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John Salvatore D'aquila, Sr v. Elizabeth Ruth D'aquila

March 21, 2011


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


Pending before the Court are Defendants' motions to dismiss or, in the alternative, stay this action pending resolution of a previously filed state action. For the following reasons, that motion is GRANTED insofar as this case is now STAYED.


In November 2009, Plaintiff John Salvatore D'Aquila, Sr., commenced a matrimonial action in South Carolina Family Court against Defendant Elizabeth D'Aquila ("Family Court Action"). In the Family Court Action, Plaintiff seeks an equitable distribution of marital assets, under South Carolina's Equitable Apportionment of Marital Property Act. (Ms. D'Aquila Opp. Br. Ex. E at ¶¶ 11-14.) In addition, Plaintiff alleges that Defendant Elizabeth D'Aquila "transferr[ed] and withdr[ew] marital monies from [marital] bank accounts and mov[ed] the money into separate accounts with her name and names of some of our children and her sister." (Id. Ex. F. at ¶ 3.) Specifically, Plaintiff claims that Ms. D'Aquila: (i) added a password to marital accounts at Island Federal Credit Union that he didn't know, thereby locking him out of the accounts; (ii) added the couple's daughter, Kim Englehardt, to an account without his knowledge or consent; and (iii) together with Ms. Englehardt, transferred approximately $110,000 out of the accounts. (Id. ¶¶ 33-40.)

Six months later, Plaintiff commenced this action. Like the Family Court Action, this action seeks relief based on Ms. D'Aquila's handling of the Island Federal Credit Union marital accounts, including adding a password, adding Ms. Englehardt has a joint owner, and withdrawing substantial sums, all without his knowledge and consent. However, whereas the Family Court action names only Ms. D'Aquila as a Defendant, this action adds additional Defendants: Ms. Englehardt, her husband Thomas Englehardt, and the Island Federal Credit Union. In addition, this action asserts additional theories of liability not expressly pled in the Family Court Action, including conversion, negligence, breach of fiduciary duty, and statutory claims under the New York State Banking Law, the New York State General Business Law, and the Federal Credit Union Act.

On November 23, 2010, Ms. D'Aquila moved to dismiss or stay this action under the Colorado River abstention doctrine. The remaining Defendants then filed short "me too" letter motions that adopted Ms. D'Aquila's arguments.


I. Standard of Review

Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976), and its progeny, set forth the standards governing abstention when "state and federal courts exercise concurrent jurisdiction simultaneously." Gregory v. Daly, 243 F.3d 687, 702 (2d Cir. 2001). Under this authority, "the mere fact that parallel proceedings are pending in state court is insufficient to justify abdicating the 'virtually unflagging obligation,' to exercise federal jurisdiction." Id. (quoting Colorado River). Rather, to justify abstention, there must be "exceptional circumstances," such as when "the resolution of existing concurrent state-court litigation could result in "comprehensive disposition of litigation." Woodford v. Community Action Agency of Greene County, Inc., 239 F.3d 517, 522 (2d Cir. 2001) (quoting Colorado River).

In determining whether Colorado River abstention applies, the court should consider (1) whether the controversy involves a res over which one of the courts has assumed jurisdiction; (2) whether the federal forum is less inconvenient than the other for the parties; (3) whether staying or dismissing the federal action will avoid piecemeal litigation;(4) the order in which the actions were filed, and whether proceedings have advanced more in one forum than in the other; (5) whether federal law provides the rule of decision; and (6) whether the state procedures are adequate to protect the plaintiff's federal rights. Id. "No one factor is necessarily determinative." Id. (citations and quotations omitted). Instead, a "carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counseling against that exercise is required." Id.

II. Examination of the Colorado River Factors Warrants a Stay, but not Dismissal

Here, most of the Colorado River factors strongly favor Defendants' motions. First, this action involves a res, the marital bank accounts at Island Federal Credit Union, that the Family Court Action has already assumed jurisdiction over. This is because "the state court's disposition of the marital assets at issue will have a profound impact" on whether Ms. D'Aquila, or anyone else, improperly converted Mr. D'Aquila's property. See Moss v. Moss Tubes, 96-CV-1407, 1997 U.S. Dist. LEXIS 13352, at *7 (N.D.N.Y Aug. 18, 1997).

Second, staying or dismissing this action will avoid piecemeal litigation, in that it will avoid two courts simultaneously adjudicating ownership of the marital bank accounts, leading to potentially conflicting decisions. See Boronow v. Boronow, 71 N.Y.2d 284, 290-91, 525 N.Y.S.2d 179 (N.Y. 1988) (all claims concerning marital property should be brought in one proceeding, because "[f]ragmentation in this area would be particularly inappropriate and counterproductive" resulting in an "inevitable cloud on titles [that] should also not be allowed to hang over the alienability of the property.").

Third, Plaintiff commenced the Family Court Action six months before he instigated this suit, and the parties have already begun discovery there. ...

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