Gianatasio v. D'Agostino et al

Filing 32

OPINION: Based on the conclusions set forth above, Defendants' motion to dismiss is granted, and the Complaint is dismissed with prejudice. (Signed by Judge Robert W. Sweet on 5/22/2012) (mro)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

----x
ROBERT GIANATASIO,
11 Civ. 3095
PI

ifL

OPINION
-against-

MARIO D'AGOSTINO, PERSAL LLC d/b/a
MUSCLE MAKER GRILL and TIRREANIAN REALTY,
Defendants.

-----­

-----­

-----­

---x

A P PEA RAN C E S:
At

for Plaintiff

NEIL S. COMER, ATTORNEY AT LAW
445 Hamilton Avenue
White Plains, NY 10601
By: Neal S. Comer, Esq.

At

for Defendants

PETER J. PIERGIOVANNI, ESQ.

984 Morris Park Avenue

Bronx, NY 10462

By: Peter J. Piergiovanni, Esq.

USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
'

LDATIl

Fll1'~:

51al [2

-j

Sweet, D.J.

The defendants Mario D'Agostino, Persal, LLC d/b/a
Muscle Maker Grill and Tirrenian Real ty Corp.
have moved pursuant to Fed. R. Civ. P. 8(c) (1)

(the "Defendants")
to dismiss the

complaint (the "Complaint") filed by plaintiff Robert Gianatasio
(the "Plaintiff") under the affirmative defenses of res
judicata, collateral estoppel and the full faith and credit
doctrine.

Based upon the conclusions set forth below,

Defendants' motion is granted.

Facts & Prior Proceedings

The Court previously described the facts alleged in
the Complaint as well as the case's prior proceedings in its
opinion dated November 2, 2011

(the "November 2 Opinion")

See

Gianatasio v. D'Agostino, No. 11 Civ. 3095(RWS), 2011 WL
5244 9 61, at * 1 - 2 ( S . D . N . Y . Nov. 2, 2 0 11) .

Familiarity with

those alleged facts and prior proceedings is presumed.

Because

Defendants' present motion to dismiss is brought under the
affirmative defenses of res judicata, collateral estoppel and
the full faith and credit doctrine based on a decision rendered
by the Supreme Court of the State of New York, Bronx County, a

1

brief summary of the relevant aspects of this case's procedural
history is warranted.

As noted in the November 2 Opinion, 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 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 profits.

At the 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 also
domiciled in New York.

On February 11, 2011, Defendants appeared in the
Supreme Court of the State of New York, Bronx County, filed a
motion to dismiss the state court complaint and submitted an

2

appl

ion for a judgment of dismissal.

Although the motion

for March 16, 2011, the parties agreed to adjourn

was

hearing until April 25 after Plaintiff retained new couns
According to Defendants, Plaintiff did not appear on April 25,
prompting the state court to adjourn the motion until May 2.
May 2 hearing date, Plaintiff again failed to appear.

On

On

May 2, 2012, the Honorable Norma Ruiz of the Bronx County
Supreme Court submitted Defendants' motion to dismiss without
opposition.

On May 6, 2011, Plaintiff filed the
this Court.

Meanwhile, in state court,

Voluntary Discontinuance dated May 10 i
that plaintiffs were voluntarily discont
without prejudice, pursuant to CPLR Rule 3217.

action in
aintiffs filed a
state court
the action,
In the federal

court action, Defendants, on May 27, 2011, moved this Court to
dismiss the Complaint for lack of subject matter jurisdiction,
insufficient process and failure to join an indispensable party.
Four days later, in the state court action, Justice Ruiz granted
Defendants' motion to dismiss

cause the state court plaintiffs

had defaulted.

et al. v. D'

See

et al.,

No. 310498-10, Order of Hon. Norma Ruiz dated May 31, 2011
("Motion to dismiss and to vacate various mechanic liens is
granted on default wi

any opposition submitted there to /
3

Movant directed to settle order on notice / This constitutes the
decision of the Court.").

