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United States District Court, S.D. New York

February 4, 2004.

ROBERT WOLFSON, Plaintiff, -against- STEVEN JAY WOLFSON, as Personal Representative and Administrator of the Estate of Eleanor Veronica Wolfson, deceased, Defendant

The opinion of the court was delivered by: RICHARD CASEY, District Judge


Robert Wolfson ("Plaintiff") sues his father, Steven Jay Wolfson ("Defendant"), seeking to either rescind or reform the terms of a settlement agreement and a compromise order. The settlement agreement and compromise order resolved a wrongful death action that Steven Wolfson brought as personal representative of the Estate of Eleanor Veronica Wolfson, a passenger killed in the crash of Trans World Airways ("TWA") Flight 800. Eleanor Wolfson was Plaintiff's mother and Defendant's wife. Plaintiff alleges that his father fraudulently procured his consent to the terms of the settlement through, among other things, threats of physical violence and duress. Defendant moves to dismiss the Complaint on the pleadings, or in the alternative, to dismiss all of Plaintiff s claims pursuant to Federal Rule of Civil Procedure 56. For the reasons that follow, the motion is GRANTED and all of Robert Wolfson's claims are dismissed.


  The following relevant facts are either undisputed or construed in the light most favorable to Plaintiff. Page 2

  On July 17, 1996, Eleanor Wolfson was aboard Paris-bound TWA Flight 800 when it crashed shortly after take-off along the coast of Long Island, New York. (Compl. ¶¶ 4-5; Robert Wolfson Affidavit in Support of Cross-Motion [R. Wolfson Aff.], at 3.)*fn1 Eleanor was traveling to Paris with her sixteen year-old daughter, Wendy Wolfson. (Id.; Declaration of Steven Jay Wolfson [S. Wolfson Decl.] ¶ 2.) Both Eleanor and Wendy Wolfson died in the crash, leaving Robert and Steven as the only surviving members of their immediate family. (Compl. ¶ 5; R. Wolfson Aff. at 3.)

  In 1998, as executor of his wife's estate, Steven commenced a wrongful death action against TWA and the Boeing Company.*fn2 (Compl. ¶ 7; Justin N. Lite Affidavit in Support of Cross-Motion and in Opposition to Defendant's Motion [Lite Aff.] ¶ 3; S. Wolfson Decl. ¶ 5.) In March 2001, TWA and Boeing offered to settle the action. (Lite Aff. ¶ 3; S. Wolfson Decl. ¶ 6.) On March 23, 2001, Steven spoke by telephone from California to Robert, who was in New York, about the proposed settlement. (Compl. ¶ 13; R. Wolfson Aff. at 9; S. Wolfson Decl. ¶ 7.) Robert contends that during this cross-country telephone conversation, his father threatened him with imminent physical violence and bodily harm if he refused to participate in the settlement.*fn3 (Compl. ¶ 13.) Page 3 Although Steven and Robert spoke by telephone about the settlement, they never met in person during the months of March and April 2001. (S. Wolfson Decl. ¶ 7; R. Wolfson Aff. at 8-9.)

  On April 13, 2001, Robert, then twenty-four years old, swore to a Consent, in which he expressly agreed to a $2.85 million total payment by TWA and Boeing, with the net recovery to be distributed 77.5% to Steven and 22.5% to Robert. (Compl. ¶¶ 30-33; Notice of Appearance, Waiver of Service and Consent ¶¶ 1, 2 & 7, Ex. A to Bainnson Decl.) In the Consent, Robert also acknowledged that he had been informed and understood the following: (1) the Court had yet to determine whether maritime*fn4 or Pennsylvania law would be applicable; (2) if Pennsylvania law applied, he might be entitled to a claim larger than the distribution to which he was consenting,*fn5 and Page 4 (3) he could seek his own independent legal counsel, but had decided on his own not do so. (Id. ¶ 12.) Additionally, Robert agreed to the entry of a Compromise Order by the court without further notice to him. (Id.)

  Also on April 13, 2001, as requested by TWA and Boeing, Robert executed a Release, which included an addendum setting forth the fact that nearly all of the settlement proceeds would be paid in structured annuity payments based upon the 77.5% to 22.5% distribution. (Release of All Claims Arising Out of the Loss of TWA Flight 800, Ex. B to Bainnson Decl.) The Release also provided that the annuity payments were fixed and could not be altered once the annuity was purchased. (Id. ¶ 5.)

