Knopf et al v. Esposito et al

Filing 80

OPINION AND ORDER.....The defendants September 7, October 13, and October 16 motions to dismiss are granted. The sole federal claim is dismissed with prejudice. The Court declines to exercise supplemental jurisdiction over the state law claims and they are dismissed without prejudice to refiling in state court. The Clerk of Court shall close the case. (Signed by Judge Denise L. Cote on 12/7/2017) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
:
NORMA KNOPF and MICHAEL KNOPF,
:
:
Plaintiffs,
:
:
-v:
:
FRANK M. ESPOSITO, DORSEY & WHITNEY
:
LLP, NATHANIEL H. AKERMAN, EDWARD S.
:
FELDMAN, and MICHAEL HAYDEN SANFORD,
:
:
Defendants.
:
:
-------------------------------------- X

17cv5833(DLC)
OPINION AND ORDER

APPEARANCES
For Norma Knopf and Michael Knopf:
Eric W. Berry
Berry Law PLLC
745 Fifth Avenue, 5th Floor
New York, New York 10151
Gary Greenberg
Gary Greenberg, Esq.
666 Fifth Avenue, 27th Floor
New York, New York 10103
For Frank M. Esposito:
Frank Esposito
275 Madison Avenue, 14th Floor
New York, New York 10016
For Dorsey & Whitney LLP and Nathaniel H. Akerman:
Nathaniel H. Akerman
Amanda M. Prentice
Dorsey & Whitney LLP
51 West 52nd Street
New York, New York 10019
Peter M. Lancaster
Dorsey & Whitney LLP
50 South Sixth Street
Suite 1500

Minneapolis, MN 55402
For Edward S. Feldman:
Edward S. Feldman
570 Grand Avenue
Englewood, New Jersey 07631
For Michael Hayden Sanford:
Michael Hayden Sanford
Post Office Box 1328
Montauk, New York 11954
DENISE COTE, District Judge:
This is the third action before this Court arising out of a
loan repayment dispute involving the plaintiffs -- Norma and
Michael Knopf (the “Knopfs”) –- and defendant Michael Sanford
(“Sanford”) and his company Pursuit Holdings, LLC (“Pursuit”).
In this action, the Knopfs allege that Sanford conspired in
violation of 42 U.S.C. § 1983 with three attorney defendants -Frank Esposito (“Esposito”), Nathaniel Akerman (“Akerman”),
Akerman’s law firm Dorsey & Whitney LLP (“Dorsey”), and Edward
Feldman (“Feldman”) -- and others to obtain what the Knopfs
characterize as an ex parte advisory opinion (“Advisory
Opinion”) from a court attorney (“Court Attorney”) employed by
the New York State Appellate Division, First Judicial Department
(“Appellate Division”).

The Court Attorney is Esposito’s wife.

The Knopfs assert that using the illegally obtained Advisory
Opinion, Sanford and Pursuit sold real estate without using the
proceeds of the sale to repay the Knopfs.

The Knopfs also

assert claims for fraud and deceit, fraudulent conveyance, and
2

violation of New York Judiciary Law § 487 arising out of these
events.

The defendants each move to dismiss the first amended

complaint (“FAC”).

For the following reasons, the defendants’

motions are granted.
Background
The history of this litigation is described in several
prior Opinions, with which familiarity is assumed.

See Knopf v.

Meister, Seelig & Fein, LLP, 15cv5090(DLC), 2017 WL 1449511
(S.D.N.Y. Apr. 21, 2017); Knopf v. Phillips, 16cv6601(DLC), 2016
WL 7192102 (S.D.N.Y. Dec. 12, 2016); Knopf v. Meister, Seelig &
Fein, LLP, 15cv5090(DLC), 2016 WL 1166368 (S.D.N.Y. Mar. 22,
2016); Knopf v. Meister, Seelig & Fein, LLP, 15cv5090(DLC), 2015
WL 6116926 (S.D.N.Y. Oct. 16, 2015).

