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Thunder Island Amusements, Inc. v. Ewald

June 29, 2009


The opinion of the court was delivered by: Neal P. McCurn, Senior District Judge


I. Introduction

Presently before the court in this action brought pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999 (1971), is a motion by defendants for summary judgment pursuant to Federal Rule of Civil Procedure 56 seeking judgment in their favor as to both counts of the amended complaint.

II. Procedural Background

Plaintiffs Thunder Island Amusements, Inc. ("TIA"), Harold L. Perau ("Mr. Perau") and Tammie L. Perau ("Mrs. Perau") (collectively "Plaintiffs") initially commenced this action on December 20, 2007 against IRS Special Agent Kelly L. Ewald ("Ewald") as well as "John Doe 1-50 and Jane Doe 1-50, Federal Agents and/or State Agents." Dkt. No. 1. Thereafter, a pre-answer motion to dismiss the complaint, or in the alternative for summary judgment, was filed by the aforementioned defendants. Plaintiffs subsequently amended their complaint as a matter of course pursuant to Federal Rule of Civil Procedure 15(a)(1), to, among other things, substitute defendants UCA No. 1, UCA No. 2, Thomas Rubel, Christopher Vickers, Douglas Miller, Ronald Kidder, Frank Perez, Thomas Fattorusso, Jason Leshinksky, Nicholas Finocchio, and Michael Kinahan (collectively, "newly named defendants"), for defendants John Doe 1-50 and Jane Doe 1-50. The amended complaint includes claims against all defendants pursuant to the Fourth Amendment to the United States Constitution (Count I) and Article I, Section 12 of the New York State Constitution (Count II). After all papers were filed regarding the motion to dismiss or for summary judgment, the court notified the parties that said motion was being converted to a motion for summary judgment, and allowed the parties to file any additional materials pertinent to same. Oral argument was not heard, and the motion is decided solely on the submitted papers.

III. Factual Background

The following facts are undisputed.

On December 17, 2004, Mr. Perau met with two individuals at his place of business, TIA, in Fulton, New York, who held themselves out to be a real estate agent and her client, a businessman who was considering purchasing TIA. The two individuals whom Mr. Perau met that day were in fact Internal Revenue Service -Criminal Investigative Division ("IRS-CID") Special Agents working undercover, one of whom was wearing a concealed recording/transmitting device during their meeting with Mr. Perau. At a separate location, Ewald, also a Special Agent with IRS-CID, listened to the conversation between the undercover agents and Mr. Perau in "real time," that is, at the same time that the recorded conversation took place.

On December 21, 2004, Ewald applied to United States Magistrate Judge George H. Lowe for the issuance of four warrants ("the Search Warrants") authorizing federal law enforcement agents to search the TIA business premises, the personal residence of Mr. And Mrs. Perau, a conversion van, and a utility trailer, for "fruits, evidence and instrumentalities of criminal tax offenses against the United States," specifically, violations of Title 26, United States Code section 7206(1) (subscribing to a false federal income tax return) and Title 31, United States Code section 5324 (structuring transactions to evade reporting requirements) for the tax years 1999 through 2003.

The Search Warrants were approved by Magistrate Judge Lowe, and were executed the following day, December 22, 2004. There were two search teams: one for the residence of Mr. and Mrs. Perau, and the other for the TIA business location. Ewald was in charge of the search team at the business location; she remained at that location throughout the day. Ewald's search-day assignment was to interview Mr. Perau; she did not participate in executing any of the other Search Warrants (i.e. the residence or any vehicle).

In late February 2006, Ewald's investigation of Plaintiffs concluded. No criminal charges were brought against any of the Plaintiffs. By letter dated March 31, 2006, the IRS notified Mr. Perau that he was no longer the subject of a criminal investigation. This action was commenced on December 20, 2007, two years and 363 days after the execution of the Search Warrants.

IV. Discussion

A. Legal Standard

A motion for summary judgment shall be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). See also Beyer v. County of Nassau, 524 F.3d 160, 163 (2d Cir. 2008). "In ruling on a motion for summary judgment, the district court may rely on any material that would be admissible or usable at trial." Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 309 (2d Cir. 2008) (internal quotation and citation omitted).

The movant has the burden to show that no genuine factual dispute exists. See Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004) (citation omitted). Moreover, when the court is deciding a motion for summary judgment, it must resolve all ambiguities and draw all reasonable inferences in the non-movant's favor. See id.

When deciding whether a material issue of fact is in dispute, the court is cognizant that a fact is "material" if "it might affect the outcome of the suit under governing law." White v. Haider-Shah, No. 9:05-CV-193, 2008 WL 2788896, at *4 -5 (N.D.N.Y. Jul. 17, 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986)). Also, "[a] material fact is genuinely in dispute 'if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Id., quoting Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.

B. Analysis

Defendants argue that the action against all defendants except Ewald is barred by the statute of limitations. Ewald seeks summary judgment on the claims against her on the merits, or alternatively, under the doctrine of qualified immunity. These arguments will be addressed in sequence.

