Excelsior Capital, LLC v. Devine et al
Filing
65
MEMORANDUM OF DECISION AND ORDER - For the foregoing reasons, it is hereby ORDERED that Devine's motion to substitute Grace Allen, Executrix of the Estate of C. Robert Allen III, as a plaintiff in the Allen action and as a third-party defendant in the Excelsior action, in lieu of C. Robert Allen III, is hereby granted; and further ORDERED that the amended caption in the Allen case will read as follows: (see "Decision"); and it is further ORDERED that the amended caption in the Excelsior case will read as follows: (see "Decision"). Ordered by Senior Judge Arthur D. Spatt on 10/25/11. Terminating 54 Motion to Substitute Party; and 57 Motion to Substitute Party as granted. (Coleman, Laurie)
-;cE
E.D.N.Y
'I
OtT :25 .. ~11
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------------)(
C. ROBERT ALLEN, III, by LUKE ALLEN, as Guardian
for the Property Management of C. Robert Allen III,
Plaintiff,
-againstCHRISTOPHER DEVINE, LAKESHORE MEDIA, LLC,
MILCREEK BROADCASTING LLC, COLLEGE
CREEK MEDIA LLC, MARATHON MEDIA GROUP,
LLC, 3 POINT MEDIA- SALT LAKE CITY, LLC, 3
POINT MEDIA DELTA, LLC, 3 POINT MEDIA UTAH, LLC, 3 POINT MEDIA- FRANKLIN, LLC, 3
POINT MEDIA- PRESCOTT VALLEY, LLC, 3 POINT
MEDIA- COAL VILLE, LLC, 3 POINT MEDIAARIZONA, LLC, 3 POINT MEDIA- FLORIDA, LLC, 3
POINT MEDIA- KANSAS, LLC, 3 POINT MEDIAOGDEN, LLC, 3 POINT MEDIA- SANFRANCISCO,
LLC, MIDVALLEY RADIO PARTNERS, LLC, D&B
TOWERS LLC, SUPERIOR BROADCASTING OF
NEVADA, LLC, SUPERIOR BROADCASTING OF
DENVER, LLC, W ACKENBURG ASSOCIATES, LLC,
PORTLAND BROADCASTING LLC, DESERT SKY
MEDIA LLC, SKY MEDIA LLC, DEVINE RACING
MANAGEMENT, LLC, ACB CONSULTING CO., and
John Does 1-50,
Defendants.
--------------------------------------------------------------------)(
CHRISTOPHER DEVINE, LAKESHORE MEDIA, LLC,
MILCREEK BROADCASTING LLC, COLLEGE
CREEK MEDIA LLC, MARATHON MEDIA GROUP,
LLC, 3 POINT MEDIA -SALT LAKE CITY, LLC, 3
POINT MEDIA DELTA, LLC, 3 POINT MEDIAUTAH, LLC, 3 POINT MEDIA- FRANKLIN, LLC, 3
POINT MEDIA- PRESCOTT VALLEY, LLC, 3 POINT
MEDIA- COAL VILLE, LLC, 3 POINT MEDIAARIZONA, LLC, 3 POINT MEDIA- FLORIDA, LLC, 3
POINT MEDIA- KANSAS, LLC, 3 POINT MEDIAOGDEN, LLC, 3 POINT MEDIA- SANFRANCISCO,
LLC, MIDVALLEY RADIO PARTNERS, LLC, D&B
TOWERS LLC, SUPERIOR BROADCASTING OF
L
MEMORANDUM
OF DECISION AND
ORDER
09-cv-668 (ADS)
(ETB)
*
NEVADA, LLC, SUPERIOR BROADCASTING OF
DENVER, LLC, WACKENBURG ASSOCIATES, LLC,
PORTLAND BROADCASTING LLC, DESERT SKY
MEDIA LLC, SKY MEDIA LLC, DEVINE RACING
MANAGEMENT, LLC, ACB CONSULTING CO., and
John Does 1-50,
Third-Party Plaintiffs,
-againstLUKE ALLEN,
Third-Party Defendant.
