Mallek v. Allstate Indemnity Company et al

Filing 36

ORDER ADOPTING REPORT AND RECOMMENDATION. For the reasons set forth in the attached Memorandum and Order, the court adopts Magistrate Judge Bulsara's Report and Recommendation in its entirety. Plaintiff's Motion to Amend the Complaint, file d as part of her Motion to Amend and Objections to the Report and Recommendation 27 is also denied for the reasons set forth in the attached Memorandum and Order. The Clerk of Court is respectfully directed to enter judgment in favor of defendants, and to serve a copy of the order and an appeals packet on pro se plaintiff. Ordered by Judge Kiyo A. Matsumoto on 7/31/2018. (Abugo, Uzezi)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------X
EVA MALLEK,
MEMORANDUM & ORDER
ADOPTING R&R
& DENYING MOTION
TO AMEND

Plaintiff,
-againstALLSTATE INDEMNITY COMPANY,
KEVIN SHAEFER,
JOHN DOE,
JANE DOE,

17-CV-5949(KAM)

Defendants.
--------------------------------------X
KIYO A. MATSUMOTO, United States District Judge:
Presently before the court is the Report and
Recommendation of United States Magistrate Judge Sanket J.
Bulsara, filed on March 12, 2018, recommending that plaintiff’s
Motion to Remand filed October 20, 2017, plaintiff’s duplicative
Motion to Remand filed February 13, 2018, and plaintiff’s Motion
for Sanctions filed February 21, 2018 be denied. (Report and
Recommendation (“R&R”), ECF No. 26 at 1; Motion to Remand, ECF
No. 9; Second Motion to Remand, ECF No. 21; Motion for
Sanctions, ECF No. 22.) 1

On March 26, 2018, the plaintiff filed

a joint Motion to Amend and Objections to the R&R which the
Court interprets as a timely objection to the R&R and Motion to
Amend.

(Plaintiff’s Motion to Amend and Objections to the

Citations to page numbers in documents filed on the court
docket using the Electronic Court Filing System (“ECF”) refer to
the page numbers assigned by ECF.
1

1

Report and Recommendation, ECF No. 27.)

Defendant Allstate

Indemnity Company (“Allstate”) did not object to the R&R, but
responded to plaintiff’s objections to the R&R and opposed the
Motion to Amend.

(Defendant’s Memorandum in Opposition, ECF No.

29; Defendant’s Opposition to Plaintiff’s Motion to Amend (ECF
No. 27), ECF No. 30.)

Familiarity with the factual background

of this action, set forth in detail in the R&R, is assumed.
(See ECF No. 26 at 1–3.)
Legal Standard
A. Objections to the Magistrate Judge’s Report and
Recommendation
A district court “may accept, reject, or modify, in
whole or in part, the findings and recommendations made by the
magistrate judge” in a report and recommendation.
636(b)(1)(C).

28 U.S.C. §

The court must review the portions of the R&R to

which timely and proper objections are made de novo.
§ 636(b)(1)(C); see Fed. R. Civ. P. 72(b)(3).

28 U.S.C.

Objections to a

report and recommendation “must point out the specific portions
of the report and recommendation to which [that party]
object[s].”

U.S. Flour Corp. v. Certified Bakery. Inc., No. 10–

CV–2522 (JS), 2012 WL 728227, at *2 (E.D.N.Y. Mar. 6, 2012); see
also Fed.R.Civ.P. 72(b)(2) (“[A] party may serve and file
specific written objections to the [R & R].”).

However, if a

party “makes only conclusory or general objections, or simply
2

reiterates his original arguments, the Court reviews the Report
and Recommendation only for clear error.”

