Brown v. 7-Eleven Incorp et al

Filing 7

ORDER and REPORT-RECOMMENDATION: Ordered that Pltf's #6 Amended IFP application is granted; Pltf's #2 IFP application is denied as moot; Pltf's #3 Motion for appt of counsel is denied. Recommended that the Court dismiss with leave to replead Pltf's complaint.( Objections to R&R due by 7/2/2020, Case Review Deadline 7/6/2020). Signed by Magistrate Judge Miroslav Lovric on 6/17/20. (Attachments: #1 Case Law)(Copy served via regular mail)(sfp, )

Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018)
2018 WL 4185705

2018 WL 4185705
Only the Westlaw citation is currently available.
For Online Publication Only
United States District Court, E.D. New York.
Nicholas TALLEY, Donna Evans Talley, Plaintiffs,
v.
LOANCARE SERVICING, DIV. OF
FNF, Selene Finance, Defendants.
15-CV-5017 (JMA) (AKT)
|
Signed 08/31/2018
Attorneys and Law Firms
Donna Evans Talley, Nicholas Talley, pro se.
Stuart L. Kossar, Esq., Knuckles, Komosinski & Manfro,
LLP, 565 Taxter Road, Suite 590, Elmsford, New York 10523,
Attorney for Defendant Selene Finance, LP.
Edward Rugino, Rosicki, Rosicki and Associates, P.C., 51
East Bethpage Road, Plainview, New York 11803, Attorney
for Defendant LoanCare Servicing.

MEMORANDUM AND ORDER
Joan M. Azrack, United States District Judge
*1 On August 18, 2015, Donna Evans Talley and Nicholas
Talley (together “plaintiffs” or the “Talleys”) filed a pro se
complaint in this Court against Selene Financing (“Selene”)
and LoanCare Servicing, Division of FNF (“LoanCare”)
(together “defendants”). On January 21, 2016, the Court
granted plaintiffs' applications to proceed in forma pauperis,
but dismissed the complaint sua sponte pursuant to
28 U.S.C. § 1915(e)(2)(B)(ii). Plaintiffs were given an
opportunity to file an amended complaint. On February 16,
2016, plaintiffs filed an amended complaint, which seeks,
among other things, injunctive relief to “[s]top illegal and
fraudulent foreclosure.” (Am. Compl. at 4.) Simultaneous
with the filing of the amended complaint, plaintiffs filed
an Order to Show Cause for a Preliminary Injunction and
Temporary Restraining Order seeking to enjoin LoanCare
from pursuing a foreclosure sale scheduled for March 3, 2016.
In an Order dated February 24, 2016, this Court, sua sponte
dismissed, pursuant to

28 U.S.C. § 1915(e)(2)(B)(ii), the

prayer for injunctive relief in plaintiffs' amended complaint
and denied plaintiffs' request for a preliminary injunction and
temporary restraining order. Before the Court are defendants'
motions to dismiss the amended complaint pursuant to
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For
the reasons stated below, the Court grants defendants' motions
and dismisses plaintiffs' amended complaint in its entirety.

I. BACKGROUND
The following facts are taken from plaintiffs' amended
complaint, the record before the Court and fillings from the
foreclosure action. In deciding a motion to dismiss under
Rule 12(b)(6), the Court may take judicial notice of public
records, including state court filings.
Blue Tree Hotels
Inv. (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide,
Inc., 369 F.3d 212, 217 (2d Cir. 2004). The Court can
also consider exhibits—such as copies of the mortgage and
mortgage assignments—which are attached or integral to the
amended complaint.
(2d Cir. 2004).

Sira v. Morton, 380 F.3d 57, 67

A. The Bay Shore Mortgage
On March 7, 2009, Nicholas Talley and Donna Evans Talley
executed a mortgage in favor of non-party Lend America
(the lender) in the principal sum of $311,558 concerning
a property located at 22 Lakeland Street, Bay Shore, New
York (“the Bay Shore property”). (Am. Compl., ECF No.
7 at 15-16.) Plaintiffs claim that there was no recording
of the original title or delivery of the mortgage or deed
to plaintiffs. (Id. at 5.) Plaintiffs further allege that Lend
America became defunct in December of 2009 and that no
assignments of the mortgage occurred prior to 2012. (Id.)
By way of an endorsement to the note and two assignments
of the mortgage, the loan instruments were transferred to
defendant LoanCare on February 27, 2012. (Id. at 5, 8-12.)
The assignment to LoanCare was recorded on April 10, 2012
in the Suffolk County Clerk’s Office. (Id. at 5.) On March 31,
2015, LoanCare assigned the mortgage to defendant Selene.
(Id. at 24-25.)
B. The Foreclosure Proceeding
*2 Plaintiffs defaulted on the note and mortgage by failing
to make their monthly payment due in January 2011 and
each month thereafter. (Kossar Decl. Ex. J, ECF No. 42-11
at 3.) As a result, LoanCare commenced an action against

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plaintiffs in New York State Supreme Court, Suffolk County
on March 19, 2012. (Id.) In the Talleys' verified joint answer,
they admitted their default in payments but requested a
judicially mandated loan modification. (Id. at 8.) The state
court denied the Talleys' request, noting that after numerous
prior attempts the parties had not been able to reach an
agreement to modify the loan or settle the action. (Id.) The
Talleys also asserted fifteen affirmative defenses, alleging,
among other things: lack of personal jurisdiction; lack of
standing and legal capacity; fraud in connection with the
origination and the servicing of the loan; lack of good faith
with respect to a loan modification; and LoanCare’s failure
to state a cause of action, mitigate damages and comply with
the provisions of Real Property Actions and Proceedings Law
and Banking Law. (Id. at 3.) LoanCare moved for summary
judgment against the Talleys seeking to strike their answer
and dismiss their affirmative defenses amongst other relief.
(Id.) The Talleys opposed the motion and cross moved for
summary judgment seeking dismissal of the complaint on the
grounds that LoanCare lacked standing. (Id. at 4.)
In an Order dated April 11, 2014, the state court denied the
Talleys' cross motion for summary judgment in its entirety.
(Id.) In response to the Talleys' lack of standing defense,
the court found that, “as holder of the endorsed note and as
the assignee of the mortgage, [LoanCare] ha[d] standing to
commence [the foreclosure] action. (Id. at 5.) The court noted
that LoanCare demonstrated that it had been in “continuous
possession of the note and mortgage since February 27,
2012,” concluding that LoanCare “is the transferee and holder
of the original note as well as the assignee of the mortgage by
virtue of the written assignments.” (Id. at 6.) In sum, the court
held that LoanCare satisfied its prima facie burden as to the
merits of the foreclosure action as it produced the endorsed
note, the mortgage and assignments as well as evidence of
plaintiffs' nonpayment. (Id. at 5.) Further, the court noted
that LoanCare submitted proof of its compliance with the
notice requirements of the
RPAPL § 1303 and
§
1304. (Id.) Thus, the court found that LoanCare established
its entitlement to summary judgement and dismissed the
Talleys' remaining affirmative defenses finding that plaintiff
submitted sufficient proof to establish, prima facie, that
such defenses were unmeritorious. (Id. at 5, 7-9) (noting
that circumstances of fraud must be “stated in detail” and
that a defense based upon the “doctrine of unclean hands”
lacks merit where a defendant fails to come forward with
admissible evidence of immoral or unconscionable behavior).
The court also noted that the Talleys “failed to demonstrate
that they made a reasonable attempt to discover the facts

which would give rise to a triable issue of fact or that
further discovery might lead to relevant evidence.” (Id. at 8.)
The court further rejected the Talleys' contention that they
were entitled to a judicially mandated loan modification and
ordered the appointment of a referee to compute amounts due
under the subject note and mortgage. (Id. at 8, 9.)
On September 29, 2014, the state court entered final judgment
for foreclosure and sale of the Bay Shore property. (Kossar
Decl. Ex. K, ECF No. 42-12 at 3-8.) The state court further
ordered that LoanCare was entitled to judgment establishing
the validity of the mortgage and to recover $390,013.50 with
interest to date of the closing of time of the referee’s sale of
the subject property. (Id.)
C. The Instant Action
Plaintiffs' amended complaint alleges fraud against
defendants LoanCare and Selene along with other claims
under: (1) the Real Estate Settlement Procedures Act
(“RESPA”),

12 U.S.C. § 2605, § 2608; (2) federal

regulation 24 C.F.R. § 203.350 1 associated with the National
Housing Act, 12 U.S.C. § 1701; (3) various provisions of
the Uniform Commercial Code (“UCC”); (4) the Pooling
and Servicing Agreement (“PSA”) that governs plaintiffs'
mortgage; and (5) fraud. 2 (Amend. Compl.) Though stated
somewhat differently, plaintiffs' amended complaint appears
to reiterate their contentions from the prior state court
foreclosure action, specifically alleging that LoanCare did
not have standing to foreclose on the Bay Shore property
and that the mortgage and its assignment to LoanCare,
and subsequently to Selene, were invalid and therefore
unenforceable. 3 (See Am. Compl.)
*3 Specifically, plaintiffs allege that the original deed has
never been delivered since the inception of the mortgage. (Id.
at 3.) Plaintiffs claim that although the original lender, Lend
America ceased to exist as of December 2009, the mortgage
was never assigned in the years 2009 through 2012. (Id.)
Plaintiffs allege that Lend America “acquired the loan without
providing principal/issuer resulting in no securitization of an
FHA security instrument from 2009-2012.” (Id.) Plaintiffs
appear to allege that “no delivery of deed and title” concerning
plaintiffs' mortgage “proves deceptive practices and fraud
was the intention from the origination of the mortgage.” (Id.)
Plaintiffs further allege that defendants have no standing
under Article III of the Constitution because the original title
was not recorded or delivered to plaintiffs. (Id. at 5-6.) Finally,

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plaintiffs allege that “even if this was a legal foreclosure,
we were not given our due process because we were not
notified by LoanCare or the Court of our Right to Appeal
thereby denying us ‘due process’.” 4 (Id. at 6.) Specifically,
plaintiffs allege that they did not receive the Notice of Entry of
Final Judgment for Foreclosure and Sale from LoanCare until
February 6, 2015 and that the September 29, 2014 judgment
is in violation of the PSA, RESPA and the UCC because the
mortgage and note were transferred to Selene on August 1,
2014. 5 (Id.)
Plaintiffs seek the following relief: “[d]efendants produce
orig[inal] deed of mortgage, title with covenants”;
“[r]eimburse[ment] [of] $4,336 for services not rendered
(deed/title)”; “[p]rove securitization of mortgage from 2009
to present”; “[p]roduce chain of assignment”; “[e]xplain
no recordation of closing documents”; “[r]eveal identity of
principal/issuer”; “LoanCare cease and desist from harassing
us and placing us under duress since the mortgage has been
sold to Selene”; “[s]top illegal and fraudulent foreclosure by
prior servicer, LoanCare without assignment.” (Id. at 4.)
Defendants filed separate motions to dismiss pursuant to
Fed. R. Civ. P. 12(b)(1) and 12(b)(6), claiming that plaintiffs'
claims should be dismissed because (a) they are barred by the
Rooker-Feldman doctrine; (b) are barred by the doctrines of
res judicata and collateral estoppel; and (c) fail to state a claim
upon which relief can be granted. 6

dismissed for lack of subject matter jurisdiction pursuant to
Rule 12(b)(1) “when the district court lacks the statutory or
constitutional power to adjudicate it.” Makarova v. United
States, 201 F.3d 110, 113 (2d Cir. 2000); see Fed. R. Civ. P.
12(b)(1). In reviewing a motion to dismiss under this Rule,
the Court accepts all factual allegations in the complaint as
true.
Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129,
131 (2d Cir. 1998). However, the Court should not draw
inferences favorable to the party asserting jurisdiction. Id.
In resolving a jurisdictional issue, the Court may consider
affidavits and other materials beyond the pleadings, but may
not rely on mere conclusions or hearsay statements contained
therein. J.S. ex rel. N.S. v. Attica Cent. Sch., 386 F.3d 107,
110 (2d Cir. 2004); see also All. For Envtl. Renewal, Inc. v.
Pyramid Crossgates Co., 436 F.3d 82, 89, n. 8 (2d Cir. 2006)
(“The presentation of affidavits on a motion under Rule 12(b)
(1) ... does not convert the motion into a motion for summary
judgment under Rule 56.”).
2. Fed. R. Civ. P. 12(b)(6)
*4 To survive a motion to dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(6), a plaintiff must allege
sufficient facts “to state a claim to relief that is plausible
on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim is facially plausible only “when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.”

II. DISCUSSION

(2009) (citing

Ashcroft v. Iqbal, 556 U.S. 662, 678

Twombly, 550 U.S. at 556). Mere labels

A. Standard of review
The court is mindful that when considering a motion to
dismiss a pro se complaint, the court must construe the
complaint liberally and interpret the complaint “to raise

and legal conclusions will not suffice. Twombly, 550 U.S.
at 555. In reviewing a motion to dismiss, the Court must
accept the factual allegations set forth in the complaint as true
and draw all reasonable inferences in favor of the plaintiff.

the strongest arguments they suggest.”
Triestman v.
Federal Bureau of Prisons, 470 F.3d 471, 474 (2d Cir.
2006). “However, mere conclusions of law or unwarranted

Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.
2006). Motions to dismiss invoking res judicata and collateral
estoppel are properly brought under Rule 12(b)(6). See Hirsch
v. Desmond, No. 08–CV–2660, 2010 WL 3937303, at *2
(E.D.N.Y. Sept. 30, 2010) (collateral estoppel); Wiercinski v.
Mangia 57, Inc., No. 09–CV–4413, 2010 WL 2681168, at *1
(E.D.N.Y. July 2, 2010) (res judicata ).

deductions need not be accepted.”
Bobrowsky, 777 F.
Supp. 2d at 703 (internal quotation marks and citations
omitted).
1. Fed. R. Civ. P. 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1) requires the
dismissal of a claim when there is a “lack of subject-matter
jurisdiction.” Fed. R. Civ. P. 12(b)(1). A case is properly

B. Rooker-Feldman Doctrine
Defendants' initial argument is that this Court lacks
jurisdiction to hear this case under the Rooker-Feldman

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doctrine. See
Rooker v. Fidelity Trust Co., 263 U.S.
413 (1923) (holding that only the Supreme Court can
entertain a direct appeal from a state court judgment);
District of Columbia Court of Appeals v. Feldman, 460
U.S. 462, 483, n.3 (1983) (finding that federal courts do
not have jurisdiction over claims which are “inextricably
intertwined” with prior state court determinations). The
Rooker-Feldman doctrine “recognizes that ‘federal district
courts lack jurisdiction over suits that are, in substance,
appeals from state-court judgments.’ ” Alston v. Sebelius, CV
13-4537, 2014 U.S. Dist. LEXIS 123613, at *23-24 (E.D.N.Y.
July 31, 2014) (report and recommendation), adopted by,
2014 U.S. Dist. LEXIS 122970, 2014 WL 4374644 (E.D.N.Y.
Sept. 2, 2014) (quoting
Hoblock v. Albany Cnty. Bd.
of Elections, 422 F.3d 77, 84 (2d Cir. 2005) ). “The
doctrine applies when a litigant seeks to reverse or modify a
state court judgment or asserts claims that are ‘inextricably
intertwined’ with state court determinations.”
Park v.
City of N.Y., No. 99–Civ–2981, 2003 WL 133232, at *7
(S.D.N.Y. Jan. 16, 2003) (citations omitted). The doctrine
precludes a district court from hearing “cases brought by
state-court losers complaining of injuries caused by statecourt judgments rendered before the federal district court
proceedings commenced and inviting district court review
and rejection of those judgments.”
Exxon Mobil Corp. v.
Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
The Second Circuit has established four requirements that
must be satisfied for the Rooker–Feldman doctrine to apply:
(1) “the federal-court plaintiff must have lost in state
court;” (2) “the plaintiff must complain of injuries caused
by a state court judgment;” (3) “the plaintiff must invite
district court review and rejection of the judgment;” and (4)
“the state-court judgment must have been rendered before
the district court proceedings commenced.”
Hoblock, 422
F.3d at 85 (internal quotation marks and citations omitted).
The first and fourth requirements are procedural and the
second and third are substantive. Id.
Specifically, with respect to foreclosure proceedings, “courts
in this Circuit have consistently held that any attack on a
judgment of foreclosure is clearly barred by the Rooker–
Feldman doctrine.” Ashby v. Polinsky, No. 06–CV–6778,
2007 WL 608268, at *1 (E.D.N.Y. Feb. 22, 2007) (internal
quotation marks and citation omitted), aff'd, 328 F. App'x 20
(2d Cir. 2009); see also Done v. Wells Fargo Bank, N.A., No.
08–CV–3040, 2009 WL 2959619, at *3 (E.D.N.Y. Sept. 14,

2009); Ward v. Bankers Trust Co. of California, N.A., No. 09–
CV–1943, 2011 WL 1322205, at *5 (E.D.N.Y. Mar. 29, 2011).
This even includes challenges to a judgment of foreclosure
that was allegedly procured by fraud, as plaintiffs have
alleged herein. See, e.g.,
Swiatkowski v. Citibank, 745 F.
Supp. 2d 150, 164–65 (E.D.N.Y. 2010) aff'd, 446 F. App'x
360, 361 (2d Cir. 2011) (finding Rooker–Feldman doctrine
applied to allegations that defendants engaged in a pattern of
submitting fraudulent and perjurious documents related to the
judgment of foreclosure and sale in other courts and that the
allegations and relief sought were “inextricably intertwined
with the state court judgment and would require overturning
the state court judgment”);
Parra v. Greenpoint Mortgage
Co., No. Civ.A. 01–CV–02010, 2002 WL 32442231, at *2
(E.D.N.Y. Mar. 26, 2002) (“The fact that [a] plaintiff alleges
that a state court judgment was procured by fraud does not
remove [the] claims from the ambit of Rooker–Feldman”);
Dockery v. Cullen & Dykman, 90 F. Supp. 2d 233, 236
(E.D.N.Y. 2000) (same).
*5 In the instant case, Rooker-Feldman bars plaintiffs'
claims. The procedural requirements of Rooker–Feldman
are satisfied. First, plaintiffs lost in state court. (Kossar
Decl. Exs. J, K.) Second, the state court granted LoanCare
summary judgment and denied plaintiffs' cross-motion for
summary judgment by Order dated April 9, 2014, and issued
a foreclosure judgment on September 29, 2014. (See id.)
Since those judgments predate the August 18, 2015 filing of
the initial complaint in the instant action, (see Compl., ECF
1), all pertinent state-court decisions were issued before the
proceedings in this Court commenced.
The substantive requirements of Rooker–Feldman are also
satisfied because plaintiffs' amended complaint seeks review
and rejection of those state court decisions. Plaintiffs' claims
complain of injuries, including, “deceptive practices and
fraud” at the origination of the mortgage due to no delivery
or recording of closing documents and seeks to “[s]top illegal
and fraudulent foreclosure,” in contravention of the state court
judgment of foreclosure and the state court’s acceptance of
the validity of the mortgage documents that formed the basis
for that judgement. (Am. Compl. at 4-6.) See
Trakansook
v. Astoria Fed. Sav. & Loan Ass'n, No. 06–Civ–1640, 2007
WL 1160433, at *5 (E.D.N.Y. Apr. 18, 2007), aff'd, No.
07–2224–CV, 2008 WL 4962990 (2d Cir. Nov. 21, 2008)
(holding that because plaintiff’s complaint asked the court
“to vacate the judgment of foreclosure and sale and award
her title to the property, it [was] plain that she [was] inviting

