Allen ex rel. Allen v. Devine, 09-cv-668 (ADS)(MLO).

• Decision Date: 19 November 2009
• Docket Number: No. 09-cv-668 (ADS)(MLO).,09-cv-668 (ADS)(MLO).
• Citation: 670 F.Supp.2d 164
• Court: U.S. District Court — Eastern District of New York
• Parties: C. Robert ALLEN, III, by Luke ALLEN, as Guardian for the Property Management of C. Robert Allen III, Plaintiff, v. Christopher DEVINE, Lakeshore Media, LLC, Milcreek Broadcasting LLC, College Creek Media LLC, Marathon Media Group, LLC, 3 Point Media— Salt Lake City, LLC, 3 Point Media Delta, LLC, 3 Point Media—Utah, LLC, 3 Point Media—Franklin, LLC, 3 Point Media—Prescott Valley, LLC, 3 Point Media—Coalville, LLC, 3 Point Media—Arizona, LLC, 3 Point Media—Florida, LLC, 3 Point Media—Kansas, LLC, 3 Point Media— Ogden, LLC, 3 Point Media—San Francisco, LLC, Midvalley Radio Partners, LLC, D & B Towers LLC, Superior Broadcasting of Denver, LLC, Wackenburg Associates, LLC, Portland Broadcasting LLC, Desert Sky Media LLC, Sky Media LLC and John Does 1-50, Defendants.

670 F.Supp.2d 164

C. Robert ALLEN, III, by Luke ALLEN, as Guardian for the Property Management of C. Robert Allen III, Plaintiff, v. Christopher DEVINE, Lakeshore Media, LLC, Milcreek Broadcasting LLC, College Creek Media LLC, Marathon Media Group, LLC, 3 Point Media— Salt Lake City, LLC, 3 Point Media Delta, LLC, 3 Point Media—Utah, LLC, 3 Point Media—Franklin, LLC, 3 Point Media—Prescott Valley, LLC, 3 Point Media—Coalville, LLC, 3 Point Media—Arizona, LLC, 3 Point Media—Florida, LLC, 3 Point Media—Kansas, LLC, 3 Point Media— Ogden, LLC, 3 Point Media—San Francisco, LLC, Midvalley Radio

Partners, LLC, D & B Towers LLC, Superior Broadcasting of Denver, LLC, Wackenburg Associates, LLC, Portland Broadcasting LLC, Desert Sky Media LLC, Sky Media LLC and John Does 1-50, Defendants.

No. 09-cv-668 (ADS)(MLO).

United States District Court, E.D. New York.

November 19, 2009.

Cohen & Gresser LLP, by Lawrence T. Gresser, Esq., Alexandra Sarah Wald, Esq., Nathaniel P.T. Read, Esq., Alexis Gena Stone, Esq., and Harvey B. Silikovitz, Esq., Of Counsels, New York, NY, for Plaintiffs.

Peckar & Abramson, P.C., by Kevin Joseph O'Connor, Esq., Of Counsel, New York, NY, for Defendants.

Allyn & Fortuna, LLP, by Nicholas J. Fortuna, Esq., Of Counsel, New York, NY, Callister Nebeker & McCullough, P.C., by Mark L. Callister, Esq., Of Counsel, Salt Lake City, UT, for Defendant D & B Towers LLC.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

This case arise out of allegations by the plaintiff, C. Robert Allen, III ("Allen"), by his Guardian for Property Management, Luke Allen, that the defendants defrauded Allen out of tens of millions of dollars over several years. Presently before the Court are (1) a motion by defendants Christopher Devine, Lakeshore Media, LLC, College Creek Media LLC, Marathon Media Group, LLC, 3 Point Media—Salt Lake City, LLC, 3 Point Media Delta, LLC, 3 Point Media—Prescott Valley, LLC, 3 Point Media—Coalville, LLC, 3 Point Media—Arizona, LLC, 3 Point Media—Florida, LLC, 3 Point Media—Kansas, LLC, 3 Point Media—Ogden, LLC, 3 Point Media—San Francisco, LLC, Midvalley Radio Partners, LLC, Superior Broadcasting of Nevada, LLC, Superior Broadcasting of Denver, LLC, Wackenburg Associates, LLC, Portland Broadcasting LLC, Desert Sky Media LLC, and Sky Media LLC (collectively, the "Moving Defendants") to dismiss the complaint for failure to join an indispensable party, pursuant to Fed. R.Civ.P. 19, (2) a motion by the Moving Defendants in the alternative to transfer the action, (3) a motion by defendant D & B Towers, LLC ("D & B Towers") to dismiss the complaint against them for lack of personal jurisdiction, and (4) a motion by defendant D & B Towers to dismiss the complaint against them for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6) and 9(a). For the reasons which follow, the Court denies all the motions, and orders Bruce Buzil, Richard Davis, and Superior Broadcasting Company, Inc. to be joined as defendants as to the plaintiffs request for a constructive trust, and orders Bruce Buzil and Richard Davis to be joined as defendants as to the plaintiffs request for injunctive relief.

I. BACKGROUND

C. Robert Allen III is a 79-year old resident of Port Washington, New York. He is alleged to have lived in Port Washington since at least the 1980's. Through his family, Allen developed significant personal wealth, though Allen himself had earned little money in business. According to the complaint, Allen is today both physically and mentally infirm, and rarely leaves his home.

Allen alleges that he met defendants Christopher Devine and Bruce Buzil in the 1980's. Soon after Allen met Devine, it is alleged that Devine began telephoning Allen in his New York home on a daily basis. Devine also allegedly visited Allen at his home in Port Washington, New York on multiple occasions. According to Allen, Devine and Buzil saw him as a "mark", and ingratiated themselves to Allen for the purpose of defrauding him.

