US. at 748-49. In addition, “[u]nder
collateral estoppel, once a court has decided an issue of fact or law necessary to its
judgment, that decision may preclude relitigation of the issue in a suit on a different cause
of action involving a party to the first case.” Allen v. McCurm, 449 US. 90, 94 (1980); s_e§
@ United States v. Mendoza, 464 US. 154, 158 (1984) (“Underthejudicially—developed
doctrine of collateral estoppel, once a court has decided an issue of fact or law necessary
to its judgment, that decision is conclusive in a subsequent suit based on a different cause
of action involving a party to the prior litigation”). “When an issue of ultimate fact has
once been determined by a valid and final judgment, that issue cannot again be litigated
between the same parties in any future lawsuit." Ashe v. Swenson, 397 US. 436, 443
(1970). The United States Supreme Court has explained that issue preclusion guards
against “the expense and vexation attending multiple lawsuits, conserves judicial
resources, and fosters reliance on judicial action by minimizing the possibility of
inconsistent decisions.” Montana v. United States, 440 US. 147, 153—54 (1979) (footnote
omitted). The Supreme Court indicated that:

Issue preclusion bars successive litigation of “an issue of fact or law” that
“is actually litigated and determined by a valid and final judgment, and . . .
is essential to the judgment.” Restatement (Second) of Judgments § 27
(1980) (hereinafter Restatement). If a judgment does not depend on a given
determination, relitigation of that determination is not precluded. |d_., § 27,
Comment h.

Bobby v. Bies, 556 US. 825, 834 (2009).22 The United States Court of Appeals for the
'Federal Circuit has directed that;

Collateral estoppel is generally appropriate if “(1) an issue is identical to one
decided in the first action; (2) the issue was actually litigated in the first
action; (3) the resolution ofthe issue was essential to a final judgment in the
first action; and (4) the party defending against issue preclusion had a full
and fair opportunity to litigate the issue in the first action.”

22 The Supreme Court has explained that, “[i]ssue preclusion refers to the effect of a
judgment in foreclosing relitigation of a matter that has been litigated and decided. This
effect also is referred to as direct or collateral estoppel." Migra v. Warren City Sch. Dist.
__Bd. of Educ., 465 US. 75, 77 n.1 (1984).

16

Biafora v. United States, 773 F.3d 1326, 1333 (Fed. Cir. 2014) (quoting Shell Petroleum,
Inc. v. United States, 319 F.3d 1334, 1338 (Fed. Cir. 2003)). 23 Similarly, according to the
Ninth Circuit, issue preclusion applies when:

(1) the issue necessarily decided at the previous proceeding is identical to
the one which is sought to be relitigated; (2) the first proceeding ended with
a final judgment on the merits; and (3) the party against whom [issue
preclusion] is asserted was a party or in privity with a party at the first
proceeding.

Paulo v. Holder, 669 F.3d 911, 917 (9th Cir. 2011) (citing Hydranautics v. FilmTec Corp.,
204 F.3d 880, 885 (9th Cir. 2000)).

Under either approach, regarding the first element of issue preclusion, the issues
presented in the instant complaint is identical to the issues raised in Ms. Martl’s
complaints previously filed in this court in Martl l and Martl lj, As discussed above, at the
heart of each of Ms. Martl's complaints filed in this court is the alleged wrongful taking of
the Hawaii property by the District Courtforthe District of Hawaii, and Ms. Martl continues
to allege nearly identical causes of action based on the District Court’s actions. While Ms.
Martl has asserted different arguments in support of her claim of an alleged wrongful
taking of property by the District Court for the District of Hawaii, first asserting in Martl I
that she had nothing to do with Mr. Milgroom’s litigations, then in Martl ll arguing that the
Hawaii property belonged solely to her and not to Mr. Milgroom, and finally in the instant
complaint that the District Court’s decision was void due to an alleged violation of an
automatic stay,24 the issue of the court’s jurisdiction over her claims remains the same.
The first element of issue preclusion is satisfied.

 

 

 

Regarding the second element of issue preclusion, although the previous
dismissals of Ms. Martl’s complaints were not “final judgments on the merits” as defined
in RCFC 41 (b), as discussed above, those dismissals still have a preclusive effect when
the new complaint fails to cure the jurisdictional defect identified in the first dismissal. See
Lowe v. United States, 79 Fed. Cl. at 230. Ms. Martl has failed to cure the jurisdictional

23 As noted above, collateral estoppel is available as a defense by the United States, even
though the United States was not a party to the District Court case, assuming the party
to be bound by the preclusion had a full and fair opportunity to litigate the precluded issue.

E Parklane Hoisem Co. v. Shore, 439 US. at 326 n.4.

24 The court notes that plaintiffs’ argument that the District Court violated the Bankruptcy
Court’s automatic also fails on the merits because the record demonstrates that there
was no violation of the Bankruptcy Court's automatic stay. The automatic stay was lifted
on May 1, 2006, and the court altered the date of relief from the automatic stay nunc m
m to July 11, 2005. The Hawaii District Court action against Mr. Milgroom did not begin
until May 23, 2006 when the Valvanis family filed their First Amended Complaint naming
Mr. Milgroom as a defendant, which was well after the date of relief from the automatic
stay, both in terms of when the Bankruptcy Court lifted the stay, and when the date of

relief was altered nunc pro tunc.

 

17

defect identified in both Martl | and Martl II, and, therefore, those dismissals to satisfy the
final judgment requirement of issue preclusion.

 

 

Finally, Ms. Martl was a party to Marti |_ and Martl ll. Ms. Martl has filed each
complaint ws_e, and fully participated in both actions. Ms. Martl claims that she was not
in the United States from December 1, 2005 until October 14, 2009, and argues that she
“could not have had her ‘day in court’ in any US. Federal or State Court during that
period.” The record shows, however, that Ms. Martl initiated Martl l, p_rg g, in the Court
of Federal Claims on May 12, 2009, and at that time she was given a full and fair
opportunity to present and argue the issues raised in her complaint. Ms. Martl fully
participated in the action, filing a motion for an extension of time, an amended complaint,
another amended complaint, a third amended complaint, with an attached Memorandum
in Support of Jurisdiction, and a response to the defendant’s Motion to Dismiss. Any
alleged inability to fully litigate a claim due to absence rests completely with Ms. Martl,
who chose to commence a litigation and had the responsibility to meet court orders and
deadlines. Ms. Martl took another opportunity to litigate her claims in Martl II, which she
also filed m E, but she failed to assert any claims over which the court had jurisdiction.
Therefore, Ms. Martl definitively was a party to the previous actions which are the basis
for this court’s determination on the doctrine of issue preclusion, and fully participated in
the cases. Therefore, the final element of issue preclusion is satisfied.

 

 

Ms. Martl, twice previously in this court, had a full and fair opportunity to litigate the
issue of subject matter jurisdiction. Ms. Martl argues in her current response to the
defendant’s Motion to Dismiss that the issues she presents in the instant complaint have
not been litigated. Ms. Martl does not identify which issues have not been litigated, and
provides no further argument in support of her position. Ms. Martl has not identified any
significant procedural limitations, and did not present any evidence that an effective
litigation was limited by the nature or relationship of the parties. The record also provides
no evidence of such limitations. Ms. Martl had an incentive to fully litigate the issue of
jurisdiction, particularly in her second action filed in the Court of Federal Claims after her
first action was dismissed due to a lack of jurisdiction. Even now, in her third effort to
litigate these claims, Ms. Martl does not argue any new issues and provides no evidence
to suggest why she has not already had a full and fair opportunity to be heard. Ms. Martl
has twice had an opportunity to litigate the issue of jurisdiction in Martl l and Martl ll.
Under the doctrine Ofﬁ judicata, including both claim preclusion and issue preclusion,
Ms. Martl must be barred from bringing her claims before this court for a third time.

