Opinion
05 Civ. 10456 (RWS).
December 22, 2006
RENZER BELL, Plaintiff Pro Se, Jacksonville, FL.
C. SIDNEY LESTER, ESQ., Defendant Pro Se, New York, NY.
OPINION
Defendant Charles Sidney Lester ("Lester") has moved pursuant to Rule 12(b)(6), Fed.R.Civ.P., to dismiss the complaint ofpro se plaintiff Renzer Bell ("Bell"). For the reasons set forth below, the motion is construed as a motion pursuant to Rule 12(c) and is granted, and the complaint is dismissed with prejudice as to both Lester and co-defendant James L. Hubbert ("Hubbert") (collectively, the "Defendants").
Prior Proceedings
Bell filed his complaint in this action (the "Complaint") on December 13, 2005, alleging diversity jurisdiction and asserting four causes of action: fraud and fraudulent misrepresentation, malpractice and a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962. Lester filed an answer to the Complaint on April 18, 2006.
The instant motion was filed on May 26, 2006, and was marked fully submitted on July 19, 2006.
The Facts
For the purposes of this motion, all well-pleaded allegations are accepted as true. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). In addition to the allegations contained in the Complaint, the court may refer "to documents attached to the complaint as an exhibit or incorporated in it by reference, to matters of which judicial notice may be taken, or to documents either in plaintiffs possession or of which plaintiffs had knowledge and relied on in bringing suit."Brass v. Am. Film Tech., Inc., 987 F.2d 142, 150 (2d Cir. 1993);see also Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991). Consideration of documents subject to judicial notice does not necessarily convert a motion to dismiss into a motion for summary judgment. See Graal Enterp., Ltd. v. Desourdy Int'l 1949 Inc., No. 95 Civ. 0752 (LMM), 1996 WL 353003, at *3 (S.D.N.Y. June 26, 1996) (court may consider pleadings and "facts that are capable of accurate and ready determination") (internal quotation marks omitted). Rule 201 of the Federal Rules of Evidence generally permits a court to take judicial notice of any facts "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b)(2).
The facts as set forth below are drawn from the allegations contained in the Complaint, from the attached exhibits, and from documents subject to judicial notice, and do not constitute findings of the Court.
In or around November 1992, Bell retained the Defendants' law firm, known as Lester, Hubbert Gill, P.C. ("LH G"), to prosecute a cause of action in New York Supreme Court. Defendants' then — law partner, LeRoi Gill ("Gill"), neglected to respond to a summary judgment motion in that matter, and judgment was subsequently entered against Bell on default. Gill failed to advise Bell of the default, instead representing on several occasions between October 1993 and July 1994 that the summary judgment motion was still pending. Bell discovered these misrepresentations in July 1994, and discharged LH G shortly thereafter.
Following Gill's suspension from the practice of law for three years on October 3, 1996, the Defendants continued to practice under the name of Lester Hubbert, P.C. ("L H").
On March 26, 1998, Bell filed an action in New York Supreme Court against Gill, alleging breach of contract, breach of fiduciary duty, fraud and malpractice. On May 24, 2000, Bell was awarded a default judgment in the amount of $138,533.67 against Gill and L H. No judgment was entered against Hubbert or Lester personally.
Bell discovered in or about July 2000 that neither LH G nor L H was incorporated as a professional corporation.
Bell filed an action in New York Supreme Court on July 14, 2000, alleging malpractice and fraud by Hubbert and Lester. Upon the default of Hubbert and Lester, a judgment in the amount of $142,037.23 was filed on October 2, 2001.
Lester filed for bankruptcy on December 12, 2001. By order dated July 9, 2003, the Honorable Novalyn L. Winfield of the United States Bankruptcy Court for the District of New Jersey held that the judgment of $142,037.23 was non-dischargeable debt pursuant to 11 U.S.C. § 523(a)(2). On or about July 23, 2003, Lester moved to voluntarily dismiss his bankruptcy petition.
