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RAFFE v. "DOE"

October 11, 1985

HYMAN RAFFE, individually and on behalf of PUCCINI CLOTHES, LTD., Plaintiff, against "JOHN DOE," true name unknown to plaintiff but person or persons intended to be those who published and/or distributed certain material on or about July 26, 1984; Hon. DONALD DIAMOND; Hon. XAVIER C. RICCOBONO; Hon. MICHAEL J. DONTZIN; Hon. THOMAS V. SINCLAIR, JR.; Hon. ROBERT ABRAMS; DAVID S. COOK; CITIBANK, N.A., and JEROME H. BARR, individually, and as executors of the Estate of MILTON KAUFMAN KREINDLER & RELKIN, P.C.; LEE FELTMAN; FELTMAN, KARESH & MAJOR; ARUTT, NACHAMIE, BENJAMIN, LIPKIN & KIRSCHNER, P.C., Defendants


The opinion of the court was delivered by: CONNER

CONNER, D. J.:

OPINION and ORDER

 Plaintiff Hyman Raffe ("Raffe") is a shareholder of Puccini Clothes, Ltd. ("Puccini"), a New York corporation dissolved and placed in receivership by the New York Supreme Court. Raffe brought this action under 42 U.S.C. § 1983 (1982) alleging that various participants in the corporate dissolution and receivership proceedings in that court have violated and continue to violate his civil rights. He has named as defendants in this suit Lee Feltman, Esq. ("Feltman"), the court-appointed receiver for Puccini; Feltman, Karesh & Major ("the Feltman firm"), counsel to the receiver; Citibank, N.A. and Jerome H. Barr, executors of the estate of Milton Kaufman, a Puccini shareholder; Kreindler & Relkin, P.C., attorneys for the executors; Arutt, Nachamie, Benjamin, Lipkin & Kirschner, P.C. ("the Arutt firm"), attorneys for Eugene Dann and Robert Sorrentino, also Puccini shareholders; two justices, an administrative law judge, and a referee of the New York Supreme Court who have, at one time or another, presided over the dissolution and receivership proceedings; Robert Abrams, Esq., the Attorney General of the State of New York, and David Cook, Esq., an Assistant Attorney General, who have represented these judges in prior actions brought by Raffe; and one allegedly unknown person referred to as "John Doe."

 As best I can discern from the rambling, and at times incomprehensible, 73-page complaint, Raffe contends that Feltman, the Feltman firm, the executors of the estate of Milton Kaufman, the attorneys for the executors, and the Arutt firm, conspired to and did take "possession and control of Puccini, its assets and affairs, and began to dissipate its assets and affairs as suited their individual and joint private purposes." Complaint P21. Raffe further contends that this conspiracy was successful only with the cooperation or inaction of the various judges who oversaw the dissolution as well as the Attorney General and his staff.

 Raffe seeks damages and wide-ranging injunctive relief, including an order nullifying all state court proceedings since June 4, 1980 with respect to Puccini, or in the alternative, an order (1) enjoining the defendant judges from "interfer[ing] with the judicial process"; (2) declaring "null and void" the appointments of the court-appointed attorneys and accountants for the receiver; (3) prohibiting the receiver and the attorneys for the Puccini shareholders "from taking positions in the judicial forum contrary to the legitimate interests of their clients, former client, and/or trust"; (4) "prohibiting conduct which interferes with plaintiff's absolute right to access to the court and/or the appropriate jurist"; (5) declaring "null and void" all proceedings before the referee of the Supreme Court appointed to oversee the dissolution proceedings; (6) nullifying the Supreme Court's disqualification of George Sassower, Esq. ("Sassower") as plaintiff's attorney in all state court actions related to the dissolution of Puccini Clothes; (7) prohibiting Attorney General Abrams and Assistant Attorney General Cook from "representing conflicting interests"; and (8) awarding attorney's fees to plaintiff. Complaint P3.

 This matter is now before the Court on a variety of motions. The defendant judges, Attorney General Abrams, and Assistant Attorney General Cook, collectively referred to below as the "state defendants," have moved for (1) an order pursuant to Rule 12(b)(6), Fed. R. Civ. P., dismissing the complaint on the ground that the action against them is barred under the doctrines of res judicata and collateral estoppel by Judge Nickerson's recent decision in Raffe v. Citibank, N.A., No. 84 Civ. 305 (E.D.N.Y. Aug. 1, 1984); (2) an order pursuant to Rule 12(b)(1), Fed. R. Civ. P., dismissing the complaint against them on the ground that the Court lacks subject matter jurisdiction over this matter; (3) an order pursuant to Rule 12(b)(6) dismissing the complaint on the ground that it fails to state a claim upon which relief can be granted; and (4) an order pursuant to 42 U.S.C. § 1988 assessing against Raffe and his attorney, George Sassower, the reasonable attorney's fees incurred by the state defendants in defending this action.

 Feltman, the Feltman firm, the executors of the estate of Milton Kaufman, the attorneys for the executors, and the Arutt firm, collectively referred to below as the "private party defendants," have moved for (1) an order pursuant to Rule 56, Fed. R. Civ. P., granting summary judgment in their favor on the ground that the action against them also is barred under the doctrines of res judicata and collateral estoppel by Judge Nickerson's recent decision in Raffe v. Citibank, N.A. and previous state court decisions; (2) in the alternative, an order pursuant to Rule 12(b)(6), Fed. R. Civ. P., dismissing the complaint against them on the ground that it fails to state a claim upon which relief can be granted; (3) an order pursuant to 28 U.S.C. § 1651 (1982) permanently enjoining Raffe and Sassower from commencing further actions in any federal court arising out of or related to the Puccini dissolution or receivership; and (4) an order pursuant to 42 U.S.C. § 1988 and Rules 11 and 56, Fed. R. Civ. P., assessing against Raffe and Sassower the reasonable attorney's fees incurred by these defendants in defending this action.

