Intellipayment, LLC v. Trimarco

Filing 57

ORDER granting 38 Motion to Dismiss; granting 41 Motion to Dismiss; granting 42 Motion to Dismiss; granting 46 Motion to Dismiss; granting 47 Motion to Dismiss for Failure to State a Claim; denying 14 Motion to Disqualify Counsel. For the reasons set forth herein, plaintiff's motion to dismiss the counter-claim is granted. However, the Court grants defendant leave to amend his counter-claim against plaintiff. The moving third-party defendants' motions to dismiss are granted without prejudice to defendant bringing the claims in a separate action. Defendant's motion to disqualify is denied. SO ORDERED. Ordered by Judge Joseph F. Bianco on 3/29/2016. (Shea, Zoe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 15-CV-01566 (JFB)(GRB)

_____________________

INTELLIPAYMENT, LLC.,
Plaintiff,
VERSUS

MICHAEL TRIMARCO,
Defendant.
___________________
MEMORANDUM AND ORDER
March 29, 2016
___________________

JOSEPH F. BIANCO, District Judge:

filed an amended third-party complaint (the
“Trimarco Complaint”).

On March 25, 2015, plaintiff
IntelliPayment LLC (“IntelliPayment” or
“plaintiff”) filed this action against defendant
Michael C. Trimarco (“Trimarco” or
“defendant”). On April 16, 2015, Trimarco
filed an answer, a counter-claim against
plaintiff, and a third-party complaint against
Pepper Hamilton LLP, Meltzer LLP and Fred
Meltzer (together,
“Meltzer”), CJM
Investments, Hull Street Group, Eric
Schlanger (“Schlanger”), John Does 1-20,
Christopher Meyers, Mickey Cavuoti
(“Cavuoti”), and Barclays Capital Inc.
(“Barclays”) (together, the “third-party
defendants”). On June 5, 2015, Trimarco

Before the Court are motions to dismiss
the Trimarco Complaint filed on July 17,
2015 by plaintiff and third-party defendants
Meltzer, Barclays, Cavuoti, and Schlanger,
(the “moving third-party defendants”), as
well as Trimarco’s motion to disqualify
plaintiff’s counsel 1 and Cavuoti’s counsel.
For the reasons discussed below, the
plaintiff’s motion to dismiss the counterclaim is granted. However, the Court grants
defendant leave to amend his counter-claim
against plaintiff. The moving third-party
defendants’ motions to dismiss are granted
without prejudice to defendant bringing the

1

Plaintiff’s counsel, Michael Lee Smith, also currently
represents third-party defendant Schlanger. Smith’s
notice of appearance was not entered until July 1,
2015, after defendant’s motion to disqualify was
submitted to the Court. As discussed, infra, the Court

nevertheless considers defendant’s disqualification
arguments as they relate to Schlanger’s representation
because defendant raised them in his reply in support
of his motion to disqualify.

1

purchased the remainder of Trimarco’s
ownership interest. (Id.) The complaint
alleges that, in 2014, Trimarco “embarked on
a disruptive course of action designed to
force [IntelliPayment] to increase the terms
of the buyout of his previously held interest”
in IntelliPayment. (Id. ¶ 13.) Trimarco
allegedly
accessed
IntelliPayment’s
computer and information systems without
authorization, including by illegally
impersonating Cavuoti and others. (Id. ¶¶ 13,
20-28.)

claims in a separate action. Defendant’s
motion to disqualify is denied.
I.

BACKGROUND
A. Facts

The following facts are taken from the
plaintiff’s complaint and the Trimarco
Complaint and are not findings of fact by the
Court. Instead, the Court will assume the
allegations to be true and, for purposes of the
pending motions to dismiss, will construe
them in a light most favorable to the
defendant, the non-moving party.