 

 

Despite his apparent continuous and intense involvement in Ms. Martl’s affairs and
claims previously filed in the Court of Federal Claims, and although he has been involved
and included in earlier related, relevant state and federal litigation, Mr. Milgroom has not
previously filed a complaint in this court or another federal court which alleges the same
claims or issues alleged in the instant complaint. Therefore, Mr. Milgroom’s suit in this
court is not barred by the doctrines of [g '|udicata.25 As explained below, however, this

25 E Taylor v. Sturgell, 553 US. at 892 (“A person who was not a party to a suit generally
has not had a ‘full and fair opportunity to litigate’ the claims and issues settled in that suit.
The application of claim and issue preclusion to nonparties thus runs up against the ‘deep-

18

court lacks jurisdiction over all of the claims alleged in Ms. Martl and Mr. Milgroom’s
current complaint, and, therefore, the above captioned complaint must be dismissed.26

It is well established that “subject-matter jurisdiction, because it involves a court’s
power to hear a case, can never be forfeited or waived.’" Arbaugh v. Y & H Corp., 546
US. 500, 514 (2006) (quoting United States v. Cotton, 535 US. 625, 630 (2002)).
“[F]ederal courts have an independent obligation to ensure that they do not exceed the
scope of their jurisdiction, and therefore they must raise and decide jurisdictional
questions that the parties either overlook or elect not to press.” Henderson ex rel.
Henderson v. Shinseki, 562 US. 428, 434 (2011); ﬂ @ Gonzalez v. Thaler, 132 S-
Ct. 641, 648 (2012) (“When a requirement goes to subject—matterjurisdiction, courts are
obligated to consider sua sponte issues that the parties have disclaimed or have not
presented”); Hertz Corp. v. Friend, 559 US. 77, 94 (2010) (“Courts have an independent
obligation to determine whether subject-matter jurisdiction exists, even when no party
challenges it.” (citing Arbaugh v. Y & H Corp., 546 US. at 514)); Special Devices, Inc. v.
OEA Inc., 269 F.3d 1340, 1342 (Fed. Cir. 2001) (“[A] court has a duty to inquire into its
jurisdiction to hear and decide a case.” (citing Johannsen v. .P Less Dru Stores.-N.-.=W..
l_ng, 918 F.2d 160, 161 (Fed. Cir. 1990))); View Eng’g, Inc. v. Robotic Vision Sys, Inc.,
115 F.3d 962, 963 (Fed. Cir. 1997) (“[C]ourts must always look to their jurisdiction,
whether the parties raise the issue or not"). “Objections to a tribunal’s jurisdiction can be
raised at any time, even by a party that once conceded the tribunal’s subject-matter
jurisdiction overthe controversy.” Sebelius v. Auburn Reg’l Med. Ctr, 133 S. Ct. 817, 824
(2013); E ﬁg Arbaugh v. Y & H Corp., 546 US. at 506 (“The objection that a federal
court lacks subject-matter jurisdiction . . . may be raised by a party, or by a court on its
own initiative, at any stage in the litigation, even after trial and the entry ofjudgment.");
.Cent. Pines Land Co. L.L.C. v. United States, 697 F.3d 1360, 1364 n.1 (Fed. Cir. 2012)
(“An objection to a court’s subject matter jurisdiction can be raised by any party or the
court at any stage of litigation, including after trial and the entry of judgment." (citing
Arbaugh v. Y & H Corp., 546 US. at 506—07)); Rick’s Mushroom .Se.rv.:._lnc.. v. United
States, 521 F.3d 1338, 1346 (Fed. Cir. 2008) (“[A]ny party may challenge, or the court
may raise sua sponte, subject matter jurisdiction at any time.” (citingArbaugh v. Y & H_
Corp., 546 US. at 506; Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.), ﬂg
ﬂ ih'g g M denied (Fed. Cir. 2004), an denied, 545 US. 1127 (2005); and
Fanning, Phillips & Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998))); Mata v. United
States, 118 Fed. Cl. 92, 95-96 (2014), recons. denied, 2015 WL 1000820 (Fed. Cl. Mar.
4,2015); Pikulin v. United States, 97 Fed. Cl. 71, 76, appeal dismissed, 425 F. App’x 902
(Fed. Cir. 2011). In fact, “[s]ubject matterjurisdiction is an inquiry that this court must raise
sua sponte, even where . . . neither party has raised this issue.” Metabolite Labs. Inc. v.
Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1369 (Fed. Cir.) (citing Textile Prods. Inc. v.
Mead Corp., 134 F.3d 1481, 1485 (Fed. Cir.), ﬁg denied and en banc suggestion

 

 

 

 

 

 

 

 

 

 

 

 

 

’1’

rooted historic tradition that everyone should have his own day in court. (citing Richards
v. Jefferson County, 517 US. 793, 798 (1996))).

25 Although this court dismisses Ms. Martl’s claims as barred by r_e§ judicata, the court
refers to the plaintiffs’ claims jointly to demonstrate that even if Ms. Martl’s case were not
so barred, her claims also must be dismissed for lack ofjurisdiction in this court.

19

declined (Fed. Cir.), cert. denied, 525 US. 826 (1998)), reh’g gig reh’g ﬂ banc denied

(Fed. Cir. 2004), cert. granted mm sub. nom Lab. Corp. of Am. Holdings v. Metabolite
Labs. Inc., 546 US. 975 (2005), cert. dismissed Q improvidently granted, 548 US. 124

(2006); ﬂ also Avid Identification Sys., Inc. v. Cgstal Import Corp., 603 F.3d 967, 971
(Fed. Cir.) (“This court must always determine for itself whether it has jurisdiction to hear

the case before it, even when the parties do not raise or contest the issue”), reh’g ﬂ
reh’g g banc denied, 614 F.3d 1330 (Fed. Cir. 2010), cert. denied, 131 S. Ct. 909 (2011).

 

 

 

 

 

 

Pursuant to the RCFC and the Federal Rules of Civil Procedure, a plaintiff need
only state in the complaint “a short and plain statement of the grounds for the court’s
jurisdiction,” and “a short and plain statement of the claim showing that the pleader is
entitled to relief.” RCFC 8(a)(1), (2) (2015); Fed. R. Civ. P. 8(a)(1), (2) (2015); sue—ew
Ashcroft v. lgbal, 556 US. 662, 677—78 (2009) (citing Bell Atl. Corp. v. Twombly, 550 US.
544, 555—57, 570 (2007)). “Determination ofjurisdiction starts with the complaint, which
must be well-pleaded in that it must state the necessary elements of the plaintiff’s claim,
independent of any defense that may be interposed.” Holley v. United States, 124 F.3d
1462, 1465 (Fed. Cir.) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463
US. 1 (1983)), gﬁg denied (Fed. Cir. 1997); E ﬁg Klamath Tribe Claims Comm. v.
United States, 97 Fed. CI. 203, 208 (2011); Gonzalez-McCaulley Inv. Grp .. Inc. v. United
States, 93 Fed. CI. 710, 713 (2010). “Conclusow allegations of law and unwarranted
inferences of fact do not suffice to support a claim." Bradley v. Chiron Corp., 136 F.3d
1317, 1322 (Fed. Cir. 1998); ﬁalﬂ McZeal v. Sprint Nextel Corp., 501 F.3d1354,1363
n.9 (Fed. Cir. 2007) (Dyk, J., concurring in part, dissenting in part) (quoting C. Wright and
A. Miller, Federal Practice and Procedure § 1286 (3d ed. 2004)). “A plaintiff’s factual
allegations must ‘raise a right to relief above the speculative level’ and cross ‘the line from
conceivable to plausible.” Three S Consulting v. United States, 104 Fed. CI. 510, 523
(2012) (quotingBeIl Atl. (22's.?- -..v. Twombl-x 550 US. at 555), ﬂ, 562 F. App’x 964 (Fed.
Cir.), ih’g denied (Fed. Cir. 2014). As stated in Ashcroft v. LtgbatE “[a] pleading that offers
‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will
not do.’ 550 US. at 555. Nor does a complaint suffice if it tenders ‘naked assertion[s]’
devoid of ‘further factual enhancement.’” Ashcroft v. lgbal, 556 US. at 678 (quoting Be_H

Atl. Corp. v. Twombly, 550 US. at 555).