 In response to these motions, Raffe has submitted only Sassower's affidavit reiterating the vague and conclusory allegations of the complaint. Raffe has also twice cross-moved for summary judgment on conclusory allegations, unsupported by the materials called for by Rule 56(e), Fed. R. Civ. P. For the reasons stated below, defendants' motions are granted and plaintiff's motions are denied.

 Background

 As Judge Nickerson noted in his opinion in Raffe v. Citibank, N.A., 84 Civ. 305 (E.D.N.Y. Aug. 1, 1984), the parties to this action come to the federal courts with an "already long and tortured history of litigation in the New York State courts." Id., slip op. at 3. Judge Nickerson reviewed the many lawsuits between these parties in his opinion, and I refer those unfamiliar with this matter to his decision for more of the unpleasant details of this saga. Except for the facts set forth below, I have attempted to avoid repeating his discussion here.

 At one time, Raffe, Milton Kaufman ("Kaufman"), Eugene Dann ("Dann"), and Robert Sorrentino ("Sorrentino") were each 25% shareholders in Puccini Clothes, Ltd. Kaufman, who was president and a director of the corporation, died in 1979. After Kaufman's death, the remaining shareholders failed to call a meeting to elect a successor director, a violation of the shareholders' agreement. In addition, they failed to implement a provision in the shareholders' agreement for the disposition of Kaufman's shares. Finally, the shareholders, allegedly led by Raffe and Sassower, refused to allow Puccini to pay obligations that Kaufman had guaranteed. As a result, Kaufman's estate was diminished.

 In 1980, the executors of Kaufman's estate petitioned the New York Supreme Court for Puccini's dissolution pursuant to New York Business Corporation Law § 1104 on the ground that the shareholders had failed to comply with the shareholders' agreement. The court granted the dissolution on June 4, 1980, and appointed John V. Lindsay ("Lindsay") as receiver. Raffe appealed the court's order; it was unanimously affirmed by the Appellate Division, First Department.

 Both before and after the dissolution proceedings, the executors of Kaufman's estate brought actions in the state courts against Raffe and the other shareholders to recover those amounts that Kaufman's estate had paid on Puccini's obligations. The estate won judgments against Raffe for more than $ 350,000, and Raffe in turn obtained awards against the other shareholders and against the corporation itself. Raffe also brought an action in New York Supreme Court against the executors of Kaufman's estate alleging that they had. damaged Puccini by their actions. The court dismissed the suit; the Appellate Division, First Department unanimously affirmed.

 In January 1981, Lindsay declined his appointment as Puccini's receiver, and Raffe moved the Supreme Court to have himself made receiver. In February 1981, the court denied Raffe's motion, and appointed defendant Lee Feltman. At the same time, the court disqualified Sassower from representing Raffe in all related state court proceedings due to a conflict of interest caused by his previous representation of Dann and Sorrentino. Sassower has apparently continued to represent Raffe in state court despite that order, and as a result, both Raffe and Sassower were recently held in contempt of court. See Affidavit of Donald F. Schneider, Esq. in Support of Defendants' Motion for Summary Judgment P6.

 Raffe and Sassower evidently were not discouraged by their defeats, and renewed their efforts to undo the dissolution and receivership proceedings. Feltman has averred, and plaintiff has not denied, that in the period since Feltman was appointed receiver, Raffe and Sassower have made more than 100 motions in the state courts in connection with the Puccini litigation. Raffe has, for example: (a) sought on nine separate occasions to remove Feltman as receiver; (b) sought on several occasions to have the Feltman firm disqualified and/or discharged as attorneys for the receiver or to deny the firm compensation for the legal services it has rendered; (c) sought on numerous occasions to have the lawyers and co-executor of the estate of Milton Kaufman disqualified; and (d) sought on several occasions to have various justices who ruled adversely to plaintiff recuse themselves or be disqualified. Affidavit of Lee Feltman, Esq. in Support of Defendants' Motion for Summary Judgment P6. The state courts have consistently denied these motions, and at least twice have imposed on Raffe extraordinary costs and attorney's fees. Id. & n.*; id. Exhs. F, G.

 Unsuccessful in these efforts, Raffe and Sassower apparently thought it fruitful to commence more lawsuits. First, they brought suit in New York Supreme Court against the Feltman firm and the Arutt firm alleging that they acted improperly in representing the receiver and Dann and Sorrentino, respectively. The Supreme Court granted the Feltman firm's motion to dismiss the complaint, and the Appellate Division, First Department affirmed. The court reserved decision on the Arutt firm's motion to dismiss pending a determination of whether the complaint had been timely served.

 Perhaps hoping they would obtain better results in a different forum, Raffe and Sassower turned their litigative energies to the federal courts, and filed an action in the United States District Court for the Eastern District of New York. In that case, Raffe v. Citibank, N.A., No. 84 Civ. 305 (E.D.N.Y. Aug. 1, 1984), Raffe sued all of the participants in the dissolution and receivership proceedings, including nearly all of the defendants named in this case, contending, as he has here, that they "performed acts and/or conspired to take control of Puccini and 'dissipate its assets and affairs as suited their individual and joint private purposes,' and to conceal these alleged unlawful activities by having deceptive financial reports prepared, so as to deprive him of his constitutional rights." Id., slip op. at 7. Raffe sought $50,000 in compensatory ...


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