--------------------------------------------------------------------)(
APPEARANCES:
Cohen & Gresser LLP
Attorneys for the plaintiff
100 Park A venue
23rd Floor
New York, NY 10017
By:
Lawrence T. Gresser, Esq.
Alexandra Sarah Wald, Esq.
Nathaniel P.T. Read, Esq.
Alexis Gena Stone, Esq.
Harvey B. Silikovitz, Esq., of Counsel
Peckar & Abramson, P.C.
Attorneys for all defendants except defendants D&B Towers LLC
41 Madison Ave, 20th Floor
New York, NY 10010
By:
Daniel E. Budorick, Esq.
David Scriven-Young, Esq.
Edward Pacer, Esq.
Kevin Joseph O'Connor, Esq.
Thomas Jerome Curran, Esq., of Counsel
Allyn & Fortuna, LLP
Attorneys for the defendant D&B Towers LLC
200 Madison A venue
5th Floor
New York, NY 10016
By:
Nicholas J. Fortuna, Esq.,
Megan Jeane Muoio, Esq., of Counsel
2
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------)(
E)(CELSIOR CAPITAL, LLC,
Plaintiff,
MEMORANDUM OF
DECISION AND ORDER
10-cv-1319 (ADS)(ARL)
-againstCHRISTOPHER DEVINE, BRUCE BUZIL,
ROBERT E. NEIMAN and GREENBERG
TRAURIG, LLP,
Defendants.
---------------------------------------------------------)(
CHRISTOPHER DEVINE,
Third-Party Plaintiff,
-againstC. ROBERT ALLEN, III and LUKE ALLEN, as
Guardian for the Property Management of C.
Robert Allen, III,
Third-Party Defendants.
---------------------------------------------------------)(
APPEARANCES:
Judd Burstein, P.C.
Attorneys for the plaintiff Excelsior Capital, LLC
1790 Broadway
Suite 1501
New York, NY 10019
By:
Judd Burstein, Esq., ofCounsel
Peckar & Abramson, P.C.
Attorneys for the defendant, third-party plaintiff Christopher Devine
208 S Lasalle, Suite 1660
Chicago, IL 60604
By:
Daniel E. Budorick, Esq.,
David Scriven-Young, Esq.,
Edward Pacer, Esq.,
Kevin Joseph O'Connor, Esq.,
Thomas Jerome Curran, Esq., of Counsel
3
His rock & Barclay, LLP
Attorneys for the defendant Bruce Buzil
300 South State Street
Syracuse, NY 13202
By:
Alan Robert Peterman, Esq., of Counsel
Simpson Thatcher & Bartlett LLP
Attorneys for the defendants Robert E. Neiman and Greenberg Traurig, LLP
425 Lexington A venue
New York, NY 10017
By:
Mary Elizabeth McGarry, Esq.,
Michael Joseph Castiglione, Esq.,
Ryan Kane, Esq., of Counsel
Cohen & Gresser LLP
Attorneys for the third-party defendants C. Robert Allen, III and Luke Allen
800 Third Ave
21st Floor
New York, NY 10022
By:
Alexis Gena Stone, Esq.,
Harvey B. Silikovitz, Esq.,
Lawrence T. Gresser, Esq.,
Nathaniel P.T. Read, Esq.,
Alexandra Sarah Wald, Esq., of Counsel
SPATT, District Judge.
The two cases at issue both stem from allegations regarding a loan based upon
alleged false representations. One of the parties in both actions, C. Robert Allen, III
("Robert Allen"), is now deceased, and a motion has been filed in each case to
substitute Grace M. Allen, the executrix of his estate, in his place.
For the reasons that follow, the Court grants the motions to substitute in both
cases.
