Aventura Technologies, Inc. v. The World of Residensea II, Ltd.

Filing 45

ORDER re 42 Appeal of Magistrate Judge Decision to District Court filed by Aventura Technologies, Inc. For the reasons set forth in the attached Memorandum and Order, Magistrate Judge Brown's decision to stay this action is affirmed. Ordered by Judge Denis R. Hurley on 4/6/2015. (Kaley, Regina)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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AVENTURA TECHNOLOGIES, INC.,
Plaintiff,
MEMORANDUM AND ORDER
13-CV-1097 (DRH) (GRB)
- against THE WORLD OF RESIDENSEA II, LTD.,
Defendants.
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APPEARANCES:
BRYAN HA, ESQ
Attorney for Plaintiff
405 Tarrytown Road, # 1244
White Plains, NY 10607
BY: Brian Ha, Esq.
MCALPIN CONROY, P.A.
Attorneys for Defendant
Brickell Bayview Centre
80 Sw 8th Street, Suite 2805
Miami, FL 33130
BY: Michael Edward Conroy, Esq.
Adria G. Notari, Esq.
POLES, TUBUN, ET AL
Attorneys For Defendant
46 Trinity Place, Fifth Floor
New York, NY 10006
BY: Scott R. Johnston, Esq.
HURLEY, Senior District Judge:
Aventura Technologies, Inc. (“Aventura” or “plaintiff”) brought this action against
defendant The World of Residensea II, Ltd. (“Residensea” or “defendant”) alleging breach of
contract and unjust enrichment pursuant to a contract for plaintiff’s installation and repair of
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certain surveillance equipment on defendant’s luxury passenger ship. Presently before the Court
are plaintiff’s objections to Magistrate Judge Brown’s decision granting defendant’s motion to
stay the action. For the reasons set forth below, Magistrate Judge Brown’s decision is affirmed.
BACKGROUND
“On July 31, 2012, Residensea and the ship’s vessel manager, Row Management Ltd.
(“ROW”) brought a state-court action in Florida against Aventura for breach of contract (under
the Agreement) and breach of implied warranty because Aventura’s repair work was allegedly
inadequate and not in compliance with the Agreement.” (Order of Magistrate Judge Brown
(“Order”) dated January 28, 2014, Docket Entry 41, at 1.) “On or about December 10, 2012, the
state court entered [a] default judgment against Aventura, but subsequently vacated the default
judgment on or about March 14, 2013.” (Id.) “[W]hile the motion to vacate the default
judgment was pending, Aventura brought the instant action against Residensea, alleging breach
of contract (under the same Agreement) and unjust enrichment.” (Id. at 1-2.) “Aventura
essentially alleges that Residensea has withheld full payment under the Agreement and that
Residensea owes additional payment for the out-of-warranty repairs it performed.” (Id. at 2.)
On August 16, 2013, Residensea filed a Motion to Stay the federal court proceedings
pending the outcome of the Florida case. On September 16, 2013, the Court referred that motion
to Magistrate Judge Brown, and Judge Brown granted defendant’s motion on January 28, 2014.
Plaintiff filed timely objections to Judge Brown’s order on February 10, 2014.
DISCUSSION
A. Standard of Review

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The Court reviews Magistrate Judge’s decisions regarding non-dispositive pretrial
matters under a “clearly erroneous or contrary to law” standard. See 28 U.S.C. § 636(b)(1)(A);
FED . R. CIV . P. 72(a). An order is “clearly erroneous” only if a reviewing court, considering the
entirety of the evidence, “is left with the definite and firm conviction that a mistake has been
committed”; an order is “contrary to law” when it “fails to apply or misapplies relevant statutes,
case law, or rules of procedure.” Equal Employment Opportunity Comm. v. First Wireless
Group, Inc., 225 F.R.D. 404, 405 (E.D.N.Y. 2004) (quoting Weiss v. La Suisse, 161 F. Supp. 2d
305, 320-21 (S.D.N.Y. 2001)). This standard is “highly deferential,” “imposes a heavy burden
on the objecting party,” and “only permits reversal where the magistrate judge abused his
discretion.” Mitchell v. Century 21 Rustic Realty, 233 F. Supp. 2d 418, 430 (E.D.N.Y. 2002).
B.

