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KLEIN v. SPEAR

January 20, 1970

Ernest KLEIN, Plaintiff,
v.
SPEAR, LEEDS & KELLOGG, James Crane Kellogg III, Raymond E. Grabowski, Mabon, Nugent & Co., Weingarten & Co., Herman Lass, Lew Sonn, Sidney S. Bobbe, Vanden, Broeck, Lieber & Co., Thomson & McKinnon, Reynolds & Co., and Herman Fins, Defendants


Cooper, District Judge.


The opinion of the court was delivered by: COOPER

COOPER, District Judge.

Defendants Spear, Leeds & Kellogg, James C. Kellogg III, Raymond E. Grabowski (Kellogg defendants), Mabon, Nugent & Co., Weingarten & Co. (Nugent defendants) and Vanden, Broeck, Lieber & Co. (Vanden), moving separately seek summary judgment dismissing the first and third causes of action of plaintiff's amended complaint. See Rule 56, F.R. Civ. P.

 Plaintiff is an habitual litigant who in the past five or six years has commenced well over thirty lawsuits against a very large number of defendants. He does not desist when the loss of an action occurs. Such defeats merely serve as springboards for libel actions against the attorney for the prevailing party, for repetitious suits against the successful side, for criminal complaints, etc. His irresponsible tactics in this regard have been such that one defendant has obtained in the State courts an injunction against further harassment by plaintiff. For a more complete and detailed recital of plaintiff's litigious enterprises see this Court's prior decision herein, Klein v. Spear, Leeds & Kellogg et al. 306 F. Supp. 743 (S.D.N.Y. July 23, 1969).

 We are disquieted by yet another facet of plaintiff's approach to these proceedings. An unverified statement brought to our attention is to the effect that an attorney (or attorneys) have been, and still are, actively assisting him with legal advice and, in the main, by drawing up the papers before us now as well as those submitted on the prior motion. They are quite voluminous and by reason of their legal content and phraseology most strongly suggest that they emanate from a legal mind. If this be true, it should not be countenanced. It is one thing to give some free legal advice (incidentally, plaintiff is apparently not indigent); quite another to participate so extensively and not reveal one's identity. If this is the case, we see no good or sufficient reason for depriving the opposition and the Court of the identity of the legal representative(s) involved so that we can proceed properly and with the relative assurance that comes from dealing in the open. Besides, where it is unnecessary we should not be asked to add the extra strain to our labours in order to make certain that the pro se party is fully protected in his rights. Most importantly, this unrevealed support in the background enables an attorney to launch an attack, even against another member of the Bar (as was done by this same plaintiff), without showing his face. This smacks of the gross unfairness that characterizes hit-and-run tactics. If this is the situation here, we vigorously condemn it.

 Our initial impression of plaintiff as an irresponsible litigant based on his record and our personal observations of him (including a frenzied diatribe which he advanced before us by way of argument in open Court) has been more than amply confirmed by all that has developed in the course of this litigation. On the motions before us, however, we are strictly confined to considering the bare face of the record and are not triers of fact or of credibility. From what we have already recited, we are nonetheless left with the distinct belief of devoting attention to what in the final analysis will be simply an exercise in procedural formality - at the further expense of time and energy.

 Accordingly, as we stated in Klein v. Spear, Leeds & Kellogg et al., supra, we are constrained to and do measure plaintiff's papers with the same preciseness which we apply to the claims of the most deserving.

 On July 23, 1969 this Court granted in part defendants' motions for summary judgment on the original complaint and detailed the issues in the three causes of action remaining for trial. See Klein v. Spear, Leeds & Kellogg et al., supra. In that opinion, we granted plaintiff leave to amend his first cause of action so to allege sufficient specific facts as would make out a claim of fraudulent concealment, failing which that cause of action was to be dismissed as time-barred. Plaintiff's amended complaint was filed August 21, 1969. The instant motions followed.

 First Cause of Action

 All moving defendants seek to dismiss plaintiff's first cause of action on the ground that plaintiff's complaint, as amended, fails to set forth such factual allegations as would entitle him, if believed, to the benefits of either the New York accrual rule for actions based on fraud, CPLR § 213(9), or in any event to the federal equitable doctrine of fraudulent concealment, either of which defer the running of the statute of limitations to the time plaintiff discovered the fraud or could with reasonable diligence have discovered it. We are constrained to disagree.

 Defendants rest their arguments upon the fact that in the exercise of due diligence the plaintiff could have discovered immediately the fact that his stock was purchased at the day's highest price, for such information is published and readily available. Certainly this is so. However, plaintiff claims that until he allegedly discovered, in the course of a 1968 lawsuit he brought against some of these same defendants, that the prices of certain unrelated stock purchases therein involved had been "manipulated," he had no reason to know or even suspect that the price of the stock purchases herein involved were high because of manipulation or fraud.

 Plaintiff need not show affirmative acts of concealment by defendants; only that plaintiff remained in ignorance of the fraud without any fault or want of due diligence or care on his part. See Saylor v. Lindsley, 302 F. Supp. 1174, 1187 n. 28 (S.D.N.Y. 1969); C.P.L.R. § 213(9). Plaintiff's allegations, if believed, suffice to gain for him the benefits of either this equitable tolling doctrine or this special accrual rule for at least the one month necessary to make his first cause of action timely.

 Defendants next point to the recent decision of our Circuit in Globus v. Law Research Service, Inc., 418 F.2d 1276 (2d Cir. September 8, 1969) which reversed the trial court and held it error to award punitive damages for violations of the Securities Act of 1933, and ask that we dismiss so much of plaintiff's prayer for relief in his first cause of action as seeks such damages. Plaintiff in opposition seeks leave to amend his present amended complaint so as to state a claim of common law fraud under State law.

 We dismiss plaintiff's claim for punitive damages in this first cause of action since under no applicable federal statute would he be entitled to such relief. See Globus v. Law Research Service, Inc., supra; Klein v. Kellogg et al., supra.

 With regard to plaintiff's request to amend his complaint to allege "common law fraud," plaintiff in no way indicates what form his proposed amendment would take or what in substance it would contain. From the papers before us and in the absence of any allegations by plaintiff to the contrary, it appears that plaintiff is barred by res adjudicata from asserting a state law claim of fraud based on the facts herein alleged. See Klein v. Spear, Leeds & Kellogg, N.Y.L.J. May 23, 1969, p. 18 (Justice Rinaldi granted summary judgment for defendants in a State action based on these same factual contentions). Fully cognizant of the mandate that leave to amend "shall be freely given when justice so requires," we deny plaintiff, whose seemingly endless of stream of unsuccessful litigation has ...


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