Defazio v. Wallis

• Citation: 500 F.Supp.2d 197
• Decision Date: 14 July 2007
• Docket Number: No. 05-CV-5712 (ADS)(ARL).,05-CV-5712 (ADS)(ARL).
• Parties: Victor J. DEFAZIO, Jack Finkelstein, James Collins, and Henry Gebhard, Plaintiffs, v. Kevin WALLIS; Robert Aquino; Ryan P. Greenberg; Thomas Ryan; Bryan Zwolack; Jeffrey M. Roberts P.C.; Jeffrey M. Roberts; Capital Health Management, Inc.; Meridian Ambulance Group, LLC; Meridian Behavioral Sciences, LLP; Meridian Group Holdings, LLC; Meridian Behavioral Health Sciences, LLP; Meridian MSO, Inc.; Meridian MSO, LLC; Phoenix Transport Corp. d/b/a Emergency Ambulance Service; University Care Network, LLC; Defendants "John Does" and "Jane Roes" "1" through "15", The Names "John Doe" and "Jane Roe' Being Fictitious, The Identity of said Defendants not being Presently known to the Plaintiffs; and/or Others Presently Unknown to the Plaintiff, Jointly or Severally, Doing Business Under the Trade Styles, Capital Management, Med Transit, Meridian, Meridian Behavioral Health Services, Meridian Health Services, Phoenix Ambulance, Physicians Health Services, Presidential Emergency Medical Service; and University Health Plans, Defendants.
• Court: U.S. District Court — Eastern District of New York

Page 197

500 F.Supp.2d 197

Victor J. DEFAZIO, Jack Finkelstein, James Collins, and Henry Gebhard, Plaintiffs, v. Kevin WALLIS; Robert Aquino; Ryan P. Greenberg; Thomas Ryan; Bryan Zwolack; Jeffrey M. Roberts P.C.; Jeffrey M. Roberts; Capital Health Management, Inc.; Meridian Ambulance Group, LLC; Meridian Behavioral Sciences, LLP; Meridian Group Holdings, LLC; Meridian Behavioral Health Sciences, LLP; Meridian MSO, Inc.; Meridian MSO, LLC; Phoenix Transport Corp. d/b/a Emergency Ambulance Service; University Care Network, LLC; Defendants "John Does" and "Jane Roes" "1" through "15", The Names "John Doe" and "Jane Roe' Being Fictitious, The Identity of said Defendants not being Presently known to the Plaintiffs; and/or Others Presently Unknown to the Plaintiff, Jointly or Severally, Doing Business Under the Trade Styles, Capital Management, Med Transit, Meridian, Meridian Behavioral Health Services, Meridian Health Services, Phoenix Ambulance, Physicians Health Services, Presidential Emergency Medical Service; and University Health Plans, Defendants.

No. 05-CV-5712 (ADS)(ARL).

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

July 14, 2007.

COPYRIGHT MATERIAL OMITTED

Dinerstein & Lesser, P.C., Commack, NY (Robert J. Dinerstein, of counsel), for Movant.

The Law Firm of Joel Spivak, Great Neck, NY (Joel Spivak, of counsel), for Plaintiffs.

Law Offices of Edward Weissman, New York, NY (Edward Weissman, of counsel), for Defendants, Kevin Wallis and Ryan P. Greenberg.

Law Offices of Thomas F. Liotti, Garden City, NY (Thomas F. Liotti, of counsel), for Defendants, Robert J. Aquino and Capital Health Management, Inc.

Murray & McCann, Rockville Centre, NY (Joseph D. McCann, of counsel), for Defendant, Thomas Ryan.

Pezold, Smith, Hirschmann & Selvaggio, LLC, Huntington, NY (George C. Pezold, of counsel), for Defendant, Bryan Zwolack.

The Law Office of Bennett D. Krasner, Atlantic Beach, NY (Bennett D. Krasner, of counsel), for Defendant, Phoenix Transport Corp.

Jeffrey M. Roberts, P.C., Smithtown, NY (Jeffrey M. Roberts, of counsel), for Defendants, Jeffrey M. Roberts P.C. and Jeffrey M. Roberts.

NO APPEARANCE: The Defendants Meridian Ambulance Group, LLC, Meridian Behavioral Sciences, LLP, Meridian Group Holdings, LLC, Meridian Behavioral Health Sciences, LLP, Meridian MSO, Inc., Meridian MSO, LLC, and University Care Network, LLC.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

On December 8, 2005, Victor DeFazio, Jack Finkelstein, James Collins, and Henry Gebhard (collectively, the "plaintiffs") commenced this action against the numerous defendants alleging, among other matters, violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). Presently there are four motions before the Court: (1) a motion by the plaintiffs' former counsel, Dinerstein & Lesser, P.C. and Robert Jay, Dinerstein, Esq., pursuant to Rule 60(b) of the Federal Rules of Civil Procedure ("Fed.R.Civ.P.") for relief from the Court's October 17, 2006 Order disqualifying Dinerstein as counsel for the plaintiffs; (2) the defendant Robert J. Aquino's motion to dismiss the amended complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) and for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1); and (3) separate motions by (a) the defendant Thomas Ryan and (b) the defendants Kevin Wallis and Ryan Greenberg, both for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) and 9(b). For the purpose of this motion Aquino, Ryan, Wallis, and Greenberg are referred to as "the moving defendants."

