United States District Court, N.D. New York
ROBERT H. AJAMIAN, Plaintiff,
SAMUEL EGISH ZAKARIAN, Continental Broker Dealer Corp., Defendants.
ROBERT H. AJAMIAN, Plaintiff, Pro Se, Latham, New York.
RANDOLPH F. TREECE, Magistrate Judge.
The Clerk has sent to the Court for review a Complaint filed by pro se Plaintiff Robert H. Ajamian, pursuant to the Securities Exchange Act of 1934, § 10(b), 15 U.S.C. § 78j(b), for damages resulting from Defendant Zakarian's actions. Dkt. No. 1, Compl. Plaintiff seeks permission to proceed with this action in forma pauperis ("IFP"). Dkt. No. 2, IFP App. He further asks the Court to direct Defendant Zakarian, whom he claims has fled the country, to obtain a bond in the amount of $150, 000.00 to cover damages (Dkt. No. 5), and seeks a default judgment against Defendant Zakarian (Dkt. No. 14).
I. IFP Application
Turning first to Plaintiff's request to proceed with this action IFP, after reviewing the entire file, the Court finds that Plaintiff meets the economic requirement and grants permission for Plaintiff to proceed IFP.
Having found that Plaintiff meets the financial criteria for commencing this action IFP, the Court must consider the sufficiency of the allegations set forth in the Complaint in light of 28 U.S.C. § 1915(e).
Section 1915(e) directs that, when a plaintiff seeks to proceed in forma pauperis, "the court shall dismiss the case at any time if the court determines that... the action... (i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2)(B). Thus, even if a plaintiff meets the financial criteria to commence an action IFP, it is this Court's responsibility to determine whether Plaintiff may properly maintain the Complaint. See id.
II. PLAINTIFF'S COMPLAINT
Plaintiff initiated this action on September 15, 2014, with the filing of his Complaint, signed and dated July 18, 2014. See Compl. By this action, Plaintiff claims that Defendant Zakarian defrauded him into believing that he was a capable and knowledgeable investor and instead lost tens of thousands of dollars with poor investments in Plaintiff's retirement Keogh account, while profiting off of fees. See generally id. Plaintiff asserts that these acts occurred in 2002, that Continental Broker Dealer Corporation has been subsequently dissolved, due mostly to their questionable investment tactics, and that Mr. Zakarian fled the country in 2004. He states that he brings this action under Section 10(b) of the Securities and Exchange Act of 1934 and that the applicable statute of limitations has been tolled due to the fact that Mr. Zakarian could not be located until recently.
The Court notes that Plaintiff has filed several other actions in this District, all of which have been dismissed. Of particular import in Plaintiff's litigation history is a recent case wherein he sued Samuel Egish Zakarian of Continental Broker-Dealer Corp., for mishandling his funds and failing to make conservative, safe investments in his Keogh retirement account from 2002 to 2005. See Ajamian v. Zakarian, Civ. No. 1:14-CV-321 (DNH/TWD). Although Plaintiff initiated that action by utilizing a pro forma complaint typically used by individuals seeking vindication of their constitutional rights under 42 U.S.C. § 1983, the Honorable Therèse Wiley Dancks, United States Magistrate Judge, liberally construed the complaint to have raised several legal theories, and ultimately recommended dismissal, pursuant to 28 U.S.C. § 1915(e), of the entire action for failure to state a claim. Id. at Dkt. No. 18. Included amongst Judge Dancks's thorough review is a discussion as to whether Plaintiff could bring the action pursuant to Section 10(b) of the Securities and Exchange Act of 1934. Id. at pp. 7-12. Judge Dancks found that not only did Plaintiff fail to meet the heightened pleading required when fraud is alleged, but he also failed to bring the action within the applicable statute of limitations. Id. In response, Plaintiff filed several documents with the Clerk of the Court which were broadly construed as objections to the recommendations of dismissal. See id. at Dkt. Nos. 19-23 & 26-29. Included amongst Plaintiff's many filings in response to Judge Dancks's Report-Recommendation are arguments regarding the tolling of the applicable statute of limitations based upon Mr. Zakarian's absence from the country; Plaintiff also submitted exact replicas of the Complaint that he filed in the instant action. See id. at Dkt. Nos. 19, 21, 22, & 23. On August 26, 2014, the Honorable David N. Hurd, United States District Judge, adopted Judge Dancks's recommendations and dismissed the action. Id. at Dkt. No. 30. On August 29, 2014, Plaintiff filed an appeal in that action, and, on September 15, 2014, Plaintiff filed the current action. Because the claims raised in the instant action mirror those claims previously dismissed, the Court recommends that this action be dismissed on the basis of res judicata.
The concept of res judicata, based in consideration of judicial time and economy, is by no means a novel concept. Generally res judicata, or claim preclusion, is an affirmative defense to be pleaded in the defendant's answer. See FED. R. CIV. P. 8(c). In this Circuit, however, it has been held that certain affirmative defenses, including res judicata, may be raised sua sponte. See, e.g., Doe v. Pfrommer, 148 F.3d 73, 80 (2d Cir. 1998) (affirming sua sponte application of collateral estoppel in motion for summary judgment); Pino v. Ryan, 49 F.3d 51, 53 (2d Cir. 1995) (affirming sua sponte dismissal under 28 U.S.C. § 1915(d) on statute of limitations grounds). Indeed, the Second Circuit has held that "the strong public interest in economizing the use of judicial resources by avoiding relitigation" provides strong justification for allowing a court to raise res judicata sua sponte. Salahuddin v. Jones, 992 F.2d 447, 449 (2d Cir. 1993).
When a judgment on the merits is entered in a case, the doctrine of res judicata commands preclusive effect not only on matters of law already decided, but also those which could have been raised. Allen v. McCurry, 449 U.S. 90, 94 (1980) (cited in Burgos v. Hopkins, 14 F.3d 787, 789 (2d Cir. 1994)). This preclusive effect applies only to future cases involving the same parties and their privies. In this Circuit, res judicata applies "to preclude later litigation if the earlier decision was (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action." In re Teltronics Servs., Inc., 762 F.2d 185, 190 (2d Cir. 1985) (citations omitted); see also EDP Med. Computer Sys., Inc. v. United States, 480 F.3d 621, 624 (2d Cir. 2007).
Because the claims raised in the instant action mirror exactly those raised in the action previously dismissed on the merits by Judge Hurd, and because the exact paperwork filed as a Complaint in this action was presented to Judge Hurd for consideration prior to ruling on the merits, Plaintiff is estopped from bringing this action. Accordingly, the case should be dismissed. Furthermore, in light of the recommendation of ...