Friedman v. Self Help

Cmty. Servs., No. 11-CV-3210, 2015 WL 1246538, at *3 (E.D.N.Y.
Mar. 17, 2015), aff'd sub nom. Friedman v. Self Help Cmty.
Servs., Inc., 647 F. App'x 44 (2d Cir. 2016); see also
Manigaulte v. C.W. Post of Long Island Univ., 659 F. Supp. 2d
367, 372 (E.D.N.Y. 2009); Baptichon v. Nev. State Bank, 304 F.
Supp. 2d 451, 453 (E.D.N.Y. 2004), aff’d, 125 F. App’x 374 (2d
Cir. 2005); Fortgang v. Pereiras Architects Ubiquitous LLC, No.
16-CV-3754, 2018 WL 1505564, at *2 (E.D.N.Y. Mar. 27, 2018);
Frankel v. City of New York, No. 06-CV-5450, 2009 WL 465645, at
*2 (S.D.N.Y. Feb.25, 2009); Fed. R. Civ. P. 72(b).
Additionally, “even in a de novo review of a party's
specific objections, the court ordinarily will not consider
arguments, case law and/or evidentiary material which could have
been but [were] not, presented to the magistrate judge in the
first instance.”

U.S. Flour Corp., 2012 WL 728227, at *2

(citing Kennedy v. Adamo, No. 02–CV–1776, 2006 WL 3704784, at *1
(E.D.N.Y. Sept. 1, 2006)).
B. Motion to Amend Pleadings
“Rule 15(a) of the Federal Rules of Civil Procedure
provides that leave to amend a pleading ‘shall be freely given
when justice so requires.’”

Lucente v. Int'l Bus. Machines

Corp., 310 F.3d 243, 258 (2d Cir. 2002)(citing Fed.R.Civ.P.
3

15(a).)

However, “[w]here 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. (citing Ruffolo v.

Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir.1993) (per
curiam)).

Where an amendment has no merit and is thus futile,

leave to amend should be denied.

(citing Health–Chem Corp.

Id.

v. Baker, 915 F.2d 805, 810 (2d Cir.1990)).

An amendment to a

complaint is futile where the proposed claim could not survive a
Fed. R. Civ. P. 12(b)(6) motion to dismiss.

Dougherty v. North

Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002).
To survive a motion to dismiss pursuant to Rule
12(b)(6), a complaint must contain sufficient facts, that if
accepted as true, “state a claim to relief that is plausible on
its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A

complaint providing only “labels and conclusions” or “a
formulaic recitation of the elements of a cause of action will
not do.”

Twombly, 550 U.S. at 555.

A pro se complaint must be

construed liberally to raise the strongest claim it suggests.
See Erickson v. Pardus, 551 U.S. 89, 94 (2007).

However, it

must still satisfy the same pleading requirements and, “[b]ald
assertions and conclusions of law are not adequate to withstand
a motion to dismiss.”

Wilson v. Dalene, 699 F. Supp. 2d 534,

554 (E.D.N.Y. 2010)(citations omitted).
4

Discussion
The plaintiff objected to the R&R issued by Judge
Bulsara on three overarching bases: 1) defendant Schaefer was
properly joined, 2) the citizenship of Allstate’s attorneys
rendered removal improper, and 3) she was entitled to sanctions
against the defendants.

In her Motion to Amend and Objections

to the R&R, the plaintiff argued that the decision to deny
remand was “solely based on the argument that 1) Cellilli and
Skarzynski had never been mentioned, and 2) that Schaefer is not
accountable for non-contractual offenses . . . and on torts of
misleading/fraudulent advertising.”

(ECF No. 27 at ¶ 95.)

In her submissions, plaintiff offered only conclusory
statements and a few inapposite cases to support her argument
that the defendants she alleged were properly joined had
breached the insurance contract, and that they did so in a
tortious fashion.

(Id. at ¶¶ 5-17.)

Plaintiff also cursorily

addressed issues extensively and correctly analyzed by the
magistrate judge in recommending against remand, including
fraudulent joinder and the home state bar to remand.

Plaintiff

dedicated substantial portions of her objection to describing an
alleged conspiracy between the insurance industry and the
National Association of Insurance Commissioners to implement and
uphold unjust laws, (Id. at ¶¶ 18-24,) and conclusory statements
regarding the unconscionability of the insurance contract at
5

issue and of New York insurance laws that provide limits on
damages. (Id. at ¶¶ 27-42.)
Plaintiff’s conclusory statements and general
objections overly simplify the analysis in the R&R and reiterate
arguments made by the plaintiff earlier in the record that Judge
Bulsara considered prior to issuing the R&R.

As the objections

are conclusory and repetitive, they are subject to clear error
review.

See Friedman, 2015 WL 1246538, at *3.

