Empire United Lines Co., Inc. v. Presniakovas et al

Filing 34

ORDER granting 10 Motion to Dismiss for Failure to State a Claim -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, Plaintiff's motion to voluntarily dismiss its claims is granted; Defendants' counterclaims are dismissed for failing to state a claim; and Defendants' requests for leave to replead and attorneys' fees are denied. The parties are admonished that the pursuit of any further non-meritorious litigation may result in the imposition of sanctions. The Clerk of the Court is directed to close this case. SO ORDERED by Chief Judge Dora Lizette Irizarry on 9/22/2017. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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EMPIRE UNITED LINES CO., INC.,
:
:
Plaintiff,
:
:
MEMORANDUM & ORDER
-against:
15-CV-557 (DLI) (RER)
:
ANDREJUS PRESNIAKOVAS and BALTIC
:
AUTO SHIPPING, INC.,
:
:
Defendants.
:
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DORA L. IRIZARRY, Chief United States District Judge:
Plaintiff Empire United Lines Co. Inc. (“Empire” or “Plaintiff”) filed this diversity action
against Andrejus Presniakovas (“Presniakovas”) and Baltic Auto Shipping, Inc. (“Baltic”)
(collectively, “Defendants”) on February 4, 2015, and advanced three causes of action: (1) breach
of contract; (2) fraud in the inducement to contract; and (3) unjust enrichment. See Complaint
(“Compl.”), Dkt. Entry No. 1. Defendants answered and brought two counterclaims against
Empire: (1) fraud in the inducement to contract; and (2) civil conspiracy. See Answer &
Counterclaims (“Answer”), Dkt. Entry No. 8; see also Def. Mem. of Law in Opp. to Pl. Mot. to
Strike Aff. Defs. & Dism. Countercls. (“Strike Opp.”), Dkt. Entry No. 25 at 16-19 (characterizing
the counterclaims contained in the Answer).
There are three motions presently before the Court. The first motion, filed by Empire on
March 19, 2015, sought to strike certain affirmative defenses under Federal Rule of Civil
Procedure 12(f), dismiss both counterclaims under Rule 12(b)(6), and, in the alternative, secure a
more definite statement as to the counterclaims under Rule 12(e). See Mem. of Law in Supp. of
Mot. to Strike Aff. Defs. & Dism. Countercls. (“Strike Mot.”), Dkt. Entry No. 12. Defendants
opposed. See Strike Opp. Empire did not file a reply brief. In the second motion, filed on May 18,

2015, Empire moved to voluntarily dismiss this action, without prejudice, pursuant to Federal Rule
of Civil Procedure 41(a)(2). See Aff. of Jon Werner in Supp. of Mot. for Vol. Dismiss. (“Dism.
Mot.”), Dkt. Entry No. 18. Defendants opposed this motion, requested leave to replead the
counterclaims, and “cross-moved” 1 for attorneys’ fees. See Def. Mem. of Law in Opp. to Pl. Mot.
for Vol. Dismiss. (“Dism. Opp.”), Dkt. Entry No. 20. Empire did not file any reply papers.
For the reasons set forth below, Plaintiff’s motion to voluntarily dismiss its claims is
granted; the counterclaims are dismissed; Plaintiff’s motions to strike affirmative defenses and for
a more definite statement are denied as moot; Defendants’ requests for leave to replead and
attorneys’ fees are denied; and this proceeding is terminated.
BACKGROUND
I.

FACTUAL ALLEGATIONS IN PLAINTIFF’S COMPLAINT
Empire is a maritime non-vessel common carrier that purchases space on commercial ships

and resells that space to its customers. Compl. at ¶ 6. Presniakovas is the president of Baltic which,
in turn, regularly purchased space from Empire in order to export vehicles from the United States.
Id. at ¶¶ 3, 7-8. Over the course of approximately two years, from 2009 to 2011, Empire arranged
to transport hundreds of Baltic’s shipments. Id. at ¶ 8.
In October 2010, Presniakovas personally met with Michael Hitrinov (“Hitrinov”),
Empire’s president, at a café in Brooklyn, New York, to secure a loan. 2 Id. at ¶ 9-10. Under the
terms of the Loan Agreement (“Agreement”) prepared by Presniakovas, Empire would lend him
$200,000.00, for the term of one month, at a monthly interest rate of one percent. Id. at ¶¶ 11-12;

1

Defendants did not file a notice of motion as to their request for attorneys’ fees.

