Johnson v. State Financial Solutions

Filing 10

MEMORANDUM-DECISION AND ORDER rejecting 8 Report and Recommendations: ORDERED, that plaintiff is granted leave to proceed in forma pauperis; and it is further ORDERED, that upon receipt from plaintiff of the documents required for service the Cler k shall issue a summons, and forward it together with a copy of the complaint, to the United States Marshal for service on defendant without the payment of fees. ORDERED, that a formal response to the Complaint be filed by the Defendants as provided for in the Federal Rules of Civil Procedure subsequent to service of process on the Defendants; and it is further ORDERED, that any paper sent by a party to the Court or the Clerk shall be accompanied by a certificate setting forth the date a true an d correct copy of it was mailed to all opposing parties or their counsel. Any letter or other document received by the Clerk or the Court which does not include a certificate of service which clearly states that an identical copy was served upon all opposing parties or their attorneys is to be returned, without processing, by the Clerk. Plaintiff shall also comply with any requests by the Clerk's Office for any documents that are necessary to maintain this action; and it is further ORDERED, that all motions shall comply with the Local Rules of Practice of the Northern District; and it is further ORDERED, that the Clerk serve a copy of this Decision and Order and General Order 25 on Plaintiff in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 5/14/12. (ban)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________________________
MARK JOHNSON, CEO/DIR of JQ SOLUTIONS, LLC,
Plaintiff,
v.

1:11-CV-1518
(MAD/DRH)

STATE FINANCIAL SOLUTIONS and/or State Trust
Solutions,
Defendants.
________________________________________________

APPEARANCES:
MARK JOHNSON
2797 Banning Road
Cincinnati, Ohio 45239
Plaintiff Pro Se
MAE A. D’AGOSTINO, U. S. DISTRICT JUDGE
MEMORANDUM-DECISION AND ORDER
INTRODUCTION
On April 2, 2012, the Court received for filing a pro se second amended complaint and in
forma pauperis application.1 (Dkt. No. 7). In his second amended complaint, plaintiff asserts
claims of fraud and breach of contract against defendant. In an Order and
Report–Recommendation dated April 10, 2012, United States Magistrate Judge David R. Homer
found that plaintiff's complaint was subject to dismissal for lack of federal jurisdiction.

1

On December 23, 2011, plaintiff filed a pro se complaint and motion to proceed in forma pauperis (“IFP”).
(Dkt. Nos. 1 and 2). On January 6, 2012, the Court issued an Order denying plaintiff’s application without prejudice.
(Dkt. No. 3). On February 16, 2012, plaintiff filed an amended complaint but did not pay the filing fee or file an
amended IFP application. (Dkt No. 5). A text order was issued directing plaintiff to pay the filing fee or submit a
renewed IFP application. On April 2, 2012, plaintiff filed the renewed application and second amended complaint.

Magistrate Judge Homer also recommended denying plaintiff’s IFP application as moot. (Dkt.
No. 8).
Plaintiff filed specific objections to the Report-Recommendation. (Dkt. No. 9). In view of
the objections and pursuant to 28 U.S.C. § 636(b)(1), this Court conducts a de novo review of
these issues. The Court reviews the remaining portions of the Report-Recommendation for clear
error or manifest injustice. See Brown v. Peters, 1997 WL 599355, at *2-3 (N.D.N.Y.) aff’d
without op., 175 F.3d 1007 (2d Cir. 1999). After the appropriate review, “the court may accept,
reject, or modify, in whole or in part, the findings or recommendations made by the magistrate
judge.” 28 U.S.C. § 636(b)(1).
BACKGROUND
I.

The Second Amended Complaint
On or about October 24, 2011, plaintiff received a business loan contract for the sum of

$25,000.00 from defendant. To begin the loan process, plaintiff was directed to forward $600.00,
via Western Union, to Marie Wilson in Vancouver, Canada. Defendant’s representative, John
Fine, told plaintiff that upon receipt of the funds, the loan process would be “turned over to the
lender”. However, prior to that, plaintiff was directed to remit $400.00 for “electronic clearing
house charges”. John Fine told plaintiff that upon receipt of those funds, the loan would be
released.

Plaintiff forwarded this amount to Marie Wilson in Vancouver via Western Union.

Plaintiff was contacted by “another man” with a different telephone number who indicated that
plaintiff was to call his “855" number and release $350.00 in broker’s fees to “close the deal and
receive the check”. Plaintiff remitted the $350.00. Plaintiff attempted to telephone the broker
but was unable to reach him at the telephone number provided. Plaintiff called John Fine and was
told that the broker’s fee was sent to the wrong department and asked plaintiff to forward another
2

“350 to Canada”. Plaintiff alleges that he has lost a total of $1,350.00 to defendant thru “hidden
fees and misdirection” and further, plaintiff claims he never received the $25,000.00 loan.
Plaintiff alleges causes of action for breach of contract, theft by deception and
misrepresentation. Plaintiff also asserts a cause of action based upon 18 U.S.C. § 1030 asserting
violations of the Computer Fraud and Abuse Act (“CFAA”).2 Plaintiff alleges that due to
defendant’s actions, he was unable to service contracts and suffered a “loss of reputation in the
import/export business”. Plaintiff claims a loss of $24,000,000.00.
II.

Report-Recommendation
On April 10, 2012, Magistrate Judge Homer recommended that the Court dismiss

plaintiff’s second amended complaint for lack of jurisdiction. Judge Homer concluded, “. . . the
second amended complaint is devoid of any facts which would establish that the amount of
controversy exceeds the sum or value of $75,000.”3 (Dkt. No. 8, p. 3).
III.