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[the] court to ‘reject’ the [state court] order.”); Done v.
Option One Mortgage, No. 09–civ–4770, 2011 WL 1260820,
at *6 (E.D.N.Y. Mar. 30, 2011) (concluding substantive
requirements of Rooker-Feldman met where “[a]lthough
plaintiff ha[d] made a cursory reference to seeking monetary
damages, it [was] abundantly clear that the whole purpose of
th[e] action [was] to undo the foreclosure judgment”).
In their amended complaint, plaintiffs contend that LoanCare
had no standing to bring the state court foreclosure action.
(See Am. Compl.) However, as plaintiffs admit, the state
court rejected this exact contention in its final judgment.
(Pls.' Supplemental Opp. to defendant LoanCare’s Mot. to
Dismiss, ECF No. 43 at 4; Kossar Decl. Ex. J at 7 (“The
assertions by the defendant mortgagors as to the plaintiff’s
alleged lack of standing, which rest, inter alia, upon alleged
defects in the assignments, rife with speculation, are rejected
as unmeritorious ...”).) In opposition to defendants' motion
to dismiss, plaintiffs specifically state that they are seeking
“[r]escission of [f]inal [s]ummary [j]udgment”, that this
Court “[r]ender the lien unenforceable due to fraudulent
concealment”, and seek “[d]ismissal of the [f]oreclosure due
to lack of [s]tanding.” (Pls.' Opp. to defendant LoanCare’s
Mot. to Dismiss, ECF No. 39-12.) Plaintiffs are requesting
this Court to do exactly what Rooker-Feldman forbids—
to overturn the New York Supreme Court judgment of
foreclosure. See
Trakansook, 2007 WL 1160433, at *5
(“Because [plaintiff’s] complaint asks this court to vacate the
judgment of foreclosure and sale and award her title to the
property, it is plain that she is inviting this court to ‘reject’
the [state court order].”). A ruling in plaintiffs' favor “would
effectively declare the state court judgment [of foreclosure]
fraudulently procured and thus void, ... which is precisely
the result that the Rooker–Feldman doctrine seeks to avoid.”
Kropelnicki v. Siegel, 290 F.3d 118, 129 (2d Cir. 2002).
Moreover, plaintiffs' attempt to thwart application of RookerFeldman by labeling their claims as “fraud in the inducement”
and “fraudulent concealment” rather than the “fraud” they
alleged in the state action fails. Plaintiffs' claim of “newly
discovered facts of fraud in the inducement” based on the
actions of third parties at the time of the loan origination
fails to preclude application of Rooker-Feldman. 7 (Pls.'
Opp. to defendant Selene’s Mot. to Dismiss, ECF No. 42-26
at 1.) Plaintiffs' claims relate not to defendants' conduct
in the course of the state court foreclosure action, but,
rather, to the validity of the underlying mortgage documents
and defendants' standing to commence the foreclosure

proceeding. Thus, “the injury complained of is the judgment
permitting the foreclosure, which implicitly held that the
mortgage[ ] w[as] valid.” Webster v. Wells Fargo Bank, N.A.,
No. 08–civ–10145, 2009 WL 5178654, at *8 (S.D.N.Y. Dec.
23, 2009), aff'd sub nom. as amended (Jan. 24, 2012) Webster
v. Penzetta, 458 F. App'x 23 (2d Cir. 2012) (finding the Court
“plainly lack[ed] subject matter jurisdiction” over plaintiff’s
claims “attacking the validity of the foreclosure proceedings
and the validity of the underlying mortgage loan documents”
pursuant to Rooker-Feldman because “the injury complained
of is the judgment permitting foreclosure, which implicitly
held that the mortgages were valid.”); see also Feliciano v.
U.S. Bank Nat. Ass'n, No. 13–CV–5555, 2014 WL 2945798,
at *2–4 & n. 7 (S.D.N.Y. June 27, 2014) (finding that
plaintiffs' claims that “[defendant] wrongfully foreclosed
upon their home because it lacked the legal capacity to
accept the assignment of the underlying mortgage, and
therefore lacked standing in the Foreclosure Action” failed
under Rooker-Feldman and the fraud exception did not apply
because “the complaint alleges fraudulent conduct (generally)
by defendant prior to the institution of the Foreclosure Action
rather than on the state court itself.” (internal citations and
quotations omitted) ). Therefore, plaintiffs attempt to invoke
a fraudulent procurement exception to the Rooker–Feldman
doctrine fails.
*6 Accordingly, the Court lacks subject matter jurisdiction
over plaintiffs' claims and the amended complaint should be
dismissed in its entirety.
C. Res judicata
Alternatively, to the extent the Rooker-Feldman doctrine does
not deprive the Court of subject matter jurisdiction, all of
plaintiffs' claims are barred by the doctrine of res judicata.
Under the doctrine of res judicata, “a final judgment on the
merits of an action precludes the parties or their privies from
re-litigating issues that were or could have been raised in that
action.” Flaherty v. Lang, 199 F.3d 607, 612 (2d Cir. 1999)
(quotation omitted). “In applying the doctrine of res judicata,
[a court] must keep in mind that a state court judgment has
the same preclusive effect in federal court as the judgment
would have had in state court.” Burka v. New York City
Transit Auth., 32 F.3d 654, 657 (2d Cir. 1994). Further, federal
courts must apply the doctrine of res judicata according to
the rules of the state from which the judgment is taken. See
Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 373
(1996); Giardina v. Nassau Cnty., No. 08–CV–2007, 2010
WL 1850793, at *3 (E.D.N.Y. May 7, 2010). New York State

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courts apply a transactional analysis, “barring a later claim
arising out of the same factual grouping as an earlier litigated
claim even if the later claim is based on different legal theories
or seeks dissimilar or additional relief.” Burka, 32 F.3d at
657 (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir.
1994) ); see Done, 2009 WL 2959619, at *3 (same).
Res judicata applies when there was: (1) a previous action
that resulted in a final adjudication on the merits, (2) the party
against whom res judicata is to be invoked was party to the
previous action or in privity with a party to that action, and
(3) the claims involved in the current case were, or could have
been, raised in the previous action.

Swiatkowski, 745 F.

Supp. 2d at 171 (quoting
Whelton v. Educ. Credit Mgmt.
Corp., 432 F.3d 150, 155 (2d Cir. 2005) ). Res judicata applies
to defenses that could have been raised in the prior action as
well. Waldman v. Vill. of Kiryas Joel, 39 F. Supp. 2d 370, 377
(S.D.N.Y. 1999) (res judicata “prevents a party from litigating
any issue or defense that could have been raised or decided in
a previous suit, even if the issue or defense was not actually
raised or decided”) (quoting
Woods v. Dunlop Tire Corp.,
972 F.2d 36, 38 (2d Cir. 1992) ); Robbins v. Growney, 229
A.D.2d 356, 645 N.Y.S.2d 791, 792 (N.Y. App. Div. [1st]
Dep't 1996) (“The doctrine of res judicata is applicable ... to
defenses raised in the prior action or which, though not raised,
could have been.”) (internal citation omitted). “All litigants,
including pro se plaintiffs, are bound by the principles of res
judicata. Done, 2009 WL 2959619, at *3.
Here, plaintiffs' claims are barred from further adjudication
by res judicata. First, the judgment of foreclosure entered
against plaintiffs is an adjudication on the merits, which
prevents reconsideration of any claim that is based on the
same facts as the foreclosure judgment and which would
disturb LoanCare’s (or Selene’s) ability to enforce rights
provided pursuant to the mortgage and the note securing
the Bay Shore property. See id. at *4. Second, the facts
pled by plaintiffs in their amended complaint—that LoanCare
brought the foreclosure suit in the Suffolk County Supreme
Court and was not the holder of a valid mortgage note
at the time of assignment, (see Am. Compl.)—would have
been central to deciding any entitlement to a judgment of
foreclosure, and thus demonstrates that their claims in the
current suit arise from the same transaction as LoanCare’s
claim in the previous foreclosure action. Done, 2009 WL
2959619, at *4. Plaintiffs' claims arising from the origination
of the mortgage and attacking the ability of defendants to
enforce it in the foreclosure proceedings, (see Am. Compl.),

not only could have been raised as a defense to foreclosure
in the state court, but were actually raised, (see Kossar
Decl. Exs. I, J) and therefore cannot be relitigated in this
Court. See, e.g.,
Hinds v. Option One Mortg. Corp., No.
11–CV–6149, 2012 WL 6827477, at *5 (E.D.N.Y. Dec. 6,
2012) (report & recommendation), adopted by 2013 WL
132719 (E.D.N.Y. Jan. 10, 2013) (“Inasmuch as Plaintiff’s
fraud claim is premised on his allegations that Defendants
obtained the underlying mortgage through predatory lending
tactics and fraud, res judicata operates to preclude federal
review of such a claim ... [since the plaintiff’s claims] arise
from the same factual grouping—namely the validity of
Plaintiff’s mortgage, and the right of Defendants to enforce
that agreement in a state court foreclosure proceeding”):
Solomon v. Ocwen Loan Servicing, LLC, No. 12CV-2856, 2013 WL 1715878, at *5 (E.D.N.Y. Apr. 12,
2013) (“The state-law claims asserted by plaintiff arise from
the origination of the [m]ortgage and attack the ability of
defendants to enforce it in the foreclosure proceedings. These
claims could have been raised as a defense to foreclosure in
state court, and therefore cannot be relitigated in a subsequent
suit in federal court.”);
Swiatkowski, 745 F. Supp. 2d
at 171 (“Many of the factual allegations plaintiff raises in
opposition to the instant motion to dismiss involve issues
that could have been raised as claims or defenses in the state
court [foreclosure] proceedings.”);
Gray v. Americredit
Fin. Servs., Inc., No. 07 Civ. 4039, 2009 WL 1787710, at
*6 n. 2 (S.D.N.Y. June 23, 2009) (“Plaintiff’s allegations of
fraud regarding the underlying loan transaction do not appear
to be of the type recognized by certain courts as immune
from res judicata.”);
Yeiser v. GMAC Mortg. Corp., 535
F.Supp.2d 413, 421 (S.D.N.Y. 2008) (“According to New
York law, ... res judicata ... applies to defenses that could have
been litigated, including defenses to a foreclosure.”).
*7 Whether cast as violations of RESPA, or regulations
governing the National Housing Act, plaintiffs effectively
allege that defendants improperly obtained the foreclosure
judgment due to lack of standing based on fraud or
“fraud in the inducement”. (See Am. Compl.) However,
plaintiffs asserted these claims, albeit in different form,
in the state foreclosure action as affirmative defenses in
their verified answer, in their opposition to LoanCare’s
summary judgment motion, and in support of their own
cross motion for summary judgment. (Kossar Decl. Exs. I,
J.) Specifically, in the state action, plaintiffs alleged that
LoanCare had no standing to bring a foreclosure action, had

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6

Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018)
2018 WL 4185705

“unclean hands,” and misled, overcharged and defrauded
plaintiffs in the mortgage application, closing and servicing
process. (Id., Ex. I at ¶ ¶ 3, 8, 14, 18) The state court
considered and ultimately dismissed plaintiffs' affirmative
defenses and denied plaintiffs' summary judgment; instead,
granting summary judgment in LoanCare’s favor. (Kossar
Decl. Ex. J.) “If plaintiffs were unhappy with the result of
that proceeding, the proper recourse was a state court appeal.
Because plaintiffs could have presented the same claims
they now assert, including the RESPA claim, as defenses or
counterclaims in the action for foreclosure, the doctrine of res
judicata bars this litigation.” Yeiser, 535 F. Supp. 2d at 422
(citing 12 U.S.C. § 2614, which authorizes an action, pursuant
to the provisions of RESPA, to be brought in the federal
district court or in any other court of competent jurisdiction in
which the property involved is located, or where the violation
is alleged to have occurred); Mercado v. Playa Realty Corp.,
No. CV 03-3427, 2005 WL 1594306, at *7 (E.D.N.Y. July 7,
2005) (determining that because plaintiff could have asserted
the new claims she was raising in her federal action during
the foreclosure action as counterclaims and the relief sought
by plaintiff was inconsistent with the ruling in the foreclosure
action, the new claims were barred by the doctrine of res

action concerning the mortgage for purposes of res judicata.
Yeiser, 535 F. Supp. 2d at 423.
The facts alleged in the amended complaint establish privity
between Selene and LoanCare, as LoanCare assigned the
mortgage to Selene on March 31, 2015—after final judgment
in the state foreclosure action. See
Yeiser, 535 F. Supp.
2d at 423 (“[s]ince the loan was transferred to GRP in May
2005,” almost one year after the state foreclosure action,
“GRP is a successor to that interest and is also in privity
with [the original note holder],” which was the plaintiff in
the foreclosure litigation);
Hinds, 2012 WL 6827477, at
*4 n.8 (finding the privity requirement satisfied where Wells
Fargo was not a party in the state court proceeding, but
bought the subject property at a foreclosure sale, rendering it
a successor in interest). Thus, the requirements of res judicata
are satisfied here.
Therefore, to the extent Rooker-Feldman does not deprive this
Court of subject matter jurisdiction over plaintiffs' claims, the
claims are barred by the doctrine of res judicata and must be
dismissed.

judicata). 8
Lastly, the present action satisfies the privity requirement for
claim preclusion since LoanCare commenced the foreclosure
proceeding and is a named party to the current action.
Further, Selene, a non-party to the earlier state court action
may still invoke claim preclusion if it can demonstrate
that it was in privity with a party to the earlier action.
See Houdet v. U.S. Tennis Ass'n, No. 13-CV-5131, 2014
WL 6804109, at *4 (E.D.N.Y. Dec. 3, 2014) (finding res
judicata to apply “not just to the parties in a prior litigation
but also to those in privity with them” where the “new
defendants have a sufficiently close relationship to justify
[its] application” (internal quotation marks omitted) ). “A
relationship of privity ‘includes those who are successors
to a property interest, those who control an action although
not formal parties to it, [and] those whose interests are
represented by a party to the action.’ ” Modular Devices, Inc.
v. Alcatel Alenia Space Espana, No. 08-CV-1441, 2010 WL
3236779, at *4 (E.D.N.Y. Aug. 12, 2010) (quoting
Ferris
v. Cuevas, 118 F.3d 122, 126 (2d Cir. 1997) ). Under New
York law, both the party servicing the mortgage and the party
that later acquires it (becoming a successor in interest) are
considered to be in privity with the party to the original

D. Collateral Estoppel
Plaintiffs' claims are also precluded under the narrower
doctrine of collateral estoppel. “Collateral estoppel, or
issue preclusion, ‘precludes a party from relitigating in a
subsequent action or proceeding an issue clearly raised in a
prior action or proceeding and decided against that party ...
whether or not the tribunals or causes of action are the same.’
” Sullivan v. Gagnier, 225 F.3d 161, 166 (2d Cir. 2000).
Whether relitigation of an issue is precluded is determined
by the rules of the court that rendered the prior judgment.
Id. “Under New York law, the doctrine of collateral estoppel
requires that ‘the issue in the second action [be] identical to
an issue which was raised, necessarily decided and material
in the first action.’ ” Hines v. HSBC Bank USA, No. 15CV-3082, 2016 WL 5716749, at *9 (E.D.N.Y. Sept. 30, 2016)
(quoting Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d
343, 349 (1999) ). Thus, “[b]efore collateral estoppel can
be invoked, the court must find that an identical issue was
necessarily decided in the prior action and is decisive of the
present action, and that there was a full and fair opportunity
to contest the decision now said to be controlling.”
535 F. Supp. 2d at 424 (internal citation omitted).

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Yeiser,

7

Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018)
2018 WL 4185705

*8 “To determine whether the issue in the first litigation was
necessarily decided, the focus is on the rights, questions or
facts that underlie a judicial decision, not the legal theories
underlying the complaint.”
Id. at 424-25 (citing Coveal
v. Consumer Home Mortgage, Inc., 2005 WL 2708388, at
*5 (E.D.N.Y. Oct. 21, 2005) ) “New York requires only
that the issue have been properly raised by the pleadings or
otherwise placed in issue and actually determined in the prior
proceeding.” Id. (finding collateral estoppel to be applicable
where all the facts giving rise to the amended complaint were
presented in the foreclosure proceeding even though plaintiffs
did not allege all of the same causes of action).
Here, plaintiffs had a full and fair opportunity to litigate
the factual issues raised in the amended complaint in the
state foreclosure action. And, those issues were decided
in LoanCare’s favor. As discussed supra, plaintiffs already
challenged the validity of the assignment of the mortgage
to LoanCare and its standing to foreclose on the Bay
Shore property in state court, and the state court necessarily
rejected those arguments when it found LoanCare had a valid
claim to the Bay Shore property and entered judgment of
foreclosure on that property. No appeal was filed in that
action. Accordingly, plaintiffs cannot relitigate these issues
against defendant LoanCare in federal court. See
Graham
v. Select Portfolio Servicing, Inc., 156 F. Supp. 3d 491, 505–
06 (S.D.N.Y. 2016).
Plaintiffs are also precluded from litigating these same issues
against Selene, despite the fact that Selene was not a party to
the initial suit in state court. See Jasper v. Sony Music Entm't,
Inc., 378 F. Supp. 2d 334, 343 (S.D.N.Y. 2005) (“By binding
the plaintiff to earlier judicial decisions in which he was a
party, defensive collateral estoppel precludes a plaintiff from
getting a second bite at the apple merely by choosing a new
adversary.”); see also
Fequiere v. Tribeca Lending, No.
14-CV-812, 2016 WL 1057000, at *9–10 (E.D.N.Y. Mar. 11,
2016) (applying defensive non-mutual collateral estoppel to
FDCPA claim).
Accordingly, the Court grants defendants' motions to dismiss
plaintiffs' claims because they are precluded pursuant to the
doctrine of collateral estoppel. 9
E. Sanctions
Pursuant to Rule 11 of the Federal Rules of Civil Procedure
(“Rule 11”), defendant LoanCare seeks to impose sanctions

on plaintiffs in the form of attorneys' fees incurred in
defendant’s defense of the instant action. (Def. LoanCare’s
Mot. to Dismiss, ECF No. 39-7 at 19-20.) For the reasons
discussed below, defendant’s motion is denied.
As an initial matter, the Court notes that LoanCare has not
satisfied the procedural requirements for filing a sanctions
motion. Rule 11 requires that a motion for sanctions “be
made separately from any other motion and ... describe the
specific conduct that allegedly violates Rule 11(b).” Fed. R.
Civ. P. 11(c)(2). In any event, the Court denies LoanCare’s
motion for sanctions. Plaintiffs' claims against defendants
are plainly without merit. Nevertheless, this alone does not
warrant sanctions, particularly as plaintiff is proceeding pro
se. Although Rule 11 does apply to pro se litigants, the court
may take into account the “special circumstances of litigants
who are untutored in the law,”
Maduakolam v. Columbia
Univ., 866 F.2d 53, 56 (2d Cir. 1989), as well as whether
such a litigant has been warned of the possible imposition of
sanctions. See
Kuntz v. Pardo, 160 B.R. 35, 40 (S.D.N.Y.
1993); see also Fed. R. Civ. P. 11 advisory committee’s
note to the 1993 amendments (stating that the court should
consider, inter alia, whether the motion was made in bad
faith). There are no facts indicating that plaintiff instituted or
maintained this lawsuit in bad faith or that they were warned
of the imposition of sanctions. For all of the above reasons,
LoanCare’s request for sanctions is denied.
F. Leave to Amend
*9 Pro se plaintiffs are ordinarily given the opportunity “to
amend at least once when a liberal reading of the complaint
gives any indication that a valid claim might be stated.”
Shomo v. City of New York, 579 F.3d 176, 183 (2d Cir.
2009) (internal quotation omitted). Nevertheless, “a district
court may deny a pro se plaintiff leave to amend when
amendment would be futile.”
Boddie v. N.Y. State Div. of
Parole, No. 08-CV-911, 2009 WL 1033786, at *5 (E.D.N.Y.
Apr. 17, 2009).
Here, the Court has carefully considered whether plaintiffs
should be granted leave to amend the complaint. Having
decided plaintiffs' claims are barred by Rooker-Feldman, res
judicata and collateral estoppel, the Court finds that any
amendment of these claims would be futile. For these reasons,
the Court declines to grant plaintiffs leave to amend.

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Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018)
2018 WL 4185705

III. CONCLUSION
For the reasons stated above, the Court grants defendants'
motions and dismisses plaintiffs' amended complaint in its
entirety. The Clerk of Court is directed to close this case and
send a copy of this Order to pro se plaintiffs.

SO ORDERED.
All Citations
Not Reported in Fed. Supp., 2018 WL 4185705

Footnotes
1

2

3
4
5

6
7

8

9

Plaintiffs also allege a violation of 24 C.F.R. § 203.35 in their amended complaint, (Am. Compl. at 5), but note
in their opposition to defendant LoanCare’s motion to dismiss that this was an error. (Pls.' Opp. to LoanCare’s
Mot. to Dismiss, ECF No. 39-12 at 3.)
Though the amended complaint seeks relief from “LoanCare harassing us and placing us under duress” (Am.
Compl. at 5-6), the only allegation of such harassment appears in plaintiffs' opposition to defendant
LoanCare’s motion to dismiss. (See Pls.' Opp. to LoanCare’s Mot. to Dismiss, ECF No. 39-12 at 5-6.) A
plaintiff “cannot amend [his] complaint by asserting new facts or theories for the first time in opposition to
[d]efendants' motion to dismiss”,
K.D. ex rel. Duncan v. White Plains Sch. Dist., 921 F. Supp. 2d 197,
209 (S.D.N.Y. 2013). In any event, plaintiff’s conclusory assertions of harassment are insufficient to state
any plausible claims.
The Court notes that plaintiffs appear to use the terms “fraud”, “fraudulent concealment” and “fraud in the
inducement” interchangeably.
To the extent that plaintiffs attempt to allege a due process violation under
42 U.S.C. § 1983, such claim
is unwarranted as the defendants are private parties, not state actors.
According to the loan transfer documents attached to plaintiffs' amended complaint, the mortgage and note
were transferred to Selene on March 31, 2015. (See Am. Compl. at 23-24.) However, Selene first became
involved with plaintiffs' loan when it became a servicer of the loan on August 1, 2014. (Pls.' Opp. to Def.
LoanCare’s Mot. to Dismiss, ECF No. 35-1, Ex. H at 17.)
Plaintiffs filed for Chapter 13 bankruptcy on June 5, 2017. (Pls.' Opp. to Mot. to Dismiss, Ex. J, ECF No.
35 at 37.)
Plaintiffs appear to allege newly discovered facts in relation to the alleged fraudulent closing of the mortgage
in 2009. (Pls.' Opp to defendant Selene’s Mot. to Dismiss, ECF No. 42-26 at 1.) Specifically, plaintiffs now
argue, in conclusory fashion, that at the time of the closing of their mortgage in 2009, the Title Company was
a “shell company” and the attorney at the closing table was fraudulent. (Id.)
“Although New York’s permissive counterclaim rule means that res judicata generally will not necessarily bar
claims that could have been counterclaims in a prior action, this exception for counterclaims does not permit
an attack on a judgment” previously issued by the state court.
Beckford v. Citibank N.A., No. 00 Civ. 205,
2000 WL 1585684, at *3 (S.D.N.Y. Oct. 24, 2000) (internal quotation omitted).
Because plaintiffs' claims fail under Rooker-Feldman, res judicata and collateral estoppel, the Court need not
reach the defendants' alternative arguments in support of dismissal.

End of Document

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9

Aguilar v. U.S., Not Reported in F.Supp.2d (1999)
1999 WL 1067841

KeyCite Yellow Flag - Negative Treatment
Distinguished by U.S. v. $6,787.00 in U.S. Currency, N.D.Ga., February 13,
2007

1999 WL 1067841
Only the Westlaw citation is currently available.
United States District Court, D. Connecticut.
Francisco AGUILAR, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.
Nos. 3:99–MC–304 (EBB), 3:99–MC–408 (EBB).
|
Nov. 8, 1999.

cases. This court denied without prejudice Aguilar's initial
complaint, which was erroneously captioned “United States
v. One Parcel Of Property Located At 414 Kings Hwy.,”
one of the cases already docketed and then pending.
See Order of June 15, 1999. Upon refiling an amended
complaint (the “Amended Complaint”) with the appropriate
caption, Aguilar also filed a second complaint (the “Second
Complaint”), seeking the same relief and asserting essentially
the same claims against the government for bringing the
other three forfeiture cases. The clerk returned these pleadings
because Aguilar failed to complete the IFP forms. See Order
of August 25, 1999. After Aguilar cured these pleading
deficiencies, miscellaneous docket numbers were assigned to
the complaints.

