Opinion
22-CV-9493 (AT) (VF)
08-01-2024
TZVEE WOOD; ANDREA MALESTER; ALEXIS GOTTSCHALK Plaintiffs, v. MUTUAL REDEVELOPMENT HOUSES, INC., et al., Defendants.
TO: THE HONORABLE ANALISA TORRES, United States District Judge.
REPORT AND RECOMMENDATION
VALERIE FIGUEREDO, UNITED STATES MAGISTRATE JUDGE
On November 3, 2022, Plaintiffs Tzvee Wood, Andrea Malester, and Alexis Gottschalk commenced this action against Mutual Redevelopment Houses, Inc. (“Mutual”) and related individuals(the “Mutual Defendants”); the City of New York, Eric Adams, in his capacity as the Mayor of the City of New York, and Adolfo Carrion, Jr., in his capacity as the Commissioner of the City of New York Housing Preservation and Development (the “City Defendants”); and Continental Casualty Company (“Continental,” and collectively with City Defendants and Mutual Defendants, the “Defendants”). On March 28, 2024, one day before their deadline to file oppositions to the three pending motions to dismiss filed by Defendants, Plaintiffs filed a motion pursuant to Federal Rule of Civil Procedure 41(a)(2) for voluntary dismissal without prejudice. See ECF Nos. 70, 72, 73. All Defendants oppose a dismissal without prejudice and instead request that the case be dismissed with prejudice. See ECF Nos. 76-77, 89. Alternatively, Defendants request that the Rule 41(a)(2) motion be denied and the case dismissed on the merits pursuant to Federal Rule of Civil Procedure 12 for the reasons raised by Defendants in their respective motions to dismiss. See ECF Nos. 36-38, 39-40, 41-43. The Mutual Defendants also seek an anti-filing injunction, barring Plaintiffs from commencing any future actions arising from the allegations and claims at issue in this action and the prior actions without leave of this Court. See ECF No. 43 at 35. For the reasons explained below, I recommend that Plaintiffs' Rule 41(a)(2) motion be DENIED. I further recommend that Defendants' respective motions to dismiss be GRANTED and the case be dismissed pursuant to Rule 12 with prejudice. Finally, I recommend that the Mutual Defendants' request for an anti-filing injunction be DENIED.
Plaintiffs named a number of employees and board members of Mutual as defendants. The named employees are Carmen Santiago, Ryan Dziedziech, Brendan Keany, Gena Feist. ECF No. 24 ¶¶ 46, 66, 68. The named board members of Mutual are Ambur Nicosia, Bette Levine, Fran Kaufman, Maarten de Kadt, Matthew Barile, Morris Benjamin, Robert Sikorski, Rocco Ottomanelli, Sarah Kahn, Sascha Tobacman-Smith, and Tracy Riposo-Cook. Id. ¶ 67.
BACKGROUND
Plaintiffs, who are proceeding pro so, filed this action on November 3, 2022. See ECF No. 1. On August 1, 2023, Plaintiffs filed their First Amended Complaint. See ECF No. 24 (“Am. Compl.”). Wood and Malester have previously brought a number of actions against the City and Mutual, among others, stemming from Wood's attempt to secure a Mitchell-Lama apartment at Mutual. See infra Section II(B)(1). Mutual owns and operates an income-limited housing cooperative complex in Manhattan under contract with the City's Department of Housing Preservation and Development. Am Compl. ¶¶ 58, 133-35. Following a 2003 lottery for the opportunity to apply for an apartment at Mutual, Wood was put on a waiting list for a one-bedroom apartment. Id. ¶¶ 510-11. In 2012, Wood rose to the top of the waiting list and alleges that he was skipped over and Mutual refused to offer him a one-bedroom apartment even though he established his income eligibility for an apartment. Id. ¶¶ 8, 242, 258, 260-61, 487, 496-99, 520. In short, Plaintiffs contend that they were discriminated against in the housing-application process. See e.g., id. ¶¶ 5, 9.
Article II of New York's Private Housing Finance Law, otherwise known as the Mitchell-Lama Housing Program, “promote[s] construction of so-called affordable housing by providing long-term, low-interest government mortgage loans to developers on the condition that the resulting development be subject to rent regulation.” United States v. Glenn Gardens Assocs. L.P., 534 Fed.Appx. 17, 19 (2d Cir. 2013).
On October 6, 2023, the City Defendants filed a motion to dismiss the First Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). See ECF Nos. 3638. On October 10, 2023, Continental also filed a motion to dismiss the First Amended Complaint under Rule 12(b)(6). See ECF Nos. 39-40. On the same day, the Mutual Defendants filed their motion to dismiss. See ECF Nos. 41-43. The Mutual Defendants also seek an antifiling injunction against Plaintiffs. See ECF No. 41 at 1-2.
Although Continental's memorandum of law is titled “Memorandum of Law in Support of Motion for Summary Judgment,” see ECF No. 40 at 1, Continental's notice of motion and attached declaration make clear that Continental seeks an order pursuant to Federal Rule of Civil Procedure 12(b)(6). See ECF Nos. 39, 39-1.
The Mutual Defendants sought dismissal of the First Amended Complaint pursuant to Federal Rules of Civil Procedure 12, for failure to state a claim, as well as under Federal Rules of Civil Procedure 4(m) and 41, based on Plaintiffs' failure to serve the Mutual Defendants with the summons and complaint. See ECF No. 43 at 12-15.
Plaintiffs sought and obtained three extensions of their time to oppose the motions to dismiss. See ECF Nos. 58-59, 62-63, 68-70. On February 25, 2024, Plaintiffs requested a fourth extension of time to file their opposition brief. See ECF No. 71. The Court denied the extension request and Plaintiffs' deadline to oppose the motions to dismiss remained March 29, 2024. See ECF No. 72. Plaintiffs did not file an opposition to the motions to dismiss on March 29.
Instead, on March 28, 2024-one day before their deadline to file an opposition to the motions to dismiss-Plaintiffs filed a letter motion seeking a voluntary dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(2). See ECF No. 73 at 1. Plaintiffs sought dismissal due to Wood's ongoing health condition which Plaintiffs stated impacted Wood's “daily life significantly and Plaintiffs' ability to litigate” this case. Id. Plaintiffs did not provide any details about Wood's health condition, and they did not explain how the health condition prevented them from litigating their claims.
Plaintiffs' letter was dated March 27, 2024, and it was filed on the docket on March 28, 2024. See ECF No. 73.
In a letter filed on April 5, 2024, the Mutual Defendants agreed that the case should be dismissed but requested dismissal with prejudice for the reasons stated in their motion to dismiss and because Plaintiffs are vexatious litigants. See ECF No. 76 at 1-3. The Mutual Defendants also requested that the Court enter an anti-filing injunction against Plaintiffs, barring them from commencing any future action arising from the allegations and claims at issue in this and other related cases without leave of this Court. Id. Continental also filed a letter on April 5, 2024, agreeing that dismissal was appropriate but seeking dismissal with prejudice for the reasons stated in their own motion to dismiss. See ECF No. 77 at 1-2. On June 11, 2024, the City Defendants also submitted a letter stating that if the Court granted Plaintiffs' Rule 41 motion, dismissal should be with prejudice, or alternatively, the Court should dismiss the case on the merits for the reasons stated in the motions to dismiss. See ECF No. 89 at 1-2.
On June 3, 2024, the Parties attended a conference before the undersigned to discuss, in part, Plaintiffs' request for dismissal without prejudice under Rule 41(a)(2) and whether dismissal under a different subsection of Rule 41, subsection (a)(1), was permissible. See ECF No. 95 at 4-6, 8-11. Following the conference, Defendants submitted letter briefs addressing whether Plaintiffs could obtain dismissal without prejudice under Rule 41(a)(1). See ECF Nos. 87, 88-89, 91, 95. On June 5, 2024, the Court issued an order directing Plaintiffs to file an opposition to the motions to dismiss by June 21, 2024, and indicating that no further extensions of that deadline would be granted. See ECF No. 87. On June 12, 2024, the Court directed Plaintiffs, if they wished to do so, to move for voluntary dismissal under Rule 41(a)(1) by June 28, 2024. See ECF No. 90. Plaintiffs did not file a motion for dismissal without prejudice under Rule 41(a)(1) by the stated deadline. Plaintiffs also did not file an opposition to the motions to dismiss by the court-ordered deadline. In a letter dated June 17, 2024, Plaintiffs reiterated their request for dismissal without prejudice under Rule 41(a)(2). See ECF No. 91 at 3-13.
