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Defazio v. Wallis

December 9, 2006

VICTOR J. DEFAZIO, JACK FINKELSTEIN, JAMES COLLINS, AND HENRY GEBHARD, PLAINTIFFS,
v.
KEVIN WALLIS; ROBERT AQUINO; RYAN P. GREENBERG; THOMAS RYAN; BRYAN ZWOLACK; CAPITAL HEALTH MANAGEMENT, INC.; MERIDIAN AMBULANCE GROUP, LLC; MERIDIAN BEHAVIORAL SCIENCES, LLP; MERIDIAN GROUP HOLDINGS, LLC; MERIDIAN BEHAVIORAL HEALTH SCIENCES, LLP; MERIDIAN MSO, INC.; MERIDIAN MSO, LLC; NATIONAL HEALTH CAR CORP; PHOENIX TRANSPORT CORP. D/B/A EMERGENCY AMBULANCE SERVICE; UNIVERSITY CARE NETWORK, LLC; DEFENDANTS "JOHN DOES" AND "JANE ROES" "1" THROUGH "15", THE MANES "JOHN DOE" AND "JANE ROE" BEING FICTITIOUS, THE IDENTITY OF SAID DEFENDANTS NOT BEING PRESENTLY KNOWN TO THE PLAINTIFFS; AND/OR OTHERS PRESENTLY UNKNOWN TO THE PLAINTIFF, JOINTLY OR SEVERALLY, DOING BUSINESS UNDER THE TRADE STYLES AFFORDABLE AMBULANCE, CAPITAL MANAGEMENT, MED TRANSIT, MERIDIAN, MERIDIAN BEHAVIORAL HEALTH SERVICES, MERIDIAN HEALTH SERVICES, NATIONAL EMS, NATIONAL MANAGEMENT GROUP, PHOENIX AMBULANCE, PHYSICIANS HEALTH SERVICES, PRESIDENTIAL EMERGENCY MEDICAL SERVICE AND UNIVERSITY HEALTH PLANS, DEFENDANTS.



The opinion of the court was delivered by: Spatt, District J.

MEMORANDUM OF DECISION AND ORDER

On December 8, 2005, Victor DeFazio, Jack Finkelstein, James Collins, and Henry Gebhard (collectively, the "plaintiffs") commenced this action against the numerous defendants alleging, among other things, violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). Presently there are two motions before the Court: (1) a motion by the plaintiffs' former counsel, Dinerstein & Lesser, P.C. and Robert Jay, Dinerstein, Esq., for relief from the Court's October 17, 2006 Order disqualifying Dinerstein as counsel for the plaintiffs; and (2) a motion by the plaintiffs for leave to file an amended complaint.

A. AS TO DINERSTEIN'S RULE 60 MOTION

Dinerstein's motion for an Order, pursuant to Fed. R. Civ. P. 60, granting relief from the Court's October 17, 2006 Order disqualifying him from representing the plaintiffs will not be considered because the motion violates the Local Rules for the Southern and Eastern Districts of New York and the Court's individual rules. Specifically, the motion does not include a memorandum of law as required by Local Civil Rule 7.1 and, to the extent that counsel would have the Court consider the Declaration of Robert Jay Dinerstein, the Declaration does not cite any cases or other legal authority authorizing the Court to grant the requested relief. In addition, the Declaration contains numerous footnotes and exceeds the Court's twenty-five page limit, both in violation of the Court's rules. See Individual Rule IV(B)(I). Dinerstein may re-file this motion upon compliance with the Court's individual rules and the Local Rules.

B. AS TO THE PLAINTIFFS' MOTION FOR LEAVE TO AMEND

The plaintiffs move for leave to file an amended complaint which would

(1) add the defendants Jeffrey M. Roberts, P.C. and Jeffrey M. Roberts to the caption; and (2) "eliminate, consolidate, clarify, and amplify other Complaint allegations." The plaintiffs submit a proposed first amended complaint with their motion. For the following reasons, the motion for leave to amend is granted in part, and denied in part.

1. Amendments to Pleadings

Fed. R. Civ. P. 15(a) generally governs the amendment of pleadings. Rule 15(a) provides that:

A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served . . . . Otherwise a party may amend the party's pleadings only by leave of court or by written consent of the adverse party; and leave shall be freely given as justice so requires.

Fed. R. Civ. P. 15(a); see also Lucente v. Int'l Bus. Machs. Corp., 310 F.3d 243, 258 (2d Cir. 2002); Branum v. Clark, 927 F.2d 698, 705 (2d Cir. 1991). Leave to amend should be denied only because of undue delay, bad faith, futility, or prejudice to the non-moving party, and the decision to grant or deny a motion to amend rests within the sound discretion of the district court. Aetna Cas. and Sur. Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 603-04 (2d Cir. 2005); Zahra v. Town of Southold, 48 F.3d 674, 685 (2d Cir. 1995). A proposed amendment is futile when it fails to state a claim upon which relief can be granted. Lucente v. IBM Corp., 310 F.3d 243, 258 (2d Cir. 2002) (citation omitted).

2. Rule 9(b)

In general, a plaintiff need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), and "[a]ll pleadings shall be so construed as to do substantial justice." Fed. R. Civ. P. 8(f). At the pleading stage, all that is required is that the allegations in the complaint " 'give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.' " Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512, 122 S.Ct. 992, 998, 152 L.Ed. 2d 1 (2002) (quoting Conley, 355 U.S. at 47, 78 S.Ct. 99, 2 L.Ed. 2d 80). Rule 9(b) sets forth additional pleading requirements with respect to allegations of fraud. The reason for these requirements are three-fold: (1) to provide the defendants with fair notice of the claims against them; (2) to protect the defendants from harm to their reputation or goodwill as a result of unfounded allegations of fraud; and (3) to reduce the number of strike suits. See DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987). "[C]onclusory allegations that defendant's conduct was fraudulent or deceptive are not enough." Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 114 (2d Cir. 1982).

Rule 9(b) provides that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake [must] be stated with particularity." Fed. R. Civ. P. 9(b). In order to satisfy this requirement, the complaint must: " '(1) specify the statements that the plaintiff contends were fraudulent; (2) identify the speaker; (3) state where and when the statements were made; and (4) explain why the statements were fraudulent.' " Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)). As such, this requires the plaintiffs to identify which defendant caused each allegedly fraudulent statement to be spoken, written, ...


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