Teves Realty, Inc. v. Bartley et al
MEMORANDUM AND ORDER denying 47 Teves Realty Inc.'s Motion for Summary Judgment: For the reasons stated in the attached Memorandum and Order,the Court dismisses this action under the Colorado River doctrine, and as such, denies Teves's motion for summary judgment (Doc. No. 47). The Clerk of Court is respectfully directed to enter judgment accordingly and close this case. Ordered by Judge Roslynn R. Mauskopf on 3/30/2017. (Mauskopf, Roslynn)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
TEVES REALTY, INC.,
MEMORANDUM AND ORDER
14-CV-3227 (RRM) (VMS)
- against ZADIE BARTLEY; THE CITY
OF NEW YORK; NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD; NEW
YORK CITY DEPARTMENT OF FINANCE; and
NEW YORK CITY PARKING VIOLATIONS
ROSLYNN R. MAUSKOPF, United States District Judge.
Plaintiff Teves Realty, Inc. (“Teves”) brings this action seeking to foreclose on a
mortgage that encumbers two properties located in Queens owned by defendant Zadie Bartley.1
(See Compl. (Doc. No. 1) at 1–2.)2 Teves has moved for summary judgment, (see Mot. Summ.
J. (Doc. No. 47-9)), and in opposition, Bartley seeks dismissal on a variety of grounds, including
the abstention doctrine set forth in Colorado River Water Cons. Dist. v. United States, 424 U.S.
800, 818 (1976), based on an earlier-filed and currently pending state court foreclosure action,
filed against Bartley on the very same mortgage. (See Opp’n to Mot. Summ. J. (Doc. No. 46) at
3–7.) For the reasons set forth below, the Court finds that abstention is warranted, and Bartley’s
motion to dismiss is granted.
The complaint names the following additional defendants, alleging that they “may  have an interest” in the
Properties: the City of New York, the New York City Environmental Control Board, and the New York City
Parking Violations Bureau (collectively, the “City Defendants”). (Compl. at 2.) The complaint also names Zadie
Bartley’s late husband, Enos Bartley. (Compl. at 1.) Mr. Bartley has passed away and, accordingly, was dismissed
as a defendant. (See 9/17/15 Minute Entry (Doc. No. 41).)
For ease of reference, citations to Court documents utilize the Electronic Case Filing System pagination.
On December 13, 2005, Zadie and Enos Bartley (the “Bartleys”) obtained a $140,000
loan from Nechadim Corp. (“Nechadim”), secured by a mortgage (the “Mortgage”) encumbering
the Properties. (See Mortgage Contract (Doc. No. 42-1) at 2–3.) Under the terms of the
Mortgage, the Bartleys were to make monthly interest payments at an annual rate of sixteen
percent, starting on January 13, 2006. (Id. at 1.) They were to return the unpaid balance, as well
as any interest owed, on June 13 of the same year. (Id.) Alternatively, the principal would
become due “on the happening of any default.” (Id.)
On August 27, 2009, Nechadim filed a foreclosure action against the Bartleys3 in the
Supreme Court of the State of New York, County of Queens, seeking to foreclose on the
Mortgage. (See Queens Compl. (Doc. No. 42-6) at 6.) On June 6, 2011, without opposition, the
state court granted summary judgment in favor of Nechadim. (See Queens Summ. J. Order
(Doc. No. 42-7).) According to Teves, on January 8, 2014, Nechadim assigned the Mortgage to
Teves, (see Assignment (Doc. No. 42-8)); according to the parties, the assignment was never
recorded.4 On May 23, 2014, Teves filed the instant federal action, invoking this Court’s
diversity jurisdiction under 28 U.S.C. § 1332.5
Bartley argues, inter alia, that the Court should dismiss the case pursuant the Colorado
River doctrine, which allows federal courts to abstain from exercising jurisdiction over certain
Also named as defendants, as is typical in foreclosure actions, are unnamed John Doe parties who are either in
possession of the premises being foreclosed or have an interest in the premises.
Bartley disputes the validity of the assignment. Whether the assignment is valid or not does not affect the outcome
of the Court’s analysis here.
As alleged, plaintiff is a corporation formed pursuant to the laws of the State of New Jersey and maintains its
principal place of business in Montclair New Jersey. Defendants are all citizens of New York, and amount due on
the loan exceeds the $75,000 amount in controversy requirement. See Compl. ¶¶ 2-5, 8.)
parallel state court proceedings. (See Colorado River, 424 U.S. at 818; see Opp’n to Mot.
Summ. J. (Doc. No. 46) at 3–4.)