4
I. BACKGROUND
The two relevant cases involve many of the same parties and events, in which
the Court has issued several previous orders. Familiarity with those prior decisions is
assumed. Moreover, a detailed discussion of the allegations in either case is not
necessary for the determination of the present motion, so the Court will only briefly
sketch the parties' requests in these matters.
In sum, the gravamen of the Plaintiffs' allegations in both cases is that the
Defendants, led by Christopher Devine ("Devine") and others, made misstatements to
convince the Plaintiffs to loan a significant amount of money to entities that the
Defendants controlled, and then illegally diverted this money for their own benefit.
A. The Allen Case
On February 18, 2009, Luke Allen, as Guardian for the Property Management
of Robert Allen, filed an action against Devine and others (the "Allen case"), and was
later permitted to file an amended complaint. On August 9, 2010, the Defendant DBA
Towers, LLC, filed an answer to the amended complaint and asserted a counterclaim
for indemnification against Robert Allen. On December 20, 2010, Devine answered
the amended complaint and also asserted several counterclaims against Robert Allen.
On that same day, a third-party complaint was filed against Luke Allen in his
individual capacity by all of the Defendants/Third-Party Plaintiffs.
B. The Excelsior Case
On March 23, 2010, Excelsior Capital, LLC ("Excelsior") filed suit against
Devine, Bruce Buzil, and Robert E. Neiman (the "Excelsior case"). After the Plaintiff
commenced the Excelsior case, one of the Defendants, Devine, filed a third party
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complaint seeking contribution and indemnification from the third-party Defendants
Robert Allen and Luke Allen, as Guardian for the Property Management of Robert
Allen.
C. The Present Motions
On March 17, 2011, Cohen & Gresser LLP, as "Former Attorneys for [Robert
Allen] by his Former Guardian of Property Management," filed a "Suggestion of
Death upon the Record." This document notified the parties in both cases "pursuant to
Fed. R. Civ. P 25(a)(l) of the death of C. Robert Allen, III." In the Probate
Proceeding for Robert Allen's estate, Grace M. Allen was appointed as his executrix
by the Surrogate's Court of Nassau County. Subsequently, motions were filed in both
cases by Devine, a defendant and third-party plaintiff, to substitute Grace Allen, in her
capacity as executrix of Robert Allen's estate, for Robert Allen as a third-party
defendant in the Excelsior case and as a plaintiff in the Allen case. Also, in the Allen
case, the Defendant and third-party PlaintiffHumprey Peak Tower, formally known as
D&B Towers, LLC, joined the motion to substitute. Finally, Reed P. Whiteemore,
counsel in the Probate Proceeding for Robert Allen's estate, also filed a motion to
substitute the Estate of Robert Allen, by its Executrix, Grace Allen, as a plaintiff in
Allen and as a third-party defendant in Excelsior.
No parties have objected to these motions to substitute.
II. DISCUSSION
A. The Legal Standard on a Motion to Substitute
Federal Rule of Civil Procedure 25(a) ("Fed. R. Civ. P. 25(a)" or "Rule 25(a)")
governs the substitution of parties in the event of a death of a party. The rule states:
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Substitution if the Claim Is Not Extinguished. If a party dies and the claim
is not extinguished, the court may order substitution of the proper party.
A motion for substitution may be made by any party or by the decedent's
successor or representative. If the motion is not made within 90 days after
service of a statement noting the death, the action by or against the
decedent must be dismissed.
The purpose of the rules governing the substitution of parties following the death of
one of the original parties to a lawsuit is to prevent undue delay in the suit. "Rule
25(a) provides a procedural device allowing for the substitution of a party in order for
litigation on a decedent's behalf to continue. The substitute is thus not litigating on his
or her own behalf and need not have standing in his personal capacity, but rather
stands in the shoes ofthe decedent." See Roe v. City ofNew York, No. 00 Civ. 9062,
2003 WL 22715832, at *3 (S.D.N.Y. Nov. 19, 2003).
The period for filing substitution upon the death of a party is not triggered until
formal written statement of fact of death has been filed. Unicorn Tales, Inc. v.
