Roberts v. Perez et al

Filing 75

MEMORANDUM OPINION AND ORDER re: 57 MOTION to Dismiss Plaintiff's Amended Complaint filed by Ivonne Santos, 53 MOTION to Dismiss the amended complaint filed by Mahandra Persaud, 47 MOTION to Dismiss Amende d Complaint filed by Joseph Altman. For the foregoing reasons, the Court concludes that it lacks subject-matter jurisdiction, and the Attorney Defendants' motions are GRANTED. Further, given the lack of subject-matter jurisdictio n, the case must be dismissed as to all Defendants. In light of the Court's holding, the Court does not need to (and, indeed, should not) reach any of Defendants' arguments on the merits. The Court denies Defendant Santos's request for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure (Santos Mem. 17-23), as Santos failed to comply with the requirement of Rule 11(c)(2) that any motion for sanctions be "made separately from any other motion." See also Williamson v. Recovery Ltd. P'ship, 542 F.3d 43, 51-52 (2d Cir. 2008). The Clerk of Court is directed to terminate Docket Nos. 47, 53, 57 and to close the case. (Signed by Judge Jesse M. Furman on 8/7/2014) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
SHIRLEY ROBERTS, individually and as authorized
:
legal representative of the estate of Wendell E.
:
Jordan, deceased,
:
:
Plaintiff,
:
:
-v:
:
RAMON PEREZ et al.,
:
:
Defendants.
:
:
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08/07/2014

13-CV-5612 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
Acting on behalf of herself and the estate of her deceased father, Plaintiff Shirley Roberts
sues Ramon Perez and Francia Rodriguez (together, the “Buyers”); their attorneys Ivonne Santos
and Joseph Altman; Plaintiff’s own former attorney, Mahandra Persaud (together, with the
Buyers’ attorneys, the “Attorney Defendants”); and ten unidentified John Doe Defendants,
alleging a wide-ranging conspiracy perpetrated in connection with the sale of her father’s home
in the Bronx, New York. (Am. Compl. (Docket No. 43) ¶ 1). The Attorney Defendants now
move to dismiss the Amended Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal
Rules of Civil Procedure. (Docket Nos. 43, 47, and 53). For the reasons discussed below, the
motions are granted and the case is dismissed for lack of subject-matter jurisdiction.
BACKGROUND
The following facts are taken from the Amended Complaint, documents referenced
therein, and publicly available judicial records. See, e.g., Global Network Commc’ns, Inc. v. City
of New York, 458 F.3d 150, 157 (2d Cir. 2006). Sometime around August 13, 2001, Wendell

Jordan contracted with the Buyers, who were represented in connection with the sale by
Defendant Santos, to sell real estate located at 2272 Hampden Place, Bronx, New York (the
“Property”). (Am. Compl. ¶ 9, at 4). The initial contract set the price at $245,000. (Id. ¶ 11, at
4; see also Decl. A. Michael Furman (Docket No. 48) (“Furman Decl.”), Ex. B).
A signed amendment to the contract, dated October 3, 2001, raised the ostensible
purchase price by adding a $15,600.00 “seller’s concession.” (Am. Compl. ¶¶ 12, at 4, 25;
Furman Decl., Ex. D). 1 Although someone signed that amendment on behalf of “Wendell
Jordan,” Plaintiff alleges that Jordan was unaware of the addition of the seller’s concession
because it was not disclosed and because his attorney, Defendant Persaud, did not advise him of
the alterations to the contract. (Am. Compl. ¶ 14). Plaintiff alleges that Jordan never agreed to
the version of the contract that included the seller’s concession. (Id. ¶¶ 19-20).
On October 3, 2001, the date of both the closing and the contractual amendment, Jordan
spoke with an attorney named Michael Fingerit, who Plaintiff alleges told Jordan that the
transaction was fraudulent. (Id. ¶¶ 29-30). After hearing Fingerit’s assessment of the seller’s
concession by telephone, Jordan “aborted the closing, [and] collected his file and all closing
documents,” thus terminating the deal. (Id. ¶¶ 29-31).
On January 14, 2002, the Buyers — represented by Defendant Altman — sued Jordan in
Bronx County Supreme Court for specific performance of the real-estate contract. (Id. ¶ 33; see
also Furman Decl., Ex. G). The verified complaint in that action was served on Jordan at the
Property (and on both Fingerit and Persaud as well). (See Am. Compl. ¶¶ 33-34; accord Furman
Decl., Ex. G, at 6). Jordan answered the complaint, but Plaintiff alleges that “neither [Jordan]
1

The seller’s concession was added to the purchase price, as well as the mortgage, and was
paid back to the Buyers and their agents, presumably to cover the costs associated with closing.
(See Am. Compl. ¶¶ 16, 18, 27).