*1 Francisco Aguilar, pro se, seeks leave to proceed in forma
pauperis (“IFP”) to press two meritless complaints against
the government, which is prosecuting related civil forfeiture
actions against his properties. Although Aguilar is otherwise
financially eligible, the court dismisses these complaints sua

In Aguilar's Amended Complaint—the one originally filed
against his own property at 414 Kings Highway—Aguilar
seeks return of the property, compensatory damages and
$100,000,000 in punitive damages “to deter the United
States of America from committing a similar Abuse of
Power.” Aguilar pleads his case in four “Articles,” asserting
sundry state and federal “constitutional” claims, including
conversion, false pretenses, mail fraud, and breach of
fiduciary duty. The Amended Complaint also suggests an
allegation that the government falsified and deliberately
omitted known material facts from its probable cause affidavit

sponte pursuant to
28 U.S.C. § 1915(e)(2)(B) because the
purported claims are frivolous, baseless and irremediable.

in “disregard” of
19 U.S.C. § 1615, the statute outlining
the burden of proof in administrative forfeiture proceedings.

Dismissal of Plaintiff's Complaints
BURNS, Senior J.

Background
Would-be plaintiff Aguilar is no stranger to this court. He is
currently serving a forty-year sentence for drug trafficking
at the federal penitentiary in Leavenworth, Kansas. See
United States v. Tracy, 12 F.3d 1186, 1189 (2d Cir.1993)
(affirming conviction and sentence). In connection with his
conviction for narcotics offenses, the government filed civil
forfeiture actions pursuant to
21 U.S.C. § 881(a) in 1990
and 1991 against four of Aguilar's Connecticut properties,
which have since been sold. With the help of CJA-appointed
counsel, Aguilar has vigorously defended each of these four
actions, three of which remain pending before this court, and
are scheduled for trial in January 2000. 1
Now Aguilar seeks to take the offensive by filing these
purported claims against the government, and serving the
current property owners as well as the Assistant United
States Attorney who is prosecuting the related forfeiture

The Second Complaint—the one related to the government's
seizure of the other three properties—seeks similar equitable
and monetary relief, including return of the properties,
compensation for “suffering,” “usurpation,” denial of his
use and enjoyment of the properties and lost rents, and one
billion dollars in punitive damages. Liberally construed, the
Second Complaint simply repeats the claims of the Amended
Complaint except for one additional allegation: that Aguilar
was entitled to, and did not receive, a hearing prior to the
seizure and sale of his properties.
Discussion
A.
§ 1915(e)(2)(B) Standards
*2 The Prisoner Litigation Reform Act (“PLRA”) mandates
dismissal of an IFP action if it: “(i) is frivolous or malicious;
(ii) fails to state a claim on which relief may be granted; or
(iii) seeks monetary relief against a defendant who is immune
from such relief.”

28 U.S.C. § 1915(e)(2)(B) (as amended

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1

Aguilar v. U.S., Not Reported in F.Supp.2d (1999)
1999 WL 1067841

in 1996). Prior to the adoption of the PLRA, district courts had
discretion to dismiss frivolous actions; now they are required
to do so. See Pub.L. 104–134, 110 Stat. 1321 (1996) (making
dismissal of frivolous actions mandatory, and also requiring
dismissal for failing to state a claim or seeking damages from
an immune defendant). Because Aguilar's claims qualify for
dismissal under all three of these prongs, the standards for
each are set out in turn.
1. Frivolous or Malicious
A complaint is frivolous if “it lacks an arguable basis either in
law or in fact.” Neitzke v. Williams, 490 U.S. 319, 325, 109
S.Ct. 1827, 1831–32, 104 L.Ed.2d 338 (1989) (interpreting

no relief could be granted under any set of facts that could be
proved consistent with the allegations.”
Hishon v. King &
Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d.
59 (1984).
*3 Pro se complaints, such as these, however, must be read
broadly, see
Haines v. Kerner, 404 U.S. 519, 520–21, 92
S.Ct. 594, 595–96, 30 L.Ed.2d 652 (1972) (per curiam), and
may not be dismissed “simply because the court finds the
plaintiff's allegations unlikely.” Denton v. Hernandez, 504
U.S. 25, 33, 112 S.Ct. 1728, 1733, 118 L.Ed.2d 340 (1982)
(construing pre-PLRA complaint as frivolous). Therefore,

§ 1915(d), later redesignated as
§ 1915(e)(2)(B)(i),
to preclude “not only the inarguable legal conclusion, but
also the fanciful factual allegation”). Factual frivolity occurs
where “the ‘factual contentions are clearly baseless,’ such
as when allegations are the product of delusion or fantasy.”

a pro se plaintiff who is proceeding
in forma pauperis should be afforded
the same opportunity as a pro se feepaid plaintiff to amend his complaint
prior to its dismissal for failure to state

Livingston v. Adirondack Beverage Co., 141 F.3d 434,
437 (2d Cir.1998) (quoting
Neitzke, 490 U.S. at 327, 109
S.Ct. at 1833). Legal frivolity, by contrast, occurs where
“the claim is based on an indisputably meritless legal theory
[such as] when either the claim lacks an arguable basis in
law, or a dispositive defense clearly exists on the face of
the complaint.” Livingston, 141 F.3d at 327 (internal quotes
and citation omitted); see also Tapia–Ortiz v. Winter, 185
F.3d 8, 11 (2d Cir.1999) (upholding dismissal as frivolous
where “[t]he complaint's conclusory, vague, and general
allegations ... d[id] not [ ] suffice to establish” plaintiff's
claims).
In addition to frivolous claims, the court must also dismiss
any malicious claims, i.e., where “[t]he manifest purpose of
appellant's complaint [i]s not to rectify any cognizable harm,
but only to harass and disparage.” Tapia–Ortiz, 185 F.3d at 11.
2. Failure To State A Claim
An IFP action must also be dismissed sua sponte if it fails to
state a claim on which relief may be granted. See 28 U.S.C.
§ 1915(e)(2)(B)(ii); see also Star v. Burlington Police Dep't,
189 F.3d 462, 1999 WL 710235 (2d Cir.1999) (summarily
affirming dismissal made pursuant to
§ 1915(e)(2)(B)(ii)
of purported due process challenge that failed to state a claim).
As in a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
§
1915(e)(2)(B)(ii) dismissal is warranted only if “it is clear that

a claim [under
§ 1915(e)(2)(B)(ii)
], unless the court can rule out any
possibility, however unlikely it might
be, that an amended complaint would
succeed in stating a claim.

Gomez v. USAA Federal Sav. Bank, 171 F.3d 794, 796
(2d Cir.1999) (per curiam) (vacating
§ 1915(e)(2)(B)
(ii) dismissal where “the district court did not give th[e]
pro se litigant an opportunity to amend his complaint, and
because [the court] cannot rule out the possibility that such
an amendment will result in a claim being successfully
pleaded”).
3. Relief Against An Immune Defendant
Dismissal of an IFP case is also required where plaintiff
seeks monetary damages against a defendant who is immune
from such relief. See
also,

28 U.S.C. § 1915(e)(2)(B)(iii); see

Spencer v. Doe, 139 F.3d 107, 111 (2d Cir.1998)

(affirming dismissal pursuant to
§ 1915(e)(2)(B)(iii) of
official-capacity claims in § 1983 civil rights action because
“the Eleventh Amendment immunizes state officials sued for
damages in their official capacity”). Here, even if Aguilar's
claims had any merit, the complaints must be dismissed

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Aguilar v. U.S., Not Reported in F.Supp.2d (1999)
1999 WL 1067841

nevertheless because each seeks monetary damages from
the United States, which is immune from such relief. See
Presidential Gardens Assocs. v. United States, 175 F.3d
132, 139 (2d Cir.1999) (noting “[t]he sovereign immunity of
the United States may only be waived by federal statute”).
B. Dismissal Standards Applied
Aguilar's complaints are devoid of any arguable basis in
law or fact. Most of his factual allegations—to the extent
they are even comprehensible—are conclusory, vague and
baseless. For example, he purports to allege: “The United
States of America has misused its power against the Francisco
Aguilar's Intangible Rights.” (Amended Complaint at 2); and
“The United States of America overpassed its bound of its
authority and make a tyrannic use of its powers.” (Second
Complaint at 4). Even the Second Circuit has recognized
Aguilar's prior handiwork to be “so indisputably lacking in
merit as to be frivolous within the meaning of
28 U.S.C.
§ 1915(e).” See United States v. One Parcel Of Property
Located At 414 Kings Hwy., No. 97–6004 (2d Cir. April 23,
1997) (mandate [Doc. No. 167] dismissing appeal of Aguilar's
motion to enjoin state default proceedings).
Only two allegations asserted by Aguilar are even arguably
actionable: the lack-of-probable-cause argument in the
Amended Complaint and the due process claim in the
Second Complaint. Both of these, however, must be dismissed
because each fails to state a claim for which relief may be
granted.
1. Probable Cause
*4 The one potentially cogent legal claim that can be derived
from a liberal reading of the Amended Complaint has already
been conclusively decided by the court and is therefore barred
from relitigation. See United States v. One Parcel Of Property
Located At 414 Kings Hwy., No. 5:91–cv–158 (denying lackof-probable-cause argument in motion to dismiss [Doc. No.
64] in 1993, and in motions for summary judgment [Doc. Nos.
55, 96] in 1996). Here again, Aguilar reiterates his allegation
that the government's affidavit in support of probable cause
was tainted because it failed to disclose that the 414 Kings
Highway property was subject to a mortgage held by People's
Bank, and therefore could not have been purchased with funds
traceable to drug sales.
After the government voluntarily dismissed that forfeiture
action, this court initially ordered the sale proceeds of the

property disbursed to Aguilar. See id., Order of Oct. 25, 1996
[Doc. No. 151]. The bank appealed the order and, during the
pendency of the appeal, secured a default judgment in state
court against Aguilar. See People's Bank v. Aguilar, No. CV–
96–0337761–S (Conn.Super.Ct.1997). On the Bank's appeal
from this court's disbursal of proceeds to Aguilar, the Second
Circuit reversed and remanded. See
United States v. One
Parcel Of Property Located At 414 Kings Hwy., 128 F.3d 125,
128 (2d Cir.1997). On remand, in accordance with the Second
Circuit mandate, this court disbursed the proceeds from the
sale of 414 Kings Highway to the bank in partial satisfaction
of Aguilar's debt owed on the defaulted mortgage. See United
States v. One Parcel Of Property Located At 414 Kings Hwy.,
No. 5:91–cv–158, 1999 WL 301704 (D.Conn. May 11, 1999).
Because the lack-of-probable-cause claim, perfunctorily
adverted to in Aguilar's otherwise meritless Amended
Complaint, has already been addressed in the 414 Kings
Highway forfeiture case, the court will not consider it again.
As such, it must be dismissed because it fails to state a claim
for which this court could grant further relief.
2. Due Process
In addition to his now-stale probable cause allegation about
414 Kings Highway, Aguilar claims in the Second Complaint
that he was wrongfully denied a hearing prior to the
seizure and sale of the other three properties. However, the
constitutional right to a preseizure hearing in civil forfeiture
proceedings was not recognized until 1993, two years after
the seizure in this case. See
United States v. James
Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492,
126 L.Ed.2d 490 (1993) (holding that Fifth Amendment
Due Process protections apply to civil forfeiture proceedings
against real property). Even if such due process protections
applied retroactively, Aguilar's challenge to the sale of the
properties would lack merit because exigent circumstances
required their interlocutory sale.
In civil forfeiture proceedings “[u]nless exigent
circumstances are present, the Due Process Clause requires
the Government to afford notice and a meaningful opportunity
to be heard before seizing real property subject to civil
forfeiture.”
Id. at 62, 114 S.Ct. at 505; see also
United
States v. One Parcel Of Property Located At 194 Quaker
Farms Rd., 85 F.3d 985, 988 (2d Cir.1996) (“[a]bsent exigent
circumstances, a hearing, with notice to record owners, is
held before seizure.”). “To establish exigent circumstances,

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3

Aguilar v. U.S., Not Reported in F.Supp.2d (1999)
1999 WL 1067841

the Government must show that less restrictive measures—
i.e., a lis pendens, restraining order, or bond—would not
suffice to protect the Government's interest in preventing the
sale, destruction, or continued unlawful use of the
property.” Id. at 62, 114 S.Ct. at 505.

real

*5 Aguilar's properties addressed in the Second Complaint
were seized because there was probable cause that each
had been used to facilitate the offenses for which he was
convicted. See
21 U.S.C. § 881(a)(7) (1999). This civil
forfeiture statute authorizes interlocutory sale of seized
properties by two methods, which are incorporated by
reference into the statute. See
21 U.S.C. § 881(b)
(authorizing seizure of property subject to civil forfeiture
upon process issued pursuant to the Supplemental Rules for
Certain Admiralty and Maritime Claims;
21 U.S.C. §
881(d) (authorizing seizure and summary sale governed by
the customs laws codified in the Tariff Act of 1930, 19 U.S.C.
§§ 1602–1619). Though the source of authority differs, the
standards for sale under each are virtually indistinguishable.
Rule E(9)(b) of the Maritime Rules permits the interlocutory
sale of seized property if such property

is perishable, or liable to deterioration,
decay, or injury by being detained
in custody pending the action, or if
the expenses of keeping the property
is [sic] excessive or disproportionate,
or if there is unreasonable delay in
securing the release of property....

Supplemental Rule for Certain Admiralty and Maritime
Claims E(9)(b). Section 1612(a) of the customs laws, by
contrast, provides for seizure and summary sale whenever it
appears that such property

is liable to perish or to waste or to be
greatly reduced in value by keeping, or
that the expense of keeping the same is
disproportionate to the value thereof....

19 U.S.C. § 1612(a) (1999).

Here, the Chief Deputy United States Marshal certified that
the properties located at both 2030–32 Main St., Bridgeport
(No. 5:90–cv–544), and 8 Drumlin Rd., Westport (No. 5:90–
cv–545), were abandoned and therefore subject to vandalism,
deterioration and depreciation. See 2/20/91 Declaration in
Support of Motion for Interlocutory Sale [Doc. Nos. 28 (5:90–
cv–544), 31 (5:90–cv–545) ] at ¶¶ 4, 5. The marshal also
certified that the mortgage obligations exceeded by over $
1,000 per month the rental income of the 2034–38 Main St.,
Bridgeport (No. 5:90–cv–546), property, which was several
months in arrears and had little or no equity. See 2/21/90
Declaration in Support of Motion for Interlocutory Sale [Doc.
No. 27 (5:90–cv–546) ] at ¶ 4. This court found these reasons
sufficiently exigent to order the interlocutory sales. See 8/1/90
Order for an Interlocutory Sale [Doc. Nos. 34 (5:90–cv–544),
50 (5:90–cv–545), 31 (5:90–cv–546) ]. Interlocutory sale was
thus warranted under both Rule E(9)(b) and § 1612(a) because
the two abandoned properties were liable to deteriorate or lose
value and the mortgage liabilities of the rented property were
disproportionate in comparison to its value. Cf. United States
v. Esposito, 970 F.2d 1156, 1161 (2d Cir.1992) (vacating
order of interlocutory sale of forfeited home where “there was
no finding that t[he amount expended for maintenance and
repairs] was excessive or disproportionate”).
*6 Aguilar's claim that he was wrongfully denied an
opportunity to be heard prior to the sale of his properties is
therefore not a cognizable due process challenge because the
exigency of the properties' abandonment and disproportionate
cost of upkeep required their interlocutory sale. Thus, sua
sponte dismissal is warranted because Aguilar's due process
claim fails to state a remediable cause of action.
3. Other Claims
The remainder of Aguilar's claims are frivolous and can be
disposed of readily. To the extent Aguilar's claim invoking
19 U.S.C. § 1615 can be construed as challenging the
constitutionality of shifting the burden to the claimant upon
the government's showing of probable cause, the Second
Circuit has “h[e]ld that it does not violate due process to
place the burden of proving an innocent owner affirmative
defense on the claimant.”
194 Quaker Farms Rd., 85
F.3d at 987. In addition, the tort claims for false pretenses
and conversion are not actionable as these are intentional
torts to which the limited waiver of sovereign immunity
of the Federal Tort Claims Act (“FTCA”) is inapplicable.

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4

Aguilar v. U.S., Not Reported in F.Supp.2d (1999)
1999 WL 1067841

See
28 U.S.C. § 2680(h); see also
Bernard v. United
States, 25 F.3d 98, 104 (2d Cir.1994) (“the FTCA does not
authorize suits for intentional torts based on the actions of
Government prosecutors”). Furthermore, because the United
States government is not a fiduciary and owes no associated
duties to Aguilar, his breach of fiduciary duty allegation
against the government fails to state a claim. Finally, Aguilar
also fails to state a valid mail fraud claim as that criminal code

For the foregoing reasons, Aguilar's complaints [Nos. 3:99–
mc–304 and 3:99–mc–408] are dismissed pursuant to
28
U.S.C. § 1915(e)(2)(B) because they present frivolous
allegations, none of which state a cognizable claim, and seek
monetary relief from an immune defendant. Because the court
cannot definitively rule out the possibility that amendment
to the pleadings might result in an actionable claim, see

provision,
18 U.S.C. § 1341, may only be prosecuted by
the government, not against it.

Gomez, 171 F.3d at 796, these dismissals are made without
prejudice and may be replead after the conclusion of the
related forfeiture proceedings.

Conclusion

All Citations
Not Reported in F.Supp.2d, 1999 WL 1067841

Footnotes
1

See United States v. One Parcel Of Property Located At 2030–32 Main St., No. 5:90–cv–544(EBB) (pending);
United States v. One Parcel Of Property Located At 8 Drumlin Rd., No. 5:90–cv–545 (EBB) (pending); United
States v. One Parcel Of Property Located At 2034–38 Main St., No. 5:90–cv–546(EBB) (pending); see also
United States v. One Parcel Of Property Located At 414 Kings Hwy., No. 5:91–cv–158(EBB) (closed).

End of Document

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5

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

2013 WL 840706
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
ACCD GLOBAL AGRICULTURE
INC. and Curt Meltzer, Plaintiffs,
v.
Alan P. PERRY and Farm Technologies
Network LLC, Defendants.

courts, and the courts must adjudicate those cases validly
brought pursuant to diversity jurisdiction.
That does not mean, however, that federal courts should
accept allegations of diversity without investigation-indeed,
federal courts are mandated to sua sponte examine their own
jurisdiction at every stage in the litigation:

Subject-matter jurisdiction can never
be waived or forfeited ... [and]
if courts become concerned about
their own jurisdiction to hear cases,
they have an independent obligation
to ensure that they do not exceed
the scope of their jurisdiction, and
therefore they must raise and decide
jurisdictional questions that the parties
either overlook or elect not to press.

No. 12 Civ. 6286(KBF).
|
March 1, 2013.

MEMORANDUM DECISION & ORDER
KATHERINE B. FORREST, District Judge.
*1 “The district courts of the United States, as [the Supreme
Court has] said many times, are courts of limited jurisdiction.
They possess only that power authorized by Constitution and
statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). In
most cases, federal jurisdiction lies either in the cause of
action arising under federal law, or in the parties' citizenship
being diverse-that is, from different states. While it is clear
why federal courts should adjudicate cases implicating federal
law, the rationale for so-called “diversity jurisdiction” is more
historical. The drafters of the Judiciary Act were concerned
that state court judges might employ improper local biases in
adjudicating large-dollar cases brought by or against people
from foreign States. See id. (“In order to provide a neutral
forum for what have come to be known as diversity cases,
Congress also has granted district courts original jurisdiction
in civil actions between citizens of different States .... To
ensure that diversity jurisdiction does not flood the federal
courts with minor disputes, § 1332(a) requires that the matter
in controversy in a diversity case exceed a specified amount,
currently $75,000.”) One wonders whether the fear of such
local biases continues to justify the ability to access the federal
courts, especially in light of the expertise one assumes state
courts have over the issues of state law raised in diversity
cases—and also in light of the overwhelming number of cases
that make it into federal court on diversity grounds. Currently,
however, diversity remains an open avenue to the federal

Dumann Realty, LLC v. Faust, 09 Civ. 7651, 2013 WL 30672,
at *1 (S.D.N.Y. Jan.3, 2013) (quotation marks omitted)
(citing

Gonzalez v. Thaler, –––U.S. ––––, ––––, 132 S.Ct.

641, 648, 181 L.Ed.2d 619 (2012);
Henderson ex rel.
Henderson v. Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197,
1202, 179 L.Ed.2d 159 (2011)) (emphasis supplied). This
means investigating all aspects of the diversity requirements
—not only whether all plaintiffs are completely diverse from
all defendants, but also whether the amount in controversy
reaches the statutory level.
Here, after having done just that, the Court determines that the
requirements for diversity jurisdiction are not met. Plaintiffs
ACCD Global Agriculture (“ACCD”) and Curt Meltzer sue
defendants Alan P. Perry and Farm Technologies Network
LLC (“FTN”) on claims arising from a soured business
collaboration. But almost the entirety of plaintiffs' theory
of damages is based on the projected profits lost from the
collapse of that collaboration-a collaboration on an unproven
business based on sophisticated new science, in an untested
foreign market. Such damages require, however, more than
the mere assurance from the entity itself that the profits were
realizable and realistic—more than the mere ipsidixit of “I
say I can make that money, therefore I can”—and instead
require plaintiffs to eventually establish both the existence
and amount of the profits allegedly lost to a reasonable
certainty. See

Schonfeld v. Hilliard, 218 F.3d 164, 172–75

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1

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

(2d Cir.2000);
Ho Myung Moolsan, Co. Ltd. v. Manitou
Mineral Water, Inc., 07 Civ. 7483, 2010 WL 4892646, at *8
(Dec. 2, 2010); Pot Luck LLC v. Freeman, 06 Civ. 10195,
2010 WL 908475, at *3 (S.D.N.Y. Mar.8, 2010).
*2 But plaintiffs' complaint here simply asserts that
plaintiffs “would [have made] over $1 million per year in
profits”—and makes no other proffer whatsoever concerning
that allegation. This is insufficient to support a claim for lost
profits, even at the motion to dismiss stage. And without
those damages, the complaint does not allege an injury in
excess of $75,000. Because plaintiffs have alleged absolutely
no facts suggesting that their actual recoverable damages are
any more than $12,157.08—far below the $75,000 required
for diversity jurisdiction to lie—the Court lacks jurisdiction
over this action and must dismiss it.
Accordingly, the Court dismisses this action sua sponte
without prejudice, and denies defendants' motion to dismiss
as moot.

