Tenamee v. Schmukler

• Decision Date: 13 July 2006
• Docket Number: No. 05 CIV.7661.,05 CIV.7661.
• Citation: 438 F.Supp.2d 438
• Parties: Reuvan TENAMEE, Plaintiff, v. Martin SCHMUKLER, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

438 F.Supp.2d 438

Reuvan TENAMEE, Plaintiff, v. Martin SCHMUKLER, et al., Defendants.

No. 05 CIV.7661.

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

July 13, 2006.

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Reuven Tenamee, Reuvan & Eyal Tenamee, Brooklyn, NY, pro se.

Martin L. Schmukler, Gould Reimer Walsh Goffin & Cohn, New York, NY, pro se.

Frederick Harvey Cohn, Naness, Chaiet & Naness, LLC, Jericho, NY, Martin D. Novar, New York, NY, for Defendants.

DECISION AND ORDER

MARRERO, District Judge.

Pro se plaintiff Reuvan Tenamee ("Tenamee") commenced this action, naming as defendants Martin L. Schmukler individually and the Law Firm of Martin L. Schmukler, P.C. (collectively "Schmukler"), Ruthi Tenamee, a/k/a Ruthi R. Nass ("Nass") and Nava Tenamee a/k/a Nava Izak ("Izak"). His complaint contains allegations of fraud, negligent misrepresentation and legal malpractice, as well as civil claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961.

Schmukler¹ moved to dismiss the complaint on the grounds that: the fraud and malpractice claims are barred by the applicable statutes of limitations; this Court lacks subject matter jurisdiction because diversity of citizenship is not established as between Tenamee and Nass and Izak; the RICO claim fails to state a cause of action with sufficient specificity to satisfy the requirements of Fed.R.Civ.P. 9(b) and does not satisfy the substantive elements of the RICO statute. For the reasons discussed below, the motion is granted.

I. BACKGROUND²

1. FACTS AND PROCEDURAL HISTORY

Tenamee states that Nass and Izak, who are his sisters, allegedly represented by and under the guidance of Schmukler, testified falsely against Tenamee before a New York State grand jury proceeding in 1987 and again in 1990, at the criminal trial of Nass on drug charges in a federal court in Maryland. As a result of these accusations, Tenamee claims he was indicted and arrested on federal drug distribution and conspiracy charges in 1990, while he was in Brazil. According to Tenamee, Schmukler represented him during discussions with government agents at that time regarding his extradition to the United States, but did not disclose his prior representation of Nass and Izak at the proceedings where the alleged false testimony was given by them under Schmukler's direction.

In 2000, Tenamee was arrested in the Netherlands as a fugitive under a warrant from the Drug Enforcement Administration. While in the Netherlands, he was interviewed by federal agents in a proffer session allegedly arranged by Schmukler. He was returned to the United States in 2001 to face the charges against him pending in the federal district court of Maryland. Tenamee pleaded guilty in February 2001 to one count of distribution of drugs, pursuant to a plea agreement that he asserts was arranged by Schmukler. Tenamee alleges that Schmukler told him that under the plea agreement he would be sentenced to only 18 months in prison. In March of 2002, Tenamee was sentenced to 70 months of incarceration, rather than the 18 months he claims Schmukler represented to him he would receive. Tenamee alleges that on this occasion as well he was not aware of Schmukler's prior representation of Nass and Izak, nor their false accusations against Tenamee that prompted his arrest.

Schmukler argues that the complaint must be dismissed on jurisdictional grounds because it fails to establish complete diversity of citizenship insofar as it contains no allegations regarding the residences of Nass and Izak. As regards the statute of limitations, Schmukler points out the three-year period applicable to the legal malpractice claim and the four-years as to the RICO claim both have expired, as these claims accrued as of the date of Tenamee's guilty plea in February 2001. Finally, Schmukler contends that Tenamee's RICO claim is deficient in that if fails to sufficiently plead the course of conduct and criminal enterprise elements necessary to a RICO cause of action.

Tenamee filed a response addressing Schmukler's motion to dismiss. However, in a subsequent filing on June 5, 2006 characterizing the objections asserted by Schmukler as "minor technicalities," he moved for leave to amend his original complaint so as to cure the deficiencies described in Schmukler's motion. ("Request for Permission to Amend Complaint Pursuant to Fed. Rule Civil Proc. 15", filed June 5, 2006.) Alternatively, Tenamee requested that if dismissal is appropriate, he be granted permission to refile an amended complaint. Tenamee did not file a proposed amended complaint as provided for by Fed.R.Civ.P. 15.

The Court does not consider the grounds Schmukler asserts in support of dismissal as mere technicalities. As Tenamee himself tacitly acknowledges, the motion does point to substantial deficiencies in the original complaint with respect to the statute of limitations and the pleading prerequisites of RICO. These deficiencies warrant dismissal.

