Stephanie Kanter, on behalf of THE ESTATE OF ROBERTA J. SCHWARTZ v. the Equitable Life Assurance Society of the United States

The Honorable Nora Barry Fischer, United States District Judge for the Western*
District of Pennsylvania, sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-2554
STEPHANIE KANTER, on behalf of
THE ESTATE OF ROBERTA J. SCHWARTZ,
Appellant
v.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES;
AXA EQUITABLE LIFE INSURANCE COMPANY; AXA FINANCIAL, INC.;
JOHN DOE; ZYZ COMPANY
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 1-07-cv-04361)
District Judge: Honorable Jerome B. Simandle
Argued May 13, 2009
Before: AMBRO and ROTH, Circuit Judges and FISCHER, District Judge*
(Opinion Filed: February 5, 2010)
Steven K. Mignogna, Esquire (Argued)
Kenneth J. Lackey, Esquire
Archer & Greiner
One Centennial Square
Haddonfield, New Jersey 08033
Counsel for Appellant

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Catherine L. Sakach, Esquire (Argued)
Patrick Matusky, Esquire
Duane Morris LLP
Suite 200
1940 Route 70 East
Cherry Hill, New Jersey 08003
Counsel for Appellees
OPINION
FISCHER, District Judge
Plaintiff Stephanie Kanter appeals from an order of the District Court granting the
motion to dismiss of defendants The Equitable Life Assurance Society of the United
States; AXA Equitable Life Insurance Company; AXA Financial, Inc.; John Doe; and
ZYZ Company. We conclude that the District Court erroneously applied New Jersey’s
applicable statute of limitations to bar plaintiff’s suit. Accordingly, we will vacate and
remand.
On December 22, 1982, Stephen Schwartz, a dentist, enrolled in an annuity
program (“the annuity”) provided by defendants for American Dental Association group
members. The annuity’s terms gave Dr. Schwartz the ability to withdraw the annuity’s
accrued cash value, but precluded the sale or assignment of any interest or amount
payable under the annuity. In addition, the annuity stated that “[n]o amount payable . . .
will in any way be subject to any claim against [the] payee.”
Dr. Schwartz married in 1985. Mrs. Schwartz was never made a beneficiary of the

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annuity, and, on July 21, 1992, she executed a signed waiver of her right to receive
survivor benefits under the annuity.
In 1996, after almost eleven years of marriage, Dr. Schwartz bludgeoned his wife
to death with a claw hammer and fire extinguisher. He pleaded guilty to aggravated
manslaughter on July 23, 1999, and received a twenty-year prison sentence.
In February 1997, prior to Dr. Schwartz’s guilty plea, Mrs. Schwartz’s Estate
began notifying defendants that New Jersey’s “Slayer Act,” N.J. Stat. Ann. § 3B: 7-1.1 et
seq., might apply to the annuity. The Estate sent a letter to defendants containing an
order prohibiting Dr. Schwartz from diminishing any of his assets without court
permission. The letter also requested that defendants freeze all of Dr. Schwartz’s
accounts. A similar letter and court order were sent in July 1999.
The court orders were eventually abrogated. Subsequently, Dr. Schwartz
withdrew $93,750 from the annuity in December 1999.
Mrs. Schwartz’s Estate brought various actions against Dr. Schwartz, including, in
a suit captioned Wasserman v. Schwartz, a novel claim for the
equitable distribution of . . . marital assets that accumulated
during the Schwartz’ . . . marriage, [such as Dr.] Schwartz’
retirement and pension plan assets, because had he not
terminated the[ ] marriage by slaying [his wife], and the
marriage instead terminated by divorce, Mrs. Schwartz would
have been entitled to an equitable distribution of their marital
estate assets.
Wasserman v. Schwartz, 836 A.2d 828, 830 (N.J. Super. Ct. Law Div. 2001).
On June 29 and July 11, 2001, a bench trial occurred in the New Jersey Superior

