Garcia v. Nassar

Filing 33

OPINION AND ORDER re: 17 MOTION to Dismiss for Lack of Jurisdiction . MOTION to Dismiss for Failure to State a Claim. filed by United States of America. For the reasons set forth above, the Government's motion to dismiss with prejudice is GRANTED. The Clerk of Court is respectfully directed to terminate the motion, Doc. 17, and close the case. SO ORDERED. (Signed by Judge Edgardo Ramos on 2/19/2019) (kv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
NILIANA N. GARCIA,
Plaintiff,
-against-

OPINION AND ORDER

UNITED STATES OF AMERICA,

18 Civ. 2200 (ER)

Defendant,
-andALBERT D. NASSAR,
Nominal
Defendant.
Ramos, D.J.:
Niliana N. Garcia (“Garcia”) brings this action against the United States of America (the
“Government”), alleging an ownership interest in an apartment the Government seized from her
former husband and seeking a temporary restraining order on the Government’s seizure of the
apartment. Before the Court is the Government’s motion to dismiss the complaint with prejudice
for lack of subject matter jurisdiction pursuant to Federal Rules of Civil Procedure 12(b)(1), and
for failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil
Procedure 12(b)(6). For the reasons set forth below, the Government’s motion to dismiss with
prejudice is GRANTED.
I.

BACKGROUND
A.

Factual Background

On July 2, 2001, Niliana Garcia and her ex-husband Albert Nassar (“Nassar”) created the
Nassar Family Irrevocable Trust (the “Trust”) with Nassar appointed as the trustee, Garcia as the
settlor of the trust, and their two children as the beneficiaries. See Compl. ¶¶ 2, 3. In the same

month, the couple separated. Id. ¶ 2. On July 31, 2001, Nassar purchased a luxury
condominium located at 845 United Nations Plaza, Apartment 53E, New York, New York (the
“Apartment”). Id. ¶ 4. Nassar transferred the Apartment to the Trust shortly thereafter on
October 15, 2001. Id. A few years later, on November 18, 2003, the marriage between Nassar
and Garcia was dissolved by a Florida court and a divorce settlement agreement (“Divorce
Agreement”) was executed. Id. ¶ 5. In the Divorce Agreement, Nassar agreed to pay Garcia
$3,000 per month in child support. Id.
The Divorce Agreement also contained a list of marital assets subject to equitable
distribution, including the Apartment which was allocated in its entirety to Nassar. Doc. 10-1 at
34. Nassar and Garcia both agreed to “releas[e] the other from all causes of actions, claims,
rights or demands whatsoever in law or in equity that either of the Parties ever had, or now has,
against the other including, without limitation . . . equitable distribution of property.” Id. at 19.
In November 2013, the Government filed an action against Nassar and the Trust
(collectively, the “Nassar Defendants”) in the case captioned United States v. Nassar, 13 Civ.
8174 (ER) (the “Foreclosure Action”) to collect a long-overdue tax liability of over $2.6 million
that Nassar owed the Government. See Nassar, 13 Civ. 8174. In September 2016, the Court
ruled in favor of the Government in the Foreclosure Action, holding that Nassar transferred the
Apartment to the Trust as his nominee and that Nassar was the true property owner, not the
Trust. Nassar Family Irrevocable Trust v. United States, 13 Civ. 5680 (ER), 13 Civ. 8174 (ER),
2016 WL 5793737, at *9 (S.D.N.Y. Sept. 30, 2016).
In October 2016, Nassar appealed to the United States Court of Appeals for the Second
Circuit. The Second Circuit, by summary order, affirmed this Court’s judgment in the
Foreclosure Action, and held that “Nassar is the beneficial owner of the apartment and the Trust

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is his legal title-holding nominee.” United States v. Nassar, 699 F. App’x 46, 48 (2d Cir. Oct.
20, 2017). After an amended judgment in the Foreclosure Action, the Government is currently
foreclosing its tax liens against the Apartment to satisfy its judgment of $2,692,634.56 against
Nassar. 1
In her complaint, Garcia now asserts an ownership interest in the Apartment, arguing that
it was not considered as subject to marital distribution during the Florida divorce proceedings.
Compl. ¶ 6. Garcia alleges that she did not previously make a claim to the Apartment in
connection with the Foreclosure Action because she believed it belonged to the Trust. Id. ¶ 10. 2
In light of the Second Circuit’s judgment in the Foreclosure Action, Garcia alleges the
Apartment is now converted to marital property subject to equitable distribution, since it was
determined that Nassar was always the true owner of the Apartment. Compl. ¶¶ 8, 9. For this
reason, she seeks a judicial determination that she has an ownership interest in the Apartment
and a temporary restraining order precluding the Government from foreclosing on the
Apartment. She also seeks a judicial order applying the proceeds of the sale of the Apartment to
satisfy Nassar’s overdue child support obligation, which she contends is now over $400,000.