Abstention Under Colorado River
Abstention is an “extraordinary and narrow” exception to a federal court’s duty to
exercise its jurisdiction. Colorado River, 424 U.S. at 813. The court’s task “is not to find some
substantial reason for the exercise of federal jurisdiction …; rather, the task is to ascertain
whether there exist exceptional circumstances … to justify the surrender of [federal court]
jurisdiction.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25-26
(1983) (internal quotation marks omitted). “[A] district court’s discretion to abstain must be
exercised within the narrow and specific limits prescribed by the particular abstention doctrine
involved.” Village of Westfield v. Welch’s, 170 F.1d 116, 125 (2d Cir. 1999) (internal citations
The test for determining whether abstention is appropriate under Colorado River requires
examination of six factors: “(1) assumption of jurisdiction over a res; (2) inconvenience of the
forum; (3) avoidance of piecemeal litigation; (4) order in which the actions were filed; (5) the
law that provides the rule of decision; and (6) protection of the federal plaintiff’s rights.” De
Cisneros v. Younger, 871 F.2d 305, 307 (2d Cir.1989). The test “does not rest on a mechanical
checklist, but on a careful balancing of the important factors as they apply in a given case, with
the balance heavily weighted in favor of the exercise of jurisdiction.” Id. The factors should “be
applied in a pragmatic, flexible manner with a view to the realities of the case at hand.” Moses
H. Cone Memorial Hosp., 460 U.S. at 21. “The weight to be given to any one factor may vary
greatly from case to case, depending on the particular setting of the case.” Id. at 16.
The Second Circuit has held that jurisdiction over the res can be dispositive when
assessing the Colorado River factors. See FDIC v. Four Star Holding Co., 178 F.3d 97, 102 (2d
Cir. 1999) (citing 40235 Washington St. Corp. v. Lusardi, 976 F.2d 587, 589 (9th Cir. 1992) (per
curiam) (holding that in an action concerning the disposition of property, “the first prong of the
Colorado River abstention test is dispositive ... [and] the forum first assuming custody of the
property at issue has exclusive jurisdiction to proceed”)).
The Supreme Court has recognized that “in cases where a court has custody of property,
that is, proceedings in rem and quasi in rem … the state or federal court having custody of such
property has exclusive jurisdiction to proceed.” Donovan v. City of Dallas, 377 U.S. 408, 412
(1964) (emphasis added); see also Colorado River, 424 U.S. at 818 (“It has been held . . . that the
court first assuming jurisdiction over property may exercise that jurisdiction to the exclusion of
other courts.”) Accordingly, the Second Circuit has held that because “[a] foreclosure action is
an in rem proceeding,” a court has “exclusive jurisdiction to proceed” where a foreclosure action
was first filed in that court, and a parallel proceeding subsequently was filed in another court.
FDIC, 178 F.3d at 102; see also Credit-Based Asset Servicing & Securitization, LLC v.
Lichtenfels, 658 F. Supp 2d 355 at 361, 365 (D. Conn. 2009) (dismissing a federal foreclosure
action on Colorado River grounds where a state court foreclosure action was commenced one
and one-half years before the federal complaint was filed); E. Chemerinsky Federal Jurisdiction
§ 14.2 (5th ed. 2007) (noting that while the traditional rule is that “the existence of a case in one
court does not defeat jurisdiction in another . . . . [t]here is one firmly entrenched exception to
this rule: in actions concerning real property, whichever court has jurisdiction first is entitled to
exclusive jurisdiction over the matter ….”). Under New York law, a foreclosure action is an in
rem proceeding. See FDIC, 178 F.3d at 102, citing Bowery Sav. Bank v. Meadowdale Co., 64
N.Y.S.2d 22, 23 (Sup.Ct.1942); cf. Chapin v. Posner, 299 N.Y. 31, 38, 85 N.E.2d 172 (1949)
(referring to mortgage foreclosure action as “one in rem”). See also N.Y.C.P.L.R. 314, comment
314:3 (McKinney 1990) (“[a]n action to define title or other interest in property is in rem ”); 55
Am.Jur.2d Mortgages § 630 (1996) (“[a]n action to foreclose a mortgage has been characterized
as an action strictly in rem and quasi in rem ”) (footnotes omitted).
In this case, the state court exercised jurisdiction over the res long before Teves filed the
instant action on May 23, 2014. It is undisputed that both the state court action and the instant
action are garden variety foreclosure proceedings involving the very same properties, the very
same mortgage, and the very same borrowers. (See Opp’n to Mot. Summ. J. at 3; Reply to Mot.
