Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Zdzislaw B. Kwiatkowski v. Polish & Slavic Federal Credit Union and

December 12, 2011


The opinion of the court was delivered by: John Gleeson, United States District Judge:


Plaintiff Zdzislaw B. Kwiatkowksi brings this action against the Polish & Slavic Federal Credit Union (the "credit union") and its board of directors, raising numerous claims related to the credit union's refusal to provide him with a business loan and other misconduct. The defendants move to dismiss for lack of jurisdiction and for failure to state a claim, pursuant to Rules 12(b)(1) and 12(b)(6), respectively. For the reasons set forth herein, I grant the motion to dismiss in its entirety.


According to the complaint, whose factual allegations I assume to be true for the purposes of this motion, see Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (12(b)(6) challenge); Robinson v. Gov't of Malaysia, 269 F.3d 133, 140 (2d Cir. 2001) (facial 12(b)(1) challenge), and accompanying exhibits, the dispute in this case arises from the following facts:

On September 21, 1993, and April 17, 2000, Kwiatkowski was granted United States patents for a device he invented called the Rainbow-Spectral Display. Compl. ¶ 4. As described by Kwiatkowski at oral argument, the device included a clock and a rainbow display. He planned to open a business to produce and market his invention, but he needed capital. Accordingly, he wrote two letters to the credit union's board of directors in August 2000 in which he encouraged the credit union to work with the Small Business Administration so that it could provide loans to start-up businesses. Compl. ¶ 22 & Exs. A1, A2. The credit union did not do so. Compl. ¶ 22.

Kwiatkowski then applied, on September 10, 2002, to the credit union for a business loan of $550,000. Compl. ¶ 23. His application was denied. Compl. Ex. B1. By letter dated September 11, 2002, Roman Sieczkowski, the Vice President of Lending at the credit union, told Kwiatkowski that the credit union was "unable to accommodate [him] with [his] request for business credit." Id. He explained, "We do not offer business loans for the purpose you requested. The only type of business loans offered by our Credit Union are loans secured by multi-family homes that are already constructed." Id.

On November 2, 2005, Kwiatkowski submitted to the credit union a second application for a $550,000 business loan. Compl. ¶ 23 & Ex. B2. In a Business Adverse Action Notice dated November 7, 2005, the credit union again denied Kwiatkowski's application. Compl. Ex. B2. As "principal reason(s)" for the denial, the Notice listed "[i]ncome insufficient for amount of credit requested," "[v]alue or type of collateral not sufficient," "[l]ength of time in business," and "[i]nsufficient cash flow." Id. The Notice explained that "[i]ntangibles are not acceptable collateral items," that Kwiatkowski had demonstrated "no history of company income and profit," that a "start up business [entails] high risk," and that the "guarantor does not have enough cash flow." Id.

Kwiatkowski responded to the credit union by letter dated November 18, 2005, complaining to Sieczkowski that the credit union "failed to consider the positive merits of [his] business plan and its main product." Compl. Ex. E1. Soon after, he also applied for a $75,000 business line of credit, which was denied by email on January 30, 2006. See Compl. Ex. E2. The email provided three reasons for the denial: first, that the credit union "does not offer unsecured business lines of credit" for amounts great than $5,000; second, that Kwiatkowski "d[id] not meet the underwriting or credit requirements necessary to be approved for a loan"; and third, that "a recent review of [Kwiatkowski's] credit history, with [the] Credit Union, disclosed that a Judgment was issued to [the credit union] for an unpaid VISA Account." Id.

On May 19, 2010, Kwiatkowski applied once more to the credit union for a business loan, this time in the amount of $650,000. Compl. ¶ 23 & Ex. B3. His request was denied. Compl. Ex. B3. In a Business Adverse Action Notice dated May 21, 2010, the credit union explained that the "principal reason(s)" for its denial of Kwiatkowski's loan application were that "according to [credit union] policy, we do not offer the type of loan requested," the application demonstrated no "gross receipts" or "cash flow," and Kwiatkowski had a "charge off account" with the credit union. Id. Kwiatkowski made numerous requests for additional information regarding why his loan application had been denied, but the credit union did not answer his requests. Compl. ¶ 28.

The credit union and its board members also engaged in a series of other acts to which Kwiatkowski objects. The credit union utilized only 12% of its funds to provide only .7% of its members with business credit, Compl. ¶¶ 3, 12, yet it invested over 50% of its assets in speculative ventures, Compl. ¶ 30. This investment strategy ultimately caused losses to credit union members, Compl. ¶ 38, contravened the credit union's bylaws, Compl. ¶ 29, and conflicted with promises made by its board members, Compl. ¶¶ 32, 34.

The credit union also made material omissions related to its investment losses in its Financial Summary Report of March 31, 2011, Compl. ¶ 31, and one board member falsely made a public statement that the credit union held securities guaranteed by the government, Compl. ¶ 33. Furthermore, board members refused to hold special meetings where appropriate, in violation of the credit union's bylaws, Compl. ¶ 8, caused the credit union to engage in business transactions with companies that employed them, Compl. ¶ 10, and "rigg[ed] the so-called 'democratic' process" in order to maintain control over the credit union, id.

On August 16, 2011, Kwiatkowski filed this action against the credit union and its board members, alleging (1) national origin discrimination in violation of the Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq.; (2) national origin discrimination in violation of Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq.; (3) patent infringement in violation of 35 U.S.C. § 271(b); (4) violations of the Community Reinvestment Act, 12 U.S.C. § 2901 et seq.; (5) violations of the Federal Credit Union Act, 12 U.S.C. § 1751 et seq., and implementing regulations; (6) violations of the credit union's bylaws; (7) common law fraud, deceit, and breach of fiduciary duty; (8) violations of 18 U.S.C. § 657; (9) securities fraud in violation of 15 U.S.C. § 78j(b), (t), and 17 C.F.R. 240.10b-5; (10) violations of 13 C.F.R. 120.150(h); (11) violations of 12 C.F.R. § 528.9(b); (12) violations of 12 U.S.C. § 3018(a); and (13) conspiracy to enslave in violation of 42 U.S.C. § 1994. The credit union and its board of directors moved to dismiss and oral argument on the motion was held on December 9, 2011.


1. Standard of ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.