Faryniarz v. Ramirez

• Decision Date: 01 December 2014
• Docket Number: No. 3:13–CV–01064 CSH.,3:13–CV–01064 CSH.
• Citation: 62 F.Supp.3d 240
• Court: U.S. District Court — District of Connecticut
• Parties: Joseph FARYNIARZ, Plaintiff, v. Jose E. RAMIREZ, Jr., Chem, LLC, and Obagi Medical Products, Inc., Defendants.

62 F.Supp.3d 240

Joseph FARYNIARZ, Plaintiff

v.Jose E. RAMIREZ, Jr., Chem, LLC, and Obagi Medical Products, Inc., Defendants.

No. 3:13–CV–01064 CSH.

United States District Court, D. Connecticut.

Signed Dec. 1, 2014.

Edward T. Murnane, Jr., Law Firm of Gary A. Mastronardi, Bridgeport, CT, for Plaintiff.

Jonathan Joseph Klein, Attorney at Law, Bridgeport, CT, for Defendants.

RULING ON MOTION TO AMEND THE COMPLAINT AND MOTION FOR PREJUDGMENT ATTACHMENT

HAIGHT, Senior District Judge.

This case was dismissed on August 5, 2013, without prejudice, for lack of subject matter jurisdiction. See Docs. [13] and [16]. Plaintiff Joseph Faryniarz has since filed a motion to amend the complaint (Doc. # 18) and proposed amended complaint, which asserts civil Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962, and patent infringement violations, 35 U.S.C. § 271, as the bases for this Court's subject matter jurisdiction. He has also filed a motion for prejudgment attachment (Doc. # 25) pursuant to Federal Rule of Civil Procedure 64, and Connecticut General Statutes §§ 52–278a et seq. This Ruling resolves both motions.

I. BACKGROUND

A. Introduction

The factual background in this Part is derived from the allegations in Plaintiff's original complaint, Doc. [1], which are substantially reiterated in his proposed amended complaint, Doc. [18–1]. For the purposes of this Ruling, the Court accepts as true the well-pleaded factual allegations of Plaintiff's complaint. The Court does not credit conclusory allegations or legal conclusions, with which these pleadings abound, as factual allegations. They are considered for the purpose of discerning the nature of Plaintiff's claims, so that the viability of those claims as pleaded may be evaluated under the governing law.

B. Factual Background as Pleaded by Plaintiff

Plaintiff and defendant Jose E. Ramirez (“Ramirez”), entered into a business relationship to develop patentable chemical technologies. Doc. [1] at 12. Under the terms of their agreement, which at its inception was not reduced to writing, Plaintiff was to be mainly responsible for inventing patentable chemical technologies, while Ramirez would handle business concerns, including negotiations with defendant Obagi Medical Products, Inc. (“Obagi”) concerning development of those technologies. Id. at 10, 12. The parties agreed to share their profits equally, and for the sake of simplicity and in recognition of their joint efforts, to alternate their names as primary and co-inventor when filing applications with the United States Patent and Trademark Office (“USPTO”). Id. at 11. The parties also agreed that Plaintiff was to be paid $100,000 a year in recognition of his services as consultant to defendant, JR Chem, LLC, a company formed by Ramirez. Id.

On January 1, 2005, Ramirez and/or JR Chem, LLC, entered into a five year product development contract with Obagi. Id. at 13. Under the product development contract, Obagi agreed to fund the development and patenting costs for the chemical technologies produced by Plaintiff. The development contract also provided that Plaintiff and Ramirez, through JR Chem, LLC, would be paid a royalty from Obagi's sale of Plaintiff's licensed technology. Id.

Plaintiff continued to develop chemical technologies pursuant to the development agreement with Obagi. In light of the oral contract between Plaintiff and Ramirez, Plaintiff assigned the intellectual property rights for the chemical technologies to JR Chem, LLC. Id. at 15. In March 2006, JR Chem, LLC began to prepare and file patent applications with the USPTO. Id.

In October 2006, Ramirez presented Plaintiff with a document he had prepared, which listed all the chemical technologies they had developed, and which stated in writing some of the terms of their oral agreement, including a provision that the parties would share equally any royalty payments from the licensed technology. Id. at 17. Plaintiff and Ramirez signed that agreement on October 6, 2006. Doc. [1], Ex. A.

By 2008, the relationship between Plaintiff and Ramirez had begun to deteriorate. Plaintiff discovered that Ramirez had not been strictly adhering to their agreement to alternate the name of primary inventor on the patent applications for the chemical technologies the parties had developed. Id. at 19. Plaintiff also noticed that Ramirez was becoming increasingly secretive about his business dealings, was sharing less information with Plaintiff, and was often complaining about being taken advantage of by Obagi. Id. at 20. Eventually, Ramirez stopped paying Plaintiff his portion of the royalty payments.Id. at 25. This lawsuit followed.