This Opinion summarizes

only those facts relevant to the instant motions.
The following facts are taken from the FAC, documents
incorporated into the FAC by reference, and proceedings in the
State Court Action described below and related litigation.
Although the FAC’s claims arise from activity in the State Court
Action and its impact on the sale of PHC, the FAC does not
provide a complete description of the decisions rendered in the
State Court Action.

Those decisions, which are recited below,

are both integral to the FAC’s claims and matters of which this
Court may take judicial notice.
3

In 2006, the Knopfs extended two real estate loans to
Pursuit: one for $1,690,860 to finance the purchase of a
residence located at 44 East 67th Street (“PHC”), and another
for $3,250,000, which Pursuit used to purchase three condominium
units located at 10 Bedford Street (the “Townhouse,”
collectively with PHC, the “Properties”).

Pursuit did not grant

the Knopfs mortgages on the Properties as promised or repay
either loan.
In 2009, the Knopfs sued Sanford and Pursuit in the Supreme
Court of the State of New York, New York County, for repayment
and sought the imposition of a constructive trust based on
Pursuit’s failure to grant a mortgage (the “State Court
Action”).

At the outset of the litigation, the Knopfs filed

notices of pendency against the Properties.

On October 15,

2013, the Appellate Division extended the notices of pendency
for a second three-year term.
On December 23, 2013, Sanford, on behalf of Pursuit, agreed
to sell PHC to Michael Phillips (“Phillips”).

Phillips’

agreement to purchase PHC was conditioned on the cancellation of
the notices of pendency.
On December 11, 2014, the Appellate Division, reversing,
granted summary judgment in favor of the Knopfs on their loan
claims.

Knopf v. Sanford, 1 N.Y.S.3d 18 (1st Dept. 2014).

4

The

Appellate Division’s decision, however, did not assess damages.
As a result, the Knopfs did not obtain a final judgment.
A. Cancellation of the Notices of Pendency
On December 23, 2014, New York County Supreme Court Justice
Milton Tingling issued an order cancelling the notices of
pendency.

On July 2, 2015, the Appellate Division affirmed the

cancellation.

On July 24, 2015, the Knopfs moved in the

Appellate Division for a preliminary injunction against the sale
or encumbrance of PHC.
On October 22, 2015, the Knopfs filed a motion in the
Appellate Division for reconsideration of a substituted October
6 decision affirming cancellation of the notices of pendency. 1
In connection with this motion, the Knopfs requested an interim
stay against the sale of PHC.

An Appellate Division Justice

issued an order that permitted the sale of PHC but required the
proceeds to be placed in escrow (“October 2015 Order”).

The

October 2015 Order reads in relevant part: “1 bedroom property
may be sold -- proceeds to be placed in escrow pending further
court order.”

Sanford refused to proceed with the sale if he

was required to escrow the proceeds.

The Appellate Division’s July 2, 2015 decision was vacated and
substituted on October 6, 2015. See Knopf v. Sanford, 17
N.Y.S.3d 674 (1st Dept. 2015); Knopf v. Sanford, 13 N.Y.S.3d 365
(1st Dept. 2015). The October 6, 2015 decision again affirmed
the cancellation of the notices of pendency.
1

5

On November 12, 2015, the Appellate Division issued an
order rejecting the Knopfs’ motion for a preliminary injunction
restraining the sale of PHC (“November 2015 Order”).

The

November 2015 Order reads, in pertinent part:
[P]laintiffs-appellants having moved for prejudgment
attachment pursuant to CPLR 6201 or, in the
alternative, for a preliminary injunction enjoining
defendants from transferring, mortgaging, or otherwise
impairing the value of the subject properties pending
hearing and determination of the aforesaid appeal,
Now, upon reading and filing the papers with respect
to the motion, and due deliberation having been had
thereon, it is
Ordered that the motion is denied.
On November 20, 2015, Sanford and Pursuit cross-moved
to vacate the October 2015 Order.

