The opinion of the court was delivered by: MOTLEY
This action arises out of a landlord/tenant dispute between plaintiff, Sam & Mary Housing Corp., and defendant, Jo/Sal Marketing Corporation. Plaintiff is the owner of commercial property in Queens County, New York, the ground floor of which was being used as a grocery store, pursuant to a long-term, assignable lease. Defendant purchased the grocery business and the lease in April 1980. At that point, plaintiff ejected defendant from the premises.
Plaintiff then sued defendant in New York State Supreme Court, Queens County, for declaratory and injunctive relief, seeking to void defendant's lease. Defendant counterclaimed for wrongful eviction. After a trial before Justice Lorraine S. Miller, judgment was rendered for the defendant on all but one of its counterclaims. In the opinion awarding judgment for defendants, Justice Miller stated that she had taken judicial notice of another proceeding before her in which the principal of plaintiff corporation had given testimony which contradicted testimony she had heard in that instant action. Both parties appealed the judgment to the Appellate Division. The Appellate Division reduced the judgment awarded to defendants and affirmed the judgment as so modified.
Plaintiff then moved the Appellate Division for permission to appeal its order to the Court of Appeals. The Appellate Division denied plaintiff's motion by an order dated, October 2, 1984, Plaintiff then moved the Court of Appeals for leave to appeal. The Court of Appeals denied plaintiff's motion. Defendant, Jo/Sal cross-appealed on the reduction of damages. The Court of Appeals affirmed the Appellate Division in a decision rendered April 25, 1985.
Plaintiff commenced this action in May of 1985 against defendants, New York State, Supreme Court Justice Lorraine Miller, and Jo/Sal Market Corporation, alleging that it was deprived of due process of law by Justice Miller's improper taking of judicial notice. Plaintiff also sought a preliminary injunction to enjoin defendants from executing on the judgment awarded them in the state court action. Plaintiff brings this action pursuant to 42 U.S.C. section 1983. Defendant New York State was dismissed from this action by stipulation dated July 1985. The remaining defendants have moved to dismiss this action pursuant to Fed. R. Civ. P. 12(b). Defendant Jo/Sal Market Corporation has also moved for attorney's fees pursuant to 42 U.S.C. section 1988, and 28 U.S.C. 1927 and for sanctions pursuant to Fed. R. Civ. P. 11. This action is now before the court on defendants' motions.
I. Defendant Jo/Sal's Motion to Dismiss
Defendant Jo/Sal Market Corp. has moved to dismiss plaintiff's suit against it for failure to state a claim upon which relief can be granted and on grounds of res judicata. Plaintiff has brought this action pursuant to 42 U.S.C. 1983, which provides that:
Every person who, under color of any statute, ordinance regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured . . .
The prerequisite for finding a violation of section 1983 is "state action." United States v. Price, 383 U.S. 787, 794 n.7, 16 L. Ed. 2d 267, 86 S. Ct. 1152 (1966). The state action requirement of Section 1983 mandates that the "conduct allegedly causing the deprivation of a federal right be fairly attributable to the State," Lugar v. Edmondson Oil Co., 457 U.S. 922, 936, 73 L. Ed. 2d 482, 102 S. Ct. 2744 (1982). This requirement means that the "party charged with the deprivation must be . . .a state actor," Lugar at 937.
The position in this circuit is that one does not become a state actor merely by being a litigant in a state court action, Stevens v. Frick, 372 F.2d. 378 (2d. Cir. 1967), cert. denied, 387 U.S. 920, 18 L. Ed. 2d 973, 87 S. Ct. 2034 (1967). In Merrick v. Merrick, 441 F. Supp. 143, 146 (S.D.N.Y. 1976), this court, per Judge Brieant, stated that "there is no authority for the proposition that a person who employs the state's judicial processes . . . is thereby clothed with the state's authority." In the instant case plaintiffs have pointed to nothing other than defendant Jo/Sal's defense of the state court action that would constitute state action. That is clearly insufficient to make defendant Jo/Sal a state actor.
Defendant also moves to dismiss plaintiff's complaint on the ground that the present action is barred by the doctrine of res judicata or claim preclusion. Res judicata provides that once a claim is brought to a final resolution, all other claims arising out of the same transaction are precluded, even if based upon different legal theories or seeking different recoveries. O'Brien v. City of Syracuse, 54 N.Y.2d 353, 445 N.Y.S.2d 687, 429 N.E.2d 1158 (1981). Smith v. Russell Sage College, 54 N.Y.2d 185, 445 N.Y.S.2d 68, 429 N.E.2d 746 (1981). Reilly v. Reid, 45 N.Y.2d 24, 407 N.Y.S.2d 645, 379 N.E.2d 172 (1978).
Federal courts are compelled by Article IV of the Constitution, as well as by 28 U.S.C. section 1738, to give full faith and credit to state court judgments. In Migra v. Warren City School District, 465 U.S. 75, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984), the Supreme Court held that state court judgments must be given the same preclusive effect in federal court that they would receive in state court, notwithstanding the presence of a federal constitutional claim. In the instant case, plaintiff argues that its claim should not be barred because the due process issue was not raised in the state court proceedings. Plaintiff, however, misconceives the law of res judicata. The "application of res judicata . . . assumes that the court in which the first action was brought would have been willing and able to consider the theory that is being advanced in the second action." Heimbach v. Chu, 744 F.2d 11, 14 (2d Cir. 1984), cert. denied 470 U.S. 1084, 105 S. Ct. 1842, 85 L. Ed. 2d 141 (1985). In the instant case, the gravamen of plaintiff's complaint is that it was deprived of due process by the improper taking of judicial notice by the trial judge. This contention could have been, and in fact, was raised in ...