Freund v. Weinstein et al

Filing 253

MEMORANDUM AND ORDER: The attached order addresses the claims remaining in this action. For the reasons set forth in the attached, Plaintiff's claims against Defendants Siforov, Quick LLC, Shain, and Gindi, and all cross-claims asserted by Defe ndants Eli Weinstein and Pine Projects, are dismissed. Moreover, if Defendants Shain and Gindi do not indicate whether they intend to pursue their cross-claims by July 29, 2016 and file proposed joint pretrial order submissions by August 5, 2016, their cross-claims will also be dismissed. Ordered by Judge Pamela K. Chen on 7/19/2016. (Chan, Grace)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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MAURICE FREUND,
Plaintiff,
- against -

MEMORANDUM & ORDER
08-cv-1469 (PKC) (MDG)

ELI WEINSTEIN, MICHAEL GINDI,
BENJAMIN HAGER, BUSHWICK
ENTERPRISE GROUP, LLC, SIFOROV,
INC., QUICK 1031 EXCHANGE QUALIFIED
INTERMEDIARY, LLC, SIMCHA SHAIN
and PINE PROJECTS, LLC,
Defendants.
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PAMELA K. CHEN, United States District Judge:
This order addresses the claims remaining in this action. Plaintiff has reached agreements
to settle with Defendant Benjamin Hager and Defendants Eli Weinstein, Pine Projects, LLC and
Bushwick Enterprise Group, LLC (collectively, the “Weinstein Defendants”), which are evidenced
by a stipulation of dismissal as to Hager and a consent judgment as to the Weinstein Defendants.
(See Dkt. 242, 242, 247, and 249.) However, Plaintiff did not reach an agreement to settle with
the other Defendants named in the Second Amended Complaint (Dkt. 19): Defendants Siforov,
Inc., Quick 1031 Exchange Qualified Intermediary LLC (“Quick LLC”), Michael Gindi, and
Simcha Shain.
In response to an order issued on April 20, 2016 by the Honorable Marilyn D. Go regarding
Plaintiff’s claims against Quick LLC, Jan Meyer, Plaintiff’s counsel, advised in a letter filed on
May 19, 2015 (“Pl.'s May 19 Letter”) that his client authorized him to “withdraw the remaining
claims and will not move forward with this matter.” (Dkt. 252.) Since Plaintiff seeks to

discontinue this action, the Court treats the letter as a motion for dismissal pursuant to Rule 41 of
the Federal Rules of Civil Procedure. To date, there have been no responses to Plaintiff’s letter.
For the reasons that follow, the Court dismisses claims involving Siforov, Inc. and Quick
LLC, including cross-claims, and all cross-claims brought by the Weinstein Defendants against
Gindi. In the absence of any response or objection from Gindi or Shain, all claims involving these
two Defendants will also be dismissed.
DISCUSSION
Rule 41(a) governs the dismissal of actions. Subsection (1) of this Rule provides for
voluntary dismissal by a plaintiff without a court order by filing: (1) a notice of dismissal before
the opposing party serves either an answer or a motion for summary judgment; or (ii) a stipulation
of dismissal signed by all parties who have appeared. Fed. R. Civ. P. 41(a)(1)(A). Otherwise:
[A]n action may be dismissed at the plaintiff’s request only by court order, on terms
that the court considers proper. If a defendant has pleaded a counterclaim before
being served with the plaintiff’s motion to dismiss, the action may be dismissed
over the defendant’s objection only if the counterclaim can remain pending for
independent adjudication. Unless the order states otherwise, a dismissal under this
paragraph (2) is without prejudice.
Fed. R. Civ. P. 41(a)(2). The Rule also “applies to a dismissal of any counterclaim, crossclaim, or
third-party claim.” Fed. R. Civ. P. 41(c).
Siforov, Inc. has neither answered nor appeared in this action. Since Siforov, Inc. has never
appeared, Plaintiff’s letter operates as a voluntary dismissal of the claims against this Defendant
pursuant to Rule 41(a)(1)(A)(i), and those claims are hereby dismissed.
The three remaining Defendants, Quick LLC, Gindi and Shain, have appeared and filed
answers to Plaintiff’s Second Amended Complaint. (See Dkts. 26 (Quick LLC answer), 34 (Shain
answer), 40 (Gindi answer).). Thus, Plaintiff’s claims against them cannot be dismissed except by