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Court, Law Division, regarding the equitable distribution claim. Id. The trial was
conducted “to identify and ascertain the value of all assets held by or for [Dr.] Schwartz’
benefit, including pension or retirement plan accounts; and to determine what portion
should belong to the Schwartz’ marital estate, and what portion belong[ed] solely to [Dr.]
Schwartz.” Id.
A certified public accountant with expertise in asset valuation and forensic
accounting presented a report and testified on behalf of the Estate. Id. She
identified certain assets held by or for [Dr.] Schwartz’ benefit,
their dates of acquisition; asset valuations as of the date of the
marriage . . .; asset valuations as of the date [of the homicide]
. . .; and the [then] current values of the assets.
In her report and testimony, [the accountant] further
documented all the assets includible in the marital estate and
their values, and concluded that the total value of all those
assets includible in the marital estate [wa]s $929,726. That
amount included marital estate assets [Dr.] Schwartz ha[d]
spent since the day he killed his wife, such as . . . [the] monies
from [Dr.] Schwartz’ retirement accounts. Those marital
estate assets also included $541,099 . . . held in [Dr.]
Schwartz’ name in his American Dental Association
retirement plan, his IRA, and a Manulife annuity account.
Id.
The Wasserman court accepted the Estate’s novel claim for equitable distribution.
Id. at 833-34. Using its equitable powers, the court determined that even though the
Schwartz’s marriage had ended by homicide and not divorce, Mrs. Schwartz’s Estate was
entitled to a share of the marital assets and those assets, like the annuity, held solely in Dr.
Schwartz’s name. Id. at 831-34. Judgment for $681,338 was entered in the Estate’s favor

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on September 14, 2001. Id. at 839. The Estate was only able to collect approximately
$390,000 of the award.
On February 13, 2007, plaintiff, a Florida resident and one of the Estate’s two
beneficiaries, was assigned the Estate’s remaining legal claims. She filed in the New
Jersey Superior Court, Law Division, this action against defendants on August 1, 2007.
Relying on diversity of citizenship, defendants removed the case to the United States
District Court for the District of New Jersey.
Plaintiff subsequently filed an amended complaint alleging four causes of action.
In count one, she asserted negligence, claiming that defendants owed the Estate a duty of
care after receiving notice of possible Slayer Act claims and that defendants breached that
duty by permitting Dr. Schwartz to withdraw $93,750 from the annuity. Count two
alleged that defendants violated New Jersey’s Slayer Act, specifically N.J. Stat. Ann. §
3B: 7-7, by allowing Dr. Schwartz to remove money from the annuity. In count three,
plaintiff contended that defendants, by permitting the withdrawal, engaged in an
unconscionable commercial practice and, therefore, violated New Jersey’s Consumer
Fraud Act, N.J. Stat. Ann. § 56: 8-2. Finally, count four alleged that defendants breached
their fiduciary duty to the Estate by allowing the withdrawal.
Defendants filed a motion to dismiss arguing, among other things, that plaintiff’s
claims were barred by New Jersey’s six-year statute of limitations, N.J. Stat. Ann. § 2A:
14-1. According to defendants, because Dr. Schwartz withdrew money from the annuity
in December 1999 and plaintiff waited over eight years to file her complaint on August 1,

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2007, her claims were time-barred. In addition, defendants asserted that even if New
Jersey’s discovery rule applied, it could only toll the statute of limitations until June 29,
2001, the first day of the Wasserman trial. By then, defendants reasoned, the Estate
would have to have known about Dr. Schwartz’s withdrawal, yet plaintiff’s complaint
was filed more than six years after the Wasserman trial began.
The District Court agreed with defendants that the statute of limitations barred
plaintiff’s suit. Any injury to the Estate, the Court believed, occurred prior to the
Wasserman judgment, and the discovery rule delayed the accrual of plaintiff’s causes of
action until, at the latest, July 11, 2001, the final day of the Wasserman trial. By that
date, the Estate would have read its own expert’s report and heard testimony that
defendants had allowed Dr. Schwartz to withdraw money from the annuity. Because
plaintiff filed her complaint more than six years after July 11, 2001, the District Court
granted the defendants’ motion to dismiss.
Plaintiff appealed and argues that her complaint was timely filed. She contends,
among other things, that she did not have the right to institute and maintain the Estate’s
claims against defendants until after the September 14, 2001 judgment. We agree.
Our review of a “district court’s dismissal under Rule 12(b)(6) of the Federal
Rules of Civil Procedure is plenary.” Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir.
2005). We must “accept as true all allegations in the complaint and all reasonable
inferences that can be drawn therefrom, and view them in the light most favorable to . . .
plaintiff[ ].” Id. However, we “need not credit either ‘bald assertions’ or ‘legal