On July 26, 2013, Plaintiff filed his verified complaint (Doc. # 1) and a motion for temporary restraining order and preliminary and permanent injunction (“motion for injunctive relief”) (Doc. # 2) pursuant to Federal Rule of Civil Procedure 65, requesting the Court to enjoin Ramirez and JR Chem, LLC, from, inter alia, “[d]isbursing, converting, spending, removing, or otherwise disposing of any monies received as royalty or licensing fees related to the chemical technologies described in [P]laintiff's complaint,” and “[f]iling any new patent applications based upon [P]laintiff's research or intellectual property.” Doc. [2] at ¶ 1. The complaint alleged diversity of citizenship as the sole source of subject matter jurisdiction in this federal district court.

After hearing arguments and testimony on Plaintiff's injunction motion on August 1, 2013, 2013 WL 3965373, the Court delivered an oral ruling which dismissed the case, without prejudice, for lack of subject matter jurisdiction, and consequently denied Plaintiff's motion for injunctive relief. As reiterated in a written Order issued that same day, the Court concluded “that Plaintiff failed to establish with the requisite degree of certitude that complete diversity of citizenship exists between the parties.” Doc. [13]. The Clerk entered judgment dismissing the case for lack of subject matter jurisdiction on August 5, 2013. Doc. [16].

Plaintiff subsequently filed a motion for leave to amend the complaint (Doc. # 18) pursuant to Rule 15(a), Federal Rules of Civil Procedure, alleging “violations of federal law making diversity moot and jurisdiction proper in this court.”¹ While Plaintiff's motion for leave to amend the complaint was pending, Plaintiff filed the instant motion for prejudgment attachment (Doc. # 25) pursuant to Rule 64 and Connecticut General Statutes §§ 52–278a et seq. Plaintiff seeks a court order “attaching the real and personal property of defendants Ramirez and JR Chem, LLC,” and directing garnishment of accounts owned by Obagi “and any and all third parties” containing “monies due” from the licensing or sale of “the intellectual property at issue.” Doc. [25] at 2.

II. DISCUSSION

A. Threshold Questions

Although the briefs of counsel do not discuss the issue, threshold questions arise as to whether Plaintiff is entitled to file a motion to amend his complaint under Rule 15, and whether this Court is authorized to entertain it. The text of Rule 15 and the accompanying Advisory Committee Notes make it clear that Rule 15 practice is contemplated to take place only in the context of a pending case. When the Plaintiff filed his Rule 15 motion to amend his complaint, there was no pending case. Judgment had previously been entered on August 5, 2013, dismissing the case. Doc. [16].

“A party seeking to file an amended complaint post-judgment must first have the judgment vacated or set aside pursuant to Fed.R.Civ.P. 59(e) or 60(b).” Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir.2008). Where, as here, “a party files an amended complaint after final judgment has been entered on its original complaint, without bringing motion under Rule 60(b) or 59(e)... the Second Circuit treats the Rule 15(a)... motion as a simultaneous motion to vacate the judgment on the original complaint.” F.D.I.C. v. Weise Apartments, 192 F.R.D. 100, 104 (S.D.N.Y.2000) (citing Nat'l Petrochemical Co. of Iran v. M/T Stolt Sheaf, 930 F.2d 240, 244–45 (2d Cir.1991) ).

Federal Rule of Civil Procedure 60(b) provides:

On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b) ; (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief.

Fed.R.Civ.P. 60(b). Absent any suggestion that subsection (1) through (5) are relevant here, the only conceivable basis on which the Court may relieve Plaintiff from its final judgment is subsection (6), which authorizes a district court to grant relief to a moving party for “any other reason that justifies relief.”² Fed.R.Civ.P. 60(b)(6). Relief under Rule 60(b)(6), however, can only be granted in “exceptional circumstances.” Paddington Partners v. Bouchard, 34 F.3d 1132, 1142 (2d Cir.1994) (citation omitted). There is no showing of exceptional circumstances in the case at bar which would warrant the extraordinary relief contemplated by Rule 60(b)(6).

Therefore, ordinarily “it would be contradictory to entertain a motion to amend the complaint” after a judgment has dismissed the action. Nat'l Petrochemical Co. of Iran, 930 F.2d at 245. The Second Circuit in National Petrochemical Company has nevertheless said in dicta that “in view of the provision of [R]ule 15(a) that ‘leave [to amend] shall be freely given when justice so requires,’ it might be appropriate in a proper case to take...