On April 16, 2015, defendant filed a pro
se pleading entitled “Answer” that contained
counterand
cross-claims
against
IntelliPayment
and
the
third-party
defendants. On June 5, 2015, without
obtaining leave of the Court, defendant filed
an amended complaint alleging claims
against plaintiff, the named third-party
defendants, and John Does 1-20. In the
Trimarco Complaint, defendant alleges that
the third-party defendants “together have
acquired
interests
and
control
of
IntelliPayment in furtherance of racketeering
activity involving the corruption of the
enterprise IntelliPayment, LLC to the
detriment of Trimarco . . . and the public at
large who are effected by their fraudulent
conduct.” (Trimarco Compl. ¶ 1.) Trimarco
brings claims for violation of federal RICO
and securities statutes, violation of the
Electronic Fund Transfer Act, 15 U.S.C.A. §
1693 (the “EFTA”), and violation of the
Prohibition
of
Unlicensed
Money
Transmitting Businesses, 18 U.S.C.A. §
1960, as well as state law claims of fraud,
conversion, breach of fiduciary duties, breach
of contract, unjust enrichment, negligence,
failure to supervise, aiding and abetting a
breach of fiduciary duty, misappropriation of
distributions and profits, accounting,
constructive trust, piercing of the corporate
veil, and breach of the covenant of good faith
and fair dealing. Trimarco seeks damages and
declaratory relief.

On March 25, 2015, plaintiff filed a threecount complaint against Trimarco, a former
IntelliPayment owner, seeking damages and
injunctive relief for his alleged hacking of
IntelliPayment’s computer systems. The
complaint alleges that Trimarco “illegally
obtained
the
ability
to
access
[IntelliPayment]’s accounts” and without
authorization, “clandestinely reviewed,
intercepted,
and
monitored
[IntelliPayment]’s confidential information,”
(Compl. ¶ 27), in violation of the Stored
Communications Act, 18 U.S.C. §§ 27012712 (the “SCA”), the Omnibus Crime
Control and Safe Streets Act of 1968, 18
U.S.C. §§ 2510-2522 (the “Wiretap Act”),
and the Computer Fraud and Abuse Act, 18
U.S.C. § 1030 (the “CFAA”).
IntelliPayment, which is the leading
provider of bi-weekly payment products for
the automobile lending industry, is a New
York limited liability company that was
formed in 2006 by Cavuoti, Trimarco, and
Scott Olsen. (Compl. ¶¶ 5-6.) Cavuoti,
Trimarco, and Olsen were originally owners
of IntelliPayment, but Olsen ceased
ownership at the end of 2007, and by 2011,
Trimarco’s ownership interest was reduced to
5%. (Id. ¶ 8.) In August 2014, IntelliPayment

2

B. Procedural History

to state a claim to relief that is plausible on its
face.” Twombly, 550 U.S. at 570.

Plaintiff commenced this action on
March 25, 2015. On April 16, 2015,
defendant submitted an answer to the
complaint and filed a third-party complaint.
On June 5, 2015, defendant filed a motion to
disqualify plaintiff’s counsel, Brewer
Attorneys & Counselors, and third-party
defendant Cavuoti’s counsel, Steven
Losquadro. On June 25, 2015, defendant filed
an amended third-party complaint. On July
17, 2015, plaintiff and the moving third-party
defendants submitted their motions to
dismiss and plaintiff submitted its response to
defendant’s motion to disqualify. On August
18, 2015, defendant submitted his response to
plaintiff’s motion to dismiss and his reply in
support of his motion to disqualify. On
August 31, 2015, plaintiff and the moving
third-party defendants submitted their replies
in support of their motions to dismiss.
II.

The Supreme Court clarified the
appropriate pleading standard in Ashcroft v.
Iqbal, 556 U.S. 662 (2009), setting forth a
two-pronged approach for courts deciding a
motion to dismiss. The Court instructed
district courts to first “identify[ ] pleadings
that, because they are no more than
conclusions, are not entitled to the
assumption of truth.” 556 U.S. at 679.
Though “legal conclusions can provide the
framework of a complaint, they must be
supported by factual allegations.” Id.
Second, if a complaint contains “wellpleaded factual allegations, a court should
assume their veracity and then determine
whether they plausibly give rise to an
entitlement to relief.” Id.
Where, as here, the defendant is
proceeding pro se, “a court is obliged to
construe his pleadings liberally. . . .”
McEachin v. McGuinnis, 357 F.3d 197, 200
(2d Cir. 2004). A pro se complaint, while
liberally interpreted, still must “‘state a claim
to relief that is plausible on its face.’”
Mancuso v. Hynes, 379 F. App’x 60, 61 (2d
Cir. 2010) (quoting Iqbal, 556 U.S. at 678);
see also Harris v. Mills, 572 F.3d 66, 72 (2d
Cir. 2009) (applying Twombly and Iqbal to
pro se complaint).

