Gianatasio v. D'Agostino et al
Filing
17
OPINION re: 5 MOTION to Dismiss for Lack of Jurisdiction. filed by Tirrenian Realty Corp., Persal, LLC, Mario D'Agostino. Based on the conclusions set forth above, Defendants' motion to dismiss the Complaint for lack of subject matter jurisdiction, insufficient process and failure to join necessary parties is denied. (Signed by Judge Robert W. Sweet on 11/1/2011) (djc) Modified on 11/2/2011 (djc).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------
---X
ROBERT GIANATASIO,
11 Civ. 3095
PI
ntiff,
OPINION
against-
MARIO D'AGOSTINO, PERSAL LLC d/b/a
MUSCLE MAKER GRILL and TIRREANIAN REALTY,
Defendants.
A P PEA RAN C E S:
NEIL S. COMER, ATTORNEY AT LAW
445 Hamilton Avenue
White Plains, NY 10601
Neal S. Comer, Esq.
At
for Defendants
PETER J. PIERGIOVANNI, ESQ.
984 Morris Park Avenue
Bronx, NY 10462
By: Peter J. Piergiovanni,
Sweet, D.J.
The defendants Mario D'Agostino, Persal, LLC d/b/a
Muscle Maker Grill and Tirrenian Realty Corp.
(the "Defendants")
have moved pursuant to Fed. R. Civ. P. 12(b) (1), 12(b) (4), and
12 (b) (7) to dismiss the Complaint filed by plaintiff Robert
Gianatasio (the "Plaintiff").
Based upon the conclusions set
forth below, Defendants' motion is denied.
The Complaint
On May 6, 2011,
aintiff filed his complaint (the
"Complaint") in the Southern District of New York, alleging that
Robert Gianatasio and Mario D'Agostino formed Persal, a limited
liability company with ownership spl
evenly between the two
men, for purposes
opening a restaurant in the Bronx called
Muscle Maker Grill.
The alleged agreement between Gianatasio
and D'Agostino divided responsibility for procuring kitchen
equipment, paying licensing fees and providing the costs of
construction.
The Complaint alleges that, in furtherance of
this agreement, Gianatasio and D'Agostino agreed to lease retail
space owed by Tirrenian Realty Corp. located at 4041 Tremont
Avenue in the Bronx.
Plaintiff Gianatasio charges that,
notwithstanding his having fulfilled his commitments under the
1
agreement, Defendant D'Agostino has been operating the
restaurant to the exclusion of Plainti
The Complaint
includes four causes of action, including a request for an
accounting, a request for declaratory relief, breach of contract
and unjust enrichment.
Plaintiff filed his claim in federal court on the
basis of diversity jurisdiction.
The Complaint states that
Gianatasio resides in Connecticut, D'Agostino resides in New
York, Persal is organized under the laws of New York with its
principal place of business in New York and Tirrenian Realty
Corp. is incorporated in New York with its principal place of
business in New York.
The Complaint also alleges that the
amount at issue in each of the pleaded causes of action is in
excess of $100,000.
Prior Proceedings
On December 21, 2010, Plaintiff, along with Paterno &
Gianatasio, LLC, Argo Construction Corporation, Paramount
Plumbing Company,
Inc., Paramount Plumbing Servicing &
Alterations, Paramount Plumbing Company of New York,
Inc., Four
Wall Construction, Inc., and F1 American, Inc. filed suit
against Defendants in the Supreme Court of the State of New
2
York, Bronx County.
This state court complaint is predicated on
the same facts as the Complaint before this Court, alleging that
Defendant D'Agostino induced the plaintiffs to invest time,
effort and resources for the construction of Muscle Maker Grill,
but that the defendants have not paid plaintiffs for any of the
work performed or any share of the partnership prof
At the
s.
time the December 2010 state court complaint was filed,
Gianatasio was a resident of the Bronx and his co-plaintiffs,
who were various contractors involved in the construction of
Muscle Maker Grill, were
so domiciled in New York.
In
connection with the state court complaint, mechanic's liens were
fil
on behalf of Four Wall Construction, Agro Construction, F1
American, Paterno & Giantasio and Paramount Plumbing.
The state
court complaint seeks only monetary damages.
In February 2011, Defendants filed a Notice of Motion
in the Supreme Court of the State
New York, Bronx County,
informing the court of its intention to move for an order of
dismissal on March 16, 2011.
ong with the Notice of Motion,
Defendants included an Attorney Affirmation outlining
Defendants' arguments as to why the plaintiffs' complaint should
be dismissed.
