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Marshall v. Grant

November 6, 2007

JOHN MARSHALL, PLAINTIFF,
v.
SELMALEE GRANT A/K/A SELMALEE KAUFMAN, ELLEN GRANT A/K/A CIVIL ELLEN GRANT MARSHALL, SUSAN GRANT A/K/A SUSAN GRANT TURNICK, NORMAN GRANT ASSOCIATES, INC., NORMAN GRANT ASSOCIATES, THE ESTATE OF NORMAN GRANT, DECEASED, BY SELMALEE GRANT, EXECUTRIX, DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

Plaintiff, John Marshall ("Plaintiff" or "Marshall"), commenced this action asserting claims of fraud, fraudulent concealment, breach of fiduciary duty and unjust enrichment against the Defendants. Presently before the Court is Defendants' motion to dismiss the complaint on the grounds that (1) the Court lacks subject matter jurisdiction under the Rooker-Feldman doctrine, or (2) the claims are subject to dismissal under Rule 12(b)(6) as barred by res judicata. For the reasons set forth below, the motion to dismiss is granted.

Background

Plaintiff asserts that he has been injured as a result of an elaborate scheme, based in a state court divorce proceeding. Named as defendants in this case are Plaintiff's ex-wife, Ellen Grant ("Grant"), and Grant's mother, Selmalee Grant ("Selmalee"), and sister, Susan Grant ("Susan") (Grant, Selmalee and Susan are collectively referred to as the "Individual Defendants"), as well as a business owned by Grant and her family, Norman Grant Associates, Inc. a/k/a Norman Grant Associates, Ltd ("NGA"). The relevant allegations contained in the complaint are as follows: During the course of the matrimonial trial of Marshall and Grant, the Individual Defendants gave perjured testimony concerning, inter alia, the incorporation of NGA. Compl. ¶¶ 5, 6, & 9. As a result of this perjured testimony, the trial judge determined that Grant had a separate property interest in NGA. Id. at ¶ 9. "But for the individual defendants' trial perjury, the entire value of Ellen Grant's portion of the sales price of [NGA], $1,000,000.00 would have been evaluated as marital property subject to equitable distribution." Id. at ¶ 10. Instead, the trial court included only $548,218.00 resulting in Plaintiff being damaged in the amount of $451,782.00. Id. at ¶ 60, 69. In addition, Plaintiff was damaged by Selmalee Grant's trial perjury in 2001 that resulted in a judgment being entered against Plaintiff in the sum of $54,500.00. Id. at ¶ 5.*fn1

Count Two alleges that the Individual Defendants breached a confidential relationship with the Plaintiff by failing to tell him of their fraudulent conduct concerning their ownership of NGA and concealing the fact that no estate tax has been paid by them for the market value of NGA upon the death of Norman Grant. Id. at ¶ 162-166. As a result of the alleged fraudulent concealment of the method by which the Individual Defendants acquired ownership of NGA, Plaintiff was damaged. Count Three alleges that the Individual Defendants conspired to breach their fiduciary duty to Plaintiff by failing to "state truthful statements" about their ownership of NGA. Id. at ¶ 171. Count Four alleges the Individual Defendants were unjustly enriched because Ellen Grant had her financial interest in NGA adjudged to be separate property. It is asserted that if the Individual Defendants had testified truthfully in the matrimonial action, Grant's entire financial interest in NGA would have been held to be marital property. (Id. at ¶ 176-178.)

Discussion

I. Standard

A. Rule 12(b)(1)

"A case is properly dismissed for lack of subject matter jurisdiction under [Rule] 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000); Reserve Solutions Inc. v. Vernaglia, 438 F. Supp. 2d 280, 286 (S.D.N.Y. 2006). In contrast to the burden on a motion to dismiss for failure to state a claim under Rule 12(b)(6), a "plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id. A district court may consider evidence outside the pleadings when resolving a challenge to the court's subject matter jurisdiction. Filetech S.A. v. France Telecom S.A,,157 F.3d 922, 932 (2d Cir. 1998); see also Flores v. S. Peru Copper Corp.,414 F.3d 233, 255 n.30 (2d Cir. 2003).

B. Rule 12(b)(6)

Rule 8(a) provides that a pleading shall contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court recently clarified the pleading standard applicable in evaluating a motion to dismiss under Rule 12(b)(6). In Bell Atl. Corp. v. Twombly, -- U.S.--, 127 S.Ct. 1955 (2007), the Court disavowed the well-known statement in Conley v. Gibson, 355 U.S. 41 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. at 45-46. The Twombly Court stated that this language "is best forgotten as an incomplete, negative gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 127 S.Ct. at 1969. Instead, to survive a motion to dismiss under Twombly, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Id. at 1974.

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Id. at 1964-65 (citations and internal quotation marks omitted).

The Second Circuit has stated that Twombly does not require a universally heightened standard of fact pleading, but "instead requir[es] a flexible 'plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007). In other words, Twombly "'require[s] enough facts to 'nudge [plaintiffs'] claims across the line from conceivable to plausible.'" In re Elevator Antitrust Litig., -- F.3d --, No. 06-3128-CV, 2007 WL 2471805, at *2 (2d Cir. Sept. 4, 2007) (quoting Twombly, 127 S.Ct. at 1974).*fn2 As always, the Court must "accept[] ...


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