MOTIONS TO DISMISS

A. Defendant’s Counter-Claim against
IntelliPayment
In reviewing a motion to dismiss pursuant
to Rule 12(b)(6), the Court must accept the
factual allegations set forth in the complaint
as true and draw all reasonable inferences in
favor of the non-moving party. See Cleveland
v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.
2006); Nechis v. Oxford Health Plans, Inc.,
421 F.3d 96, 100 (2d Cir. 2005). “In order to
survive a motion to dismiss under Rule
12(b)(6), a complaint must allege a plausible
set of facts sufficient ‘to raise a right to relief
above the speculative level.’” Operating
Local 649 Annuity Trust Fund v. Smith
Barney Fund Mgmt. LLC, 595 F.3d 86, 91 (2d
Cir. 2010) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). This
standard does not require “heightened fact
pleading of specifics, but only enough facts

Plaintiff argues that defendant’s counterclaim for “piercing the corporate veil” should
be dismissed pursuant to Rule 12(b)(6).
Plaintiff argues that the allegations contained
in the Trimarco Complaint do not state a
claim for liability against IntelliPayment or
even allege wrongdoing by IntelliPayment,
and accordingly must be dismissed. The
Court agrees, and dismisses defendant’s
counter-claim against plaintiff. The doctrine
of “piercing the corporate veil” is not an
independent legal claim, but rather “an

3

stated that the purpose of Rule 14(a) is ‘to
avoid two actions which should be tried
together to save the time and cost of a reduplication of evidence, to obtain consistent
results from identical or similar evidence, and
to do away with the serious handicap to a
defendant of a time difference between a
judgment against him and a judgment in his
favor against the third-party defendant.’”
Hicks v. Long Island R.R., 165 F.R.D. 377,
379 (S.D.N.Y. 1996) (quoting Dery v. Wyer,
265 F.2d 804, 806-07 (2d Cir. 1959)); accord
Mueller v. Long Island R.R., No. 89 Civ.
7384 (CSH), 1997 WL 189123, at *6
(S.D.N.Y. Apr. 17, 1997) (“[T]he goal of
Rule 14(a) is to promote judicial efficiency
by allowing the adjudication of several
claims in one action”) (citing Shafarman, 100
F.R.D. at 459).

assertion of facts and circumstances which
will persuade the court to impose the
corporation obligation on its owners.” Morris
v. N.Y. State Dep’t of Taxation & Fin., 82
N.Y.2d 135, 141 (1993). “The concept is
equitable in nature and assumes that the
corporation itself is liable for the obligation
sought to be imposed. Thus, an attempt of a
third-party to pierce the corporate veil does
not constitute a cause of action independent
of that against the corporation.” Id.; see
Network Enter., Inc. v. Reality Racing, Inc.,
No. 09-CV-4664 (RJS), 2010 WL 3529237,
at *4 (S.D.N.Y. Aug. 24, 2010) (dismissing
independent alter ego liability claim); 9 East
38th St. Assocs., L.P. v. George Feher
Assocs., Inc., 640 N.Y.S.2d 520, 521 (App.
Div. 1996) (citation omitted) (under New
York law, “a separate cause of action to
pierce the corporate veil does not exist
independent from the claims asserted against
the corporation”). To the extent defendant
also brings a general request for injunctive
relief against plaintiff, this claim is also
dismissed because defendant has not stated a
viable counter-claim against IntelliPayment.

