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Stanley v. Community Bank

February 4, 2009

LINDA J. STANLEY, PLAINTIFF,
v.
COMMUNITY BANK, N.A.; TIMOTHY TALLMADGE, INDIVIDUALLY AND OFFICER OF COMMUNITY BANK, N.A.; GLENS FALLS NATIONAL BANK; NBT BANK; WALTER STANLEY; ROBERTA STANLEY; NEW YORK STATE POLICE, DEFENDANTS.
GLENS FALLS NATIONAL BANK, CROSS CLAIMANT,
v.
RANDOLPH J. STANLEY; WALTER STANLEY, CROSS DEFENDANTS.



Gary L. Sharpe U.S. District Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction

Plaintiff pro se Linda Jean Stanley ("Mrs. Stanley") brings this action against defendants for, inter alia, their alleged role in her husband's fraudulent procurement of loans in her name. Mrs. Stanley seeks monetary damages under 42 U.S.C. §§ 1982, 1983, 1985 and State law. (See Dkt. No. 1.) Pending are motions by all defendants seeking dismissal of the complaint under various provisions of Federal Rule of Civil Procedure 12. (See Dkt. Nos. 17, 18, 23, 34, 37.) For the reasons that follow, the defendants' motions are granted, and the action is dismissed in its entirety.

II. Facts and Procedural History

Mrs. Stanley is the estranged spouse of Randolph J. Stanley ("Mr. Stanley"). (See Compl. ¶ 11; Dkt. No. 1.) From February 2004 to May 2005, Mr. Stanley procured in excess of $1.4 million in loans, using property held jointly by him and Mrs. Stanley as collateral. Id. at ¶¶ 16 - 28. Mrs. Stanley contends that Mr. Stanley obtained these loans without her knowledge or by convincing her to sign loan documents through misrepresentations. Id. at ¶¶ 16, 20-21, 23. On one occasion, Mr. Stanley allegedly had defendant Timothy Tallmadge ("Tallmadge"), vice-president of defendant Community Bank N.A., pressure Mrs. Stanley into signing such loan documents in the amount of $541,000. Id. at ¶¶ 26-27. In late 2005 this loan was "flipped" to another bank by Mr. Stanley and Tallmadge using Mrs. Stanley's forged signature. Id. at ¶¶ 37-38. In August of 2005, Mr. Stanley also procured auto loans from defendants Glens Falls National Bank ("GFNB") and NBT Bank "using [Mrs. Stanley's] identity" without Mrs. Stanley's knowledge. Id. at ¶¶ 29-30. Mrs. Stanley believes at least some of the loan proceeds may have gone to defendants Walter & Roberta Stanley. Id. at ¶¶ 17, 25, 27-28.

In November and December of 2007, Mrs. Stanley repeatedly called the defendant New York State Police ("NYSP") because Mr. Stanley was harassing her and her son, and stealing from their house. Id. at ¶¶ 44-48. NYSP's failure to act on these calls is apparently the basis for their inclusion in this suit.

Turning to the procedural chronology of the case, Mrs. Stanley and Mr. Stanley jointly filed for Chapter 11 bankruptcy on February 7, 2006. (See Ex.3 to Ganz Aff., Dkt. No. 17.) On March 28, 2008, the Chapter 11 petition was converted to a Chapter 7 petition. Id.

This action was commenced on August 27, 2008, with Mrs. Stanley claiming she had "only recently become aware of the extent of the conspiracy to defraud and abuses perpetrated" against her. (See Compl. ¶ 13; Dkt. No. 1.) Mrs. Stanley seeks monetary damages for purported federal civil rights violations under 42 U.S.C. §§ 1982, 1983, 1985, and asserts State claims for intentional infliction of emotional distress, promissory estoppel, breach of contract, breach of an implied in fact contract, and breach of an implied covenant of good faith and fair dealing. Presently pending before the court are motions from all defendants seeking dismissal under various provisions of FED. R. CIV. P. 12. (See Dkt. Nos. 17, 18, 23, 34, 37.) Generally, defendants argue that: 1) Mrs. Stanley lacks standing to bring this action due to her bankruptcy petition; 2) the court lacks subject matter jurisdiction because Mrs. Stanley fails to state a cognizable federal claim and there is no diversity between the parties; and 3) Mrs. Stanley has failed to state a claim upon which relief can be granted. NYSP additionally contends it is entitled to sovereign immunity. Finding the issues of standing and sovereign immunity to be dispositive, the court declines to address the remaining arguments.

III. Standard of Review

Because both standing and sovereign immunity go to the heart of a court's constitutional authority to adjudicate a dispute, the court's discussion will proceed under the rubric of FED. R. CIV. P. 12(b)(1). See Moore v. PaineWebber, Inc., 189 F.3d 165, 169 n.3 (2d Cir. 1999) (dismissal for absence of standing should be made under 12(b)(1)); Goonewardena v. New York, 475 F. Supp.2d 310, 321 (S.D.N.Y. 2007) (stating "whether or not sovereign immunity bars a claim is properly decided under a Rule 12(b)(1) motion"). A complaint will be dismissed under Rule 12(b)(1) when the court has no subject matter jurisdiction over the action. See FED. R. CIV. P. 12(b)(1). "The burden of proving jurisdiction is on the party asserting it." Malik v. Meissner, 82 F.3d 560, 562 (2d Cir.1996) (internal quotation marks and citation omitted). In determining whether jurisdiction exists, the court "must accept as true all material factual allegations in the complaint, but [it will] not ... draw inferences from the complaint favorable to plaintiffs." J.S. ex rel. N.S. v. Attica Cent. Sch., 386 F.3d 107, 110 (2d Cir. 2004). Moreover, on a Rule 12(b)(1) motion, the court "may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional issue." Id. at 110.

IV. Discussion

A. Standing

Initially, the court addresses the extent to which Mrs. Stanley has standing to bring this action in light of her February 2006 bankruptcy petition.*fn1

When a bankruptcy petition is filed all of the debtor's pre-petition legal and equitable interests in property must be disclosed, and become the property of her bankruptcy estate. See 11 U.S.C. §§ 521(1), 541(a). Property which passes to the estate includes legal claims which accrued to the debtor pre-petition or as a result of the petition. See, e.g., Parker v. Wendy's Int'l, Inc., 365 F.3d 1268, 1272 (11th Cir. 2004); Wieburg v. GTE Southwest, Inc., 272 F.3d 302, 306 (5th Cir. 2001); Richman v. First Woman's Bank (In re Richman), 104 F.3d 654, 657 (4th Cir. 1997); Hopkins v. Foothill Mountain, Inc. (In re Hopkins), 346 B.R. 294, 303-04 (Bankr. E.D.N.Y. 2006). Such pre-petition ...


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