Stair v. Calhoun, 12-CV-6121 (SJF)(SIL)

• Decision Date: 31 March 2015
• Docket Number: 12-CV-6121 (SJF)(SIL)
• Parties: THEODORE STAIR, individually, THEODORE STAIR, an Officer, Director and Shareholder of American Virgin Enterprises, Ltd., derivatively on behalf of American Virgin Enterprises, Ltd., and THEODORE STAIR, as a Member of Sirius Development, LLC, derivatively on behalf of Sirius Development, LLC, Plaintiffs, v. RORY CALHOUN, JOHN HANRAHAN, ROBERT E. PARELLA and H. LINWOOD GILBERT, Defendants.
• Court: U.S. District Court — Eastern District of New York

THEODORE STAIR, individually, THEODORE STAIR, an Officer,Director and Shareholder of American Virgin Enterprises, Ltd.,derivatively on behalf of American Virgin Enterprises, Ltd., and THEODORE STAIR,as a Member of Sirius Development, LLC, derivatively on behalf of Sirius Development, LLC, Plaintiffs, v. RORY CALHOUN, JOHN HANRAHAN, ROBERT E. PARELLA and H. LINWOOD GILBERT, Defendants.

12-CV-6121 (SJF)(SIL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 31, 2015

ORDER and ORDER TO SHOW CAUSE

FEUERSTEIN, District Judge:

Pending before the Court are objections by (1) pro se plaintiff Theodore Stair ("plaintiff"), individually and derivatively on behalf of (a) American Virgin Enterprises, Ltd. ("AVE-1"), of which he is an officer, director and shareholder, and (b) Sirius Development, LLC, of which he is a member; and (2) pro se defendant Robert E. Parella ("Parella") to a Report and Recommendation of the Honorable Steven I. Locke, United States Magistrate Judge, dated February 9, 2015, recommending (a) that the motion of Parella and defendants John Hanrahan ("Hanrahan") and Rory Calhoun ("Calhoun") (collectively, "defendants") seeking summary judgment dismissing the complaint against them pursuant to Rule 56 of the Federal Rules of Civil Procedure be granted to the extent of dismissing the complaint as against Calhoun for insufficient service of process, and (b) that defendants' motion otherwise be denied. For thereasons stated herein, the Report is accepted in part and rejected in part.

I. DISCUSSION

A. Standard of Review

Rule 72 of the Federal Rules of Civil Procedure permits magistrate judges to conduct proceedings on dispositive pretrial matters without the consent of the parties. Fed. R. Civ. P. 72(b); see Marcella v. Capital Dist. Physicians' Health Plan, Inc., 293 F.3d 42, 46 (2d Cir. 2002). Any portion of a report and recommendation on dispositive matters to which a specific, timely objection has been made is reviewed de novo. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Arista Records, LLC v. Doe 3, 604 F.3d 110, 116 (2d Cir. 2010). However, the court is not required to review the factual findings or legal conclusions of the magistrate judge as to which no proper objections are interposed. See Thomas v. Arn, 474 U.S. 140, 150, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010) ("[A] party waives [judicial] review of a decision in a magistrate judge's report and recommendation if the party fails to file timely objections designating the particular issue."); Cephas v. Nash, 328 F.3d 98, 107 (2d Cir. 2003) ("As a rule, a party's failure to object to any purported error or omission in a magistrate judge's report waives further judicial review of the point.")

General objections, or "objections that are merely perfunctory responses argued in an attempt to engage the district court in a rehashing of the same arguments set forth in the original papers will not suffice to invoke de novo review * * * [because] [s]uch objections would reduce the magistrate's work to something akin to a meaningless dress rehearsal." Owusu v. New YorkState Ins., 655 F. Supp. 2d 308, 313 (S.D.N.Y. 2009) (alterations, quotations and citations omitted); see also Phillips v. Reed Grp., Ltd., 955 F. Supp. 2d 201, 211 (S.D.N.Y. 2013) (accord); Butto v. Collecto, Inc., 290 F.R.D. 372, 379 (E.D.N.Y. 2013) ("In a case where a party makes only conclusory or general objections, or simply reiterates his original arguments, the Court reviews the Report and Recommendation only for clear error." (quotations and citation omitted)). To accept the report and recommendation of a magistrate judge to which such general or perfunctory objections are made, or to which no specific, timely objection has been made, the district judge need only be satisfied that there is no clear error apparent on the face of the record. See Fed. R. Civ. P. 72(b); Spence v. Superintendent, Great Meadow Corr. Facility, 219 F.3d 162, 174 (2d Cir. 2000) (a court may review a report to which no timely objection has been interposed to determine whether the magistrate judge committed "plain error."); Libbey v. Village of Atlantic Beach, 982 F. Supp. 2d 185, 199 (E.D.N.Y. 2013) ("[I]f a party makes only conclusory or general objections, or simply reiterates his original arguments, the Court reviews the Report and Recommendation only for clear error." (quotations and citation omitted)); 7-Eleven, Inc. v. Khan, 977 F. Supp. 2d 214, 219 (E.D.N.Y. 2013) (accord).