Banerjee, 138 F.3d 467,469 (2d Cir. 1998). Failure to file a motion for substitution of
parties within the applicable period requires the dismissal of the action, though it has
been held that dismissal is discretionary, not mandatory. Kernisant v. City ofNew
York, 225 F.R.D. 422, 426 (E.D.N.Y. 2005).
When determining a motion to substitute a party, a Court must decide whether
(1) the motion is timely; (2) the movant's claims have not been extinguished by the
death; and (3) the movant proposes a proper party for substitution. See Roe, 2003 WL
22715832, at *1.
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B. Whether the Motion is Timely
As set forth above, Rule 25(a)(1) provides for a 90-day period from the filing
of the suggestion of death to file a motion for the substitution of parties. In the present
case, the suggestion of death was filed on March 17, 2011. Devine filed a motion to
substitute in the Allen case on June 14, 2011, and in the Excelsior case on June 15,
2011. As the deadline to file the relevant motion was June 15, 2011, Devine's motions
in both cases were timely.
C. Whether the Claims By and Against Robert Allen Survive His Death
1. The Standard for Whether Claims Survive the Death of Party
Rule 25 is procedural and therefore does not provide for the survival of rights
or liabilities. Rather, it merely describes the method by which an action may proceed
ifthe right of action survives. Servidone Const. Corp. v. Levine, 156 F.3d 414,416
(2d Cir. 1998). The question of whether a claim is extinguished or survives the death
of a party is based upon the substantive Jaw. In a diversity case, state law is
controlling on whether the claim survives. The Second Circuit has held that a claim
survives an injured party's death "if applicable state law creates a right of survival."
Barrett v. United States, 689 F.2d 324, 331 (2d Cir. 1982); Johnson v. Morgenthau,
160 F.3d 897, 898 (2d Cir. 1998). In the present case, the applicable law is New York
Estates, Powers and Trusts Law§ 11-3.2(a)(l), which states, "No cause of action for
injury to person or property is lost because of the death of the person liable for the
injury." See Barrett, 689 F.2d 324 (demonstrating that New York federal courts may
look to state law to determine whether a claim has been extinguished).
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However, when the right of action is federally created, then federal law
controls on the survival of the action. "In the absence of a specific federal statutory
directive, the question of survival of a claim is determined under federal common
law." U.S. v. Private Sanitation Indus. Ass'n ofNassau/Suffolk, Inc., 159 F.R.D. 389,
390 (E.D.N.Y. 1994). "The general rule under federal common law is that an action
survives the death of a party if it is remedial and not penal in nature." Moore's Federal
Practice~
25.04(1).
2. As to the Claims By Robert Allen
On December 15, 2009, Robert Allen, by and through Luke Allen, the
Guardian for the Property Management of Allen, filed an Amended Complaint in the
Allen case. The causes of action by Robert Allen that remain are for (1) civil RICO;
(2) RICO conspiracy; (3) fraud; (4) civil conspiracy to commit fraud; (5) conversion;
(6) unjust enrichment; and (7) breach of fiduciary duty.
First, as to the RICO claims, which are federally created rights, "[ n]either the
statutory language nor the legislative history of the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. § 1961 et seq., specifically addresses whether a private
civil claim survives a party's death." Epstein v. Epstein, 966 F. Supp. 260, 260
(S.D.N.Y. 1997). However, district courts in this Circuit have found that because
"Congress viewed the private Civil RICO claim as a victim's remedy ... such claims
survive a party's demise, whether the party be a plaintiff ... or[] a defendant." Id. at
263; Holford USA Ltd., Inc. v. Harvey, 169 F.R.D. 41, 41 (S.D.N.Y. 1996) ("I hold
that an action under Section 1964(c) for treble damages [for civil RICO] is remedial
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and does not abate when the defendant dies."); Jerry Kubecka, Inc. v. Avellino, 898 F.