Nonetheless,

even upon de novo review, the court adopts Judge Bulsara’s
thorough and well-reasoned analysis.
The court, on de novo review, agrees with and entirely
adopts the R&R’s detailed analysis of potential claims that
could be inferred from the pro se Complaint, liberally
construed, to determine if any valid cause of action exists
against Schaefer such that plaintiff could potentially be
entitled to relief against Schaefer in New York State Court.
(See ECF No. 26 at 6-17.)

Upon such analysis, the court agrees

with Judge Bulsara’s conclusion that although the plaintiff’s
complaint could be liberally construed to allege causes of
action for breach of contract, gross negligence and defamation,
based on the facts alleged, none of those claims are viable
causes of action against Schaefer under New York law and would
not be viable in New York State Court.

6

(Id. at 15.)

The first basis of the plaintiff’s objection, that
Schaefer was properly joined, reiterates arguments made
previously in her Motion to Remand and supporting papers.

(See

e.g. ECF No. 9 at 2-4; Reply in Support of Motion to Remand, ECF
No. 18 at 6.)

In the plaintiff’s Reply in Support of Motion to

Remand, she argued:
Schaefer most definitely cannot be removed from the
suit. All the Defendants were clearly named in the
original Complaint and misreading the Complaint can
only be attributed to ineptitude, corruption or
juvenile wishful thinking. All the allegations
mentioned at the outset in the Complaint are made
against all Defendants since they are aiding and
abetting each other in the process of financially
exploiting the elderly insured.
(ECF No. 18 at 6.)

Just a few paragraphs after acknowledging

that agents like Schaefer “have no fiduciary duties to
insureds,” (ECF No. 27 at ¶51,) the plaintiff reversed her
position.

(Id. at ¶55.)

In support of the plaintiff’s earlier

argument that Schaefer had fiduciary duties to her and “failed
to oversee [plaintiff’s] account properly,” (ECF No. 26 at 15;
see also ECF No. 9 at 3-4,) the plaintiff conclusorily stated
that Schaefer breached an independent duty of care it owed the
plaintiff.

(See ECF No. 27 at ¶55.)

To the extent that

plaintiff’s assertions regarding a duty of care owed by Schaefer
are separate from the fiduciary duties alleged and correctly
rejected in the R&R, this is a new argument that “could have
been but [was] not, presented to the magistrate judge in the
7

first instance,” and as such, the court need not consider it.
U.S. Flour, 2012 WL 728227, at *2 (citation omitted).

Even were

the court to consider these assertions, however, they are
meritless.

A duty of care is a fiduciary duty and the R&R

correctly establishes that, “there is no fiduciary relationship
between an insurance agent and a customer, absent some evidence
of a special relationship, which is lacking in this case.” (ECF
No. 26 at 17 n. 7.)
The plaintiff also makes bare allegations in
opposition that defendant’s breach of the general duty of good
faith that applies to parties in a transaction constitutes a
tort.

(See ECF No. 27 at ¶10.)

The court agrees with Judge

Bulsara’s analysis of Plaintiff’s bad faith claims, that
“[Plaintiff’s] claim of bad faith by Allstate is coextensive
with her breach of contract claim that Allstate failed to abide
by its agreement to cover damage to her home.” (ECF No. 26 at
13.)

As such, given plaintiff’s breach of contract claim, the

bad faith claim fails to state a claim on which relief may be
granted and is dismissed. (Id.)
The second main argument, regarding the citizenship of
Thomas H. Cellilli and Skaryzynski Black LLC (“Skaryzynski”),
was raised in the plaintiff’s initial Motion to Remand and in
her Reply.

(See e.g. ECF No. 9 at 4-5 (naming Allstate’s

counsel Skaryzynski, a New York law firm, and Cellilli, a
8

partner at Skarzynski, as “two separate consultants and
defendants” and New York citizens); ECF No. 18 at 2, (naming
Skaryzynski and Cellilli as defendants).)

In the plaintiff’s

Motion to Amend and Objections to the R&R, she edited the case
caption to include Cellilli and Skaryzynski and asked that the
Court “[amend] the list of defendants of record so that it
corresponds with the list which to date has been used to
properly serve pleadings to the defendants on this case.”
No. 27 at 1.)