 

 

   

 

When deciding a case based on a lack of subject matter jurisdiction or for failure
to state a claim, this court must assume that all undisputed facts alleged in the complaint
are true and must draw all reasonable inferences in the non—movant’s favor. & Erickson
v. Pardus, 551 US. 89, 94 (2007) (“In addition, when ruling on a defendant’s motion to
dismiss, a judge must accept as true all of the factual allegations contained in the
complaint.” (citing Bell Atl. Corp. v. Twombly , 550 US. at 555—56 (citing Swierkiewicz v.
Sorema N. A,-, 534 US. 506, 508 n.1 (2002)))); Scheuer v. Rhodes, 416 US. 232, 236
(1974) (“Moreover, it is well established that, in passing on a motion to dismiss, whether
on the ground of lack ofjurisdiction over the subject matter or for failure to state a cause
of action, the allegations of the complaint should be construed favorably to the pleader.”),
abrogated Q other grounds by Harlow v. Fitzgerald, 457 US. 800 (1982), recognized by
Davis v. Scherer, 468 US. 183, 190 (1984); United Pac. Ins. Co. v. United States, 464
F.3d 1325, 1327—28 (Fed. Cir. 2006); Samish Indian Nation v. United States, 419 F.3d
1355, 1364 (Fed. Cir. 2005); Boise Cascade Corp. v. United States, 296 F.3d 1339, 1343

 

20

In addition to the Valvanis litigation in Massachusetts Superior Court forthe County
of Norfolk, on January 10, 2002, the D’Ambrosio family, the family of Mr. Milgroom’s first
wife, filed a suit against Mr. Milgroom in the Superior Court for the County of Suffolk, also
in the Commonwealth of Massachusetts. §ﬁ D’Ambrosio et al. v. Milgroom et al., No.
02E-0003 (Super. Ct. Mass. May 14, 2007). The D'Ambrosio family alleged that Mr.
Milgroom fraudulently used his power of attorney, which he obtained from his terminally
ill wife, to change the names on several bank accounts that were intended for his wife’s
family after she passed away. The D’Ambrosio family alleged that Mr. Milgroom changed
the name on the accounts so he could withdraw the money for himself. The
Massachusetts Superior Court for the County of Norfolk found that Mr. Milgroom had
misappropriated $2,072,101.03 from his deceased wife’s estate, even though at the time
he was estimated to be worth between $8 and $10 million. ﬂ “Findings of Fact, Rulings
of Law and Rationale" at 26-29, D’Ambrosio et al. v. Milgroom et al., No. 02E-0003 (Super.
Ct. Mass. May 14, 2007). The Massachusetts Superior Court for the County of Suffolk’s
decision stated that Mr. Milgroom’s actions were “reprehensible and shameful,” and that
his violation of his deceased wife’s trust “can only be characterized as outright
mendacious greed.” lg; at 29. On July 5, 2007, the Massachusetts Superior Court for the
County of Suffolk ordered him to reimburse the funds he had wrongfully taken from his
deceased wife’s estate. & “Judgment” at 5, D’Ambrosio et al. v. Milgroom et al., No.
02E-0003 (Super. Ct. Mass. July 5, 2007).

Six months after his first wife passed away, on September 11, 2001, Mr. Milgroom
married his co-plaintiff in the above captioned case, Nada Martl.4 Prior to their marriage,
Mr. Milgroom and Ms. Martl worked together in two Florida real estate investment
companies. E Valvanis v. Milgroom, 2009 WL 1561575, at *2 n.5. In 2002, Mr. Milgroom
began transferring money to Ms. Marti, allegedly pursuant to an agreement prior to their
marriage that Mr. Milgroom would give Ms. Martl $5 million if she married him. gig. at

damages dating back to when the litigation first began in 1987. ﬁll. at 19-20. In total,
the Valvanis family was awarded $3,881,612.14. The Valvanis family then brought suit
against Mr. Milgroom and Ms. Martl in the United States District Court for the District of
Hawaii, se_eValvanis v. Milgroom, No. 06-144, 2009 WL 1561575 (D. Haw. June 1, 2009),
in order to collect on their judgment after Mr. Milgroom and Ms. Martl allegedly engaged
in a scheme to shield their assets from the Massachusetts Superior Court for the County
of Norfolk judgment, through a Bankruptcy Court proceeding and a multitude of money
and property transfers, as detailed more fully below.

4 The factual findings in this section of this opinion, which details the relationship between
Mr. Milgroom and Ms. Martl, and the multitude of financial transactions between them,
are taken from the findings of, and documents submitted to, the United States District
Court for the District of Hawaii in the case brought by the Valvanis family against Mr.
Milgroom and Ms. Martl. See, 11., Valvanis v. Milgroom, 2009 WL 1561575. The District
Court based its findings on expert evidence and documents that the Valvanis family
submitted to the court, which included bank and tax records for Mr. Milgroom and Ms.
Martl. The District Court also based its findings on the uncontroverted statements
contained in the plaintiffs’ original, first, and second amended complaints.

(Fed. Cir.), ih’g ﬂ ﬁg Q m denied (Fed. Cir. 2002), gem denied, 538 US. 906
(2003). If a defendant or the court challenges jurisdiction or plaintiff’s claim for relief,
however, the plaintiff cannot rely merely on allegations in the complaint, but must instead
bring forth relevant, competent proof to establish jurisdiction. McNutt v. Gen. Motors
Acceptance Corp. of Ind., 298 US. 178, 189 (1936); ﬂ als_o Land v. Dollar, 330 US.
731, 735 n.4 (1947); Rag-Insists v. Arm-5' '. Air Force. Exch. Serv.... 846 F.2d 746, 747 (Fed.
Cir. 1988); Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 404—05 (1994)..

 

 

   

The Tucker Act grants jurisdiction to this court as follows:

The United States Court of Federal Claims shall have jurisdiction to render
judgment upon any claim against the United States founded either upon the
Constitution, or any Act of Congress or any regulation of an executive
department, or upon any express or implied contract with the United States,
or for liquidated or unliquidated damages in cases not sounding in tort.

28 USC. § 1491(a)(1) (2012). As interpreted by the United States Supreme Court, the
Tucker Act waives sovereign immunity to allowjurisdiction over claims against the United
States (1) founded on an express or implied contract with the United States, (2) seeking
a refund from a prior payment made to the government, or (3) based on federal
constitutional, statutory, or regulatory law mandating compensation by the federal
government for damages sustained. & United States v. Navajo Nation, 556 US. 287,
289—90 (2009); United States v. Mitchell, 463 US. 206, 216 (1983); E a_|s_o ﬁrmnes-
Cnty., Ariz. v. United States, 487 F.3d 871, 875 (Fed. Cir.), ﬁgmih’gen banc denied
(Fed. Cir. 2007), ce_rt. denied, 552 US. 1142 (2008); Palmer v. United States, 168 F.3d
1310, 1314 (Fed. Cir. 1999).

 

 

 

“Not every claim invoking the Constitution, a federal statute, or a regulation is
cognizable under the Tucker Act. The claim must be one for money damages against the
United States . . . Mined States v. Mitchell, 463 US. at 216; E @ United States v.
White Mountain Apache Tribe, 537 US. 465, 472 (2003); Smith v. United States, 709
F.3d 1114, 1116 (Fed. Cir.), in. denied, 134 S. Ct. 259 (2013); RadioShack Corp. v.
United States, 566 F.3d 1358, 1360 (Fed. Cir. 2009); Rick’s Mushroom Serv. Inc. v.
United States, 521 F.3d at 1343 (“[P]laintiff must . . . identify a substantive source of law
that creates the right to recovery of money damages against the United States”). In
Ontario Power Generation Inc. v. United States, the United States Court of Appeals for
the Federal Circuit identified three types of monetary claims for which jurisdiction is
lodged in the United States Court of Federal Claims. SQ Ontario Power Generation Inc.
v. United States, 369 F.3d 1298, 1301 (Fed. Cir. 2004). The court wrote:

 

 

 

 

 

The underlying monetary claims are of three types. . . . First, claims alleging
the existence of a contract between the plaintiff and the government fall
within the Tucker Act’s waiver. . . . Second, the Tucker Act’s waiver
encompasses claims where “the plaintiff has paid money over to the
Government, directly or in effect, and seeks return of all or part of that sum.”
Eastport S.S. [Corp. v. United States, 178 Ct. Cl. 599, 605—06,] 372 F.2d
[1002,] 1007-08 [(1967)] (describing illegal exaction claims as claims “in

21

I”

which ‘the Government has the citizen’s money in its pocket (quoting
Clapp v. United States, 127 Ct. Cl. 505, 117 F. Supp. 576, 580 (1954))
. . . . Third, the Court of Federal Claims has jurisdiction over those claims
where “money has not been paid but the plaintiff asserts that he is
nevertheless entitled to a payment from the treasury.” Eastport SS, 372
F.2d at 1007. Claims in this third category, where no payment has been
made to the government, either directly or in effect, require that the
“particular provision of law relied upon grants the claimant, expressly or by
implication, a right to be paid a certain sum.” ld_.; seﬁ _alﬂ |United States v.
|Testan, 424 US. [392,] 401—02 [(1976)] (“Where the United States is the
defendant and the plaintiff is not suing for money improperly exacted or
retained, the basis of the federal claim-whether it be the Constitution, a
statute, or a regulation-does not create a cause of action for money
damages unless, as the Court of Claims has stated, that basis ‘in itself. . .
can fairly be interpreted as mandating compensation by the Federal
Government for the damage sustained.” (quoting Eastport SS, 372 F.2d
at 1009)). This category is commonly referred to as claims brought under a
“money-mandating” statute.

