United States District Court, W.D. New York
June 22, 2005.
PATRICIA FAIRMAN, Plaintiff,
WILLIAM C. HURLEY, Defendant.
The opinion of the court was delivered by: DAVID LARIMER, Chief Judge, District
DECISION AND ORDER
Plaintiff, Patricia Fairman, commenced this action against
defendant, William C. Hurley, seeking damages regarding the
alleged theft of three horses that were taken from a farm owned
and operated by Ralph Urban. Urban is not a party to this action.
Nevertheless, it is clear to the Court that this action is the
latest in a series of federal and state court cases that concern
a dispute between Urban and defendant Hurley that dates back
seventeen years. One federal court characterized this dispute as
"a feud bordering on Hatfield-McCoy proportions, complete with
vicious name calling and threats against person, property and
animals." In re Ralph Urban, No. 91-B-15142, slip. op. (Bankr.
S.D.N.Y. Mar. 27, 1997) (unpublished opinion).
This Court is aware of at least five other court cases filed by
Urban or Hurley against the other concerning their feud, which
has its origins in a contract for the sale of certain real property located in Yates County. The dispute has made its way into two
Bankruptcy Courts, Id.; In re Urban, 202 B.R. 565 (Bankr.
S.D.N.Y. Mar. 31, 1994) (No. 91 B 15142), three District Courts,
In re Urban, 1998 WL 9389 (S.D.N.Y. Jan. 13, 1998) (No. 96 CIV.
8567); Urban v. Hurley, 261 B.R. 587 (S.D.N.Y. May 10, 2001)
(No. 00 CIV. 7893); Urban v. Hurley, 2003 WL 23496898 (W.D.N.Y.
May 22, 2003) (No. 02-CV-6329L), the Second Circuit Court of
Appeals (twice), In re Urban, 125 Fed.Appx. 336, 2005 WL 387909
(2d Cir. Feb. 18, 2005) (No. 03-5046); In re Urban, Second
Circuit Docket No. 04-0149, unpublished order dismissing appeal
as frivolous (2d Cir. Aug. 6, 2004), and it appears that an
action is still pending in New York State Supreme Court, Yates
County, Hurley v. Urban, et al., N.Y. Sup. Ct. Yates Co. Index
No. 01-415. Even the United States Supreme Court has been pulled
into the frey and has considered the matter four times, the last
time being in March of this year. Urban v. Hurley,
___ U.S. ___, 125 S.Ct. 1655 (Mar. 21, 2005) (Mem.); Urban v. Hurley,
___ U.S. ___, 125 S.Ct. 968 (Jan. 18, 2005) (Mem.); Urban v.
Hurley, 535 U.S. 930 (2002) (Mem.); Urban v. Hurley,
534 U.S. 1123 (2002) (Mem.).
Now, this action has been commenced, not by Urban in his name,
but by plaintiff. It is clear that plaintiff and Urban have a
long-standing personal relationship of some sort and that,
although he is not present as a party, Urban is certainly here in
spirit.*fn1 In fact, with the exception of the complaint,
plaintiff, a resident of New Jersey, has signed all of the
pleadings as: "Patricia Fairman c/o Ralph Urban."(Dkts. # 5, 6,
7, 8). After firing her attorney, plaintiff also directed that
all correspondence from the Court relating to this matter be sent
to her at Urban's New York City address. (Dkt. #3). Moreover,
Urban attempted to act as a process server in this case and he filed an "affidavit" in support of the action. (Dkt. #8). He also
communicated directly with the Court by facsimile regarding the
status of the case. (See unfiled facsimiles dated April 29 and
30, 2005). Plaintiff also has been actively involved in Urban's
other court actions since at least 1989, providing affidavits and
other evidentiary support on his behalf. (See Dkt. #9, Exs. D, E).