The Court raised the issue of the applicability of Rule 41(a)(1) because it appeared to apply given the procedural posture of the case, and dismissal without prejudice under that provision does not require a court order. See ECF No. 95 at 4, 6.
In their June 17, 2024 letter, Plaintiffs respond in one paragraph to Continental's argument that Plaintiffs have failed to state a claim against it. See ECF No. 91 at 15.
LEGAL STANDARD
A. Voluntary Dismissal by Court Order
A dismissal under Federal Rule of Civil Procedure 41(a)(2) “is not a dismissal as of right;” it requires court approval and “must be on terms that ‘the court considers proper.'” Rhoden v. Mittal, No. 18-CV-6613 (LDH) (SJB), 2020 WL 8620716, at *2 (E.D.N.Y. Oct. 26, 2020) (internal quotations omitted); see also Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990) (stating that a voluntary dismissal without prejudice is “not a matter of right”). Unless the court “order states otherwise, a Rule 41(a)(2) dismissal is without prejudice.” Zhi Zhong Qiu v. Diamond, No. 19-CV-2050 (ER), 2020 WL 2192712, at *1 (S.D.N.Y. May 6, 2020). The grant or dismissal of a motion under Rule 41(a)(2) is “within the sound discretion of the trial court.” Baby-Cakes Studio LLC v. Robinson, No. 20-CV-8779 (ALC) (KHP), 2021 WL 3604579, at *2 (S.D.N.Y. Aug. 12, 2021) (quoting Bynum v. Maplebear Inc., 209 F.Supp.3d 528, 535 (E.D.N.Y. 2016)).
In the Second Circuit, there are two tests for “determining whether dismissal without prejudice would be inappropriate.” Id. (quoting GFE Glob. Fin. & Eng'g Ltd. v. ECI Ltd. (USA), Inc., 291 F.R.D. 31, 36 (E.D.N.Y. 2013)). The first “test for dismissal without prejudice involves consideration of various factors, known as the Zagano factors.” Id. (quoting Kwan v. Schlein, 634 F.3d 224, 230 (2d Cir. 2011)). The Zagano factors include: “the plaintiff's diligence in bringing the motion; any ‘undue vexatiousness' on plaintiff's part; the extent to which the suit has progressed, including the defendant's efforts and expense in preparation for trial; the duplicative expense of relitigation; and the adequacy of plaintiff's explanation for the need to dismiss.” 900 F.2d at 14. The second test “examines whether the defendant would suffer some plain legal prejudice from a dismissal without prejudice, beyond the prospect of a second lawsuit.” Baby-Cakes Studio, 2021 WL 3604579, at *2 (quoting Camilli v. Grimes, 436 F.3d 120, 123 (2d Cir. 2006)).
B. Motion to Dismiss under Rule 12(b)(6)
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint “must plead ‘enough facts to state a claim to relief that is plausible on its face.'” Green v. Dep't of Educ. of City of N.Y., 16 F.4th 1070, 1076-77 (2d Cir. 2021) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). In determining if a claim is sufficiently plausible to withstand dismissal, a court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007); Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322, 324 (2007). However, a court does not credit “mere conclusory statements” or “[t]hreadbare recitals of the elements of a cause of action.” Iqbal, 556 U.S. at 678.
On a motion to dismiss under Rule 12(b)(6), the “court is not limited to the four corners of the complaint; it may also consider ‘documents attached to the complaint as an exhibit or incorporated in it by reference . . . matters of which judicial notice may be taken, or . . . documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit.” Exportaciones del Futuro S.A. de C.V. v. Iconix Brand Grp., Inc., No. 07-CV-4145 (LBS), 2007 WL 2981949, at *1 (S.D.N.Y. Oct. 10, 2007) (quoting Brass v. American Film Tech., Inc., 987 F.2d 142, 150 (2d Cir. 1993)). Moreover, a court is “obligated to construe a pro se complaint liberally,” Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009), and interpret pro se submissions “to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 475 (2d Cir. 2006) (per curiam) (citation, internal quotation marks, and emphasis omitted).
C. Motion to Dismiss under Rule 12(b)(1)
“[F]ederal courts are courts of limited jurisdiction and lack the power to disregard such limits as have been imposed by the Constitution or Congress.” Durant, Nichols, Houston, Hodgson, & Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009) (citation and internal quotation marks omitted). “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011) (citation and internal quotation marks omitted). A “plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). On a motion to dismiss under Rule 12(b)(1), “the defendant may challenge either the legal or factual sufficiency of the plaintiff's assertion of jurisdiction, or both.” Robinson v. Gov't of Malay., 269 F.3d 133, 140 (2d Cir. 2001).
When, as here, the case is at the pleading stage, in deciding a motion to dismiss under Rule 12(b)(1), a court must “accept as true all material allegations of the complaint, and . . . construe the complaint in favor of the complaining party.” Silva v. Farrish, 47 F.4th 78, 87 (2d Cir. 2022) (quoting Gladstone Realtors v. Vill. of Bellwood, 441 U.S. 91, 109 (1979) (alteration in original)). However, “argumentative inferences favorable to the party asserting jurisdiction should not be drawn.” Buday v. N.Y. Yankees P'ship, 486 Fed.Appx. 894, 895 (2d Cir. 2012) (summary order) (quoting Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)). The court “may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue.” Knight v. City of New York, No. 22-CV-3215 (VEC) (VF), 2022 WL 18587766, *3 (S.D.N.Y. Dec. 28, 2022), report and recommendation adopted, No. 22-CV-3215 (VEC), 2023 WL 371427 (S.D.N.Y. Jan. 24, 2023); see also Sullivan v. Syracuse Hous. Auth., 962 F.2d 1101, 1107 (2d Cir. 1992) (“Also to be considered in the standing analysis, along with the allegations made in the complaint, are such other facts and circumstances as may be evident from the record.”).
DISCUSSION
I. Plaintiffs' Rule 41(a)(2) motion
A. The Zagano test
The first test a court considers in determining whether dismissal without prejudice is appropriate under Rule 41(a)(2) examines various factors, known as the Zagano factors. Camilli, 436 F.3d at 123; Zagano, 900 F.2d at 14. The Zagano factors apply in situations, like here, where a plaintiff seeks to have “unfettered opportunity to renew claims” against a defendant. Camilli, 436 F.3d at 123. The Zagano factors include: “[1] the plaintiff's diligence in bringing the motion; [2] any ‘undue vexatiousness' on plaintiff's part; [3] the extent to which the suit has progressed, including the defendant's efforts and expense in preparation for trial; [4] the duplicative expense of relitigation; and [5] the adequacy of plaintiff's explanation for the need to dismiss.” Id. (quoting Zagano, 900 F.2d at 14). Courts have wide discretion in analyzing the Zagano factors and are not bound to analyze all of the Zagano factors or limit their consideration to only those factors. See Zagano, 900 F.2d at 14 (“[T]he denial of a motion to dismiss without prejudice will be reviewed only for abuse of discretion.”); Lebewohl v. Heart Attack Grill LLC, 890 F.Supp.2d 278, 304 (S.D.N.Y. 2012) (stating that courts have “great discretion in considering whether to grant a motion for voluntary dismissal” under Rule 41(a)(2)); Kwan, 634 F.3d at 230 (“These factors are not necessarily exhaustive and no one of them, singly or in combination with another, is dispositive.”).
Beginning with the first Zagano factor, which examines Plaintiffs' diligence in bringing their dismissal motion, this factor weighs slightly in Defendant's favor. “A plaintiff is often considered sufficiently diligent in moving for a voluntary dismissal so long as the motion was made ‘before discovery begins in earnest.'” Stinson v. City Univ. of N.Y., No. 18-CV-5963 (RA), 2020 WL 2133368, at *2 (S.D.N.Y. May 4, 2020) (quoting Sec. Exch. Comm'n v. One or More Unknown Purchasers of Sec. of Telvent GIT, No. 11-CV-3794 (TPG), 2013 WL 1683665, at *2 (S.D.N.Y. Apr. 17, 2013). Another consideration is “whether a plaintiff moved to dismiss the complaint without prejudice within a reasonable period of time after the occurrence of the event that led to the plaintiff's decision not to pursue the action.” Ascentive, LLC v. Opinion Corp., No. 10-CV-4443 (ILG), 2012 WL 1569573, at *4 (E.D.N.Y. May 3, 2012). “Generally speaking, however, ‘[i]n order for the plaintiff's delay to militate against a grant of dismissal, the [defendant] must show that it expended resources or otherwise detrimentally relied on a reasonable expectation that the plaintiff would pursue its remaining claims.'” Stinson, 2020 WL 2133368, at *2 (quoting Banco Cent. De Para. v. Para. Humanitarian Found., Inc., No. 01-CV-9649 (JFK), 2006 WL 3456521, at *4 (S.D.N.Y. Nov. 30, 2006)) (alterations in original).