B.

Procedural History

1
The background of this case is set forth in greater detail in this Court’s 2016 decision, familiarity which is
presumed. See United States v. Nassar, 13 Civ. 8174 (ER).
2

In August 2013, the Trust and its beneficiaries filed a wrongful levy action against the Government (“Levy
Action”). In March 2014, the Court consolidated the Levy Action and the Foreclosure Action, granting the
Government’s motion for summary judgment in the Foreclosure Action and denying Nassar’s motion for summary
judgment. See Nassar Family Irrevocable Trust v. United States, 13 Civ. 5680 (ER). Garcia likely had constructive
notice of her unrepresented interest in the Apartment when the Foreclosure Action commenced in 2013, since she is
represented here by the same attorney who represented the Trust, the Trust beneficiaries, and Nassar in the Levy
Action. Id. She had actual notice of her interest no later than November 2014, when she called her daughter, Alyce
Nassar (“Alyce”), to discuss Alyce’s deposition in the Foreclosure Action. Gov’t Decl. Ex. 3. According to Alyce,
Garcia “left me a voicemail about [the deposition],” and told Alyce “[j]ust to be careful, and make sure to tell the
truth.” Id.

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On November 30, 2017, Garcia filed the instant complaint in the Supreme Court of the
State of New York, New York County, Index No. 160609/2017, which named the United States
of America as a defendant and Albert D. Nassar as a nominal defendant. See Compl. On March
12, 2018, the Government removed Garcia’s complaint to this Court pursuant to 28 U.S.C. §
1442(a)(1). The Government now moves to dismiss the complaint pursuant to Rule 12(b)(1) and
(6) of the Federal Rules of Civil Procedure.
II.

LEGAL STANDARD
A district court must dismiss a case under Rule 12(b)(1) for lack of subject matter

jurisdiction when it lacks the statutory or constitutional power to adjudicate the case. See
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). Lack of subject matter jurisdiction
is not waivable and a party or the court may raise it at any time as a reason to dismiss the case.
Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003). A plaintiff has the
burden of proving that subject matter jurisdiction exists. Robinson v. Overseas Military Sales
Corp., 21 F.3d 502, 507 (2d Cir. 1994). Where the district court relies solely on the pleadings
and supporting affidavits, the plaintiff need only make a prima facie showing that subject matter
jurisdiction exists. Id.
Under Rule 12(b)(6), a complaint may be dismissed for “failure to state a claim upon
which relief can be granted.” Fed. R. Civ. P. 12(b)(6). When ruling on a motion to dismiss
pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true
and draw all reasonable inferences in the plaintiff’s favor. Koch v. Christie’s Int’l, PLC, 699
F.3d 141, 145 (2d Cir. 2012). However, the Court is not required to credit “mere conclusory
statements” or “threadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

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“To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to
‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556). Federal Rules of Civil Procedure 8 “marks a
notable and generous departure from the hypertechnical, code-pleading regime of a prior era, but
it does not unlock the doors of discovery for a plaintiff armed with nothing more than
conclusions.” Id. at 678–79. If the plaintiff has not “nudged [her] claims across the line from
conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.
III.

DISCUSSION
A. Lack of Subject Matter Jurisdiction
The complaint provides no basis for the exercise of federal subject matter jurisdiction.

Federal subject matter jurisdiction exists only when a federal question is presented (28 U.S.C. §
1331), or when there is diversity of citizenship and the amount in controversy exceeds
$75,000.00 (28 U.S.C. § 1332). If there is a lack of subject matter jurisdiction, the court must
dismiss the complaint in its entirety. See Fed. R. Civ. P. 12(h)(3); see also, e.g., Marland v.
Heysel, No. 08 Civ. 3751 (LAK) 2008 WL 2704318, at *3 (S.D.N.Y. July 10, 2008) (dismissing
plaintiff’s claims because “they fail to allege a basis for subject matter jurisdiction”); Cooper v.
Cianfrocca, No. 01 Civ. 4749 (LAK), 2001 WL 640808, at *1 (S.D.N.Y. June 7, 2001)
(dismissing complaint for “failure to allege facts sufficient to establish subject matter
jurisdiction”).
Additionally, the United States has sovereign immunity and cannot be sued without its
consent or an express waiver by Congress. See United States v. Mitchell, 463 U.S. 206, 212