Having introduced the cast of players and set the historical
stage, I turn now to what one could only hope will be the final
act (in Federal Court, at least) of this long-running,
PROCEDURAL POSTURE OF THE INSTANT CASE
On March 26, 2003, plaintiff, then represented by counsel,
simultaneously filed the complaint and a motion for a temporary
restraining order. Plaintiff alleged that in February of 2003,
defendant served Urban with two legal notices*fn2 purporting
to show that defendant had obtained a lien on the horses and that
he intended to sell them. Plaintiff asserted that the lien was
fraudulently obtained by defendant under the false assumption
that Urban owned the horses. Plaintiff alleged that she owned the
horses, not Urban, and that she was not served with either
notice. Plaintiff asserted common law claims for conversion,
unjust enrichment, fraud, and intentional infliction of emotional
distress, as well as a purported statutory claim for violation of
the N.Y. Lien Law. She sought $30,000 in compensatory damages and $10,000,000 in punitive damages. She
also sought a TRO enjoining the sale of the horses and vacating
the lien. (Dkts. # 1, 2).
One month before she filed the complaint and motion, plaintiff
sought the same injunctive relief from the District Court for the
Southern District of New York in connection with an appeal from
the Bankruptcy Court in that district. Alleging to be the
"principle creditor" (sic) of the Ralph Urban bankruptcy estate,
plaintiff made the same allegations there as she did in her
complaint here namely, that defendant fraudulently obtained a
lien, stole her horses, and had no authority to sell them because
she was the horses' true owner, not Urban.(Dkt. #9, Ex. E). In an
unpublished memorandum dated March 4, 2003, U.S. District Court
Judge John S. Martin denied the motion on the grounds that
plaintiff failed to establish likelihood of success on the
merits. See In re Urban, S.D.N.Y. Case No. 02-CV-9632, docket
entry dated 03/04/2003. Three weeks later, plaintiff sought the
same relief from this Court.
By letter dated March 27, 2003, I notified plaintiff's counsel
that I was denying the motion for a TRO.*fn3 It was as clear
then as it is today that plaintiff was attempting to collaterally
attack the proceedings in Yates County Supreme Court, and that
she was looking for a second bite of the apple after having been
rejected by the Southern District just three weeks earlier. On
April 1, 2003, the Clerk of the Court issued a summons directed
to defendant. However, plaintiff never filed an affidavit of
service stating that defendant was served with process, and
defendant never filed an answer. Having lost her second bid for a TRO, it appears that plaintiff
lost all interest in pursuing the action. For the next two years,
plaintiff took no steps to prosecute this case whatsoever. The
only document she filed in that two-year period was a notice of
dismissal of her attorney. (Dkt. #3). On April 18, 2005,
therefore, I issued an Order to Show Cause requesting a status
update on the case and warning plaintiff that she would face
dismissal for failure to prosecute if she did not respond. On May
2, 2005, plaintiff, now proceeding pro se, filed a response
that sets forth in detail the status of the state court action
between Urban and defendant. As for the status of the instant
action, plaintiff reports only that it is "still pending."
Plaintiff reported that discovery has not begun because, based on
what Urban has advised her, she fears defendant will pursue
discovery for ten or twenty years in order to delay the case
indefinitely. (Dkt. #5).
Plaintiff essentially admits, then, that she took no steps to
prosecute this case since she filed her complaint more than two
years ago. It seems that, during that time, she and Urban were
busy pursuing the other court cases and appeals then pending in
Yates County Supreme Court, this District Court, the Second
Circuit Court of Appeals, and the United States Supreme Court.
They were unsuccessful in every case and, to this Court's
knowledge, have not obtained a favorable ruling regarding the
original dispute over the real property, the allegedly fraudulent
lien, or the alleged theft and sale of the horses.
Now that the Court has reminded plaintiff that this action is
still pending, she suddenly (and for the first time) has
developed an interest in prosecuting it. Perhaps motivated by the
failed outcomes in every other court action between Urban and
defendant, plaintiff now moves the Court for certain relief. MOTION FOR DEFAULT JUDGMENT
On May 5, 2005, plaintiff filed both a "Notice of Default,"
which sought a Clerk's Entry of Default pursuant to FED. R. CIV.