Plaintiffs moved to dismiss under Rule 41(a)(2) in a letter dated March 27, 2024, which was filed the docket on March 28, 2024. See ECF No. 73. Plaintiffs' stated reason for doing so is Wood's health issues, which “continue[] to impact his daily life significantly and Plaintiffs' ability to litigate.” ECF No. 73 at 1. But Wood's health issues did not arise in March 2024. Plaintiffs had raised Wood's health issues with the Court in numerous filings before March 2024. See ECF Nos. 11, 18, 25 at 1 n.1, 29, 35, 52, 54, 58, 60, 62, 68. For example, on May 14, 2023, 10 months prior to the Rule 41(a)(2) motion, Plaintiffs sought a stay of the case due to Wood's medical conditions, stating that he had been suffering from “increasingly significant cardio/pulmonary symptoms for multiple weeks” and that his symptoms continued to worsen rather than improve. ECF No. 11 at 1. In that request, Wood described how his health and medical appointments severely limited his availability and ability to fully participate in this action. Id. at 1-2. Plaintiffs again sought a stay of this case on July 2, 2023, again relying on Wood's health as the basis for the request. See ECF No. 18. Additionally, Plaintiffs requested three extensions of their time to oppose Defendants' motions to dismiss based on Wood's medical condition. See ECF Nos. 58, 62, 68.
Plaintiffs' request for a stay of the litigation in May 2023 indicated their understanding and acknowledgment that they could not continue pursuing this action due to Wood's health condition. And following that request for a stay, which the Court denied, see ECF Nos. 11, 14, Plaintiffs continued to rely on Wood's health condition as the basis for their inability to prosecute their claims. See ECF No. 18 (renewing their request for a stay based on Wood's health); ECF No. 29 (requesting an extension to respond to a letter from Defendants on August 21, 2023, due to Wood's worsening medical condition that had “further limited his daily life activities”); ECF No. 35 (requesting an extension of time to serve the Mutual Defendants on October 3, 2023, where Plaintiffs emphasized that “Mr. Wood continues to experience health issues which are materially limiting Plaintiffs' participation in this litigation, in the quantity, quality, and pace of filings and other protected activities”); ECF No. 58 (requesting, on November 1, 2023, an “enlargement of time” to file their objections and noting that Plaintiffs may need additional extensions of time due to Wood's continuing health issues); ECF No. 62 (requesting on December 9, 2023, an extension to reply to Defendants' motions to dismiss, because “Plaintiffs ability to litigate fully in this action continues to be limited by Mr. Wood's health which affects him substantially in his daily life activities and Plaintiffs indirectly in both our ability to work on the litigation tasks and assist Mr. Wood”); ECF No. 68 (requesting an additional extension on February 20, 2024, noting Wood's limited ability to participate in the litigation due to his health issues).
Plaintiffs thus knew as early as May 2023, 10 months before the Rule 41(a)(2) motion, that Wood's health condition prevented them from litigating their claims, and they sought two stays of this case and a number of extensions to accommodate for Wood's treatment and the limitations his condition imposed on his ability to litigate the case. Indeed, on December 9, 2023, three months before the Rule 41(a)(2) motion was filed, Plaintiffs acknowledged in a filing requesting another extension of time that Wood's condition limited their ability to litigate this action. See ECF No. 62. Yet Plaintiffs did not file their Rule 41 motion until March 2024, shortly before their already-extended deadline to oppose Defendants' motions to dismiss. See Lan v. Time Warner, Inc., No. 11-CV-2870 (AT) (JCF), 2016 WL 554588, at *3 (S.D.N.Y. Feb. 6, 2016) (concluding that plaintiff's motion for voluntary dismissal without prejudice was not diligently made when she brought it three days before a court-ordered deadline despite knowledge of her preexisting health conditions for months). At that time, Plaintiffs did not explain what had changed in Wood's health to prompt the request for voluntary dismissal. Plaintiffs provided no details about Wood's health condition and they did not explain how it prevented them from continuing with the action. In a subsequent letter submitted on June 17, 2024, Plaintiffs state that they sought dismissal in March 2024 because two days before they filed the Rule 41 motion, “Wood was given a new patient appointment with a specialist for late July 2026” and it then “became apparent [to them] that a court would be unlikely to grant extensions of the needed length of time.” ECF No. 91 at 8. It should, however, have been apparent from the Court's two prior denials of their stay request, see ECF Nos. 14, 20, that the Court would not stay the litigation for any length of time due to Wood's health condition.
To be sure, no discovery has occurred in this case. See A.V. by Versace, Inc. v. Gianni Versace S.p.A., 261 F.R.D. 29, 32 (S.D.N.Y. 2009) (stating that a consideration with the first factor can be defendant's expenditure of resources or detrimental reliance on the “reasonable expectation that the plaintiff would pursue its” claims). But Plaintiffs have not demonstrated that they were sufficiently diligent in seeking a Rule 41 dismissal, because the stated reason for the timing of their request was a reason known to them at least 10 months prior to the request. See Lan, 2016 WL 554588, at *3 (concluding that plaintiff was not diligent in requesting voluntary dismissal for health reasons just days before a court-ordered deadline despite plaintiff's preexisting knowledge of that condition); see also Rayburn v. CSX Transp., Inc., No. 17-CV-48 (LEK) (CFH), 2017 WL 4990631, at *3 (N.D.N.Y. Oct. 31, 2017) (finding that plaintiff did not act diligently when it waited until the last day before a court-ordered deadline to move for dismissal and did not adequately explain why it was unable to request a dismissal any earlier).
Next, the second Zagano factor, which looks at whether Plaintiffs were unduly vexatious, weighs strongly in Defendants' favor. In determining if a plaintiff is vexatious, courts consider whether a plaintiff brought an action “to harass the defendant” or if the plaintiff has “ill-motive.” Marquez v. Hoffman, No. 18-CV-7315 (ALC), 2020 WL 729664, at *3 (S.D.N.Y. Feb. 13, 2020). Courts have found ill motive where a plaintiff has filed duplicative actions relating to the same injury. Id. Repeat filings against the same defendant is one type of harassment that should weigh against a dismissal without prejudice. See Paulino v. Taylor, 320 F.R.D. 107, 110 (S.D.N.Y 2017) (“Courts find ill-motive, where, for example . . . plaintiff filed duplicative actions relating to the same injury.”) (quoting Banco Central De Para., 2006 WL 345621, *5.
Plaintiffs commenced this action after four related lawsuits based on the same underlying facts and claimed injuries against the City and/or Mutual. All of these prior actions saw Plaintiffs' claims adjudicated on the merits. See infra Section II(B)(1) and p. 24-25. Plaintiffs then filed appeals in two of those actions but failed to perfect their appeals by filing an opening brief. See ECF Nos. 42-6, 42-18. Plaintiffs also appealed the dismissal of another action and that appeal was dismissed because “it lack[ed] an arguable basis either in law or in fact.” See ECF No. 42-11. Moreover, Plaintiffs have sought repeated stays and multiple extensions of time in this action, see, e.g., ECF Nos. 11, 18, as well as in a prior action, see ECF No. 37-8 at 2, conduct that demonstrates a desire to stave off resolution of the merits of their claims. Additionally, Plaintiffs did not seek dismissal under Rule 41 until two days before their already-extended deadline to oppose the motions to dismiss, which by that point had been pending for more than five months. See Sec. & Exec. Comm'n v. Oakford Corp., 181 F.R.D. 269, 271 (S.D.N.Y. 1998) (finding that the undue vexatiousness factor weighed in favor of defendant when plaintiff filed its motion when facing a court-ordered deadline).