Ontario Power Generation Inc. v. United States, 369 F.3d at 1301; E also Twp. of
Saddle Brook v. United States, 104 Fed. Cl. 101, 106 (2012).

 

To prove that a statute or regulation is money-mandating, “the statute and
regulations must be such that they “‘can fairly be interpreted as mandating compensation
by the Federal Government for the damage sustained.””’ Roberts v. United States, 745
F.3d 1158, 1162 (Fed. Cir. 2014) (quoting United States v. White Mountain Apache Tribe,
537 US. at 472 (quoting United States v. Testan, 424 US. 392, 400 (1976))); _se_e @
United States v. Navajo Nation, 556 US. at 290; United States v. White Mountain Apache
Tribe, 537 US. at 472; United States v. Mitchell, 463 US. at 217; Blueport Co., LLC v.
United States, 533 F.3d 1374, 1383 (Fed. Cir. 2008), in. denied, 555 US. 1153 (2009).
The source of law granting monetary relief must be distinct from the Tucker Act itself. S_eg
Navajo Nation ii, 556 US. at 290 (The Tucker Act does not create “substantive rights; [it
is simply a] jurisdictional provision[] that operate[s] to waive sovereign immunity for claims
premised on other sources of law (e.g., statutes or contracts).”). “‘lf the statute is not
money-mandating, the Court of Federal Claims lacks jurisdiction, and the dismissal
should be for lack of subject matter jurisdiction.” _Jan’s Helicopter Serv., Inc. v. Fed.._
Aviation Admin., 525 F.3d 1299, 1308 (Fed. Cir. 2008) (quoting Greenlee Cnty., Ariz. v.
United States-,487 F.3d at 876); Fisher v. United States, 402 F.3d 1167, 1173 (Fed. Cir.
2005) (The absence ofa money-mandating source is “fatal to the court'sjurisdiction under
the Tucker Act."); Peoples v. United States, 87 Fed. Cl. 553, 565—66 (2009).

 

 

Plaintiffs attempt to assert causes of action under the Fourth, Fifth, and Tenth
Amendments to the United States Constitution. Although plaintiffs allege a violation of the
Fourth Amendment, the exact nature of the violation is unclear from their complaint.
Plaintiffs state only that the Fourth Amendment “Protects people against unreasonable
searches and seizures," but make no other statements or allegations regarding their
Fourth Amendment claim. This court, however, is without jurisdiction to hear claims

22

alleging violations of the Fourth Amendment. gs LaChance v. United States, 15 Cl. Ct.
127, 130 (1988) (“[T]he fourth amendment does not mandate the payment of money by
the United States.” (citing Shaw v. United States, 8 Cl. Ct. 796, 800 (1985))); Roberson
v. United States, 115 Fed. Cl. 234, 240 (“The Fourth Amendment is not money-
mandating." (citing Brown v. United States, 105 F.3d 621, 623 (Fed. Cir. 1997))), appeal
dismissed, 556 F. App’x 966 (Fed. Cir. 2014); Haka v. United States, 107 Fed. Cl. 111,
113-14 (2012); Kam-Almaz v. United States, 96 Fed. Cl. 84, 89 (2010) (“[T]his Court does
not have jurisdiction to hear claims contesting the lawfulness of a search and seizure
because due process and Fourth Amendment claims are reserved to the District Court.”
(citing LeBlanc v. United States, 50 F.3d 1025 (Fed. Cir. 1995))), m, 682 F.3d 1364
(Fed. Cir. 2012); Treece v. United States, 96 Fed. Cl. 226, 231 (2010) (citing Milas v.
United States, 42 Fed. Cl. 704, 710 (finding that the Sixth Amendment is not money—
mandating), a'ffJ, 217 F.3d 854 (Fed. Cir. 1999)); Hernandez v. United States, 93 Fed.
Cl. 193, 198 (2010) (“Plaintiff avers that his rights under the First, Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth, Fourteenth, and Fifteenth Amendments were violated. None of
these claims allege a violation for which money damages are mandated”); Fm v. United
States, 72 Fed. Cl. 500, 507 (2006) (“As a matter of law, the Fourth Amendment’s
prohibition on unreasonable search and seizure and the Due Process Clause of the Fifth
Amendment are not money-mandating.” (citation omitted)). This court, therefore, lacks
jurisdiction over plaintiffs’ Fourth Amendment claim.

 

 

Plaintiffs also allege that the District Court violated the Tenth Amendment. The
exact nature of plaintiffs’ Tenth Amendment claim also is unclearfrom their complaint, but
plaintiffs appear to allege that the District Court violated the Tenth Amendment by
exercising jurisdiction over the Hawaii property. Plaintiffs appear to argue that the Hawaii
State courts have sole jurisdiction over property located within the state. Plaintiffs appear
to assert that the District Court overreached into an area of state jurisdiction and violated
the Tenth Amendment when it liquidated the Hawaii property. This court, however, is
without jurisdiction to hear claims under the Tenth Amendment because it is not money
mandating. “Nothing in the language of [the Tenth Amendment] ‘can fairly be interpreted
as mandating compensation by the Federal Government for the damages sustained.” m
v. United States, 72 Fed. Cl. at 508 (quoting United States v. Mitchell, 463 US. at 216).

To the extent that plaintiffs allege violations of their due process rights under the
Fifth Amendment, the United States Court of Appeals for the Federal Circuit has held that
this court does not possess jurisdiction to consider those claims. ﬂ Crocker v. United
States, 125 F.3d 1475, 1476 (Fed. Cir. 1997) (citing LeBlanc v. United States, 50 F.3d
1025, 1028 (Fed. Cir. 1995)) (no jurisdiction over a due process violation under the Fifth
and Fourteenth Amendments); ﬁ also Smith v. United States, 709 F.3d 1114, 1116
(Fed. Cir.) (“The law is well settled that the Due Process clauses of both the Fifth and
Fourteenth Amendments do not mandate the payment of money and thus do not provide
a cause of action under the Tucker Act.” (citing LeBlanc v. United States, 50 F.3d at
1028)), in. denied, 134 S. Ct. 259 (2013); In re United States, 463 F.3d 1328, 1335 n.5
(Fed. Cir.) (“[B]ecause the Due Process Clause is not money-mandating, it may not
provide the basis for jurisdiction under the Tucker Act”), ﬁg grﬁ ﬁg Q m denied
(Fed. Cir. 2006), in. denied Q m Scholl v. United States, 552 US. 940 (2007);
Acadia Tech.. Inc. & Global Win Tech. Ltd. v. Unitgd States, 458 F.3d 1327, 1334 (Fed.

 

 

 

23

Cir. 2006); Collins v. United States, 67 F.3d 284, 288 (Fed. Cir.) (“[T]he due process
clause does not obligate the government to pay money damages”), ﬁg denied (Fed.
Cir. 1995); Mullenberg v. United States, 857 F.2d 770, 773 (Fed. Cir. 1988) (finding that
the Due Process clauses “do not trigger Tucker Act jurisdiction in the courts”); Murray v.
United States, 817 F.2d 1580, 1583 (Fed. Cir. 1987) (noting that the Fifth Amendment
Due Process clause does not include language mandating the payment of money
damages); Harper v. United States, 104 Fed. Cl. 287, 291 n.5 (2012); Hamgel v. United
States, 97 Fed. CI. 235, 238, ﬂ, 429 F. App’x 995 (Fed. Cir. 2011); McCullough v,_
United States, 76 Fed. CI. 1, 4 (2006) (“[N]either the Fifth Amendment Due Process
Clause . . . nor the Privileges and Immunities Clause provides a basis for jurisdiction in
this court because the Fifth Amendment is not a source that mandates the payment of
money to plaintiff”), appeal dismissed, 236 F. App’x 615 (Fed. Cir.), ﬁg denied (Fed.
Cir.), ﬂ denied, 552 US. 1050 (2007). Due process claims “must be heard in District
Court.” Kam—Almaz v. .United States, 96 Fed. CI. 84, 89 (2011) (citing Acadia Tech... Inc.

& Global Win Tech. Ltd. v. United States, 458 F.3d at 1334), aff’d, 682 F.3d 1364 (Fed.
Cir. 2012); g also Hampel v. United States, 97 Fed. CI. at 238.