  On April 17, 2001, four days after Robert signed the Consent and Release, Judge Robert Sweet entered a Compromise Order, which approved the amount of the settlement and the distribution of the net recovery, allocating 77.5% to Steven and 22.5% to Robert. (Compromise Order, Ex. C of Bainnson Decl.) Following entry of the Compromise Order, the signed Release was provided to TWA and Boeing, which then distributed the settlement funds. Thereafter, Judge Sweet dismissed the wrongful death action.

  Pursuant to the terms of the settlement, in May 2001, Robert received an up-front cash payment. (S. Wolfson Decl. ¶ 13.) In addition, Robert continues to receive his agreed-upon monthly Page 5 annuity payments. (Id.) Nevertheless, on November 13, 2002, Robert filed a Complaint in the Eastern District of New York, seeking to either rescind or reform the terms of the settlement. Although not a model of clarity, the Complaint alleges that: (1) Robert was never consulted or advised of the settlement negotiation, rendering the settlement agreement unfair, unreasonable and unconscionable; (2) Steven threatened Robert with bodily harm if he did not agree to execute the settlement agreement; and (3) the disproportionate distribution of the settlement funds is "without explanation and simply voidable for lack of consideration to [Robert]." (Compl. ¶¶ 12-14, 17, 21, 27 & 33.) By stipulation, the parties agreed to transfer the case to this Court.


  A. Jurisdiction and Choice of Law

  In commencing this action, Plaintiff filed a Complaint that fails to comply with Federal Rule of Civil Procedure 8. That rule reads, "A pleading which sets forth a claim for relief . . . shall contain (1) a short and plain statement of the grounds upon which jurisdiction depends." Fed.R.Civ.P. 8. The Complaint makes no mention whatsoever of the Court's jurisdiction to entertain Plaintiff's case.*fn6 Although the Complaint is not artfully pled, it need not be dismissed provided that it states adequate facts on which to uphold jurisdiction. See Feehan v. United States Lines, Inc., 522 F. Supp. 811, 814 (S.D.N.Y. 1981).

  Here, the Court concludes that Plaintiff has provided adequate facts to satisfy 28 U.S.C. § 1332: the parties are citizens of different states and Plaintiff alleges damages exceeding the requisite jurisdictional amount. (See Compl. ¶¶ 2-3, Answer ¶¶ 2-3.) Accordingly, the Court Page 6 possesses diversity jurisdiction in this case.

  The substantive law of the forum state applies to claims premised on diversity jurisdiction. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). Therefore, the Court applies New York law to Plaintiff's claims.


B. Converting Defendant's Motion into Motion for Summary Judgment
  Defendant has moved to dismiss based on Plaintiff's failure to state a cause of action in his Complaint, or in the alternative, for summary judgment. Rule 12(b) states, "If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment. . . ." Fed.R.Civ.P. 12(b). Defendant has submitted declarations in support of his requested relief; Plaintiff has done the same in opposition.

  In addition, Defendant requests that the Court determine whether principles of equity bar Plaintiff's suit. To successfully assert such a defense, the party seeking dismissal (here, Steven Wolfson) must show that Plaintiff knew of Defendant's misconduct and inexcusably delayed in taking action to Defendant's detriment. Ivani Contracting Corp. v. City of New York, 103 F.3d 257, 259 (2d Cir. 1997); Stone v. Williams, 873 F.2d 620, 623-24 (2d Cir. 1989). Although courts have been inclined to consider such a defense under the rubric of Federal Rule of Civil Procedure 12(b), it is more appropriately considered upon a motion for summary judgment because its application involves consideration of fact issues outside the pleadings. See, e.g., Bolanos v. Norwegian Cruise Lines, Ltd., 2002 WL 1465907, at *7 (S.D.N.Y. 2002); Eppendorf-Netheler-Hinz GmbH v. Enterton Co., 89 F. Supp.2d 483, 486-88 (S.D.N.Y. 2000).

  Because these matters lie outside the Complaint, it is more appropriate for the Court to treat Page 7 Defendant's motion as a motion for summary judgment, as provided in Federal Rule of Civil Procedure 12(b). See Chambers v. Time Warner, Inc., 282 F.3d 147, 154 (2d Cir. 2002) ("This conversion [to a summary judgment motion] is `strictly enforced' whenever a district court considers extra-pleading material in ruling on a motion to dismiss."); Brass v. Am. Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993) (noting that courts deciding a motion to dismiss under Rule 12(b)(6) may only consider allegations in the complaint and documents incorporated in or attached to the complaint).

  C. Summary Judgment Standard

  Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment should only be granted if "the nonmoving party `has failed to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof" Berger v. United States, 87 F.3d 60, 65(2d Cir. 1996) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). When viewing the evidence, the Court must "assess the record in the light most favorable to the nonmovant, resolve all ambiguities and draw all reasonable inferences in its favor." Delaware & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990).