I. AS TO DINERSTEIN'S RULE 60 MOTION

On October 17, 2006, ruling on objections to an order of United States Magistrate Judge Arlene R. Lindsay, this Court granted a motion by the defendant Kevin Wallis to disqualify Dinerstein as the plaintiffs' counsel, and directed the plaintiffs to retain new counsel. On November 29, 2006, Dinerstein first filed a Rule 60 motion. On December 9, 2006, the Court determined that the motion should not be considered because it violated several Local Rules for the Southern and Eastern Districts of New York and this Court's individual rules. Specifically, the motion did not include a memorandum of law, and the declaration submitted in support of the motion contained numerous footnotes and exceeded the Court's twenty-five page limit. The Court permitted Dinerstein to refile his motion upon compliance with the Court individual rules and the local rules. He did so on December 14, 2006.

Dinerstein's present motion is based on Rule 60(b)(3), which provides that "[o]n motion and upon such tuns as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for ... fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party." Fed. R.Civ.P. 60(b)(3). A party seeking relief pursuant to Rule 60(b)(3) must establish by clear and convincing evidence that the opposing party engaged in fraud or other misconduct. See Fleming v. New York Univ., 865 F.2d 478, 484 (2d Cir.1989). Moreover, "No prevail on a Rule 60(b)(3) motion, a movant `must show that the conduct complained of prevented the moving party from fully and fairly presenting his case.'" State Street Bank and Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 176 (2d Cir.2004).

Dinerstein raises five grounds for relief: (1) the defendant Wallis committed perjury; (2) there was no confidential disclosure; (3) the purported communications were false and therefore were not privileged; (4) Wallis failed to satisfy the high standard of proof in supporting his motion to disqualify Dinerstein; and (5) there was no substantial relationship between the services rendered by Dinerstein to Wallis and the issues at bar in the instant case. In the Court's opinion, grounds two through five are merely attempts by Dinerstein to re-litigate the motion for disqualification which was heard by Magistrate Judge Lindsay, and the parties objections to this Court, and will not be considered. See Fleming, 865 F.2d at 484 (Rule 60(b)(3) cannot be used to relitigate the merits of a previously determined motion); see also Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir.1986) (same). Thus, only Dinerstein's allegations of fraud would be appropriate for consideration.

However, without regard to the substance of Dinerstein's arguments, the Court finds that Rule 60 is not a proper vehicle for him to seek relief from this Court's October 17, 2006 Order disqualifying him as counsel for the plaintiff. By its terms, Rule 60 applies to "a final judgment, order, or proceeding." Fed.R.Civ.P. 60(b) (emphasis added). While courts have recognized that the language of the rule leaves doubt about whether the word "final" applies to the "order" and "proceeding" referenced in Rule 60, several cases have held that it does. See Schwab v. Philip Morris USA, Inc., 449 F.Supp.2d 992, 1092 (E.D.N.Y.2006) (Rule 60 is not appropriate to challenge non-final order denying summary judgment); Buck v. Libous, No. 3:02 CV 1142, 2005 WL 2033491, *1 n. 2 (N.D.N.Y. Aug.17, 2005) (same with respect to an order denying summary judgment or granting partial summary judgment); Cancel v. Mazzuca, No. 01 Civ. 3129, 2002 WL 1891395, *3 (S.D.N.Y. Aug.15, 2002) (quotation omitted) (same with respect to order denying summary judgment to the plaintiff and granting partial summary judgment to the defendants). Rule 60 is inapplicable here if the Court's Order disqualifying Dinerstein as counsel for the plaintiff is not a final order.

The Court did not find cases discussing Rule 60 in connection with an order disqualifying counsel However, the United States Supreme Court has stated that, for purposes of an appeal, an order disqualifying an attorney from a representation is not a final order. Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 430, 440, 105 S.Ct. 2757, 2761, 2766, 86 L.Ed.2d 340 (1985) (stating that "[a]n order disqualifying counsel in a civil case is not a final judgment on the merits of the litigation"; nor are orders disqualifying counsel in a civil case collateral orders subject to immediate appeal as "final orders"). In the Court's view, there is no significant reason to distinguish "finality" for purposes of appeal from finality for purposes of a Rule 60 motion. The order disqualifying Dinerstein is not "final," and therefore is not subject to attack under Rule 60. The proper procedure for Dinerstein would have been to make a motion for reconsideration pursuant to Local Rule 6.3, or to seek leave from the Court of Appeals to file an interlocutory appeal. Dinerstein did not pursue either procedure, and the time to do so passed before he made his Rule 60 motion.

In addition, on the merits, the Court finds that Dinerstein made no showing that the defendants' fraud prevented the plaintiffs from fully and fairly presenting their case against disqualification to the magistrate judge, or to this Court on appeal from Judge Lindsay's order. See State Street Bank and Trust Co., 374 F.3d at 176. Accordingly, the Court denies Dinerstein's Rule 60 motion for relief from the Court's October 17, 2006 Order disqualifying him as counsel for the plaintiffs.

II. THE DEFENDANTS' MOTIONS TO DISMISS AND FOR JUDGMENT ON THE PLEADINGS

A. Background

The facts in the amended complaint are taken to be true for the purpose of these motions. The individual defendants Wallis, Aquino, Greenberg, Ryan, and Zwolack are alleged to have held various positions as employees, agents, or owners of the various corporate defendants. The defendants Capital Health Management, Inc., Meridian Ambulance Group, LLC, Meridian Behavioral Sciences, LLP, Meridian Behavioral Health Sciences, LLP, Meridian MSO, Inc., Meridian MSO, LLC, University Care Network, LLC, Med Transit, Physicians Health Services, Presidential Emergency Medical Services, and University Health Plans are...