It is well-settled in the Second Circuit that
an impleader or third-party action must be
“dependent on” or “derivative of” the main
claim. Bank of India v. Trendi Sportswear,
Inc., 239 F.3d 428, 438 (2d Cir. 2000).
“[W]hen determining whether impleading a
third-party is appropriate, the third-party
defendant’s liability to the third-party
plaintiff must be ‘dependent upon the
outcome of the main claim’ or the third-party
defendant must be ‘secondarily liable as a
contributor to the defendant.’” Falcone v.
MarineMax, Inc., 659 F. Supp. 2d 394, 402
(E.D.N.Y. 2009) (quoting Kenneth Leventhal
& Co. v. Joyner Wholesale Co., 736 F.2d 29,
31 (2d Cir. 1984)). “The traditional grounds
for a third-party action are indemnification,
contribution, or subrogation. Regardless of
the type of claim asserted, the outcome of the
third-party claim must be contingent on the
outcome of the main claim.” Id. (citations and
internal quotation marks omitted). “The
liability of the third-party defendant must not
arise out of a separate and independent claim,
and the mere fact that the alleged third-party
claim arises from the same transaction or set

B. Defendant’s Claims against Moving
Third-Party Defendants
The procedural mechanism for impleader
is Rule 14 of the Federal Rules of Civil
Procedure. Rule 14(a) allows a defending
party to implead a party “who is or may be
liable to the third-party plaintiff for all or part
of the plaintiff’s claim against the third-party
plaintiff.” Fed. R. Civ. P. 14(a). “Rule 14
provides a procedural mechanism whereby a
defendant can have derivative, contingent
claims against others not originally parties to
the action adjudicated contemporaneously
with the claims against it: it does not create
new substantive rights against those other
parties.” Shafarman v. Ryder Truck Rental,
Inc., 100 F.R.D. 454, 458 (S.D.N.Y. 1984)
(citation omitted). “The Second Circuit has

4

of facts as the original claim is not enough.”
Blais Const. Co., Inc. v. Hanover Square
Assocs.-I, 733 F. Supp. 149, 152 (N.D.N.Y.
1990) (citations and internal quotation marks
omitted).

the Intellipayment Enterprise
Trimarco’s ownership.” (Id. ¶ 16.)

stealing

The Court disagrees with Trimarco’s
arguments, and dismisses the third-party
claims in the Trimarco Complaint. It is clear
that the claims asserted by Trimarco against
the third-party defendants are not derivative
of, or dependent on, the plaintiff’s complaint
here. They concern entirely separate issues
(Trimarco’s allegations of fraud and
racketeering in connection with an ownership
dispute between 2007 and 2011) from the
issues in the plaintiff’s complaint
(Trimarco’s alleged unauthorized use of
IntelliPayment’s computer systems in 2014).
Moreover, the third-party claims are in no
way contingent upon the resolution of the
plaintiff’s complaint; Trimarco does not (and
indeed cannot) claim that the third-party
defendants are somehow liable for any of the
claims in the plaintiff’s complaint. 3 See
Tyson v. Cayton, No. 88-CV-8398 (JFK),
1990 WL 209381, at *3 (S.D.N.Y. Dec. 10,
1990) (dismissing third-party complaint
alleging claims for tortious interference,
breach of contract, and antitrust and RICO
violations where the third-party complaint
claims were unrelated to the plaintiff’s
complaint and the third-party complaint
brought no claim for indemnification or
contribution).

Here, the moving third-party defendants
and plaintiff argue that the Trimarco
Complaint must be dismissed because the
claims against them are wholly unrelated to
the claims brought in this action by plaintiff
against Trimarco. IntelliPayment brings
claims against defendant for violations of the
SCA, the Wiretap Act, and the CFAA based
on the defendant’s alleged unauthorized
access of IntelliPayment’s information and
communications. 2 The moving third-party
defendants argue that these claims are
entirely unrelated to Trimarco’s state and
federal claims. Trimarco contends that this
case “cannot be decided until the issues of
ownership are decided and what role each of
the various parties played in depriving
Trimarco of his ownership and thus his
defenses in this cause of action. Since
ownership is a central component of whether
or not Trimarco violated any of the Stored
Communication allegations, ownership must
be determined by the Court. . . . Ownership
would be an absolute defense to the
allegations in this complaint.” (Def. Opp. at
¶¶ 14-15.) Trimarco further asserts that “each
third-party defendant played a role in
attempting to rob and/or deprive Trimarco of
his ownership . . . these parties should be
liable to Trimarco for the role they played in
2