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conclusions’ in [the] complaint.” Id. (citation omitted).
The parties do not dispute that New Jersey’s relevant statute of limitations required
that plaintiff’s claims “be commenced within 6 years . . . after the cause of any such
action shall have accrued.” N.J. Stat. Ann. §2A: 14-1. The New Jersey Supreme Court
has “identified the accrual of [a] cause of action as the date on which ‘the right to institute
and maintain a suit’ first arose.” Rosenau v. City of New Brunswick, 238 A.2d 169, 172
(N.J. 1968) (citation omitted). “That phrase refers to the ‘combination of facts or events
which permits maintenance of a lawsuit; the time of occurrence of the last of these
requisite facts is thereby made the critical point of [the] inquiry.’” Russo Farms, Inc. v.
Vineland Bd. of Educ., 675 A.2d 1077, 1083-84 (N.J. 1996) (citation omitted). A cause
of action will therefore be said to have accrued only at the time all of its elements have
occurred. See Rosenau, 238 A.2d at 172-74 (explaining that a cause of action “grounded
on negligent injury or damage to person or property . . . accrue[s] not when the
negligence itself took place but when the consequential injury or damage occurred,” and
finding that plaintiffs could institute an action many years after the negligent act, the
improper manufacture of a water meter, because only when the meter broke was the
plaintiffs’ property damaged); see also Holmin v. TRW, Inc., 748 A.2d 1141, 1145 (N.J.
Super. Ct. App. Div. 2000) (the plaintiff’s cause of action accrued when he suffered
damages from fraud, not when the fraudulent act occurred).
Our review of this case’s unique facts convinces us that plaintiff’s claims against
defendants did not accrue until September 14, 2001, the date of the Wasserman opinion

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and judgment. Plaintiff’s causes of action require the suffering of a loss or damages. See,
e.g., Polzo v. County of Essex, 960 A.2d 375, 384 (N.J. 2008) (actual damages are an
element of negligence); Meshinsky v. Nichols Yacht Sales, Inc., 541 A.2d 1063, 1067
(N.J. 1988) (an “ascertainable loss” is an essential element of a private cause of action for
a violation of New Jersey’s Consumer Fraud Act); In re Estate of Lash, 776 A.2d 765,
770 (N.J. 2001) (breach of fiduciary duty is a tort and that “[o]ne standing in a fiduciary
relation with another is subject to liability to the other for harm resulting from a breach of
duty imposed by the relation” (emphasis supplied) (citation omitted)). Despite the
District Court’s belief and defendants’ assertions to the contrary, we do not believe that
Mrs. Schwartz’s Estate could claim to have been damaged prior to September 14, 2001.
At the time of the withdrawal in December 1999, the Estate had no legal interest in
or right to the funds in the annuity. Dr. Schwartz enrolled in the annuity prior to his
marriage and never made his wife a beneficiary. In addition, Mrs. Schwartz waived her
right to receive survivor benefits under the annuity, and the annuity expressly stated that
“[n]o amount payable . . . will in any way be subject to any claim against [the] payee.”
On September 14, 2001, however, the Wasserman court provided the Estate with a
$689,338 award based, in part, on funds held in the annuity at the time of Mrs. Schwartz’s
death. Therefore, the Estate’s injury did not arise - i.e., the cause of action did not fully
accrue - until September 14, 2001, the date of the Wasserman opinion. Any suit filed
prior to that date would have been premature.
Defendants and the District Court focus on the discovery rule and the date on

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which the Estate had knowledge of Dr. Schwartz’s withdrawal to conclude that plaintiff’s
cause of action accrued, at the latest, on July 11, 2001. This is not, however, a discovery
rule case. New Jersey courts developed the discovery rule “[t]o prevent the sometimes
harsh result of a mechanical application of the statute of limitations.” Martinez v. Cooper
Hosp.-Univ. Med. Ctr., 747 A.2d 266, 270 (N.J. 2000). The rule “provides that . . . a
cause of action will be held not to accrue until the injured party discovers, or by an
exercise of reasonable diligence and intelligence should have discovered[,] that he may
have a basis for an actionable claim.” Id. (emphasis supplied) (internal quotation marks
and citation omitted). Unless a party has been injured, therefore, the rule has no
application. See id. (discussing the requirements for satisfying the rule).
As explained, the Estate’s injury did not materialize until the September 14, 2001,
Wasserman judgment. At the time of both the withdrawal and the Estate’s subsequent
knowledge of it, whether June 29 or July 11, 2001, the Estate’s claims were not yet
complete; only the possibility of injury existed. See Holmin, 748 A.2d at 1151
(explaining that “a cause of action accrues when a plaintiff has been injured or damaged .
. . [and that] [p]rior to that date, he or she is faced only with an anticipation of possible
injury, which may or may not occur”). The Wasserman court, among other things, could
have ruled in favor of Dr. Schwartz and denied equitable distribution or issued an award
that did not include funds from the annuity. Because the Estate’s claims became
complete only upon the September 14, 2001, Wasserman judgment, the statute of