According to Defendants, Justice

Ruiz' order dated May 31 was not docketed until September 12,
2011, a delay Defendants attribute to budgetary constraints.
Because of this delay, Defendants were unable to incorporate
Justice Ruiz' order of dismissal in their motion to dismiss the
federal court action filed on May 27.

As noted above, Justice Ruiz' May 31 order directed
Defendants to "settle order on notice."

On October 21, 2011,

Defendants filed a proposed Order with Notice of Settlement in
the Bronx County Clerk's Office and served Plaintiff's counsel.
The proposed order provided as follows:

The Plaintiff having brought on this action by the Law
Offices of Anthony Meola, Esq., for a monetary judgment
upon a breach of contract claim and other related actions
against the Defendants herein, and the Defendants having
collectively appeared by and through the Law Offices of
Peter J. Piergiovanni, Esq., and Plaintiff having filed a
Motion to Dismiss, and for Cancellation of various
mechanic's liens filed by the Plaintiffs, and the Motion to
Dismiss having been returnable before this Honorable Court
on March 16, 2011, and the Defendants' motion having been
adjourned to April 25, 2011, and the Plaintiffs having
willfully failed to appear on the return date of
Defendants' Motion, and said Motion having been adjourned
by the Court to May 2, 2011, for the filing of the
Plaintiffs' opposition and Plaintiffs' appearance, and said
Motion having been duly submitted for decision as Motion
No. 10, on the May 2, 2011, calendar for the Honorable
Norma Ruiz, and Defendants' Motion to Dismiss and to vacate
various mechanic liens having been granted by this Court by

4

way of a Short Form Order dated May 31 1 2011 1 upon default
without any opposition from the
ntiffl it is hereby
ORDERED that
Defendants Motion to Dismiss is hereby
granted in all respects and that Plaintiffs Verified
Complaint 1 dated December 211 2010 1 is hereby dismissed
with prejudice, based upon the
iffs' willful default
in failing to submit any opposition thereto and/or
ling
to appear before this Court, and it hereby further
1

1

1

ORDERED, that pursuant to New York State Lien Law §10, et
., that each and all of the PI
iffs' Twenty (20)
Mechanic/s Liens filed against Defendant TIRRENIAN REALTY
CORP's parcel of
property located in the Borough and
County of Bronx and designated as
5445, Lot 4, and
more commonly known as 4051 East Tremont Avenue, Bronx New
York are hereby vacated with prejudice, and it is hereby
further
1

ORDERED, that the Bronx County Clerk/s office is hereby
directed to cancel each and all of
Twenty (20)
Mechanic's Liens filed by the PIa
iffs l on September 171
2010 and October 6 1 2010 1 from its
as related to
the Defendant TIRRENIAN REALTY CORP., parcel of real
property located in
Borough and County of Bronx and
designated as Block 5445, Lot 4, and more commonly known as
4051 East Tremont Avenue, Bronx, New York.
1

On November 2, 2011, this Court denied Defendants
motion to

smiss the federal court action.

1

On February 16,

2012, Justice Ruiz' signed Defendants' proposed order dismiss
the plaintif
21, 2012

' state court complaint with prejudice.

On March

endants moved this Court to dismiss the Complaint on

grounds of res judicata, collateral estoppel and the full faith
and credit doctrine, based on Justice Ruiz' order dated February
16.

Defendants' motion was heard and marked

April 25, 2012.

5

ly submitted on

The Applicable Standard

. R. Civ. P. 8(c) (1) provides: "In responding to a
pleading

l

a party must affirmatively state any avoidance or

affirmat

defense

including: accord and satisfaction;

l

arbitration and award; assumption of risk; contributory
negligence; duress; estoppel; failure of consideration; fraud;
illegality; injury by fellow servant; laches; license; payment;
release; res judicata; statute of frauds; statute of
limitations; and waiver."

Defendants

seek to invoke Rule

8(c) on grounds of res judicata, colI
full

estoppel and

th and credit doctrine.