P. 55(a) (Dkt. #7), and a motion "for summary judgment against
Hurley on default," which the Court construes as a motion for
default judgment pursuant to FED. R. CIV. P. 55(b) (Dkt. #8). The
Clerk of the Court, however, did not enter a default against
defendant because the file contained no affidavit of service that
the summons and complaint had been properly served on the
defendant. Thus, defendant's alleged failure to answer or
"otherwise defend" the action has not been proven. FED. R. CIV.
P. 55(a) ("When a party . . . has failed to plead or otherwise
defend as provided by these rules and that fact is made to
appear by affidavit or otherwise, the clerk shall enter the
party's default.") (emphasis added); see also 10 Moore's
Federal Practice, § 55.11[b] (Matthew Bender, 3d ed.) ("the
plaintiff who seeks entry of default must show the fact of
default by evidence, usually by affidavit, which shows the timing
of service of the summons and complaint and avers that an answer
or motion was not served within the allotted time.").
Without first obtaining an entry of default, plaintiff cannot
obtain a default judgment from this Court. See LOCAL R. CIV. P.
55(b). In any event, as set forth below, plaintiff is not
entitled to default judgment because she has failed to prove that
defendant was ever served with process in accordance with FED. R.
CIV. P. 4(e), and she has provided no basis for equitable relief.
FED. R. CIV. P. 4(e) outlines the proper methods of serving a
summons and complaint. Rule 4(e)(1) provides that a party may
serve process in accordance with the laws of the state in which
the district court sits. Rule 4(e)(2) provides that service may
also be made by personally delivering a copy of the summons and
complaint to the defendant, by leaving copies thereof at the
individual's residence with a person of suitable age and discretion, or by
delivering a copy thereof to defendant's authorized agent. Rule
4(m) requires that service be effectuated within 120 days after
filing the complaint.
There is no admissible evidence in the record that defendant
was served via a method authorized by Rule 4(e). In her
affidavit, plaintiff states "upon information and belief" that
her former attorney served defendant personally with the summons
and complaint through a process server. She fails to offer any
admissible proof in support of that contention. She did not file
an affidavit from her former attorney. Instead, she claims that
he has "forgotten" which process server he used and has "lost or
misplaced" the affidavit of service. (Dkt. #8).
Defendant, who filed an affidavit in opposition to plaintiff's
motion, denies that he was ever personally served with the
summons and complaint by a process server. He asks that the Court
dismiss the action for lack of personal jurisdiction. (Dkt. #9, ¶
Plaintiff's affidavit, and the statements she makes "upon
information and belief," are insufficient to establish that she
properly served process on defendant, particularly in light of
defendant's sworn statement to the contrary. Cf. Jorgensen v.
Epic/Sony Records, 351 F.3d 46, 55 n. 8 (2d Cir. 2003) (finding
that assertion made `upon information and belief' in an affidavit
could not be considered admissible evidence in summary judgment
context); Dellacava v. Painters Pension Fund of Westchester and
Putnam Counties, 851 F.2d 22, 26 (2d Cir. 1988) (same). Moreover, plaintiff's other allegations regarding attempted
service fail to establish that she served defendant in a manner
authorized by Rule 4(e). For instance, her contention that her
attorney "vaguely remembered that [at] the very least" he sent
defendant a copy of the summons and complaint through first-class
mail does not establish proper service. (Dkt. #8). Likewise, the
unsworn statement of Urban in his "affidavit of service"*fn5
that "(during the first four or five months of this action) he
served of (sic) Summons and Complaint upon Hurley, at his Elmira
address, by Fed Ex" is insufficient to establish proper service.