  An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party," and such contested facts are material to the outcome of the particular litigation if the substantive law at issue so renders them. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, Page 8 summary judgment is improper." Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 37 (2d Cir. 1994). Only when it is apparent that no rational trier of fact "could find in favor of the nonmoving party because the evidence to support its case is so slight" should a court grant summary judgment. Gallo v. Prudential Residential Servs., LP, 22 F.3d 1219, 1223-24 (2d Cir. 1994).

  D. Plaintiff's Claims Are Time Barred

  A party may seek to rescind or amend a final judgment in either of two ways. First, under Federal Rule of Civil Procedure 60(b), a party, by motion, may request that it be relieved from a final judgment or order procured under certain circumstances, such as mistake, excusable neglect, fraud or misconduct of an adverse party. Second, under limited circumstances, a party may bring an independent action in equity. See Fed.R.Civ.P. 60(b)(1)-(6); see, e.g., Campaniello Imports, Ltd. v. Saporiti Italia S.p.A., 117 F.3d 655, 661-62 (2d Cir. 1997). For the reasons set forth below, Plaintiff is barred from proceeding in either manner.

 1. Plaintiff Is Barred from Obtaining Rule 60(b) Legal Relief

  Rule 60(b) defines the circumstances in which a court, in its discretion, may rescind or amend a final judgment. It reads, "On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons . . . (3) fraud . . . misrepresentation, or other misconduct of an adverse party." Fed.R.Civ.P. 60(b). While Rule 60(b) is an important remedy, it is a limited one. As the Second Circuit has remarked, "Properly applied, Rule 60(b) strikes a balance between serving the ends of justice and preserving the finality of judgments. In other words, it should be broadly construed to do `substantial justice,' yet final judgments should not `be lightly reopened.'" Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986) (quoting Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 401 (5th Cir. 1981) (citations omitted). Page 9

  Although an aggrieved party may proceed to vacate an order based on fraud, misrepresentation, or other misconduct under Rule 60(b), that party must do so "not more than one year after the . . . order . . . was entered." See Fed.R.Civ.P. 60(b); see also Hadges v. Yonkers Racing Corp., 48 F.3d 1320, 1325 (2d Cir. 1995). In this case, Judge Sweet entered the Compromise Order approving the settlement and distribution on April 16, 2001. Plaintiff filed this action in the Eastern District of New York on November 13, 2002, more than one year after the Compromise Order was entered. Therefore, to the extent that Plaintiff seeks legal relief under Rule 60(b), he is time barred.

 2. Principles of Equity Bar Plaintiff's Suit

  Plaintiff may still commence an independent action to rescind the Compromise Order. Plaintiff has alleged that Defendant committed fraud in inducing him to sign the Consent and Release and that Plaintiff was under duress when he signed them. Although not clear from the Complaint, Plaintiff apparently bases his suit on Rule 60(b)'s provision "authoriz[ing] an independent action for fraud perpetrated upon a party to prior litigation in which a judgment has been entered." See Fed.R.Civ.P. 60(b). Unlike post-judgment motions for 60(b) legal relief, which must be brought within one year after judgment is entered, an independent action in equity may be brought at any time. See Campaniello Imports, 117 F.3d at 661-62; Fitzgerlad v. Field, 1999 WL 177278, at *2 (2d Cir. Mar. 26, 1999).

  When determining whether to entertain an independent action alleging fraud, courts are guided by traditional principles of equity. To successfully obtain equitable relief, a party must (1) show that it had or has no other available or adequate remedy; (2) demonstrate that movant's own fault, neglect, or carelessness did not create the situation for which it seeks equitable relief; and Page 10 (3) establish a recognized ground, such as fraud, for the requested relief. See Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 71 (2d Cir. 1990).

  Here, Plaintiff had an available remedy at law, but has failed to show that his own carelessness did not create the situation for which he now seeks equitable relief. As stated above, Rule 60(b)(3) allows a court to relieve a party from a final judgment for fraud, misrepresentation, or other misconduct of an adverse party, "as long as the motion is made . . . not more than one year after the judgment, order, or proceeding was entered or taken." Fed.R.Civ.P. 60(b)(3). The Compromise Order was entered on April 16, 2001; therefore, Plaintiff had until April 16, 2002 to bring a motion seeking Rule 60(b)(3) relief.

