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Weisshaus v. State

August 20, 2009

GIZELLA WEISSHAUS, PLAINTIFF,
v.
THE STATE OF NEW YORK; THE OFFICE OF COURT ADMINISTRATION OF THE UNIFIED COURT SYSTEM; THOMAS J. CAHILL, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY; JUDITH N. STEIN, IN HER OFFICIAL AND INDIVIDUAL CAPACITY; HAL R. LIEBERMAN, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY; EDWARD D. FAGAN; ALAN W. FRIEDBERG, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY; SAUL E. FEDER; MEL URBACH, AND JOHN AND JANE DOES, 1-20, DEFENDANTS.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

Pro se plaintiff Gizella Weisshaus brings claims related to her attorneys' conduct and the rejection of ethics complaints she filed against them in 1998 and 2000. She seeks relief against two groups of defendants, the "State Defendants" who handled her complaints, comprised of the State of New York, the Office of Court Administration of the Unified Court System; Thomas J. Cahill, Alan W. Friedberg, Judith N. Stein, Hal R. Lieberman (in their official and individual capacities), and John Does 1-20;*fn1 and three attorneys, Edward Fagan, Saul Feder, and Mel Urbach. Fagan and Feder were plaintiff's former attorneys. Urbach had an unspecified "unwelcome" "legal involvement" with the plaintiff. Except for Fagan, who filed an answer and counterclaim on December 29, 2008, the defendants have moved to dismiss the amended complaint. Their motions are granted.

BACKGROUND

The following facts are taken from the September 29, 2008 amended complaint except where noted and are presumed to be true for the purposes of this motion. Weisshaus, a Holocaust survivor, filed a lawsuit in 1996 that was consolidated into In re Holocaust Victim Assets Litigation (the "Swiss Banks Litigation"), which alleged that, inter alia, certain Swiss institutions aided and abetted the Nazi regime and looted the assets of Holocaust victims. See In re Holocaust Victim Assets Litigation, 105 F. Supp. 2d 139, 141 (E.D.N.Y. 2000). Weisshaus was originally represented by Fagan in the litigation. While the parties reached a settlement in principle in 1998, id., Weisshaus opted out of the settlement because she believed that the attorneys were enriching themselves at the expense of the class. Much of the instant litigation, not at issue in this Opinion, concerns the acrimonious relationship that developed between Weisshaus and Fagan and involves numerous allegations of wrongdoing on each side.

The amended complaint includes three allegations of attorney misconduct, one of which relates to the Swiss Banks Litigation. First, after opting out of the settlement in that matter, Weisshaus discovered that Fagan and Urbach had deceived the court by "improperly manufactur[ing]" an amended complaint in 2000 in that matter and backdating it to 1997. Second, Fagan converted an $82,583.04 escrow account in another matter involving the estate of Jack Oestreicher, in which Weisshaus was a fiduciary.*fn2 Third, Feder misrepresented to the plaintiff and the court that he was establishing an escrow account for $112,500 "in a matter involving a Sol Mermelstein and others."

In April 1998, plaintiff filed grievances against Fagan and Feder with the Departmental Disciplinary Committee ("DDC") of the Supreme Court of New York, Appellate Division, First Department. In a letter of May 6, 1998, Lieberman, then chief counsel of the DDC, responded to Weisshaus with respect to the complaint against Fagan, stating that the DDC would await the outcome of an ongoing criminal proceeding before concluding its investigation. Lieberman then left the employ of the DDC to join a law firm, where he began representing Fagan in the DDC proceedings. He submitted an answer on Fagan's behalf denying the charges brought by Weisshaus on July 15, 1998. The complaint against Fagan was later summarily dismissed. Weisshaus then submitted an expanded complaint on September 1, 2000, which was summarily dismissed by the DDC as well.

Weisshaus filed this lawsuit on April 30, 2008. Her complaint, amended on September 29, 2008, was not properly served until December 11. The amended complaint contends that the State Defendants failed in their duties to investigate and take action concerning her allegations of misconduct against Fagan and Feder, or to investigate the alleged "dual role" of Lieberman in his representation of Fagan. Weisshaus argues that the DDC and its employees are engaged in "widespread and systematic 'stonewalling' and 'whitewashing' of complaints against attorneys." She asserts that her complaints have never been properly addressed because the defendants conspired against her to prevent the DDC from fairly addressing the disciplinary complaints. She charges all defendants with violations of the First and Fourteenth Amendments pursuant to 42 U.S.C. §§ 1983 and 1985 ("Section 1983" and "Section 1985"), arguing that she was deprived of her constitutional right to a fair and honest judicial system, and seeks to recover $20,000,000 in damages as well as punitive damages.

Plaintiff brings a separate breach of fiduciary duty claim against Fagan, Feder, and Urbach, alleging that they breached duties owed to Weisshaus in their capacities as her attorneys. In a separate breach of contract claim, brought against Fagan alone, the plaintiff also asserts that Fagan breached his agreement to represent her.

On January 16, the State Defendants and Feder moved to dismiss the amended complaint on a variety of grounds, raising standing, statute of limitations, service, and failure to state a claim issues, among others. Urbach moved to dismiss on January 21. The motions were fully submitted on May 1. An Order of May 4 addressed a request from Feder that he be allowed to file a new motion to dismiss arguing that Weisshaus's claims against him are barred on collateral estoppel grounds. The Order permitted Feder to file a second motion, with an opportunity for plaintiff to oppose and for Feder to reply. Feder's second motion was fully briefed on July 14.*fn3

DISCUSSION

As the State Defendants have challenged the existence of subject-matter jurisdiction pursuant to Rule 12(b)(1), Fed. R. Civ. P., by arguing that the plaintiff lacks standing, their argument will be addressed first, followed by the arguments raised by Feder and Urbach that the allegations brought against them should be dismissed under Rule 12(b)(6), Fed. R. Civ. P., on statute of limitations grounds.

1. Standing

The State Defendants submit that there is no subject jurisdiction over Weisshaus's claims, which challenge the dismissal of the disciplinary complaints she filed with the DDC against Feder and Fagan. They argue that Weisshaus lacks standing to challenge a disciplinary proceeding not directed at her, because she has no cognizable interest in the government's alleged failure to investigate.

"Determining the existence of subject matter jurisdiction is a threshold inquiry, and a claim 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." Arar v. Ashcroft, 532 F.3d 157, 168 (2d Cir. 2008) (citation omitted). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the ...


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