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nor his attorney were served with any other documents in the case” and therefore “assumed that
the action had been abandoned by [the Buyers].” (Am. Compl. ¶ 34). On July 7, 2003,
notwithstanding the ongoing pendency of the state court action, 2 Jordan purported to convey title
to the Property to his daughter, Plaintiff here. (Id. ¶ 35).
Default judgment was entered against Jordan in the state court action in 2005. (Id. ¶ 36;
see also Furman Decl., Ex. H). Thereafter, Plaintiff timely intervened and moved to vacate the
default judgment on behalf of her father. (Am. Compl. ¶ 37; see also Furman Decl., Ex. I). That
relief was eventually granted by the Appellate Division, First Department (Am. Compl. ¶ 39),
and the case was remanded to the Supreme Court for a trial on “whether there was mutual assent
between the Buyer and the Seller” — that is, on the question whether the amended contract was
enforceable against Jordan and his assignees. (Id. ¶ 40).
The Honorable Maryann Brigantti-Hughes presided over the ensuing jury trial and, on
October 2, 2009, entered judgment in accordance with the jury’s verdict in favor of the Buyers. 3
(Id. ¶ 43; see also Furman Decl., Ex. M). Justice Brigantti-Hughes ordered Jordan to abide by
the amended contract and to close title, sign the deed, and transfer the necessary sale documents.
(Am. Compl. ¶ 43). Since entry of the judgment after trial, Buyers, through their counsel
Defendant Altman, have attempted to enforce the judgment via orders to show cause. (Id. ¶¶ 4445). Plaintiff alleges that such attempts have continued “incessantly” since an order to show
cause was filed on June 24, 2013. (Id. ¶ 44).

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Plaintiff alleges that no Notice of Pendency had been filed or served upon Jordan at the
time he conveyed title to Plaintiff. (Am. Compl. ¶ 35).
3

Plaintiff appealed the judgment (see Furman Decl., Ex. N), but the appeal was dismissed
(Furman Decl., Ex. O).

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Plaintiff now invokes the jurisdiction of this Court to remedy the wrong caused by an
alleged conspiracy among the Buyers, the Defendant Attorneys, and various John and Jane Does.
The object of the alleged conspiracy — which Plaintiff alleges violates (1) the Real Estate
Settlement Procedures Act, Title 12, United States Code, Section 2607 et seq.; and (2) the
Racketeer Influence and Corrupt Organizations Act, Title 18, United States Code, Sections 1961
and 1962 — was to defraud Plaintiff, her now-deceased father, and the New York courts. (Am.
Compl. ¶¶ 47, 52-95). Plaintiff also brings state-law claims sounding in fraudulent conveyance,
and — against Defendant Persaud — legal malpractice and breach of fiduciary duty. (Am.
Compl. ¶¶ 96-110). Plaintiff seeks $400,000 in compensatory damages, $1,200,000 in punitive
damages, and a declaratory judgment stating that Defendants “violated Federal Law.” (Id. 20).
DISCUSSION
The Attorney Defendants argue that the Court lacks subject-matter jurisdiction by virtue
of the Rooker-Feldman doctrine, which stands for “the clear principle that federal district courts
lack jurisdiction over suits that are, in substance, appeals from state-court judgments.” Hoblock
v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 84 (2005). (Persaud Mem. (Docket No. 55) 4-6;
Mem. Law Supp. Def. Joseph Altman’s Mot. To Dismiss (Docket No. 51) (“Altman Mem.”) 2022; Aff. Supp. Def. Ivonne Santos Mot. To Dismiss Pl.’s “Amended” Compl. And Supp. Def.’
Ivonne Santos Req. Sanctions Pursuant FRCP Rule 11 And 28 U.S.C. § 1927 [sic] (Docket No.
59) (“Santos Mem.”) ¶¶ 26, 29). More specifically, the Rooker-Feldman doctrine deprives
federal district courts of subject-matter jurisdiction when four conditions are met: (1) the federal
plaintiff lost in state court; (2) the plaintiff complains of injuries caused by the state-court
judgment; (3) the plaintiff’s complaint “invite[s] district court review and rejection of that
judgment”; and (4) the state judgment was rendered before the filing of the federal complaint.