On December 29, 2015,

the Appellate Division denied Pursuit and Sanford’s motion
to vacate the October 2015 Order (“December 2015 Order”).
The December 2015 Order reads, in relevant part:
[D]efendants-respondents having cross-moved for
vacatur of a certain interim order by a Justice of
this Court dated October 22, 2015 [M-5942],
. . .
The cross motion for vacatur of the interim order
dated October 22, 2015 is denied (M-5942).
B. The January 12, 2016 Telephone Call with the Court Attorney
During this period, MH Sanford & Co., LLC (“MH Sanford &
Co.”) an entity apparently owned and controlled by Sanford,
retained Esposito.

Knowing that Esposito’s wife was an attorney
6

working at the Appellate Division, Sanford gave Esposito a copy
of the December 2015 Order.

Esposito explained to Sanford that

his wife would opine that the October 2015 Order -- which had
required the sale proceeds to be escrowed “pending further court
order” -– “was no longer in effect.”
On January 11, 2016, MH Sanford & Co. and Esposito
Partners, PLLC, entered into a written agreement.

The FAC

refers to that agreement and it is incorporated here by
reference.

Under the agreement, Esposito agreed to act as

general counsel for MH Sanford & Co. and focus on its “corporate
vision, business plans and strategic initiatives” as well as to
manage outside counsel “in relation to any current and
prospective litigations.”

Esposito charged MH Sanford & Co. “a

project based, non-refundable fee of $55,000 for the six month
term of [the] agreement” in return for these services.

Esposito

agreed to wait to be paid until Sanford was in a position to
“liquidate” assets.
Around the same time, Sanford gave two other attorneys,
Akerman and Feldman, copies of the state court orders.

Akerman

is a litigator who had represented Sanford briefly in connection
with related litigation filed by the Knopfs against a law firm
that once represented Sanford and Pursuit in the State Court
Action.

Feldman is a real estate attorney who had been retained

7

by Pursuit in 2013 to assist in the sale of PHC. 2

Sanford

instructed Akerman to contact the Appellate Division with
Feldman to obtain a clarification of the December 2015 Order
because that Order was preventing Phillips from getting clear
title.

On January 12, Akerman told Feldman that he knew that

the restraints on the sale had been “dissolved as a matter of
law” and that they would learn as much when they called the
Appellate Division.
Akerman and Feldman called the Appellate Division on
January 12, 2016 and requested to speak to a “clerk” for the
Court. 3

They were transferred to an Appellate Division employee

who held the title of either Deputy Chief Appellate Court
Attorney or Principal Appellate Court Attorney (the “Court
Attorney,” as described above).

The Court Attorney also held

the title of the Director of the Pre-Argument Conference Program
a/k/a Special Master’s Program, a mediation service offered by
the Appellate Division.

The Court Attorney is Esposito’s wife.

There is no allegation, however, that either Akerman or Feldman
were aware that the Court Attorney was married to an attorney
representing a Sanford entity.

The FAC does not allege that the

This description was given to the Court at an October 13, 2017
conference and is undisputed.
2

The FAC alleges that Akerman attempted to reach a clerk and
assumed that he was speaking to a clerk on January 12.
3

8

Court Attorney used the name Esposito in her employment or
identified herself to Akerman and Feldman by the name Esposito.
During the telephone call, Akerman and Feldman identified
themselves as Sanford’s attorneys.

According to Akerman and

Feldman, the Court Attorney told them that the November 2015
Order “had terminated the effect” of the October 2015 Order. 4
The Court Attorney further stated that “there were no longer any
restrictions” regarding the sale of PHC.

Akerman did not need

to review the history of the litigation with the Court Attorney
because she was very familiar with the case.

Counsel for the

Knopfs did not participate in the call.
After the call, Feldman wrote a memorandum describing the
conversation.

The FAC refers to that memorandum and it is

incorporated here by reference.

It states:

On January 12, 2016 at 10:45AM I had a conference call
with Nick Ackerman [sic] and [name of the Court
Attorney] of the Appellate Division. She confirmed
the following:
1.

The October 22, 2015 Interim Order with
restraints was only in effect until motion
decided.

2.

Once full panel decided motion and entered
the November 12, 2015 Order denying the
restraints, all restraints were vacated.