(ECF

Plaintiff also stated that “the New York

Defendants Cellilli, Skarzynski, and Schaefer are parties to
this lawsuit as clearly expressed in the text of the Report and
Recommendation . . .

p. 9, paragraph 2 that points to the

paragraph heading in the original pleading: ‘THEFT BY ALLSTATE,
REPRESENTATIVES AND COUNSEL VIA BREACH OF CONTRACT MECHANISM.’”

2

2 An opposition to a report and recommendation is not the proper vehicle
for amending a case caption or introducing new arguments to amend a Complaint
to add new defendants. See e.g. 2012 WL 728227, at *2 (E.D.N.Y. Mar. 6,
2012) (citing Kennedy, 2006 WL 3704784, at *1)(“Even in a de novo review of a
party's specific objections, the court ordinarily will not consider
arguments, case law and/or evidentiary material which could have been but
[were] not, presented to the magistrate judge in the first instance.”);
Scientific Components Corp. v. Sirenza Microdevices, Inc., No. 03-CV-1851,
2006 WL 2524187, at *2 (E.D.N.Y. Aug. 30, 2006) (citations omitted).
Even
if leave were granted for the plaintiff to amend her complaint to include
additional New York defendants, the addition would not affect the removal
analysis in the R&R as diversity is determined at the time the complaint
underlying the removal petition was filed. (See ECF 26, at 21 (“But, in any
event, the propriety of the removal is determined by the operative Complaint.
The operative complaint is the original complaint Mallek filed in state
court. The Complaint does not make any mention of Cellilli or Skarzynski
Black . . .”)); McCulloch Orthopedic Surgical Servs., PLLC v. United
Healthcare Ins. Co. of New York, No. 14-CV-6989, 2015 WL 3604249, at *3
(S.D.N.Y. June 8, 2015)(citing Vera v. Saks & Co., 335 F.3d 109, 116 n. 2 (2d
Cir.2003); Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939))(“It is settled
law that a motion to remand is evaluated on the basis of the allegations as
pleaded at the time of removal. . . Post-removal amendments to the pleadings

9

(Id.)

The R&R makes clear that Judge Bulsara considered whether

Cellilli or Skarzynski were defendants at the time the Complaint
was filed to ascertain the propriety of removal, and correctly
determined that they were not.

(ECF No. 26 at 21-22.)

Judge

Bulsara explained:
In the Motion to Remand and Complaint and other
documents filed with the Court, Mallek makes
allegations against other persons and entities. Those
allegations do not change the outcome of this Court’s
recommendation. In evaluating the propriety of a
removal based on diversity of citizenship, “the
citizenship of defendants sued under fictitious names
shall be disregarded.” As a result, the propriety of
Allstate’s removal is not affected by the citizenship
of any Doe defendant. Mallek states that Allstate’s
lawyer—Thomas H. Cellilli, III and his law firm
Skarzynski Black LLC—are the John Doe defendants, and
because they are both New York citizens, their
presence in the case defeats diversity. The argument
is without merit. The Doe defendants remain Doe
defendants, and the Court has not entered any order
substituting them.
(Id. (citations omitted).)

The R&R stated that if the plaintiff

wished to add the two new parties, she must amend the Complaint.
(Id.)

Nowhere does the R&R state or imply that either Cellilli

or Skarzynski were presently defendants or that the Complaint
could be amended as part of an objection to the R&R.

(Id.)

Plaintiff titles one section of her objection, “The Home State
Removal Bar,” but does not use it to address any of the findings

should not be considered.”); see also Brooks v. Starbucks Corp., No. 13-CV2705, 2013 WL 4520466, at *3 (E.D.N.Y. Aug. 26, 2013).

10

in the R&R—instead she reiterates that she “oppose[s] the
Court's Recommendation to deny Remand which recommendation was
solely based on the argument that 1) Cellilli and Skarzynski had
never been mentioned.”

(ECF No. 27 at 95.)