The plaintiff and moving third-party defendants also
argue that the claims in the Trimarco Complaint
should be stricken pursuant to Rule 14(a)(1), which
requires a third-party plaintiff to obtain leave of the
Court when it seeks to file a third-party complaint
more than fourteen days after serving its original
answer. See Fed. R. Civ. P. 14(a)(1) (“A defending
party may, as a third-party plaintiff, serve a summons
and complaint on a nonparty who is or may be liable
to it for all or part of the claim against it. But the thirdparty plaintiff must, by motion, obtain the court’s

leave if it files the third-party complaint more than 14
days after serving its original answer.”) Though
defendant filed the Trimarco Complaint on June 5,
2015, nearly two months after serving his original
answer on April 16, 2015, the Court, in its discretion,
excuses defendant’s failure to obtain leave of the
Court and does not dismiss the claims on this basis.
3

The Court does not, and need not at this juncture,
reach the moving third-party defendants’ arguments in
favor of dismissal under Rule 12(b).

5

III.

MOTION TO DISQUALIFY

(“ABA”) and state disciplinary rules,
although the Second Circuit has emphasized
that “not every violation of a disciplinary rule
will necessarily lead to disqualification.”
Hempstead Video, Inc., 409 F.3d at 132. 4
However, “any doubt is to be resolved in
favor of disqualification.” See Hull v.
Celanese Corp., 513 F.2d 568, 571 (2d Cir.
1975).

Disqualification is viewed “with disfavor
in this Circuit,” Bennett Silvershein Assocs.
v. Furman, 776 F. Supp. 800, 802 (S.D.N.Y.
1991), because it “impinges on parties’ rights
to employ the counsel of their choice.”
Stratavest Ltd. v. Rogers, 903 F. Supp. 663,
666 (S.D.N.Y. 1995). In particular, the
Second Circuit has noted the “high standard
of proof” required for disqualification
motions because, among other things, they
are “often interposed for tactical reasons, and
that even when made in the best faith, such
motions inevitably cause delay.” Evans v.
Artek Sys. Corp., 715 F.2d 788, 791-92 (2d
Cir. 1983) (internal quotation marks
omitted); accord Gov’t India v. Cook Indus.,
Inc., 569 F.2d 737, 739 (2d Cir. 1978).

Defendant moves to disqualify the law
firm Brewer Attorneys & Counselors
(“Brewer”) and Steven E. Losquadro
(“Losquadro”) in this action. Defendant
makes several arguments as to why Brewer
and Losquadro have conflicts that require
their disqualification. First, defendant argues
that Brewer and Losquadro should be
disqualified because they cannot represent
one shareholder against another on issues
regarding IntelliPayment. Second, defendant
asserts that Brewer and Losquadro cannot
simultaneously represent IntelliPayment, a
managing member, and its key officer and
CEO in a derivative action because these
parties have conflicting interests. Third,
defendant insists that Brewer and Losquadro
must withdraw altogether because a conflict
exists between IntelliPayment and Cavuoti.
Finally, defendant argues that Brewer and
Losquadro’s
past
representation
of
IntelliPayment disqualifies it from now
representing IntelliPayment and Cavuoti.

Nevertheless, the disqualification of
counsel “is a matter committed to the sound
discretion of the district court.” Cresswell v.
Sullivan & Cromwell, 922 F.2d 60, 72 (2d
Cir. 1990). A federal court’s power to
disqualify an attorney derives from its
“inherent power to ‘preserve the integrity of
the adversary process,’” Hempstead Video,
Inc. v. Inc. Vill. of Valley Stream, 409 F.3d
127, 132 (2d Cir. 2005) (quoting Bd. of Educ.
v. Nyquist, 590 F.2d 1241, 1246 (2d Cir.
1979)), and “is only appropriate where
allowing the representation to continue
would pose ‘a significant risk of trial taint.’”
Team Obsolete Ltd. v. A.H.R.M.A. Ltd., No.
01-CV-1574 (ILG)(RML), 2006 WL
2013471, at *3 (E.D.N.Y. July 18, 2006)
(citing Glueck v. Jonathan Logan, Inc., 653
F.2d 746, 748 (2d Cir. 1981)). In exercising
this power, courts look for “general
guidance” to the American Bar Association

Brewer and Losquadro jointly oppose the
motion, arguing that defendant has not
satisfied his evidentiary burden and that
defendant’s arguments are based on the
erroneous belief that Brewer and Losquadro

4

The Court also notes that Civil Rule 1.5(b)(5) of the
Local Rules of the U.S. District Courts for the
Southern and Eastern Districts of New York binds
attorneys appearing before those courts to the New
York State Lawyer’s Code of Professional Conduct.
Local Civ. R. 1.5(b)(5); see, e.g., United States v.