The FAC also alleges that the Court Attorney told Akerman and
Feldman that the December 2015 Order terminated the effect of
the October 2015 Order and that the December 29, 2015 motion was
denied “because it was moot.” The FAC further alleges that
Esposito’s wife had not been given a copy of, and did not know
the content of, the October 2015 Order at the time of the call.
4

9

There was no need for the motion to remove interim
restraints as they were already gone. The motion was
denied as a matter of law as there were no restraints
to vacate and, thus the motion requested relief that
could not be granted.
Feldman forwarded the memorandum to Phillips’ lawyer.
C. The Sale of PHC
The Court Attorney’s views satisfied Phillips and his title
company that the October 2015 Order was no longer in effect.

On

February 1, 2016, Phillips and Pursuit closed on the sale of
PHC.

PHC was sold by Pursuit for $3 million.

None of the

proceeds of the sale were placed in escrow.
On February 4, 2016, Dechert LLP (“Dechert”) accepted
$500,000 out of the proceeds of the PHC sale as an initial
retainer to represent Sanford and Pursuit in the State Court
Action.

Three weeks earlier, on January 14, 2016, the Court

Attorney had inquired of Dechert whether it would be interested
in serving as their counsel.
On February 8, 2016, Judicial Hearing Officer Ira Gammerman
issued a report finding that the Knopfs were entitled to damages
against Sanford in the State Court Action in the amount of
$10,937,850, and that Pursuit was jointly liable for $8,336,488
of that amount.

The report has not yet been confirmed.

After learning of the sale of PHC and the failure to escrow
the proceeds, on February 25, 2016, the Knopfs moved to disgorge
10

the $500,000 retainer given to Dechert using proceeds from the
sale of PHC and to place it into an escrow account.
as well for contempt sanctions.

They moved

That day, the Knopfs also

obtained an interim order from an Appellate Division Justice
requiring any proceeds remaining from the sale to be placed in
escrow (“February 2016 Order”).

The February 2016 Order states:

Money remaining as of today at 3:45 pm from sale of
1-bedroom apartment shall be placed in escrow as had
been directed by Justice Sweeny in his 10/22/15
interim order, vacatur of which was denied by this
Court’s 12/29/2015 Order (M-5459, M-5942) pending
hearing and determination of this motion by full
panel.
Expedite motion & decision.
Pending hearing by full panel, remaining money shall
be escrowed with JP Morgan Chase or similar commercial
Bank in New York City by 2/29 –- close of business. 5
On March 24, 2016, the Appellate Division issued a preliminary
injunction against any further dissipation of the real estate
assets that Pursuit had acquired with loans from the Knopfs
(“March 2016 Order”).

Knopf v. Sanford, 26 N.Y.S.3d 866 (1st

Dept. 2016).
Pursuit and Sanford have since paid $436,227.32 of the sale
proceeds into an escrow account.

Pursuit, Sanford, and Dechert

opposed the Knopfs’ motion for disgorgement and contempt,
arguing that Akerman and Feldman had provided Sanford with legal
memoranda on January 12, 2016 opining that the October 2015
5

The February 2016 Order is handwritten and illegible in parts.
11

Order was no longer in effect.

In affirmations prepared in

opposition to the motion, Akerman and Feldman each explained
that an unidentified court attorney employed by the Appellate
Division advised them in a conference call on January 12 that
the October 2015 Order was no longer in effect.
On June 16, 2016, the Appellate Division denied the Knopfs’
motion for contempt and for disgorgement of Dechert’s $500,000
retainer.

Within hours, the Appellate Division issued a revised

order that included an explanation of the denial (“Revised June
2016 Order”).

