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Gotham Asset Locators Inc. v. The State of Israel

United States District Court, S.D. New York

June 17, 2014

GOTHAM ASSET LOCATORS INC., Plaintiff,
v.
THE STATE OF ISRAEL, Defendant

For Gotham Asset Locators Inc., Plaintiff: Jay Scott Markowitz, Law Offices of Jay Markowitz, New York, NY.

For The State of Israel, Defendant: David J. Sack, LEAD ATTORNEY, Feder, Kaszovitz LLP, New York, NY.

Page 410

MEMORANDUM OPINION AND ORDER

JESSE M. FURMAN, United States District Judge.

Gotham Asset Locators Inc. (" Gotham" ) brings suit against the State of Israel, seeking compensation for work it performed on Israel's behalf related to property in the United States in which Israel has an interest. Israel has moved to the dismiss the Amended Complaint for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1). For the reasons discussed below, the motion to dismiss is GRANTED and the Amended Complaint is dismissed.

BACKGROUND

The following facts, drawn from the Amended Complaint, are assumed to be true for purposes of this motion. See Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd on other grounds, 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010).

This action arises out of the disposition of the estate of Minnie Miller. Ms. Miller executed a last will and testament in 1982, in which she left her brother a life estate in property located at 2071 Haring Street, Brooklyn, New York (the " Haring Street Property" ). (Am. Compl. (Docket No. 5) ¶ ¶ 7-9). Ms. Miller's will directed that, upon her brother's death, the property was

Page 411

to be sold, and the net proceeds were to be " divided into two equal parts," one to be paid to the State of Israel and the other part to be paid to the Jewish Child Care Association of New York (" JCCA" ). ( Id. ¶ 9). In December 1994, after Ms. Miller and her brother had both died, the will was admitted for probate to the Kings County Surrogate's Court. ( Id. ¶ ¶ 7, 10-11). The Haring Street Property, however, was not sold as directed by the will; instead, over the next few years, a series of fraudulent deeds were recorded with the New York City Register's Office, conveying the property to others who had no interest in the estate, and encumbering the property with mortgages. ( Id. ¶ ¶ 13-22). Eventually, foreclosure proceedings were instituted on the basis of those unpaid mortgages as well as unpaid New York City taxes. ( Id. ¶ 23).

In early 2007, the JCCA and the Jewish National Fund hired Gotham, an " asset location and collection company," to represent their interests in the estate proceedings. ( Id. ¶ 24). Gotham performed " research and due diligence" on the Haring Street Property, eventually " piecing together what was going on in regards to the property, and learn[ing] of the various fraudulent Deeds and mortgages that had been recorded against the property." ( Id. ¶ ¶ 25, 27). Gotham then took a number of legal steps in an attempt to clear title to the property and prepare it for sale. First, it obtained an order in the tax lien foreclosure action clearing title of some of the fraudulent deeds and mortgages. ( Id. ¶ 29). Gotham then moved to appoint Richard Altman, an officer of the JCCA, as administrator of Ms. Miller's estate. ( Id. ¶ ¶ 31-32). At that point, representatives of the State of Israel contacted Gotham, seeking to have Israel's interests represented in the estate proceedings as well. ( Id. ¶ 32). After several years of litigation, the Kings County Surrogate's Court appointed both Altman and Sonia Kisslevich -- Israel's nominee -- as co-administrators of the estate. ( Id. ¶ 33). Gotham then initiated an action against tenants and squatters who had been residing at the Haring Street Property, and secured their agreement to vacate the premises. ( Id. ¶ ¶ 35-37). Gotham also negotiated with the New York City Environmental Control Board to reduce penalties that had been assessed against the property ( id. ¶ ¶ 43-44), and, most recently, filed another quiet title action because the previous order had not cleared title to all of the property's tax lots. ( Id. ¶ 41).

On January 2, 2014, Gotham filed the instant lawsuit, seeking to collect money damages from the State of Israel for work that it performed to Israel's benefit. (Docket No. 1). In particular, Gotham contends that that Israel will benefit from half of the proceeds of the eventual sale of the Haring Street Property, but " contributed absolutely nothing" to the work needed to clear title to the property and prepare it for sale. (Am. Compl. ¶ ¶ 49-54). Gotham seeks compensation under theories of unjust enrichment and quantum meruit. ( Id. ¶ ¶ 59-72).

Gotham's initial Complaint invoked this Court's subject-matter jurisdiction on the ground of diversity of citizenship, under Title 28, Section 1332(a)(4) of the United States Code. (Compl. (Docket No. 1) ¶ 1). On January 23, 2014, the Court issued an Order noting that the only possible basis for jurisdiction in this action was the Foreign Sovereign Immunities Act (" FSIA" ), 28 U.S.C. § 1330(a), and directed Plaintiff to amend the Complaint to allege subject matter jurisdiction under the FSIA, if appropriate. (Docket No. 2). Plaintiff did so on January ...


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