 

 

 

 

 

Plaintiffs Martl and Milgroom also appear to allege that the District Court for the
District of Hawaii’s actions in liquidating the Hawaii property amount to a wrongful “judicial
taking” in violation of the Fifth Amendment of the United States Constitution. To the extent
that plaintiffs are asking this court to review the decisions or actions of the United States
District Court for the District of Hawaii or the United States Bankruptcy Court for the
District of Hawaii, however, this court does not have jurisdiction to do so. Plaintiffs allege
in their complaint that they “were legally wronged and damaged by Defendant’s willful
violations of the automatic stay” when the District Court for the District of Hawaii ordered
the Hawaii property to be liquidated to satisfy its judgment in Valvanis v. Milgroom, No.
06-144, 2009 WL 1561575 (D. Haw. Jun. 1, 2009).27 Plaintiffs assert that they filed the
instant complaint “to show that Defendant’s judgments were absolutely void, as a matter
of law.” Although plaintiffs argue that “filing this Complaint in the US. Court of Federal
Claims is not a collateral attack of the Defendant’s null and void Judgments," there is no
other manner of interpreting their claims.

This court is without jurisdiction to review the alleged taking by the District Court,
a judicial taking, ﬂ Sto the Beach Renourishment. .ln_ .. v. Florida De. ’.t of Envtl.
Protection et al., 560 US. 702 (2010), because review in this case ofsuch a taking “would
require the Court of Federal Claims to scrutinize the merits of the district court’s judgment,

a task it is without authority to undertake.” Shinnecock Indian Nation v. United States, 782

     

27 The court notes that plaintiffs' allegations of a “taking” by the United States District
Court for the District of Hawaii also would fail on the merits because plaintiffs have failed
to demonstrate that the District Court took their private property for public use, and,
therefore, have failed to satisfy the very definition of a taking under a Fifth Amendment
constitutional taking. E US. Const. amend. V (“[N]or shall private property be taken for
public use, without just compensation”). The record demonstrates that the property was
liquidated to satisfy a judgment in a private court action, and there is no evidence, nor
any suggestion, that this taking was in any way related to a public use.

24
F.3d 1345, 1352 (Fed. Cir. 2015); ﬁ @ Joshua v. United States, 17 F.3d 378, 380
(Fed. Cir. 1994) (“[T]he Court of Federal Claims does not have jurisdiction to review the
decisions of district courts or the clerks of district courts relating to proceedings before
those courts”). Just as the Court of Federal Claims does not have jurisdiction to review
the decisions of the United States District Courts, the Court of Federal Claims also does
not have jurisdiction to review decisions of the United States Bankruptcy Courts. E
Allustiarte v. United States, 256 F.3d 1349, 1351 (Fed. Cir. 2001) (holding that the Court
of Federal Claims does not have jurisdiction to entertain judicial takings claims against
federal bankruptcy courts because “[s]uch a determination would require the court to
scrutinize the actions of the bankruptcy trustees and courts”), ﬂ denied, 534 US. 1042
(2001); Mora v. United States, 118 Fed. Cl. 713, 716 (2014) (“[T]his court does not have
jurisdiction to review the decisions of state courts, federal bankruptcy courts, federal
district courts, or federal circuit courts of appeals”).

 

Plaintiffs also assert that this court is the proper forum for their complaint because
“Defendant’s judgments were absolutely void, as a matter of law, leaving nothing to
appeal; therefore, it did not require an appeal prior to filing in this Court of Federal Claims.”
(emphasis in original). However, “[p]ermitting parties aggrieved by the decision of Article
III tribunals to challenge the merits ofthose decisions in the Court of Federal Claims would
circumvent the statutorily defined appellate process and severely undercut the orderly
resolution of claims.” Shinnecock Indian Nation. v.. United States, 782 F.3d at 1353,
Contrary to plaintiffs’ assertions, the only proper forum for their challenge of the District
Court’s judgment was in the United States Court of Appeals for the Ninth Circuit. E 28
U.S.C. § 1291 (2012) (“The court of appeals . . . shall havejurisdiction of appeals from all
final decisions of the district courts of the United States . . . .”). Neither plaintiffs’ failure to
appeal or plaintiffs’ alleged, but unsupported, claim of inability to appeal the District Court
for the District of Hawaii’s decision supplies this court with jurisdiction over their claims.
As stated above, this court is without jurisdiction to review the decisions of the District
Courts, including claims alleging a “judicial taking,” and, therefore, plaintiffs’ claims under
the Takings Clause of the Fifth Amendment must be dismissed.

Although plaintiffs’ complaint does not appear to assert a cause of action in tort,
plaintiffs’ request for damages for “emotional distress” may be an effort to allege some
aspect of tortious conduct. This court, however, does not possess jurisdiction over claims
that sound in tort. E 28 U.S.C. § 1491(a) (“The United States Court of Federal Claims
shall have jurisdiction to render judgment upon any claim against the United States
founded either upon the Constitution, or any Act of Congress or any regulation of an
executive department, or upon any express or implied contract with the United States, or
for liquidated or unliquidated damages in cases not sounding in tort"); ﬁ & Keene
Corp. v. United States, 508 US. 200, 214 (1993); Rick’s Mushroom 25mm, l._r_1c;..v. united
States, 521 F.3d at 1343; Alves v. United States, 133 F.3d 1454, 1459 (Fed. Cir. 1998);
Brown v. United Stem; 105 F.3d 621, 623 (Fed. Cir.), Lelig denied (Fed. Cir. 1997);
Golden Pac. Bancorg v. United States, 15 F.3d 1066, 1070 n.8 (Fed. Cir.), ﬁg denied,
g m suggestion declined (Fed. Cir.), an. denied, 513 US. 961 (1994); .Hamgel v.
United States, 97 Fed. Cl. at 238; Woodson v. United States, 89 Fed. Cl. 640, 650 (2009);

McCullough v. United States, 76 Fed. Cl. at 3; Agee v. United States, 72 Fed. Cl. 284,
290 (2006); Zhengxing v. United States, 71 Fed. Cl. 732, 739, aft’d, 204 F. App’x 885

 

 

 

 

 

25

(Fed. Cir.), reh’g denied (Fed. Cir. 2006). Therefore, any of plaintiffs’ claims that sound in
tort, likewise, must be dismissed.

 

In the above captioned case, this court dismisses the complaint filed by both
plaintiffs for a lack of jurisdiction. With respect to the claims brought by Ms. Martl, the
court is dismissing those claims as barred by all forms of @ judicata. Furthermore, the
court is dismissing both plaintiffs’ case for a lack ofjurisdiction because plaintiffs’ claims
asserted under the Fourth and Tenth Amendments, as well as the Due Process Clause
of the Fifth Amendment to the United States Constitution are not money mandating.
Moreover, this court also does not have jurisdiction to review actions sounding in tort,
and, therefore, those claims must also be dismissed. Finally, to the extent that plaintiffs
try to assert a judicial takings claim under the Takings Clause of the Fifth Amendment,
this court does not have jurisdiction to review the decisions or actions of the United States
District Courts or Bankruptcy Courts, and, therefore, those claims must be dismissed.

As a final note, plaintiffs also previously filed documents containing interrogatories
and requests for admission with this court on June 10, 2015 and June 30, 2015. This
court found that the filings were improper because “this court has not ordered filing of
these documents and discovery has not begun.”28 Furthermore, plaintiffs’ requests for
admissions are now moot, given the court’s dismissal of plaintiffs’ complaint. The court
also denies plaintiffs’ July 22, 2015 Motion for Leave to File an Amended Complaint.
Plaintiffs’ proposed amended complaint, submitted with their Motion for Leave to File an
Amended Complaint, fails to assert a cause of action that would provide this court with
jurisdiction over their claims, and only serves to assert different arguments in support of
their claim that the District Court wrongfully took their property. In their proposed amended
complaint, plaintiffs argue that the District Court for the District of Hawaii violated “the
State of Hawaii’s ‘tenants by the entirety’ law,” and claim that under this law, Ms. Martl is
exempt from any of Mr. Milgroom’s debts, and that the District Court could not collect on
Mr. Milgroom’s debts by seizing Ms. Martl’s property. The plaintiffs also assert that Mr.
Milgroom’s transfer of his property interest to Ms. Martl was not fraudulent, and instead
was to "payoff any debts owed to Ms. Martl before paying Valvanis.” These are not claims
properly within the jurisdiction of this court. As discussed above, the court does not have
jurisdiction to review decisions of the United States District Courts, and further arguments
attempting to convince this court that the District Court for the District of Hawaii’s actions
were wrong do nothing to establish that this court has jurisdiction over those claims. As
there is no basis for jurisdiction over any of either plaintiff’s claims, the court finds that
any attempt to amend the complaint would be futile. Plaintiffs’ Motion for Leave to File an
Amended Complaint is denied.