The Revised June 2016 Order provides in relevant

part:
Plaintiffs-appellants seek an order of contempt
against defendants and their counsel for allegedly
violating a temporary restraining order issued by a
single justice of this Court on October 22, 2015
(TRO);
. . .
The motion for contempt is denied because the TRO
was vacated once plaintiffs’ prior motion for a
preliminary injunction was denied (People v Asiatic
Petroleum, 45 AD2d 835, 836 [1st Dept. 1974]). 6

In June 2017, the Knopfs, Sanford, Pursuit, Dechert, and other
related entities entered into a consent order in the State Court
Action in which the parties agreed that “[n]o party hereto shall
further contend that any other party hereto has heretofore acted
in contempt of any court order in connection with this action.”
The consent order was submitted in connection with related
litigation before this Court concerning Pursuit’s sale of PHC to
Phillips.
6

12

The FAC alleges that the Revised June 2016 Order’s reference to
the denial of the Knopfs’ prior motion for a preliminary
injunction is a reference to the November 2015 Order.

The FAC

notes that the reasons given in the Revised June 2016 Order were
“identical” to the reasoning that the Court Attorney provided to
Akerman and Feldman on January 12, and which had been recited in
the Feldman memorandum. 7
On June 21, 2017, the Knopfs learned that the Court
Attorney was Esposito’s wife.
August 2, 2017. 8
August 12.

The Knopfs filed this action on

Esposito moved to dismiss the complaint on

On August 15, the Court ordered the Knopfs to file

any amended complaint by September 2 and advised that it is
unlikely that they will have a further opportunity to amend.
The Knopfs filed the FAC on September 2.

Between September 7

and October 16, each of the defendants moved to dismiss the FAC.
The motions to dismiss were fully submitted by November 17.
Discussion
When deciding a motion to dismiss under Rule 12(b), Fed. R.
Civ. P., a court must “accept all allegations in the complaint
The Knopfs’ motion for reargument and vacatur of the Revised
June 2016 Order was denied on November 2, 2017.
7

On July 10, 2017, the Knopfs filed a substantially similar
complaint in the United States District Court for the Eastern
District of New York. The case was voluntarily dismissed
without prejudice on the Knopfs’ motion on July 28, 2017.
8

13

as true and draw all inferences in the non-moving party’s
favor.”

LaFaro v. New York Cardiothoracic Group, PLLC, 570 F.3d

471, 475 (2d Cir. 2009) (citation omitted).

In deciding a

motion to dismiss, a court considers “any written instrument
attached to the complaint as an exhibit or any statements or
documents incorporated in it by reference.”

Stratte–McClure v.

Morgan Stanley, 776 F.3d 94, 100 (2d Cir. 2015) (citation
omitted).

The court also considers “documents upon which the

complaint relies and which are integral to the complaint.”
Subaru Distrib. Corp. v. Subaru of Am., Inc., 425 F.3d 119, 122
(2d Cir. 2005).

A court may properly take judicial notice of

“relevant matters of public record,” including related legal
proceedings in other courts.

Giraldo v. Kessler, 694 F.3d 161,

164 (2d Cir. 2012); see Staehr v. Hartford Fin. Servs. Grp.,
Inc., 547 F.3d 406, 425 (2d Cir. 2008)(“Courts routinely
take judicial notice of documents filed in other courts to
establish the fact of such litigation and related filings.”);
Fed. R. Evid. 201(b).
“To survive a motion to dismiss under Rule 12(b)(6), a
complaint must allege sufficient facts which, taken as true,
state a plausible claim for relief.”

Keiler v. Harlequin

Enters. Ltd., 751 F.3d 64, 68 (2d Cir. 2014).

“A claim has

facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
14

defendant is liable for the misconduct alleged.”

Parkcentral

Global Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208
(2d Cir. 2014) (citation omitted).
I.

Section 1983 Conspiracy
The Knopfs allege that Sanford and the attorney defendants
conspired with Esposito’s wife to violate their Fourteenth
Amendment due process rights by depriving them of their property
interests in PHC and the proceeds of its sale without notice and
an opportunity to be heard.

This allegation arises from the

telephone conversation Akerman and Feldman had on January 12,
2016 with the Court Attorney, who is an employee of the
Appellate Division and also Esposito’s wife.