The third factor-the progress of the lawsuit-weighs in Plaintiffs' favor. “The standard for concluding that a suit has progressed far enough to weigh against dismissal is high, and is usually satisfied only where substantial discovery, summary judgment motion practice, or trial preparation has occurred.” Am. Fed'n of State, Cnty. & Mun. Emp. v. Pfizer, Inc., No. 12-CV-2237 (JPO), 2013 WL 2391713, at *4 (S.D.N.Y. June 3, 2013). “The extent to which a suit has progressed is considered by many courts in the Second Circuit to be of ‘primary importance.'” Shaw Fam. Archives, Ltd. v. CMG Worldwide, Inc., No. 05-CV-3939 (CM), 2008 WL 4127549, at *7 (S.D.N.Y. Sept. 2, 2008).
Although Plaintiffs commenced this suit in 2022, the action is still in its infancy. No Defendant has answered the complaint. Instead, Defendants have separately moved to dismiss. See ECF Nos. 36-38, 39-40, 41-43. And at the time of Plaintiffs' Rule 41(a)(2) motion in March 2024, the three motions to dismiss were still pending before the Court. Discovery was also stayed pending the resolution of these motions. See ECF No. 56 (granting Defendants' joint motion to stay discovery until the dismissal motions were decided). There thus has been no substantial discovery, summary judgment motion practice, or trial preparation in this case. Given the procedural posture of the case, this factor favors Plaintiffs.
The fourth factor, which examines the potential duplicative expense of relitigation, favors Defendants. On the one-hand, “[i]t is well established that the mere prospect of a second litigation upon the subject matter does not constitute legal prejudice” sufficient to deny a motion for voluntary dismissal. Sec. & Exec. Comm'n v. Compania Internacional, No. 11-CV-4904 (JPO), 2012 WL 1856491, at *6 (S.D.N.Y. May 22, 2012) (quotation marks and citations omitted); see also Jose Luis Pelaez, Inc. v. McGraw-Hill Glob. Educ. Holdings LLC, No. 16-CV-5393 (KMW), 2018 WL 1115517, at *3 (S.D.N.Y. Feb. 26, 2018) (“[T]he prospect of starting an entirely new litigation, along with the attendant additional expense, does not translate to legal prejudice sufficient to deny a motion to voluntarily withdraw.”).
However, as discussed in connection with Defendants' motions to dismiss, see infra Sections II-III, Defendants have raised meritorious grounds for dismissal of the claims asserted against them. Of course, the work expended by Defendants in briefing their motions to dismiss could be used by Defendants if Plaintiffs were to commence an entirely new suit stemming from the same allegations. But ignoring Defendants' valid grounds for dismissal would result in a waste of judicial resources if Plaintiffs were to refile the same claims based on the same underlying factual allegations as they have shown by their past conduct, they may be inclined to do. It would also result in unnecessary duplicative expense to Defendants who would be forced to again defend against claims that are barred by res judicata. See Pfizer, Inc., 2013 WL 2391713, at *2 (citing Hoolan v. Stewart Manor Country Club, 888 F.Supp.2d 485, 496 (E.D.N.Y. 2012)) (considering merits of claims in assessing whether dismissal without prejudice under Rule 41(a)(2) was appropriate); Palmer v. Wells, No. 04-CV-12-P-H, 2004 WL 1790180, at *7 (D. Me. Aug. 11, 2004) (relying, in part, on the merits of the pre-existing motions to dismiss to deny plaintiffs motion for voluntary dismissal without prejudice).
The fifth and final factor, which examines the adequacy of Plaintiffs' explanation, weighs in favor of Defendants. When analyzing this factor, courts inquire into whether a plaintiff “offers a reasonable explanation for why [he] wishes to have [his] remaining claims voluntarily dismissed without prejudice.” Banco Cent. De Para, 2006 WL 3456521, at *7. “Courts may consider both stated and unstated explanations.” Reynolds v. Onewest Bank, FSB, No. 11-CV-0081, 2011 WL 5357503, at *4 (D.Vt. Nov. 7, 2011). Plaintiffs stated reason for the dismissal is Wood's health. See ECF No. 73. (“Wood's health condition continues to impact his daily life significantly and Plaintiffs' ability to litigate.”). As already discussed, Wood had been suffering from health issues long before Plaintiffs sought voluntary dismissal of this action. It is not clear what changed in Wood's condition that prompted Plaintiffs to move for voluntary dismissal. Wood has not provided the Court any documentation to substantiate his claims of health problems. See ECF Nos. 73, 91; cf. Lan, 2016 WL 554588, at *3 (rejecting a health explanation as inadequate even where plaintiff's doctor provided documentation of their condition). Nor has Wood identified the illness he suffers from, beyond the loose description of “cardio/pulmonary symptoms.” See ECF No. 11 at 1.
In short, an analysis of the Zagano factors weighs against granting Plaintiffs a dismissal without prejudice under Rule 41(a)(2).
B. The legal prejudice test
The other test for assessing the appropriateness of dismissal without prejudice under Rule 41(a)(2) examines whether the defendant would suffer some “plain legal prejudice other than the mere prospect of a second lawsuit.” Jose Luis Pelaez, Inc., 2018 WL 1115517, at *2. Courts in this Circuit have typically applied this test when the defendant has alleged a counterclaim in the action that would be dismissed if the plaintiff's Rule 41(a)(2) motion were granted. See Brown v. Nat'l R.R. Passenger Corp., 293 F.R.D. 128, 131 (E.D.N.Y. 2013) (“Legal prejudice would occur, for example, if dismissal of the plaintiff's case also impairs the ability of a defendant to pursue a counterclaim in the same action that plaintiff seeks to dismiss.”); GFE Glob. Fin. & Eng'g Ltd., 291 F.R.D. at 36 (“A finding of loss constituting plain legal prejudice is typically a means of protecting ‘defendant who is ready to pursue a claim or defense in the same action that the plaintiff is seeking to have dismissed.'”) (citing Staten Island Terminal, LLC v. Elberg, No. 11-CV-3262 (RRM) (LB), 2012 WL 1887126, at *3 (E.D.N.Y. May 23, 2012) and quoting Camilli, 436 F.3d at 124) (emphasis in original). As no defendant has alleged a counterclaim in this action, the legal prejudice test is inapplicable in assessing the appropriateness of dismissal without prejudice. See Lan, 2016 WL 554588, at 1 (denying plaintiff's Rule 41(a)(2) motion after only analyzing the Zagano factors); Thornton v. Young, No. 20-CV-10606 (ER), 2022 WL 14116750, at *2 (S.D.N.Y. Oct. 24, 2022) (stating that “‘plain legal prejudice includes ‘the plight of a defendant who is ready to pursue a claim against the plaintiff in the same action that the plaintiff is seeking to have dismissed,'” making it a sufficient, but not required, basis for denying a Rule 41 motion) (quoting Ascentive, 2012 1569573, at *2).
In sum, the adequacy of Plaintiffs' explanation for seeking dismissal, the timing of Plaintiffs' request, Plaintiffs' vexatious nature, and the merits of Defendants' pending motions to dismiss collectively weigh in favor of denying the Rule 41 motion, even despite the early posture of this case. I thus recommend denying Plaintiffs' motion for voluntary dismissal without prejudice under Rule 41(a)(2).
Plaintiffs argue that if the Court denies the Rule 41(a)(2) motion, the Court should not immediately consider the merits of Defendants' motions to dismiss. See ECF No. 91 at 16, 21. Plaintiffs cite to Paysys International, Inc. v. Atos IT Services Limited, 901 F.3d 105 (2d Cir. 2018), to support their argument that there must be “a reasonable time in between” the decision on the Rule 41(a)(2) motion and the decision on the motions to dismiss. Id. Plaintiffs' reliance on Paysys is misplaced. In Paysys, the Second Circuit explained that a plaintiff should be afforded an opportunity to withdraw his Rule 41(a)(2) motion and continue with the suit where the conditions imposed by the court for voluntary dismissal without prejudice would be too onerous. Id. at 108-09. I am not, however, recommending dismissal under Rule 41(a)(2). I am instead recommending that the Rule 41(a)(2) motion be denied. Although I am recommending that the First Amended Complaint be dismissed with prejudice, see infra Sections II-III, that recommendation is under Rule 12 and is based on the merits of Defendants' motions to dismiss. Paysys says nothing about the Court's ability to consider the separate motions that have been on the docket for more than eight months immediately following the denial of the Rule 41 motion. See Kowalchuvk v. Metro. Transp. Auth., 94 F.4th 210, 214 (2d Cir. 2024) (“District courts have the “inherent authority to manage their dockets” to promote “the efficient and expedient resolution of cases.”) (quoting Dietz v. Bouldin, 579 U.S. 40, 47 (2016)).