1. Statute of Limitations

It is undisputed that the statute of limitations for a Bivens action arising in New York is three years. See Tapia-Ortiz v. Doe, 171 F.3d 150, 151 (2d Cir. 1999) (citing Owens v. Okure, 488 U.S. 235, 251, 109 S.Ct. 573 (1989)). It is further undisputed that this Bivens action was commenced on December 20, 2007, two years and 363 days after the execution of the Search Warrants. See Defs.' Rev. Statement of Material Facts, ¶ 22 ("SOMF"). The issue presently before the court is whether Plaintiffs' substitution of the newly named defendants for John and Jane Doe defendants relates back to the filing of their original complaint, thus rendering timely the Bivens claims against said newly named defendants.

Rule 15 of the Federal Rules of Civil Procedure allows amendments to a pleading to relate back to the date of the original pleading under certain circumstances. See Fed. R. Civ. P. 15(c). The Court of Appeals for the Second Circuit has held that "Rule 15(c) does not allow an amended complaint adding new defendants to relate back if the newly-added defendants were not named originally because the plaintiff did not know their identities." Barrow v. Wethersfield Police Dep't, 66 F.3d 466, 470 (2d Cir. 1995). On the other hand, where the newly-added defendants were not named due to a "'mistake' concerning the identity of the parties[,]" Rule 15(c) permits the relation back of an amendment. Id.

Defendants argue that Plaintiffs chose to wait until the end of the three-year limitations period to commence this action, without having done the necessary legwork to identify the other law enforcement officials they intended to sue, which does not meet the definition of a "mistake" under Rule 15(c). Plaintiffs counter that it was a "mistake" to use the generic John and Jane Doe names because "[they] had knowledge that [d]efendants other than Ewald were undercover IRS agents as well as other government agents, therefore, these [d]efendants were not completely unknown. It was just the fact that their true names were not known, but they could have been identified as undercover agents or IRS agents." Defs.' Mem. of Law in Opp'n to Pls.' Mot. to Dismiss or in the alternative for Summ. J., at 9, Dkt. No. 20.

Plaintiffs further argue that Defendants are equitably estopped from seeking dismissal of the newly named defendants on statute of limitations grounds because Plaintiffs attempted to access information from the IRS in a timely manner via a Freedom of Information Act ("FOIA") request, but the IRS refused to divulge documents identifying the named defendants until informal discovery, which took place after the statute of limitations expired.

First, Plaintiffs misconstrue the definition of "mistake" under Rule 15(c). Where, as here, a plaintiff fails to identify individual defendants "when the plaintiff knows that such defendants must be named[, such failure] cannot be characterized as a mistake." Barrow, 66 F.3d at 470. Second, Plaintiffs' equitable estoppel argument carries no weight. "Equitable estoppel will apply if the defendants engage in fraud, misrepresentation, deception, or intentional concealment to induce a plaintiff to refrain from filing a timely action." Bove v. New York City, 213 F.3d 625, 2000 WL 687720, at *2 (2d Cir. 2000) (citing Farkas v. Farkas, 168 F.3d 638, 642 (2d Cir. 1999)). The evidence submitted by Plaintiffs, consisting of an affidavit of Mr. Perau and copies of correspondence between Mr. Perau and the IRS, does not support a conclusion that Defendants here acted in "fraud, misrepresentation, deception, or intentional concealment." See id. In fact, according to the documents attached to Mr. Perau's affidavit, as early as February 2007, some ten months before the expiration of the statute of limitations on Plaintiffs' claims, the IRS notified Mr. Perau that he must identify the documents he desires, and that should he fail to do so, the IRS will assume no documents are required and close the file on Mr. Perau's FOIA request. See Att. A to Aff. of Harold L. Perau III, June 5, 2008, Dkt. No. 20 ("Perau Aff."). Accordingly, the proverbial ball was left in Mr. Perau's court. There is no evidence that Defendants acted in such a way to warrant the application of equittable estoppel here. Plaintiffs' argument that Defendants acted improperly is further belied by the undisputed declaration of Ewald that she personally gave a copy of the search warrant inventory to Mr. Perau at the end of the day on December 22, 2004. See Decl. of Kelly L. Ewald, May 1, 2008, ¶ 22, Dkt. No. 14 ("Ewald Decl."). Said inventory provides the names of several of the newly named defendants. See Ex. F to Ewald Decl.

Finally, the court gives short shrift to Plaintiffs' intimated argument, set forth by attorney affidavit, that the identification of "UCA No. 1" and "UCA No. 2" as defendants in their amended complaint somehow constitutes an acceptable substitution of a named defendant for a John or Jane Doe defendant because they are "self described pseudo name[s] of the defendant[s] intended to be named." Supp. Aff. of Terrance J. Hoffman, April 9, 2009, ¶ 7, Dkt. No. 30. Defendants cannot avoid a statute of limitations bar by substituting one pseudonym for another. See Covington v. Warden of C-95, No. 93-cv-1958, 1996 WL 75211, at *4 (E.D.N.Y. Feb. 8, 1996) (citing Barrow, 66 F.3d at 468).

Accordingly, because Defendants' untimely substitution of the named defendants UCA No. 1, UCA No. 2, Thomas Rubel, Christopher Vickers, Douglas Miller, Ronald Kidder, Frank Perez, Thomas Fattorusso, Jason Leshinksky, Nicholas Finocchio, and Michael Kinahan, for defendants John Doe 1-50 and Jane Doe 1-50 was not a "mistake" within the definition of Fed. R. Civ. P. 15(c), all claims against said newly named defendants are dismissed.

Remaining for this court's determination is the disposition of Plaintiffs' ...

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