Under the doctrine of res judicata
preclusion

l

or claim

l

"[a] final judgment on the merits of an act

precludes the parties or their privies from relitigating issues
been raised

that were or could
Dep/t Stores

l

69 L.Ed.2d 103

Inc. v. Moitie
(1981)

597 1

68 S.Ct. 715

Sac

94 U.S. 351

l

1

1

l

(citing Comm/r v. Sunnen

352-53
l

1

ed

452 U.S. 394 1 398 1 101 S.Ct. 24241

92 L.Ed. 898

LLC v. United States

that action."

l

333 U.S. 591 1

(1948); Cromwell v.

of

24 L.Ed. 195 (1877)); Overview Books

438 Fed. Appx. 31 1 33

6

(2d Cir. 2011).

"Res judicata will bar subsequent litigation if the earlier
decision was (1) a final judgment on the merits,
of competent jurisdiction,

(2) by a court

(3) in a case involving the same

parties or their privies, and (4) involving the same cause
action."

Overview Books, 438 Fed. Appx. at 33

quotation marks omitted) .

(internal

"[I]n considering whether claims

asserted in a subsequent suit were, or could have been, raised
in a prior proceeding, courts look to 'whether the same
transaction or connected

es of transactions is at issue,

whether the same evidence is needed to support both claims, and
whether the facts essential to the second were present in the
f

t.'"

Greenwich

fe Settlements

Inc. v. Via Source

LLC, 742 F. Supp. 2d 446, 454 (S.D.N.Y. 2010)

--~~----

Monahan v. N.Y. Ci

(quoting

Corr., 214 F.3d 275, 289 (2d Cir.

----------------------~--~------------

2000)).

Once a final judgment has been entered on the merits of

the case, that judgment will bar any subsequent litigation by
the same part

or those in privity with them concerning the

transactions out of which the first action arose.
't of Homeland Securi

,527 F.3d 275, 280

Channer v.

(2d Cir. 2008).

The doctrine of collateral estoppel "bars a party from
relitigating in a subsequent proceeding an issue of fact or law
that was clearly raised in a prior action where the party to be
precluded .

. had a full and fair opportunity to litigate the

7

issue, and a decision on that issue was necessary to support a
valid and final judgment on the merits."
----------------~--~

omitted) .

Envtl. Def. v. U.S.

, 369 F.3d 193, 202 (2d Cir. 2004)

"Under federal law, collat

preclusion,] applies when' (1) the
a previous proceeding;

estoppel

(citations

[, or issue

ical issue was rai

in

(2) the issue was actually litigated and

decided in the previous proceeding;

(3) the party had a

1 and

fair opportunity to litigate the issue; and (4) the resolution
of the issue was necessary to support a valid and final judgment
on the merits. '"
2003)

Prudy v. Zeldes, 337 F. 3d 253, 258 (2d Cir.

(footnote omitted)

(quot

Interoceanica

v. Sound

Pilots, Inc., 107 F.3d 86, 91 (2d Cir. 1997)).

"The Full Faith and
, Art. IV,

Constitut

§

credit statute, 28 U.S.C.

t Clause of the United States

I, and the federal full faith and
§

1783, mandate that

1 courts

give

lusive effect to judgments on the merits from state

courts.

'[T]he preclusion law of the state in which the

judgment was rendered
determination of the
decis

II

iano v.

.' governs the

1 court's

lusive effect of

state court

of Westchester, No. 92 Civ.

3598 (MJL) , 1998 WL 912081, at *2 (S.D.N.Y. Dec. 30, 1998)
(quot

Marrese v. Am. Academy of Orthopaedic Surgeons, 470

U.S. 373, 380, 105 S.Ct. 1327, 84 L.Ed.2d 274
8

(1985)) ; see also

Matter of Anonymous v. Kaye, No. 94 Civ. 2882 (JFK) , 1995 WL
617795, at *5 (S.D.N.Y. Oct. 19, 1995).
claim is brought to a f

In New York "once a

conclusion, all other

aims arising

out of the same transaction or series of transact

are

barred, even if based upon different theories or if seeking a
different remedy."