Hammad, 846 F.2d 854, 857-58 (2d Cir. 1988);
Polycast Tech. Corp. v. Uniroyal, Inc., 129 F.R.D.
621, 625 (S.D.N.Y. 1990) (“[I]n this Court federal law
incorporates by reference the Code of Professional
Responsibility.”).

6

jointly represent both IntelliPayment and
Cavuoti in the litigation.

directors/sole shareholders.”). There are no
conflicts arising out of a dual or joint
representation of IntelliPayment and Cavuoti,
a shareholder, because they are separately
represented. 5

The Court agrees that defendant has not
satisfied his evidentiary burden at this
juncture. Defendant has not offered any
evidence to support his conclusory assertions
that Brewer and Losquadro are conflicted. It
is clear that Brewer currently represents
IntelliPayment,
and
that
Losquadro
separately
represents
Cavuoti.
(See
Declaration of Steve Losquadro at ¶ 5.)
Moreover, Brewer’s representation of
IntelliPayment does not establish an attorneyclient relationship with Cavuoti. See, e.g.,
Campbell v. McKeon, 75 A.D.3d 479, 480481, 905 N.Y.S.2d 589 (1st Dept. 2010) (“A
lawyer’s representation of a business entity
does not render the law firm counsel to an
individual partner, officer, director or
shareholder unless the law firm assumed an
affirmative duty to represent that
individual.”); Talvy v American Red Cross,
205 A.D.2d 143, 149, 618 N.Y.S.2d 25 (1st
Dep’t 1994), aff’d, 87 N.Y.2d 826 (1995)
(“Unless the parties have expressly agreed
otherwise in the circumstances of a particular
matter, a lawyer for a corporation represents
the corporation, not its employees”);
Kushner v. Herman, 628 N.Y.S.2d 123 (2d
Dep’t 1995) (“[E]ven if the law firm
represented the corporation in question, it
would not thereby represent the corporation’s
individual officers and directors”); see also
N.Y.S. Bar Ass’n, Comm. on Prof’l Ethics,
Op. 978 (2013) (“An attorney acting as
general counsel to a closely held corporation
. . . represents the entity and not its

Additionally, defendant’s argument that
Brewer
and
Losquadro
cannot
simultaneously represent IntelliPayment, a
managing member, and its key officer and
CEO in a derivative action because these
parties have conflicting interests, is
unavailing. Although “[t]here is thought to be
an ‘inherent conflict’ between a corporation
and its shareholders, officers, or directors in
a derivative action, because, in essence, the
plaintiff alleges that those shareholders,
officers, or directors harmed the corporation,
and thus the corporation’s interests are
directly opposed to its codefendants’
[interests],” Fox v. Idea Sphere, Inc., No. 12CV-1342 (CM), 2013 WL 1191743, at *22
(S.D.N.Y. Mar. 21, 2013), this is not truly a
derivative lawsuit. See Kriss v. Bayrock
Group LLC, 2014 WL 2212063, at *9
(S.D.N.Y. 2014) (“[I]f parties were able to
disqualify their adversaries’ long-time
corporate counsel simply by pleading that
they were suing derivatively, few entities
would be immune from the disqualification
of their attorneys.”).
With respect to defendant’s final
argument, defendant does not provide any
evidence demonstrating communications
between Losquadro and himself such that the
Court could conclude a disqualifying conflict
exists. Losquadro provided an affidavit

5

The Court notes that Brewer attorney Michael Lee
Smith entered a notice of appearance on behalf of
Schlanger on July 1, 2015, after defendant submitted
his motion to disqualify on June 5, 2015. Brewer and
Losquadro do not address this representation in their
opposition, though defendant raises it in his reply. In
any event, in the Court’s discretion, the Court does not
find that defendant has met the “high standard of
proof” required to show that this representation creates

a disqualifying conflict. Defendant alleges that
Schlanger made personal loans to IntelliPayment and
one of its owners, Cavuoti, but also acknowledges that
Schlanger filed “an affidavit in state court that he had
no ownership.” (Def. Reply at 5.) Defendant’s
statements that Brewer’s representation of Schlanger
creates a conflict are conclusory, and without more,
are insufficient for the Court to conclude that
disqualification is warranted.