The Motion to Stay

The Court cannot conclude that Magistrate Judge Brown abused his discretion in granting
the motion to stay. “The decision as to whether to stay a federal action on the ground that there is
a related action pending in a state court is committed to the sound discretion of the district
court.” United States v. Pikna, 880 F.2d 1578, 1582 (2d Cir. 1989). “In determining whether or
not to grant such a stay, the district court should consider such factors as (1) whether the
controversy involved a res over which one of the courts has assumed jurisdiction, (2) whether
one forum is more convenient than the other for the parties, (3) whether staying the federal
action will avoid piecemeal litigation, (4) whether one action is significantly more advanced than
the other, (5) whether federal or state law provides the rule of decision, and (6) whether the
federal plaintiff’s rights will be protected in the state proceeding.” Id. (citing Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 15-16 (1983); Colorado River Water
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Conservation Dist. v. United States, 424 U.S. 800, 817-18 (1976)). “In analyzing these factors,
the Supreme Court admonishes that no single factor is necessarily decisive, and that 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.’ ” De Cisneros v. Younger, 871 F.2d 305, 307 (2d Cir. 1989) (citing Moses Cone,
460 U.S. at 16).
Plaintiff claims, however, that Judge Brown “failed to take into account ‘the heavy
presumption favoring the exercise of jurisdiction.’ ” (Pl.’s Mem. in Supp. at 2 (quoting
Bethlehem Contracting Co. v. Lehrer/McGovern, Inc., 800 F.2d 325, 327 (2d Cir. 1986)).
However, Judge Brown’s conclusion that Residensea “satisfied its burden under Colorado River
and Moses H. Cone because the relevant factors largely favor the granting of a stay” (Order at 3)
demonstrates that he did not disregard the presumption, but rather that he found that Residensea
had overcome it. Particularly, Judge Brown relied on the third factor, finding that “[t]he
piecemeal-litigation factor weighs in favor of granting the stay because there is a real risk that
litigation could occur in installments.” (Id.) Moreover, although not explicitly mentioned by
Judge Brown in his discussion of this factor, a stay of jurisdiction “lends support to the value of
judicial economy that animates Colorado River.” De Cisneros, 871 F.2d at 308. “Thus ‘reasons
of wise judicial administration,’ favor abstention in this case in order to avoid duplicative
simultaneous litigation.” Id. (citing Colorado River, 424 U.S. at 818).
Additionally, Judge Brown relied on the fourth and sixth factors finding that the state
court action was “further along” and that “Aventura’s rights should be adequately protected in
state court” to justify abstention. (Order at 4.) Indeed, there has been a complete “absence of
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any proceedings in the District Court, other than the filing of the complaint,” Colorado River,
424 U.S. at 820, and it is undisputed that at least limited discovery has begun in the state action.
Moreover, Aventura does not dispute that its rights would be adequately protected in the Florida
action. Additionally, he found that “[a] stay [was] favored because the sequence of events
arguably shows that Aventura’s federal suit was “reactive” - it filed a federal suit after facing a
setback (i.e., the default judgment) as a defendant in state court.” (Order at 4.) Although
Aventura takes issue with Judge Brown’s application of Telesco v. Telesco Fuel and Masons’
Material, Inc., 765 F.2d 356 (2d Cir. 1985) in reaching this conclusion, application of the
principal of that case, i.e., that abstention is favorable when a litigant files a federal action after
suffering a setback in state court, was not contrary to law.1 Furthermore, as for the other
Colorado River factors not explicitly mentioned by Judge Brown, the Court cannot say that
consideration of them would render Judge Brown’s ruling clear error or contrary to law.
Therefore, Judge Brown’s ruling is affirmed.
CONCLUSION
For the reasons set forth above, Magistrate Judge Brown’s decision to stay the federal
action is affirmed.
SO ORDERED.
Dated: Central Islip, New York
April 6, 2015
/s/
Denis R. Hurley
Unites States District Judge
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Plaintiff contends that Telesco is inapplicable because there the plaintiff in the state
action sued in federal court on the same cause of action after suffering “some failures in the
earlier state court action,” 765 F.2d at 363, and here, Aventura is not the plaintiff in the state
court action.
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