366 EAST 7TH STREET LLC v. RABBINICAL COURT OF KOLEL TARTIKOV

Filing 10

OPINION. Signed by Judge Anne E. Thompson on 3/24/2017. (seb)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
366 EAST 7th STREET LLC,
Plaintiff,
Civ. No. 17-0014
v.
OPINION
RABBINICAL COURT OF KOLEL
TARTIKOV,
Defendant.

THOMPSON, U.S.D.J.
This matter comes before the Court upon the motion of Plaintiff 366 East 7th Street LLC
(“Plaintiff”) for default judgment (ECF No. 6) and Plaintiff’s response to the Court’s Order to
Show Cause why this matter should not be dismissed for lack of subject matter jurisdiction (ECF
Nos. 8, 9). The motion is unopposed. The Court has decided the motion based on the written
submissions and without oral argument pursuant to Fed. R. Civ. P. 78(b). For the reasons stated
herein, the Court will grant Plaintiff’s motion.
BACKGROUND
The basic allegations of the present case are as follows: Plaintiff owns property in
Lakewood, New Jersey. (Compl. ¶ 7, ECF No. 1). The principal building on the property
burned down in June 2016 and Plaintiff filed insurance claims for that property. (Id. ¶¶ 8–9).
Another man, Mordechai Thaler (“Thaler”), also claimed the insurance proceeds and seeks to
have the dispute arbitrated before Defendant Rabbinical Court of Kolel Tartikov (“Defendant”).
(Id. ¶¶ 10–11). Thaler does not have title to the property, is not a member of Plaintiff, and is not
a named insured on the property insurance. (Id. ¶ 10).
1

On December 20, 2016, Defendant issued a seruv warning demanding that “Mr. Yitchok
Moshe Friedman and his wife Mrs. Sarah [and] Mr. Shimon Yehudah Friedman” “sign
arbitration papers right away and stand before a din torah… in order that the matter should not
come to the issuance of a seruv G-d forbid.” 1 (Id. ¶ 14, ECF No. 1). A seruv is described as an
extremely punitive order of contempt that bars the subject of the order from crucial aspects of the
Orthodox Jewish community. (Id. ¶ 15).
There is no agreement or operative document regarding the property in which Plaintiff
consented to the jurisdiction of Defendant or to arbitration regarding the property. (Id. ¶ 13).
Therefore, Plaintiff seeks injunctive relief from the threatened seruv and from being
compelled to submit to arbitration before Defendant. Plaintiff has served Defendant and
Defendant has failed to respond. Default has been entered and Plaintiff now moves for Default
Judgment. That motion is presently before the Court.
DISCUSSION
A. Jurisdiction
As an initial matter, the Court must determine if subject matter jurisdiction exists. If a
court determines at any time that it lacks subject matter jurisdiction, the court must dismiss the
action. Fed. R. Civ. P. 12(h)(3); Deluxe Bldg. Sys., Inc. v. Constructamax, Inc., 94 F. Supp. 3d
601, 607 (D.N.J. 2013) (“Federal courts have an ever-present obligation to satisfy themselves of
their subject matter jurisdiction and to decide the issue sua sponte...”) (internal citations
omitted). In this case, Plaintiff alleges that this Court has original jurisdiction based on 28
U.S.C. § 1332, diversity of citizenship between the parties. Diversity jurisdiction applies to

1

Plaintiff does not clarify how “Mr. Yitchok Moshe Friedman and his wife Mrs. Sarah [and] Mr.
Shimon Yehudah Friedman” are related to Plaintiff in this case. However, for the purposes of
this motion, the Court will assume that the cited seruv warning did in fact impact Plaintiff.
2

“civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interests and costs, and is between—(1) citizens of different States...” U.S.C. § 1332(a). Where
the relief sought is injunctive, the value is measured by the value of the relief to the plaintiff,
rather than the cost to the defendant. See, e.g., Packard v. Provident Nat’l Bank, 994 F.2d 1039,
1050 (3d Cir. 1993).
In the present case, Plaintiff is organized under New Jersey law and has its principal
place of business in Lakewood, New Jersey; Defendant is organized under the law of New York
and maintains its principal place of business in Brooklyn, New York. (Compl. ¶¶ 2–3, ECF No.
1). Thus, diversity of citizenship is satisfied. In its Complaint, Plaintiff seeks only injunctive
relief from threatened punitive action of Defendant Rabbinical Court of Kolel Tartikov. (Compl.
¶¶ 19–23, ECF No. 1). Therefore, in order to satisfy the amount-in-controversy requirement,
Plaintiff must allege that the value to the Plaintiff of the injunctive relief sought is in excess of
$75,000.
In its Complaint, Plaintiff seeks an injunction against Defendant “to cease and desist from
and against any actions in the matter described in its December 20, 2016 seruv warning, [and]
ordering the Rabbinical Court to dismiss and discontinue any actions in the matter described in
its December 20, 2016 seruv warning…” (Compl. at 6, ECF No. 1). The seruv warning
demanded that “Mr. Yitchok Moshe Friedman and his wife Mrs. Sarah [and] Mr. Shimon
Yehudah Friedman” “sign arbitration papers right away and stand before a din torah… in order
that the matter should not come to the issuance of a seruv G-d forbid.” (Id. ¶ 14). Thus, Plaintiff
seeks relief from the harm it would face if a seruv is issued and from Defendant using a seruv
and the seruv warning to force Plaintiff to sign arbitration papers and to stand before a din torah.
While Plaintiff does not seek adjudication of the property insurance itself, Plaintiff does seek

3

relief from being forced to arbitrate the distribution of the property insurance. Thus, the value of
the injunctive relief to Plaintiff would include both the value of the property insurance and the
value of avoiding the harm of the seruv. The property insurance is valued either at $450,000 or
$1.5 million,2 either of which satisfies the amount-in-controversy requirement. Therefore, the
Court possesses subject matter jurisdiction over this matter.
B. Motion for Default Judgment
The Court then turns to the motion for default judgment. A district court may enter
default judgment under Federal Rule of Civil Procedure 55(b)(2), after an entry of default by the
Clerk of Court. See Sourcecorp Inc. v. Croney, 412 Fed. App’x 455, 458 (3d Cir. 2011) (citing
Fed. R. Civ. P. 55). The decision to enter such judgment is primarily within the district court’s
discretion, Bank v. Lake Estates Condominium Assoc., Inc., 2012 WL 1435637, at * 3 (D.N.J.
Apr. 25, 2012) (quoting Century Real Estate LLC v. Kenneth M. Yanni, Inc., 2009 WL 904122,
at *1 (D.N.J. Mar. 31, 2009)), with the significant caveat that default judgments are discouraged
in favor of adjudications on the merits, Hill v. Williamsport Police Dept., 69 Fed. App’x 49, 51
(3d Cir. 2003); United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984);
Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 867 (3d Cir. 1984); Hritz v. Woma Corp.,
732 F.2d 1178, 1181 (3d Cir. 1984).
The Court must accept the well-pleaded factual allegations of the Complaint, but need not
accept the moving party's legal conclusions or allegations relating to the amount of damages.
See Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 535 (D.N.J. 2008). Before entering

2

Plaintiff states that the first-tier property insurance was valued at $900,000 and has already
been adjudicated in another action. The second-tier property insurance has a policy limit of
$450,000. Plaintiff states at different points that, therefore, the total property insurance was
about $1.5 million, and the property itself was worth $1.5 million. (Pl.’s Mem. Resp. Order to
Show Cause at 2, 4, ECF No. 9).
4

default judgment, the Court must assess whether the “unchallenged facts constitute a legitimate
cause of action” that would justify a default judgment. Directv, Inc. v. Asher, 2006 WL 680533,
at *1 (D.N.J. Mar.14, 2006). In addition, the Court must consider three factors to determine the
appropriateness of default: (1) the “prejudice to the plaintiff if default is denied, (2) whether the
defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to
culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). The Court will
briefly consider each of the factors below.
In the present case, Plaintiff alleges that Defendant has pressured Plaintiff to submit to
arbitration before it by threatening to issue an order of contempt that is extremely punitive within
the Orthodox Jewish community (a seruv). If default is denied, Plaintiff would face either the
harm of the seruv or arbitration before Defendant. Plaintiff has never agreed to arbitration or the
jurisdiction of Defendant. Therefore, the Court is persuaded that Plaintiff would face significant
prejudice if default is denied.
There are no facts or readily apparent arguments that Defendant has a litigable defense or
that Defendant’s delay is due to culpable conduct. Thus, these factors do not alter the finding
that Defendant has been properly served and has failed to timely respond, and that Plaintiff
would be prejudiced by denial of default judgment.
CONCLUSION
For the reasons stated herein, Plaintiff’s motion for default judgment will be granted. A
corresponding order will follow.

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.
Date: 3/24/17
5