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(1983). The government’s sovereign immunity may be waived if such a waiver is
“‘unequivocally expressed’ in statutory text, and cannot simply be implied.” Adeleke v. United
States, 355 F.3d 144, 150 (2d Cir. 2004) (quoting United States v. Nordic Vill., Inc., 503 U.S. 30,
33 (1992)). Furthermore, such a waiver will be strictly construed in favor of the sovereign and
not enlarged beyond the statutory language. Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86
(1983) (quoting E. Transp. Co. v. United States, 272 U.S. 675, 686 (1927)). Since the doctrine is
jurisdictional in nature, “the plaintiff bears the burden of establishing that her claims fall within
an applicable waiver.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). Here, the
United States has not expressed its consent to be sued. Therefore Garcia, as plaintiff in this case,
bears the burden of establishing an applicable waiver of sovereign immunity. She has failed to
successfully assert any such waiver in her complaint.
Garcia contends 28 U.S.C § 1346(f) is the applicable express waiver of sovereign
immunity but asserts this statute as a basis for subject matter jurisdiction in her memorandum,
not her complaint. Doc. 21 at 6. Similarly, Garcia suggests that § 1346(f) formed the genesis of
the Government’s removal of this case from New York state court to this Court. Id. However,
such an assumption does not have legal merit for deciding subject matter jurisdiction since it is
the plaintiff, not the defendant, who bears the burden of establishing that her claims are within a
specific waiver and Garcia has not done so in her complaint.
In any event, Garcia’s claim fails on the merits. Title 28 U.S.C § 1346(f) provides that
“[t]he district courts shall have exclusive original jurisdiction of civil actions under section
2409a to quiet title to an estate or interest in real property in which an interest is claimed by the
United States.” 28 U.S.C § 1346(f). However, as the Government correctly points out,
“[w]ithout colorable title, [plaintiff] has no basis for a quiet-title suit.” Harrell v. United States,

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13 F.3d 232, 234 (7th Cir. 1993). Section 2409a provides it does not “apply to or affect actions
which may be or could have been brought under section . . . 2410 of this title.” 28 U.S.C §
2409a(a). In turn, 28 U.S.C § 2410 states that the United States may be named a party in any
civil action suit in any district court to quiet title with respect to property on which “the United
States has or claims a mortgage or other lien.” Id. § 2410(a). In this case, the United States has
liens on the Apartment and so, § 2410 is applicable. Since § 2410 is an explicit exception to §
2409a, § 1346(f) is not applicable as an express waiver of the United States sovereign immunity.
Therefore, Garcia has failed to establish subject matter jurisdiction for this Court to hear
her case and her complaint must be dismissed in its entirety.
B. Failure to State a Claim
Even if the Court had subject matter jurisdiction over this case, it would still dismiss the
complaint for failure to state a claim. The Government argues that Garcia’s claim to the
Apartment must be dismissed because the Divorce Agreement not only recognized the
Apartment as marital property, but in it she “unequivocally relinquished any and all of [her]
interests in the Apartment.” Doc. 18 at 9. The Government also argues that the Divorce
Agreement contradicts Garcia’s assertion that the Apartment became marital property only after
judgment in the Foreclosure Action. Id.
The Divorce Agreement contained a list of Nassar and Garcia’s assets and liabilities,
including that which the couple deemed marital property subject to equitable distribution. Doc.
10-1 at 34. The Apartment, included in this list under the heading “Nassar Family Trust—Owns
New York Property and Bank Account,” was marked as marital property. Id. Furthermore, the
Apartment was marked off in favor of Nassar, as indicated by the “X” mark in the “Husband”
column, with a blank space in the “Wife” column for Garcia. Id.

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Garcia states in her complaint that she did not make a claim for the Apartment because she
believed the Trust owned it and that it was therefore beyond her reach. Compl. ¶ 10. However,
since the Apartment was included in a list of both Nassar and Garcia’s assets and liabilities and
subsequently marked off in favor of Nassar, Garcia cannot successfully say she believed the
Trust owned the Apartment. As such, Garcia’s assertion that she was unaware the Apartment
was not marital property subject to equitable distribution is without merit.
The Divorce Agreement explicitly states that both Nassar and Garcia agree to “releas[e]
the other from all actions, claims, rights or demands whatsoever in law or in equity that either of
the Parties ever had, or now has, against the other including, without limitation section . . .
equitable distribution of property.” Doc. 10-1 at 19. The Divorce Agreement also states that
“the law of the State of Florida shall be the operative and binding law for purposes of
interpretation, if any, and enforcement and/or modification of this Settlement Agreement.” Id. at
26.
Garcia argues that the Divorce Agreement is subject to reformation since there was mutual
mistake between her and Nassar in their belief that the Apartment was outside the scope of
equitable distribution. Doc. 21 at 8. Under Florida law, a marital settlement agreement is
“binding and governs the rights and obligations of the parties upon divorce.” Kuchera v.
Kuchera, 983 So. 2d 776, 777 (Fla. 4th Dist. Ct. App. 2008). Florida law further provides that
“property settlement agreements between husband and wife made in contemplation of a divorce
are, in the absence of fraud, coercion, or overreaching, valid and binding on the parties and
should be respected by the courts.” Young v. Young, 322 So. 2d 594, 596 (Fla. 4th Dist. Ct. App.
1975). Furthermore, the party who seeks to set aside the agreement bears the burden of
demonstrating fraud, concealment, or overreaching through competent evidence. Zakoor v.