2

The parties dispute the characterization of the loan. Plaintiff alleges that the loan was personal and meant
to assist Presniakovas in purchasing a home. See Compl. at ¶ 10. Defendants allege that the loan was meant to “assist[]
Baltic with its cash flow” for November 2010. Answer at p. 7. Given the procedural posture of this case, the purpose
of the transaction is inconsequential.

2

See also Loan Agreement (“Pl. Ex. A”), Dkt. Entry No. 1-1. The collateral offered for the loan was
the cargo owned by Baltic (i.e., cars and shipping containers), but physically possessed by Empire
at the time of contract. See Compl. at ¶ 13; Pl. Ex. A. Empire transmitted the funds to Baltic via a
wire transfer on November 3, 2010. Compl. at ¶ 17; See also Wire Transfer Confirm. (“Pl. Ex.
B”), Dkt. Entry No. 1-2.
After the parties engaged in some limited discovery, Empire “discovered that the principal
amount of the loan, had in fact been repaid,” determined that it no longer had any viable claims,
and moved to voluntarily dismiss this proceeding without prejudice. Dism. Mot. at ¶ 9.
II.

FACTUAL ALLEGATIONS IN DEFENDANTS’ COUNTERCLAIMS
According to Defendants, Empire offered a $200,000.00 loan to Baltic for the purpose of

assisting with the latter’s “cash flow” in November 2010. Answer at p. 7. Baltic relied upon this
representation and accepted the loan. Id. However, Defendants allege that Empire’s “true purpose”
was not to assist Baltic, but rather, to try and collect the debt owed on the loan twice. Id. This
litigation is proof of the alleged plot. Id. The scheme was a common objective pursued by Empire,
Hitrinov, and an Empire employee, Yuliya Mikhalkevich. Id. at p. 8.
III.

THE PARTIES’ HISTORY OF LITIGATION
The history of litigation between the parties in this case tells the story of a business

relationship gone sour. In the years that have passed between the loan being made and this case
being filed, the parties have become litigious adversaries. In 2011, Baltic brought suit against
Hitrinov and Empire in the United States District Court for the District of New Jersey (“DNJ”) for,
inter alia, breach of contract, breach of fiduciary duty, conversion, and civil conspiracy (“2011
Action”). See Baltic Auto Shipping, Inc. v. Hitrinov, No. 11-CV-6908 (FSH) (PS), Dkt. Entry No.

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1 (D.N.J.). That case was dismissed by stipulation between the parties two weeks after the action
was filed. Id., Dkt. Entry No. 4.
On November 28, 2014, Baltic initiated another action against Plaintiff before the Federal
Maritime Commission (“FMC”) claiming that Empire had violated the Shipping Act of 1984
(“FMC Action”). See Baltic Auto Shipping, Inc. v. Hitrinov, F.M.C. No. 14-16, Doc. Entry No. 1.
Shortly after the FMC Action was filed, Plaintiff brought suit in the DNJ, claiming that Baltic
violated the terms of the 2011 Action’s settlement agreement by filing the FMC Action (“2015
Action”). See Empire United Lines Co., Inc. v. Baltic Auto Shipping, Inc., No. 15-CV-355 (CCC)
(MF), Dkt. Entry No. 1 (D.N.J.). The 2015 Action was terminated by settlement in June 2016. Id.,
Dkt. Entry No. 72. The FMC Action was dismissed, in part, by an April 21, 2017 decision that
granted Baltic’s request to withdraw its exceptions to the FMC and discontinue the action. See
Baltic Auto Shipping, Inc., F.M.C. No. 14-16, Doc. Entry No. 94. The only remaining question
pending before the FMC is whether attorneys’ fees will be awarded. Id.
So far as the Court is aware, this litigation is the only other case between the parties.
DISCUSSION
I.

PLAINTIFF’S MOTION TO VOLUNTARILY DISMISS ITS COMPLAINT WITHOUT PREJUDICE
“Once a defendant has answered a complaint, a plaintiff may no longer dismiss [its] suit as