In between filing the state court complaint and
aintiff changed counsel.
the Complaint before this Court,
Defendants, in the
moving papers, state that, following the
3
change
1
the parties stipulated to adjourn the hearing on the
state court motion to dismiss from March 16 to April 25.
Defendants state that Plaintiff did not appear on April 25
1
prompting the state court to adjourn the motion until May 21 and
Plaintiff again did not appear on the May 2 hearing date.
Plaintiff filed the Complaint in federal court
May 6
1
and
on May 23
l
2011
1
On
1
1
the state court plaintiffs filed a Voluntary
Discontinuance informing the New York Supreme Court
1
Bronx
County that plaintiffs were voluntarily discontinuing the
action
l
without prejudice
pursuant to CPLR Rule 3217.
l
The Applicable Standard
On a motion to dismiss pursuant to Rule 121 all
factual allegations in the complaint are accepted as true
all inferences are drawn in favor of the pleader.
Polar Molecular
.1
--------------------~~
issue
~is
12 F.3d 1170
not whether a plainti
1
l
and
Mills v.
1174 (2d Cir. 1993).
The
will ultimately prevail but
whether the claimant is entitled to offer evidence to support
the claims."
375 1
378 (2d Cir. 1995)
232
235 36
1
1
Inc. v. Town of Darien
ViII
{quoting Scheuer v. Rhodes
94 S.Ct. 1683
1
40 L.Ed.2d 90 (1974)).
4
1
l
56 F.3d
416 U.S.
Subject matter jurisdiction ordinarily must be
established at the time an action is commenced.
See Trans Union
LLC v. Lindor, 393 Fed. App'x 786,789 (2d Cir. 2010)
(citing
Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 574-75/
124 S.Ct. 1920, 158 L.Ed.2d 866 (2004)).
A case may be
dismissed for lack of subject matter jurisdiction under Rule
12(b) (1)
"when the dist
ct court lacks the statutory or
constitutional power to adjudicate it.1I
States, 201 F.3d 110/ 113 (2d Cir. 2000).
Makarova v. United
A facially sufficient
complaint may be dismissed for lack of subject matter
jurisdiction under Rule 12(b) (1) if the asserted basis for
jurisdiction is not sufficient.
See TM Patents, L.P. v. Int'l
Bus. Machs. Corp., 121 F. Supp. 2d 349, 367 68 (S.D.N.Y. 2000);
v. Continental Airlines
(S.D.N.Y. 1997).
Inc., 970 F. Supp. 246, 249
A plaintiff bears the burden of proving by a
preponderance of the evidence that subject matter jurisdiction
exists.
Makarova, 201 F.3d at 113; see also Thomson v. Gaskill,
315 U.S. 442, 446 (1942)
i
Malik v. Meissner, 82 F.3d 560, 562
(2d Cir. 1996).
Objections to sufficiency of process under Fed. R.
Civ. P. 12 (b) (4) must identify substantive deficiencies in the
summons, complaint or accompanying documentation.
Hilaturas
Miel, S.L. v. Republic of Iraq, 573 F. Supp. 2d 781, 796
5
(S.D.N.Y. 2008)
(citing Fagan v. Deutsche Bundesbank, 438 F.
Supp. 2d 376, 386 (S.D.N.Y. 2006)).
"[A] Rule 12(b) (4) motion
is proper only to challenge noncompliance with the provision
Rule 4(b) or any applicable provision incorporated by Rule 4(b)
that deals specifically with the content of the summons."
Charles A. Wright & Arthur M. Miller, 5B Federal Practice &
Procedure
§
1353 (3d ed. 2011).
On a Rule 12(b) (7) motion to dismiss for failure to
join an indispensable party, a court's analysis proceeds in two
steps.
See Associated Dry Goods Corp. v. Towers Fin. Corp., 920
F.2d 1121, 1123
(2d Cir. 1990).
First, the court must determine
whether the absent party is a "party to be joined if feasible"
(i.e. a "necessary party") under Fed. R. Civ. P. 19(a).
Only if
the court determines that the party is to be joined if feasible,
but cannot be joined, must the court proceed to determine
whether, under Rule 19(b), the absent party is "indispensable"
and the action should "in equity and good conscience" be
dismissed.
In applying Rule 19, a court should generally be
reluctant to dismiss a case for failure to join a party.
v. N.Y.