In 1999, Devine and Buzil allegedly began soliciting Allen to invest in a company called Superior Broadcasting Company, Inc. ("Superior"), for which Devine served as president and Buzil served as secretary. Devine and Buzil allegedly represented to Allen that Superior owned several radio stations and other related assets, when in fact Superior was a shell company with no significant assets or income. Allen alleges that, beginning in 2000, he began making significant loans to Superior based on Devine and Buzil's misrepresentations.

Once Allen began making loans to Superior, Devine and Buzil allegedly began using these loans for their own benefit. Allen alleges that Devine and Buzil improperly diverted some of the money he loaned to Superior directly to themselves, and used some of the money to pay an accomplice, one Richard Davis. However, A large portion of the money is alleged to have been used to fund a network of limited liability corporations that Devine and Buzil owned (the "Devine/Buzil LLCs"), without any benefit for Superior or Allen. One of these alleged Devine/Buzil LLCs is the defendant D & B Towers. Allen names as defendants an additional twentytwo Devine/Buzil LLCs, all of which Allen alleges were operated by Devine and Buzil from a single Chicago office.

Further, Allen alleges that Devine and Buzil were aided in their scheme by Allen's neighbor in Port Washington, Richard Davis. While Allen introduced Davis to Devine and Buzil, Allen alleges that Devine and Buzil ultimately included Davis as a co-conspirator in their scheme. Davis' role in the scheme is alleged as follows: First, Davis would loan money to Superior, Devine, Buzil, and the Devine/Buzil LLCs. Devine and Buzil would then use the money Allen invested in Superior to repay these loans to Davis, plus exorbitant interest. Allen alleges that approximately $23 million of Allen's money was eventually paid to Davis.

To keep Allen from discovering their alleged misappropriation of funds, Devine and Buzil allegedly prepared falsified financial statements for Superior. They then regularly sent these statements to Allen at his home in New York. Allen alleges that, by 2007, when family members discovered the fraud, he had lost some $70 million to Devine and Buzil's scheme.

On February 18, 2009, Allen filed the present law suit, naming as defendants Devine, Buzil, and twenty-three Devine/Buzil LLCs. Against Devine and Buzil, Allen alleges violations of the Racketeering Influenced Corrupt Organizations Act ("RICO"), fraud, and breach of fiduciary duty. Against all the defendants Allen alleges civil conspiracy, conversion, and unjust enrichment. On March 20, 2009, Allen voluntarily dismissed Buzil from the present case pursuant to Fed.R.Civ.P. 41(a)(1)(A)(1), after a New York State Justice found, in sealed proceedings in a separate but related matter, that New York State long arm jurisdiction did not extend to Buzil. Allen states that he dismissed Buzil "rather than waste time on motion practice over jurisdictional issues incidental to Allen's principal rights to relief." (Opp. at 8.)

II. DISCUSSION

A. As to the Moving Defendants' Motion to Dismiss for Failure to Join an Indispensable Party

The Moving Defendants have moved to dismiss the present action without prejudice pursuant to Fed.R.Civ.P. 19(b) for failure to join an indispensable party. Specifically, the Moving Defendants argue that Buzil and Davis are necessary parties, but that Buzil's joinder is not feasible because the Court has no personal jurisdiction over him, and that Davis's joinder is not feasible because his joinder would destroy the Court's subject matter jurisdiction. The Moving Defendants argue this is fatal to the plaintiffs complaint. The Moving Defendants additionally argue that Superior is a necessary party, though the parties agree that Superior's joinder is feasible.

Under Rule 19, the Court conducts a three-part analysis concerning the joinder of a party. The Court considers (1) whether the party is necessary to the present case and therefore should be joined, (2) whether the party's joinder is feasible (that is, whether all jurisdictional requirements are met and whether any other extraordinary circumstance prevents joinder), and (3) whether, if the party is necessary but joinder is not feasible, the court may in equity and good conscience, allow the action to proceed with the existing parties. See, Viacom Intern., Inc. v. Kearney, 212 F.3d 721, 724-25 (2d Cir.2000); Underpinning & Foundation Skanska, Inc. v. Berkley Regional Ins. Co., 07-cv-2758 (ADS)(ARL), 262 F.R.D. 196, 200-01 (E.D.N.Y.2009); Fed.R.Civ.P. 19.

Fed.R.Civ.P. 19 provides that a party is necessary to an action when:

(A) in that person's absence, the court cannot accord complete relief among existing parties ...

Fed.R.Civ.P. 19(a); see also, Viacom Intern., Inc., 212 F.3d at 724.

The Court therefore first considers whether Buzil, Davis, or Superior are necessary parties who must be joined in this action pursuant to Rule 19(a). In general, the party moving for compulsory joinder has the burden of showing that joinder is appropriate. Joseph S. v. Hogan, 561 F.Supp.2d 280, 311 (E.D.N.Y.2008) (citing Bodner v. Banque Paribas, 114 F.Supp.2d 117, 137 (E.D.N.Y.2000) and M.C. v. Voluntown Bd. of Educ., 178 F.R.D. 367, 369 (D.Conn.1998)). Generally, joint tortfeasors are not necessary parties under Rule 19(a). See Temple v. Synthes Corp., Ltd., 498 U.S. 5, 7, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990) ("It has long been the rule that it is not necessary for all joint tortfeasors to be named as defendants in a single lawsuit."); Bodner v. Banque Paribas, 114 F.Supp.2d 117, 136-37 (E.D.N.Y.2000); Fed R. Civ. P. 19 advisory committee's note ("[Rule 19] is not at variance with the settled authorities holding that a tortfeasor with the usual `joint-and-several' liability is merely a permissive party to an action against another with like liability.").

Here, the plaintiff is alleging that all...