of right.” D’Alto v. Dahan Cal., Inc., 100 F.3d 281, 283 (2d Cir. 1996). Rather, at this juncture,
the decision as to whether Empire may dismiss its action lies within the discretion of the Court.
See Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990). In pertinent part, Federal Rule of
Civil Procedure 41(a)(2) states:
Except as provided in Rule 41(a)(1), an 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
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be dismissed over the defendant's objection only if the counterclaim
can remain pending for independent adjudication.
Of course, when counterclaims are compulsory, as they are here, the Court may retain jurisdiction
over the counterclaims, even if the plaintiff’s claims are dismissed. See Ascentive, LLC v. Opinion
Corp., No. 10-CV-4433 (ILG) (SMG), 2012 WL 1569573, at *3 (E.D.N.Y. May 3, 2012) (internal
citations omitted). As such, the counterclaims could remain for independent adjudication.
In applying Rule 41(a)(2), the Second Circuit Court of Appeals has noted the existence of
two “lines of authority” as to when “dismissal without prejudice might be improper.” Kwan v.
Schlein, 634 F.3d 224, 230 (2d Cir. 2011) (internal citations and quotation marks omitted). Under
the first line of cases, “dismissal would be improper if the defendant would suffer some plain legal
prejudice other than the mere prospect of a second lawsuit.” Id. (internal citations and quotation
marks omitted). Here, dismissal under this line of authority would be proper, as Defendants make
no argument about prejudice aside from citing the possibility that they might be subject to a
duplicative action at some point in the future. See Dism. Opp. at 2-3.
As for the second line of cases, the Court weighs the “Zagano factors,” which are:
(1) the plaintiff's diligence in bringing the motion, (2) any undue
vexatiousness on the plaintiff's part, (3) the extent to which the suit
has progressed, including the defendant's efforts and expense in
preparation for trial, (4) the duplicative expense of relitigation, and
(5) the adequacy of the plaintiff's explanation for the need to
dismiss.
Id. at 230 (quoting Zagano, 900 F.2d at 14). The majority of these factors favor Plaintiff.
Empire diligently brought its motion to dismiss. “When assessing a plaintiff’s diligence,
courts consider the length of time the action has been pending.” In re Bank of Am. Mortg. Serv’g
S’holder Derivative Litig., No. 11-CV-2475 (WHP), 2012 WL 1506271, at *2 (S.D.N.Y. Apr. 4,
2012) (internal citations and quotation marks omitted). Here, Plaintiff’s motion was made little

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more than three months after the action was filed, and approximately one month after it determined
its claims were meritless. See Dism. Mot. at ¶¶ 8-9. In acting so efficiently and quickly to terminate
its claims, Plaintiff was diligent. See Kwan, 634 F.3d at 231 (defendants were diligent in moving
to dismiss their counterclaims three months after plaintiff’s claims were dismissed); Catanzano v.
Wing, 277 F.3d 99, 110 (2d Cir. 2001) (finding that “plaintiffs were not dilatory in bringing the
motion but did so in order to facilitate an end of litigation”).
The vexatiousness is neutral as to Plaintiff’s motion. “In cases where there is no evidence
to suggest that the case was brought to harass the defendant, or that a plaintiff had ill-motive,
dismissal without prejudice is favored.” Staten Is. Terminal LLC v. Elberg, No. 11-CV-3262
(RRM) (LB), 2012 WL 1887126, at *4 (E.D.N.Y. May 23, 2012) (internal citations and quotation
marks omitted). Although the case might have been avoided had Plaintiff been more cautious in
its review of its own bank records before filing suit, the Court is not convinced that Plaintiff’s
motive in bringing suit was improper. Furthermore, while Defendants submit copies of messages
between counsel concerning other proceedings in other forums, there is nothing in those messages
that necessarily indicates that this case was brought in bad faith. See Aff. of Marcus A. Nussbaum
in Opp. to Pl. Mot. for Vol. Dism. (“Nussbaum Aff.”), Dkt. Entry No. 20-1 at pp. 11-16, 20-21,
36-37. If anything, Defendants’ own submissions reveal that they share responsibility for the very
existence of this litigation. See discussion infra.
The three remaining factors favor granting Plaintiff’s motion. With respect to expense of
the suit, at the time of the motion, there is “no indication that the parties have expended efforts or
expense in preparing for trial as there is no pre-trial order, no trial date has been set, and,” no
depositions had been held. Fox Indus., Inc. v. Gurovich, No. 03-CV-5166 (SJF) (WDW), 2009
WL 393949, at *5 (E.D.N.Y. Feb. 17, 2009). In fact, Defendants take the position that discovery