7

should be granted leave to amend his counterclaim against plaintiff in accordance with this
order. The amended complaint completely
replaces the Trimarco Complaint and
therefore must include factual allegations and
any claims defendant seeks to pursue against
plaintiff. The amended complaint must be
clearly labeled “second amended complaint,”
bear the same docket number as this order,
15-01566 (JFB)(GRB), and shall be filed
within thirty (30) days from the date of this
order.

declaring that defendant’s allegations,
including that defendant sought his legal
advice and possesses “personal sensitive
information regarding other legal actions,”
are false. Losquadro states, among other
things, that he has never discussed or
consulted defendant regarding individual
legal matters, never provided legal advice
individually, and has no legal or professional
relationship with defendant; rather, the few
communications he has had with defendant
regarding IntelliPayment derive solely from
his role as counsel for Cavuoti. (Losquadro
Aff. at 2-3.) Defendant has not provided any
evidence to the contrary, and his unsupported
allegations fall well short of meeting the high
standard for a motion to disqualify. The
motion is, accordingly, denied.
IV.

V. CONCLUSION
For the foregoing reasons, plaintiff’s
motion to dismiss the counter-claim is
granted. However, the Court grants defendant
leave to amend his counter-claim against
plaintiff. The moving third-party defendants’
motions to dismiss are granted without
prejudice to defendant bringing the claims in
a separate action. Defendant’s motion to
disqualify is denied.

LEAVE TO AMEND

Although defendant has not requested
leave to amend the Trimarco Complaint, the
Court has considered whether he should be
afforded an opportunity to do so. The Second
Circuit instructs that a district court should
not dismiss a pro se complaint “without
granting leave to amend at least once when a
liberal reading of the complaint gives any
indication that a valid claim might be stated.”
Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d
Cir. 2000) (quotation omitted); see also
Aquino v. Prudential Life & Cas. Ins. Co.,
419 F. Supp. 2d 259, 278 (E.D.N.Y. 2005).
Rule 15(a)(2) of the Federal Rules of Civil
Procedure provides that a party shall be given
leave to amend “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). “This relaxed
standard applies with particular force to pro
se litigants.” Pangburn v. Culbertson, 200
F.3d 65, 70 (2d Cir. 1999). It appears unlikely
that defendant can allege a plausible counterclaim incorporating a “piercing the corporate
veil” theory of liability. However, in light of
plaintiff’s pro se status and in an abundance
of caution, the Court finds that defendant

SO ORDERED.

________________________
JOSEPH F. BIANCO
United States District Judge
Dated:

March 29, 2016
Central Islip, NY

***
IntelliPayment, LLC is represented by
Michael Lee Smith, William A. Brewer, and
Salvatore
Nunzio
Astorina,
Brewer
Attorneys & Counselors, 750 Lexington
Avenue, New York, New York 10022.
Defendant proceeds pro se. Third-party

8

defendants Meltzer LLP and Fred Meltzer are
represented by Joseph A. Vogel, Kaplan
Kravet & Vogel, LLP, 630 Third Avenue, 5th
Floor, New York, New York 10017. Thirdparty defendant Mickey Cavuoti is
represented by Steven E. Losquadro, 649
Route 25A, Suite 4, Rocky Point, New York
11778. Third-party defendant Barclays
Capital Inc. is represented by Christopher
Emmanuel Duffy and Demetri Brumis
Blaisdell, Boies, Schiller, & Flexner, LLP,
575 Lexington Avenue, New York, NY
10022. Third-party defendant Eric Schlanger
is represented by Michael Lee Smith, Brewer
Attorneys & Counselors.

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