BACKGROUND
The following facts are drawn from the First Amended
Complaint (the “FAC”), the documents attached thereto, and
the documents incorporated therein, and are construed in the
light most favorable to plaintiffs.
Policemen's Annuity &
Benefit Fund of City of Chicago v. Bank of Am., NA, –––
F.Supp.2d ––––, 2012 WL 6062544, at *1 (Dec. 7, 2012).
The Parties and the Dispute
Plaintiff ACCD is an agricultural technologies company
targeting international farming markets, and specifically
China. (FAC ¶ 9.) Plaintiff Meltzer is the president, CEO, and
a director of ACCD. ( Id. ¶ 2.) Collectively as shareholders,
Meltzer formed ACCD with defendant Perry, and two other
individuals not involved in this lawsuit. (Id. ¶¶ 11, 16, 17.)
Perry had worked in “crop production ... farming, agronomy,
and soil sciences” for four decades, and served as vice
president, treasurer, and a director of ACCD. (Id. ¶¶ 10, 11,
16, 18.) Perry was and is also the sole member and owner of
defendant FTN—another soil sciences company. (Id. ¶¶ 12,
13.)
Meltzer had initially sought to pursue a business enterprise
with Perry because of Perry's representations concerning his

soil sciences expertise. (See id. ¶¶ 10, 13–15.) Specifically,
Perry told Meltzer that his and FTN's soil science
technology allowed for significant production improvements
over regular farming techniques. (Id. ¶¶ 13–15.) 1 But
Perry “failed to provide supporting data to ACCD” to
back up his representations, and—allege plaintiffs—those
representations “were not accurate.” (Id. ¶ 13; see also id.
¶¶ 14, 15.) Despite Perry's failure to provide ACCD with
data, ACCD still “projected that one farm of 5,000 acres ...
with Perry's alleged expertise ... would generate over $1
million per year in profits.” (Id. ¶ 38.) The FAC contains no
factual support or data whatsoever concerning the more-than$1 million per-year-per-farm profits projected by ACCD.
In May 2011, Meltzer and Perry, and others, formed ACCD
through execution of a “Shareholders Agreement.” (Id. ¶ 11;
see also id. Ex. 1 (the “Shareholders Agreement”).) That
agreement contained provisions, inter alia:
*3 • Requiring that Perry-and the other shareholders
—devote “commercially reasonable” time to ACCD
(Shareholder Agreement ¶ 7);
• Requiring that Perry license the FTN technology to
ACCD for $1.00 per year—until such time as ACCD
“accept[s] its initial funding,” at which point requiring
that Perry sell the technology to ACCD for $1.00, which
would then license the technology to FTN for $1.00,
provided that FTN use the technology only domestically
(id. ¶ 8); and
• Requiring that a departing shareholder not compete with
ACCD for two years, but permitting Perry to run FTN
domestically provided he had no contact with ACCD's
customers (id. ¶ 20).
By late 2011, however, the relationship between Meltzer
and Perry had broken down. Perry allegedly interfered in
various ways in ACCD's operations, (see FAC ¶¶ 23–27),
and eventually resigned in December 2011. (Id. ¶ 28.) Due to
that resignation, ACCD was denied “Perry's alleged expertise
and his involvement and active participation.” (Id. ¶ 38.)
Accordingly, ACCD was alleged denied the projected morethan-$1 million per-year-per-farm profits the Meltzer/Perry
collaboration would have generated.
Facts Relating to Diversity Jurisdiction and Damages
Diversity jurisdiction in cases with domestic parties requires
that “the matter in controversy exceeds the sum or value of

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2

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

$75,000, exclusive of interest and costs, and is between ...
citizens of different states.”
28 U.S.C. § 1332(a)(1). The
parties on one side of the litigation must be completely diverse
from the parties on the litigation's other side—that is, “no
plaintiff can be a citizen of the same state as a defendant.”
Aurora Loan Servs. LLC v. Sadek, 809 F.Supp.2d 235, 239
(S.D.N.Y.2011).
There is no dispute in this case that all plaintiffs are fully
diverse from all defendants—plaintiffs are citizens of New
York, and defendants are citizens of Maine. (FAC ¶¶ 1–4.)
There is also no present dispute amongst the parties as
to the amount in controversy—defendants do not raise the
issue in their pending motion to dismiss. But, the court's
“independent obligation to ... raise and decide jurisdictional
questions that the parties either overlook or elect not to press,”
Henderson, 131 S.Ct. at 1202, requires that the Court
examine the FAC's damages allegations on its own.
Plaintiffs' allegations concerning injury, harm, or otherwise
suggesting damages, are—in toto—the following:
• Perry interfered with ACCD's operations in late 2011
by (1) impeding ACCD's “testing efforts”; (2) failing
to pursue business opportunities in Mexico; (3) failing
to pursue “citrus greening trials”; (4) “pull[ing]”
an employee off an ACCD project; (5) “hav[ing]
private conversations with” another employee 2 ; and (6)
“fail[ing] to set up private meetings for Meltzer with ...
industry leaders.” (FAC ¶¶ 23–26.) There is not a single
allegation as to how these alleged harms affected ACCD,
either in terms of dollar amounts or in terms of practical
consequences.
*4 • Perry told Meltzer that Meltzer should restructure
ACCD, however “Perry was not committed to
the” restructuring, and “the restructuring was never
completed.” (Id. ¶¶ 34–35.) What affect this had on
ACCD or Meltzer, in terms of dollars, is not alleged.
• Perry and FTN have been competing with ACCD
in violation of the Shareholders Agreement. (Id.
¶¶ 36–37.) What affect this has had on ACCD or
Meltzer, in terms of dollars or in terms of practical
consequences, is not alleged.

• Meltzer “advanced” certain sums to Perry totaling
$12,157.08 for certain business and personal
expenses. Perry never paid Meltzer back. (Id. ¶¶
31–33.)
• Due to Perry's alleged wrongful refusal to continue
working with Meltzer and ACCD, ACCD has been
unable to achieve its business plans. Specifically,
“ACCD [had] projected that one farm of 5,000
acres under its management ... which [was] denied
to ACCD by Perry's misconduct ... would generate
over $1 million per year in profits to ACCD. Thus,
ACCD's damages for its lost profits due to Perry's
and FTN's misconduct are well in excess of $1
million.” (Id. ¶ 38.)
Procedural History
ACCD and Meltzer initially sued Perry and FTN on August
16, 2012. (ECF No. 1.) Defendants moved to dismiss, but
before the Court ruled on that motion, plaintiffs filed the
current FAC on October 12, 2012. (ECF No. 11.) Defendants
then filed the current motion on October 26. That motion
seeks dismissal of five of the FAC's seven counts—all on Rule
12(b)(6) grounds. (See ECF No. 13.) Shortly thereafter, on
December 12, 2012, this action was transferred from Judge
Barbara S. Jones to the undersigned. (ECF No. 17.)

DISCUSSION
Legal Standards
“A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court
lacks the statutory or constitutional power to adjudicate it.”
Makarova v. United States, 201 F.3d 110, 113 (2000);
see
Williams v. Skyline Auto. Inc., 11 Civ. 8318, 2012
WL 1965334, at *2 (S.D.N.Y. May 24, 2012). To survive
a Rule 12(b)(1) challenge to the Court's subject matter
jurisdiction, the plaintiff must “allege facts that affirmatively
and plausibly” suggest that jurisdiction exists.
Amidax
Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d
Cir.2011); see GMA Accessories, Inc. v. Dorfman–Pacific
Co., Inc., 11 Civ. 3731, 2012 WL 899385, at *3 (March 16,
2012) (dismissal is proper “when the complaint fails to allege
sufficient allegations to support subject matter jurisdiction”).
The Court draws all well-pleaded facts from the complaint—
and the documents attached thereto and incorporated therein

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3

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

—assumes such facts to be true, and construes reasonable
inferences in the plaintiffs' favor.

Amidax, 671 F.3d at 145.

The constitutional and statutory basis for jurisdiction in a
diversity case such as this one is found in 28 U.S.C. § 1332.
That section requires that “the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and costs,
and is between ... citizens of different states.”
§ 1332(a)(1).

28 U.S.C.

Lost Profits Damages
*5 The only injury or damages alleged by the FAC, other
than ACCD's lost profits, consists of the $12,157.08 Meltzer
allegedly loaned or advanced Perry that Perry never paid
back. Otherwise, the only damages articulated by plaintiffs
are the “in excess of $1 million” of lost profits based on
ACCD's alleged “project[ion] that one farm of 5,000 acres ...
would generate over $1 milion per year in profits.” (See FAC
¶¶ 31–33, 38.)
A plaintiff may recover lost profits “only if he can establish
both the existence and amount of such damages with
reasonable certainty. The damages may not be merely
speculative, possible or imaginary ... and must be capable
of measurement based upon known reliable factors without
undue speculation.”
Schonfeld, 218 F.3d at 172 (quotation
marks and citations omitted). Thus, a party claiming lost
profits must eventually prove that it would have been able to
pursue its business venture on the price, cost, and quantity
terms it contemplates. See
Ho Myung Moolsan, 2010
WL 4892646, at *8. “A court should be hesitant ... to rely
on stated assumptions as to the” operating success of a
proposed business venture. Id.; see Dupont Flooring Sys., Inc.
v. Discovery Zone, Inc., 98 Civ. 5101, 2004 WL 1594629, at
*7 (S.D.N.Y. July 14, 2004) (“Courts repeatedly have rejected
claims for lost profits that rest on a series of assumptions and
projections.”) (quotation marks omitted; collecting cases);
Coastal Aviation. Inc. v. Commander Aircraft Co., 937
F.Supp. 1051, 1070 (S.D.N.Y.1996) (“To award plaintiff lost
profits based on the unproven assumption that it would have
[succeeded in its business ventures] would unjustly reward
plaintiff rather than make it whole.”)
Moreover, “evidence of lost profits from a new business
venture receives greater scrutiny because there is no track
record upon which to base an estimate.”

Schonfeld, 218

F.3d at 172. Thus, “[p]rojections of future profits based
upon a multitude of assumptions that require speculation and
conjecture and few known factors do not provide the requisite
certainty.” Id.; see Robin Bay Assocs., LLC v. Merrill Lynch
& Co., 07 Civ. 376, 2008 WL 2275902, at *7 (S.D.N.Y.
June 3, 2008) (“the obvious reason [is] that there does not
exist a reasonable basis of experience upon which to estimate
lost profits”). Indeed, for 100 years, the New York Court of
Appeals has been “reluctant” to award lost profits in cases
involving new business ventures. See
Cramer v. Grand
Rapids Show Case Co., 223 N.Y. 63, 119 N.E. 227, 228–29
(N.Y.1918). 3
Finally, if sought on breach of contract claims, 4 plaintiff
must additionally eventually prove that “lost profit damages,”
specifically, “were within the contemplation of the parties
when the contract was made.”
Schonfeld, 218 F.3d at 172;
Robin Bay, 2008 WL 2275902, at *7 (“To recover lost profits
the plaintiff must show both that the alleged loss is capable
of proof with reasonable certainty and that the damages were
fairly within the contemplation of the parties.”).
*6 “Though courts often address the issue of lost profits
at the summary judgment stage, New York courts have
dismissed claims for lost profits where the pleadings suggest
that an award of lost profits would require an unreasonable
level of speculation.” Robin Bay, 2008 WL 2275902, at *7 (on
motion to dismiss, dismissing claims for lost profits arising
from proposed construction of a casino in St Croix because
“court would have to assume” that plaintiff would obtain
funding to purchase land, secure proper licenses, complete
construction, and operate the business profitably, when the
industry was “in its infancy”); 5 see also Pot Luck, 2010
WL 908475, at *3 (on motion to dismiss, dismissing claims
for lost profits arising from proposed distribution of film in
certain regions because such claims would require the court to
assume the existence of markets in those regions, the terms of
any distributorship agreements in those regions, the efforts of
retained distributors, and the effectiveness of those efforts);
Calip Dairies, Inc. v. Penn Station News Corp., 262 A.D.2d
193, 194, 695 N.Y.S.2d 70 (1st Dep't 1999) (“The cause of
action for lost profits was also properly dismissed [on motion
to dismiss under N.Y. C.P.L.R.] because the profits alleged
to have been lost could not be determined with a reasonable
degree of certainty.”); Lama Holding Co. v. Smith Barney
Inc., 215 A.D.2d 314, 315, 627 N.Y.S.2d 33 (1st Dep't 1995;
676 R.S.D. Inc. v. Scandia Realty, 195 A.D.2d 387, 387, 600
N.Y.S.2d 678 (1st Dep't 1993).

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4

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

There is not a single allegation in the FAC in the case at
bar suggesting that ACCD would ever have been profitable
in China or the other international farming markets the FAC
alleges were its targets. (See FAC ¶ 9.) As a preliminary
matter, the Court notes that such allegations-well-pleaded,
and with support—should not have been or be difficult for
plaintiffs to produce. Indeed, it is plaintiffs' business whose
profits are alleged to have been destroyed. It is there plaintiffs
who should have the records and models and projections—
without any need for discovery, or any other process—to
support any allegations that ACCD would have made the
many millions in lost profits that plaintiffs claim.
But there is no allegation that ACCD could acquire land in
China on which to operate any farms; nor that ACCD could
acquire any Chinese legal rights or licenses to operate the
farms; nor that technologically-advanced farming in China
is even possible, practically or legally; nor that ACCD
could build the farms; nor that ACCD could find laborers
with the necessary experience with technologically-advanced
farming; nor that ACCD could find laborers at all; nor that the
FTN farming techniques would be effective.
Nor is there any well-pleaded allegation even that ACCD
could operate the farms profitably. Indeed, there is no
allegation that ACCD or Meltzer had ever been successful
in any venture similar to ACCD. And while the FAC
alleges that Perry told Meltzer that Perry had had success
in prior similar ventures, the FAC specifically alleges that
Perry was lying when he made those representations. (See
FAC ¶¶ 13–15.) It seems odd to accuse an individual of
lying about his credentials and, in the very next breath,
claim damages based—essentially—solely on the withheld
expertise of that individual. Likewise, the Court cannot—
and will not—assume the effectiveness and profitability of

unproven farming techniques that plaintiffs themselves allege
were not as effective as they were represented to be.
*7 In the absence of well-pleaded allegations supporting any
of the facts listed above, “there is simply no basis for the court
to determine lost profits at this point or any other stage of
the litigation because such a calculation would require a high
degree of speculation.” Robin Bay, 2008 WL 2275902, at *8.
Indeed, “a high degree of speculation” puts it lightly.
Plaintiffs' damages claims based on ACCD's alleged lost
profits are therefore dismissed. The FAC is thus left with
a claim for $12,157.08 in money Meltzer advanced Perry,
which Perry never repaid. But this is below the $75,000
threshold required by
28 U.S.C. § 1332(a). Accordingly,
the Court lacks subject matter jurisdiction and must dismiss
this action.

CONCLUSION
For the reasons stated above, plaintiffs' FAC is dismissed.
This dismissal is without prejudice, and plaintiffs are hereby
granted leave to file a second amended complaint not later
than March 11, 2013.
Defendants' motion to dismiss is denied as moot.
The Clerk of the Court is directed to terminate the motion at
ECF No. 12.
SO ORDERED.
All Citations
Not Reported in F.Supp.2d, 2013 WL 840706

Footnotes
1

2
3

Perry allegedly told Meltzer that his and FTN's technology provided (1) “at least a 30% increase in production
for nearly every crop ... for 15 years”; (2) “crop yields of 20% to 100% over the traditional N, P, K fertilizer
program; and (3) “high end yield increases (of up to over 120%) for 11 different crops.” (FAC ¶¶ 13–15.)
The content of those conversations is not alleged.
“I have pointed out the limited business experience of plaintiffs, the fact that the enterprise was an adventure in
a locality where neither one of them had before been engaged in business. No doubt the plaintiffs entertained
hope that the business venture upon which they were about to embark would prove successful. Such

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5

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

expectation was evidently based upon a consideration of the resident population of the city of Amsterdam,
the business activity of the residents of that city, and the number and character of competitors in the same
general line of business. Plaintiffs, however, had no assurance that the venture would not prove to be a
failure. At the time the contract was made they had the lease of a vacant unfinished store. They had not
as yet purchased goods, placed goods on sale, or secured one customer. They had before them the labor
of building up a new business. Nevertheless, the courts below have held that plaintiffs may recover for the
breach of the contract such an amount of profits as they would have made had they not been prevented from
starting in business, such damages not to be based upon a business theretofore carried on, but measured
by profits during a period of time corresponding to the period of interruption one year later. Therein material
error was committed.
...
A distinction exists between the interruption of an established business and a new venture. The owner of an
established business may have it in his power to establish with reasonable certainty the amount of capital
invested, the monthly and yearly expenses of operating his business, and the daily, monthly, or yearly income
he derived from it for a long time prior thereto and for the time during which the interruption of which he
complains continued, thereby furnishing a reasonably correct estimate of the nature of the legal injury and
the amount of damages which resulted therefrom. While evidence of such facts may be admissible they must
not be uncertain or problematical. The requirement imposed upon one whose business has been established
and interrupted cannot be enforced as to him and made less stringent to one embarking in a new business
who cannot furnish data of past business from which the fact that anticipated profits would have been realized
4

5

can be legally deduced.”
119 N.E. at 228–29 (internal citations omitted).
Plaintiffs' FAC lists seven counts—some of which are plead “in the alternative” from each other—including
one for breach of contract. Because no count includes a statement of the damages arising from that count,
it is impossible for the Court to determine what damages claims are linked to which legal counts.
Indeed, the Robin Bay case is particularly instructive because there—like in the case at bar—the party against
whom lost profits were claimed acted in the venture as an adviser without whom the venture could not proceed
for lack of the venturers' expertise. Moreover, like this case, the claims in that case arose under contract,
negligence, and fiduciary duty theories. See 2008 WL 2275902, at ––––1–2, 7–8.

End of Document

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6

Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013)
2013 WL 30672

2013 WL 30672
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
DUMANN REALTY, LLC, Profitechnic Limited,
LLC, Lawrence Luk and Mac Luk, Plaintiffs,
v.
Frederick FAUST, Defendant/
Counterclaim Plaintiff,
v.
Dumann Realty, LLC, Richard Du and
Mac Luk, Counterclaim Defendants.
No. 09 Civ. 7651(JPO).
|
Jan. 3, 2013.