  Through his own fault, neglect or carelessness, Plaintiff failed to do so. Plaintiff states that in "[m]id-late 2001. . . . I have on my own consulted a lawyer [in Pennsylvania] about the settlement documents. . . . The lawyer [in Pennsylvania] . . . recommended that I retain a lawyer in the State of New York to pursue this situation and my legal rights." (R. Wolfson Aff. at 10-11.) Plaintiff continued that, having realized the "manipulation of the Defendant and the events that had transpired" he grew "absolutely disgusted," which even resulted in his failure to sleep. (Id. at 11.) By his own admission, Plaintiff has, however, slumbered on his legal rights. If Plaintiff believed that Defendant's conduct constituted fraud, he had come to this realization in "[m]id-late 2001." (Id. at 10.) Therefore, Plaintiff had ample time to submit a Rule 60(b)(3) motion before the April 16, 2002 deadline. "`[I]t is fundamental that equity will not grant relief if the complaining party "has, or by exercising proper diligence would have had, an adequate remedy at law, or by proceedings in the original action . . . to open, vacate, modify, or otherwise obtain relief against, the judgment.'" Campaniello Imports, 117 F.3d at 662 (quoting Cresswell, 922 F.2d at 71). Accordingly, Plaintiff Page 11 may not now seek equitable relief.


E. Plaintiff Fails to Demonstrate the Elements of Duress
  Even assuming that Plaintiff's action was not barred under Rule 60(b)'s one-year limitation period and under traditional principles of equity, Plaintiff's claims of duress would still be dismissed. Plaintiff asserts that he was under duress when he signed the Consent and Release for the following reason: on March 23, 2001, three weeks before he signed these documents, Defendant threatened him with physical violence.

  A contract is voidable on grounds of duress when the party making the claim was forced to agree to the contract "`by means of a wrongful threat precluding the exercise of his free will'" Orient Shipping Rotterdam B.V. v. Hugo Neu & Sons. Inc., 918 F. Supp. 806, 812 (S.D.N.Y. 1996) (quoting First Nat'l Bank of Cincinnati v. Pepper, 454 F.2d 626, 632 (2d Cir. 1972)). In order for a contract to be void for duress, one of three circumstances must be present: duress by physical compulsion, duress by threat or duress by undue influence. See Reid v. IBM Corp., 1997 WL 357969, at *6 (S.D.N.Y. June 26, 1997). And, unless the party invoking duress acts promptly to repudiate the agreement, it will be deemed to have elected to affirm it. National Trends, Inc. v. Krimson Corp., 1994 WL 97058, at *22 (S.D.N.Y. Mar. 23, 1994). A party's ability to invoke duress diminishes in proportion to its delay in repudiating the contract. Id.

  Here, Plaintiff claims duress by threat. To successful assert such a claim, Plaintiff must show: (1) a threat, (2) which was unlawfully made, (3) caused involuntary acceptance of contract terms, (4) and the circumstances permitted no alternative. See Borouchov v. Strobel, 1995 WL 510013, at *3 (S.D.N.Y. Aug. 28, 1995). Plaintiff contends that on March 23, 2001, Defendant threatened him with physical harm if he did not execute the settlement agreement. (Compl. ¶ 13.) Page 12 Plaintiff has, however, offered no evidence of Defendant's threat aside from the conclusory statements in the Complaint. In fact, Plaintiff's own affidavit belies the Complaint's allegations, as Plaintiff states only that he telephoned Defendant to discuss the settlement and that Defendant stated, "If you want more (money) than that, you're going to have to sue me." (R. Wolfson Aff. at 9.) In opposition, Defendant has offered uncontested evidence that the March 23, 2001 telephone conversation occurred while Defendant was in California and Plaintiff was in New York. (S. Wolfson Decl. ¶ 7.) Moreover, Defendant has offered further uncontested testimony that at no time during March or April 2001 did he meet Plaintiff in person. (Id.) Even considering the facts in the light most favorable to Plaintiff, no rational factfinder could find that Defendant threatened Plaintiff during a cross-country telephone call, such that he could reasonably believe that he was in imminent danger of violence or physical harm.

  Even if Plaintiff could establish that he would not have agreed to the terms of the Consent and Release but for the unlawful coercion and duress, Plaintiff must show that he acted promptly to repudiate it See VKK Corp. v. Nat'l Football League, 244 F.3d 114, 122-23 (2d Cir. 2001). Failure to act quickly in repudiating a contract may be construed as ratifying it. See DiRose v. PK Mgmt. Corp., 691 F.2d 628, 633 (2d Cir. 1982). "The burden on a party seeking to avoid contractual obligations on the grounds of . . . duress `increases proportionately with the delay in initiating suit or otherwise repudiating the contract in question.'" VKK Corp., 244 F.3d at 123 (quoting Int'l Halliwell Mines, Ltd. v. Cont'l Copper & Steel Indus., Inc., 544 F.2d 105, 108 (2d Cir. 1976)).