Summ. J. at 3–4.) An order granting summary judgment without opposition in favor of
Nechadim and against the Bartleys and appointing a referee was filed on July 16, 2015. (See
7/16/15 Order (Doc. No. 43-1) at 5–8.) Even today, the Queens court docket indicates that the
“Case Status” is “Active,” and it appears that in a recent filing,, the borrowers seek to have the
summary judgment order foreclosing on the property set aside. See Nechadim Corp. v. Bartley,
No. 23283/2009 (N.Y. Sup. Ct.).6 Thus, the state court has been actively adjudicating all rights
and interests in the res for a lengthy period of time. “[O]nce a state court has taken jurisdiction
of the res that is the subject of a state court in rem proceeding, a federal court cannot also
exercise jurisdiction of the res.” Oneida Indian Nation of New York v. Madison County, 401
F.Supp.2d 219, 226 (N.D.N.Y. 2005) citing Donovan, 377 U.S. at 412.
These principles are particularly compelling in this case as Teves, the plaintiff in this
New York state court dockets are available through the New York State Unified Court System’s eTrack service at:
https://iapps.courts.state.ny.us/webcivil/FCASSearch (last viewed Mar. 20, 2017). Although the parties have not
furnished a current copy of the Queens court docket, when considering whether to dismiss a case, the Court may
consult documents filed in other courts, as well as other public records. See Glob. Network Commc’ns, Inc. v. City
of N.Y., 458 F.3d 150, 157 (2d Cir. 2006).
action, claims to be the successor in interest to Nechadim, the plaintiff in the state court action.7
“[A]n assignee of a mortgage can continue an action in the name of the original mortgagee, even
in the absence of a formal substitution.” Central Fed. Sav., F.S.B v. 405 West 45th St., Inc., 662
N.Y.S.2d 489 (N.Y. App. Div. 1st Dep’t 1997) (citing N.Y.C.P.L.R. 1018). Thus, if Teves truly
holds an assignment of Nechadim’s mortgage, it can continue to press its predecessor’s claims in
the state action. There is complete identity of parties, and the issues and relief are the same in
both the state and federal actions. See Nat’l Union Fire Ins. Co. of Pittsburg, Pa. v. Karp, 108
F.3d 17, 22 (2d Cir. 1977). If Teves’s rights regarding the property are in issue, those rights are
properly adjudicated in the ongoing state court action as is the case with any party with an
interest in the res.
Moreover, further analysis of the Colorado River factors strongly favor abstention.8
Perhaps most important among them in this case, for the reasons just articulated, is that
abstention will avoid piecemeal litigation of claims involving the same mortgage, borrowers and
properties, particularly where the state action was first-filed and has been active and ongoing for
so many years. Moreover, if Teves is, indeed, the successor in interest to Nechadim, Teves, by
filing this action, seeks to litigate in this court the very issue already decided in its favor by the
state court. See De Cisneros, 871 F.2d at 307. Thus, allowing both cases to proceed may very
well result, at best, in duplicative and wasted effort. At worst, doing so could easily lead to
Indeed, both Teves and Nechadim are represented by Solomon Rosengarten, Esq.
The inconvenience of the federal forum refers to the geographical relation of the respective courthouses. See
Arkwright-Boston Mfrs. Mut. Ins. Co. v. City of New York, 762 F.2d 205, 210-211 (2d Cir. 1985) (finding no
inconvenience when the state and federal courthouses were next door to each other). In the ordinary case, this
factor would favor slightly Teves’s choice of the federal forum, as the Eastern District of New York is slightly
closer to Montclair, New Jersey than the Queens Supreme Court; nonetheless, it is clearly outweighed by the other
factors. However, given the circumstances of this case, it is hard to see how slightly more favorable geography
benefits Teves, particularly where Teves, who claims to be an assignee of Nechadim, has decided to file this lawsuit
rather than assert its right to benefit from Nechadim’s award of summary judgment in the state court action.
inconsistent decisions. In addition, foreclosure determinations are governed by state law, and no
federal interest is implicated. “Although absence of federal issues does not require the surrender
of jurisdiction, it does favor abstention where ‘the bulk of the litigation would necessarily
revolve around the state-law … rights of … parties.’” General Reins. Corp. v. Ciba-Geigy
Corp., 853 F.2d 78, 82 (2d Cir. 1988). Moreover, no concerns have been raised that the state
court cannot adequately protect Teves’s rights.
Thus, considering all of these factors together, and notwithstanding the heavy
presumption in favor of retaining jurisdiction, the Court finds that abstention under the Colorado
River doctrine is warranted.
For the reasons stated in this Memorandum and Order, the Court dismisses this action
under the Colorado River doctrine, and as such, denies Teves’s motion for summary judgment
(Doc. No. 47). The Clerk of Court is respectfully directed to enter judgment accordingly and
close this case.
Roslynn R. Mauskopf
Dated: Brooklyn, New York
March 30, 2017
ROSLYNN R. MAUSKOPF
United States District Judge
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