Ray v. Watnick, 15 Civ. 10176

• Decision Date: 26 April 2016
• Docket Number: 15 Civ. 10176
• Citation: 182 F.Supp.3d 23
• Parties: Ames Ray, Plaintiff, v. Donald Watnick, Julie Stark, and John Does 1–5, Defendants.
• Court: U.S. District Court — Southern District of New York

182 F.Supp.3d 23

Ames Ray, Plaintiff,

v.Donald Watnick, Julie Stark, and John Does 1–5, Defendants.

15 Civ. 10176

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

Signed April 26, 2016

As Amended May 4, 2016

Frank Victor Raimond, New York City Law Department, New York, NY, for Plaintiff.

Janice J. Digennaro, Avigael Cymrot Fyman, Rivkin Radler LLP, Uniondale, NY, for Defendants.

OPINION AND ORDER

JED S. RAKOFF, United States District Judge

On December 31, 2015, plaintiff Ames Ray filed suit in this Court against defendants Donald Watnick and Julie Stark, who are attorneys representing Mr. Ray's ex-wife, Christina Ray, in an underlying state court matter. See Complaint ("Compl."), Dkt. 1, ¶ 1.¹ Ames claimed that defendants Watnick and Stark had made or consented to the making of deceitful statements during the course of that underlying litigation, in violation of New York Judiciary Law § 487. See id. ¶ 3. On February 26, 2016, defendants Watnick and Stark moved to dismiss for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6). See Notice of Motion, Dkt. 13.² At oral argument on April 4, 2016, the Court indicated that it would grant defendants' motion to dismiss and noted that final judgment would be entered upon issuance of an Opinion explaining the Court's reasoning. See Transcript of Oral Argument dated April 4, 2016 ("Tr.") at 13:6–8, 14:2–5. This is the promised Opinion and Order.

In ruling on a motion to dismiss under Fed.R.Civ.P.12(b)(6),³ the Court accepts as true the factual allegations in the complaint and draws all reasonable inferences in favor of the plaintiff. Town of Babylon v. Fed. Hous. Fin. Agency, 699 F.3d 221, 227 (2d Cir.2012). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted).

In this case, the relevant allegations of the Complaint are as follows. Christina, as noted, is Ames's former wife. See Compl. ¶ 11. She divorced Ames in 1977, but had business dealings with him until 1993. See id. Ames sued Christina in New York State Supreme Court in 1998, seeking damages for breach of a series of contracts in which Christina allegedly assumed certain obligations to Ames that she later failed to pay. See id. ¶¶ 12–14. The Law Offices of Donald Watnick became Christina's attorney of record in or about March 2012. See id. ¶ 15. The Complaint then describes eight allegedly deceitful statements in court papers filed with the New York State Supreme Court and Appellate Division that defendants purportedly made or consented to while knowing the statements were untrue and intending to deceive the courts in order to gain an advantage in litigation. See id. ¶¶ 17–49. However, as to each of these statements, plaintiff's allegations of intentional deceit are doubtful on their face.

The first two statements at issue appeared in a brief that defendant Watnick filed on January 25, 2013 in opposition to plaintiff's motion in limine to preclude the admission of Christina's expert report into evidence at trial. See id. ¶¶ 19–21. In this brief, Watnick stated that "[t]he third quarrel Dr. Kirstein has with the Report is that his review of the evidence does not reveal physical abuse. Clearly, Dr. Kirstein missed plaintiff's admission in his deposition that he physically abused Christina and that she was fearful of him." In the same brief, Watnick stated that "as this Court recognized, plaintiff also admits the existence of oppressive circumstances and that he knew Christina feared him." See Compl. ¶¶ 21–22, 29. According to the Complaint, however, Ames never admitted to physically abusing Christina, and defendant Watnick had no evidence that plaintiff admitted that Christina was afraid of Ames or that there existed oppressive circumstances. See id. ¶¶ 23, 31.

However, defendant Watnick, in making these statements about physical abuse and oppressive circumstances, cited to an opinion written by Judge Ramos, who presided over the underlying state court litigation. See DiGennaro Declaration, Exhibit N, Dkt. 14–14, at 8–9, 12; DiGennaro Declaration, Exhibit D, Dkt. 14–4. In that Opinion, Judge Ramos stated as follows:

Underlying these issues are [Christina's] disturbing allegations of [Ames's] oppressive behavior, which [Christina] contends forced her to sign the documents and agreements. These allegations of oppressive circumstances are credible, given [Ames's] admission in his deposition that he physically abused her "maybe to alleviate some fear she had about what I might do."