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Hoblock, 422 F.3d at 85 (alterations and internal quotation marks omitted). The first and fourth
requirements are “procedural”; the second and third are “substantive.” Id.
Here, the two procedural requirements are plainly met. Plaintiff lost in state court (Am.
Compl. ¶ 43; Furman Decl., Exs. M, N, O), and that loss was well before Plaintiff’s federal
complaint was filed: the Appellate Division dismissed Plaintiff’s appeal on June 7, 2012, and she
did not file her original Complaint here until August 12, 2013. (Furman Decl., Ex. O; Docket
No. 1). Plaintiff argues that the Rooker-Feldman doctrine does not bar her claims here because
the Attorney Defendants were not parties to the state-court action. (Pl.’s Omnibus Mem. Law
Opp’n Defs.’ Joseph Altman’s, Mahandra Persaud’s, Ivonne Santos’ Mots. To Dismiss First Am.
Compl. (Docket No. 69) (“Pl.’s Mem.”) 9). In support of that argument, Plaintiff relies on Lance
v. Dennis, 546 U.S. 459 (2006) (per curiam), for the proposition that Rooker-Feldman does not
apply “in situations, as here, where the party in Federal Court was not a party to the underlying
state-court proceeding.” (Pl.’s Mem. 9). But Lance addressed the question of whether a plaintiff
may be barred by a different party’s loss in state court. 546 U.S. at 460. This case presents the
entirely different circumstance in which Plaintiff, having lost in state court, names additional
parties. Such gamesmanship is not enough to get around the Rooker-Feldman bar.
The first substantive requirement — namely, that the plaintiff complains of injuries
caused by the state-court judgment — is also met here, as Plaintiff’s alleged injury was caused
solely by the state-court judgment. Plaintiff’s Amended Complaint seeks to redress injuries that
are a direct result of the state-court judgment and subsequent attempts to enforce it. Although
the Amended Complaint purports to complain of injuries caused by Defendants’ actions dating
back to 2001, such artful pleading is insufficient to bypass Rooker-Feldman. See, e.g., Hoblock,
422 F.3d at 88 (“Can a federal plaintiff avoid Rooker-Feldman simply by clever pleading — by

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alleging that actions taken pursuant to a court order violate his rights without ever challenging
the court order itself? Surely not.”). “[A] federal suit complains of injury from a state-court
judgment . . . when [a] third party’s actions are produced by a state-court judgment . . . .” Id.
Read as a whole, Plaintiff’s Amended Complaint plainly seeks to remedy harm caused by the
state-court judgment ordering her to yield her title to the Buyers. That is evident from the
requested compensatory damages (Am. Compl. 20), the detail with which Plaintiff complains of
the state-court proceedings (id. ¶¶ 33-45, 49-50), and the fact that Plaintiff specifically names
Defendant Altman, the Buyers’ state-court litigation counsel.
Most telling for purposes of Rooker-Feldman’s causation requirement, Plaintiff suffered
no tangible injuries prior to the issuance of the state-court judgment. See Anctil v. Ally Fin., Inc.,
— F. Supp. 2d —, No. 12-CV-8572 (CS), 2014 WL 516686, at *5 (S.D.N.Y. Feb. 10, 2014)
(“[T]hat the Defendants’ misconduct may have predated the [state-court] proceedings does not
change the fact that it was the [state-court] judgments . . . that caused the loss of the homes.”).
That is, Plaintiff had full enjoyment of the Property, and neither she nor her deceased father had
been forced to pay the Buyers a dime prior to the state-court proceedings. It was not until the
2005 default judgment that either Plaintiff or Jordan owed anybody anything (see Am. Compl.
¶¶ 35-36), and the only source of Plaintiff’s current injuries is the as-yet-unsatisfied judgment
made final on June 7, 2012 (see Furman Decl., Ex. O). Put simply, if the state-court judgment
were to disappear, Plaintiff would presumably retain the Property and would therefore have no
injury. Accordingly, the Court concludes that her injury is caused by the state-court judgment.
Finally, Plaintiff’s allegations “invite district court review and rejection of” the statecourt judgment. Plaintiff argues that she raises an issue here that was not presented to the state
court — namely, that the state-court judgment was procured by fraud — and that such claims are