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is not yet complete. 3 See Def. Nov. 23, 2015 Ltr., Dkt. Entry No. 27. The Court also finds that
there is no serious prospect of duplicating litigation expenses, as there is little chance that Empire
could relitigate its claims. Plaintiff has admitted that the loan has been repaid, but for a “modest
amount” that it no longer wishes to pursue. Dism. Mot. at ¶ 9. Assuming that Plaintiff could find
a way to retract that representation, it also would now contend with the applicable statutes of
limitations. See N.Y. C.P.L.R. § 213. Furthermore, even if Plaintiff could overcome its
representation and the hurdles potentially created by the statutes of limitations, it appears that the
effort expended in this litigation easily could be applied in any future proceeding concerning the
existence and repayment of the loan. See Steward v. Womack Material Handling Sys., Inc., No.
06-CV-1648 (LDW) (ETB), 2009 WL 4891808, at *4 (E.D.N.Y. Dec. 11, 2009).
Based upon the foregoing, Plaintiff’s request is meritorious under either “line of authority.”
Accordingly, Empire’s motion for voluntary dismissal pursuant to Rule 41(a)(2) is granted.
Moreover, as a result of the voluntary dismissal, Plaintiff’s motion to strike certain affirmative
defenses to the claims is denied as moot.
II.

PLAINTIFF’S MOTION TO DISMISS DEFENDANTS’ COUNTERCLAIMS
“In deciding a motion to dismiss a counterclaim for failure to state a claim pursuant to Rule

12(b)(6) of the Federal Rules of Civil Procedure, the Court must accept the allegations in the
counterclaim as true and draw all reasonable inferences in the counterplaintiff's favor.” Mercer
Capital, Ltd. v. U.S. Dry Cleaning Corp., No. 08-CV-5763 (LTS) (JCF), 2009 WL 2163598, at *3
(S.D.N.Y. July 21, 2009) (internal citations omitted). “To survive a motion to dismiss, [the
counterclaim] must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. v.

3

Pursuant to the Case Management Plan, all discovery was to be completed by September 25, 2015. See Case
Mgmt. Plan, Dkt. Entry No. 19.

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Twombly, 550 U.S. 544, 570 (2007)). “[W]here the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint . . . has not shown . . . that the
pleader is entitled to relief.” Ashcroft, 556 U.S. at 679 (citations and internal quotations omitted).
A counterclaim does not “suffice if it tenders ‘naked assertions’ devoid of ‘further factual
enhancement.’” Id. (quoting Twombly, 550 U.S. at 557). The pleader’s “obligation to provide the
grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal
citations and quotation marks omitted).
A. Counterclaim One: Fraudulent Inducement to Contract
In order to state a claim for fraudulent inducement to contract under New York State law,
one must allege “(1) a representation of material fact, (2) which was untrue, (3) which was known
to be untrue or made with reckless disregard for the truth, (4) which was offered to deceive another
or induce him to act, and (5) which that other party relied on to its injury. Aetna Cas. & Surety Co.
v. Aniero Concrete Co., Inc., 404 F.3d 566, 580 (2d Cir. 2005) (citing Helmsley-Spear v.
Westdeutsche Landesbank, 692 F. Supp. 194, 203 (S.D.N.Y. 1988)). The misrepresentation upon
which the complainant allegedly relied must concern a then-present fact, not future intent, and
must be “collateral or extraneous” to the terms of the enforceable agreement between the parties.
See Trionic Assocs., Inc. v. Harris Corp., 27 F. Supp.2d 175, 182-83 (E.D.N.Y. 1998) (internal
citations omitted).
In addition to meeting the elements for stating the claim under New York State law,
pursuing a claim for fraudulent inducement in this forum means that it also must meet the
heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Aetna Cas. & Surety
Co., 404 F.3d at 580 (citing Luce v. Edelstein, 802 F.2d 49, 54 (2d Cir.1986)). Under Rule 9(b), a
claim must “(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the
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speaker, (3) state where and when the statements were made, and (4) explain why the statements
were fraudulent.” Kardovich v. Pfizer, Inc., 97 F. Supp.3d 131, 136-37 (E.D.N.Y. 2015) (quoting
Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)).
Defendants allege Empire’s president claimed that the purpose of the loan was to “assist[]
Baltic with its cash flow for the month of November of 2010.” Answer at p. 7. Without explaining
what the money was actually used for, Defendants claim that they relied upon this stated purpose.
Id. Yet, despite this claim, Defendants allege that, in actuality, the “true purpose in offering the
loan was to attempt to collect twice for the same amount,” as evidenced by the present suit. Id.
Without addressing the sufficiency of the factual allegations, even if the Court accepts the
allegation that the grantor possessed a furtive intent to try and collect twice the amount owed on
the loan, Defendants’ counterclaim for fraudulent inducement to contract must be dismissed
because it seeks redress for an alleged bad intent, not for a misrepresentation of present material
fact. See Mexican Hass Avocado Importers Assoc. v. Preston/Tully Grp. Inc., 838 F. Supp.2d 89,
98 (E.D.N.Y. 2012) (“Insincere promises of future performance under a contract . . . are not
collateral or extraneous and are insufficient to allege fraud.”) (internal citations omitted); LaRoss
Partners, LLC v. Contact 911 Inc., 874 F. Supp.2d 147, 164 (E.D.N.Y. 2012) (“[A]n insincere
promise of future performance under a contract . . . is insufficient to allege fraud.”) (internal
citations omitted); Zinter Handling, Inc. v. Gen. Elec. Co., No. 04-CV-500 (GLS) (DRH), 2005
WL 1843282, at *6 (N.D.N.Y. Aug. 2, 2005) (allegation that the party entered into a contract
without the intent to perform does not support a claim for fraud) (internal citations omitted);
Trionic Assocs., Inc., 27 F. Supp.2d at 182-83 (internal citations omitted); Hudson Optical Corp.
v. Cabot Safety Corp., 971 F. Supp. 108, 109 (E.D.N.Y. 1997) (internal citations omitted).