Supp. 963, 968 (E.D.N.Y. 1995).
Next, as to the pendent state law claims governed by New York state law, all of
the claims asserted by Robert Allen are related to injury to property or property
interests. Generally, actions in tort and in contract survive the death of a party.
Therefore, Robert Allen's originally asserted causes of action sounding in contract and
fraud are not extinguished by his death because under New York law, "[n]o cause of
action for injury to person or property is lost because of the death of the person in
whose favor the cause of action existed." EPTL § 11-3.2(b); see Cangemi v.
Russomanno, 12 Misc.3d 1191(A), 824 N.Y.S.2d 768, at *3 (N.Y. Sup. Ct. 2006)
(finding that plaintiffs claims for breach of contract, unjust enrichment, and fraud
were not extinguished by defendant's death). These claims may be continued by his
executrix, Grace M. Allen.
3. As to the Claims Against Robert Allen
In addition to the causes of action by Robert Allen, there are causes of action
against Robert Allen in three different respects. First, in the Excelsior case, Devine
asserts third-party plaintiff claims against Robert Allen based upon breach of contract
and contribution. Second, in the Allen case, the Defendant D&B Towers, LLC
counter-claimed against Plaintiff Robert Allen for indemnification, which is an action
again based upon breach of contract and injury to property. Third, also in the Allen
case, Defendant Devine counter-claimed against Plaintiff Robert Allen for breach of
contract, fraud, and civil conspiracy.
10
All of the claims asserted against Robert Allen in both cases are related to
injury to property or property interests. Generally, actions in tort and in contract
survive the death of a party. Therefore, these claims were not extinguished by Robert
Allen's death. See Topal v. BFG Corp., 108 A.D.2d 849, 850, 485 N.Y.S.2d 352, 354
(2nd Dep't 1985) ("In this case, plaintiff's claims, in the nature of breach of contract
and injury to property, were not extinguished by reason of defendant Greene's death,
and the action could therefore be continued against the personal representative of the
decedent").
D. Whether Grace Allen is a Proper Party for Substitution
A "proper party" for substitution under Rule 25(a)(l) is either (1) a successor
of the deceased party-a distributee of an estate if the estate of the deceased has been
distributed at the time the motion for substitution has been made, or (2) a
representative of the deceased party-a person lawfully designated by state authority
to represent the deceased's estate. Garcia v. City ofNew York, No. CV 08-2152, 2009
WL 261365, at *1 (E.D.N.Y. Feb. 4, 2009) (citations and internal quotation marks
omitted). Under New York law, applicable here, a "representative" is usually the
appointed administrator or executor ofthe decedent's estate. Graham v. Henderson,
224 F.R.D. 59, 64 (N.D.N.Y. 2004).
As a result of a probate proceeding for Robert Allen's estate in the Surrogate's
Court of the State ofNew York, Nassau County, Grace M. Allen was appointed
Executrix ofthe estate. This is reflected in the Certificate of Appointment of Executor
issued by the Surrogate court. Therefore, Grace M. Allen is a proper party for
substitution under Rule 25(a)(l). Cf. Perlow v. Commissioner of Social Sec., No. 10
11
cv. 1661, 2010 WL 4699871, at*2 (E.D.N.Y. 2010) (reserving decision on whether the
movant was a property party for substitution because she was not appointed executrix
of the estate).
III. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that Devine's motion to substitute Grace Allen, Executrix of the
Estate of C. Robert Allen III, as a plaintiff in the Allen action and as a third-party
defendant in the Excelsior action, in lieu of C. Robert Allen III, is hereby granted; and
further
ORDERED that the amended caption in the Allen case will read as follows:
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------------------------------------------------){
THE ESTATE OF C. ROBERT ALLEN, III, by its Executrix, GRACE M. ALLEN
Plaintiff,
-againstCHRISTOPHER DEVINE, LAKESHORE MEDIA, LLC, MILCREEK
BROADCASTING LLC, COLLEGE CREEK MEDIA LLC, MARATHON MEDIA
GROUP, LLC, 3 POINT MEDIA- SALT LAKE CITY, LLC, 3 POINT MEDIA
DELTA, LLC, 3 POINT MEDIA-UTAH, LLC, 3 POINT MEDIA- FRANKLIN,
LLC, 3 POINT MEDIA- PRESCOTT VALLEY, LLC, 3 POINT MEDIACOALVILLE, LLC, 3 POINT MEDIA- ARIZONA, LLC, 3 POINT MEDIAFLORIDA, LLC, 3 POINT MEDIA- KANSAS, LLC, 3 POINT MEDIA- OGDEN,
LLC, 3 POINT MEDIA- SANFRANCISCO, LLC, MIDV ALLEY RADIO
PARTNERS, LLC, D&B TOWERS LLC, SUPERIOR BROADCASTING OF
NEVADA, LLC, SUPERIOR BROADCASTING OF DENVER, LLC,
W ACKENBURG ASSOCIATES, LLC, PORTLAND BROADCASTING LLC,
DESERT SKY MEDIA LLC, SKY MEDIA LLC, DEVINE RACING
MANAGEMENT, LLC, ACB CONSULTING CO., and John Does 1-50,
Defendants.
---------------------------------------------------------------------------------------------------){
12
CHRISTOPHER DEVINE, LAKESHORE MEDIA, LLC, MILCREEK
BROADCASTING LLC, COLLEGE CREEK MEDIA LLC, MARATHON MEDIA
GROUP, LLC, 3 POINT MEDIA- SALT LAKE CITY, LLC, 3 POINT MEDIA
DELTA, LLC, 3 POINT MEDIA- UTAH, LLC, 3 POINT MEDIA- FRANKLIN,
LLC, 3 POINT MEDIA- PRESCOTT VALLEY, LLC, 3 POINT MEDIACOALVILLE, LLC, 3 POINT MEDIA- ARIZONA, LLC, 3 POINT MEDIAFLORIDA, LLC, 3 POINT MEDIA- KANSAS, LLC, 3 POINT MEDIA- OGDEN,
LLC, 3 POINT MEDIA- SANFRANCISCO, LLC, MIDV ALLEY RADIO
PARTNERS, LLC, D&B TOWERS LLC, SUPERIOR BROADCASTING OF
NEVADA, LLC, SUPERIOR BROADCASTING OF DENVER, LLC,
WACKENBURG ASSOCIATES, LLC, PORTLAND BROADCASTING LLC,
DESERT SKY MEDIA LLC, SKY MEDIA LLC, DEVINE RACING
MANAGEMENT, LLC, ACB CONSULTING CO., and John Does 1-50,
Third-Party Plaintiffs,
-againstLUKE ALLEN,
Third-Party Defendant.
--------------------------------------------------------------------)(
and it is further
ORDERED that the amended caption in the Excelsior case will read as
follows:
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------)(
E)(CELSIOR CAPITAL, LLC,
Plaintiff,
-againstCHRISTOPHER DEVINE, BRUCE BUZIL,
ROBERT E. NEIMAN and GREENBERG
TRAURIG, LLP,
Defendants.
---------------------------------------------------------)(
13
CHRISTOPHER DEVINE,
Third-Party Plaintiff,
-againstTHE ESTATE OF C. ROBERT ALLEN, III,
by its Executrix GRACE M. ALLEN
Third-Party Defendants.
---------------------------------------------------------){
SO ORDERED.
Dated: Central Islip, New York
October 25, 2011
Is/ Arthur D. Spatt
ARTHUR D. SPAIT
United States District Judge
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