II. Defendants' Motions to Dismiss
A. Gottschalk's Standing to Sue
The City Defendants contend that Plaintiff Gottschalk should be dismissed under Rule 12(b)(1) for lack of standing. See ECF No. 38 at 2, 18-20. Plaintiffs allege Gottschalk has standing to sue because she is Wood's “partner” and thus a “permitted tenant-shareholder” who was harmed by the Defendants' denial of housing and their failure to provide remedial relief. Am. Compl. ¶¶ 515, 1833; Am. Compl. at 311.
Lack of standing is a “jurisdictional defect[] and may be addressed through a motion to dismiss for lack of subject-matter jurisdiction” under Federal Rule of Civil Procedure 12(b)(1). Lyons v. Litton Loan Servicing LP, 158 F.Supp.3d 211, 218 (S.D.N.Y. 2016). “The irreducible constitutional minimum of standing contains three requirements: (1) an injury in fact; (2) traceability, i.e., a causal connection between the injury and the actions complained of; and (3) redressability, i.e., a likelihood that the requested relief will redress the alleged injury.” Id. (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103 (1998)). An “injury in fact” requires the party to “have a personal stake in the alleged dispute.” Carter v. HealthPort Tech., LLC, 822 F.3d 47, 55 (2d Cir. 2016). Further, “[a]n injury in fact must be ‘particularized,' and it must be ‘concrete'” and ‘‘affect the plaintiff in a personal and individual way.'” Harty v. W. Point Realty, Inc., 28 F.4th 435, 442-43 (2d Cir. 2022) (citations omitted).
Gottschalk has not alleged facts from which to conclude that she herself suffered an injury, which is a prerequisite for standing to sue Defendants. Gottschalk was not a party to any of the previous suits. There are no allegations that Gottschalk applied for an apartment or was denied an apartment. See Am. Compl. ¶¶ 481, 512-14, 1125, 1518. Instead, Plaintiffs allege that Gottschalk has standing to sue because she was a “permitted tenant-shareholder, occupant, and/or resident as Wood's partner.” Id. ¶ 515. But Gottschalk's status as Wood's partner does not suffice to adequately plead an injury in fact. See Manbeck v. Micka, 640 F.Supp.2d 351, 367 n.16 (S.D.N.Y. 2009) (“[J]urisdiction cannot be invoked solely on the basis of harms to a plaintiff's spouse.”) (quoting Hui Yu v. U.S. Dep't of Homeland Sec., 568 F.Supp.2d 231, 234 (D. Conn. 2008)). Gottschalk thus has not alleged an independent injury to herself; her claims instead are based on alleged injuries to Wood. Because Gottschalk has not alleged that she herself suffered an injury, she lacks standing to sue Defendants. See Robainas v. Metro. Life Ins. Co., No. 14-CV-9926 (DLC), 2015 WL 5918200, at *4 (S.D.N.Y. Oct. 9, 2015) (explaining that injury in fact “requires that the party seeking review be himself among the injured”); Harty, 28 F.4th at 442-43 (requiring an injury to affect a plaintiff in a personal and individual way to create standing). I therefore recommend that claims asserted against Defendants by Gottschalk be dismissed.
B. Res Judicata
1. Factual Background
This is Wood and Malester's fifth action against the City and/or Mutual, among others, all stemming from the same underlying factual allegations. See ECF No. 38 at 1. The first action by Wood and Malester was in 2014 in this Court. See Wood v. Mutual Redevelopment Houses, Inc., No. 14-CV-7535 (S.D.N.Y.), appeal dismissed, No. 21-CV-2617 (2d Cir. 2022) (“2014 Action”). In the 2014 Action, Wood and Malester asserted various claims, including a civil-rights claim under Section 1983, based on the failure to secure an apartment at Mutual in 2012 due, in part, to what they claimed was housing discrimination by Mutual, a City agency, Housing Preservation and Development, and the agency's employee, Joseph Quigley. See, e.g., ECF No. 37-1 ¶¶ 41, 143-257; ECF No. 37-2 at 1-9.The Court dismissed the 2014 Action in its entirety as against the Department of Housing Preservation and Development and its employee under Rule 12(b)(6) for failure to state a claim. See ECF No. 37-2 at 15-18, 27 n.20. The Court also denied Plaintiff's motion for reconsideration of the dismissal order. See ECF No. 37-3 at 1011. The claims against Mutual were not dismissed, but the Court granted summary judgment in its favor. See ECF No. 42-5 at 21.
Malester is Wood's mother. See ECF No. 37-1 ¶ 71.
On a motion to dismiss under Rule 12(b)(6), the Court can take judicial notice of publicly available documents filed in other lawsuits by Wood and Malester. Bussa v. Educ. All., Inc., No. 14-CV-449 (GBD) (JLC), 2014 WL 4744556, at *2 (S.D.N.Y. Sept. 24, 2014) (“[A] district court reviewing a motion to dismiss may also consider documents of which it may take judicial notice, including prior decisions in related lawsuits.”).
Following dismissal of the 2014 Action, Wood and Malester commenced another suit in this Court in 2018. See Wood v. Mutual Redevelopment Houses, Inc. et al, No. 18-CV-726 (S.D.N.Y.) (“2018 Action”). In the 2018 Action, Wood and Malester again alleged housing discrimination by the City, Quigley, and Mutual based on the same dispute over Wood's application for an apartment at Mutual in 2012. See ECF No. 37-4. As the Court explained, the complaint in the 2018 Action “largely mirror[ed]” the complaint in the 2014 Action and was “based on the same operative facts-namely, Mutual's failure to offer [Wood and Malester] a Mitchell-Lama apartment in 2012.” See ECF No. 37-6 at 3; see also id. at 4-7 (describing how the allegations in the complaint in the 2018 Action were “largely identical” to the allegations in the 2014 Action). The Court concluded that Wood's and Malester's claims in the 2018 Action were, “to a large extent, repackaged versions of claims dismissed by or pending before the Court” in the 2014 Action. ECF No. 37-6 at 11. Accordingly, the Court dismissed the 2018 Action “as duplicative of the [2014 Action].” Id. at 12.
Wood and Malester moved for reconsideration of the Court's dismissal order, which the Court denied. See ECF No. 37-7. Wood and Malester then appealed to the Second Circuit and that court dismissed the appeal because it lacked an “arguable basis either in law or in fact.” ECF No. 37-12 at 2. Wood and Malester than sought reconsideration of the Second Circuit's dismissal order or, alternatively, en banc review. Id. at 1. Both were summarily denied by the court. Id.
Not done, Wood and Malester filed another action in this Court in 2019 against Mutual and other individuals and entities. See Wood v. Mutual Redevelopment Houses, Inc. et al, No. 19-CV-9563 (S.D.N.Y.), appeal dismissed No. 21-CV-2775 (2d Cir. 2022) (“2019 Action”). The 2019 Action, like its predecessors, also stemmed from Wood's dispute with Mutual over his application for an apartment in 2012. See ECF No. 37-9; see also ECF No. 37-10 at 2-3. The 2019 Action also asserted discrimination and retaliation claims against Mutual based on a 2017 application by Wood for an apartment. See ECF No. 37-10 at 3-5. This Court dismissed the 2019 Action in its entirety, concluding that Wood and Malester had not plausibly stated a housing- discrimination or retaliation claim, in part, because they had failed to allege facts from which to plausibly infer that Wood was qualified for a Mitchell-Lama apartment. See ECF No. 37-10 at 10-13.
Wood and Malester also commenced suit in New York state court. In 2018, Wood and Malester sued Mutual and the City, among other defendants, in Supreme Court, New York County, alleging housing-discrimination claims stemming from the same dispute over his 2012 application for an apartment at Mutual. See Wood v. Mutual Redevelopment Houses, Inc. et al, Index: 101354/2018 (Sup. Ct., N.Y. Cnty.) (“2018 State Action”). Wood and Malester again asserted discrimination and retaliation claims, including breach of contract, fraud, and violations of New York's General Business Law, New York State Human Rights Law and New York City Human Rights Law, for the alleged denial of an apartment at Mutual in 2012. See ECF No. 37-5 ¶¶ 42, 185, 446-53. Wood and Malester failed to oppose the motions to dismiss and the state court dismissed the action with prejudice on August 28, 2023, for “the reasons set forth in the defendants' respective motion papers.” See ECF No. 37-8 at 2. Wood and Malester subsequently filed a notice of appeal on September 28, 2023, and the appeal remains pending. See ECF No. 37-13.