By order to show cause filed in the New York Supreme Court, Lester succeeded in having the $142,037.23 judgment opened. The underlying action against Hubbert and Lester, originally filed on July 14, 2000, was dismissed as time-barred by opinion of the Honorable Richard F. Braun of the New York Supreme Court. Bell v. Hubbert, No. 115509/00 (N.Y.Sup.Ct. Nov. 3, 2004).
The Appropriate Standards For A Motion To Dismiss
Because a responsive pleading has already been interposed in this matter, the instant motion must be construed as a motion for judgment on the pleadings under Rule 12(c) rather than a motion to dismiss under Rule 12(b). See Fed.R.Civ.P. 12(b), (c);Westmarc Communications, Inc. v. Connecticut Dep't of Pub. Util. Control, 807 F. Supp. 876, 879 n. 10 (D. Conn. 1990) (holding that Rule 12(b)(6) motions filed after close of pleadings "must be construed as motions for judgment on the pleadings, under Rule 12(c)"). This does not affect the Court's consideration of the motion, however, as "[t]he standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that of a Rule 12(b)(6) motion for failure to state a claim." Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). As such, the Court must construe the complaint liberally, "accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor," Chambers v. Time Warner, 282 F.3d 147, 152 (2d Cir. 2002) (citing Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001)), although "mere conclusions of law or unwarranted deductions" need not be accepted. First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 771 (2d Cir. 1994). Dismissal is only appropriate when "it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him or her to relief." Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000).
Although the pleadings of pro se plaintiffs are liberally construed, "[d]ismissal under Rule 12(b)(6) is proper if the complaint lacks an allegation regarding an element necessary to obtain relief. . . ." 2 Moore's Federal Practice § 12.34[4][a], at 12-72.7 (2004). The "duty to liberally construe a plaintiff's complaint [is not] the equivalent of a duty to re-write it."Id., § 1234[1][b], at 12-61.
Counts One And Three Are Barred By Res Judicata And The Relevant Statutes of Limitations
The full faith and credit statute, 28 U.S.C. § 1738, requires federal courts to give preclusive effect to state court judgments. "Under the doctrine of res judicata, or claim preclusion, `[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.'" St. Pierre v. Dyer, 208 F.3d 394, 399 (2d Cir. 2000) (quoting Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981)); see also Maharaj v. Bankamerica Corp., 128 F.3d 94, 97 (2d Cir. 1997) (noting that the application of the doctrine of res judicata is the same under both New York law and federal law). The doctrine of res judicata is intended to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Allen v. McCurry, 449 U.S. 90, 94 (1980).
"Res judicata bars litigation of any claim for relief that was available in a prior suit between the parties or their privies, whether or not the claim was actually litigated." Irish Lesbian Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir. 1998). In order to establish the defense of res judicata, "a party must show that (1) the previous action involved an adjudication on the merits; (2) the previous action involved the parties or those in privity with them; (3) the claims in subsequent actions were, or could have been raised in the prior action." Pike v. Freeman, 266 F.3d 78, 91 (2d Cir. 2001) (quoting Monahan v. N.Y.C. Dep't. of Corr., 214 F.3d 275, 284-85 (2d Cir. 2000)).
As the Second Circuit found in Pharr v. Evergreen Garden, Inc., 123 Fed. App'x 420 (2d Cir. 2005), "a judgment dismissing a claim as barred by a statute of limitations is considered by [New York] state courts to be a judgment on the merits with full res judicata effect." Id. at 423 (citing Bray v. New York Life Ins., 851 F.2d 60, 64 (2d Cir. 1988); Gargiul v. Tompkins, 790 F.2d 265, 269 (2d Cir. 1986); Meegan S. v. Donald T., 475 N.E.2d 449 (N.Y. 1984); Smith v. Russell Saqe Coll., 429 N.E.2d 746 (N.Y. 1981)); see also Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 228 (1995) (holding under federal law that the dismissal of a claim as time-barred amounts to a merit-based adjudication for the purposes of res judicata analysis); PRC Harris, Inc. v. Boeing Co., 700 F.2d 894, 896 (2d Cir. 1983) (same).
