United States District Court, S.D. New York
July 10, 2014
KARINA WALTON, Plaintiff,
GEORGE M. HADLEY, Defendant.
OPINION AND ORDER
EDGARDO RAMOS, District Judge.
This diversity action arises from a dispute over the ownership of a valuable piece of fine artwork by the renowned French sculptor Auguste Rodin. Doc. 1 ("Compl."). The specific work at issue, a sculpture entitled Le Baiser ( The Kiss ), is one of a limited number of nearly identical bronze casts authorized and signed by the artist. Docs. 1, 3. Plaintiff Karina Walton ("Plaintiff") alleges that she acquired the work upon her father's death in 2001. Compl. ¶ 33. Shortly before it was to be sold through Christie's auction house, however, Defendant George M. Hadley ("Defendant") intervened on the grounds that he believed the work to be one that he had loaned to a friend and that had subsequently been removed from the friend's home. See Compl. ¶¶ 1, 40, 45; Countercl. ¶¶ 14, 17, 19. The work was sold at auction for $800, 000, and Christie's is currently holding the proceeds in trust pursuant to an agreement between the parties and Christie's, pending a determination as to who owned the sculpture and thus is entitled to the proceeds. Countercl. ¶ 22.
Plaintiff then filed suit on November 6, 2013, alleging tortious interference with contract and seeking a declaration that she has a right to the auction proceeds. Compl. ¶¶ 48-58. Defendant answered and interposed a counterclaim on November 21, 2013. Doc. 3. The Counterclaim seeks an order quieting title, a declaratory judgment in Defendant's favor, and an injunction requiring that the sales proceeds be released to him. Countercl. ¶¶ 24-30.
Presently before the Court is Plaintiff's motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Doc. 12. Plaintiff seeks judgment in her favor on her declaratory judgment claim, as well as dismissal of Defendant's counterclaim. Id.
For the reasons discussed below, Plaintiff's motion for judgment on the pleadings is GRANTED in part and DENIED in part. Specifically, Defendant's counterclaim is dismissed for failure to state a claim, but Plaintiff is not entitled to an affirmative judgment in her favor based solely on the contents of the pleadings.
Plaintiff, a New Jersey resident,  alleges that the cast of Le Baiser was in her father's possession for "all of her conscious life" and that she acquired it after his death in 2001. Compl. ¶¶ 3, 31, 33. In 2013, upon learning that it might be valuable, she contacted Christie's and ultimately entered into a contract with the auction house to sell the work at a public auction. Id. ¶¶ 37-40.
Defendant alleges that he saw the sculpture, which matches the description of the one he owns, listed in the Christie's auction catalogue. Countercl. ¶¶ 4-5. According to Defendant, his sculpture is one of two Rodins that had originally been displayed at his grandfather's Richmond Hill estate in New York, the other being a similarly sized work entitled L'Éternel Printemps ( Eternal Springtime ). Id. ¶¶ 7-8. The two sculptures remained in the family following his grandfather's death-though his mother loaned them to Vassar College for a time-and ultimately passed to Hadley on his mother's death in 1985. Id. ¶¶ 9-13. Defendant retained possession of the sculptures in Philadelphia until 1994, when he loaned both to an individual in Boston and subsequently loaned Le Baiser to Elaine Moranz in Philadelphia. Id. ¶ 14.
Defendant, who now resides in Boston, Massachusetts, attempted to contact Moranz upon seeing the Christie's catalogue but was informed that she had died two years earlier. Id. ¶¶ 1, 16. Joel Moranz, Elaine's husband, told Defendant that a woman named Jana Paley had removed the sculpture from his home and that it, along with the rest of the contents of Paley's moving van or storage facility, had been stolen. Id. ¶ 17. Defendant was unable to contact Paley,  locate a police report, or obtain any other explanation as to the location of his cast, and Christie's was unable to provide him with any additional information regarding the provenance of the sculpture listed in the catalogue. Id. ¶¶ 18-20.
Plaintiff alleges-and Defendant admits-that the sculpture she consigned to Christie's is one of at least 65 unnumbered casts of Le Baiser and that it does not have any known distinguishing characteristics setting it apart from the others. Compl. ¶¶ 26-27, 29; Answer ¶¶ 26-27, 29. Defendant likewise admits that his missing sculpture is unnumbered and lacks any known characteristics that would distinguish it from the other Le Baiser casts. Compl. ¶¶ 28, 30; Answer ¶¶ 28, 30.
II. Legal Standard
Rule 12(c) provides that "[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). The Court applies the same standard of review to a Rule 12(c) motion as it does to a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6). Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006).
When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, the Court is not required to credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also id. at 681 (citing Twombly, 550 U.S. at 551). "To survive a motion to dismiss, a complaint must contain sufficient factual matter... to state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. Federal Rule of Civil Procedure 8 "marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79. If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570.
