Miller et al v. Geidel et al

Filing 17

DECISION AND ORDER granting 8 Motion to Remand to State Court with the exception of their request for related costs and attorneys fees, which is hereby denied; finding as moot 11 Motion to Dismiss. The Clerk of the Court is directed to transfer this case to the New York State Supreme Court, County of Erie, and is directed thereafter to close this case.. Signed by Hon. Michael A. Telesca on 12/16/16. (JMC)-CLERK TO FOLLOW UP-

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

GARY J. MILLER, JR. and KATHLEEN
A. MILLER,

No. 1:13-CV-00090 (MAT)
DECISION AND ORDER

Plaintiff,
-vsTIMOTHY J. GEIDEL, GEORGETOWN
CAPITAL GROUP, INC., and ROYAL
ALLIANCE ASSOCIATES, INC.,
Defendants.

I.

Introduction
Plaintiffs Gary J. and Kathleen A. Miller (“plaintiffs”)

brought

this

suit

alleging

various

state

law

claims

against

defendants for money damages resulting from a fraudulent financial
scheme for which defendant Timothy Geidel (“Geidel”) was criminally
convicted in April 2012.1 On August 29, 2012, plaintiffs filed a
summons with notice in New York State Supreme Court, Erie County.
Defendants Georgetown Capital Group, Inc. (“Georgetown”) and Royal
Alliance Associates (“Royal Alliance”) were served with the summons
and notice approximately four months later.2
The summons with notice stated that the nature of the action
was:
[A] claim for money damages arising from monies received
by the Defendant, Timothy J. Geidel, from the Plaintiffs

1

2

See United States v. Geidel, 11-CR-12S.

There is no indication that Geidel was ever served in this
matter.

in exchange for fraudulent investments / securities /
certificates of deposit / promissory notes, during a time
when Defendant, Timothy J. Geidel, was employed by,
licensed, or otherwise affiliated with and / or an agent
of Defendant Georgetown Capital Group, Inc. and Royal
Alliance Associates, Inc.
Doc. 1 at 8. As a result, the notice alleged that defendants were
liable for “fraud, unjust enrichment, deceptive business practice,
actual

authority,

apparent

authority,

Respondeat

Superior,

negligence and vicarious liability.” Id. at 9.
All three defendants jointly removed the matter to this Court
on January 28, 2013. Doc. 1. Defendants asserted in their notice of
removal

that

federal

question

jurisdiction

exists

because

plaintiffs’ claims, upon information and belief, would be the same
or similar as those raised in previously-filed federal civil
actions against the same defendants. Id. at ¶ 1. The complaints in
those actions alleged violations of the Securities and Exchange Act
of 1934 as well as state law claims of fraud, unjust enrichment,
and conversion. See Forti v. Geidel et al., No. 10–CV–793, Doc. 1;
DiRosa v.

Geidel

et al.,

No.

11–CV–49, Doc.

1.

Accordingly,

defendants argued that plaintiffs’ claims in the instant action
“appear to involve the same federal securities statutes at issue in
the Forti and DiRosa litigation, including whether Georgetown and
Royal

Alliance

Associates,

Inc.,

are

liable

as

‘controlling

persons’ under 15 U.S.C. § 78t.” Doc. 1 at ¶ 7. As a result,
jurisdiction was asserted based on both 28 U.S.C. § 1331 (federal

2

question)

and

§

1337

(action

arising

under

Act

of

Congress

regulating commerce).
No action was taken by plaintiffs following removal for six
months, prompting this Court to order plaintiffs to show cause why
the case should not be dismissed. Doc. 6. Plaintiffs’ counsel
averred that he believed the matter was being held in abeyance due
to the Court’s automatic referral of this matter to mediation and
the pending resolution of certain issues in Forti and DiRosa.
Doc. 7 (Affidavit of Michael Morse, Esq.) at ¶¶ 6–13. The Court
allowed the case to proceed, and plaintiffs moved to remand the
matter back to state court. Doc. 8. Defendants Georgetown and Royal
Alliance each opposed the motion to remand, and jointly cross-moved
to dismiss the case pursuant to Rule 4(m) of the Federal Rules of
Civil Procedure for the failure to timely serve a complaint.
Docs. 10, 11.
II.