Plaintiffs’ complaint in this court was filed in a frivolous attempt to re-litigate issues
raised and decided in multiple other courts. The plaintiffs together have engaged in a

 

23 On July 13, 2015, defendant’s attorneys responded to the plaintiffs’ Motion Requesting
Limited Admissions, stating that they sent plaintiffs a letter “objecting to the discovery
requests as premature” and stated that they “will not respond to plaintiffs’ motion any
further unless the Court directs otherwise.”

26

calculated scheme to tw to evade the decisions of those courts. Mr. Milgroom and Ms.
Marti repeatedly have asked for the same relief and have deliberately wasted judicial
resources, with repetitive and seriatim attempts to undo the consequences of their own
improper behavior as found by the United States District Court for the District of Hawaii
and the United States Bankruptcy Court for the District of Hawaii. Neither plaintiff should
be allowed to file further complaints based on the same subject matter as raised in the
above captioned case in this court without prior permission from a judge of this court.

CONCLUSION

Defendant’s motion to dismiss, as against both plaintiffs, for lack of subject matter
jurisdiction is, hereby, GRANTED. Plaintiffs’ complaint is DISMISSED. The Clerk of the
Court shall enter JUDGMENT consistent with this opinion. Costs to the defendant.

ma

ARIAN BLANK HORN
Judge

IT IS SO ORDERED.

27

*2 (The District Court for the District of Hawaii noted that “[i]n lieu of giving Martl $5 million,
Milgroom asserts that he added her name to all of his financial accounts”). On March 1,
2002, the same day that Mr. Milgroom was served with the D’Ambrosio complaint alleging
that he had misappropriated funds from his first wife’s estate, Mr. Milgroom transferred
$1.05 million from his bank account, and $950,000.00 from an accountjointly held by Mr.
Milgroom and Ms. Martl, to Ms. Martl‘s Bank of America checking account. Ms. Marti then
transferred the resulting $2 million to a bank account she had in Germany. E id_. at *3.
During that same month, Mr. Milgroom sold several of his Treasury Direct securities,
totaling over $4.5 million, and transferred those funds to Ms. Martl’s German bank
account. 5% id_. On April 23, 2002, Ms. Martl transferred an additional $2.7 million,
traceable to Mr. Milgroom’s funds, into her German bank account.5 In total, Mr. Milgroom
transferred approximately $9 million to Ms. Martl, who subsequently placed the funds in
her German bank account. §ﬁ id_.

On August 2, 2002, Mr. Milgroom and Ms. Martl purchased real property in Hawaii
for $5.2 million in cash. E id_. Mr. Milgroom and Ms. Martl allegedly created title to the
Hawaii Property as “tenants by the entirety.” _S_e;e_ id_. at *2. The record from the United
States District Court for the District of Hawaii shows that the money used to purchase the
Hawaii property came from funds that originated in whole or in substantial part from Mr.
Milgroom’s accounts.6 On July 12, 2002, Ms. Marti transferred $6,499,982.00 from her
German bank account, the same account into which she had previously deposited the $9
million from Mr. Milgroom, to a checking account she shared with Mr. Milgroom at First
Hawaiian Bank. ﬂ id_. at *3. Mr. Milgroom then drew a check from this account for
$7,125,000.00, payable to himself, and deposited it into theirjoint savings account. These
funds were then used to purchase the Hawaii property..§;e_i_d,.

5 Financial documents submitted to the District Court for the District of Hawaii
demonstrate that Mr. Milgroom purchased real property and a yacht, then sold them
shortly thereafter. The funds from the sales were subsequently deposited into Ms. Martl’s
German bank account.

5 In documents submitted to this court, and in her complaint in Martl ll, Ms. Marti has
asserted that the funds used to purchase the property were entirely hers. In the instant
case, Ms. Martl states in her objection to the defendant’s Motion to Dismiss, “Ms. Marti
purchased the unfinished Hawaii house in August 2002 and completed the construction
with her own $6,500,000 that she transferred from her personal bank account in
Germany . . .  In Martl ll, Ms. Marti had stated in her complaint, “Plaintiff [Marti]
purchased the Property, using her own funds that she transferred from her personal bank
account in Germany to her personal bank account in Hawaii . . .  Financial records from
proceedings before the United States District Court for the District of Hawaii in Valvanis
v. Milgroom, as detailed above, however, demonstrate that, according to the District
Court, the funds used to purchase the Hawaii property “originated in whole or in
substantial part from Milgroom’s self-estimated $10 million net worth.” Valvanis v.
Milg room, 2009 WL 1561575, at *8.

 

 

From January through May 2003, Mr. Milgroom continued to transfer assets to Ms.
Martl. Mr. Milgroom liquidated $6.3 million in Treasury Direct investments and transferred
those funds to Ms. Martl’s checking account in the United States. Ms. Marti subsequently
transferred $6 million from that account to her bank account in Germany. Mr. Milgroom
also transferred his interest in the Hawaii property to Ms. Marti through a quitclaim deed.
The deed stated that Ms. Martl paid Mr. Milgroom “consideration in the sum of TEN
DOLLARS” for his interest in the property. Valvanis v. Milgroom, 2009 WL 1561575, at *4
(capitalization in original). According to the United States District Court for the District of
Hawaii, following the transfer of his property interest to Ms. Martl, Mr. Milgroom had a
negative net worth of approximately $2 million.

According to documents filed in the United States District Court for the District of
Hawaii, on June 14, 2005, Ms. Martl filed a Complaint for Divorce against Mr. Milgroom
in Family Court, Circuit Court of the First Circuit, in the State of Hawaii. In the divorce
action, Mr. Milgroom listed no income, no expenses, no debts, and no assets. Ms. Marti
similarly listed no income and no expenses, and listed a 2005 BMW vehicle and the
Hawaii property as her only assets. On June 15, 2005, Mr. Milgroom filed a “RELEASE
.OF MARRITAL sic“ INTEREST lN RE&_ESTATE. LOCATED AT 253 PUUIKENA
DRIVE' HONOLULU: HI 96821,” (emphasis and capitalization in original), with the Family
Court in the Circuit Court of the First Circuit of Hawaii, trying to establish Ms. Martl as the
“sole owner of the property.” ﬂ Docket Number 339, Exhibit 7,_Va_lva.r1is v. Milgroom,
06-144 (D. Haw. Mar. 5, 2008). Mr. Milgroom purported to release all of his marital interest
in the property “for consideration paid,” and asserted that “the assets and debts of one
spouse shall not be the responsibility of the other spouse." Docket Number 339, Exhibit
7, Valvanis v. Milgroom, 06-144 (D. Haw. Mar. 5, 2008). Two weeks later, on June 28,
2005, a divorce decree was entered. ﬁg Marti v. Milgroom, No. 05-1-1994 (Fam. Ct. 1st
Cir. Haw. June 27, 2005). According to the United States District Court for the District of
Hawaii, after the divorce, Mr. Milgroom and Ms. Martl allegedly continued their
relationship. Mr. Milgroom apparently continued residing in the Hawaii property, treating
it as his own, and Ms. Martl apparently continued to provide Mr. Milgroom with money to
maintain the property and to pay his expenses, including more than $200,000.00 in legal

fees. E Valvanis v. Milgroom, 2009 WL 1561575, at *4.

 

 

On July 11, 2005, two weeks after the divorce decree was issued, Mr. Milgroom
filed a Voluntary Petition for Relief under Chapter 7 of the United States Bankruptcy Code
in the United States Bankruptcy Court for the District of Hawaii.7 “Findings of Fact and
Conclusions of Law” at 2, In re Robert Bernard Milgroom, No. 05-01833. He did not list
the Valvanis family or the D’Ambrosio family as creditors in his bankruptcy petition,
despite his ongoing litigation with both families, and, as a result, neither was informed
about Mr. Milgroom’s bankruptcy proceeding. ﬂ id_. On September 2, 2005, Mr.
Milgroom converted his Chapter 7 case to a Chapter 13 case. ﬁe id_. at 4. The

 

7 The factual findings regarding Mr. Milgroom’s bankruptcy proceedings are taken from
the findings ofthe United States Bankruptcy Court forthe District of Hawaii in its “Findings
of Fact and Conclusions of Law,” n re Robert Bernard Milgroom, No. 05-01833 (Bankr.
D. Haw. May 1, 2006).