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B. Counterclaim Two: Civil Conspiracy
As for the remaining counterclaim, “a plaintiff must demonstrate the primary tort, plus the
following four elements: (1) an agreement between two or more parties; (2) an overt act in
furtherance of the agreement; (3) the parties’ intentional participation in the furtherance of a plan
or purpose; and (4) resulting damage or injury.” NorGuard Ins. Co. v. Lopez, No. 15-CV-5032
(DRH) (AYS), 2017 WL 354209, at *14 (E.D.N.Y. Jan. 24, 2017) (internal citations and quotation
marks omitted). In stating a claim of civil conspiracy under New York State law, while a plaintiff
need not meet the “rigorous requirements of Rule 9(b),” Medtech Prods. Inc. v. Ranir, LLC, 596
F. Supp.2d 778, 794 (S.D.N.Y. 2008) (internal citations omitted), it nevertheless must provide
“specific allegations, including the times, facts, and circumstances of the alleged conspiracy. Am.
Bldg. Maint. Co. of New York v. ACME Prop. Servs., Inc., 515 F. Supp.2d 298, 318 (N.D.N.Y.
2007) (internal citations omitted).
Although it was unclear on the face of the pleading, Defendants argue that the predicate
tort underlying the claim for civil conspiracy is fraudulent inducement to contract. See Strike Opp.
at 18-19. Even assuming that the pleading clearly identifies fraudulent inducement to contract as
the initial tort, the counterclaim for civil conspiracy must be dismissed because Defendants fail to
state a claim for fraudulent inducement to contract. See McCall v. Chesapeake Energy Corp., 509
F. App’x 62, 65 (2d Cir. 2013) (explaining that since “the claims that could have provided a basis
for the civil conspiracy claim were dismissed, [the civil conspiracy claim] must also fail as a matter
of law”); Alexander & Alexander of N.Y., Inc. v. Fritzen, 68 N.Y.2d 968, 969 (1986) (“Allegations
of conspiracy are permitted only to connect the actions of separate defendants with an otherwise
actionable tort.”) (internal citations omitted). Consequently, Plaintiff’s motion for a more definite
statement as to the counterclaims is denied as moot.

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III.

DEFENDANTS’ MOTION FOR LEAVE TO REPLEAD
In passing, Defendants ask that, “in the event the Court finds the . . . pleading defective as

to any cause of action against plaintiff,” they be granted leave to replead their counterclaims. Strike
Opp. at 19-20. According to Federal Rule of Civil Procedure 15(a)(2), “The court should freely
give leave when justice so requires.” However, “the district court has discretion whether or not to
grant leave to amend, and its discretion is not subject to review on appeal except for abuse of
discretion.” Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993) (internal citations
and quotation marks omitted). “Where it appears that granting leave to amend is unlikely to be
productive . . . it is not an abuse of discretion to deny leave to amend.” Id. (internal citations
omitted).
In making this request, Defendants solely rely on the Second Circuit Court of Appeals’
decision in Official Publ’ns, Inc. v. Kable News Co., 884 F.2d 664 (2d Cir. 1989). See Strike Opp.
at 19-20. In that case, the Circuit reversed that portion of the district court’s opinion that denied
the plaintiff’s request for leave to replead its RICO claim. Kable News Co., 884 F.2d at 668-69. In
examining the complaint, the Circuit noted that “[a] reading of the amended complaint and
accompanying submissions leads us to conclude that plaintiff’s RICO claim is at least potentially
viable.” Id. at 668. As for the application of Rule 15(a), the Circuit observed that, when claims are
dismissed as deficient under Rule 9(b), as they were in that case, “leave to amend is usually
afforded.” Id. at 669 (internal citations and quotation marks omitted). Defendants’ reliance on this
case is flawed, as the facts in Kable News Co. are readily distinguishable from the situation
currently before this Court for two reasons. First, Defendants’ counterclaims were dismissed for
fatal flaws in the underlying theories of liability, not the sufficiency of the factual allegations. See

