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Luisa Muia v. Brookview Rehab Funding

March 23, 2012




Presently before the Court is a Motion to dismiss Plaintiff Luisa Muia ("Plaintiff")'s Amended Complaint, filed by Defendant on August 25, 2011. Dkt. Nos. 14 ("Amended Complaint"); 15 ("Motion"). Defendant seeks to dismiss Plaintiff's claims pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Mot. at 1. Plaintiff filed a Response in Opposition to the Motion on November 30, 2011.*fn2 Dkt No. 16.


The Court presumes familiarity with the factual background in this case as outlined in the Court's Memorandum-Decision and Order dated May 5, 2011. Dkt. No. 11 ("May 2011 Order"). In that Order, the Court denied Defendant's previous Motion to dismiss (Dkt. No. 5) and granted Plaintiff's Motion for leave to submit an amended complaint (Dkt. No. 7). May 2011 Order at 4. The Court further noted in the May 2011 Order that the factual allegations in Plaintiff's initial Complaint indicated that the mortgage executed on the property in question was for "business purposes," and, if so, would mean that Plaintiff's claims under the Truth in Lending Act ("TILA") the Real Estate Settlement and Procedures Act ("RESPA") could not proceed. Id. at 3-4. The Court therefore directed that any amended complaint filed by Plaintiff must "allege facts showing that the loan was for personal consumer use as opposed to business purposes" in order to state claims for relief under TILA and RESPA. Id. at 3-4.

Plaintiff filed the Amended Complaint on August 4, 2011, along with an affidavit from her husband, James Muia, stating that: (1) because his and Plaintiff's children had grown up and moved away, he and Plaintiff had been "considering the prospect of downsizing into a condo or apartment";

(2) he and Plaintiff had "looked at [the property in question] with the intent that one of the units be converted into an 'Owner's Suite' while the remaining units be rented out to assist us in our housing expenses"; and (3) he and Plaintiff "[a]t all times . . . intended to acquire and occupy this property as our primary residence." Am. Compl.; James Muia Aff. (Dkt. No. 14-3) ¶¶ 2-4. The present Motion followed.


In considering a motion to dismiss pursuant to Rule 12(b)(1), the plaintiff bears the burden of establishing subject matter jurisdiction by a preponderance of the evidence. Aurrechione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005). Furthermore, subject matter jurisdiction may not be established by drawing inferences from the pleadings favorable to the plaintiff. Shipping Fin. Serv. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998); see also London v. Polishook, 189 F.3d 196, 199 (2d Cir. 1999) (the party invoking subject matter jurisdiction must "proffer the necessary factual predicate -- not just an allegation in a complaint -- to support jurisdiction."). "If the court determines at any time that it lacks subject matter jurisdiction, the court must dismiss the action." FED. R. CIV. P. 12(h)(3).

Second, in ruling on a motion to dismiss pursuant to Rule 12(b), court should not dismiss a complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, __, 129 S.Ct. 1937, 1949 (2009). While the Court should construe the factual allegations in the light most favorable to the plaintiff, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Allegations that "are so vague as to fail to give the defendants adequate notice of the claims against them" are subject to dismissal. Sheehy v. Brown, 335 F. App'x. 102, 104 (2d Cir. 2009).

Finally, the Second Circuit requires courts to be more cautious when dismissing pro se complaints. Easton v. Sundram, 947 F.2d 1011, 1015 (2d Cir. 1991). The Court must liberally construe pro se submissions, McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999), and interpret them "to raise the strongest arguments that they suggest." Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994). Nonetheless, a party's pro se status does not exempt him from "compliance with relevant rules of procedural and substantive law." Triestman, 470 F.3d at 477.


Defendant argues that Plaintiff's Complaint warrants dismissal on the grounds of res judicata, collateral estoppel, and lack of subject matter jurisdiction.*fn3 Def.'s Mem. at 1, 3-9; see also Day v. Moscow, 955 F.2d 807, 811 (2d Cir. 1992) ("Generally, res judicata is an affirmative defense to be pleaded in the defendant's answer . . . However, when all relevant facts are shown by the court's own records, of which the court takes notice, the defense may be upheld on a Rule 12(b)(6) motion without requiring an answer."). In support of its arguments, Defendant points to a decision issued on June 16, 2011, in the New York Supreme Court, Schenectady County, granting summary judgment in its favor against Plaintiff in the mortgage foreclosure action. Def.'s Ex. I (Dkt. No. 15-3) at 116-18.

The doctrine of res judicata requires the Court to accord to state court judgments the same force and conclusive effect that they would have in the states in which they were rendered. 28 U.S.C. § 1738; Winters v. Lavine, 574 F.2d 46, 54 (1978). Under New York rules of preclusion, a party may not relitigate issues that were "clearly raised and decided against that party in a prior proceeding where the party had a full and fair opportunity to contest the issue." Kowalcyzk v. Gilroy, 994 F. Supp. 410, 412 (E.D.N.Y. 1998) (citing Weiss v. Manfredi, 639 N.E.2d 1122 (N.Y. 1994)). The Court therefore must decide whether: (1) whether the parties in the current action were also parties in the state court proceedings; (2) the state court issued a final judgment on the merits; and (3) the decision involved the same causes of action as the Amended Complaint.

Here, all three of these elements are satisfied. It is undisputed that Plaintiff and Defendant were parties in the state court foreclosure action. Def.'s Ex. I at 116. Second, it is well-settled "that a summary judgment dismissal is considered a decision on the merits for res judicata purposes" in this Court and under New York state law. Weston Funding Corp. v. Lafayette Towers, Inc., 550 F.2d 710, 715 (2d Cir. 1977). Finally, the claims in Plaintiff's Amended Complaint plainly "aris[e] out of the same transaction or series of transactions" as those ...

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