Whether or not proper objections have been filed, the district judge may, after review, accept, reject, or modify any of the magistrate judge's findings or recommendations. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Sentry Ins. A Mut. Co. v. Brand Mgmt., Inc., 295 F.R.D. 1, 2 (E.D.N.Y. 2013); North Shore-Long Island Jewish Health Care Sys., Inc. v. MultiPlan, Inc., 953 F. Supp. 2d 419, 424 (E.D.N.Y. 2013).

B. Objections

1. Parella's Objections

Parella contends that Magistrate Judge Locke erred in recommending that the branch of defendants' motion seeking dismissal of plaintiff's complaint as time barred by the applicable statutes of limitations be denied because, inter alia, (1) plaintiff "is not the good faith diligent suitor for whom [New York Civil Practice Law and Rules ("CPLR")] 205 was intended[,]" (Parella's Objections to the Report ["Parella Obj."], at 1); and (2) plaintiff failed to establish that he "satisf[ied] the conditions or requirements of CPLR 205." (Id.)

a. CPLR 205(a)

In diversity cases, such as this one, "state statutes of limitations govern the timeliness of state law claims, and state law determines the related questions of what events serve to commence an action and to toll the statutes of limitations." Diffley v. Allied-Signal, Inc., 921 F.2d 421, 423 (2d Cir. 1990) (quotations and citation omitted); see also Schermerhorn v. Metro. Transp. Auth., 156 F.3d 351, 354 (2d Cir. 1998) (holding that when the plaintiffs' claims are governed by state law, courts "look to state-law tolling rules to determine whether the statute of limitations was tolled * * *.") Thus, "if New York's courts would apply [CPLR 205(a)] to [a] case, then [the federal court] also [is] bound to apply it." Diffley, 921 F.2d at 424.

Section 205(a) of the New York Civil Practice Law and Rules provides, in relevant part:

"If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff * * *may commence a new action upon the same transaction or occurrence or series of transactions or occurrenceswithin six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period."

The Court of Appeals of the State of New York has held "that CPLR 205(a) effectively tolls the running of a statutory period to permit refiling within six months when an action has been timely commenced but dismissed on grounds other than [as set forth therein] * * *." Matter of Goldstein v. New York State Urban Dev. Corp., 13 N.Y. 3d 511, 520, 893 N.Y.S.2d 472, 921 N.E.2d 164 (N.Y. 2009); see also Diffley, 921 F.2d at 423 (holding that CPLR 205(a) "allows the plaintiffs an additional six months in which to bring another action based on the same occurrences, after their timely initial complaint was dismissed for procedural defects.")

i. Purpose of CPLR 205(a)

With respect to his first objection, Parella contends, inter alia, that Magistrate Judge Locke erred in "rel[ying] entirely on Judge Bianco's statement [in the prior action] that he was declining to dismiss [that action] with prejudice," (Parella Obj. at 4), particularly because the applicability of CPLR 205 was not then before Judge Bianco. (Id. at 5).

In response, plaintiff contends, inter alia, (1) that he "was a diligent and good faith suitor eligible for the benefits of CPLR 205," ("Plaintiff's Objection to Defendant Parella's Objection to R&R" ["Plf. Response"] at 2, ¶ 1); and (2) that Parella's objection is untimely, as he never opposed, or appealed, Judge Bianco's dismissal of the prior action without prejudice on July 10, 2012, (id. at 3).¹

The "broad and liberal purpose" of CPLR 205(a) is to "remedy[] what might otherwise be the harsh consequence of applying a limitations period where the defending party has had timely notice of the action * * *, and it has long been understood that that purpose is not to be frittered away by any narrow construction * * *." In re Goldstein, 13 N.Y.3d at 521, 893 N.Y.S.2d 472 (quotations and citations omitted); see also Hakala v. Deutsche Bank AG, 343 F.3d 111, 115 (2d Cir. 2003).

Approximately a hundred (100) years ago, the Court of Appeals of the State of New York stated, in dicta, that "[i]f the protection of [CPLR 205(a)] is to be denied to [the plaintiff], it ought to be clearly shown that his case, though within the letter of the statute, is not within its reason." Gaines v. City of New York, 215 N.Y. 533, 109 N.E. 594, L.R.A. 1917C, 203 (N.Y. 1915). The court in Gaines also indicated that "[t]he rule of [CPLR 205(a)] was enacted * * * to save the rights of the honest rather than the fraudulent suitor," 215 N.Y. 533, and suggested that "where the earlier action has been brought with knowledge of the lack of jurisdiction and in fraud of the statute," id., i.e., if the plaintiff acted in "bad faith" in commencing the prior action in the particular court that he did, CPLR 205(a) may not apply. Id.

Nonetheless, defendants do not cite to any case decided in this Circuit or in a New York state court in the approximate hundred (100) years since Gaines that actually denied a plaintiff the...