According to the

Knopfs, “a due process violation occurred because, but for the
ex parte nature of the call in which the advisory opinion was
rendered the Knopfs would likely have been able to require that
the [entirety of the proceeds of the sale] be paid into escrow.”
They also assert that “as a matter of law, the wrongful
deprivation of an opportunity to seek injunctive relief or other
pre-deprivation remedy is a due process violation.”

Finally,

they assert a violation of their substantive due process rights,
specifically, that the defendants “acted with evil motive and
with intentional, callous and/or reckless indifference to the
Knopfs’ constitutional rights.”

15

To state a § 1983 conspiracy claim, a plaintiff must allege
(1) an agreement between two or more state actors, or “a state
actor and a private party; (2) to act in concert to inflict an
unconstitutional injury; and (3) an overt act done in
furtherance of that goal causing damages.”

Ciambriello v.

County of Nassau, 292 F.3d 307, 324–25 (2d Cir. 2002).

When the

object of the § 1983 conspiracy is a violation of the
plaintiff’s procedural due process rights, a plaintiff must
allege that he possesses a liberty or property interest
protected by the Constitution or federal statutes and that he
was deprived of that liberty or property interest without due
process.

Id. at 313.

With respect to a substantive due process

claim brought under § 1983, a plaintiff must allege that the
action at issue was “so egregious, so outrageous, that it may
fairly be said to shock the contemporary conscience.”

Okin v.

Village of Cornwall-On-Hudson Police Dept., 577 F.3d 415, 431
(2d Cir. 2009) (citation omitted).

State action is an essential

prerequisite to a § 1983 conspiracy claim, Grogan v. Blooming
Grove Volunteer Ambulance Corps, 768 F.3d 259, 263 (2d Cir.
2014), and a § 1983 conspiracy claim “will stand only insofar as
the plaintiff can prove the sine qua non of a § 1983 action: the
violation of a federal right.”

Singer v. Fulton Cty. Sheriff,

63 F.3d 110, 119 (2d Cir. 1995).

16

For at least two reasons, the Knopfs fail to adequately
plead a § 1983 conspiracy claim. 9

First, the gravamen of the

alleged harm stems not from any conspiracy but from orders duly
issued in 2015 by the Appellate Division.

The January 12, 2016

conversation at the center of the Knopfs’ claim concerned orders
issued by the Appellate Division in the latter half of 2015.

To

the extent the Knopfs were unhappy with any of those orders -in particular, the November 2015 Order rejecting the Knopfs’
efforts to enjoin the sale of PHC –- they were free to take any
further steps that state court procedures allowed.
This analysis is confirmed by the Revised June 2016 Order,
which denied the Knopfs’ motion seeking disgorgement and an
order of contempt on the theory that the PHC sale had violated
the temporary restraining order (“TRO”) issued through the
October 2015 Order.

As the Revised June 2016 Order found, that

TRO had been vacated “once plaintiffs’ prior motion for a
preliminary injunction was denied” and the FAC alleges that this
is a reference to the November 2015 Order.
Thus, the harm that the Knopfs assert that they experienced
from the sale of PHC is solely attributable to orders issued by
Esposito argues that the Court lacks jurisdiction over the
Knopfs’ claims under the Rooker-Feldman doctrine or under the
doctrine of collateral estoppel -- i.e., issue preclusion. For
substantially the same reasons discussed in the Court’s December
12 Opinion and Order in this case, these arguments fail. Knopf
v. Phillips, 2016 WL 7192102, at *6-7.
9

17

judges of the New York State courts in 2015.

Those orders were

issued weeks before the conversation with the Court Attorney
that is central to this § 1983 claim.

If the Knopfs were or are

unhappy with orders issued by New York State courts, then the
New York State court system provides them with ample avenues of
redress through appeal or additional motion practice.

See New

York State Nat. Org. for Women v. Pataki, 261 F.3d 156, 169 (2d
Cir. 2001) (“[A] procedural due process violation cannot have
occurred when the governmental actor provides apparently
adequate procedural remedies and the plaintiff has not availed
himself of those remedies.”)(citation omitted).