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discussion supra. Second, and perhaps more importantly, given the basis for dismissal of the
counterclaims, the Court does not believe that either of them are “at least potentially viable.”
As for the application of Federal Rule of Civil Procedure 15(a)(2), Defendants have not
given any indication as to what would change in an amended pleading or how any additional
information or allegations would overcome the infirmities of their counterclaims. Indeed,
Defendants did not even file a proposed amended pleading for the Court’s review. See Rosendale
v. Iuliano, 67 F. App’x 10, 14 (2d Cir. 2003) (“Without a proposed pleading, the district court
could not determine whether [the plaintiff’s] claim could survive a motion to dismiss, whether it
was futile, or whether it was frivolous.”) (internal citation omitted); State Trading Corp. of India,
Ltd. v. Assuranceforeningen Skuld, 921 F.2d 409, 418 (2d Cir. 1990) (failing to submit a proposed
amended pleading “indicates lack of diligence and good faith”) (internal citation omitted).
Since Defendants have failed to submit a proposed pleading for the Court’s review or
provide any indication that additional facts or repleading would overcome the above-referenced
failings, the request for leave to replead the counterclaims is denied.
IV.

DEFENDANTS’ MOTION FOR ATTORNEY’S FEES
Finally, in a slipshod application, without supplying any documentation to substantiate

their claim, Defendants wedge a request for an award of “well over $35,000 [spent] in defending
the case” into their opposition papers. See Dism. Opp. at 8-9. The failure to provide any
documentation, alone, demands that the request be denied. See New York State Ass’n for Retarded
Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983) (“Hereafter, any attorney . . . who
applies for court-ordered compensation in this Circuit for work done . . . must document the
application with contemporaneous time records.”). However, even if Defendants had submitted
the appropriate records, this Court still would not be inclined to grant the application. Without

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minimizing any conduct on Plaintiff’s part, looking solely at Defendants’ behavior, the Court finds
that awarding attorneys’ fees to Defendants would be neither proper nor equitable.
In addition to dismissing the counterclaims for failure to state a claim and denying the
incomplete request for leave to replead those counterclaims, the Court previously denied
Defendants’ two frivolous motions for sanctions under Federal Rule of Civil Procedure 11. See
Aug. 30, 2016 Min. Entry. Beyond these failings, one factual item is particularly noteworthy:
Defendants’ counsel admits that he received an e-mail from Plaintiff’s counsel asking for
“confirmation that the loan had been repaid.” Dism. Opp. at 5. Indeed, the e-mails submitted by
Defendants bear out that Defendants’ counsel was asked twice, on December 19, 2014 and on
January 12, 2015, for documentation proving that the subject loan was repaid. See Nussbaum Aff.
at p. 23. In response to the messages, in the words of defense counsel, he affirmatively “ignored”
those requests. Nussbaum Aff. at p. 3; See also Dism. Opp. at 5. Instead of staving off needless
litigation between litigious parties, Defendants’ counsel chose to risk it by ignoring the messages.
In the circumstances of this case, the Court finds that both sides of the dispute own this
quagmire, and neither shall be free of the consequences of needlessly taking combative postures
and failing to act reasonably. The motion for attorneys’ fees is denied and each party is to bear its
own costs.

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CONCLUSION
For the reasons stated above, Empire’s motion to voluntarily dismiss its claims is granted,
Defendants’ counterclaims are dismissed for failing to state a claim, and Defendants’ requests for
leave to replead and attorneys’ fees are denied. The parties are admonished that the pursuit of any
further non-meritorious litigation may result in sanctions.

SO ORDERED
Dated: Brooklyn, New York
September 22, 2017
/s/
DORA L. IRIZARRY
Chief Judge

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