. Ins. Underwrit
Ass'n, 815 F.2d 240, 242
~--~~--~~--~------------~--~-----Cir. 1987)
Jaser
(2d
("very few cases should be terminated due to the
absence of nondiverse part
s unless there has been a reasoned
6
determination that their nonjoinder makes resolution of the
action impossible. If) •
Defendants' Motion to Dismiss the Complaint Pursuant to Fed. R.
Civ. P. 12 (b) (1), 12 (b) (4), and 12(b) (7) Is Denied
Defendants seek to dismiss the Complaint for lack of
subject matter jurisdiction, insufficient process and failure to
jo
necessary parties.
Defendants argue that the voluntary
discontinuance Plaintiff filed in state court was invalid under
CPLR 3217(a) (1), which states a voluntary discontinuance can
only be motioned by the Plaintiff either before a responsive
pleading is received or within 20 days after the Plaintiff
served the pleading to Defendants, whichever occurs sooner.
Because Plaintiff filed his state court complaint in December
2010 and did not file the discontinuance until May 2011,
Defendants argue that the original proceedings have not been
discontinued and that the Supreme Court of the State of New
York, Bronx County retained jurisdiction over all of the parties
involved.
Defendants note that the December 2010 state court
complaint alleges that the Defendants and the Plaintiff, as well
as the additional plaintiffs not named in the federal court
complaint, are all citizens of New York, thereby defeating
diversity jurisdiction.
Defendants
7
so assert that the
additional plaintiffs Gianatasio did not include
his federal
court complaint are necessary and indispensable part
to the
instant action in that those parties either maintain lien status
as holders of mechanics' liens or were subcontractors on the
alleged construction project underlying the Plaintiff's non
payment claims, and that joining these necessary parties would
ultimately destroy diversity.
Plaintiff rejects Defendants' arguments, stating that
though Robert Gianatasio was a resident of the Bronx when he
filed his state court complaint in December 2010, Gianatasio
moved to New Canaan, Connecticut on April 15, 2011.
Since
Gianatasio is the sole plaintiff in the federal court action
against three New York defendants, Plaintiff argues that
complete diversity exists.
With respect to Defendants' argument
that Plaintiff has failed to name all
necessary parties,
Plaintiff asserts that, when he retained new counsel, counsel
ewed the pleadings with Gianatasio and it became apparent
that the pleadings were incorrect in several respects and not
supportable by available proof.
Some of the defects
the
state pleading were highlighted in Defendants' motion to dismiss
filed
state court.
Plaintiff states that his new counsel
informed Defendants' counsel that the state action would be
withdrawn and that Plaintiff would consent to vacate the
8
mechanics liens.
Plaintiff's Voluntary Discontinuance, dated
May 10, 2011, was filed on May 23, 2011, and while Defendants'
aver that this discontinuance is procedurally invalid,
Defendants have taken no steps to strike it.
As is described below, Plaintiff has carried his
burden of proving by a preponderance of the evidence that
jurisdiction exists.
Additionally, because the Complaint does
not fail to include any necessary parties, Defendants' motion to
dismiss for insufficient process and failure to join necessary
parties also fails.
A. Plaintiff Has Established A Basis For Diversity
Jurisdiction
In order for a federal court to have subject matter
jurisdiction based on the diversity of the part
be complete diversity.
, there must
C.T. Carden v. Arkoma Associates, 494
U.S. 185, 187, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990)
(citing
Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806)).
Specifically, the residency of all
the plaintiffs must be
different from that of all the defendants.
. v. S & N Travel
Airlines Reporting
Inc., 58 F.3d 857, 861 (2d Cir. 1995).
When determining whether diversity jurisdiction exists, a court
9
must rely on the citizenship of the parties at the time the
action was commenced.
Co., 23 F.3d 617, 622
See
and Cas. Co. v. W.R. Grace &
(2d Cir. 1993).
In addition to
demonstrating diversity in the parties' citizenship, "the party
asserting diversity jurisdiction in a federal court has the
burden of establishing the existence of the jurisdictional
amount in controversy."
F.3d 269, 273
v. Human Affairs Int'l
(2d Cir. 1994)
Inc., 28
See also Tongkook Am., Inc. v.
Shipton Sportswear Co., 14 F.3d 781, 784
(2d Cir. 1994)
("A
party invoking the jurisdiction of the federal court has the
burden of proving that it appears to a reasonable probability
that the claim is in excess of the statutory j
amount.").