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“independent” for Rooker-Feldman purposes. (Pl.’s Mem. 7-9). It is well established, however,
that “a federal plaintiff cannot escape the Rooker-Feldman bar simply by relying on a legal
theory not raised in state court.” Hoblock, 422 F.3d at 87. 4 And courts in this District have
consistently held that claims that a state-court judgment was fraudulently procured are subject to
Rooker-Feldman. See Anctil, 2014 WL 516686, at *7; Millman v. PNC Bank Nat’l Ass’n, No.
97-CV-3097 (HB), 1998 WL 635548, at *3 (S.D.N.Y. Sept. 16, 1998) (collecting cases).
Moreover, while the Second Circuit has not explicitly ruled on the issue, it has indicated that it
would be unwilling to recognize a fraud exception to Rooker-Feldman. See, e.g., Kropelnicki v.
Siegel, 290 F.3d 118, 128 (2d Cir. 2002); Castiglione v. Papa, 423 F. App’x 10 (2d Cir. 2011)
(summary order) (affirming the application of Rooker-Feldman to an attempt to collaterally
attack an allegedly fraudulently obtained state-court judgment). 5

4

The Supreme Court’s opinion in Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544
U.S. 280 (2005), cited by Plaintiff (Pl.’s Mem. 6-7), is not to the contrary. That case held that
Rooker-Feldman does not bar claims that incidentally call into question the validity of a statecourt judgment, but did nothing to disturb the doctrine’s longstanding application to federal suits
that seek damages to remedy alleged wrongs created by state courts. See Exxon Mobil, 544 U.S.
at 291-92; accord Anctil, 2014 WL 516686, at *6 (“I see nothing in the Exxon Mobil decision
that would affect the presence or absence of an exception to Rooker-Feldman for allegations of
fraud on the state court in procuring the prior judgment.”).
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Some courts outside this District have recognized a fraudulent-procurement exception to
Rooker-Feldman, see, e.g., Goddard v. Citibank, NA, No. 04-CV-5317 (NGG), 2006 WL
842925, at *5 (E.D.N.Y. Mar. 27, 2006) (citing In re Sun Valley Foods Co., 801 F.2d 186, 189
(6th Cir. 1986)), but many of those courts have done so based on reasoning derived not from
Rooker or Feldman but from cases addressing res judicata, a conceptually distinct doctrine with
different requirements but occasionally similar results. See id. at *6-8; see also West v.
Evergreen Highlands Ass’n, 213 F. App’x 670, 674 n.3 (10th Cir. 2007) (unpublished) (“State
rules of procedure provide various means to attack a wrongfully obtained judgment. Construing
Rooker-Feldman to permit federal reconsideration and nullification of state judgments on
grounds that could have been pursued in state court arguably allows under the rubric of collateral
attack just another mechanism for lower federal court review unauthorized under [28 U.S.C.]
§ 1257.”). In any event, the Court declines to follow those courts that have recognized a
fraudulent-procurement exception, and adopts the majority rule of courts in this Circuit.

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In short, Plaintiff’s suit is “in substance,” an “appeal[] from [a] state-court judgment[].”
Hoblock, 422 F.3d at 84 (emphasis added). The question of whether the contract of sale for the
Property was valid and enforceable was tried, and decided, in state court, and Plaintiff’s central
claims in this suit — namely, that the contract was fraudulent and that Defendants continued to
perpetrate their fraud through the state-court proceedings — plainly invites review and rejection
of the state court’s judgment. Under Rooker-Feldman, this Court therefore lacks subject-matter
jurisdiction to review Plaintiff’s claims, which are inextricably intertwined with the extant statecourt judgment against her. If Plaintiff wishes to argue that the judgments against her were
procured through fraud or otherwise wrong, “Rooker-Feldman and 28 U.S.C. § 1257 require
[her] to do so in the state courts that rendered those judgments.” Anctil, 2014 WL 516686, at *8.
CONCLUSION
For the foregoing reasons, the Court concludes that it lacks subject-matter jurisdiction,
and the Attorney Defendants’ motions are GRANTED. Further, given the lack of subject-matter
jurisdiction, the case must be dismissed as to all Defendants. In light of the Court’s holding, the
Court does not need to (and, indeed, should not) reach any of Defendants’ arguments on the
merits. The Court denies Defendant Santos’s request for sanctions pursuant to Rule 11 of the
Federal Rules of Civil Procedure (Santos Mem. 17-23), as Santos failed to comply with the
requirement of Rule 11(c)(2) that any motion for sanctions be “made separately from any other
motion.” See also Williamson v. Recovery Ltd. P’ship, 542 F.3d 43, 51-52 (2d Cir. 2008).
The Clerk of Court is directed to terminate Docket Nos. 47, 53, 57 and to close the case.
SO ORDERED.
Date: August 7, 2014
New York, New York

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