Caldwell v. Gutman

• Decision Date: 30 March 2010
• Docket Number: No. 08-CV-4207 (JFB)(WDW).,08-CV-4207 (JFB)(WDW).
• Citation: 701 F.Supp.2d 340
• Parties: Ken CALDWELL and Lisa Caldwell, Plaintiffs,v.GUTMAN, MINTZ, BAKER & SONNENFELDT, P.C, et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

701 F.Supp.2d 340

Ken CALDWELL and Lisa Caldwell, Plaintiffs,v.GUTMAN, MINTZ, BAKER & SONNENFELDT, P.C, et al., Defendants.

No. 08-CV-4207 (JFB)(WDW).

United States District Court E.D. New York.

March 30, 2010.

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Ken Caldwell, Newark, DE, pro se.

Lisa Caldwell, Newark, DE, pro se.

Kenneth A. Novikoff, Rivkin Radler, LLP, Uniondale, NY, for the Defendants.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge:

Before the Court are plaintiffs Ken and Lisa Caldwell's (“plaintiffs” or “the Caldwells”) objections to a Report and Recommendation (“R & R”) issued by Magistrate Judge Wall. The R & R recommends the Court grant defendants' motion for judgment on the pleadings and deny plaintiffs' motion to amend their complaint. For the reasons set forth below the Court adopts the well-reasoned and thorough R & R, except its recommendation regarding plaintiffs' Fair Credit Reporting Act Claim. Although the Court agrees that the FCRA claim should be dismissed, the Court will give plaintiffs the opportunity to replead the claim.

I. Background

Plaintiffs Ken and Lisa Caldwell, who are proceeding pro se, filed the complaint in this case on October 7, 2008 against defendants Gutman, Mintz, Baker, & Sonnenfeldt P.C. (“Gutman”); Russell Polirer; Fairfield Presidential Associates (“FPA”); Lightstone Group; Fairfield Presidential Management Corporation (“FPMC”); David Lichtenstein; and Debbie Ketay. Plaintiffs allege numerous federal and state claims, including: (1) violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.; (2) violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.; (3) violations of New York General Business Law § 349; (4) malicious prosecution; (5) abuse of process; (6) wrongful use of a civil proceeding; (7) violations of Federal Rule of Civil Procedure 11; (8) violations of the federal criminal false statements statute, 18 U.S.C. § 1001; and (9) federal criminal mail fraud, apparently under an “honest services” theory, pursuant to 18 U.S.C. § 1341 and § 1346.

Gutman and Polirer answered the complaint on November 26, 2008. FPA, Lightstone Group, FPMC, Lichtenstein, and Ketay answered on December 10, 2008. On May 5, 2009, all defendants notified the Court that they intended to move for judgment on the pleadings, and the Court issued a briefing schedule that same day. On May 29, 2009, plaintiffs filed a letter motion seeking leave to file an amended complaint. On June 2, 2009, in accordance with the briefing schedule previously issued by the Court, defendants filed their motion for judgment on the pleadings. On November 6, 2009, this Court referred defendants' motion to Magistrate Judge Wall for an R & R. On January 27, 2010, Magistrate Judge Wall recommended that defendants be granted judgment on the pleadings and also recommended sua sponte, that plaintiffs' motion to amend their complaint be denied. Defendants served plaintiffs with the R & R by mail on February 3, 2010. On February 18, 2010, this Court received objections to the R & R from plaintiffs.

II. Standard of Review

A district judge may accept, reject, or modify, in whole or in part, the findings and recommendations of the Magistrate Judge. See DeLuca v. Lord, 858 F.Supp. 1330, 1345 (S.D.N.Y.1994); Walker v. Hood, 679 F.Supp. 372, 374 (S.D.N.Y.1988). As to those portions of a report to which no “specific written objections” are made, the Court may accept the findings contained therein, as long as the factual and legal bases supporting the findings are not clearly erroneous. See Fed.R.Civ.P. 72(b); Thomas v. Arn, 474 U.S. 140, 149, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Greene v. WCI Holdings Corp., 956 F.Supp. 509, 513 (S.D.N.Y.1997). As to portions of a report to which specific written objections are made, the Court reviews such findings de novo. See Fed.R.Civ.P. 72(b); Hynes v. Squillace, 143 F.3d 653, 656 (2d Cir.1998); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir.1997).

III. Discussion

A. Motion for Judgment on the Pleadings

The R & R recommended granting defendants judgment on the pleadings because (1) plaintiffs sought review of a prior state court judgment, and the Rooker-Feldman doctrine therefore precluded them from bringing this action, and (2) to the extent plaintiffs asserted claims independent of the prior state court judgment, those claims failed to state a claim for which relief could be granted.