  Here, Defendant's undisputed evidence shows that Plaintiff failed to promptly act to Page 13 repudiate the Consent and Release after any alleged duress had ceased.*fn7 Even more importantly, he has yet to do so. Not only did Plaintiff accept an up-front payment from the settlement proceeds, he received monthly annuity payments prior to commencing this suit and continues to do so. (S. Wolfson Decl. ¶ 13.) Confronted with these actions — coupled with the fact that Plaintiff has offered no evidence that his "duress" extended beyond March 23, 2001 — no rational factfinder could reasonably conclude that Plaintiff promptly repudiated the contact. See VKK Corp., 244 F.3d at 122 (holding that plaintiff forfeited claim of duress by waiting thirty months to assert it); 2 Broadway LLC v. Credit Suisse First Boston Mortgage Capital L.L.C., 2001 WL 410074, at *12 (S.D.N.Y. Apr. 23, 2001) (concluding that although there was duress, plaintiffs' delay often months in alleging duress constituted a waiver of the claim).

  For these reasons, even if Plaintiff's action was timely commenced, his claims of duress would be dismissed.

  F. Plaintiff Does Not Prove Fraud

  Like Plaintiff's claims of duress, the fraud claims would fare no better. As a threshold matter, Plaintiff's vague, general allegations in the Complaint fail to satisfy the particularity requirements of Federal Rule of Civil Procedure 9(b). Alleging fraud, Plaintiff has failed to detail and explain the statements that he contends are fraudulent or to state where and when such statements (or omissions) were made. See Fed.R.Civ.P. 9(b) ("In all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity."); see also Harsco Corp. v. Segui, 91 F.3d 337, 347 (2d Cir. 1996). Page 14

  Moreover, Plaintiff fails to prove the elements of fraud or fraudulent indictment. To prove such claims under New York law, Plaintiff must show that Defendant made a material false statement, with the intent to defraud Plaintiff, that Plaintiff reasonably relied on that statement, and that the statement thereby caused Plaintiff to suffer damages. See Keywell Corp. v. Weinstein, 33 F.3d 159, 163 (2d Cir. 1994); May Dep't Stores Co. v. Int'l Leasing Corp., Inc., 1 F.3d 138, 142 (2d Cir. 1993); Lama Holding Co. v. Smith Barney, Inc., 668 N.E.2d 1370, 1373 (N.Y. 1996).

  The statements that Plaintiff has identified do not meet these requirements. Plaintiff alleges that Defendant advised him that the settlement was "fair," in "everyone's best interests" and that a trial would be too "risky, lengthy, and . . . costly." (Compl. ¶¶ 18, 19, 25.) These statements are merely statements of opinion, not fact. Representations constituting "mere opinion" are "not actionable representations of fact." Greenberg v. Chrust, 282 F. Supp.2d 112, 120 (S.D.N.Y. 2003) (quoting Reich v. Mitrani, 701 N.Y.S.2d 368, 369 (App. Div. 2000)); see also Chase v. Columbia Nat'l Corp., 832 F. Supp. 654, 661 (S.D.N.Y. 1993). As evidence of fraud, Plaintiff further asserts that the Defendant stated that he would "personally provide for the Plaintiff from his share of the settlement proceeds." (Compl. ¶ 20.) Even when considered in the light most favorable to Plaintiff, this statement pertains to a possible future event, which is, given the circumstances of this case, insufficient to demonstrate fraud. See Rubenstein v. East River Tenants Corp., 527 N.Y.S.2d 29, 32 (App. Div. 1988) ("The . . . court did not err in its dismissal of the . . . claim for fraud. No cause of action for fraud arises when the only fraud alleged is, in essence, a failure to fulfill promises to perform acts in the future."); see also Clarke v. Max Advisors, LLC, 235 F. Supp.2d 130, 143 (N.D.N.Y. 2002) ("It is also true, as defendants argue, that fraudulent inducement requires a misrepresentation of a present fact, and not of a future intent, absent a showing that the defendant Page 15 has a preconceived and undisclosed intention of not performing as represented.").

  Plaintiff's allegations of fraud, based solely on opinions or prognostications, are not cognizable under New York law. Therefore, like the allegations of duress, even if Plaintiff's suit was timely, these claims would be dismissed.


  For the foregoing reasons, Plaintiff is bound by his explicit, sworn acceptance of the settlement terms. Plaintiff's belated claims of fraud and duress may not overturn the clear terms of the settlement. Defendant's motion to dismiss is therefore GRANTED. Any pending motions are moot.*fn8 The Clerk of Court is hereby directed to close the case.

  So Ordered.

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