MEMORANDUM AND ORDER
J. PAUL OETKEN, District Judge.
*1 Dumann Realty, LLC (“Dumann” or “the LLC”),
Profitechnic Capital Limited (“Profitechnic”), Lawrence Mac
(“Mac”), and Mac Luk (together, “Plaintiffs”) brought this
action against Dumann member Frederick Faust (“Faust” or
“Defendant”) asserting nine claims under New York State
Law, including breach of Dumann's Operating Agreement and
breach of the common law duty of good faith and fair dealing.
Faust has filed several counterclaims against Plaintiffs, also
under New York law.
Defendant has filed a motion for summary judgment, which
is now fully briefed. However, this Court has determined that
it lacks subject matter jurisdiction over this matter, and thus
must dismiss this case sua sponte, without reaching the merits
of Defendant's motion.
I. Subject Matter Jurisdiction
“The district courts of the United States ... are ‘courts of
limited jurisdiction. They possess only that power authorized

1673, 128 L.Ed.2d 391 (1994)). “Plaintiffs bear the burden
of showing by a preponderance of the evidence that subject
matter jurisdiction exists. [J]urisdiction must be shown
affirmatively, and that showing is not made by drawing from
the pleadings inferences favorable to the party asserting it.”
APWU v. Potter, 343 F.3d 619, 623 (2d Cir.2003) (internal
quotation marks and citations omitted; alteration in original).
“Subject-matter jurisdiction can never be waived or forfeited.
The objections may be resurrected at any point in the
litigation, and a valid objection may lead a court midway
through briefing to dismiss a complaint in its entirety.”
Gonzalez v. Thaler, ––– U.S. ––––, ––––, 132 S.Ct. 641,
648, 181 L.Ed.2d 619 (2012). Moreover, if courts become
concerned about their jurisdiction to hear cases, they have “an
independent obligation to ensure that they do not exceed the
scope of their jurisdiction, and therefore they must raise and
decide jurisdictional questions that the parties either overlook
or elect not to press.” Hernandez ex rel. Hernandez v.
Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197, 1202, 179
L.Ed.2d 159 (2011) (citation omitted); see also Alliance of
American Insurers v. Cuomo, 854 F.2d 591, 605 (2d Cir.1988)
(stating that “a challenge to subject matter jurisdiction cannot
be waived and may be raised sua sponte by the district
court” (citation omitted)). To be sure, if it is determined late
in the life of a case that no subject matter jurisdiction exists,
“many months of work on the part of the attorneys and the
court may be wasted.”
Henderson, 131 S.Ct. at 1202.
This, however, is a modest price to pay for the continued
preservation of federalism. Accord
Mansfield, C. & L.M.
Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed.
462 (1884) (explaining that the rules governing subject matter
jurisdiction “spring[ ] from the nature and limits of the judicial
power of the United States” and are therefore “inflexible and
without exception”).
II. Diversity Jurisdiction in Cases Involving Limited
Liability Companies
*2 In their Second Amended Complaint, Plaintiffs allege
that “[t]his Court has original jurisdiction over the subject

by Constitution and statute.’ “
Exxon Mobil Corp. v.
Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611,

matter of this action pursuant to
28 U.S.C. § 1332 based
upon the diversity of citizenship of each of the parties and
the amount in controversy.” (Second Amended Complaint at

162 L.Ed.2d 502 (2005) (quoting
Kokkonen v. Guardian
Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct.

¶ 11.) Under
28 U.S.C. § 1332(a) (1), federal diversity
jurisdiction exists where the matter is between “citizens of

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1

Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013)
2013 WL 30672

different States.” Since
Strawbridge v. Curtiss, 3 Cranch
267, 2 L.Ed. 435 (1806), it has been settled law that there
must be complete diversity between all plaintiffs and all
defendants.
A Limited Liability Company (“LLC”) is completely diverse
from opposing parties only if all of the members of the LLC
are citizens of different states than all opposing parties. See
Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d
48, 51 (2d Cir.2000) (“defendants Bedford Partnership and
Bedford LLC are, for diversity purposes, citizens of Florida
because both entities have Florida members”); Receivables
Exch., LLC v. Hotton, No. 11 Civ. 0292(JS)(WDW), 2011
WL 239865, at *1 (E.D.N.Y. Jan. 21, 2011) (explaining
that, “for diversity purposes, an LLC is a citizen of every
state that its members are citizens of” (citations omitted));
Castillo Grand LLC v. Sheraton Operating Corp., No. 09
Civ. 7197(RPP), 2009 WL 4667104, at *1 (S.D.N.Y. Dec.9,
2009) (“For purposes of assessing diversity jurisdiction, an
unincorporated entity such as a partnership or a limited
liability company is deemed to be a citizen of all states
of which its partners or members are citizens.” (citation
omitted)); cf.
Carden v. Arkoma Assocs., 494 U.S. 185,
110 S.Ct. 1015, 108 L.Ed.2d 157 (1990) (holding that, in
the context of limited partnerships, citizenship of limited
partners had to be taken into account to determine diversity
of citizenship among the parties).
In his recent submission to this Court, Richard Du avers that
that, as of the filing of the initial Complaint on September
2, 2009, two of the original three members, Du and Luk,
were both citizens of New York, while Faust, who is both an
original member of Dumann and the defendant in this action,
was a domiciliary of Pennsylvania. (Dkt. No. 96 (“the Du
Affidavit”) at ¶¶ 3, 5–6.) 1 Du states, however, that Faust
“resigned as a member” of the LLC on March 18, 2009,
over five months before the initial Complaint was filed. (Du
2

Affidavit at ¶ 2.) This begs the question whether Faust
must be considered a member of Dumann for the purpose of
determining whether the parties are completely diverse.
III. State Law and LLC Membership
The question of whose citizenship constitutes part of the
LLC's citizenship is ultimately governed by the law of the
state of incorporation. This is illuminated in CR Holding
Company, LLP v. Campbell, No. 11 Civ.2051(JWL), 2011 WL
2357649, at *3 (D.Kan. June 3, 2011), a case whose facts

are remarkably similar to this case. Campbell concerned a
dispute between several limited partnerships and their former
partner, the defendant Campbell. The sole remaining partner,
Renkemeyer, was a citizen of Kansas, while Campbell was a
citizen of Missouri. In his motion to dismiss for lack of subject
matter jurisdiction, Campbell argued

*3 that diversity is not complete
because [Campbell] remains a partner
of each of the plaintiff entities
such that the plaintiff entities are
citizens of both Kansas and Missouri,
thereby destroying complete diversity
... Plaintiffs, however, contend that Mr.
Renkemeyer is the sole partner of each
entity because Mr. Campbell has either
withdrawn from the partnerships or,
under the circumstances, should be
deemed dissociated ....

Id. at *1.
In determining whether subject matter jurisdiction existed,
Judge Lungstrum looked to the Kansas state law on partner
withdrawal from limited partnerships, which provided that
withdrawal was impermissible unless it was provided for by
the partnership agreement. Id. at *2. “[B]ecause defendant is
not permitted to withdraw as a limited partner of Renkemeyer
Campbell LP under the agreement itself and, thus, by
statute ...,” Judge Lungstrum held, “defendant remains a
limited partner .... That entity, then, is a citizen of both Kansas
and Missouri, thereby destroying complete diversity.” Id. at
*3. In other words, despite Campbell's attempted withdrawal,
the LLC remained a citizen of Campbell's place of citizenship.
Though less squarely on point, Tri–County Metropolitan
Transportation District of Oregon v. Butler Block, LLC, No.
08 Civ. 259(AA), 2008 WL 2037306 (D.Or. May 7, 2008),
is also informative. In Butler Block, Judge Aiken wrestled
with the question whether an Oregon plaintiff was completely
diverse from the defendant, a parent LLC composed of a
California citizen and a child LLC with one member, an
Oregon citizen. The defendant LLC argued that its Oregon
LLC member did not destroy complete diversity, because the
child LLC had been administratively dissolved under Oregon
law for failure to pay its fees. Id. at *2. However, Judge
Aiken held that neither Delaware state law 3 nor the parent

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2

Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013)
2013 WL 30672

LLC agreement permitted withdrawal of a member due to
administrative dissolution. Further, “under Delaware law,” as
under New York law, “unless an LLC agreement provides
otherwise, a member may not resign from a limited liability
company prior to the dissolution and winding up of the limited
liability company.” Id. at *2 (internal quotation marks and
citation omitted). Thus, even if Oregon no longer recognized
the existence of the child LLC, the child LLC continued
to exist under Delaware law, and the citizenship of its
member destroyed diversity. Butler Block, then, underscores
the principle laid out in Campbell: the law of the state of
incorporation plays a central role in the determination of
whether complete diversity can exist between an LLC and an
opposing party.
Armed with Campbell and Butler Block, this Court can now
turn to the case at hand. It is undisputed that Dumann, the
LLC, was formed in New York and is governed by New York
Limited Liability Company Law (“NYLLCL”). (See Dkt.
No. 85, Ex. A (“Operating Agreement”) at III § 1 (“Unless
specifically set forth otherwise in the Articles of Organization
or by amendment thereto, management of this Company shall
be vested in the members, who shall be subject to all of the
rights, duties, privileges and liabilities of the Managers, as set
forth in the New York Limited Liability Company Law .”)
NYLLCL § 606(a) provides in relevant part:

*4 A member may withdraw as
a member of a limited liability
company only at the time or upon
the happening of events specified
in the operating agreement and
in accordance with the operating
agreement. Notwithstanding anything
to the contrary under applicable
law, unless an operating agreement
provides otherwise, a member may
not withdraw from a limited liability
company prior to the dissolution and
winding up of the limited liability
company.

See also Klein v. 599 Eleventh Ave. Co., 14 Misc.3d 1211(A),
at *3 (N.Y.Sup.2006) (explaining that “a member may
withdraw from a limited liability company only as provided in
its operating agreement. If the operating agreement is silent,

a member may not withdraw prior to the dissolution of the
company.” (citations omitted)).
The Operating Agreement contains the following rules about
withdrawal:

A member may withdraw as a member
of this Company with the vote or
written consent of at least two-thirds
in interest of the members, other than
the member who proposes to withdraw
as a member. If such consent is not
given, a member may withdraw upon
not less than six months prior written
notice to this Company, provided
such withdrawal does not breach this
Operating Agreement, and the New
York Limited Liability Company Law
or any other contractual obligation
between such proposed withdrawing
member and this company or its other
members. Should such breach occur,
then the withdrawing member may be
liable for damages as a result thereof.

(Operating Agreement at III, § 10.) 4 Read together, the
NYLLCL and the Operating Agreement do not permit
member withdrawal, unless (1) two-thirds consent is given or
(2) the withdrawal occurs after six months' notice.
Here, Faust did not obtain two-thirds consent to withdraw.
Nor did he provide six months' notice before withdrawal;
indeed, this is the very basis of Dumann's contention that
Faust breached the membership agreement. (See Second
Amended Complaint at ¶¶ 17–18.) 5 Because Faust has not
withdrawn under one of the two methods enumerated in the
Operating Agreement, his “resignation” from Dumann was,
in short, ineffective. 6 Thus, when Plaintiffs brought this
suit, Dumann's citizenship for diversity jurisdiction purposes
was both New York and Pennsylvania. Pennsylvania, in
other words, finds itself “on both sides of the ‘v.’ sign”
in this matter, Saavedra v. Boeing Co., 464 F.Supp.2d 770,
771 (N.D.Ill.2006), meaning that diversity of citizenship is
incomplete.

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3

Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013)
2013 WL 30672

The infirmity in this Court's subject matter jurisdiction over
this case is a subtle one, which may explain why it has gone
unnoticed throughout much of the litigation. Nevertheless,
that infirmity divests this Court of the power to adjudicate this
case as a matter of federal law.

the Court is directed to terminate the case and all pending
motions.
*5 SO ORDERED.
All Citations

IV. Conclusion
For the foregoing reasons, this case is DISMISSED sua
sponte for lack of subject matter jurisdiction. The Clerk of

Not Reported in F.Supp.2d, 2013 WL 30672

Footnotes
1

2

3
4
5
6

While the Second Amended Complaint alleges that Dumann has its “principal place of business” in New York
State, that fact (as to an LLC) is entirely irrelevant to diversity jurisdiction. The Second Amended Complaint
does not enumerate the citizenship of the members of Dumann at the time the suit was filed.
On December 6, 2012, this Court issued an issued an Order to Show Cause why Plaintiff's Second
Amended Complaint should not be dismissed for lack of subject matter jurisdiction (“the Order”). The Order
directed Plaintiffs to both “enumerate every Member of the LLC as of the original date of this action's filing,
and ... specify the citizenship of each Member.” Dumann Realty LLC v. Faust, No. 09 Civ. 7651(JPO),
2012 WL 6135020, at *1 (S.D.N.Y. Dec.6, 2012). On December 19, 2012, Plaintiffs filed an affidavit by
Richard Du. On December 28, 2012, Defendant filed an affidavit by Anthony R. Molé in reply. (Dkt. No.
97 (“Molé Affidavit”).)
As Defendant rightly notes (see Molé Affidavit at ¶¶ 4–7), the Du Affidavit's contention that Faust “resigned
as a member” is problematic on its own terms. Du relies on paragraph 23 of Faust's Answer to the Second
Amended Complaint for the proposition that Faust resigned from Dumann; however, that paragraph states not
that Faust resigned, but that “on or about March 18, 2009, by letter, Faust indicated his desire to resign from
Dumann and requested that Dumann's remaining members, Du and Luk, consent to his resignation.” (Du's
Affidavit, Ex. A at ¶ 23 (emphasis added).)
The defendant LLC was a Delaware LLC governed by Delaware law. Id. at *1.
Moreover, the Operating Agreement “has (no) specified date of dissolution ... unless sooner dissolved
pursuant to this Agreement or pursuant to the provisions of the [NYLLCL].” (Id. at § II, 7.)
As Defendant's counsel notes, this puts Plaintiff “in a situation where any argument made in an attempt to
support diversity subject matter jurisdiction would be counterproductive to their claim.” (Molé Affidavit at ¶ 9.)
Moreover, Dumann sued Faust within six month of his resignation, meaning that the period during which
the Operating Agreement anticipated Faust to be liable for consequential damages of the breach was still
in effect. This underscores that, at the time this Complaint was filed, Faust was a member of the LLC for
purposes of diversity jurisdiction.

End of Document

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4

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

2013 WL 840706
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
ACCD GLOBAL AGRICULTURE
INC. and Curt Meltzer, Plaintiffs,
v.
Alan P. PERRY and Farm Technologies
Network LLC, Defendants.

courts, and the courts must adjudicate those cases validly
brought pursuant to diversity jurisdiction.
That does not mean, however, that federal courts should
accept allegations of diversity without investigation-indeed,
federal courts are mandated to sua sponte examine their own
jurisdiction at every stage in the litigation:

Subject-matter jurisdiction can never
be waived or forfeited ... [and]
if courts become concerned about
their own jurisdiction to hear cases,
they have an independent obligation
to ensure that they do not exceed
the scope of their jurisdiction, and
therefore they must raise and decide
jurisdictional questions that the parties
either overlook or elect not to press.

No. 12 Civ. 6286(KBF).
|
March 1, 2013.

MEMORANDUM DECISION & ORDER
KATHERINE B. FORREST, District Judge.
*1 “The district courts of the United States, as [the Supreme
Court has] said many times, are courts of limited jurisdiction.
They possess only that power authorized by Constitution and
statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). In
most cases, federal jurisdiction lies either in the cause of
action arising under federal law, or in the parties' citizenship
being diverse-that is, from different states. While it is clear
why federal courts should adjudicate cases implicating federal
law, the rationale for so-called “diversity jurisdiction” is more
historical. The drafters of the Judiciary Act were concerned
that state court judges might employ improper local biases in
adjudicating large-dollar cases brought by or against people
from foreign States. See id. (“In order to provide a neutral
forum for what have come to be known as diversity cases,
Congress also has granted district courts original jurisdiction
in civil actions between citizens of different States .... To
ensure that diversity jurisdiction does not flood the federal
courts with minor disputes, § 1332(a) requires that the matter
in controversy in a diversity case exceed a specified amount,
currently $75,000.”) One wonders whether the fear of such
local biases continues to justify the ability to access the federal
courts, especially in light of the expertise one assumes state
courts have over the issues of state law raised in diversity
cases—and also in light of the overwhelming number of cases
that make it into federal court on diversity grounds. Currently,
however, diversity remains an open avenue to the federal

Dumann Realty, LLC v. Faust, 09 Civ. 7651, 2013 WL 30672,
at *1 (S.D.N.Y. Jan.3, 2013) (quotation marks omitted)
(citing

Gonzalez v. Thaler, –––U.S. ––––, ––––, 132 S.Ct.

641, 648, 181 L.Ed.2d 619 (2012);
Henderson ex rel.
Henderson v. Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197,
1202, 179 L.Ed.2d 159 (2011)) (emphasis supplied). This
means investigating all aspects of the diversity requirements
—not only whether all plaintiffs are completely diverse from
all defendants, but also whether the amount in controversy
reaches the statutory level.
Here, after having done just that, the Court determines that the
requirements for diversity jurisdiction are not met. Plaintiffs
ACCD Global Agriculture (“ACCD”) and Curt Meltzer sue
defendants Alan P. Perry and Farm Technologies Network
LLC (“FTN”) on claims arising from a soured business
collaboration. But almost the entirety of plaintiffs' theory
of damages is based on the projected profits lost from the
collapse of that collaboration-a collaboration on an unproven
business based on sophisticated new science, in an untested
foreign market. Such damages require, however, more than
the mere assurance from the entity itself that the profits were
realizable and realistic—more than the mere ipsidixit of “I
say I can make that money, therefore I can”—and instead
require plaintiffs to eventually establish both the existence
and amount of the profits allegedly lost to a reasonable
certainty. See

Schonfeld v. Hilliard, 218 F.3d 164, 172–75

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1

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

(2d Cir.2000);
Ho Myung Moolsan, Co. Ltd. v. Manitou
Mineral Water, Inc., 07 Civ. 7483, 2010 WL 4892646, at *8
(Dec. 2, 2010); Pot Luck LLC v. Freeman, 06 Civ. 10195,
2010 WL 908475, at *3 (S.D.N.Y. Mar.8, 2010).
*2 But plaintiffs' complaint here simply asserts that
plaintiffs “would [have made] over $1 million per year in
profits”—and makes no other proffer whatsoever concerning
that allegation. This is insufficient to support a claim for lost
profits, even at the motion to dismiss stage. And without
those damages, the complaint does not allege an injury in
excess of $75,000. Because plaintiffs have alleged absolutely
no facts suggesting that their actual recoverable damages are
any more than $12,157.08—far below the $75,000 required
for diversity jurisdiction to lie—the Court lacks jurisdiction
over this action and must dismiss it.
Accordingly, the Court dismisses this action sua sponte
without prejudice, and denies defendants' motion to dismiss
as moot.

BACKGROUND
The following facts are drawn from the First Amended
Complaint (the “FAC”), the documents attached thereto, and
the documents incorporated therein, and are construed in the
light most favorable to plaintiffs.
Policemen's Annuity &
Benefit Fund of City of Chicago v. Bank of Am., NA, –––
F.Supp.2d ––––, 2012 WL 6062544, at *1 (Dec. 7, 2012).
The Parties and the Dispute
Plaintiff ACCD is an agricultural technologies company
targeting international farming markets, and specifically
China. (FAC ¶ 9.) Plaintiff Meltzer is the president, CEO, and
a director of ACCD. ( Id. ¶ 2.) Collectively as shareholders,
Meltzer formed ACCD with defendant Perry, and two other
individuals not involved in this lawsuit. (Id. ¶¶ 11, 16, 17.)
Perry had worked in “crop production ... farming, agronomy,
and soil sciences” for four decades, and served as vice
president, treasurer, and a director of ACCD. (Id. ¶¶ 10, 11,
16, 18.) Perry was and is also the sole member and owner of
defendant FTN—another soil sciences company. (Id. ¶¶ 12,
13.)
Meltzer had initially sought to pursue a business enterprise
with Perry because of Perry's representations concerning his

soil sciences expertise. (See id. ¶¶ 10, 13–15.) Specifically,
Perry told Meltzer that his and FTN's soil science
technology allowed for significant production improvements
over regular farming techniques. (Id. ¶¶ 13–15.) 1 But
Perry “failed to provide supporting data to ACCD” to
back up his representations, and—allege plaintiffs—those
representations “were not accurate.” (Id. ¶ 13; see also id.
¶¶ 14, 15.) Despite Perry's failure to provide ACCD with
data, ACCD still “projected that one farm of 5,000 acres ...
with Perry's alleged expertise ... would generate over $1
million per year in profits.” (Id. ¶ 38.) The FAC contains no
factual support or data whatsoever concerning the more-than$1 million per-year-per-farm profits projected by ACCD.
In May 2011, Meltzer and Perry, and others, formed ACCD
through execution of a “Shareholders Agreement.” (Id. ¶ 11;
see also id. Ex. 1 (the “Shareholders Agreement”).) That
agreement contained provisions, inter alia:
*3 • Requiring that Perry-and the other shareholders
—devote “commercially reasonable” time to ACCD
(Shareholder Agreement ¶ 7);
• Requiring that Perry license the FTN technology to
ACCD for $1.00 per year—until such time as ACCD
“accept[s] its initial funding,” at which point requiring
that Perry sell the technology to ACCD for $1.00, which
would then license the technology to FTN for $1.00,
provided that FTN use the technology only domestically
(id. ¶ 8); and
• Requiring that a departing shareholder not compete with
ACCD for two years, but permitting Perry to run FTN
domestically provided he had no contact with ACCD's
customers (id. ¶ 20).
By late 2011, however, the relationship between Meltzer
and Perry had broken down. Perry allegedly interfered in
various ways in ACCD's operations, (see FAC ¶¶ 23–27),
and eventually resigned in December 2011. (Id. ¶ 28.) Due to
that resignation, ACCD was denied “Perry's alleged expertise
and his involvement and active participation.” (Id. ¶ 38.)
Accordingly, ACCD was alleged denied the projected morethan-$1 million per-year-per-farm profits the Meltzer/Perry
collaboration would have generated.
Facts Relating to Diversity Jurisdiction and Damages
Diversity jurisdiction in cases with domestic parties requires
that “the matter in controversy exceeds the sum or value of

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2

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

$75,000, exclusive of interest and costs, and is between ...
citizens of different states.”
28 U.S.C. § 1332(a)(1). The
parties on one side of the litigation must be completely diverse
from the parties on the litigation's other side—that is, “no
plaintiff can be a citizen of the same state as a defendant.”
Aurora Loan Servs. LLC v. Sadek, 809 F.Supp.2d 235, 239
(S.D.N.Y.2011).
There is no dispute in this case that all plaintiffs are fully
diverse from all defendants—plaintiffs are citizens of New
York, and defendants are citizens of Maine. (FAC ¶¶ 1–4.)
There is also no present dispute amongst the parties as
to the amount in controversy—defendants do not raise the
issue in their pending motion to dismiss. But, the court's
“independent obligation to ... raise and decide jurisdictional
questions that the parties either overlook or elect not to press,”
Henderson, 131 S.Ct. at 1202, requires that the Court
examine the FAC's damages allegations on its own.
Plaintiffs' allegations concerning injury, harm, or otherwise
suggesting damages, are—in toto—the following:
• Perry interfered with ACCD's operations in late 2011
by (1) impeding ACCD's “testing efforts”; (2) failing
to pursue business opportunities in Mexico; (3) failing
to pursue “citrus greening trials”; (4) “pull[ing]”
an employee off an ACCD project; (5) “hav[ing]
private conversations with” another employee 2 ; and (6)
“fail[ing] to set up private meetings for Meltzer with ...
industry leaders.” (FAC ¶¶ 23–26.) There is not a single
allegation as to how these alleged harms affected ACCD,
either in terms of dollar amounts or in terms of practical
consequences.
*4 • Perry told Meltzer that Meltzer should restructure
ACCD, however “Perry was not committed to
the” restructuring, and “the restructuring was never
completed.” (Id. ¶¶ 34–35.) What affect this had on
ACCD or Meltzer, in terms of dollars, is not alleged.
• Perry and FTN have been competing with ACCD
in violation of the Shareholders Agreement. (Id.
¶¶ 36–37.) What affect this has had on ACCD or
Meltzer, in terms of dollars or in terms of practical
consequences, is not alleged.