(Dkt. #6). Neither the Federal Rules nor New York's CPLR permit
service of a summons and complaint by simply mailing a copy to a
defendant via the U.S. Postal Service or an express delivery
service. Pearson v. Board of Educ. of City of New York, No. 02
Civ. 3629, 2004 WL 2297354, *4 (S.D.N.Y. Oct. 12, 2004); Olympus
Corp. v. Dealer Sales & Service, Inc., 107 F.R.D. 300, 305
(E.D.N.Y. 1985) ("New York law does not expressly authorize
service by an express delivery service such as Federal
Express."). Although New York state law allows a plaintiff to
attempt service by mail, see C.P.L.R. § 312-a(a), such service
is not effective unless the defendant signs and returns an
"acknowledgment of receipt." Id. § 312-a(b). Here, no such
acknowledgment was signed. Because plaintiff has failed to show
that defendant was served properly, her motion for default
judgment is denied.
That defendant received actual notice of the pending action
does not change the result. Buggs v. Ehrnschwender,
968 F.2d 1544, 1548 (2d Cir. 1992) (citing Markoff v. South Nassau Cmty.
Hosp., 61 N.Y.2d 283, 288 (1984))("Actual notice alone will not sustain
the service or subject a person to the court's jurisdiction when
there has not been compliance with prescribed conditions of
service."); Morrison v. New York State Div. for Youth Children
and Family Ser., No. 98-CV-643, 2000 WL 532762 (N.D.N.Y. Apr.
25, 2000) ("Notice of suit received by means other than those
authorized by statute or rule cannot serve to bring a defendant
within the jurisdiction of the court.").
DISMISSAL OF THE CASE WITH PREJUDICE
By Decision and Order dated May 31, 2005 (Dkt. #10), the Court
ordered plaintiff to show cause why the case should not be
dismissed based on: (1) her failure to serve process timely or in
a manner sufficient, pursuant to FED. R. CIV. P. 4(m); (2) her
failure to prosecute this action for over two years, pursuant to
LOCAL R. CIV. P. 41.2; and (3) lack of subject matter
jurisdiction based on her failure to allege facts sufficient to
show that she could recover $75,000 in damages, the minimum
statutory jurisdictional amount for diversity cases.
In an apparent concession that she has neither good cause for
failing to serve process timely, nor any excuse for not
prosecuting this action for over two years, plaintiff has now
filed a motion to withdraw the action without prejudice. (Dkt.
#11). Plaintiff's response fails to address any of the issues
raised in the Court's May 31, 2005 Order (Dkt. #10).
Plaintiff's motion to withdraw the case without prejudice is
denied. She cannot escape adjudication of the action on the
merits, and the Court hereby dismisses the action with prejudice.
First, pursuant to Rule 4(m), the Court, on its own initiative
after notice to the plaintiff, shall dismiss the action for
failure to serve process within 120 days.*fn6 Plaintiff has
failed to show good cause or excusable neglect as to why service of process was not
effectuated. Plaintiff is not entitled to equitable relief from
this Court now, more than two years after the action was
commenced, in light of the prejudice to defendant and her failure
to prosecute this action in the interim.*fn7
Second, dismissal with prejudice is warranted for failure to
prosecute, pursuant to LOCAL R. CIV. P. 41.2 and FED. R. CIV. P.
Third, the Court dismisses the action with prejudice because
the complaint fails to allege facts sufficient to show that
plaintiff could recover $75,000 in damages, the minimum statutory
jurisdictional amount required for diversity cases.
28 U.S.C. § 1332(a). "[W]ith mounting federal case loads, . . . it has become
doubly important that the district courts take measures to
discover those suits which [do not belong in a federal court] and
to dismiss them when the court is convinced to a legal certainty that the plaintiff cannot recover an amount in
excess of [the minimum statutory jurisdictional amount]."Deutsch
v. Hewes Street Realty Corp., 359 F.2d 96, 98 (2d Cir. 1966)
(internal quotation marks and citation omitted). This is
precisely one of those cases.
