Beatie and Osborn LLP et al v. Bogert

Filing 37

MEMORANDUM OPINION & ORDER.......The defendants April 5, 2017 motion to dismiss is granted. The Clerk of Court shall close the case. (Signed by Judge Denise L. Cote on 7/10/2017) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
:
BEATIE AND OSBORN LLP and OSBORN LAW,
:
P.C.,
:
:
Plaintiffs,
:
:
-v:
:
JEFFREY C. BOGERT,
:
Defendant.
:
:
----------------------------------------X

17cv1047(DLC)
MEMORANDUM OPINION
& ORDER

APPEARANCES:
For the plaintiffs:
Daniel A. Osborn
The Osborn Law Group
200 North Sea Road, Suite B
Southampton, New York 11968
For the defendant:
Barry J. Muller
Barri A. Frankfurter
Fox Rothschild LLP
100 Park Avenue, 15th Floor
New York, NY 10017
DENISE COTE, District Judge:
Plaintiffs Beatie and Osborn LLP and Osborn Law, P.C. bring
this lawsuit alleging that the defendant Jeffrey Bogert
(“Bogert”) failed to repay loans (“Loans”) that the plaintiffs
made to him.

Bogert has moved to dismiss the first amended

complaint (“FAC”) as barred by prior litigation in New Jersey
between the parties and pursuant to New Jersey’s entire
controversy doctrine (“NJECD”).

The motion is granted.

BACKGROUND
The plaintiffs and Bogert were co-counsel on hundreds of
personal injury cases (the “ONJ Litigation”).

The plaintiffs

assert in the instant action that during the ONJ Litigation they
lent Bogert $177,065.56, which Bogert agreed to repay at the
conclusion of the litigation.

The ONJ Litigation was settled on

November 21, 2014, but Bogert has not repaid any portion of the
Loans.

In this action, the plaintiffs assert claims for breach

of an agreement to repay the Loans and unjust enrichment.
The briefing on Bogert’s motion to dismiss attaches filings
from the New Jersey litigation that reveal the following: During
the ONJ Litigation, RD Legal Funding Partners, LP (“RD Legal”)
provided the plaintiffs with financing to pursue the ONJ
Litigation.

Upon settlement of the ONJ Litigation, RD Legal

sued Bogert in New Jersey state court, asserting that Bogert had
signed a subordination agreement in which he pledged the
attorneys’ fees he might receive from the ONJ Litigation as
collateral in the event that the fees earned by the plaintiffs
in the ONJ Litigation were not sufficient to repay RD Legal.
Bogert filed a third-party complaint against the plaintiffs
alleging that the parties had agreed to reimburse RD Legal
proportionally to the funds each party received.
On March 10, 2016, the New Jersey Superior Court granted
the motions brought by RD Legal and the plaintiffs for summary
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judgment against Bogert.

Bogert has appealed the Superior

Court’s decision.
In granting summary judgment against Bogert, the court made
the following rulings of significance to the instant action.
Without the funding provided by RD Legal, Bogert and the
plaintiffs would have been unable to continue representing their
clients in the ONJ Litigation.

The court found that a September

2009 subordination agreement between RD Legal and Bogert was
enforceable and entitled RD Legal to the legal fees awarded to
Bogert.

It found further that Bogert had provided no evidence

that the parties had an agreement whereby the parties would
reimburse RD Legal proportionally to the funds each party
received.

It also rejected Bogert’s argument that the

plaintiffs had a duty to contribute to the amount that Bogert
owed RD Legal.
In its brief on appeal in the New Jersey action, the
plaintiffs indicated that Osborn individually and Beatie and
Osborn LLP had lent Bogert tens of thousands of dollars prior to
2009, and had never been repaid.

Bogert again asked to borrow

money around 2009, and Osborn Law agreed to lend Bogert funds
“if and when” they became available.
On October 7, 2016, the plaintiffs filed this lawsuit
against Bogert seeking repayment of the Loans.

On April 5,

2017, Bogert filed a motion to dismiss the FAC pursuant to Rule
3

12(b)(6), arguing that the plaintiffs’ claims are precluded by
the NJECD.
DISCUSSION
Bogert argues that the plaintiffs’ claims in this diversity
action are precluded by the NJECD.

Under the full faith and

credit clause, a federal court must give a state court judgment
“the same preclusive effect as would be given that judgment
under the law of the State in which the judgment was rendered.”
Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81
(1984).1
The NJECD precludes “all claims arising out of the same
controversy that could have been raised in the earlier action,
including those involving different legal theories or requesting
alternative relief.”

Stochastic Decisions, Inc. v. DiDomenico,

995 F.2d 1158, 1170 (2d Cir. 1993).2

“In determining whether a

The NJECD bars a subsequent action only when a prior action
based on the same transactional facts “has been tried to
judgment or settled.” Allstate New Jersey Ins. Co. v. Cherry
Hill Pain & Rehab Inst., 911 A.2d 493, 499 (App. Div. 2006)
(citation omitted); see Fisher v. Yates, 637 A.2d 546, 550, 552
(App. Div. 1994) (applying NJECD to judgment from bench trial on
appeal). Only judgments “on the merits” will have preclusive
effect. Allstate, 911 A.2d at 500. The parties do not dispute
that the court’s judgment in the New Jersey action is a judgment
on the merits that is entitled to preclusive effect.
1

Under the NJECD, “[n]on-joinder of claims required to be
joined by the entire controversy doctrine shall result in the
preclusion of the omitted claims to the extent required by the
entire controversy doctrine . . . .” N.J. Ct. R. 4:30A.
2

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subsequent claim should be barred under [the NJECD], the central
consideration is whether the claims against the different
parties arise from related facts or the same transaction or
series of transactions. . . . There is no requirement that there
be a commonality of legal issues.”

Wadeer v. New Jersey Mfrs.

Ins. Co., 220 N.J. 591, 605 (2015) (citation omitted).

Courts

should also consider whether applying the NJECD is fair “to the
court system as a whole, as well as to all parties.”

Id.

The

NJECD is based on the principle that:
the adjudication of a legal controversy should occur
in one litigation in only one court; accordingly, all
parties involved in a litigation should at the very
least present in that proceeding all of their claims
and defenses that are related to the underlying
controversy.
Id. (citation omitted).
The plaintiffs’ claims in this federal action are precluded
by the NJECD.

The claims arise out of the same relationships

and transactions at issue in the state litigation -- namely,
financial transactions among the parties during and in relation
to the ONJ Litigation.

The plaintiffs do not contend that they

could not have filed a counterclaim against Bogert for repayment
of the Loans.

Indeed, the extent to which the plaintiffs owed

money to Bogert and vice versa as a result of their work on the
ONJ Litigation was at the heart of the New Jersey action.
plaintiffs’ barebones FAC and brief response to this motion

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The

provide no ground to find otherwise.

Because the plaintiffs’

claims in the instant action are precluded under the NJECD, they
are dismissed.
CONCLUSION
The defendant’s April 5, 2017 motion to dismiss is granted.
The Clerk of Court shall close the case.
Dated:

New York, New York
July 10, 2017
__________________________________
DENISE COTE
United States District Judge

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