• Meltzer “advanced” certain sums to Perry totaling
$12,157.08 for certain business and personal
expenses. Perry never paid Meltzer back. (Id. ¶¶
31–33.)
• Due to Perry's alleged wrongful refusal to continue
working with Meltzer and ACCD, ACCD has been
unable to achieve its business plans. Specifically,
“ACCD [had] projected that one farm of 5,000
acres under its management ... which [was] denied
to ACCD by Perry's misconduct ... would generate
over $1 million per year in profits to ACCD. Thus,
ACCD's damages for its lost profits due to Perry's
and FTN's misconduct are well in excess of $1
million.” (Id. ¶ 38.)
Procedural History
ACCD and Meltzer initially sued Perry and FTN on August
16, 2012. (ECF No. 1.) Defendants moved to dismiss, but
before the Court ruled on that motion, plaintiffs filed the
current FAC on October 12, 2012. (ECF No. 11.) Defendants
then filed the current motion on October 26. That motion
seeks dismissal of five of the FAC's seven counts—all on Rule
12(b)(6) grounds. (See ECF No. 13.) Shortly thereafter, on
December 12, 2012, this action was transferred from Judge
Barbara S. Jones to the undersigned. (ECF No. 17.)

DISCUSSION
Legal Standards
“A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court
lacks the statutory or constitutional power to adjudicate it.”
Makarova v. United States, 201 F.3d 110, 113 (2000);
see
Williams v. Skyline Auto. Inc., 11 Civ. 8318, 2012
WL 1965334, at *2 (S.D.N.Y. May 24, 2012). To survive
a Rule 12(b)(1) challenge to the Court's subject matter
jurisdiction, the plaintiff must “allege facts that affirmatively
and plausibly” suggest that jurisdiction exists.
Amidax
Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d
Cir.2011); see GMA Accessories, Inc. v. Dorfman–Pacific
Co., Inc., 11 Civ. 3731, 2012 WL 899385, at *3 (March 16,
2012) (dismissal is proper “when the complaint fails to allege
sufficient allegations to support subject matter jurisdiction”).
The Court draws all well-pleaded facts from the complaint—
and the documents attached thereto and incorporated therein

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3

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

—assumes such facts to be true, and construes reasonable
inferences in the plaintiffs' favor.

Amidax, 671 F.3d at 145.

The constitutional and statutory basis for jurisdiction in a
diversity case such as this one is found in 28 U.S.C. § 1332.
That section requires that “the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and costs,
and is between ... citizens of different states.”
§ 1332(a)(1).

28 U.S.C.

Lost Profits Damages
*5 The only injury or damages alleged by the FAC, other
than ACCD's lost profits, consists of the $12,157.08 Meltzer
allegedly loaned or advanced Perry that Perry never paid
back. Otherwise, the only damages articulated by plaintiffs
are the “in excess of $1 million” of lost profits based on
ACCD's alleged “project[ion] that one farm of 5,000 acres ...
would generate over $1 milion per year in profits.” (See FAC
¶¶ 31–33, 38.)
A plaintiff may recover lost profits “only if he can establish
both the existence and amount of such damages with
reasonable certainty. The damages may not be merely
speculative, possible or imaginary ... and must be capable
of measurement based upon known reliable factors without
undue speculation.”
Schonfeld, 218 F.3d at 172 (quotation
marks and citations omitted). Thus, a party claiming lost
profits must eventually prove that it would have been able to
pursue its business venture on the price, cost, and quantity
terms it contemplates. See
Ho Myung Moolsan, 2010
WL 4892646, at *8. “A court should be hesitant ... to rely
on stated assumptions as to the” operating success of a
proposed business venture. Id.; see Dupont Flooring Sys., Inc.
v. Discovery Zone, Inc., 98 Civ. 5101, 2004 WL 1594629, at
*7 (S.D.N.Y. July 14, 2004) (“Courts repeatedly have rejected
claims for lost profits that rest on a series of assumptions and
projections.”) (quotation marks omitted; collecting cases);
Coastal Aviation. Inc. v. Commander Aircraft Co., 937
F.Supp. 1051, 1070 (S.D.N.Y.1996) (“To award plaintiff lost
profits based on the unproven assumption that it would have
[succeeded in its business ventures] would unjustly reward
plaintiff rather than make it whole.”)
Moreover, “evidence of lost profits from a new business
venture receives greater scrutiny because there is no track
record upon which to base an estimate.”

Schonfeld, 218

F.3d at 172. Thus, “[p]rojections of future profits based
upon a multitude of assumptions that require speculation and
conjecture and few known factors do not provide the requisite
certainty.” Id.; see Robin Bay Assocs., LLC v. Merrill Lynch
& Co., 07 Civ. 376, 2008 WL 2275902, at *7 (S.D.N.Y.
June 3, 2008) (“the obvious reason [is] that there does not
exist a reasonable basis of experience upon which to estimate
lost profits”). Indeed, for 100 years, the New York Court of
Appeals has been “reluctant” to award lost profits in cases
involving new business ventures. See
Cramer v. Grand
Rapids Show Case Co., 223 N.Y. 63, 119 N.E. 227, 228–29
(N.Y.1918). 3
Finally, if sought on breach of contract claims, 4 plaintiff
must additionally eventually prove that “lost profit damages,”
specifically, “were within the contemplation of the parties
when the contract was made.”
Schonfeld, 218 F.3d at 172;
Robin Bay, 2008 WL 2275902, at *7 (“To recover lost profits
the plaintiff must show both that the alleged loss is capable
of proof with reasonable certainty and that the damages were
fairly within the contemplation of the parties.”).
*6 “Though courts often address the issue of lost profits
at the summary judgment stage, New York courts have
dismissed claims for lost profits where the pleadings suggest
that an award of lost profits would require an unreasonable
level of speculation.” Robin Bay, 2008 WL 2275902, at *7 (on
motion to dismiss, dismissing claims for lost profits arising
from proposed construction of a casino in St Croix because
“court would have to assume” that plaintiff would obtain
funding to purchase land, secure proper licenses, complete
construction, and operate the business profitably, when the
industry was “in its infancy”); 5 see also Pot Luck, 2010
WL 908475, at *3 (on motion to dismiss, dismissing claims
for lost profits arising from proposed distribution of film in
certain regions because such claims would require the court to
assume the existence of markets in those regions, the terms of
any distributorship agreements in those regions, the efforts of
retained distributors, and the effectiveness of those efforts);
Calip Dairies, Inc. v. Penn Station News Corp., 262 A.D.2d
193, 194, 695 N.Y.S.2d 70 (1st Dep't 1999) (“The cause of
action for lost profits was also properly dismissed [on motion
to dismiss under N.Y. C.P.L.R.] because the profits alleged
to have been lost could not be determined with a reasonable
degree of certainty.”); Lama Holding Co. v. Smith Barney
Inc., 215 A.D.2d 314, 315, 627 N.Y.S.2d 33 (1st Dep't 1995;
676 R.S.D. Inc. v. Scandia Realty, 195 A.D.2d 387, 387, 600
N.Y.S.2d 678 (1st Dep't 1993).

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4

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

There is not a single allegation in the FAC in the case at
bar suggesting that ACCD would ever have been profitable
in China or the other international farming markets the FAC
alleges were its targets. (See FAC ¶ 9.) As a preliminary
matter, the Court notes that such allegations-well-pleaded,
and with support—should not have been or be difficult for
plaintiffs to produce. Indeed, it is plaintiffs' business whose
profits are alleged to have been destroyed. It is there plaintiffs
who should have the records and models and projections—
without any need for discovery, or any other process—to
support any allegations that ACCD would have made the
many millions in lost profits that plaintiffs claim.
But there is no allegation that ACCD could acquire land in
China on which to operate any farms; nor that ACCD could
acquire any Chinese legal rights or licenses to operate the
farms; nor that technologically-advanced farming in China
is even possible, practically or legally; nor that ACCD
could build the farms; nor that ACCD could find laborers
with the necessary experience with technologically-advanced
farming; nor that ACCD could find laborers at all; nor that the
FTN farming techniques would be effective.
Nor is there any well-pleaded allegation even that ACCD
could operate the farms profitably. Indeed, there is no
allegation that ACCD or Meltzer had ever been successful
in any venture similar to ACCD. And while the FAC
alleges that Perry told Meltzer that Perry had had success
in prior similar ventures, the FAC specifically alleges that
Perry was lying when he made those representations. (See
FAC ¶¶ 13–15.) It seems odd to accuse an individual of
lying about his credentials and, in the very next breath,
claim damages based—essentially—solely on the withheld
expertise of that individual. Likewise, the Court cannot—
and will not—assume the effectiveness and profitability of

unproven farming techniques that plaintiffs themselves allege
were not as effective as they were represented to be.
*7 In the absence of well-pleaded allegations supporting any
of the facts listed above, “there is simply no basis for the court
to determine lost profits at this point or any other stage of
the litigation because such a calculation would require a high
degree of speculation.” Robin Bay, 2008 WL 2275902, at *8.
Indeed, “a high degree of speculation” puts it lightly.
Plaintiffs' damages claims based on ACCD's alleged lost
profits are therefore dismissed. The FAC is thus left with
a claim for $12,157.08 in money Meltzer advanced Perry,
which Perry never repaid. But this is below the $75,000
threshold required by
28 U.S.C. § 1332(a). Accordingly,
the Court lacks subject matter jurisdiction and must dismiss
this action.

CONCLUSION
For the reasons stated above, plaintiffs' FAC is dismissed.
This dismissal is without prejudice, and plaintiffs are hereby
granted leave to file a second amended complaint not later
than March 11, 2013.
Defendants' motion to dismiss is denied as moot.
The Clerk of the Court is directed to terminate the motion at
ECF No. 12.
SO ORDERED.
All Citations
Not Reported in F.Supp.2d, 2013 WL 840706

Footnotes
1

2
3

Perry allegedly told Meltzer that his and FTN's technology provided (1) “at least a 30% increase in production
for nearly every crop ... for 15 years”; (2) “crop yields of 20% to 100% over the traditional N, P, K fertilizer
program; and (3) “high end yield increases (of up to over 120%) for 11 different crops.” (FAC ¶¶ 13–15.)
The content of those conversations is not alleged.
“I have pointed out the limited business experience of plaintiffs, the fact that the enterprise was an adventure in
a locality where neither one of them had before been engaged in business. No doubt the plaintiffs entertained
hope that the business venture upon which they were about to embark would prove successful. Such

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5

ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013)
2013 WL 840706

expectation was evidently based upon a consideration of the resident population of the city of Amsterdam,
the business activity of the residents of that city, and the number and character of competitors in the same
general line of business. Plaintiffs, however, had no assurance that the venture would not prove to be a
failure. At the time the contract was made they had the lease of a vacant unfinished store. They had not
as yet purchased goods, placed goods on sale, or secured one customer. They had before them the labor
of building up a new business. Nevertheless, the courts below have held that plaintiffs may recover for the
breach of the contract such an amount of profits as they would have made had they not been prevented from
starting in business, such damages not to be based upon a business theretofore carried on, but measured
by profits during a period of time corresponding to the period of interruption one year later. Therein material
error was committed.
...
A distinction exists between the interruption of an established business and a new venture. The owner of an
established business may have it in his power to establish with reasonable certainty the amount of capital
invested, the monthly and yearly expenses of operating his business, and the daily, monthly, or yearly income
he derived from it for a long time prior thereto and for the time during which the interruption of which he
complains continued, thereby furnishing a reasonably correct estimate of the nature of the legal injury and
the amount of damages which resulted therefrom. While evidence of such facts may be admissible they must
not be uncertain or problematical. The requirement imposed upon one whose business has been established
and interrupted cannot be enforced as to him and made less stringent to one embarking in a new business
who cannot furnish data of past business from which the fact that anticipated profits would have been realized
4

5

can be legally deduced.”
119 N.E. at 228–29 (internal citations omitted).
Plaintiffs' FAC lists seven counts—some of which are plead “in the alternative” from each other—including
one for breach of contract. Because no count includes a statement of the damages arising from that count,
it is impossible for the Court to determine what damages claims are linked to which legal counts.
Indeed, the Robin Bay case is particularly instructive because there—like in the case at bar—the party against
whom lost profits were claimed acted in the venture as an adviser without whom the venture could not proceed
for lack of the venturers' expertise. Moreover, like this case, the claims in that case arose under contract,
negligence, and fiduciary duty theories. See 2008 WL 2275902, at ––––1–2, 7–8.

End of Document

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6

Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015)
2015 WL 2124365

Home Loan Serv., 3:14–CV–53 (CSH), ––– F.Supp.3d ––––,
2015 WL 2124365
Only the Westlaw citation is currently available.
United States District Court, D. Connecticut.
Luis GONZALEZ and Sonia Gonzalez, Plaintiffs,
v.
OCWEN HOME LOAN SERVICING, Sand Canyon
Corporation, Dale M. Sugimoto, Fabiola N.
Camperi, Matthew A. Engel, William S. Smith,
Leopold & Associates, Option One Mortgage
Corporation, American Home Mortgage Service,
Inc., Deutsche Bank National Trust Company,
Soundview Home Loan Trust 2005–OPT3, Hunt
Leibert Jacobson PC, Benjamin T. Staskiewicz, S.
Bruce Fair, Esq., Jon Doe, Jan Doe, Hinshaw &
Culbertson, LLP, Valerie Nicole Doble, Defendants.
Civil Action No. 3:14–CV–53 (CSH).
|
Signed May 6, 2015.
Attorneys and Law Firms
Sonia Gonzalez, East Windsor, CT, pro se.
Valerie N. Doble, Hinshaw & Culbertson, LLP, Boston, MA,
for Defendants.

RULING ON PLAINTIFFS' MOTION TO
REARGUE AND REQUEST FOR JUDGE
TO RECONSIDER/ARTICULATE [Doc. 15]
HAIGHT, Senior District Judge:
I. INTRODUCTION
*1 Pro se Plaintiffs Luis Gonzalez and Sonia Gonzalez
brought this action against various defendant mortgage
companies, banks, and individuals (counsel to and executives
for said mortgage companies and banks), alleging violations
of the United States Constitution and the United Nations
Declaration on the Rights of Indigenous Peoples, “banking
fraud,” and conspiracy with respect to the foreclosed
mortgage of 54 Abbe Road, East Windsor, Connecticut (the
“East Windsor Property”). 1 On February 25, 2015, the
Court entered an “Order of Dismissal” [Doc. 13], dismissing
Plaintiffs' action with prejudice. See Gonzalez v. Ocwen

2015 WL 778432 (D.Conn. Feb. 25, 2015). 2 In particular,
the Court dismissed the action in its entirety because the
Court determined that it lacked subject matter jurisdiction
and the complaint failed to set forth any claims upon which
relief may be granted in that it contained only frivolous
or legally impossible claims. 3 2015 WL 778432, at *4–
11. Furthermore, the Court found that Plaintiffs failed to
serve Defendants with process (the summons and complaint),
Fed.R.Civ.P. 4(c)(1), 4(m), and failed to prosecute the
action for more than six months, Fed.R.Civ.P. 41(b), both
constituting alternative grounds for dismissal. 4 Id., at *11–
14.

II. DISCUSSION
Pending before the Court is Plaintiffs' “Motion to Reargue and
Request for Judge to Reconsider/Articulate” [Doc. 15]. The
Court construes this pro se motion as one for reconsideration
and/or oral argument with respect to the Court's “Order
of Dismissal” of Plaintiffs' Amended Complaint [Doc. 13].
The standard for granting a motion for reconsideration “is
strict, and reconsideration will generally be denied unless the
moving party can point to controlling decisions or data that
the court overlooked—matters, in other words, that might
reasonably be expected to alter the conclusion reached by
the court.”
Shrader v. CSX Transp., Inc., 70 F.3d 255,
257 (2d Cir.1995); accord Mir v. Shah, 569 F. App'x 48, 50
(2d Cir.2014) (same). See also
Virgin Atl. Airways, Ltd. v.
Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992), cert.
denied, 506 U.S. 820 (1992) (“The major grounds justifying
reconsideration are ‘an intervening change of controlling law,
the availability of new evidence, or the need to correct a
clear error or prevent manifest injustice.’ ”) (quoting 18 C.
Wright, A. Miller & E. Cooper, Federal Practice & Procedure
§ 4478 at 790); Kolel Beth Yechiel Mechil of Tartikov, Inv. v.
YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir.2013) (same)
(citing

Virgin Atl. Airways, 956 F.2d at 1255).

“It is well-settled that a motion for reconsideration is ‘not
a vehicle for relitigating old issues, presenting the case
under new theories, securing a rehearing on the merits, or
otherwise taking a ‘second bite at the apple.’ “ Driessen v.
Royal Bank Int'l, No. 3:14–CV–01300, 2015 WL 881205, *1
(D.Conn. Mar. 2, 2015) (quoting
Analytical Surveys, Inc.
v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.2012)). Put

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Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015)
2015 WL 2124365

simply, a “motion to reconsider should not be granted where
the moving party seeks solely to relitigate an issue already
decided.” Weiming Chen v. Ying–Jeou Ma, 595 F. App'x 79,
80 (2d Cir.2015) (citing

Shrader, 70 F.3d at 257).

*2 The Court has carefully reviewed Plaintiffs' submitted list
of assertions in support of their motion for reconsideration.
Pursuant to the Second Circuit's strict standard for
reconsideration, the Court finds no adequate grounds—
no controlling authority or factual information that the
Court overlooked—to warrant reconsideration of its Order
of Dismissal. Rather, Plaintiffs have once again set forth
allegations in an attempt to challenge the validity of the state
court foreclosure of the East Windsor Property, upon which
Deutsche Bank, as Trustee, foreclosed the mortgage and took
title to the property. The requested reconsideration and/or
“reargument” (oral argument before the Court) would thus not
reasonably be expected to alter the Court's ruling.
The only potentially “new” evidence or data Plaintiffs
presented on their motion for reconsideration included:
(1) two letters from Howard F. Pitkin (“Pitkin letters”),
the Banking Commissioner for the State of Connecticut,
regarding a “National Ocwen Settlement” (herein
“Settlement”) entered between the Consumer Financial
Bureau and Ocwen Home Loan Servicing (“Ocwen”) with
respect to various loans serviced by Homeward Residential
Holdings, LLC (previously known as American Home
Mortgage Servicing, Inc. or AHMSI); and (2) a photocopy
of a check from “Ocwen Borrower Payment Account QSF”
payable to Luis Gonzalez for $1,168.44 (dated 12/6/2014).
Doc. 15, at 4–7. The Pitkin letters indicate that they relate to
a mortgage loan with respect to “54 Abbe Road, E. Windsor,
CT” and inform the “Borrowers” (recipients) that they “may
be eligible to receive a payment of at least $700.00 as a part
of the National Ocwen Settlement” because they “had a loan
serviced by Homeward Residential Holdings LLC ... and lost
[their] primary residence to foreclosure between January 1,
2009 and December 31, 2012.” 5
In presenting the Pitkin letters and/or the National
Settlement payment to Luis Gonzalez, Plaintiffs once again
seek to challenge the state court's final judgment of
foreclosure. As stated in the Order of Dismissal, pursuant
to the Rooker–Feldman doctrine, this Court remains barred
from reconsidering that foreclosure judgment. See, e.g.,
Swiatkowski v. Bank of America, NT & SA, 103 F. App'x
431, 432 (2d Cir.2004) (affirming district court's “holding

that under the Rooker–Feldman doctrine, the [district] court
lacked subject matter jurisdiction: even reading the complaint
liberally, ... [plaintiffs'] lawsuit was effectively seeking to
re-litigate a judgment of foreclosure entered against them
by the state court”); Ford v. U.S. Dep't of Treasury Internal
Revenue Serv., 50 F. App'x 490, 491 (2d Cir.2002) (affirming
district court's dismissal of plaintiff's complaint for lack
of subject matter jurisdiction under the Rooker–Feldman
doctrine where plaintiff's claims asserted alleged fraud and
the statute of limitations with respect to the state court
foreclosure judgment; Second Circuit held such claims were
“inextricably intertwined with the state court's underlying
foreclosure judgment,” so that, in “seek[ing] a declaration
that the foreclosure judgment [was] void,” plaintiff was
effectively seeking a “reversal of the state court foreclosure
judgment”); Billie v. Aurigremma, No. 3:13–cv–1432 (JBA),
2013 WL 6331358, at *2 (D.Conn. Dec. 5, 2013) (“any
claims contesting the validity of the state court foreclosure
judgment are precluded by the Rooker–Feldman doctrine”);
Andrews v. Citimortgage, Inc., No. 14–CV–1534(JS)(AKT),
2015 WL 1509511, at *5 (E.D.N.Y. Mar. 31, 2015) (“in the
Second Circuit, any attack on a judgment of foreclosure is ...
barred by the Rooker–Feldman doctrine”) (citation omitted)
(collecting cases). In addition, the Rooker–Feldman doctrine
also bars challenges to the state court foreclosure judgment
as “obtained fraudulently.” Vossbrinck v. Accredited Home
Lenders, Inc., 773 F.3d 423, 427 (2d Cir.2014) (per curiam ).
*3 In the case at bar, Plaintiffs lost in state court regarding
foreclosure of their property, complain of injuries caused
by that state court judgment, invite federal district court
review and rejection of the state court foreclosure, and
commenced this federal suit after the state court judgment was
rendered. See, e.g., McKithen v. Brown, 481 F.3d 89, 97 (2d
Cir.2007) (setting forth “four requirements for the application
of Rooker–Feldman” doctrine). This Court therefore lacks
subject matter jurisdiction over the present action pursuant to
the Rooker–Feldman doctrine. 6
No evidence presented by Plaintiffs for reconsideration
contradicts the Court's threshold finding that it lacks subject
matter jurisdiction. Absent such jurisdiction, the Court is
barred from proceeding in this matter and must dismiss. See
Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time
that it lacks subject-matter jurisdiction, the court must dismiss
the action .”). See also Manway Constr. Co. v. Housing Auth.
of Hartford, 711 F.2d 501, 503 (2d Cir.1983) (“It is common
ground that in our federal system of limited jurisdiction any

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2

Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015)
2015 WL 2124365

party or the court sua sponte, at any stage of the proceedings,
may raise the question of whether the court has subject matter
jurisdiction; and, if it does not, dismissal is mandatory.”)
(emphasis added).