In 2023, Wood and Malester commenced another lawsuit against the City and Mutual in New York Supreme Court. See Wood v. Mutual Redevelopment Houses, Inc. et al., Index: 155197/2023 (Sup. Ct., N.Y. Ctny.) (“2023 State Action”). This lawsuit also asserts discrimination and retaliation claims based on the 2012 and 2017 denial of housing at Mutual. See ECF No. 42-30 ¶¶ 1-4. The City and Mutual moved to dismiss the 2023 Action, and the motion is still pending. See ECF No. 38 at 7.
2. The instant action is barred by res judicata.
The City Defendants and the Mutual Defendants contend that Plaintiffs' action is barred by res judicatabecause Plaintiffs' allegations here stem from previously litigated disputes over their attempts in 2012 and 2017 to secure an apartment at Mutual. See id.; ECF No. 43 at 24. The City Defendants and the Mutual Defendants are correct.
The Mutual Defendants argue that the action is barred by claim and issue preclusion while the City Defendants argue that the action is barred by res judicata. Res Judicata and claim preclusion are synonymous and the same analysis applies to both. Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 590 U.S. 405, 412 (2020) (noting that the doctrine of “claim preclusion” is “sometimes itself called res judicata”); see also Monahan, 214 F.3d at 284-85 (describing this same three factor test for establishing res judicata and claim preclusion).
“It is well settled that a court may dismiss a claim on res judicata or collateral estoppel ground on a Rule 12(b)(6) motion.” Rountree v. U.S. Bank NA, No. 15-CV-9018 (KPF), 2017 WL 31405, at *7 (S.D.N.Y. Jan. 3, 2017) (quoting Bd. of Managers of 195 Hudson St. Condo. v. Jeffrey M. Brown Assocs., Inc., 652 F.Supp.2d 463, 470 (S.D.N.Y. 2009)). Further, “[u]nder 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)) (brackets and internal quotation marks omitted). “To prove the affirmative defense [of res judicata or claim preclusion] a party must show that (1) the previous action involved an adjudication on the merits; (2) the previous action involved the plaintiffs or those in privity with them; [and] (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action.” Monahan v. N.Y.C. Dep't of Corr., 214 F.3d 275, 285 (2d Cir. 2000). Additionally, “discovery of additional facts following the entry of . . . judgment does not block the application of res judicata[.]” Clark v. Kitt, No. 12-CV-8061 (CS), 2014 WL 4054284, at *12 (S.D.N.Y. Aug. 15, 2014) (citations omitted).
Beginning with the first factor, the 2014 Action, the 2018 Action, the 2018 State Action, and the 2019 Action all resulted in adjudications on the merits. In the 2014 Action, Wood and Malester asserted claims against the City, Quigley (a City employee), and Mutual based on the denial of his 2012 application. See ECF No. 37-1 ¶¶ 65, 146, 153, 160. The Court dismissed the claims as against City and Quigley and granted summary judgment to Mutual. See ECF No. 37-2 at 27 n.20; ECF No. 42-5 at 21. In the 2019 Action, Wood and Malester asserted housingdiscrimination and retaliation claims under the Fair Housing Act, New York State Human Rights Law, and New York City Human Rights Law against Mutual. See ECF No. 37-9 ¶¶ 54-55. The Court also dismissed the 2019 Action for failure to state a claim. See ECF No. 37-10 at 12.
In this circuit, “a disposition of a Rule 12(b)(6) motion is a decision on the merits.” Sikhs for Just. Inc. v. Indian Nat'l Cong. Party, 17 F.Supp.3d 334, 338 (S.D.N.Y. 2014) (quoting Magee v. Nassau Cnty. Med. Ctr., 27 F.Supp.2d 154, 158 (E.D.N.Y. 1998)). Likewise, “a summary judgment dismissal is considered a decision on the merits for res judicata purposes.” See Yeiser v. GMAC Mortg. Corp., 535 F.Supp.2d 413, 421 (S.D.N.Y. 2008). The 2014 Action, 2018 Action, and 2019 Action were thus disposed of on the merits. See ECF No. 37-2 at 33; ECF No. 37-6 at 13; ECF No. 37-10 at 19.
The 2018 State Action was also dismissed on the merits. The state court's order stated that the action was dismissed “in its entirety, with prejudice.” See ECF No. 37-8 at 3. That language triggers a dismissal on the merits in New York. See Aard-Vark Agency, Ltd. v. Prager, 779 N.Y.S.2d 213, 214 (2d Dep't 2004) (“A dismissal ‘with prejudice' generally signifies that the court intended to dismiss the action ‘on the merits' . . . we have used the words ‘with prejudice' interchangeably with the phrase ‘on the merits' to indicate the same preclusive effect.”). In sum, the 2014 Action, 2018 Action, 2018 State Action, and 2019 Action by Wood and Malester were all dismissed on the merits.
Turning to the second factor, Wood and Malester, two of the three plaintiffs here, were the plaintiffs in the 2014 Action, the 2018 Action, the 2018 State Action, and the 2019 Action. See ECF Nos. 37-1, 37-4, 37-9, 37-5. And although Gottschalk was not a party to any of those prior suits, she lacks standing to sue and is thus not a proper party in this action. See supra Section II(A).
The final factor examines whether the “claims asserted in the subsequent action were, or could have been, raised in the prior action[s].” Monahan, 214 F.3d at 285. That factor, too, is satisfied. Whether a claim was, or could have been, raised in the previous action “depends in part on whether the same transaction or connected series of transactions is at issue, whether the same evidence is needed to support both claims, and whether the facts essential to the second [action] were present in the first [action].” Woods v. Dunlop Tire Corp., 972 F.2d 36, 38 (2d Cir. 1992) (internal quotation marks omitted). To determine whether two actions arise from the same transaction or claim, a court examines “whether the underlying facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.” TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 499 (2d Cir. 2014) (quoting Pike v. Freeman, 266 F.3d 78, 91 (2d Cir. 2001) (internal quotation marks omitted)).
The claims raised in this action were all raised, or could have been raised, in the 2014 Action, the 2018 Action, 2018 State Action, or the 2019 Action because the instant suit arises from the same “nucleus of operative fact” as those prior actions. Waldman v. Vill. of Kiryas Joel, 207 F.3d 105, 108 (2d Cir. 2000). The instant action is based principally on Wood's inability to secure an apartment at Mutual in 2012 and 2017. Specifically, Plaintiffs allege that Wood was selected to join the Mutual waiting list in 2003; he identified Malester as an intended cooccupant for the apartment; Wood and Malester were contacted in 2012 and selected a specific apartment; Mutual refused to process Wood's application for the apartment, in part, because he and Malester are Jewish; and the City refused to take corrective action of the discriminatory and retaliatory conduct by Mutual. See Am. Compl. ¶¶ 511-12, 520-21, 523, 530-40, 543, 546-47, 555, 563-64, 567, 571, 577, 594, 796, 796, 801. In addition, Plaintiffs allege that in 2017, Wood was discriminated against in the denial of his request for a reasonable accommodation on the basis of his disability, a traumatic brain injury. Id. ¶¶ 580, 655, 657, 712-26, 728, 767. These allegations were all raised in the 2014 Action, the 2018 Action, the 2018 State Action, and the 2019 Action. See ECF No. 37-1 ¶¶ 153, 160, 168, 177; ECF No. 37-4 ¶¶ 364-65, 491, 497, 510, 527; ECF No. 37-5 ¶¶ 42, 45, 446; ECF No. 37-9 ¶¶ 54, 198, 429-32, 434, 440.