DiGennaro Declaration, Exhibit D, at 3. Even assuming arguendo that Judge Ramos was himself incorrect in his construction of Ames' deposition, how can it be plausibly alleged that defendant Watnick, in citing and stating that same construction back to the same judge, was acting deceitfully?⁴

Similar deficiencies in plaintiff's allegations arise when considering the next three allegedly deceitful statements, which relate to documents that plaintiff calls a "material confession of judgment" and a "letter agreement" (and which defendants label the "Confession" and the "Penalty Letter"). See Compl. ¶ 35. On December 5, 2012, in a written submission in support of a motion seeking spoliation sanctions, defendants stated that "Ames produced only one letter that preceded the date of the Confession—the unsigned Feb. 17, 1993 letter about the Confession and that stated that it was from Christina to Alkalay.⁵

Conspicuously absent from Ames's and Alkalay's document productions are any drafts of the Confession, written communications about the Confession or notes about its drafting or its enforcement." See id. ¶ 36. In the same submission, defendants also stated that "Ames produced no documents relating to [the Penalty Letter's] creation." See id. Furthermore, defendant Watnick later repeated the same statement in his brief on appeal of the trial court's order granting spoliation sanctions.See id. ¶ 41.

Plaintiff Ames claims that these three statements were false and deceitful because he "did produce documents relating to both the confession of judgment and Penalty Letter in controversy, including their creation." Id. ¶ 37. A review of the underlying state court documents upon which the Complaint relies, however, makes clear that, read in context, Watnick's above-quoted statements were directed at plaintiff's failure to produce documents related specifically to the creation of the Confession of Judgment and Penalty Letter. See DiGennaro Declaration, Exhibit F, Dkt. 14–6, at 9. The documents plaintiff claims to have produced do not appear to be related to the creation of these instruments (other than the February 17, 1993 letter that Watnick acknowledged plaintiff had produced). See DiGennaro Declaration, Exhibit F, at 9; DiGennaro Declaration, Exhibit I, Dkt. 14–9, at 6–7; DiGennaro Declaration, Exhibit J, Dkt. 14–10, at 3. At worst, there is a reasonable disagreement over the context of Watnick's statements, but nothing like a plausible allegation that the statements were the product of intentional deceit.

The same point applies to the sixth allegedly deceitful statement, which concerned files in a case that both of the Rays had brought against a building contractor, John Salomon. See Compl. ¶ 38. The statement in question, filed in Christina's December 5, 2012 brief seeking spoliation sanctions, was that "without [the Salomon Action] files, Christina is unfairly denied evidence ... The prejudice here is especially severe because there are no documents that address these issues and plaintiff's attorneys had access to the Salomon Action file." See id. ¶ 38. But as defendants point out, the wider context of this statement is as follows:

Without these files, Christina is unfairly denied evidence that could allow her to prove that the alleged sale of the House was a sham and that could be critical in cross-examining Ames and/or Alkalay. The prejudice here is especially severe because there are no documents that address these issues and plaintiff's attorney had access to the Salomon Action file while that case still was ongoing.

DiGennaro Declaration, Exhibit F, at 23. Though plaintiff now claims (as he did in the underlying state court litigation) that he did produce the relevant documents, see DiGennaro Declaration, Exhibit J, at 3; Pl. Opp. Br. at 8, he does not deny that, as Judge Ramos found in granting spoliation sanctions against plaintiff, no litigation hold was placed on Alkalay's litigation file on the matter. See DiGennaro Declaration, Exhibit G, Dkt. 14–7, at 12–15. Even if plaintiff is correct to assert that documents "that address these issues" were produced, nothing about this dispute gives rise to an inference that defendants' statements were intentionally false. The fact that Judge Ramos's ruling granting spoliation sanctions was reversed by the Appellate Division, see Pl. Opp. Br. at 9; DiGennaro Declaration, Exhibit V, Dkt. 14–22, does not suggest that Christina's counsel engaged in deceit.

The seventh and eighth allegedly deceitful statements concerned Ames's payment of Christina's credit card debt. See id. ¶ 46. In a brief filed in the underlying litigation on January 25, 2013, Watnick stated that "although plaintiff seeks to recover monies he paid toward Christina's credit card debts, he failed to produce a shred of documentary evidence that he ever made such payments." See id. ¶ 46. Defendant Watnick also stated (in a brief filed on December 5, 2012, see DiGennaro Declaration, Exhibit F, at 23) that "no such files have been produced and plaintiff's failure to preserve them denies Christina evidence that would directly bear upon whether Ames paid this credit card debt." See id. ¶ 46.⁶ The Complaint contends that plaintiff did produce documents relating to his payment of Christina's credit card...