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Zakoor, 240 So. 2d 193, 197 (Fla. 4th Dist. Ct. App. 1970) (citing Pemelman v. Pemelman, 186
So. 2d 552, 554 (Fla. 2nd Dist. Ct. App. 1966)). Garcia fails to provide competent evidence that
the Divorce Agreement should be set aside for the reasons listed above.
Therefore, Garcia has failed to state a claim upon which relief can be granted pursuant to
Federal Rules of Civil Procedure 12(b)(6).
C. Failure to Intervene
As an additional reason for dismissal, the Government argues this case concerns the same
res as the previous Foreclosure Action which this Court has already adjudicated. Doc. 24 at 3.
The “prior pending action doctrine,” as applicable here, provides that courts must avoid
duplicative litigation between the same parties addressing the same issues. Andy Stroud, Inc. v.
Brown, 08 Civ. 8246 (HB), 2009 WL 539863, at *34 (S.D.N.Y. Mar. 4, 2009) (quoting Curcio v.
Hartford Fin. Servs. Group, 472 F. Supp. 2d 239, 243 (D. Conn. 2007) (“[A] court may dismiss
an action when a prior pending action has been filed as long as the controlling issues in the
dismissed action will be determined in the other lawsuit.”)).
To obtain a temporary restraining order against the Government’s foreclosure of the
Apartment, Garcia would have needed to file a motion to intervene under Rule 24(a)(2) of the
Federal Rules of Civil Procedure, which states the court will permit a timely motion to intervene
for anyone who “claims an interest relating to the property or transaction that is the subject of the
action, and is so situated that disposing of the action may as a practical matter impair or impede
the movant's ability to protect its interest, unless existing parties adequately represent that
interest.” Fed. R. Civ. P. 24(a)(2). However, Garcia’s intervention would have been untimely in
any event.

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“The timeliness of an intervention motion is a matter left to the district court’s discretion.”
Sherman v. Town of Chester, No. 12 Civ. 647 (ER), 2015 WL 1473430, at *16 n.20 (S.D.N.Y.
Mar. 31, 2015). “In determining whether a motion to intervene is timely, courts consider (1)
how long the applicant had notice of the interest before it made the motion to intervene; (2)
prejudice to existing parties resulting from any delay; (3) prejudice to the applicant if the motion
is denied; and (4) any unusual circumstances militating for or against a finding of timeliness.”
Laroe Estates, Inc. v. Town of Chester, 828 F.3d 66–67 (2d Cir. 2016) (quoting United States v.
Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir. 1994)). “Rule 24(a) requires courts to measure
timeliness from the moment when the applicant had actual or constructive notice of its
unrepresented interest.” Kamden-Ouaffo v. Pepsico, Inc., 314 F.R.D. 130, 135 (S.D.N.Y 2016)
(citation omitted). “In most instances, a motion to intervene based on a claim that was known,
but not acted upon, for a period of years would be untimely.” Aristocrat Leisure Ltd. v.
Deutsche Bank Tr. Co. Ams., 262 F.R.D. 348, 353 (S.D.N.Y. 2009).
The Government correctly states that “the most significant criterion is whether the delay in
moving for intervention has prejudiced any of the existed parties.” Hartford Fire Ins. Co. v.
Mitlof, 193 F.R.D. 154, 160 (S.D.N.Y. 2000). Also, “post-judgment intervention is generally
disfavored because it fosters delay and prejudice to existing parties.” Farmland Dairies v.
Comm’r, 847 F.2d 1038, 1044 (2d Cir. 1998).
Here, Garcia had constructive notice of her allegedly unrepresented interest by at least
2013, when the Foreclosure Action commenced, and actual notice no later than November 2014,
when she and her daughter Alyce Nassar discussed Alyce’s deposition for that case. Yet, her
complaint was filed many years later, in February 2018. Since Garcia has failed to satisfy the

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