Moreover, Plaintiffs here seek relief for, inter alia, violations of the Americans with Disabilities Act (“ADA”), the Fair Housing Act, 42 USC §§ 1981, 1982, and 1983, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, 42 CFR § 91.40, the New York City Human Rights Law, the New York State Human Rights Law, General Business Law §§ 349-350, the Fourteenth Amendment to the United States Constitution, and breach of contract. Am. Compl. ¶¶ 1828-29, 1840-41, 1843, 1848 1859; Am. Compl. at 310. Except for their ADA and Fourteenth Amendment claims, Wood and Malester previously raised the claims asserted here in the 2014 Action, 2018 Action, 2018 State Action, or 2019 Action. See ECF No. 37-1 ¶¶ 152191; ECF No. 37-4 ¶¶ 192, 528-30; ECF No. 37-5 ¶¶ 397, 404, 416-17; ECF No. 37-9 ¶¶ 430-38. Indeed, in dismissing the 2018 Action, the Court noted that “Plaintiffs may have repackaged [their claims] slightly and added new legal theories . . . but the gravamen of the claims is identical: that Mutual failed to offer Plaintiffs a Mitchell-Lama apartment in 2012.” See ECF No. 37-6 at 9.
Further, res judicata applies even if Plaintiffs raise new allegations here because, at bottom, Plaintiffs' allegations arise from the same nucleus of operative facts and could have been raised in any of their prior actions. See Monahan, 214 F.3d at 284-85 (stating that res judicata applies to claims that were “or could have been” litigated in previous actions). Plaintiffs' First Amended Complaint asserts for the first time that they were retaliated against by Mutual for taking part in protected activities starting in 2012, including informal and formal complaints and their initiation of the 2014 Action. See Am. Compl. ¶¶ 578-81, 1230-38, 1829, 1838, 1839. Plaintiffs for the first time also allege that they were deprived of a property interest without due process when they lost their position on the waitlist and were denied an apartment. See Am. Compl. ¶¶ 232, 280. And Plaintiffs also assert for the first time a violation of the ADA. Id. ¶ 709. These allegations and claims could have been raised in any of the prior actions by Wood and Malester against Mutual and the City because they all stem from the 2012 and 2017 applications for an apartment, and Wood and Malester were aware of those circumstances prior to filing their earlier suits. See Falardo v. N.Y.C. Police Dep't, 566 F.Supp.2d 283, 286 (S.D.N.Y. 2008) (barring claims based on res judicata when plaintiff could have raised them in previous proceedings).
What's more, to the extent Plaintiffs are challenging affidavits submitted in the 2014 Action, in connection with the summary judgment motion in that case, see Am. Compl. ¶¶ 839977, Plaintiffs raised arguments about the accuracy of the affidavits in connection with the summary judgment motion, see ECF No. 42-4 ¶¶ 8, 18, 22, and the Court rejected those arguments in ruling on the summary judgment motion. ECF No. 42-5 at 20-21.
Finally, Plaintiffs assert that Defendants violated 24 CFR § 100.7. See Am. Compl. ¶¶ 68, 94, 795, 807, 1380, 1491. But there is no stand-alone cause of action under that regulation. Arthur v. Windsor Shadows Homeowner's Ass'n, No. 20-CV-435 (PHX) (DJH), 2022 WL 2473423, at *3 (D.Ariz. July 6, 2022) (“24 CFR § 100.7 is a regulation related to the FHA and not a separate cause of action from what the [Fair Housing Act] already provides.”).
In short, res judicata bars the claims in the instant action against Defendants.
The City Defendants also argue that all of Plaintiffs' claims are time barred. See ECF No. 38 at 20-22. Any of Plaintiffs' claims arising from the denial of an apartment in 2012 are time barred as the statute of limitations for those claims would have run long ago. See Town of Ramopo, N.Y. v. Town of Clarkstown, No. 16-CV-2004 (NSR), 2017 WL 782500, at *3 (S.D.N.Y. Feb. 27, 2017) (two year limitations period for claims under the Fair Housing Act); Andresakis v. Cap. One Bank (USA) N.A., No. 09-CV-08411 (DAB) (FM), 2011 WL 846830, at *3 (S.D.N.Y. Feb. 3, 2011) (two year limitations period for claims under the Fair Credit Reporting Act); De La Rosa v. Lewis Foods of 42nd St., LLC, 124 F.Supp.3d 290, 299 n.14 (S.D.N.Y. 2015) (three year limitations period for ADA claims); Sotomayor v. City of N.Y., 862 F.Supp.2d 226, 248-49 (E.D.N.Y. 2012) (three year limitations period for claims under the New York State and New York City Human Rights Laws); Carvel v. Franchise Stores Realty Corp., No. 08-CV-8938 (JGK), 2009 WL 4333652, at *6, 8 (S.D.N.Y. Dec. 1, 2009) (six year limitations period for breach-of-contract claim and three year limitations period for claims under 42 U.SC. §§ 1981-1983); Marshall v. Hyundai Motor Am., 51 F.Supp.3d 451, 459 (S.D.N.Y. 2014) (three year limitations period for GBL §§ 349 claim).
III. Continental's motion to dismiss
Continental also moved to dismiss the claims asserted against it, arguing that Plaintiffs lack standing to assert a direct claim against it. See ECF No. 40 at 5-6. Continental is Mutual's insurer and Plaintiffs appear to be asserting that Continental is liable because they “were and are funding and managing the litigation” against Mutual. See Am. Compl. ¶¶ 71-72, 87; ECF No. 40 at 1. Plaintiffs allege that Continental is liable for the acts of the Mutual Defendants “whether directly or through agency liability,” because Continental was purportedly “conducting and controlling” Mutual's defense. See Am. Compl. ¶¶ 71, 87, 89, 1779. Plaintiffs allege that Continental knew or should have known that Mutual “has a history of housing discrimination claims” because Continental “has covered and/or defended claims from Wood, Malester, and prior unrelated claimants.” Id. ¶ 456. There are no well-pled allegations in the complaint that Continental itself denied Plaintiffs an apartment.
Plaintiffs' conclusory allegations that Continental “at times” has “blacklist[ed]” or “refuse[d] to deal” with prospective applicants due to discriminatory policies, see, e.g., Am. Compl. ¶¶ 1671-72, do not suffice to defeat Continental's motion. The Court need not credited conclusory allegations that lack factual support and the complaint contains no factual allegations supporting a plausible inference that Continental played any direct role in the apartment application process.
Under New York common law, a stranger to an insurance policy lacks standing to bring a direct action against the insurer because “there [is] no privity of contract between plaintiff and the insurance carrier.” Commonwealth Land Title Ins. Co. v. Am. Signature Servs., No. 13-CV-3266 (JFB) (WDW), 2014 WL 672926, at *4 (E.D.N.Y. Feb. 20, 2014) (quoting Lang v. Hanover Ins. Co., 787 N.Y.S.2d 211, 213 (N.Y. 2004)). This rule bars claims against the insurers based on allegations that the insurer was “the actual head of the litigation . . . directing [the insured's] defense counsels.” U.S. Underwriters Ins. Co. v. Ziering, No. 06-CV-1130 (JFB) (WDW), 2010 WL 3419666, at *4 n.6 (E.D.N.Y. Aug. 27, 2010). Further, this rule applies regardless of the type of claim alleged and has been applied by courts in this District to bar discrimination claims against an insurer based on conduct by the insured. See Tatas v. Ali Baba's Terrace, Inc., No. 19-CV-10595 (ER), 2020 WL 2061539, at *3 (S.D.N.Y. Apr. 29, 2020) (concluding that plaintiff had no cause of action for employment discrimination against insurer, based on actions by insured, because plaintiff had not pled facts regarding insurer's “involvement in his injuries”); Vargas v. Boston Chicken, Inc., 269 F.Supp.2d 92, 93-94 (E.D.N.Y. 2003) (party alleging employment-discrimination claim against insurer did not have standing to sue insurer for acts by insured).
There are no allegations in the First Amended Complaint that Plaintiffs are in any contractual relationship with Continental or are parties to the contractual relationship between Mutual and Continental. Additionally, Plaintiffs do not come within the narrow exception under New York law that enables a party not in privity to sue the insurer. Under New York Insurance Law § 3420, a stranger to an insurance policy can assert a cause of action against the insurer only if “the plaintiff first obtains a judgment against the person who injured him, serves the insurance company with a copy of the judgment, and waits 30 days for payment.” Tatas, 2020 WL 2061539, at *3 (quoting Lang, 787 N.Y.S.2d at 214). Plaintiffs do not allege that they obtained a judgment against Mutual which they have served on Continental and that has been outstanding for 30 days. Plaintiffs have therefore not alleged facts from which to conclude that they come within the exception in New York Insurance Law § 3420. I thus recommend that Continental be dismissed as a party to this suit because Plaintiffs cannot assert a claim against Continental based on its role as Mutual's insurer.