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We are not holding, as our colleague’s dissent opines, that plaintiff “discovered” a1
new legal theory on the date of the Wasserman decision. As we have stated, the
discovery rule plays no role in this case. Instead, we hold that the cause of action became
complete (and thus the statute of limitations began to run) when plaintiff obtained an
enforceable legal interest in the annuity by virtue of the Wasserman ruling. We agree that
plaintiff may have known prior to the judgment that the Estate could receive a legal
interest in the annuity, should it be awarded an ownership interest by the Wasserman
court. However, the Estate had no legal interest in the annuity until the September 14,
2001, decision.
Because we find that the District Court erred in granting defendants’ motion to2
dismiss, we need not address plaintiff’s argument that the Court also erred by resolving
facts not apparent from the complaint and viewing facts in favor of defendants.
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limitations did not begin to run until that date.1
Accordingly, we conclude that the District Court erred in finding that New
Jersey’s statute of limitations barred this suit. Plaintiff’s causes of action did not accrue
until September 14, 2001, and her complaint, docketed August 1, 2007, was timely filed
within six years. The order of the District Court granting defendants’ motion to dismiss
will be vacated, and the case remanded for further proceedings.2
___________________
ROTH, Circuit Judge, dissenting:
I respectfully dissent. The majority holds that Stephanie Kanter, as the assignee of
the Estate of Roberta Schwartz, did not have the right to institute and maintain the claims
against the defendants until after September 14, 2001, the date of the decision in
Wasserman v. Schwartz, 836 A.2d 828 (N.J.Super. 2001). The majority concludes that

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Kanter could not have instituted the Estate’s claim for the annuity until after that time
because the Estate’s claim did not accrue until that date. In explaining this conclusion,
the majority states: “At the time of the withdrawal in December 1999, the Estate had no
legal interest in or right to the funds in the annuity.” Majority at 8. If that were so, I do
not find any basis for the defendant’s being held liable to the Estate for having paid out
funds in which the Estate had no legal interest and to which the Estate had no legal right.
Moreover, the majority cites no basis to create such liability.
Contrary to the majority, however, I believe that the Estate did have a claim to
funds in the annuity at the time they were paid out to Dr. Schwartz. As described by the
majority, the Estate had been pursuing that claim in the Wasserman case. In view of the
undisputed facts, the majority’s reasoning seems to be based on a new version of the
Discovery Rule under which it is not the discovery of facts but the discovery of the new
legal theory – here, the judicial ruling in the Wasserman case, validating the Estate’s
theory of recovery – that determines when the cause of action accrues. The New Jersey
Supreme Court has held, however, that a delay in determining the legal theory under
which one will pursue a cause of action does not delay the accrual of the cause of action.
See Burd v. New Jersey Telephone Co., 386 A.2d 1310, 1314 (N.J. 1978) (holding that
“[w]e find the trial judge to have been in error in concluding that regardless of when a
claimant knows or reasonably should know the facts of the relationship of his injury to a
particular source or cause, the applicable limitations period does not begin running until
he learns from a lawyer that those facts equate with a legal cause of action against the

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producer or originator of the injurious source or cause.”). Following that precedent, I
conclude that the “discovery” of the “new legal theory,” announced in Wasserman, is not
recognized under New Jersey law as determining the accrual date of a cause of action.
Moreover, as set out above, this “new legal theory” was known to the Estate – and
to the lawyers representing it – when the Wasserman case was filed. The lawyers for the
Estate understood the concept that the Estate might recover part of Dr. Schwartz’s
annuity. They in fact made that claim in Wasserman against Dr. Schwartz. And, indeed,
the right to make such a recovery had been recognized elsewhere. See In re Estate of
Diane L. Hackl, 604 N.W. 2d 579, 585 (Wis. Ct. App. 1999) (imposing a constructive
trust on murdered spouse’s marital property interest in murdering spouse’s pension).
In addition, at least by the time of the Wasserman trial, the lawyers for the Estate
were aware that the annuity had been paid out by Equitable to Dr. Schwartz. Clearly,
everything that the Estate needed to know to pursue a recovery from the defendants was
known to it more than six years before this action was brought. The action is, therefore,
barred.
Finally, I am not aware of any precedent that holds that, after the statute of
limitations has run, a plaintiff can look around for new sources of recovery if the plaintiff
has failed to recover in full from the defendants already found to be liable. As noted
above, the Estate had knowledge of facts and a legal theory under which it could have
included defendants in the Wasserman case – or, even if not pursuing them in that action,
it could have brought an action within the six year limitations period after the Estate

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learned of the injury – i.e., of the taking of the funds from the annuity.
For the reasons stated above, I submit that the judgment of the District Court
should be affirmed.

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