Discussion
On August 14, 2014, this Court (Skretny, J.) addressed a case

brought by a different plaintiff against the same defendants as
here, with essentially identical facts and procedural history.
Loiacono v. Geidel, 2014 WL 4057436, *4 (W.D.N.Y. Aug. 14, 2014).
In that case, the Court granted plaintiffs’ motion to remand the
matter to state court and denied defendants’ joint cross-motion to
dismiss for improper service. Because the facts of this case are

3

directly analogous, the same reasoning applied in Loiacono applies
to this case.
Although defendants argue that their motion to dismiss for
improper service should be reached prior to the Court reaching the
threshold

issue

of

subject

matter

jurisdiction,

this

Court

addresses the jurisdictional question first “because, if dismissal
is warranted on this ground, any additional defenses or objections
become moot.” Loiacono, 2014 WL 4057436, at *2 (citing Rhulen
Agency, Inc. v. Alabama Ins. Guar. Ass’n, 896 F.2d 674, 678
(2d Cir. 1990)).
Regarding plaintiffs’ motion to remand, “[w]here, as here,
jurisdiction is asserted by a defendant in a removal petition, it
follows that the defendant has the burden of establishing that
removal is proper.” United Food & Comm. Workers Union v. CenterMark
Props. Meriden Square, 30 F.3d 298, 301 (2d Cir. 1994). Removal
jurisdiction

is

strictly

construed

in

light

of

the

limited

jurisdiction of federal courts and out of respect for states’
rights, with all doubts resolved against removal. In re Methyl
Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 488 F.3d 112,
124 (2d Cir. 2007).
In Loiacono, defendants made the same argument they raise
here, namely, that this Court has subject matter jurisdiction over
the present action based on the existence of a substantial federal
question. In Loiacono, the Court found that this argument was

4

“undeveloped, inasmuch as [d]efendants [did] not appear to argue
that [p]laintiffs’ state law claims [were] preempted by federal
securities law[, and in] any event, such an argument would be
without merit here.” 2014 WL 4057436, at *3 (citing 15 U.S.C.
§ 78bb(a)(2), (f) (providing that with the exception of certain
class actions, the rights and remedies afforded by the Securities
and Exchange Act of 1934 “shall be in addition to any and all other
rights and remedies that may exist at law or in equity”)).
Moreover, as in Loiacono, “here there are no allegations in
the proposed complaint that [d]efendants ‘conspired to violate the
federal securities laws’ or failed to perform a statutory duty
created under federal law raising a substantial question of federal
law.” Id. at *4 (citing D’Alessio v. New York Stock Exch., 258 F.3d
93, 101–02 (2d Cir. 2001), cert. denied, 534 U.S. 1066.
Plaintiffs’ motion to remand is therefore granted. Plaintiffs’
request

pursuant

to

28

U.S.C.

§

1447(c)

for

costs

and

fees

associated with the motion to remand is, however, denied. Although
defendants

acted

prematurely

and

ultimately

without

grounds,

plaintiffs compounded the delay by failing to take any action for
over six months and, as of this date, the complaint still has not
been filed or served on defendants.
III. Conclusion
Defendants failed to meet their burden of establishing that
federal

subject

matter

jurisdiction

5

exists

in

this

case.

Plaintiffs’ motion to remand (doc. 8) is therefore granted with the
exception of their request for related costs and attorney’s fees,
which is hereby denied. Defendants’ motion to dismiss (doc. 11) is
denied as moot. The Clerk of the Court is directed to transfer this
case to the New York State Supreme Court, County of Erie, and is
thereafter directed to close this case.

ALL OF THE ABOVE IS SO ORDERED.

S/Michael A. Telesca
HON. MICHAEL A. TELESCA
United States District Judge
Dated:

December 16, 2016
Rochester, New York.

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