Bankruptcy Court later indicated that Mr. Milgroom had converted his case from Chapter
7 to Chapter 13 in order “to avoid investigation and action by the Chapter 7 Trustee” after

the Chapter 7 trustee identified fraudulent transfers of property. LCL at 6.

According to the Bankruptcy Court, on November 4, 2005, Mr. Milgroom’s counsel
in the bankruptcy proceeding sent a Notice of Automatic Stay to the Valvanis family.8 ﬂ
id_. at 5. This was the first time that the Valvanis family was informed of Mr. Milgroom’s
bankruptcy proceeding, and they joined the proceeding as creditors after the
Massachusetts Superior Court for the County of Norfolk entered a default judgment
against Mr. Milgroom in their favor. E id_.; se_e @ “Memorandum of Decision on
Damages Trial and Orderfor Judgment” at 1-2, Valvanis v. Milgroom, No. 87-997 (Super.
Ct. Mass. July 3, 2007). On November 15, 2005, the Chapter 13 trustee filed an objection
to Mr. Milgroom’s Chapter 13 Plan, arguing that Mr. Milgroom had made
misrepresentations about his financial affairs and was not eligible to be a debtor under
Chapter 13. E “Findings of Fact and Conclusions of Law" at 5, In re. Rgﬁ erit Bernard
Milgroom, No. 05-01833. '

The Chapter 13 trustee filed a Motion to Dismiss, arguing that “the Debtor’s
commencement of the case herein may have been designed to merely defeat pending
State Court litigation against him.”9 |d_. at 7. The Chapter 13 trustee cited “deliberate
failures of the Debtor to disclose information and to identify creditors in his Statement of
Financial Affairs and other bankruptcy disclosure papers.” Q at 8. The Valvanis family
also objected to the Chapter 13 plan, arguing that Mr. Milgroom filed his bankruptcy case
to avoid State court orders in the Massachusetts Superior Court for the County of Norfolk
litigation with the Valvanis family, that he filed the Chapter 13 case to avoid revelations
under the Chapter 7 case of fraudulent transfers of property, and finally that he failed to

3 It is unclear if the D‘Ambrosio family received a similar notification of the automatic stay,
however, it does not appearfrom the record that the D'Ambrosio family participated in Mr.
Milgroom’s bankruptcy proceeding, or any further litigation with Mr. Milgroom after the
Massachusetts Superior Court for the County of Suffolk litigation.

9 The Massachusetts Superior Court for the County of Suffolk in the D’Ambrosio action
also found that the bankruptcy petition was filed to disrupt Mr. Milgroom’s Massachusetts
Superior Court actions in both the Massachusetts Superior Court for the County of Suffolk
and the Massachusetts Superior Court for the County of Norfolk. The Massachusetts
Superior Court for the County of Suffolk stated:

When suit was initiated, Defendant [Mr. Milgroom] frivolously resisted the
jurisdiction ofthis Court, essentially stalling for time. . . . As soon as this suit
was filed, Defendant filed a frivolous Petition for Bankruptcy in Hawaii,
where he was residing with his new wife. Disposition ofthe Bankruptcy case
further delayed the matter in this Court.

“Findings of Fact, Rulings of Law and Rationale” at 28, D’Ambrosio et al. v. Milgroom et
a_|., No. 02E-0003 (Super. Ct. Mass. May 14, 2007).

disclose his safe deposit box and other assets. _S§ id. at 5-6. The Valvanis family also
asked the Bankruptcy Court to appoint an independent trustee to examine the suspicious
transfer of real estate (specifically the Hawaii property) from Mr. Milgroom to his recently
divorced wife, Ms. Martl. E id_. at 6.

On November 29, 2005, the Bankruptcy Court entered an “Amended Order Under
Bankruptcy Rule 2004 Upon Oral Examination and Request for Production of Documents
of Robert Milgroom.” Q at 7. On March 10, 2006, the Valvanis family filed a Motion to
Compel Debtor’s Compliance with Rule 2004 Order and for an Award of Sanctions. E
id_. at 9. The Valvanis family provided uncontroverted evidence that Mr. Milgroom refused
to produce financial records and information, refused to produce his laptop computer that
he previously had testified contained certain financial information, and refused to sign
bank authorizations to turn over financial information. ﬂail. at 9-10. On March 30, 2006,
the Bankruptcy Court granted the Order to Compel. ﬂ id_. at 10. On April 13, 2006, the
Valvanis family filed a motion for an Order “Finding Debtor Robert Bernard Milgroom In
Contempt of Court,” “Awarding Sanctions,” “Granting Relief From the Automatic
Bankruptcy Stay Nunc Pro Tunc,” and “Authorizing the Arrest and Apprehension of Debtor
Robert Bernard Milgroom and to Compel Attendance for Examination." 1;, at 11.
According to the Valvanis family, the motion was “based on compelling evidence that the
Debtor Robert Bernard Milgroom left his residence in Honolulu, Hawaii, and fled to Florida
to avoid examination and orders of this Court compelling compliance with an outstanding
order for his examination under Rule 2004." Q

On May 1, 2006, the Bankruptcy Court granted the motion and found Mr. Milgroom
in contempt of court, stating, “Debtor has failed and refused to comply with the Rule 2004
Order. . . . He has failed to account for millions of dollars in real estate and financial
transactions with his wife . . . or to offer any credible explanation regarding such
transactions.” |d_. at 13. The Bankruptcy Court, however, declined to issue a bench
warrant for Mr. Milgroom, stating:

There is no question that the Debtor is in contempt, that the bankruptcy
court has the power to order apprehension and removal of the Debtor, and
that the Debtor deserves such treatment. In the circumstances ofthis case,
however, it is more appropriate that the Valvanis Family pursue its remedies
in state court. The dismissal of this bankruptcy case was deferred for the
sole purpose of permitting the Valvanis Family to complete an examination
of the Debtor. . . . Apprehension and removal of the Debtor is not essential
to vindicate the authority of the court; this is particularly so because the
Debtor’s whereabouts are unknown and the issuance of a bench warrant is
therefore likely to be yet another futile act.

a at 15. The Bankruptcy Court also granted the Valvanis family relief from the automatic
stay nunc m m “as of the date of the Debtor’s bankruptcy petition on July 11, 2005, to
pursue and/or continue litigation and enforcement action(s) against the Debtor in any
state or federal court.” “Order Finding Debtor Robert Bernard Milgroom In Contempt of
Court” at 2, In re Robert Bernard Milgroom, No. 05-01833 (Bankr. D. Haw. May 1, 2006).

 

On June 7, 2006, the Bankruptcy Court dismissed the bankruptcy proceeding with
prejudice, stating that “no debts which could have been discharged in this bankruptcy
case shall be dischargeable in any other bankruptcy case in which Robert Bernard
Milgroom shall be a debtor.” “Judgment Awarding Sanctions and Dismissing Bankruptcy
Case with Prejudice” at 1, In re Robert Bernard Milgroom, No. 05-01833 (Bankr. D. Haw.
June 7, 2006). The Bankruptcy Court entered judgment against Mr. Milgroom in the
amount of $8,622.97 for the Valvanis family’s legal fees. ﬂ id_.

On March 10, 2006, the Valvanis family filed a complaint against Ms. Martl in the
United States District Court for the District of Hawaii. ﬂ Valvanis v. Milgroom, 2009 WL
1561575.10 They asserted an interest in the Hawaii property as creditors to Mr. Milgroom’s
estate following the entry of a default judgment against Mr. Milgroom in their favor in the
Massachusetts Superior Court for the County of Norfolk litigation. E Pls.’ Compl. at 18,
Valvanis v. Milgroom, No. 06-144 (D. Haw. Mar. 10, 2006). The Valvanis family claimed
that “Martl unjustly holds title” of the Hawaii property, and asserted that Mr. Milgroom and
Ms. Martl were engaged in an ongoing scheme to defraud Mr. Milgroom’s creditors and
to shield his assets from the Massachusetts State court judgments against him through
fraudulent transfers of money and property. Pls.’ Compl. at 17, Valvanis v. Milgroom, No.
06-144 (D. Haw. Mar. 10, 2006). The Valvanis family also asserted that, on January 19,
2006, the Bankruptcy Court “orally granted the Valvanis Family ‘relief from the automatic
stay nunc pro tunc to the extent necessary to foreclose an argument that the orders of
the Massachusetts court are void for violation of the automatic stay.”’ Pls.’ Compl. at 13,
Valvanis v. Milgroom, No. 06-144 (D. Haw. Mar. 10, 2006). On May 23, 2006, after the
Bankruptcy Court issued an Order relieving the Valvanis family of the automatic stay nunc
m Luge, the Valvanis family filed a first amended complaint in the District Court for the
District of Hawaii, which named Mr. Milgroom as a defendant in addition to Ms. Martl. See.
Valvanis v. Milgroom, 2009 WL 1561575, at *6. On December 14, 2007, the Valvanis
family filed a Motion for Leave to File Second Amended Complaint and a Request for
Entry of Default against Ms. Martl, based on her failure to answer or othenNise plead to
the first amended complaint.11 E id_. The Clerk of Court for the District Court entered a
default against Ms. Martl that same day. Se; E, On January 30, 2008, the Valvanis family
filed a second amended complaint in the District Court. See id_. The Valvanis family also
filed a Motion for Entry of Default Judgment against Mr. Milgroom. SE jg,