Court [Doc. 13], which directed dismissal of the action with
prejudice. The Court therefore DENIES Plaintiffs' motion for
reconsideration [Doc. 15].
It is SO ORDERED.
All Citations

III. CONCLUSION
In sum, Plaintiffs have presented no legal authority or new
evidence which would reasonably alter the prior Order of this

Not Reported in F.Supp.3d, 2015 WL 2124365

Footnotes
1
2

3

Plaintiffs also included two defendants with the generic names of “Jon Doe” and “Jan Doe.” It is unclear whom
Plaintiffs sought to represent with these designations.
The full facts and circumstances of the case are set forth in the February 25 Order, familiarity with which is
assumed. See also Gonzalez v. Option One Mortg. Corp., No. 3:12–CV–1470 (CSH), 2014 WL 2475893,
at *1 (D.Conn. June 3, 2014) (dismissing prior federal case in which Plaintiffs also challenged foreclosure
on East Windsor Property); Gonzalez v. United States, No. 3:13–CV–650 (CSH), 2014 WL 3738179, at *1
(D.Conn. July 29, 2014) (same).
With respect to lack of subject matter jurisdiction, Plaintiffs' claims presented no grounds for “federal question”
jurisdiction, 28 U.S.C. § 1331; and there was also no complete “diversity of citizenship” in that Plaintiffs and
multiple defendants were all citizens of Connecticut at the commencement of the action. See
28 U.S.C. ¶
1332(a) (“[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different
States ”) (emphasis added).
Plaintiffs' claims were also barred by the “Rooker–Feldman” doctrine in that Plaintiffs sought to challenge final
state court judgments, which foreclosed on the East Windsor property and passed title to Deutsche Bank. See
Rooker v. Fid. Trust Co., 263 U.S. 413 (1923);
D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983).
For the Rooker—Feldman doctrine to apply, (1) a plaintiff must have lost in state court; (2) his injury must have
been caused by a state court judgment; (3) he must have invited federal review of that state court judgment;

4

5

and (4) the state court judgment must have been entered before his federal suit commenced.
McKithen v.
Brown, 481 F.3d 89, 97 (2d Cir.2007). This Court therefore lacked jurisdiction to consider Plaintiffs' claims.
The Court clarified that it “would ordinarily grant Plaintiffs a brief additional period within which to effect proper
service before dismissing the complaint without prejudice,” but “granting Plaintiffs additional time for service
would be futile because their Complaint is fatally defective in that it sets forth ‘frivolous' claims which cannot
be remedied by amendment.” 2015 WL 778432, at *12. Similarly, the Court found “no point” in providing
Plaintiffs with additional days to serve the summons and complaint because the Amended Complaint “sets
forth exclusively frivolous and/or legally impossible claims.” Id., at *13.
Pursuant to Federal Rule 401 of Evidence, the Court takes judicial notice of the “Consent Judgment”
which gave rise to the National Ocwen Settlement payments. See Consumer Fin. Protection Bureau v.
Ocwen Fin., Corp., No. 1:13–cv–2025 (RMC) (D.D.C. Feb. 26, 2014), Doc. 12. Pursuant to Exhibit B of
that judgment, “[t]he purposes of the payments ... are remedial and relate to the reduction in the proceeds
deemed realized by borrowers for tax purposes from the foreclosure sale of residential properties owned
by the borrowers allegedly resulting from the allegedly unlawful conduct of Ocwen.” Id., Doc. 12–2, at ¶ 7.

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3

Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015)
2015 WL 2124365

6

See also https:// nationalocwensettlement.com (website for National Settlement, declaring that the Consent
Judgment addresses Ocwen's alleged “misconduct during the mortgage servicing process.”) (visited May
4, 2015). It thus follows that the letters presented by Plaintiffs do not indicate that foreclosure on the East
Windsor Property was wrongful or invalid. Rather, they address possible errors in mortgage servicing by
Ocwen or its subsidiaries. Either reading of the letters, however, does not alter the Court's finding that any
such challenge to the state court foreclosure judgment is barred by the Rooker–Feldman doctrine.
The Court also notes that Plaintiffs have presented no data that the Court overlooked in finding that neither
“federal question” nor “diversity of citizenship” subject matter jurisdiction exists in this action. See 28 U.S.C.
§§ 1331,

End of Document

1332(a), respectively.

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4

McDermott v. Cicconi, Not Reported in F.Supp.2d (2011)
2011 WL 4834257

the sufficiency of the allegations set forth in the complaint in
KeyCite Red Flag - Severe Negative Treatment
Report and Recommendation Rejected by McDermott v. Cicconi, N.D.N.Y.,
October 12, 2011

2011 WL 4834257
Only the Westlaw citation is currently available.
United States District Court,
N.D. New York.
Brian E. McDERMOTT, Plaintiff,
v.
Zebra CICCONI and David A.
Stallone, Supt., Defendants.
No. 6:11–CV–1059 (MAD/ATB).
|
Sept. 20, 2011.
Attorneys and Law Firms
Brian E. McDermott, pro se.

ORDER and REPORT–RECOMMENDATION
ANDREW T. BAXTER, United States Magistrate Judge.
*1 The Clerk has sent to the court a civil rights complaint,
together with an application to proceed in forma pauperis
(IFP), filed by pro se plaintiff, Brian E. McDermott.
(Dkt.Nos.1, 2).
I. In Forma Pauperis (IFP) Application
A review of plaintiff's IFP application shows that he declares
he is unable to pay the filing fee. (Dkt. No. 2). In his
application, plaintiff states that he is not employed and has
no money or assets from any sources. (Dkt. No. 2). Plaintiff
states that his last employment date was August 23, 2011, and
that he was working for AdvantageRN, an Ohio company.
(Dkt. No. 2 at ¶ 2(b)). Plaintiff states that he received $
726.00 for the pay period ending August 27, 2011, but that
he has no checking or savings accounts. (Id.) Plaintiff's only
dependent is his wife. (Id. ¶ 6). After reviewing plaintiff's
application, this court finds that he meets the financial criteria
for proceeding without the payment of fees for purposes of
this recommendation.
In addition to determining whether plaintiff meets the
financial criteria to proceed IFP, the court must also consider

light of
28 U.S.C. § 1915, which provides that the court
shall dismiss the case at any time if the court determines that
the action is (i) frivolous or malicious; (ii) fails to state a claim
on which relief may be granted; or (iii) seeks monetary relief
against a defendant who is immune from such relief.
U.S.C. § 1915(e)(2)(B) (i)-(iii).

28

In determining whether an action is frivolous, the court must
consider whether the complaint lacks an arguable basis in law
or in fact. Neitzke v. Williams, 490 U.S. 319, 325, 109 S.Ct.
1827, 104 L.Ed.2d 338 (1989). Dismissal of frivolous actions
is appropriate to prevent abuses of court process as well as
to discourage the waste of judicial resources.
Neitzke, 490
U.S. at 327; Harkins v. Eldridge, 505 F.2d 802, 804 (8th
Cir.1974). Although the court has a duty to show liberality
toward pro se litigants, and must use extreme caution in
ordering sua sponte dismissal of a pro se complaint before
the adverse party has been served and has had an opportunity
to respond, the court still has a responsibility to determine
that a claim is not frivolous before permitting a plaintiff to
proceed. Fitzgerald v. First East Seventh St. Tenants Corp.,
221 F.3d 362, 363 (2d Cir.2000) (finding that a district court
may dismiss a frivolous complaint sua sponte even when
plaintiff has paid the filing fee).
To survive dismissal for failure to state a claim, the complaint
must contain sufficient factual matter, accepted as true, to
state a claim that is “plausible on its face.”
Ashcroft
v. Iqbal, 556 U.S. 662, ––––, 129 S.Ct. 1937, 1949, 173
L.Ed.2d 868 (2009) (quoting
Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
“Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Id.
(citing
Bell Atl. Corp., 550 U.S. at 555). The court will
now turn to a consideration of the plaintiff's complaint under
the above standards.
II. Complaint
*2 In his complaint, plaintiff alleges that he worked as
a nurse at Cayuga Correctional Facility (CCF), a facility
within the New York State Department of Corrections
and Community Supervision (“DCCS”) . 1 On April 11,
2011, plaintiff states that he submitted a “Work Place [sic]
Harassment Complaint” to defendant Ciccioni. (Compl. ¶

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1

McDermott v. Cicconi, Not Reported in F.Supp.2d (2011)
2011 WL 4834257

4; Dkt. No. 1 & Pl.'s Ex. I). Plaintiff states that on April
12, defendant Cicconi made plaintiff sign two probationary
employee evaluations, at the same time, allegedly contrary to
DCCS personnel policy. Plaintiff states that one evaluation
was a “6 week” evaluation, and the other was a “10 week”
evaluation. (Id. & Pl.'s Exs. II—III).
Plaintiff claims that both of these evaluations were
late, and the second evaluation was full of allegations
of undocumented and unsubstantiated misconduct against
plaintiff. (Id. & Pl.'s Ex. II). Plaintiff states that defendant
Cicconi's purpose in issuing these poor performance
evaluations was to retaliate against plaintiff for his April
11, 2011 harassment complaint. (Id.) As a result, plaintiff
resigned from his employment at Cayuga Correctional
Facility on May 4, 2011. (Compl. Ex. V; Pl.'s Ltr. of
Resignation). Plaintiff also alleges that, on May 12, 2011,
after plaintiff's resignation, defendant Stallone took the
unprecedented step of posting a picture of plaintiff in the
lobby of the facility, warning that plaintiff was not allowed
past the lobby. (Id. & Pl .'s Ex. IV; Memorandum to Lobby
Officer)).
The complaint contains two “Causes of Action.” (Compl.¶
5). The “First Cause of Action” states that defendant Ciccone
violated the “NYS DOCS Employee Service Manual” when
she made plaintiff sign two evaluations on the same date,
subsequent to his filing a complaint of workplace harassment.
Plaintiff's “Second Cause of Action” states that defendant
Stallone violated plaintiff's rights when he posted plaintiff's
picture on the wall, banning plaintiff from the facility, for
everyone to see, also in retaliation for plaintiff's harassment
complaint. 2
Plaintiff seeks substantial monetary relief “for ten years of
employment had Plaintiff not been harassed and forced to
resign after Retaliation to a Whistleblower.” (Compl.¶ 6).
III. Whistleblower Protection Act
Plaintiff cites as his basis for jurisdiction, the federal
Whistleblower Protection Act,
5 U.S.C. § 2302(b)(8).
Congress passed the Whistleblower Protection Act in order to
provide “federal employees with the right to seek corrective
action from the [Merit Systems Protection Board] whenever
a personnel action has been taken in retaliation for certain
whistleblowing activities.” Mulero Abreu v. Oquendo–Rivera,
729 F.Supp.2d 498, 523–24 (D.P.R.2010) (quoting Fields v.
DOJ, 452 F.3d 1297, 1302 (Fed.Cir.2006)) (emphasis added).

Plaintiff in this case is not a federal employee, and therefore,
this whistleblower legislation does not apply to him. Federal
jurisdiction for this action may not be based upon the federal
statute he cites in the complaint.
IV. Alternative Bases for Jurisdiction
*3 The court notes that plaintiff raises only the federal
Whistleblower Protection Act as his basis for federal
jurisdiction, and the case could be dismissed for that reason
alone. The court must keep in mind, however, that when a
plaintiff proceeds pro se, particularly when he or she claims
violations of civil rights, the pleadings must be construed with
great liberality.
Sealed Plaintiff v. Sealed Defendants, 537
F.3d 185, 191 (2d Cir.2008) (citation omitted). The court must
interpret the pleadings to raise the strongest arguments they
suggest.

McPherson v. Coombe, 174 F.3d 276, 279 (2d

Cir.1999) (quoting
Burgos v. Hopkins, 14 F.3d 787, 790
(2d Cir.1994). Thus, the court will examine other possible
bases for plaintiff's complaint.
A. Other Federal Whistleblower Statutes
There are several federal statutes prohibiting retaliation
against whistleblowers, each of which is applicable to a
specific type of individual or misconduct. See, e.g., 5 U.S.C.
§ 1221 (protecting federal employees from certain types
of retaliation);
12 U.S.C. § 1441a(q) (protecting those
reporting misconduct by the FDIC or the Thrift Depositor
Protection Oversight Board); 18 U.S.C. § 1513(e) (Sarbanes
Oxley provision for those who report corporate fraud);
31
U.S.C. § 3730(h) (False Claims Act whistleblower provision);
33 U.S.C. § 1367 (protecting employees who report violations
of Clean Water Act). Clearly, none of these statutes apply in
plaintiff's stated factual situation.
B. Federal Employment Statutes
There are other federal employment statutes that prevent
retaliation for making complaints. See e.g.
42 U.S.C. §
2000e–3(a) (Title VII). Title VII prohibits discrimination
based upon membership in a “protected class.”
42 U.S.C.
§ 2000e–2(a). Title VII also forbids an employer from
discriminating against an employee because he or she has
made a charge, testified, assisted, or participated in any
manner in a Title VII investigation, proceeding or hearing.
Id. In order to state a claim under Title VII, the plaintiff

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2

McDermott v. Cicconi, Not Reported in F.Supp.2d (2011)
2011 WL 4834257

must show, among other factors, that he participated in a
protected activity, defendant knew about that activity, and
that there is a causal connection between the protected
activity and an adverse employment action. See
Jute v.
Hamilton Sustrand Corp., 420 F.3d 166, 173 (2d Cir.2005).
Participation in a protected activity includes expressing
opposition to employment practices that are “unlawful under
Title VII.”
Swift v. Countrywide Home Loans, Inc., 770
F.Supp.2d 483, 489 (E.D.N.Y.2011).
In
this
case,
although
plaintiff
labeled
his
internal employment complaint “Harassment/Hostile Work
Environment,” which sounds like a claim for employment
discrimination under Title VII, plaintiff was not complaining
about discrimination based upon race, color, religion, sex,
or national origin. A review of plaintiff's complaint shows
that he alleged he was harassed for being too slow, taking
too long with a patient, and improperly handling paperwork.
(Compl. Pl.'s Ex. I). He does not claim that he is a member of
a protected group. He does not claim that his resignation was
in any way related to complaints about violations of Title VII.
Rather, he complained about his work environment in general,
apparently related to the rudeness of his supervisors.
plaintiff does not state a claim under Title VII.

3

Thus,

C. First Amendment
*4 The federal constitution also prohibits retaliation against
adverse employment actions based upon protected speech.
See e.g.

Singh v. City of New York, 524 F.3d 361, 372 (2d

Cir.2008). Such a claim would be brought under 42 U.S.C.
§ 1983. Id. However, in order to state a First Amendment
claim, the plaintiff would first have to show that his speech
addressed a matter of “public concern.” Id. A matter is of
public concern when it relates to matters of political, social, or
other community concerns. Id. (citing
Connick v. Myers,
461 U.S. 138, 146, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983)).
Matters of public concern involve an employee speaking as
a citizen, and not as an employee, who is only complaining
about a personnel decision. Id. Personal grievances are not
protected under the First Amendment. Id.
In this case, plaintiff's internal complaint was clearly a
personal grievance, complaining about how he was being
treated at work. There was no matter of “public concern”
involved in his “harassment” complaint. Thus, he may not

bring an action, claiming First Amendment violations under
section 1983.
D. New York Statutes
New York State has a whistleblower statute that is specifically
applicable to public employees. 4 See N.Y. Civ. Serv. Law
§ 75–b. However, this section does not apply to plaintiff's
situation.

Section 75–b provides that

2(a) A public employer shall not dismiss or take other
disciplinary or other adverse personnel action against a
public employee regarding the employee's employment
because the employee discloses to a governmental body
information: (i) regarding a violation of a law, rule
or regulation which violation creates and presents a
substantial and specific danger to public health or safety; or
(ii) which the employee reasonably believes to be true and
reasonably believes constitutes an improper governmental
action
N.Y. Civ. Serv. Law § 75–b(2)(a). Section 75–b only
applies as a defense to disciplinary charges and does not
permit the plaintiff to bring a separate claim for damages
such as plaintiff is attempting to do in this case. See Dibiase
v. Barber, No. CV 06–5355, 2008 WL 4455601, at *9
(E.D.N.Y. Sept. 30, 2008) (citing Perfetto v. Erie County
Water Auth., No. 03–CV–439, 2006 WL 1888556, at *5
(W.D.N.Y. July 7, 2006)). Thus, plaintiff cannot base any
action on the above state law sections.
Even assuming that plaintiff could state a claim under some
New York State statute, there would be no jurisdiction in
federal court for such an action. There is clearly no diversity
of citizenship, sufficient to assert jurisdiction under
28
U.S.C. § 1332. The other basis for jurisdiction is “federal
question” under 28 U.S.C. § 1331. A well-pleaded complaint
may allege federal question jurisdiction by either asserting
a federal cause of action or presenting state claims that “
‘necessarily raise a stated federal issue, actually disputed
and substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal
and state judicial responsibilities.’ “ Broder v. Cablevision
Sys. Corp., 418 F.3d 187, 194 (2d Cir.2005) (quoting
Grable & Sons Metal Products, Inc. v. Darue Eng'g &
Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257
(2005)).

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3

McDermott v. Cicconi, Not Reported in F.Supp.2d (2011)
2011 WL 4834257

*5 In this case, plaintiff's complaint is anything but wellpleaded, and the court is only speculating regarding the types
of claims that plaintiff could be attempting to bring because
of the liberality with which pro se plaintiffs are treated. After
a review of the complaint and the potentially applicable law,
this court finds that plaintiff's complaint does not state a
claim, nor can a federal claim be stated based upon plaintiff's
disagreement with the personnel action taken against him,
regardless of the fact that his supervisor made him sign two
performance evaluations in one day, and even if that action
was in violation of the DCCS policy manual. Thus, although
plaintiff may meet the financial criteria for IFP status, his
complaint may be dismissed under
(ii) for failure to state a claim.

section 1915(e)(2)(B)

V. Opportunity to Amend
Generally, when the court dismisses a pro se complaint sua
sponte, the court should afford the plaintiff the opportunity
to amend at least once, however, leave to re-plead may be
denied where any amendment would be futile.
Ruffolo v.
Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir.1993). In this
case, the court finds that any attempt of the plaintiff to amend
this complaint would be futile, and she would still be unable
to state a federal claim.
WHEREFORE, based on the findings above, it is

RECOMMENDED, that plaintiff's complaint be
DISMISSED SUA SPONTE WITH PREJUDICE pursuant
to 29 U.S.C. § 1915(e)(2)(B) (ii) for failure to state a claim,
and it is
RECOMMENDED, that if the District Court adopts this
recommendation, the court further certify that any appeal
from this matter would not be taken in good faith pursuant to
28 U.S.C. § 1915(a)(3), and it is
ORDERED, that the Clerk of the Court serve a copy of this
Order on plaintiff in accordance with the Local Rules.
Pursuant to
28 U.S.C. § 636(b)(1), the parties have
fourteen (14) days within which to file written objections
to the foregoing report. Such objections shall be filed
with the Clerk of the Court. FAILURE TO OBJECT TO
THIS REPORT WITHIN FOURTEEN (14) DAYS WILL
PRECLUDE APPELLATE REVIEW.

Roldan v. Racette,

984 F.2d 85, 89 (2d Cir.1993) (citing
Small v. Sec'y of
Health and Human Servs. ., 892 F.2d 15 (2d Cir.1989)); see
also
6(e).

28 U.S.C. § 636(b) (1); FED. R. CIV. P. 72, 6(a), &

All Citations

ORDERED, that plaintiff's motion to proceed IFP (Dkt. No.
2) is GRANTED for purposes of filing only, and it is

Not Reported in F.Supp.2d, 2011 WL 4834257

Footnotes
1

2
3

4

Although plaintiff refers to the Department as DOCS, on April 1, 2011, the New York State Department of
Correctional Services (“DOCS”) and the New York State Division of Parole were merged into one agency,
named the New York State Department of Corrections and Community Supervision. The court will refer to
the department with its new acronym.
The plaintiff's allegation that they posted his picture in the lobby is related to his retaliation claim and does
not appear to be a separate action challenging the use of his photograph.
The court would also point out that before bringing an action under Title VII, plaintiff would be required to
exhaust his administrative remedies and obtain a “right to sue” letter. See
McPherson v. New York City
Dep't of Educ., 457 F.3d 211, 214 (2d Cir.2006) (requirements of a Title VII action in federal court).
The other whistleblower statute does not apply to public employeer, and thus, plaintiff could not make use of
that law as a basis for his claims. See Dibiase v. Barber, No. CV 06–5355, 2008 WL 4455601, at *5 (E.D.N.Y.

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4

McDermott v. Cicconi, Not Reported in F.Supp.2d (2011)
2011 WL 4834257

Sept. 30, 2008) (citing

N.Y. Labor Law § 740); Balduzzi v. City of Syracuse, No. 96 Civ. 824, 1997 WL

52434, at *3–4 (N.D.N.Y. Feb.4, 1997) (

End of Document

section 740 applies only to employees in the private sector).

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5

Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

1997 WL 599355
Only the Westlaw citation is currently available.
United States District Court, N.D. New York.
Kenneth BROWN, Plaintiff,
v.
Andrew PETERS, Warden, Watertown Correctional
Facility; Joseph Williams, Warden, Lincoln Work–
Release Center; Francis J. Herman, Senior Parole
Officer Interstate Bureau; T. Stanford, Senior Parole
Officer; Deborah Stewart, Parole Officer; John
Doe # 1, Parole Agent, Watertown Correctional
Facility; John Doe # 2, Parole Agent, Lincoln
Work Release Center; Susan Bishop, Director of
Interstate Compact, South Carolina; Cecil Magee,
Parole Officer, South Carolina; Frank Barton,
Parole Officer, South Carolina; John McMahan,
Parole Officer, South Carolina, Defendants.
No. Civ.A. 95CV1641RSPDS.
|
Sept. 22, 1997.
Attorneys and Law Firms
Kenneth Brown, State Court Institute–Greene, Waynesburg,
PA, plaintiff, pro se.
Dennis C. Vacco, New York State Attorney General, The
Capitol Albany, NY, for defendants Peters, Herman Stewart,
Doe # 1, Doe # 2, and Williams, Jeffrey M. Dvorin, Assistant
Attorney General, Carl N. Lundberg, Chief Legal Counsel,
South Carolina Department of Probation, Columbia, SC, for
defendants Bishop, Magee, Barton, McMahan, and Stanford,
Carl N. Lundberg, of Counsel.