The legal standard on a Rule 12 motion is the same when evaluating whether counterclaims have been sufficiently pled: the factual allegations in the counterclaim are accepted as true, all reasonable inferences are drawn in the counterclaimant's favor, and the counterclaim must state a facially plausible claim to relief. See, e.g., Weisman Celler Spett & Modlin, P.C. v. Trans-Lux Corp., No. 12 CIV. 5141 JMF, 2014 WL 476348, at *2 (S.D.N.Y. Feb. 6, 2014); Ross Stores, Inc. v. Lincks, No. 13 CIV. 1876 SAS, 2013 WL 5629646, at *2 (S.D.N.Y. Oct. 4, 2013); Overseas Private Inv. Corp. v. Furman, No. 10 CIV. 7096 RJS, 2012 WL 967458, at *7 (S.D.N.Y. Mar. 14, 2012) (discussing the applicability of Twombly to counterclaims challenged under Rule 12(c)); Kingvision Pay-Per-View, Ltd. v. Falu, No. 06 CIV. 4457, 2008 WL 318352, at *1 (S.D.N.Y. Feb. 4, 2008).
A. The Court Disregards Matters Extrinsic to the Pleadings
As a preliminary matter, the Court notes that the parties devote a significant portion of their briefing to matters outside the pleadings, and they have submitted to the Court an array of extrinsic documents that are not properly before the Court on a Rule 12(c) motion. See L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011) ("On a 12(c) motion, the court considers the complaint, the answer, any written documents attached to them, and any matter of which the court can take judicial notice for the factual background of the case.'" (quoting Roberts v. Babkiewicz, 582 F.3d 418, 419 (2d Cir. 2009))); Century Sur. Co. v. Marzec, No. 12 CIV. 5540 JPO, 2013 WL 3919383, at *2 (S.D.N.Y. July 30, 2013) (nothing that, in ruling on a Rule 12(c) motion, "a Court may review only the pleadings, any documents that are attached thereto, incorporated by reference, or those integral' to the allegations, together with any facts of which a Court may take judicial notice"); McCoy Assocs., Inc. v. Nulux, Inc., 218 F.Supp.2d 286, 290 (E.D.N.Y. 2002) ("As suggested by the name of such a motion, a court analyzing a motion under Rule 12(c) may look only at the pleadings, ' i.e., the complaint, the answer, the counterclaims and replies thereto, the third-party complaint, and the answer to the third-party complaint.").
The extrinsic materials at issue here include, inter alia, statements made in the parties' pre-motion letters and at the pre-motion conference, Defendant's Rule 26 initial disclosures, emails exchanged between counsel, an affidavit that Plaintiff provided to Defendant prior to filing the Complaint, and a draft complaint that Defendant purportedly considered filing at one point but ultimately did not. Such matters will be excluded from consideration.
Likewise, the entire debate in the parties' briefs over the significance of the "chaser's mark" said to be present on Defendant's cast is irrelevant at this stage, as nothing in Defendant's pleadings-including the description of his cast provided in the counterclaim- references this feature. See Pl.'s Mem. of Law in Supp. at 14-15; Def.'s Mem. in Opp'n at 5, 8; Pl.'s Reply Mem. of Law in Supp. at 7-8. Indeed, as noted above, Defendant affirmatively admitted that his sculpture lacks any distinguishing characteristics. Defendant cannot supplement his pleadings via facts alleged in his brief or arguments made during pre-motion proceedings. See Shah v. Helen Hayes Hosp., 252 F.Appx. 364, 366 (2d Cir. 2007) (summary order) ("A party may not use his or her opposition to a dispositive motion as a means to amend the complaint.").
Thus, in evaluating the merits of Plaintiff's motion, the Court considers only the pleadings themselves, any documents that are attached thereto or that are otherwise properly before the Court, and the parties' arguments to the extent that they are based on those materials.
B. Defendants' Counterclaim Fails To State a Plausible Claim
The counterclaim in this case fails to establish a plausible claim that Defendant is the owner of this particular Le Baiser cast. Defendant merely alleges that he possessed a Le Baiser cast at one time, that he loaned it out, that he received second-hand information indicating that it was stolen from the person last known to have possessed it, and that he was unable to obtain additional information regarding the provenance of Plaintiff's cast. Even assuming the truth of all of these allegations, as the Court is required to do in this instance, none of this permits the Court to draw a non-speculative inference that Plaintiff's cast and Defendant's cast are one and the same. Defendant has not offered any allegations linking Plaintiff to his cast or to any of the persons who allegedly possessed the cast prior to its disappearance; instead, Defendant admits that he is acquainted with the person last believed to have possessed his cast and that he has been unable to contact her or otherwise obtain information regarding the sculpture's whereabouts subsequent to its disappearance. In short, Defendant's allegations establish solely that his cast is missing; they are silent as to what role, if any, Plaintiff is alleged to have played in these events.