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stipulation signed by all appearing parties or by court order. Fed. R. Civ. P. 41(a)(1)(A)(ii) and
41(a)(1)(A)(2).
Although Quick LLC originally appeared through the same counsel who represented the
Weinstein Defendants, 1 it did not retain new counsel after the Court granted the motion of David
Carlebach, the last counsel of record for these Defendants, for leave to withdraw at a hearing on
November 30, 2010. Quick LLC did not participate at the motion hearing or at any subsequent
proceedings. As Quick LLC was previously advised, a corporation may not appear in the federal
courts except through counsel (Dkt. 83). See also Rowland v. California Men’s Colony, 506 U.S.
194, 201-02 (1993); Chao v. Russell P. Le Frois Builder, Inc., 291 F.3d 219, 226 n.7 (2d Cir.
2002). Quick LLC not only failed to retain new counsel, but it has also utterly failed to participate
in any way in this action since 2010. Quick LLC’s inaction would be an appropriate basis for
striking its answer and entering default, but Plaintiff has sought instead to discontinue his claims
against Quick LLC. Since Quick LLC has demonstrated no interest in pursuing this action and
has not asserted any counterclaims against Plaintiff, the Court finds dismissal of Plaintiff’s claim
with prejudice against this Defendant to be proper pursuant to Rule 41(a)(2). See Miran Jeon v.
Lee So Hee, No. 11-cv-974, 2015 WL 789984, at *3 (E.D.N.Y. 2015).
Gindi and Shain, the two other appearing Defendants who remain, have participated in this
action, most recently, at a conference on January 6, 2016. At that conference, Judge Go set a
schedule for the exchange of joint pretrial order submissions and required that a proposed joint
pretrial order be sent to her by May 19, 2016. However, neither Gindi nor Shain have filed any
document with the Court since that conference and also have not responded to the May 19 Letter

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Counsel for Quick LLC filed an answer on behalf of this Defendant and the Weinstein
Defendants.
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from Plaintiff’s counsel. Judge Go advises that she has not received any communications from
Gindi and Shain regarding pretrial order submissions.
Given their silence, the Court is doubtful that Gindi and Shain have any objection to
withdrawal of Plaintiff’s claims against them. Since they have not asserted any counterclaims
against Plaintiff, dismissal of Plaintiff’s claims against them is permissible under Rule 41(a)(2).
The Court, therefore, dismisses Plaintiff’s claims against Gindi and Shain.
Finally, the Court addresses Defendants’ cross-claims against each other. Both Gindi and
Shain have asserted cross-claims against other Defendants in their answers to Plaintiff’s Second
Amended Complaint. (See Dkts. 30, 35.) Gindi asserts a cross-claim only against Eli Weinstein,
a claim based on bare allegations contained in two paragraphs of his answer. (See Dkt. 35 (Gindi
answer) at ¶¶ 20, 21.) Alleging that because “[a]ny agreements purportedly made on behalf of
defendant Gindi were made by defendant Weinstein without defendant Gindi’s authorization,
knowledge or consent,” Gindi claims that Weinstein “is liable for all such amounts by reason of
contribution and/or indemnification.” (Id.)
Shain asserts cross-claims against all of the other Defendants for indemnification, but also
bases his claims on sparse allegations lacking in specificity. (See Dkt. 34 (Shain answer) at ¶¶ 2225.) Shain alleges that “if plaintiff sustained the damages alleged in the Second Amended
Complaint, . . . these damages were caused in whole or in part by the actions, inactions and/or
misrepresentations of the other defendants, and not by any actions, inactions or misrepresentations
made by Shain.” (Id. at ¶ 11.) He thus claims he “is entitled to complete or partial indemnification
by defendants Weinstein, Gindi, Hager, Bushwick, Siforov, Quick 1031 and/or Pine Projects, for
any sums Shain may be compelled to pay as a result of any damages, judgment, or other awards
recovered by plaintiff or any other party against Shain.” (Id. at ¶ 13.) He also seeks costs and