Plaintiff’s

addition of new factual allegations against Cellilli and
Skarzynski is unavailing and does not alter the outcome as they
are not defendants.
To the extent plaintiff’s Motion to Amend and
Objections to the R&R state a request to file an amended
complaint that joins Schaefer Agency Inc. a/k/a Kevin Schaefer,
Thomas Wilson, Allstate’s CEO, Cellilli and Skarzynski,
Plaintiff’s Motion to Amend is denied as plaintiff’s new
allegations are a thinly veiled attempt to “oust the federal
court of its subject-matter jurisdiction” and consist of vague
and conclusory statements that do not state any cognizable right
of action against the current or proposed new defendants.

(See

ECF No. 26 at 22, n.10. (citing 14C Wright & Miller § 3738 (4th
ed.))

Plaintiff characterizes the motion to amend as an attempt

to amend only the case caption to reflect currently and properly
served defendants, however, the R&R makes clear that the only
current defendants are Allstate and Schaefer.

(Id. at 21-22.)

Further, the motion to amend, which seeks to add new defendants
and claims and to disqualify Allstate’s counsel based on those
new proposed claims, is futile, as it fails to state a claim on
11

which relief could be granted for the reasons clearly outlined
in defendants’ Opposition to the Motion to Amend.

(See ECF No.

30 at 4-28.)
Plaintiff’s objections to the denial of sanctions take
the form of three brief sentences reiterating her previous
demands for sanctions.
97. The Plaintiff once again requests upon Remand,
sanctions in favor of the Plaintiff for the
Defendants' pattern of vexatious litigation.
98. The Plaintiff also requests for sanctions against
Defendants for abusing the Mediation process and
utilizing that forum to apply pressure and extortion
that offended and intimidated the Plaintiff.
9[9]. The Plaintiff also requests additional sanctions
against Defendants for the gratuitous tort offenses in
cancelling her 2018 policy based on defamatory
allegations made against the Plaintiff and
communicated to her mortgage holder.
(ECF No. 27 at ¶¶ 97-99.)
In her initial motion for sanctions, the plaintiff
asked the court to sanction the defendants for:
[R]emoving the case to this venue based on frivolous
reasons, demonstrated bad faith for the purposes of
delaying payment on her claim on an insurance policy,
abuse of the judicial system, and in particular, for
abusing the Mediation Process. Sanctions ought to also
be issued against Defendants for perjury offenses and
defamation of the Plaintiffs character in this Court.
Sanctions are also requested for the time, effort, and
expenses exerted by the Plaintiff in proceedings in
this Court.
(Motion on Third Request to Remand & Motion for Sanctions, ECF
No. 21 at 1.)
12

In her second motion for sanctions, the plaintiff
requests new sanctions against the defendants for:
[C]ausing ADDITIONAL intentional emotional distress
and financial harm to the Plaintiff this week by
cancelling her policy for the coverage year beginning
in March 2018 on false allegations by the Defendants
that the Courts to-date have not deliberated upon.
(Motion

for

New

Sanctions

Against

Defendants

for

Cancelling

Plaintiff’s 2018 Policy Based on Fraudulent Allegations & Usurping
the Authority of the Court, ECF No. 22 at 1.)
Like
Bulsara’s

the

plaintiff’s

recommended

finding

objections
that

to

removal

Magistrate
was

Judge

proper,

the

plaintiff’s objections to the recommendation to deny sanctions
merely

restate

arguments

that

were

before

Judge

Bulsara

for

consideration at the time he issued the R&R.
The plaintiff cursorily addresses fraudulent joinder
and the home state bar, however, her objections are general and
conclusory in nature.

(ECF No. 27 at ¶ 91-96.)

For example,

she argues that she, “stated non-contractual tort offenses
sufficient to justify causes of action against the non-diverse
Defendants in State Court.”

In essence, plaintiff generally

restates the basis of her remand motion and a remarkably general
objection to Judge Bulsara’s detailed, well-reasoned analysis of
fraudulent joinder.
The plaintiff also asserts that Allstate, Schaefer,
Cellilli, Skaryzynski and Wilson, tampered with evidence and a
13

witness, and that Skaryzynski has a conflict of interest
stemming from its representation of Allstate. (Id. at ¶¶ 71-75,
94.)

These assertions are again presented in a conclusory

manner.