DECISION AND ORDER
POOLER, J.
*1 The above matter comes to me following a Report–
Recommendation by Magistrate Judge Daniel Scanlon, Jr.,
duly filed on April 17, 1997. Following ten days from the
service thereof, the Clerk has sent me the entire file, including
any and all objections filed by the parties herein.

Plaintiff Kenneth Brown commenced this Section 1983 civil
rights action on November 17, 1995. On February 12,
1996, Magistrate Judge Scanlon ordered Brown to submit an
amended complaint alleging the specific acts committed by
the individuals named as defendants which Brown claimed
violated his constitutional rights. Brown filed an amended
complaint on March 21, 1996. In his amended complaint,
Brown alleged that defendants violated his rights under the
Eighth and Fourteenth Amendments by failing to process
properly his interstate compact paperwork, resulting in Brown
being imprisoned pursuant to a parole hold when in fact
he had never violated the conditions of his parole. For a
more complete statement of Brown's claims, see his amended
complaint. Dkt. No. 5.
On August 5, 1996, defendants Peters and Williams made
a motion to dismiss for failure to state a claim pursuant to
Fed.R.Civ.P. 12(b)(6). Dkt. No. 13; Dkt. No. 14, at 2. On
August 19, 1996, defendants Bishop, Magee, Barton, and
McMahan made a motion to dismiss the complaint against
them or, in the alternative, for summary judgment. Dkt. No.
20. On October 17, 1996, defendants Herman, Stewart, and
Stanford made a motion to dismiss for failure to state a
claim. Dkt. No 34. On April 17, 1996, Magistrate Judge
Scanlon recommended that all defendants' motions to dismiss
be granted and that the complaint be dismissed. Dkt. No. 50.
On June 9, 1997, Brown filed objections to the
magistrate judge's report-recommendation, having been
granted additional time in which to do so. Dkt. No. 52. In
addition, Brown filed on June 9, 1997, a motion for leave to
file a second amended complaint and a copy of his proposed
amended complaint. Dkt. No. 53. I turn first to the last motion
filed, Brown's motion for leave to amend his complaint a
second time.
Brown seeks to file a second amended complaint “setting
forth in detail the personal involvement of each defendant
and how their acts of commission and omission served to
deprive plaintiff of Constitutionally secured rights.” Dkt. No.
53. The district court has discretion whether to grant leave
to amend.
Ruffolo v. Oppenheimer & Co., 987 F.2d 129,
131 (2d Cir.1993). In exercising that discretion, the court
should freely grant leave to amend when justice so requires.
Fed.R.Civ.P. 15(a). However, the court need not grant leave
to amend where it appears that amendment would prove to be
unproductive or futile.

Ruffolo, 987 F.2d at 131.

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1

Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

Here, Brown moved to amend his complaint to add additional
allegations against the named defendants. However, the
additional allegations fail to cure the deficiency which
forms the basis of defendants' motion to dismiss—
the absence of defendants' personal involvement in a
constitutional deprivation. Section 1983 imposes liability
upon an individual only when personal involvement of that
individual subjects a person to deprivation of a federal right.
See
Monell v. Dep't of Soc. Servs., 436 U.S. 658, 98 S.Ct.
2018, 56 L.Ed.2d 611 (1978). A complaint is fatally defective
if it fails to allege personal involvement sufficient to establish
that a supervisor was “directly and personally responsible for
the purported unlawful conduct.”
Alfaro Motors, Inc. v.
Ward, 814 F.2d 883, 886 (2d Cir.1987).
*2 Brown's proposed amended complaint alleges in
conclusory fashion that defendants acted “in a grossly
negligent and concerted manner which breached their duties
owed to Plaintiff and is the proximate cause of [the violation
of plaintiff's constitutional rights].” Proposed Am. Compl.,
at 3. Brown continues in the same vein, stating that
defendants owed duties to plaintiff to carry out their jobs in a
professional manner and they failed to carry out those duties
appropriately. The complaint states that defendants held
specific responsibilities, such as checking for outstanding
warrants, which if performed properly should have alerted
them to a problem. However, nowhere does the complaint
set forth allegations that these defendants either participated
directly in any constitutional infraction or that they were even
aware of such an infraction. The proposed amended complaint
merely alleges that these defendants failed in performing their
supervisory and ministerial functions. “These bare assertions
do not state a claim under
42 U.S.C. § 1983.”
Davis, 1988 WL 78306, *2 (S.D.N.Y.).

Smiley v.

This plaintiff previously has had the opportunity to amend his
complaint for the same reason asserted here, to allege personal
involvement on the part of defendants. Brown's first amended
complaint failed to accomplish that task, and it appears that
even if allowed to amend again Brown would be unable to
make the requisite allegations with sufficient specificity to
sustain his complaint. Consequently, I find that amendment
would be futile, and I deny Brown's motion for leave to amend
his complaint.
I turn now to the magistrate judge's report-recommendation
and defendants' motions. The magistrate judge recommends
that I grant defendants' motions and dismiss the complaint

as to all defendants. The report-recommendation clearly
describes the grounds on which the magistrate judge
recommends dismissal as to each defendant. Fed.R.Civ.P.
72(b) requires the district judge to make a de novo
determination on “any portion of the magistrate's disposition
to which specific, written objection has been made.” Brown's
objections fail to address directly any of the analysis.
Brown's objections state (1) that he has been deprived of
his constitutional rights; (2) that he has stated a cause of
action; (3) that the court wrongly refused to appoint an
attorney for him and wrongly stayed discovery pending the
outcome of these motions; (4) that he seeks to file an amended
complaint; (5) the standard of review for a Fed.R.Civ.P. 12(b)
(6) motion; (6) that he disagrees with the magistrate judge's
recommendation to grant defendants' motions because the
allegations in his complaint, which he repeats, show that his
rights were violated; and (7) the text of the Fourteenth and
Eighth Amendments.
Even affording the objections the liberal reading required
for pro se pleadings, I find that these objections fail to
state any basis whatsoever, much less a specific one, for
the court not to adopt the magistrate judge's rulings. They
simply re-state the relief sought and the facts on which Brown
grounds his complaint and conclude that the magistrate
judge's conclusions are wrong. When the parties make only
frivolous, conclusive, or general objections, the court reviews
the report-recommendation for clear error. See Camardo v.
General Motors Hourly–Rate Employees Pension Plan, 806
F.Supp. 380, 382 (W.D.N.Y.1992) (court need not consider
objections which are frivolous, conclusive, or general and
constitute a rehashing of the same arguments and positions
taken in original pleadings); Chambrier v. Leonardo, 1991
WL 44838, *1 (S.D.N.Y.) (restatement of allegations already
before the court and assertion that valid constitutional claim
exists insufficient to form specific objections); Schoolfield
v. Dep't of Correction, 1994 WL 119740, *2 (S.D.N.Y.)
(objections stating that magistrate judge's decisions are
wrong and unjust, and restating relief sought and facts
upon which complaint grounded, are conclusory and do not
form specific basis for not adopting report-recommendation);
Vargas v. Keane, 1994 WL 693885, *1 (S.D.N.Y.) (general
objection that report does not address violation of petitioner's
constitutional rights is a general plea that report not be
adopted and cannot be treated as objection within the meaning
of
28 U.S.C. § 636), aff'd,
86 F.3d 1273 (2d Cir.),
cert. denied, 519 U.S. 895, 117 S.Ct. 240, 136 L.Ed.2d 169
(U.S.1996). See also Scipio v. Keane, 1997 WL 375601, *1

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2

Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

(1997) (when objections fail to address analysis directly, court
reviews report-recommendation for clear error); Fed.R.Civ.P.
72(b), Advisory Comm. Note (when no specific, written
objections filed, “court need only satisfy itself that there is
no clear error on the face of the record in order to accept the
recommendation”).
*3 Because Brown fails to make specific objections or
provide any basis for his general objections, I review the
report-recommendation for clear error. After careful review,
I conclude that the magistrate judge's report-recommendation
is well-reasoned and is not clearly erroneous. 1 The
magistrate judge employed the proper standard, accurately
recited the facts, and reasonably applied the law to those facts.
Consequently, I adopt the report-recommendation.

CONCLUSION
Because plaintiff's proposed amendment demonstrates that
amendment would be futile, I deny plaintiff's motion for leave
to amend his complaint. I approve the magistrate judge's
recommendation and grant defendants' motions to dismiss.
Plaintiff's complaint is dismissed in its entirety.
IT IS SO ORDERED.

ORDER and REPORT–RECOMMENDATION
This matter was referred to the undersigned for report and
recommendation by the Hon. Rosemary S. Pooler, United
States District Judge, by Standing Order dated November
12, 1986. Currently before this Court are a number of
motions. Defendants Peters and Williams have filed a motion
to dismiss (dkt.13); defendants Bishop, Magee, Barton and
McMahan have filed a motion for summary judgment, or in
the alternative to dismiss (dkt.20); and defendants Herman,
Stewart and Stanford also have filed a motion to dismiss
(dkt.34). Plaintiff opposes these three motions (dkts.27, 29,
33, 38). Defendants Bishop, Magee and McMahan have filed
a motion to stay discovery (dkt.41) and plaintiff has filed a
motion to extend time (dkt.44) in which to file opposition to
the latter motion for a stay of discovery.
The Court addresses these issues seriatim.

BACKGROUND
Plaintiff's amended complaint, which he has brought pursuant
to
42 U.S.C. § 1983, alleges the following facts. In
October, 1991, plaintiff was incarcerated in the Watertown
Correctional Facility in Watertown, New York. He applied
for an interstate compact because he wanted to return to
South Carolina to live with his common law wife, Pamela
Reid. During the application process, he was interviewed by
the facility's parole officer, identified only as defendant John
Doe # 1. After signing the necessary papers, his application
was forwarded to defendant Andrew Peters, the facility's
superintendent, who reviewed, signed and forwarded the
papers to the Interstate Bureau. Amend. Compl. at ¶¶ 1–2;
Exs. A, B.
On or about January 15, 1992, while his compact was waiting
for review at the Interstate Bureau, plaintiff was approved for
work release and sent to the Lincoln Work Release Center
in New York City. While at the center, plaintiff spoke to a
parole officer, defendant John Doe # 2, and told him that
he was seeking a compact that would return him to South
Carolina upon his conditional release. Plaintiff claims the
parole officer told him that he would handle the necessary
paperwork, although the officer had had no experience with
an interstate compact. Amend. Compl. at ¶¶ 3, 4.
*4 Plaintiff, meanwhile, asked Reid whether any officials
had contacted her in South Carolina regarding his prospective
residence in that state. Upon discovering no one had contacted
her, plaintiff asked a lawyer he knew, Navron Ponds, to
inquire as to his compact status. In March, 1992, the
lawyer spoke with defendant Susan Bishop, who is the
director of the interstate compact program in South Carolina.
Bishop allegedly told Ponds that plaintiff “was disapproved
because there was a discrepancy about approving plaintiff['s]
compact.” The “discrepancy” was the fact that plaintiff owed
the state of South Carolina eighty-six days of confinement
from a previous sentence. Plaintiff claims Bishop told Ponds
to contact defendants Cecil Magee and Frank Barton, who
worked for the South Carolina Parole Department. Sometime
in March, 1992, Ponds made some calls to Barton and Magee.
A verbal agreement was reached, and plaintiff, upon speaking
with Barton and Magee was told that his compact had been
approved. He also was told that he should report to the South
Carolina Department of Parole upon being released. Amend.
Compl. at ¶¶ 5–7.

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Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

Prior to leaving the Lincoln Work Release Center, plaintiff
processed paperwork related to his interstate compact. His
paperwork was sent by Doe # 2 to defendant Joseph Williams,
the superintendent of the center. Williams reviewed, signed
and returned the paperwork to plaintiff. On May 1, 1992,
upon his release from the center, plaintiff traveled to South
Carolina. Three days later, he entered a South Carolina parole
office and promptly was arrested because of the eightysix days of confinement that he owed the state. Plaintiff's
paperwork was given to defendant John McMahan, a parole
officer. Plaintiff claims that McMahan never returned this
paperwork to him. On May 20, 1992, the state of South
Carolina revoked plaintiff's parole and plaintiff was returned
to prison to serve the eighty-six days that he owed. When he
asked McMahan what would happen to his one year of parole
from New York, the officer allegedly told him that his New
York parole would run concurrently with his South Carolina
parole, and that when he finished his South Carolina parole,
he would not owe any parole whatsoever. Plaintiff served the
eighty-six days he owed and was released on July 31, 1992.
Amend. Compl. at ¶¶ 8–10.
In February, 1993, plaintiff was arrested on robbery charges
in South Carolina. The charges ultimately were dropped,
but he apparently encountered some difficulties regarding
this arrest as a result of a parole hold that New York state
had placed upon him. Bishop's office told him that it had
nothing to do with his parole hold and that any problem that
he had was between him and the state of New York. He
talked to authorities in Albany, New York regarding the parole
hold, but was not successful in his efforts to have the hold
removed. On September 30, 1993, after had been extradited
to New York as a fugitive from justice, plaintiff was given a
preliminary hearing at Riker's Island, New York. The hearing
officer found no probable cause that plaintiff had violated any
condition of parole. He was released. Amend. Compl. at ¶¶
11–14; Exs. C–J.
*5 Plaintiff claims that he would not have suffered hardships
if his interstate compact had been handled correctly. He
alleges that defendant Deborah Stewart failed to follow up
and see whether plaintiff had arrived in South Carolina. If she
had, he argues, she would have discovered that he had been
arrested upon his arrival. He alleges that defendant Francis
Herman, a parole officer at the Interstate Bureau failed to
do his job by not investigating plaintiff's violation reports.
Amend. Compl. at ¶¶ 15–17; Exs. F–I.

Plaintiff asserts that the foregoing amounts violations of his
Eighth and Fourteenth Amendment rights, wherefore he both
compensatory and declaratory relief.

DISCUSSION
A. Motion to Dismiss by Williams and Peters.
Williams and Peters have filed a motion to dismiss plaintiff's
complaint pursuant to FED.R.CIV.P. 12(b)(6) on the grounds
that it fails to state a claim upon which relief may be
granted. In a Rule 12(b)(6) motion, all factual allegations
in the complaint must be taken and construed in plaintiff's
favor. See
LaBounty v. Adler, 933 F.2d 121, 122 (2d
Cir.1991) (citing Ortiz v. Cornette, 867 F.2d 146, 149 (1989)).
The Court's role is not to assess whether plaintiffs have
raised questions of fact or demonstrated an entitlement
to a judgment as a matter of law, as in a motion made
pursuant to FED.R.CIV.P. 56 for summary judgment, but
rather to determine whether plaintiff's complaint sufficiently
alleges all of the necessary legal elements to state a claim
under the law. See Christopher v. Laidlaw Transit, Inc. 899
F.Supp. 1224, 1226 (S.D.N.Y.1995), (citing
Ricciuti v.
New York City Transit Authority, 941 F.2d 119, 124 (2d
Cir.1991)). Factual allegations in brief or memoranda may not
be considered. Fonte v. Board of Managers of Continental
Towers Condominium, 848 F.2d 24, 25 (2d Cir.1988). The
Court now turns to the issues presented.
Personal involvement of defendants in alleged constitutional
deprivations is a prerequisite to an award of damages under
§ 1983. Wright v. Smith, 21 F.3d 496, 501 (2d Cir.1994).
As superintendents at New York State Correctional facilities,
Williams and Peter may be found personally involved in the
alleged deprivation of plaintiff's constitutionally protected
rights by a showing that they: (1) directly participated in the
infraction; (2) knew of the infraction, but failed to remedy
the wrong; (3) created or continued a policy or custom under
which unconstitutional practices occurred; or (4) were grossly
negligent in managing subordinates who caused unlawful
conditions or events. Id., (quoting
Williams v. Smith, 781
F.2d 319, 323–24 (2d Cir.1986)). Supervisory liability also
may be imposed against Williams or Peters with a showing
of gross negligence or deliberate indifference to plaintiff's
constitutional rights. Id. Absent some personal involvement
by Williams or Peters in the allegedly constitutionally infirm
conduct of their subordinates, neither can be held liable

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Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

under
§ 1983.
Cir.1987).

Gill v. Mooney, 824 F.2d 192, 196 (2d

*6 Plaintiff has not provided any evidence linking either
Williams or Peters to his alleged constitutional deprivations.
All that plaintiff has alleged is that Williams and Peters,
as superintendents, have reviewed and signed paperwork
relating to plaintiff's compact. Though it has long been held
that pro se complaints are held to “less stringent standards
than formal pleadings drafted by lawyers” for the purpose
of a motion to dismiss under Rule 12(b)(6),
Haines
v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 595–96, 30
L.Ed.2d 652 (1972), plaintiff has not explained how the
ministerial conduct of these two defendants was violative of
the Constitution. Their motion to dimiss should be granted.
B. Motion for Summary Judgment or to Dismiss by Bishop,
Magee, Barton and McMahan.
Bishop, Magee, Barton and McMahan have filed a motion
for summary judgment, or in the alternative a motion to
dismiss. The Court will treat their motion as a motion to
dismiss. “[C]omplaints relying on the civil rights statutes are
insufficient unless they contain some specific allegations of
fact indicating a deprivation of rights, instead of a litany
of general conclusions that shock but have no meaning.”
Barr v. Adams, 810 F.2d 358, 363 (2d Cir.1987). Plaintiff
has not alleged specifically how the conduct of these four
defendants infringed upon his constitutional rights. In his
amended complaint, he contends that defendants violated the
Constitution by “continuously breaching [[[their] duty” to
him. This language underscores the defect with the complaint:
if it alleges anything at all, it alleges that defendants
were negligent in handling plaintiff's interstate compact and
parole. To state a cognizable
§ 1983 claim, the prisoner
must allege actions or omissions sufficient to demonstrate
deliberate indifference; mere negligence will not suffice.
Hayes v. New York City Dept. of Corrections, 84 F.3d 614,
620 (2d Cir.1996);

Morales v. New York State Dep't of

Corrections, 842 F.2d 27, 30 (2d Cir.1988) ( section 1983
does not encompass a cause of action sounding in negligence).
The Court finds that the claims against Bishop, Magee, Barton
and McMahan should be dismissed.
C. Motion to Dismiss by Herman, Stewart and Stanford.

Plaintiff's claim against Stewart is that she failed to follow
up and see whether plaintiff had arrived in South Carolina.
Herman, he likewise asserts, failed to do his job because he
did not investigate plaintiff's violation reports. Plaintiff has
not alleged how these actions run afoul of the Constitution;
and again, these claims seem to be grounded in negligence,
which is not actionable under
at 620.

§ 1983.

Hayes, 84 F.3d

Plaintiff's claim against Stanford must fail because his
complaint literally fails to state a claim against that
defendant. Aside from naming Stanford as a defendant, and
alleging that he was the appointed Senior Parole Officer at
plaintiff's September 30, 1993 revocation hearing at Riker's
Island, plaintiff does not detail how Stanford violated his
constitutional rights. Absent some personal involvement by
Stanford in the allegedly constitutionally infirm conduct of
his subordinates, he cannot be held liable under

§ 1983.

Gill, 824 F.2d at 196.
*7 Accordingly, the Court finds that Stanford, Stewart and
Herman's motion to dismiss should be granted.
D. Plaintiff's “John Doe” Claims.
In so far as neither John Doe # 1 nor John Doe # 2 have been
identified and served in this matter, the Court does not have
jurisdiction over these parties and does not reach the merits
of plaintiff's claims against them.
E. Discovery Motions.
Defendants Bishop, Magee and McMahan have filed a motion
to stay discovery until the Court has made a ruling on their
motion to dismiss. Plaintiff has filed a motion to extend
the time in which he may file opposition to defendants'
motion. Plaintiff, however, has filed his opposing response
(dkt.47), therefore his instant discovery motion is denied as
moot. In that the Court recommends granting defendants'
motion to dismiss, discovery in this matter would be fruitless.
Accordingly, defendants' motion for a stay of discovery
pending the resolution of their motion to dismiss is granted.

CONCLUSION
WHEREFORE, based upon the foregoing analysis, it is
hereby

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Brown v. Peters, Not Reported in F.Supp. (1997)
1997 WL 599355

ORDERED, that plaintiff's motion to extend the time to file
an opposing reply (dkt.44) is denied as moot; and it is further
ORDERED, that defendants Bishop, Magee and McMahan's
motion to stay discovery until their motion to dismiss is
decided (dkt.41) is granted; and it is further
RECOMMENDED, that defendants Peters and Williams'
motion to dismiss (dkt.13) be granted; and it is further
RECOMMENDED, that defendants Bishop, Magee, Barton
and McMahan's motion to dismiss (dkt.20) be granted; and it
is further
RECOMMENDED, that defendants Herman, Stewart and
Stanford's motion to dismiss (dkt.34) be granted.

Pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 72.1(c),
the parties have ten (10) days within which to file written
objections to the foregoing report. Such objections shall be
filed with the Clerk of the Court. FAILURE TO OBJECT
TO THIS REPORT WITHIN TEN (10) DAYS WILL
PRECLUDE APPELLATE REVIEW.

Roldan v. Racette,

984 F.2d 85, 89 (2d Cir.1993) (citing
Small v. Secretary
of Health and Human Services, 892 F.2d 15 (2d Cir.1989));
28 U.S.C. § 636(b)(1); FED.R.CIV.P. 6(a), 6(e) and 72.
All Citations
Not Reported in F.Supp., 1997 WL 599355

Footnotes
1

I note, however, that the report-recommendation would survive even de novo review.

End of Document

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