 

 

1° Although the decisions of the District Court on Westlaw reflect the caption: “Valvanis v.
Milgroom,” the court notes that the Mary Valvanis, John Valvanis, and George Valvanis
were all listed as plaintiffs on the docket sheet for the District Court and both Robert B.
Milgroom and Nada Martl were listed as defendants. Despite the additional parties, the
court’s citations reflect the caption on Westlaw. The court also notes the docket sheet
indicates Nada R. Martl was also known as Nada R. Milgroom.

1‘ The record from the United States District Court for the District of Hawaii indicates that
during this time, Ms. Martl had left the United States and was residing in Germany. Ms.
Martl has asserted various reasons for her absence in prior proceedings, including an
illness and inability to return to the United States.

On June 1, 2009, the District Court entered a default judgment against Mr.
Milgroom and Ms. Martl, finding that the second amended complaint, and the likelihood
of success on the merits of the Valvanis family’s claims, were sufficient for a default
judgment.12 E id. at *11. The District Court found that Mr. Milgroom had “engaged in a
pattern of conduct of committing numerous violations of court orders and rules as part of
an intentional scheme to prevent this action from proceeding to a trial on the merits,” and
cited “numerous violations of court orders and rules by refusing to produce discovery
despite orders compelling his compliance, ignoring all pretrial deadlines, and filing
numerous frivolous motions to transfer this action to Florida.” Valvanis v. Milgroom, 2009
WL 1561575, at *6. Mr. Milgroom attempted to argue that the violations were due to “his
ignorance of court rules and a desire to be on ‘equal footing’ with Plaintiffs,” but the court
pointed out that Mr. Milgroom is an “indefinitely suspended attorney and no interpretation
of any of the court rules or orders would suggest to a claimant that he can engage in such
obstructionist behavior.” g at *14. Mr. Milgroom also attempted to argue that the default
was not due to excusable neglect, but instead caused by “a large-scale conspiracy
between Milgroom’s and Martl’s attorneys, Plaintiffs, and the court to take away the
Hawaii Property from Martl.” Q The District Court found these allegations to be “both
wholly false and ridiculous” and stated that “Milgroom has nobody to blame but himself

 

12 On June 1, 2009, the District Court entered two orders one granting the plaintiffs’ Motion
for Entry of Default Judgment against Mr. Milgroom, and the other granting the plaintiffs’
second Motion for Entry of Default Judgment against Ms. Martl. E “Order Granting
Plaintiffs’ Second Motion for Default Judgment Against Defendant Robert B. Milgroom as
to the Second Amended Complaint," Valvanis v. Milgroom, 2009 WL 1561575, at *1;
“Order Granting Plaintiffs' Second Motion for Entry of Default Judgment Against
Defendant Nada R. Martl as to the First Amended Complaint,” Valvanis v. Milgroom, No.
06-144, 2009 WL 1561571, at *1 (D. Haw. June 1, 2009). The District Court entered an
individual default against each defendant based on the “very different contexts ofdefault.”
Valvanis v. Milgroom, 2009 WL 1561575, at *1. The District Court entered default against
Ms. Martl because she failed to file an answer to the First Amended Complaint or
othenNise participate in the action. ﬂ Valvanis v. Milgroom, 2009 WL 1561571, at *1.
The District Court entered default against Mr. Milgroom, who had actively participated in
the action, “as a sanction for his willful conduct of violating numerous court orders and
rules in an attempt to prevent this action from proceeding on the merits." Valvanis v.
Milgroom, 2009 WL 1561575, at *1. Previously, on December 30, 2008, the District Court
entered default against Mr. Milgroom, concluding that “[t]he court strongly prefers that
cases be resolved on the merits, but this case presents extreme circumstances of a
defendant who took every effort to derail its efficient adjudication. Milgroom’s willful
conduct merits entry of default." “Order Entering Default Against Defendant Robert B.
Milgroom” at 32, Docket Number 615, Valvanis v. Milgroom, 06-144 (D. Haw. Dec. 30,
2008). The court noted that “[o]n November 13, 2008, the court entered default against
Defendant Robert Milgroom after he failed to attend the Final Pretrial Conference in
apparent disregard of the court’s warnings that his failure to attend ‘may result in
sanctions, up to and including default being entered against him.”’ (internal citation

omitted). Q at 1.

for the entry of default.” |_d_. The District Court also found that Mr. Milgroom did not present
any evidence to rebut the plaintiffs’ allegations and substantial evidence, and stated that
“[t]he evidence presented demonstrates, by clear and convincing evidence, that Milgroom
engaged in a willful, elaborate scheme to hide his assets and frustrate his creditors’
attempts to collect on his debts.”13 _|_cL at *17. The District Court entered a judgment
against Mr. Milgroom in the amount of $250,000.00 in punitive damages, and imposed a
constructive trust over all assets in the Hawaii property to which Mr. Milgroom had any
interest. §§ﬁ,at *18-19.

On June 1, 2009, the District Court also entered a judgment against Ms. Martl in
the amount of $4,523,940.29.14 &_ Valvanis v. Milgroom, 2009 WL 1561571, at *14. The
District Court entered a monetary judgment in the form of a monetary lien and equitable
lien on the Hawaii property from the date ofthe Notice of Adverse Claim that the Valvanis
family filed with the State of Hawaii Land Court on March 3, 2006. g id_. The District
Court imposed a constructive trust over all assets in the Hawaii property that were
assigned, transferred, or conveyed by Mr. Milgroom to Ms. Martl, including the Hawaii
property. gig. The District Court enjoined Ms. Martl and Mr. Milgroom from attempting
to sell or transfer interest in the Hawaii property,15 and appointed a receiver to liquidate
the Hawaii property. & id_. On November 18, 2009, the Hawaii property was sold at
auction for $4,075,000.00, and the proceeds of the sale were credited to the Valvanis
family. ﬂ “Final Receiver’s Report” at 2-3, Valvanis v. Milgroom, No. 06-144 (D. Haw.
Dec. 10, 2009).

On May 12, 2009, prior to entry ofjudgment in the District Court case, Ms. Martl
filed her first complaint, Martl l, in the United States Court of Federal Claims, m g,

 

‘3 In the D’Ambrosio action, the Massachusetts Superior Court for the County of Suffolk
came to a similar conclusion, finding that “Defendant transferred funds, rightfully
belonging to Lillian’s [Mr. Milgroom’s first wife] estate and the Trusts she created, to his
new wife as part of a fraudulent divorce in Hawaii specifically to remove those assets from
the jurisdiction of this Court.” “Findings of Fact, Rulings of Law and Rationale" at 28,
D’Ambrosio et al. v. Milgroom et al., No. 02E-0003 (Super. Ct. Mass. May 14, 2007).

14 The District Court noted that to prevent possible duplicative recovery, any recovery the
Valvanis family had in the Massachusetts Superior Court for the County of Norfolk against
Mr. Milgroom was to be taken from the monetary judgment entered here against Ms.
Martl, based on the finding that Ms. Martl had received substantial sums of money from
Mr. Milgroom. ﬁValvanis v. Milgroom, 2009 WL 1561571, at *13.

15 Ms. Martl previously had attempted to sell the Hawaii property, and in 2006 listed it at
$6.5 million, even though the property was valued at $8 million. Ms. Martl was unable to
sell the property due to the li_s pendens put on the property by the United States District
Court for the District of Hawaii, which notified any potential buyers that the property was
involved in a lawsuit. S_ee_ Valvanis v. Milgroom, 529 F. Supp. 2d 1206, 1211 (D. Haw.
2007) (affirming the District Court magistrate judge’s decision to impose a |i_s pendens on
the Hawaii property).

10