Further, the plaintiff advanced similar arguments in

her Motion to Remand and her Statement Reaffirming Remand
Request, accusing the defendants generally of unlawfully
manipulating evidence and accusing Cellilli and Skarzynski of
tampering with evidence to obstruct justice.
9 at 5, 7; ECF No. 18 at 2, 18.)

(See e.g. ECF No.

For the reasons stated in the

R&R and stated above, plaintiff’s arguments are without merit
with regard to Schaefer and irrelevant with regard to Cellilli
and Skaryzynski as they are not defendants in this matter.

(See

supra. at 7-11; ECF No. 26 at 22 n.11.)
The plaintiff also contends that the insurance
contract at issue in this case is unconscionable because it was
a contract of adhesion and Allstate failed to provide her with a
copy of her full policy until after she filed a claim. (See ECF
No. 27 at ¶¶36-37.)

Plaintiff cursorily raised the issue of

unconscionability in her Second Motion to Remand. (See ECF No.
21 at 5, ¶3; ECF No. 22 at 1-2.)

However, she did not assert

unconscionability with respect to any act by Schaefer
specifically, nor does she provide any facts to support such a
claim against Schaefer in her objection to the R&R.

In the

plaintiff’s Motion for Remand and Sanctions, plaintiff advanced
14

this argument against Allstate.

On her motion, plaintiff also

included new assertions against Allstate and Schaefer for false
advertising and misleading the plaintiff. (ECF No. 27 at ¶¶ 4850.)

These assertions are conclusory and general objections to

remand.

They do not address any specific portion of the R&R and

do not provide facts in support of the claims.

Instead, they

essentially assert that Allstate should have disclosed that
Schaefer had no fiduciary duty to the plaintiff.

As a final

attempt to challenge diversity, plaintiff alleges that Allstate
may not be diverse.

This argument recapitulates the argument

the plaintiff made in her Reply in Support of the Motion to
Remand, (See ECF No. 18 at 10,) and Judge Bulsara correctly
determined that there was complete diversity once Schaefer, who
was fraudulently joined, was removed from the case.
at 20.)

(ECF No. 26

Plaintiff’s final efforts to support remand are

comprised of general, conclusory and repetitive allegations.
As previously noted, despite this court’s de novo
review, arguments that merely rehash old arguments, that are
conclusory, or that do not raise targeted objections to the R&R
may be reviewed for clear error.

Simply restating the original

arguments that the R&R has addressed or making new unfounded
allegations in response to the R&R is insufficient to trigger de
novo review.

See Machicote v. Ercole, No. 06-Civ-13320, 2011 WL

3809920, at *2 (S.D.N.Y. Aug. 25, 2011)(citing Indymac Bank,
15

F.S.B. v. Nat'l Settlement Agency, Inc., 2008 WL 4810043, at *1
(S.D.N.Y. Nov. 3, 2008)).

Plaintiff’s objections raised in

opposition to the R&R were either reiterations of previous
arguments or general objections and conclusory statements.

The

court also denies plaintiff’s objections under a clear error
review standard as it finds no clear error.
1246538, at *3.

Friedman, 2015 WL

Nor, on de novo review, did the court find any

basis to grant plaintiff’s objections to the R&R.
CONCLUSION
Accordingly, Judge Bulsara’s well-reasoned and
thorough R & R is adopted in its entirety and the plaintiff’s
request that the case be remanded to state court and Motion for
Sanctions are denied.

(See ECF No. 26 at 1; Motion to Remand,

ECF No. 9; Second Motion to Remand, ECF No. 21; Motion for
Sanctions, ECF No. 22.)

Plaintiff’s Motion to Amend the

Complaint, filed as part of her Motion to Amend and Objections
to the R&R is also denied, as an amendment on the grounds
alleged in plaintiff’s motion would be futile.
27.)

(See ECF No.

The parties are referred to the assigned Magistrate Judge

for supervision of any settlement discussions, discovery, and
all remaining pre-trial issues.

16

The Clerk of Court is respectfully requested to mail a
copy of this Memorandum and Order to the pro se plaintiff and
note service on the docket.

SO ORDERED.
Dated:

July 31, 2018
Brooklyn, New York
___________/s/_______________
Hon. Kiyo A. Matsumoto
United States District Judge

17