, 445 N.Y.S.2d

0'

687, 688, 54 N.Y.2d 353, 429 N.E.2d 1158
a complaint is dismi
in [the] pleading,

(1981)

for legal insuffic

correct the de

"when

or other defect

does not act as a bar to commencement of a

new action for the same relief unless the di
expressly made on

However,

ssal was

merits or the new compl
s or omissions fatal to

fails to
prior one."

Deacon's Bench, Inc. v. Hoffman, 101 A.D.2d 971, 971, 477
N.Y.S.2d 447 (3d Dep't 1984) i accord Pretzel Time
Pretzel Int'l

Inc. v.

Inc., No. 98 Civ. 1544, 1998 WL 474075, at *5

(S.D.N.Y. Aug. 10, 1998).

Defendants' Motion To Dismiss The Complaint Is Granted

As highlighted above, Justice Ruiz' order held that
"Plaintiffs' Verified Complaint, dated December 21, 2010, is
hereby di
will

with prejudice,

upon the Plaintiffs'

t in failing to submit any opposition thereto
s Court[.]"

and/or failing to appear before
9

The sole

between the parties concerns whether this order

of content

constitutes a judgment "on the merits."

As noted above, the

grounds upon which Defendants seek to dismiss the Complaint all
require that
the merits."

state court's order be deemed a judgment "on
Whi

Defendant claims that Justice Ruiz' order

was "on the merits," thereby triggering the applicability of res
judicata, coll

estoppel and the full

doctrine, Plaintiff states that the dismi
procedural issues
issues as to the

th and credit
dealt only with

did not determine the
ts of the claims set

or legal
h in the state

court complaint.

A. Justice Ruiz' Order Is Sufficient To Trigger Res Judicata

In oppos

Defendants' motion to dismiss, Plaintiff

raises only one argument, namely that "[t]he dismis

order in

the Bronx action dealt with procedural issues and did not
determine the factual or 1
claims set forth there

/I

issues as to the merits of the
However, for purposes of

establishing whether Justice Ruiz' order constitutes a judgment
"on the merits," it must be noted that "[a] judgment on the
merits for purposes of res judicata is not necessarily a
judgment based upon a trial of contested facts; it may, for
example, be a default judgment, a judgment on stipulation or
10

agreement, or a summary judgment."
Supp. 2d 367, 369 (S.D.N.Y. 1999)

i

Dillard v. Henderson, 43 F.
see also

u.s. Sec. & Futures

v. Irvine, No. 00 Civ. 2322 (RMB) (THK) , 2002 WL 34191506,
at *4

(S.D.N.Y. May 13, 2002)

("A default judgment has the same

preclusive effect for res judicata purposes as a judgment on the
me

tS.")

(citing N. Am. Foreign Trading Corp. v. Chiao Tung

Bank, No. 95 Civ. 5189 (LBS) , 1997 WL 193197, at *5

(S.D.N.Y.

Apr. 18, 1997) ; Sterling Doubleday Enters. v. Marro, 238 A.D.2d
502, 503, 656 N.Y.S.2d 676 (2d Dep't 1997)).

Justice Ruiz' order granted dismissal
court action "with prejudice."

the state

"'A dismissal with prejudice

constitutes a judgment on the merits just as fully and
completely as if the order had been entered after trial[i]
a decree

settlement

. will be given full res judicata

effect in a subsequent suit between' the parties and on
claims 'comprised in the settlement. '"

1 the

Modular Devices, Inc. v.

Alcatel Alenia
Inc., No. 08-CV-1441
------------------~----~------~----~-----(JS) (WDW) , 2009 WL 749907, at *3

(E.D.N.Y. Mar. 16, 2009)

ting Cahill v. Arthur Anderson & Co., 659 F. Supp. 1115, 1120
(S.D.N.Y. 1986), aff'd 822 F.2d 14

(2d Cir. 1987)).

While it is

true that Justice Ruiz did not hear argument or review evidence,
"[r]es judicata does not require the precluded claim to actually
have been lit

edi

its concern, rather, is that the party
11

against whom the doctrine is asserted had a
opportunity to litigate the claim.
the law

1 and fair

That is why it has long

default judgments can support res judicata as

surely as judgments on the merits."