The first and third causes of action in the Complaint allege fraud and legal malpractice arising from the representation of Bell by LH G from about November 1992 to August 1994. These claims were squarely addressed by the New York Supreme Court on November 4, 2004, when the Honorable Richard F. Braun dismissed identical claims against the Defendants as barred by the relevant statutes of limitations. Bell v. Hubbert, No. 115509/00 (N.Y.Sup.Ct. Nov. 3, 2004). The state-court action involved the same parties before the Court on the instant motion, and Justice Braun's decision constitutes an adjudication on the merits as to the precise claims raised in counts one and three of the Complaint. These counts are therefore barred by res judicata and must be dismissed.
Even if counts one and three were not barred by res judicata, they would have to be dismissed as untimely. As Justice Braun found, the statutes of limitations for fraud and legal malpractice on counts one and three began to run no later than August 18, 1994, when Bell has stated he discharged LH G. The Complaint was not filed until December 13, 2005, long after the statutes of limitations had run.
The Second Count Fails To State A Claim Of Fraud
The second cause of action alleges that Defendants defrauded Bell by holding themselves out as Lester Hubbert, P.C., despite the fact that no such professional corporation had been duly organized. The elements of a common-law fraud claim under New York law are "(1) a material misrepresentation or omission of fact (2) made by defendant with knowledge of its falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and (5) resulting damage to the plaintiff." Crigger v. Fahnestock Co., 443 F.3d 230, 234 (2d Cir. 2006). Bell has failed to allege any legally cognizable damages resulting from the Defendants' alleged misrepresentation, and therefore the second count of the Complaint must be dismissed.
The Fourth Count Fails To State A Claim Of A Civil RICO Violation
The Civil RICO Act, 18 U.S.C. § 1962, provides a private cause of action for those injured by another's pattern of racketeering activity. To state a claim for civil damages under section 1962, a plaintiff has a twofold pleading burden. First, the plaintiff must allege that the defendant has violated the substantive RICO statute, 18 U.S.C. § 1962. See Moss v. Morgan Stanley Inc., 719 F.2d 5, 17 (2d Cir. 1983). Second, the plaintiff must allege that he or she was injured in his or her business or property by reason of the violation of section 1962. See 18 U.S.C. § 1964(c);Moss, 719 F.2d at 17.
To plead a violation of the substantive RICO statute, a plaintiff must allege the existence of seven constituent elements: "(1) that the defendant (2) through the commission of two or more acts (3) constituting a `pattern' (4) of `racketeering activity' (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an `enterprise' (7) the activities of which affect interstate or foreign commerce." Id. at 17 (citing 18 U.S.C. § 1962(a)(c)); The Jordan (Bermuda) Inv. Co., Ltd. v. Hunter Green Invs. Ltd., 154 F. Supp. 2d 682, 690 (S.D.N.Y. 2001). Section 1961(1) sets forth various criminal violations defined by state and federal law that may constitute "racketeering activity" under Section 1962. See 18 U.S.C. § 1961(1).
"Civil RICO is an unusually potent weapon — the litigation equivalent of a thermonuclear device." Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44 (1st Cir. 1991). "Because the `mere assertion of a RICO claim . . . has an almost inevitable stigmatizing effect on those named as defendants, . . . courts should strive to flush out frivolous RICO allegations at an early stage of the litigation.'" Katzman v. Victoria's Secret Catalogue, 167 F.R.D. 649, 655 (S.D.N.Y. 1996) (quoting Fiqueroa Ruiz v. Alegria, 896 F.2d 645, 650 (1st Cir. 1990)).