Objections
Plaintiff argues that Judge Homer erred in recommending dismissal because the action

satisfies the requirements of 28 U.S.C. §§ 1331 and 1332. Plaintiff alleges that , “the sum
demanded is 24 million dollars, not 25,0000 usd”.

2

Under the CFAA, an individual commits computer fraud when she:

(A) knowingly causes the transmission of a program, information, code, or command, and as a result of such
conduct, intentionally causes damage without authorization, to a protected computer;
(B) intentionally accesses a protected computer without authorization, and as a result of such conduct,
recklessly causes damage; or
(C) intentionally accesses a protected computer without authorization, and as a result of such conduct, causes
damage and loss.
Fink v. Time Warner Cable, 810 F.Supp.2d 633, 640 (S.D.N.Y. 2011) (citing 18 U.S.C. § 1030(a)(5)).
3

The Court noted that plaintiff and defendant were “citizens of different states”.
3

DISCUSSION
A district court has subject matter jurisdiction based on diversity of citizenship if the suit
is between citizens of different states and “the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a). The amount in controversy is
determined from the face of the complaint unless defendant can show that the amount was
determined in bad faith. S. Point, Inc. v. Krawczyk, 2008 WL 434590, at *5-6 (W.D.N.Y. 2008)
(citation omitted).
“A party invoking the jurisdiction of the federal court has the burden of proving that it
appears to a ‘reasonable probability’ that the claim is in excess of the statutory jurisdictional
amount.” Chase Manhattan Bank v. Am. Nat’l Bank and Trust Co. of Chicago, 93 F.3d 1064,
1069-1071 (2d Cir. 1996) (quoting Tongkook Am., Inc. v. Shipton Sportswear Co., 14 F.3d 781,
784 (2d Cir. 1994)). “It is well settled that the sum claimed by the plaintiff controls if the claim
is apparently made in good faith. It must appear to a legal certainty that the claim is really for less
than the jurisdictional amount to justify dismissal.” Id. (collecting cases). “[B]efore determining
that the amount in controversy requirement has not been met, the court must afford the plaintiff
an appropriate and reasonable opportunity to show good faith in believing that a recovery in
excess of the jurisdictional amount is reasonably possible.” Id. (internal quotation marks omitted).
The Second Circuit has held:
A party invoking the jurisdiction of the federal court has the burden of
proving that it appears to a reasonable probability that the claim is in
excess of the statutory jurisdictional amount. This burden is hardly
onerous, however, for we recognize a rebuttable presumption that the
face of the complaint is a good faith representation of the actual
amount in controversy. To overcome the face of the complaint
presumption, the party opposing jurisdiction must show to a legal
certainty that the amount recoverable does not meet the jurisdictional
threshold. Our cases have set a high bar for overcoming this
4

presumption. The legal impossibility of recovery must be so certain as
virtually to negative the plaintiff's good faith in asserting the claim.
Scherer v. The Equitable Life Assurance Soc'y of the U.S., 347 F.3d 394, 397 (2d Cir.2003)
(internal citations and quotation marks omitted).
In this matter, at this juncture, the Court cannot say to a legal certainty that plaintiff will
not be able to achieve the recovery demanded in the complaint, and thus the Court cannot sua
sponte dismiss a plaintiff's claim against for lack of subject matter jurisdiction. Brown v. New
York State Supreme Court for Second Judicial Dist., 2009 WL 1065892, at *2 (E.D.N.Y. 2009)
(citing Pisani v. Diener, 2009 WL 749893, at *4 (E.D.N.Y. 2009) (noting that the plaintiff's good
faith demand for recovery on the face of the complaint determines whether the plaintiff can meet
the amount-in-controversy requirement in the absence of a challenge by the defendant)). At this
preliminary stage, all that plaintiff needs to demonstrate, is a “reasonable probability” that his
claim is for an amount in excess of the $75,000 jurisdictional threshold. Hall v. Chase Home
Fin., 2010 WL 2039087, at *2 (E.D.N.Y. 2010) (citing Chase Manhattan Bank, 93 F.3d at 1070).
While plaintiff’s monetary claim for recovery is excessive, without a challenge by defendant, the
Court cannot state that plaintiff has not made a “good faith” demand for recovery that will not
exceed $75,000.00.
CONCLUSION
It is hereby
ORDERED, that the Report and Recommendation by United States Magistrate Judge
David R. Homer (Dkt. No. 8) is rejected for the reasons set forth herein; and it is further
ORDERED, that plaintiff is granted leave to proceed in forma pauperis4; and it is further

4

Plaintiff should note that although the application to proceed in forma pauperis has been granted, he will
still be required to pay fees that he may incur in this action, including copying and/or witness fees
5

ORDERED, that upon receipt from plaintiff of the documents required for service the
Clerk shall issue a summons, and forward it together with a copy of the complaint, to the United
States Marshal for service on defendant without the payment of fees; and it is further
ORDERED, that a formal response to the Complaint be filed by the Defendants as
provided for in the Federal Rules of Civil Procedure subsequent to service of process on the
Defendants; and it is further
ORDERED, that any paper sent by a party to the Court or the Clerk shall be accompanied
by a certificate setting forth the date a true and correct copy of it was mailed to all opposing
parties or their counsel. Any letter or other document received by the Clerk or the Court
which does not include a certificate of service which clearly states that an identical copy was
served upon all opposing parties or their attorneys is to be returned, without processing, by
the Clerk. Plaintiff shall also comply with any requests by the Clerk's Office for any documents
that are necessary to maintain this action; and it is further
ORDERED, that all motions shall comply with the Local Rules of Practice of the
Northern District; and it is further
ORDERED, that the Clerk serve a copy of this Decision and Order and General Order 25
on Plaintiff in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: May 14, 2012
Albany, New York

6