EDP Med. Computer Sys.,

Inc. v.,(]nited States, 480 F.3d 621,626 (2d Cir. 2007)
(citations omitted) i see also Morris v. Jones, 329 U.S. 545,
550- 51, 67 S. Ct. 451, 91 L. Ed . 488 (1947)

( " 'A j udgment

a

court having jurisdiction of the parties and of the subject
matter operates as res judicata, in the absence of fraud or
collusion, even if obtained upon a de
----""'-"---­

t.'")

(quoting Riehle

, 279 U.S. 218, 225, 49 S.Ct. 310, 73 L.Ed. 669

(1929)).

As noted above, res judicata requires that (1) a final
judgment on the merits,
juri

ction,

(3)

s, and (4)

(2) by a court of competent

in a case involving the same parties or their
involving the same cause of action," Overview

Books, 438 Fed. Appx. at 33, and
disputes is whether a judgment
is no dispute concerning
over the matter.

only element Plaintiff
been rendered on the merits.
state court's jurisdiction

The state court action involved the same

litigants (along with several others) as those involved in the
present action.
court action al

With respect to the causes

action, the state

(1) breach of contract against D'Agostino
12

and

(2) breach of contract against all Defendants,
(4) conversion against

(3) fraud against D'Agostino and
all De

s,

(5) breach of fiduciary obligation against

and Persal and (6) unjust

chment.

Plaintiff's

federal complaint has four causes of action, including (1) a
request

an accounting,

entitling

aintiff, after the accounting, to 50% of all profits

from Muscle Maker Grill,
enrichment.

(2) a request

declaratory relief

(3) breach of contract and (4) unjust

though the causes of action in

complaint are

ed in a somewhat dif

federal
form from those in

the state court complaint, all the federal causes of action stem
from the same breach
asserted in

contract and unjust enrichment claims

state court action.

Because Justice Ruiz' February 16 order is a final
decision on the me

ts, Plaintiff's federal compl

dismissed on grounds

nt is

res judicata.

B. Justice Ruiz' Order Is Insufficient To Trigger Collateral
Estoppel

Justice Ruiz'
Complaint on grounds of col
preclusion.

"[T]he general

r is insufficient to dismiss
ral estoppel, also known as issue
e is well-established that
13

default judgments lack issue-preclusive effect."
Coleman CI
------

., 205

Appx. 856, 857 (2d Cir. 2006)

.............--------~~--~-

(citing Abrams v. Interco
1983)) .

In re Adler,

Inc., 719 F.2d 23, 34 n.9 (2d Cir.

" [U]nder New York law, collateral estoppel forecloses

only those issues that have been 'actually litigated and
determined in a prior action,' and' [aJn issue is not actual
litigated if there has

a default.'"

Yoon v. Fordham Univ.

Faculty & Administrative Retirement Plan, 263 F.3d 196, 202 n.7
(2d Cir. 2001)

(citing Pigliavento

v~mm

Tyler Equip. Corp., 233

A.D.2d 810, 811, 650 N.Y.S.2d 414 (3d Dep't 1996)).
issues

Because the

sed in Defendants' motion to dismiss the state court

action were never actually litigated, collateral estoppel cannot
be employed to dismiss

aintiff's Complaint.

C. Justice Ruiz' Order Is Entitled To Deference Under The Full
Faith And Credit Act

With respect to Defendants' contentions regarding the
Full Faith and Credit Clause, judgments of any New York court

"

I have the same full faith and

t in every court within

the United States and its Territories and Possessions as they
have by law or usage in the courts of such State,
Possession from which they are taken."

28 U.S.C.

tory or
§

1738; see

., 456 U.S. 461, 481 82, 102

so Kremer v. Chemical Const.
14

s.et. 1883, 72 L.Ed.2d 262 (1982)
that

ished

("It has long been es

1738 does not allow federal courts to employ their own

§

rules of res judicata in determining the effect of state
judgments.