IV. Anti-filing Injunction
The Mutual Defendants also seek an anti-filing injunction against Plaintiffs. See ECF No. 43 at 12. The Second Circuit has identified the following factors to be considered in deciding whether to impose an anti-filing injunction: “(1) the litigant's history of litigation and in particular whether it entailed vexatious, harassing or duplicative lawsuits; (2) the litigant's motive in pursuing the litigation, e.g., does the litigant have an objective good faith expectation of prevailing?; (3) whether the litigant is represented by counsel; (4) whether the litigant has caused needless expense to other parties or has posed an unnecessary burden on the courts and their personnel; and (5) whether other sanctions would be adequate to protect the courts and other parties.” Eliahu v Jewish Agency for Isr., 919 F.3d 709, 714 (2d Cir. 2019) (quoting Safir v. U.S. Lines, Inc., 792 F.2d 19, 24 (2d Cir. 1986)).
The City Defendants and Continental did not move for such relief.
First, Plaintiffs' history of meritless litigation against Mutual and the City is plain. Wood and Malester have filed four previous cases, all of which have been dismissed on the merits, and all stemming from their attempt to secure an apartment at Mutual in 2012 and 2017. See Safir, 792 F.2d at 25 (determining that the “meritless nature” of plaintiff's motions were an attempt to harass the defendants and supported restrictions on future litigation). As discussed, see supra Section II(B), Wood and Malester were the plaintiffs in those prior cases, all of those actions concerned the same nucleus of operative facts, and each case resulted in a final adjudication on the merits. Additionally, Wood and Malester appealed the dismissal of the 2014 Action, 2018 Action, and 2019 Action. Those appeals were all dismissed. See ECF No. 43 ¶¶ 12-15, 20-21, 38-41. In the appeal of the 2018 Action, the Second Circuit dismissed the appeal because it lacked “an arguable basis either in law or in fact.” ECF No. 42-11. And despite bringing these suits, Wood and Malester have repeatedly sought to delay resolution of their claims. For example, Plaintiffs here sought three extensions of their time to oppose Defendants' motions to dismiss, as well as two requests for a stay of the litigation. ECF Nos. 11, 20, 58, 62, 68. In the 2018 State Action, Plaintiffs similarly sought a stay and adjournments, delaying resolution of the then-pending motions to dismiss by two years. See ECF No. 37-8 at 3.
Tellingly, another court has already found that an anti-filing injunction was warranted against Wood and Malester. See ECF No. 42-21 at 3. In Wood v. Richman, Wood and Malester brought an action against their former attorneys for legal malpractice arising from the firm's representation of Wood and Malester in litigation related to their denial of an apartment at Mutual. See ECF No. 42-21. Wood and Malester had already filed a “virtually identical” prior action that the court had summarily dismissed. Id. In a 2022 order, Supreme Court, Nassau County issued an anti-filing injunction against Wood and Malester. See ECF No. 42-21. In concluding that an injunction was appropriate, the court stated that “plaintiffs' persistent filing of meritless actions in both this forum and federal court”-citing to the 2014 Action-“compels the conclusion that the plaintiffs have forfeited their right to free access to the courts by abusing the judicial process.” ECF No. 42-21 at 3.
Second, Plaintiffs do not have an objective good-faith expectation of prevailing on their claims in the instant action. Wood and Malester's prior actions, which concern nearly indistinguishable facts and claims as raised here, have been dismissed on the merits. Simply stated, this is Plaintiffs' fifth attempt to relitigate the same previously dismissed claims. See Colida v. Nokia Inc., No. 07-CV-8056 (KMW) (HBP), 2008 WL 4517188, at *15 (S.D.N.Y. May 6, 2008) (finding that the second factor weighs against a plaintiff when they file duplicative motions, without materially substantive changes, after previous iterations had been dismissed); see also Eliahu, 919 F.3d at 715 (“The dismissal of similar, if not identical, prior actions underscores that [plaintiffs] had little, if any, good faith basis for believing they could prevail on their claims.”); Iwachiw v. N.Y. State Dep't of Motor Vehicles, 396 F.3d 525, 528-29 (2d Cir. 2005) (upholding anti-filing injunction on appeal entered against plaintiff who brought a similar prior appeal).
The third factor examines whether Plaintiffs are represented by counsel. They are not. While pro se proceedings generally will not support the issuance of an injunction, Iwachiw, 194 F.Supp.2d at 208, “when it becomes clear that the courts are being used as a vehicle of harassment by a knowledgeable and articulate experienced pro se litigant who asserts the same claims repeatedly in slightly altered guise, the issuance of an injunction is warranted.” Colida, 2008 WL 4517188, at *15 (quoting Kane v. City of New York, 468 F.Supp. 586, 590 (S.D.N.Y. 1979)); see also Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 477 (2d Cir. 2006) (holding that courts “should not excuse frivolous or vexatious filings by pro se litigants”). Despite being pro se, Wood and Malester have extensive litigation experience, as this Court previously recognized. See ECF No. 42-16 at 18 (noting that Wood and Malester “have been filing lawsuits at least since 1999” and Wood “has received a formal legal education” because he was enrolled in law school for five semesters).
Fourth, Wood and Malester's repeated frivolous lawsuits have imposed an unnecessary burden on the courts that have had to adjudicate their meritless claims and have also imposed unnecessary expense on the City and Mutual, who have had to continuously defend against these claims. This further weighs in favor of an anti-filing injunction. See Eliahu, 919 F.3d at 715 (affirming that the fourth factor weighed in favor of granting an anti-filing injunction when repetitive frivolous suits came at a not insignificant cost to the defendants and burden to the courts).
Finally, the fifth factor examines whether other sanctions would be sufficient to protect the City, Mutual, other parties, and the court's resources. See Safir, 792 F.2d at 24. This factor weighs against granting an anti-filing injunction. The issuance of an injunction barring a litigant from the courthouse is “a serious matter,” Raffe v. Doe, 619 F.Supp. 891, 898 (S.D.N.Y. 1985), and the record here does not conclusively demonstrate that a lesser sanction, short of an injunction, would be inadequate to deter Plaintiffs' conduct.
Even as pro se litigants, Rule 11 applies and Plaintiffs could be subject to sanctions under that rule. See Fariello v. Campbell, 860 F.Supp. 54, 71 (E.D.N.Y. 1994). Plaintiffs, however, have not previously been sanctioned by this Court for their duplicative and meritless suits. See Colida, 2008 WL 4517188, at *15 (granting an anti-filing injunction against a pro se litigant after a record of monetary sanctions and previous admonishment from the court had not deterred plaintiff from continuing to commence frivolous claims); Safir, 792 F.2d at 25 (affirming, in part, an anti-filing injunction against a plaintiff who had previously failed to pay costs and fees already assessed against him because alternative sanctions would be insufficient). There is also no indication that Plaintiffs-who are not proceeding in forma pauperis-would lack the financial means to pay a monetary sanction, should one be imposed. See Colida, 2008 WL 4517188, at *13 (reasoning that a plaintiff proceeding in forma pauperis “does not have the financial means to pay” a monetary sanction and that weighed against the imposition of such a sanction and in favor of an injunction). Without some indication that a lesser sanction would be inadequate to protect Defendants and deter Plaintiffs from filing vexatious suits, an anti-filing injunction at this point is premature. I thus recommend denying the Mutual Defendants' motion for an anti-filing injunction. However, Plaintiffs are warned that their continued pursuit of frivolous litigation may result in the imposition of sanctions, including monetary penalties, upon notice and an opportunity to be heard. See 28 U.S.C. § 1651(a).
CONCLUSION
For the foregoing reasons, I recommend that Plaintiffs' Rule 41(a)(2) motion at ECF No. 73 be DENIED. I also recommend that the motions to dismiss filed by the City Defendants, the Mutual Defendants, and Continental at ECF Nos. 36, 39, and 41 be GRANTED. I recommend that the claims by Plaintiffs Wood and Malester be dismissed under Federal Rule of Civil Procedure 12(b)(6). I further recommend that Plaintiff Gottschalk be dismissed as a party under Rule 12(b)(1). Finally, I recommend that the motion for an anti-filing injunction at ECF No. 41 be DENIED.
SO ORDERED.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), 6(b), 6(d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to the Honorable Analisa Torres. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Fed.R.Civ.P. 6(a), 6(b), 6(d); Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).