II. DISCUSSION

A. STATUTE OF LIMITATIONS

1. Malpractice

Under New York law, the statute of limitations for commencing an action to recover damages for non-medical professional malpractice is three years. See New York Civil Practice Laws and Rules ("CPLR") § 214(6) (1996). The limitations period begins to run at the time the malpractice occurs, not when the client discovers it. See Hoffenberg v. Hoffman & Pollok, 288 F.Supp.2d 527, 536 (S.D.N.Y.2003) (citing De Carlo v. Ratner, 204 F.Supp.2d 630, 634 (S.D.N.Y.2002) and Shumsky v. Eisenstein, 96 N.Y.2d 164, 726 N.Y.S.2d 365, 750 N.E.2d 67 (N.Y.2001)).

In his complaint, Tenamee alleges that Schmukler committed malpractice by advising him to sign a plea agreement on February 16, 2001. Tenamee does not claim to have had any contact with Schmukler after that date, and indeed at his sentencing he was represented by a different attorney. Thus, under CPLR § 214(6), Tenamee had only until February 16, 2004 to commence a malpractice suit. His complaint in this action was filed on August 30, 2005, more than a year and a half after the statute of limitations had run.

Nonetheless, Tenamee urges that his malpractice claim is still timely under the doctrines of equitable tolling and equitable estoppel.³ Specifically, he asserts that he could not have brought his suit in a timely manner because he was in prison throughout the limitations period and because Schmukler fraudulently concealed his conflict of interest, which made it impossible to establish the malpractice claim before the statute had run. The Court, however, disagrees that justice requires applying equitable tolling or equitable estoppel in this case.

a. Equitable Tolling

Under the doctrine of equitable tolling, the statute of limitations is extended "as a matter of fairness where a plaintiff has been prevented in some extraordinary way from exercising his rights." Johnson v. Nyack, 86 F.3d 8, 12 (2d Cir. 1996) (internal citation omitted). It applies only in "rare and exceptional circumstances," where the plaintiff has acted with due diligence but some egregious conduct by defendant or a third party, or some other exceptional circumstance beyond his control makes a timely filing impossible. Smith v. McGinnis, 208 F.3d 13, 17 (2d Cir.2000) (quoting Turner v. Johnson, 177 F.3d 390, 391-92 (5th Cir.1999)).

Tenamee has not alleged any extraordinary conditions that justify his delay in filing the malpractice claim. Although he was in prison throughout the limitations period, incarceration, in itself, does not rise to the level of the "rare and exceptional circumstances" that would move the Court to toll the statute of limitations. Smith, 208 F.3d at 17-18; see also Doe v. Menefee, 391 F.3d 147, 178-79 (2d Cir.2004).⁴ Thus, equitable tolling is not applicable here.

b. Equitable Estoppel

Under New York's doctrine of equitable estoppel, a defendant can be barred from raising a statute of limitations defense if he fraudulently induces a plaintiff to refrain from filing suit in a timely manner. See Kaufman v. Cohen, 307 A.D.2d 113, 760 N.Y.S.2d 157, 167 (App. Div. 1st Dep't 2003) (citing Simcuski v. Saeli, 44 N.Y.2d 442, 406 N.Y.S.2d 259, 377 N.E.2d 713, 716 (1978)). The doctrine derives from the maxim that no party should benefit from its own wrong. See Arbutina v. Bahuleyan, 75 A.D.2d 84, 428 N.Y.S.2d 99, 100 (App. Div. 4th Dep't 1980) (citing Glus v. Brooklyn E. Dist. Terminal, 359 U.S. 231, 232-33, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959)).

Equitable estoppel can apply when a defendant either affirmatively makes a false statement that plaintiff relies upon in not filing a complaint, or deliberately conceals facts underlying a claim which he is under a duty to disclose. Jordan v. Ford Motor Co., 73 A.D.2d 422, 426 N.Y.S.2d 359, 361 (App. Div. 4th Dep't 1980) (citing Simcuski, 406 N.Y.S.2d 259, 377 N.E.2d at 716 and General Stencils v. Chiappa, 18 N.Y.2d 125, 272 N.Y.S.2d 337, 219 N.E.2d 169, 170 (1966)). For example, in Arbutina, defendant hospital delayed delivering medical records critical to plaintiff's case for more than a year. The court held that an unreasonable delay in delivering hospital records to an attorney consulted in a suspected case of malpractice may result in defendants being estopped from later asserting the statute of limitations if the delay prevented the timely commencement of an action. See 428 N.Y.S.2d at 101. Even if plaintiff establishes that he was prevented from bringing a suit by defendant's fraudulent misrepresentation or concealment, he must further demonstrate that he commenced his suit within a reasonable time after the fraud has ceased to be operational. Simcuski, 406 N.Y.S.2d 259, 377 N.E.2d at 717.

Here, Tenamee asserts that he learned of Schmukler's concealed conflict of interest sometime after August of 2004 and that this concealment prevented Tenamee from timely filing his malpractice claim. He further claims that Schmukler had a duty as his former attorney...