Rather, it goes beyond

common law and commands a

federal court to accept the rules chosen by the State from which
the judgment is taken.")
1738

1

(citation omitted).

Under 28 U.S.C.

this Court is required "to give preclusive effect to state

court judgments whenever the courts of that state would do
v. N.Y.

Ins'

--~--------------------

suchl

851 F.2d 60, 62

l

New York state law must

preclus

(2d Cir. 1988).

As

effect New York courts would assign to Justice Ruiz

New York courts

2012.

1

t on issues which were or could

have been determined in the earlier action.
Co. of N. Am., 40 A.D.2d 873

874

1

(citing Goebel v. Iffla

l

1I

Mitchell v. Ins.

338 N.Y.S.2d 92 (2d Dep/t

1

111 N.Y. 170

Goldfarb v. Cranin, 35 Misc.2d 126
Ct. 1962)).

1

1

18 N.E. 649 (1888)

229 N.Y.S.2d 43

Res judicata applies "to an

fault which was not been vacated

l

(2d

v. P & G Enters.
It

2009); see

I

58 A.D.3d 607

or judgment taken

as well as to issues

1

i

(N.Y. Sup.

which were or could have been raised in the prior [action]."
Laz

l

held that "a prior default

judgment bars a subsequent

by

SO."

applied to determine what

default judgment issued on February 16

1972)

§

609, 871 N.Y.S.2d 357

so Allstate Ins. Co. v. Williams
15

l

29

A.D.3d 688, 690, 816 N.Y.S.2d 497 (2d Dep't 2006).
Additionally, New York law applies a "transactional analysis"
approach to res judicata such that any claim which received a
final judgment on the merits and "all other claims arising out
of the same transaction or series of transactions are barred,
even if based upon different theories or if seeking a different
remedy."
1995).

Antonious v. Muhammad, 873 F. Supp. 817, 822 (S.D.N.Y.
Although the state court complaint lists plaintiffs in

addition to Gianatasio and alleges different causes of action,
both the federal and state complaints are predicated on the
allegations that D'Agostino induced Plaintiff to invest time,
effort and resources to construct Muscle Maker Grill and that
Plaintiff did not receive any profits from the business
enterprise established as a part of such efforts.

These

similarities are sufficient to trigger res judicata under New
York law.

See O'Brien, 54 N.Y.2d at 357 ("[O]nce a claim is

brought to a final conclusion, all other claims arising out of
the same transaction or series

transactions are barred, even

if based on different theories or if seeking a dif
Here,

I of defendants' conduct .

rent remedy.

. was also raised during [a

previous] suit as the basis for that litigation.

That

proceeding having been brought to a final conclusion, no other
claim may be predicated upon t

same incidents.").

Justice Ruiz' February 16 order is suff
16

Because

ient under New York law

to trigger res judicata to all claims
leged

sing out of the facts

the state court complaint, Plaintiff is unable to

bring the present action predicated on

same facts in federal

court.

Plaintiff's Complaint Is Dismissed With Prejudice

Although leave to amend should

granted freely,

is not warranted where the amendment of a compl
futile.
1995)

it

would be

See Acito v. IMCERA Grp., Inc., 47 F.3d 47, 55 (2d Cir.

("Although the decision of whether to allow plaintiffs to

amend their complaint is left to the sound discretion of the
strict court, there must

good reason to deny the motion.

One good reason to deny leave to amend is when such leave would
be futile.")

(citing S.S. Silberblatt, Inc. v. E. Harlem Pilot

Block-Bldg. 1 Hous. Dev. Fund. Co., 608 F.2d 28, 42
1979).

(2d Cir.

In granting Defendants' motion to dismiss on grounds of

res judicata and application of the full faith and credit
doctrine, the def

iencies in Plaintiff's Complaint are not ones

that can be corrected

amendment.

udice is warranted.

Conclusion

17

As such

l

dismissal with

Based on the conclusions set forth above, Defendants'
motion to

smiss is granted, and the Complaint is dismiss

with prej

ceo

It is so ordered.

New York, NY
May
2012

tr:

U.S.D.J.

18