Bell has alleged that Defendants engaged in racketeering activity in holding themselves out as Lester, Hubbert Gill, P.C., and Lester Hubbert, P.C. Even if this allegation were sufficient to state a cause of action for fraud, it does not describe a state offense that falls within the definition of "racketeering activity," see 18 U.S.C. § 1961(1)(A), and thus as a matter of law does not amount to a properly pleaded violation of section 1962.
Bell also has alleged that defendant Lester committed bankruptcy fraud constituting racketeering activity by fraudulently conveying an equity interest in his primary residence to his wife, and hiding certain other unspecified assets. Even assuming,arguendo, that these alleged acts are sufficient to constitute a pattern of racketeering activity, they do not state a civil RICO claim because Bell has failed to allege a cognizable injury stemming from a violation of any of the four subsections of section 1962. See 18 U.S.C. § 1962(a)-(d). Accordingly, count four of the Complaint must be dismissed.
Conclusion
Although this Court generally permits amendment of a feepaid action to cure any defects before dismissing the case, Hughes v. Albany, 76 F.3d 53 (2d Cir. 1996), there is no need to do so here as Bell presents no arguably meritorious issue. See Mallard v. United States Dist. Court, 490 U.S. 296, 307-08 (1989) ("Section 1915 . . . authorizes courts to dismiss a `frivolous or malicious' action, but there is little doubt they would have power to do so even in the absence of this statutory provision."); cf. Pillay v. Immigration Naturalization Serv., 45 F.3d 14, 17 (2d Cir. 1995) (per curiam) (discussing appellate court's inherent authority to dismiss meritless and/or frivolous fee-paid cases). Repleading would also be inappropriate here in light of Bell's "history of abusing the process of this and other courts by repeatedly filing actions based on the same allegations." Malley v. N.Y.C. Bd. of Educ., No. 94 Civ. 7186 (JFK), 1997 WL 570501 (Sept. 15, 1997) (enjoining plaintiff from filing further complaints in any federal court based on given allegations without prior permission). In addition to filing several state court complaints alleging fraud and malpractice on the part of Defendants, Bell has been a frequent litigant in this District. In the last three years, he has filed at least eleven complaints, many involving similar facts and allegations. See Bell v. Schaeffer Buick BMW, Inc., No. 03 Civ. 10315 (PKC) (FM) (S.D.N.Y. filed Dec. 31, 2003); Bell v. Classic Chevrolet/Buick and BMW, Inc., No. 04 Civ. 0693 (PKC) (S.D.N.Y. filed Jan. 29, 2004); Bell v. Zavell, No. 04 Civ. 9733 (RWS) (S.D.N.Y. filed Dec. 10, 2004); Bell v. Gordon, No. 05 Civ. 2163 (NRB) (S.D.N.Y. filed Feb. 4, 2005); Bell v. Stephens, No. 05 Civ. 7182 (LTS) (RLE) (S.D.N.Y. filed Aug. 12, 2005); Bell v. Hubbert, No. 05 Civ. 10456 (RWS) (S.D.N.Y. filed Dec. 13, 2005); Bell v. Gotham Process Service, Inc., No. 06 Civ. 0470 (JGK) (S.D.N.Y. filed Jan. 23, 2006); Bell v. South Bay European Corp., No. 06 Civ. 0472 (PKC) (GWG) (S.D.N.Y. filed Jan. 23, 2006); Bell v. Manhattan Motorcars, Inc., No. 06 Civ. 4972 (GBD) (S.D.N.Y. filed June 28, 2006); Bell v. Carlsen Motor Cars, Inc., No. 06 Civ. 4974 (LBS) (DFE) (S.D.N.Y. filed June 28, 2006); Bell v. Brace Engineering and Investment Corp., No. 06 Civ. 5742 (KMK) (S.D.N.Y. filed July 28, 2006).
For the reasons stated above, Lester's motion is granted and the Complaint is dismissed with prejudice as to both Defendants.
It is so ordered.
Submit judgment on notice.