1. Rooker-Feldman

The Court agrees with the R & R that Rooker-Feldman at least partially precludes plaintiffs from bringing this action. Specifically, the R & R stated that plaintiffs sought to attack a judgment from the Civil Court of the City of New York, Kings County (“the civil court judgment”) that issued following a bench trial. ( See Novikoff Aff. Ex. B.) In that case, FPA-a defendant in this case-sued the Caldwells seeking unpaid rent from several years before. The Caldwells counterclaimed, seeking rent abatement. The civil court found that plaintiffs were liable for back rent and that they were not entitled to any abatement. ( See id.) Judgment was entered on September 14, 2007. ( See id. Ex. C.) The Caldwells appealed, and the Appellate Term affirmed the civil court judgment, relying in part on a stipulation plaintiff signed in 2002 to resolve two earlier proceedings. See Fairfield Presidential Assoc. v. Caldwell, No. 2008-134 K.C., 2009 WL 383231 (N.Y.App. Term Feb. 11, 2009).

The Second Circuit has delineated four requirements for the application of the Rooker-Feldman doctrine: (1) “the federal-court plaintiff must have lost in state court”; (2) “the plaintiff must complain of injuries caused by a state-court judgment”; (3) “the plaintiff must invite district court review and rejection of that judgment”; and (4) “the state-court judgment must have been rendered before the district court proceedings commenced.” Hoblock v. Albany County Bd. of Elections, 422 F.3d 77, 85 (2d Cir.2005) (internal citations and quotations omitted). The Second Circuit has classified the first and fourth requirements as “procedural” and the second and third requirements as “substantive.” See id.

i. Procedural Requirements

The procedural requirements are met here. First, plaintiff lost in state court as evidenced by the civil court judgment.

Second, the civil court judgment was rendered before the district court proceedings were commenced on October 10, 2008. This issue merits some discussion, however. In objecting to the R & R, plaintiffs contend that the R & R incorrectly “stated that we had started this lawsuit in Federal court [sic] after we were denied our appeal....” ( See Obj. to R & R, at 2.) The R & R actually states that “[i]n between the entry of judgment in the [Kings County] Civil Court and the denial of [plaintiffs' state-court] appeal, they started this lawsuit.” ( See R & R, at 3.) In any event, the Court will construe the pro se objections to advance the strongest argument possible. Here, that argument would be that the state-court judgment was not “rendered before the district court proceedings commenced” because state appellate proceedings were still pending when plaintiffs filed this lawsuit in federal court. ( See generally id. at 2-3.)

Although neither the Supreme Court nor the Second Circuit has directly addressed the issue, some courts have found the Rooker-Feldman doctrine inapplicable unless all state proceedings-including appeals-have ended before the federal action commences. See Nicholson v. Shafe, 558 F.3d 1266, 1275-76 (11th Cir.2009) (“[B]ecause an appeal remained pending in the state court action at the time the Appellants filed the instant [federal] case, the state court proceedings had not ended for purposes of Rooker-Feldman ....”); Guttman v. G.T.S. Khalsa, 446 F.3d 1027, 1032 (10th Cir.2006) (“In this case, [plaintiff] filed his federal suit while his petition for certiorari to the New Mexico Supreme Court was pending. His state suit was not final. As such, the Rooker-Feldman doctrine does not bar his federal suit....”); Dornheim v. Sholes, 430 F.3d 919, 923-24 (8th Cir.2005) (“At the time that the [plaintiffs] commenced this federal action, the state court adjudication was not complete” because state appellate proceedings took place after filing of federal action); Federación de Maestros de P.R. v. Junta de Relaciones del Trabajo de P.R., 410 F.3d 17, 27 & n. 13 (1st Cir.2005); see also Council v. Better Homes Depot, Inc., 04 CV 5620(NGG)(KAM), 2006 WL 2376381, at *8, 2006 U.S. Dist. LEXIS 57851, at *25 (E.D.N.Y. Aug. 16, 2006) (“Therefore, the state court proceeding ends for Rooker-Feldman purposes after a plaintiff allows the time for appeal to lapse without filing an appeal in state court.”); Phillips ex rel. Green v. City of N.Y., 453 F.Supp.2d 690, 714 (S.D.N.Y.2006).

Generally speaking, these decisions have focused on language in the Supreme Court's decision in Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005), stating that Rooker-Feldman applies only when “ ‘the losing party in state court filed suit in federal court after the state proceedings ended ....’ ” See, e.g., Federación, 410 F.3d at 24 (quoting Exxon Mobil, 544 U.S. at 291, 125 S.Ct. 1517) (emphasis added); see also Nicholson, 558 F.3d at 1275-76. Under the reasoning of these cases, “state proceedings” have not “ended” if appeals are still pending, and, therefore, if, as here, a plaintiff files a federal suit while state court appeals are still pending, the Rooker-Feldman doctrine does not bar the federal suit.

Other courts, however, have disagreed. These courts have applied Rooker-Feldman as long as the federal action seeks review of a previous state court judgment, regardless of whether that judgment is being appealed in the state courts when the federal case begins. See, e.g., Schuh v. Druckman & Sinel, L.L.P., No. 07 Civ. 366(LAK)(GWG), 2008 WL 542504, at *5, ...