No federal

procedural due process claim lies in such circumstances.
Second, there is no plausible claim of any conspiratorial
agreement in connection with the January 12, 2016 conversation.
There is no allegation that Akerman or Feldman knew that the
Court Attorney was married to another attorney who represented a
Sanford company, or that they knew her at all.

Nor does the FAC

allege that Sanford or anyone associated with him instructed
Akerman and Feldman to contact a specific person -- by name or
title -- who worked at the Appellate Division.

There is also no

allegation that the Court Attorney or any other alleged
conspirator was in a position to cause the telephone call to be
routed to the Court Attorney.

As described in the FAC, Akerman

requested to speak with a “clerk” and Akerman and Feldman “were
18

transferred” to the Court Attorney, who happened to be
Esposito’s wife.

Under these circumstances, the Knopfs fail

plausibly to plead the existence of an agreement among the
defendants and the Court Attorney in connection with the January
12, 2016 telephone call. 10

The coincidence that the Court

Attorney who responded to the Akerman and Feldman inquiry was
also -- unbeknownst to Akerman and Feldman -- related to another
attorney retained by Sanford to represent one of his companies
is insufficient to state a claim of conspiracy with this state
actor.
The Knopfs argue that in “hub-and-spoke” conspiracies it is
not necessary for each member of the conspiracy to know the
identities of each co-conspirator so long as each conspirator
was aware of the conspiracy’s general nature and goal.

The

knowing and intentional participation of a state actor in the
conspiracy, however, is essential to the pleading of a § 1983
conspiracy claim.

There is no adequate pleading that Esposito’s

wife was a member of any conspiracy on January 12, 2016 when she
answered a transferred call.

As significantly, at no point do

The Knopfs also allege that, prior to calling the Appellate
Division, Akerman indicated to Feldman that he “already knew”
that they would be told that the restraints had been dissolved
as a matter of law. This allegation does not suggest Akerman’s
involvement in any conspiracy. The more natural inference is
that Akerman had already studied the relevant state court orders
and formed an independent judgment as to their effect.
10

19

the Knopfs allege that Akerman and Feldman were aware of any
plan to improperly obtain information from the Court Attorney.
The Knopfs also emphasize tension in the wording of various
state court orders.

Such tension may not be surprising given

the volume and pace of motion practice.

This tension does not

alter the fundamental holding, however, that orders issued by
the Appellate Division in 2015 removed all restraints on the
sale of PHC.

Underscoring this reading of those 2015 orders,

the FAC has not identified any instance in which any party has
been found in contempt of a state court order for proceeding
with that sale and not placing the proceeds in escrow on the day
of the sale, despite the Knopfs’ vigorous efforts to obtain such
a ruling.
For these same reasons, to the extent that the FAC seeks to
plead a substantive due process violation, that effort fails.
The Knopfs’ § 1983 claim is dismissed.
II.

Remaining State Law Claims
The remainder of the Knopfs’ claims arises under state law.

Although a federal court has supplemental jurisdiction over
these claims, it may, in its discretion, decline to exercise
such jurisdiction where it has “dismissed all claims over which
it has original jurisdiction.”

28 U.S.C. § 1367(c).

In

general, when all of a plaintiff’s federal claims are dismissed
before trial, the state law claims should be dismissed as well.
20

Pension Benefit Guar. Corp. ex rel. St. Vincent Catholic Med.
Centers Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d
705, 727 (2d Cir. 2013); First Capital Asset Mgmt., Inc. v.
Satinwood, Inc., 385 F.3d 159, 183 (2d Cir. 2004).

Because the

Knopfs’ federal claim is dismissed, the Court declines to
exercise supplemental jurisdiction over their state law claims.
Conclusion
The defendants’ September 7, October 13, and October 16
motions to dismiss are granted.
dismissed with prejudice.

The sole federal claim is

The Court declines to exercise

supplemental jurisdiction over the state law claims and they are
dismissed without prejudice to refiling in state court.

The

Clerk of Court shall close the case.

Dated:

New York, New York
December 7, 2017
__________________________________
DENISE COTE
United States District Judge

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