Some sort of link between Plaintiff and the purportedly stolen sculpture is essential given that, as noted, Defendant concedes that his cast did not bear any distinguishing characteristics relative to the other Le Baiser casts, thus foreclosing the possibility that he can establish ownership based solely on the appearance of the sculpture itself. As currently pled, the counterclaim essentially asks the Court to infer that, simply because he can trace his cast's provenance back further than Plaintiff can trace hers, she must have either stolen his or obtained it with knowledge that it had been stolen. Defendant does not expressly allege either of these theories, nor does he offer any factual allegations that would tend to substantiate the requisite inference.
Defendant's manner of pleading would effectively allow him to assert an ownership claim against anyone who possessed a Le Baiser cast but was unable to provide a detailed account of its provenance. Given the distinction drawn in Twombly between claims that are plausible and those that are merely conceivable, the Court cannot permit the counterclaim to go forward based solely on this type of loose speculation. Accordingly, Defendant's counterclaim will be dismissed.
C. Plaintiff Is Not Entitled to a Declaratory Judgment Pursuant to Rule 12(c)
Plaintiff appears to be of the view that, because Defendant's counterclaim is deficient under Twombly, she is necessarily entitled to an affirmative declaratory judgment as a matter of law. See Pl.'s Mem. of Law in Supp. at 1 n.1 (describing dismissal of the counterclaim as "simply the other side of the same coin"). That position is incorrect. Here, the Court has determined solely that the counterclaim-as currently pled-fails to allege sufficient factual content as to render Defendant's claim of ownership plausible. This determination is not equivalent to a finding that Defendant's claim is conclusively foreclosed as a matter of law. In other words, the fact that Defendant has failed to adequately allege the plausibility of his ownership at the pleading stage does not automatically compel the conclusion that Plaintiff is, in fact, the true owner of Le Baiser.
To hold otherwise would be to allow one party to a title dispute to bring a declaratory judgment action before the matter has been fully investigated and then obtain a favorable declaration of ownership based solely on the counterparty's inability to adequately state an affirmative claim in its favor. Granted, as the party contesting ownership, Defendant will bear the burden of proof at trial, just as he would have had he brought suit against Plaintiff in the ordinary course. See Schoeps v. Museum of Modern Art, 594 F.Supp.2d 461, 463-64 (S.D.N.Y. 2009) ("In an action for declaratory judgment, the burden of proof rests on the party who would bear it if the action were brought in due course as a claim for non-declaratory relief." (citing Preferred Acc. Ins. Co. of N.Y. v. Grasso, 186 F.2d 987, 991 (2d Cir. 1951))); see also Shiotani v. Walters, 555 F.Appx. 90, 91 (2d Cir. 2014) (summary order) (noting that New York law places the burden of establishing a superior ownership right on the party seeking to recover the subject property, regardless of whether the claim sounds in conversion or replevin). Plaintiff cannot, however, elect to bring a declaratory judgment action and then deprive Defendant of the opportunity to try to meet his burden at the appropriate time.
The only question, then, in determining whether Plaintiff is entitled to a declaratory judgment at this stage in the proceedings, is whether Defendant's admissions as to the near identity of the various casts of Le Baiser and his cast's lack of distinguishing characteristics resolve the dispute as a matter of law. They do not. While the presence of multiple indistinguishable casts will presumably make it more difficult for Defendant to meet his burden at trial, it does not necessarily render that task insurmountable. As detailed above, there are other factors-apart from the appearance of the sculpture itself-that might tend to support Defendant's position. While he has failed to allege any such facts to this point, thus rendering his counterclaim insufficiently pled, Defendant is still entitled to defend against Plaintiff's affirmative case. Whether that defense ultimately proves to be meritorious is a question either for summary judgment or for trial; it cannot be determined based solely on the allegations currently before the Court. See VCG Special Opportunities Master Fund Ltd. v. Citibank, N.A., 594 F.Supp.2d 334, 339 (S.D.N.Y. 2008) ("Judgment on the pleadings is appropriate where material facts are undisputed and where a judgment on the merits is possible merely by considering the contents of the pleadings.'" (quoting Sellers v. M.C. Floor Crafters Inc., 842 F.2d 639, 642 (2d Cir. 1988))), aff'd, 355 F.Appx. 507 (2d Cir. 2009).
Thus, it would be premature for the Court to grant Plaintiff's request for a declaratory judgment at this time. To the extent Plaintiff's motion seeks such affirmative relief, the motion is denied.
For the reasons set forth above, Plaintiff's motion for judgment on the pleadings is GRANTED in part and DENIED in part. Defendant's counterclaim is dismissed without prejudice. If Defendant wishes to amend the counterclaim, he shall do so by July 31, 2014.
The parties shall appear for an initial case management and scheduling conference on August 15, 2014 at 9:30 a.m. The parties are directed to confer in advance of that conference