A dist
sdictional
ct court can exercise jurisdiction of a
civil action when the matter in controversy exceeds $75,000.
U.S.C.
§
28
1332 (a) .
The action currently pending before the Court was
filed on May 6, 2011.
As described above, while
aintiff bears
the burden of proving by a preponderance of the evidence that
jurisdiction exists, Makarova, 201 F.3d at 113,
I factual
allegations in the Complaint are accepted as true and all
inferences are drawn in favor of the pleader.
1174.
Mills, 12 F.3d at
The Complaint before the Court states that Plaintiff
Gianatasio resides in Connecticut, Compl.
10
~
2, and that each of
the Defendants resides in New York
l
Compl. ~~ 3-5.
Furthermore
I
the Complaint alleges that the amount at issue in each of the
pleaded causes
action is in excess of $100 1 000.
~recognize[s]
The Second Circuit
~
Compl.
6.
a rebuttable presumption that
the face of the complaint is a good faith representation of the
actual amount in controversYI" and that
this presumption
so patently defi
l
~[i]n
order to rebut
the defendant must show that the complaint was
ent as to reflect to a legal certainty that
the plaintiff could not recover the amount alleged or that the
damages alleged were feigned to satisfy jurisdictional
minimums.
Colavito v. New York Organ Donor Network
II
F.3d 214/ 221 (2d Cir. 2006)
(citations omitted).
l
Inc'
l
438
Defendants
have not attempted to make this showing concerning Plaintiff/s
alleged amount in controversy.
As suchl the Complaint
establishes the prerequisites necessary for this Court to
exercise jurisdiction on the basis of diversity.
Pacific B.V. v. Chassman
2010)
(holding that
l
l
See V.D.B.
753 F. Supp. 2d 202 1 204
on the face of the complaint
I
(S.D.N.Y.
plaintiffs
alleged facts sufficient to establish diversity jurisdiction
when complaint alleged plaintiffs to be citizens of the
Netherlands
I
defendant to be a citizen of New York and the
amount in controversy to be over the threshold level) .
11
Defendants' argument against the existence of
diversity jurisdiction is that Plaintiff did not proceed
correctly in voluntarily discontinuing his state court
complaint.
Defendants, however, provide no support for their
contention that the invalidity of Plaintiff's Motion for
Voluntary Discontinuance should render Plaintiff's complaint in
federal court invalid.
Regardless of whether Defendants are
correct concerning the invalidity of the voluntary
discontinuance, the existence of a state court proceeding
concerning the same issues does not constitute justification, by
itself, to dismiss the Complaint.
v.
See Bethlehem Contracting Co.
Inc., 800 F.2d 325, 327 (2d Cir. 1986)
("Where, as here, a federal court properly has subject matter
jurisdiction,
has a virtually unflagging obligation to
exercise that jurisdiction, even if an action concerning the
same matter is pending in state court.")
quotation marks omitted)
i
(internal citations and
see also Woodford v.
Action
--~~~~~~~~~~~~~
Agency of Greene County, Inc., 239 F.3d 517, 525 (2d Cir. 2001)
("There is no bar against parallel in personam actions
proceeding in two or more courts.
'Each court is free to
proceed in its own way and in its own time, without reference to
the proceedings
the other court.
Whenever a judgment is
rendered in one of the courts and pleaded in the other, the
effect of that judgment is to
determined by the application
12
of the principles of res
udicata.")
(citing Kline v. Burke
Constr. Co., 260 U.S. 226, 230, 43 S.Ct. 79, 67 L.Ed. 226
(1922)).
Furthermore, Defendants' underlying assumption that
these lawsuits are the same and that the state court complaint
is the "original complaint" is flawed.
In the state court
complaint, Plaintiff and six additional entities brought suit
against the Defendants, seeking only money damages.
The federal
court complaint names only Gianatasio as Plaintiff and seeks
different forms of
ief.
Defendants argue that since the state court action is
presently ongoing, the Plaintiff's citizenship for this federal
action should be considered the same as that when the state
court complaint was filed.
Defendants, however, have provided
no support for the proposition that a court should refer back to
an earlier complaint in determining the domicile of the parties.
It is well established that "[w]hen determining whether
diversity jurisdiction exists, a court must rely on the
citizenship of the part
commenced.