The Second Circuit has held that "[a] party invoking the
jurisdiction of the federal court has the burden of proving that
it appears to a reasonable probability that the claim is in
excess of the statutory jurisdictional amount. This is so because
when a party chooses to proceed in federal court, [the party]
knows or should know whether [the] claim is within the statutory
requirement as to amount." Tongkook America, Inc. v. Shipton
Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994). "[I]f, from the
face of the pleadings, it is apparent, to a legal certainty, that
the plaintiff cannot recover the amount claimed, or if, from the
proofs, the court is satisfied to a like certainty that the
plaintiff never was entitled to recover that amount, and that his
claim was therefore colorable for the purpose of conferring
jurisdiction, the suit will be dismissed." St. Paul Mercury
Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) (footnote
Here, plaintiff's complaint alleges that the value of the
horses was $30,000. (Dkt. #1, ¶ 43). Inexplicably, in her ad
damnum clause, plaintiff seeks $1,000,000 in compensatory
damages. Yet, the complaint contains no allegations of other
compensable damages. Plaintiff also seeks punitive damages on the
fraud claim because defendant "willfully, flagrantly and with
malice a forethough (sic), unlawfully deprived plaintiff of her
property." (Dkt. #1, ¶ 67). Although punitive damages are
considered when calculating the amount in controversy, if
punitive damages are not recoverable under New York law on the
claim for which they are sought, then the amount should not be
included in the calculation. "It is a question of law for the Court, not
the jury, to decide whether a plaintiff has established that
punitive damages are available." 15 Moore's Federal Practice §
Under New York law, punitive damages ordinarily are not
recoverable in a garden-variety fraud claim. See Reinah
Development Corp. v. Kaaterskill Hotel Corp., 59 N.Y.2d 482, 488
(1983); RKB Enterprises Inc. v. Ernst & Young, 182 A.D.2d 971,
973 (3rd Dept. 1992). However, punitive damages may be recovered
when the fraud is gross, involves high moral culpability, or is
aimed at the general public. Giblin v. Murphy, 73 N.Y.2d 769,
772 (1988). Here,"[p]laintiff has not alleged facts sufficient to
demonstrate that defendant['s] conduct rose to the level of high
moral culpability which must be reached to support a claim for
punitive damages." RBK Enterprises, 182 A.D.2d at 972; see
also Atkins Nutritionals, Inc. v. Ernst & Young, LLP.,
301 A.D.2d 547, 549 (2d Dept. 2003) ("the claim for punitive damages
should have been dismissed, as the plaintiffs failed to allege
facts sufficient to demonstrate that the conduct of [defendant]
rose to the level of moral culpability which must be reached to
support a claim for punitive damages"). Nor does plaintiff's
complaint allege a fraud aimed at the general public. This case
concerns nothing more than a personal feud between two
landowners. It is not the type of action involving the "very high
threshold of moral culpability" required to sustain punitive
damages. Giblin v. Murphy, 73 N.Y.2d at 772.
When viewed in the context of the history of the litigation
between Urban and Hurley, it is clear that the complaint as
pleaded was done so deliberately and without good faith, in order
to reach the amount in controversy threshold to confer
jurisdiction. This fact is made more apparent based on
plaintiff's failure to provide any additional information to the
Court regarding how she expected to reach the minimum amount in
controversy. I find that, to a legal certainty, plaintiff could
never recover an amount of damages exceeding $75,000 based on the
allegations in her complaint. Accordingly, the action is
dismissed for the additional reason that the Court lacks subject
matter jurisdiction pursuant to 28 U.S.C. § 1332(a). See
Tongkook America, Inc., 14 F.3d at 786.
Plaintiff's motion for default judgment (Dkt. #8) is denied.
Plaintiff's motion to withdraw the complaint without prejudice
(Dkt. #11) is denied.
Plaintiff's complaint is dismissed with prejudice.
IT IS SO ORDERED.