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Hameed v. Aldana

January 4, 2007


The opinion of the court was delivered by: John Gleeson, United States District Judge


Imran Hameed brings this action for breach of contract, breach of fiduciary duty, negligence, and other common law claims.*fn1 Defendants have moved to dismiss Hameed's claims.*fn2 Defendants also ask that I enjoin Hameed from filing any more lawsuits on this matter, and that I impose sanctions upon him pursuant to Fed. R. Civ. P. 11. For the reasons discussed below, I dismiss Hameed's complaint but decline to impose injunctive relief or sanctions.

This action arises out of a termination of Hameed's interest in certain shares in 41-50 78th Street Corp., the defendant cooperative corporation, which owns an apartment building located at 41-50 78th Street in Elmhurst, New York. Hameed and certain partners bought the shares in October 1984. The property later went into receivership, and on February 6, 1998 the cooperative terminated the interests of all other entities with title to the shares of the property. Hameed sued the cooperative, among others, in the Supreme Court of the State of New York, Queens County three times, each time contending that the cooperative had not rightfully foreclosed upon the shares. See Imran Hameed c/o Hameed & Safder Co-Owners, Inc. v. 41-50 78th Street Corp., et al., No. 19357/03 (N.Y. Sup. Ct. Queens County filed Aug. 8, 2003) ("Action One"); Hameed & Safder Co-Owners, Inc. c/o Imran Hameed, Hameed & Safder Co-Owners v. 41-50 78th Street Corp. et al., No. 29736/03 (N.Y. Sup. Ct. Queens County filed Dec. 23, 2003) ("Action Two"); Imran Hameed c/o Hameed and Safder Co-Owners v. Lorri Aldana, et al., No. 20120/05 (N.Y. Sup. Ct. Queens County filed Sept. 14, 2005) ("Action Three"). Named defendants Lorri Aldana and Plum Holding Corp. were defendants in Action Two. All named defendants in this case were defendants in Action Three.

Action One alleged ownership of the shares and requested a lis pendens on the property and recovery of all the money in receivership. Action Two, brought in the name of a corporation, repeated essentially the same factual allegations. The actions both requested, among other things, recovery of the money in receivership and issuance of new ownership documents, as well as damages for conversion and negligence, breach of contract, breach of fiduciary duty, and fraud. Hameed claims that discovery in Action One is ongoing but has been obstructed by the defendants "concealing information and evidence" so badly that they are "in contempt of court." Compl. ¶ 7. Hameed claims that the cooperative is "avoiding" a preliminary conference ordered on June 23, 2004 by the state court. Id. ¶ 9(i). This claim is controverted by two decisions of that court on October 26, 2004 dismissing both actions in full.*fn3

See Aff. of Barry G. Margolis, Sept. 19, 2006, Ex. G. The state court held that the causes of action for conversion and negligence were time-barred, that the fraud and breach of contract claims were insufficiently pleaded, and that the breach of fiduciary duty claim was both insufficiently pleaded and time-barred. See id. at 5 (Action One) & 3 (Action Two).

Action Three alleged the same claims that are alleged in this action. Indeed, the complaint in that case appears identical, except for alterations of the caption, to the one challenged here. The Supreme Court dismissed Action Three on res judicata grounds. Under the New York approach to res judicata, the state court held, the action was precluded by the "[t]wo prior actions arising from the same facts and circumstances and seeking the same relief" as Action Three. Id., Ex. L.

As I mentioned above, Hameed brings the same claims here as he did in the previous state court actions. Defendants move to dismiss the claims on res judicata grounds.

See Thompson v. County of Franklin, 15 F.3d 245, 253 (2d Cir. 1994) ("Res judicata challenges may properly be raised via a motion to dismiss for failure to state a claim under Rule 12(b)(6).").

"Congress has specifically required all federal courts to give preclusive effect to state-court judgments whenever the courts of the State from which the judgments emerged would do so." Allen v. McCurry, 449 U.S. 90, 95 (1980) (citing 28 U.S.C. § 1738 (1976)). I therefore look to whether New York law would give preclusive effect to Hameed's previous actions.

Under New York law, "[r]es judicata is designed to provide finality in the resolution of disputes to assure that parties may not be vexed by further litigation." Reilly v. Reid, 45 N.Y.2d 24, 28 (1978). Accordingly, New York adopts a "transactional analysis" to claim preclusion, which precludes a claim arising out of the same "factual grouping" as an earlier-litigated claim even if the later claim is based on different legal theories or seeks different (or additional) relief. Smith v. Russell Sage Coll., 54 N.Y.2d 185, 192-93 (1981). However, the party asserting the defense of claim preclusion "must show the existence of a prior judgment on the merits." Miller Mfg. Co. v Zeiler, 45 N.Y.2d 956, 958 (1978).

In Smith, the New York Court of Appeals held that a previous judgment dismissing a claim on statute of frauds and statute of limitations grounds was "at least sufficiently close to the merits for claim preclusion purposes to bar a second action . . . ." 54 N.Y.2d at 194. The court reasoned that an adverse judgment based upon the statute of limitations, though procedural in form, is substantive "in a practical sense" because "'while a time bar is usually said to affect the remedy . . . its interposition is at least as often the difference between life or death for the right as well' as the remedy." Id. (quoting Sheerin v. N.Y. Fire Dep't Articles 1 & 1B Pension Funds, 46 N.Y.2d 488, 497 (1979)). See also EFCO Corp. v. U.W. Marx, Inc., 124 F.3d 394, 397-98 (2d Cir. 1997) ("Under New York law, an action dismissed in a New York court for failure to sue within the applicable statute of limitations is considered a determination 'on the merits' for res judicata purposes.").

Applying that reasoning here, I conclude that Action One involved a prior judgment on the merits of several of Hameed's claims because those claims -- conversion and negligence, and breach of fiduciary duty -- were dismissed as time-barred. As mentioned above, the judgment in Action One concerned the same plaintiff and the same factual grouping as the case at issue, that is, the foreclosure and termination of Hameed's shares in the cooperative. Furthermore, Action One sought damages for common law claims related to the foreclosure and termination of the shares, as does this action. Accordingly, Action One precludes the claims in this case for conversion and negligence, and breach of fiduciary duty.

The remaining claims -- breach of contract and fraud -- are precluded by the state court judgment in Action Three that a complaint virtually identical to the one before me was barred by principles of res judicata. That judgment itself deserves res judicata effect in this Court. Under the reasoning of Smith, such a judgment is "on the ...

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