II
s at the time the action was
Bonnie & Co Fashions, Inc. v. Bankers Trust CO'
F. Supp. 2d 297
1
302 (S.D.N.Y. 1998) i Maryland Cas. CO'
at 622 (citing Anderson v. watt, 138 U.S. 694
449 1
34 L.Ed. 1078 (1891).
1
702-03
1
I
I
18
23 F.3d
11 S.Ct.
Defendants have made no allegation
13
that, when the Complaint was filed on May 6, 2011, Plaintiff
Gianatasio was not a resident of Connecticut.
Because
aintiff has met his burden of establishing,
by a preponderance of the evidence, that diversity jurisdiction
exists, Defendants' motion to dismiss the Complaint pursuant to
Fed. R. Civ. P. 12 (b) (1) is denied.
B. Plaintiff Has Not Failed To Join Necessary Parties
In addition to arguing
dismiss under Rule
12(b) (I), Defendants also argue that dismissal of the Complaint
is appropriate because Plaintiff failed to join necessary
parties, see Fed. R. Civ. P. 12 (b) (7), and that Plaintiff's
service
process was insufficient as a result, see Fed. R.
Civ. P. 12 (b) (4).
Fed. R. Civ. P. 12 (b) (7) permits a party to
move for dismissal if the complaint fails to join a party under
Rule 19.
Rule 19(a) sets forth the standards for determining
when a party should be joined if feasible:
A person.
must be jo
as a party if: (A) in that
person's absence, the court cannot accord complete relief
among existing partiesi or (B) that person claims an
interest
ating to the subject of the action and is so
situated that disposing of the action in the person's
absence may: (i) as a practical matter impair or impede the
person's ability to protect the interest; or (ii) leave an
existing party subject to a substantial risk of incurring
14
double, multiple, or otherwise inconsistent obligations
because of the interest.
Fed. R. Civ. P. 19(a).
If a person who meets this standard cannot be joined,
the court must determine, pursuant to Rule 19(b), "whether in
equity and good conscience the action should proceed among the
existing parties or should be dismissed.
19 (b).
Under
considered:
fl
Fed. R. Civ. P.
e 19(b), there are four factors to be
(1) to what extent a judgment rendered in the
person's absence might be prejudicial to him or those already
parties;
(2) the extent to which, by protect
provisions in
the judgment, by the shaping of relief, or other measures, the
prejudice can be
ssened or avoided;
(3) whether a judgment
rendered in the person's absence will be adequate; and (4)
whether the plaintiff will have an adequate remedy if the action
is dismissed for nonjoinder.
See Fed. R. Civ. P. 19(b) i see
also Jonesfilm v. Lion Gate Int'l, 299 F.3d 134, 139 (2d Cir.
2002).
In this case, because Gianatasio's co-plaintiffs in
the state court action are not necessary parties under
. R.
Civ. P. 19(a), Plaintiff had no obligation to join them.
Here,
Plaintiff has represented to the Court that, after changing
15
iff came to the conclusion that the various
iffs in the state action whom Defendants claim are
parties were incorrectly included.
Plaintiff's
reviewed the file and concluded that these
ent
ous
do not have viable claims against the Defendants.
Defendants argue that the additional plaintiffs are necessary
parties on account of their holding liens against
Defendants' property.
However, both parties have acknowledged
that these liens are defective, and Plaintiff
sented in
his opposition that he consents to vacating
filed by his former counsel.
The reI
mechanic's liens
f
Complaint requests
pertains only to amounts owed to Gianatas
only benefit Gianatasio.
or
As such, the addit
not "necessary" parties under Rule 19(a).
Enter., Inc., 765 F. Supp. 2d 440,453
ief that would
I plaintiffs are
See Lee v. Marvel
(S.D.N.Y. 2011)
(holding
that a company was not an indispensable party in a dispute
between a writer and his former employer as complete relief
could be accorded without non-part
Because
ing present) .
's co plaintiffs in the state court
action are not necessary
ies, Defendants' motion to dismiss
the Complaint pursuant to Fed. R. Civ. P. 12(b) (7) is denied.
Similarly, because PI
parties, the Compl
iff did not fail to join necessary
cannot be dismissed for insufficient
16
process, and Defendants mot
to
to Fed. R. Civ. P. 12(b) (4) is
smiss the Complaint pursuant
so denied.
Conclusion
Based on
motion to dismiss
conclusions set forth above, Defendants'
Comp
jurisdiction, insuffi
int for lack of subject matter
process and failure to join necessary
parties is denied.
It is so ordered.
New York, NY
November
I '
2011
ROBERT W. SWEET
U.S.D.J.
17
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