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expenses, including attorneys’ fees from Weinstein, Gindi, Hager, Bushwick, Siforov, Quick 1031
and/or Pine Projects. (Id. at ¶ 14.)
Setting aside whether Gindi or Shain have pled viable claims for contribution or
indemnification, 2 their claims for reimbursement of any damages recovered against them by
Plaintiff are moot since neither face any potential liability from Plaintiff. They also have not
submitted any proposed joint pretrial order submissions indicating that they intend to pursue their
respective cross-claims for contribution or indemnification. If they intend to pursue such claims,
they must file a letter by July 29, 2016, so advising the Court and the remaining Defendants of
such intent. If such notice is given, they must promptly submit proposed joint pretrial order
submissions with respect to these cross-claims. Their time to do so is extended to August 5, 2016.
If they do not give notice that they intend to pursue their cross-claims, the Court will assume that
they consent to dismissal of their cross-claims and will also dismiss all claims against them.
Eli Weinstein and Pine Projects have asserted five cross-claims against Gindi in their
answer to the Second Amended Complaint, including claims for breach of contract, conversion,
negligence, and breach of fiduciary duty, in addition to claims for contribution and

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Under New York law, indemnification arises “only under an express contract of
indemnification, or where one defendant is held vicariously liable for the negligence of another.”
Resolution Trust Corp. v. Young, 925 F. Supp. 164, 169 (S.D.N.Y. 1996). Neither Gindi nor Shain
allege the existence of any contract. See Playwell Toy, Inc. v. Bureau Veritas Consumer Products
Servs., Inc., No. 03-cv-0704, 2007 WL 2892031, at *7-8 (W.D.N.Y. Sept. 28, 2007).
Moreover, Gindi and Shain are precluded under New York from seeking indemnification
if they are “partially at fault” or “responsible to any degree.” Monaghan v. SZS 33 Assoc., L.P.,
73 F.3d 1276, 1284 (2d Cir. 1996). Rather, they only have the remedy of contribution. Amusement
Indus., Inc. v. Stern, 693 F. Supp. 2d 319, 326-27 (S.D.N.Y. 2010) (citing Johnson City Cent.
School Dist. v. Fidelity & Deposit Co. of Md., 272 A.D.2d 818, 822 (3d Dep’t 2000)). However,
Gindi’s and Shain’s claims for contribution against Hagar and the Weinstein Defendants, who
have reached agreements to settle with Plaintiff, may be barred by operation of § 15-108(b), which
has been applied “to bar claims for contribution arising under common law fraud,” as in this case.
Minpeco, S.A. v. Conticommodity Services, Inc., 677 F. Supp. 151, 153 (1988) (citations omitted)
(holding that § 15-108(b) also bars claims sounding in fraud).
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indemnification. (See Dkt. 26 at ¶¶ 127-147.) Although the Weinstein Defendants have settled
their claims with Plaintiff, the Consent Judgment that they signed, (Dkt. 249), does not state that
Weinstein and Pine Projects are terminating their cross-claims, but instead, states that the Consent
Judgment “shall not have an estoppel effect with regard to any other civil or criminal proceeding.”
(Id.) By order filed June 7, 2016, Judge Go directed the Weinstein Defendants to advise by June
15, 2016 whether they intend to pursue their cross-claims. After they failed to respond, Judge Go
extended their time to file a report to June 27, 2016 and warned that “absent an indication that they
intend to proceed with these cross-claims, the Court will recommend dismissal of those claims
with prejudice for failure to prosecute, pursuant to Fed. R. Civ. P. 41.” (6/21/2016 Order.)
To date, the Weinstein Defendants have not filed any report nor have they filed any joint
pretrial order submissions with respect to their cross-claims. Given their failure to respond after
being warned, the Court dismisses their cross-claims.
CONCLUSION
For the reasons discussed above, Plaintiff’s claims against Defendants Siforov, Quick LLC,
Shain, and Gindi, and all cross-claims asserted by Defendants Eli Weinstein and Pine Projects, are
dismissed. If Defendants Shain and Gindi do not express their interest in pursuing their crossclaims by July 29, 2016 and file proposed joint pretrial order submissions by August 5, 2016, their
cross-claims will also be dismissed.

SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: July 19, 2016
Brooklyn, New York
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