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Khodeir v. Sayyed

United States District Court, S.D. New York

November 1, 2017

ASHRAF KHODEIR et al., Plaintiffs,
MARWAN SAYYED et al., Defendants.



         Plaintiffs Ashraf Khodeir and Rasha Elgahsh, on behalf of themselves and their children, have sued defendants Marwan Sayyed (“Marwan”) and Subhi Sayyed (“Sayyed”), alleging violations of the Fair Housing Act, as well various state law causes of action. After plaintiffs amended their Complaint and Sayyed filed an Answer to that Amended Complaint, Sayyed filed an Amended Answer and Counterclaims. Plaintiffs now move to strike Sayyed's Amended Answer and Counterclaims or, in the alternative, to dismiss Sayyed's Counterclaims.[1]

         We first address plaintiffs' motion to strike Sayyed's Amended Answer and Counterclaims. Concluding that this motion should be denied, we then address the basis for the Court's subject matter jurisdiction and plaintiffs' motion to dismiss.


         A. Procedural History

         On October 11, 2015, plaintiffs filed a complaint against defendants alleging violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq., and various state law causes of action. See Complaint, filed Nov. 6, 2015 (Docket # 1) (“Compl.”). Plaintiffs allege that the defendants, acting as plaintiffs' landlords, discriminated against plaintiffs on the basis of family status, harassed them, unlawfully evicted them, and destroyed their property. See Compl. ¶ 1. After Sayyed moved to dismiss the original Complaint, see Notice of Motion, filed Jan. 15, 2016 (Docket # 14), plaintiffs filed an Amended Complaint, see Amended Complaint and Jury Demand, filed Feb. 5, 2016 (Docket # 20) (“Am. Compl.”). Defendants moved to dismiss the Amended Complaint, as well as to strike certain statements from the Amended Complaint. See Notice of Motion, filed Feb. 26, 2016 (Docket # 21); Notice of Motion, filed Feb. 26, 2016 (Docket # 26). These motions were denied on September 28, 2016. See Memorandum & Order, filed Sept. 28, 2016 (Docket # 44).

         The order denying the motion to dismiss required defendants to file their answers to plaintiffs' Amended Complaint within thirty days, or October 28, 2016. See Memorandum & Order, filed Sept. 28, 2016 (Docket # 44), at 28. Sayyed filed his first Answer in this case on October 28, 2016. See Defendant Subhi Sayyed's Answer to Amended Complaint, filed Oct. 28, 2016 (Docket # 46) (“Answer”). The Answer included no counterclaims.

         After a failed settlement conference, the Court issued a Scheduling Order on May 22, 2017, pursuant to Federal Rule of Civil Procedure 16 that included a provision stating as follows: “The parties may move to amend the pleadings or join any other parties no later than June 2, 2017.” Scheduling Order, filed May 22, 2017 (Docket # 56) (“Scheduling Order”), at 1. On June 2, 2017, Sayyed filed an Amended Answer to the Complaint that included counterclaims for breaches of contract, fraud, and assault. See Defendant Subhi Sayyed's Amended Answer to Amended Complaint and Counterclaims, filed June 2, 2017 (Docket # 57).[2]Prior to filing his Amended Answer, Sayyed did not file a motion to amend his Answer. Sayyed has since stated in his opposition brief to the instant motion that he is moving to amend his Answer, see Def. Mem. at 7-8, though he has not actually filed a notice of motion as contemplated by Local Civil Rule 6.1.

         B. Discussion

         Plaintiffs contend that Sayyed's Amended Answer and Counterclaims should be struck because Sayyed failed to timely move for leave to amend his Answer. See Pls. Mem. at 3-4. Plaintiffs do not argue that a motion to amend, if filed on the day Sayyed filed his Amended Answer, would have been untimely under the Scheduling Order. Instead, they argue that the Amended Answer is untimely because it was not accompanied by a motion to amend.

         While we do not fault plaintiffs for raising this issue, we find it appropriate to sua sponte extend Sayyed's time to file the motion to amend to the date of the filing of his memorandum of law. We do this because Sayyed filed the Amended Answer by the deadline contained in the Court's Scheduling Order and the filing itself made plain that Sayyed was seeking to amend his Answer. Not only do we possess the power to extend the deadline, it has been held that a court “has the discretion to grant leave to amend sua sponte” even when the amending party has “not moved for leave to amend the [pleading].” S. Ill. Laborers' & Emp'rs Health & Welfare Fund v. Pfizer Inc., 2009 WL 3151807, at *1 n.3 (S.D.N.Y. Sept. 30, 2009) (citations omitted). This discretion includes the ability to retroactively grant a party leave to file an amended pleading. See Levisohn, Lerner, Berger & Langsam v. Med. Taping Sys., Inc., 20 F.Supp.2d 645, 648 (S.D.N.Y. 1998).

         Additionally as discussed at length in Fresh Del Monte Produce, Inc. v. Del Monte Foods, Inc., 304 F.R.D. 170, 176 (S.D.N.Y. 2014), “a district court has discretion to consider Rule 15(a) factors notwithstanding the failure to show good cause for violating a Rule 16(b) deadline.” Rule 15 of the Federal Rules of Civil Procedure mandates that a court “should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). The policy behind this rule is that “[l]iberal amendment promotes judicial economy by making it possible to dispose of all contentions between parties in one lawsuit.” Bilt-Rite Steel Buck Corp. v. Duncan's Welding & Corr. Equip., Inc., 1990 WL 129970, at *1 (E.D.N.Y. Aug. 24, 1990) (citing Jenn-Air Prods. Co. v. Penn Ventilator, Inc., 283 F.Supp. 591, 594 (E.D. Pa. 1968)). The Court may deny leave to amend for “good reason, ” which normally involves an analysis of the factors articulated in Foman v. Davis, 371 U.S. 178, 182 (1962): undue delay, bad faith, futility of amendment, or undue prejudice to the opposing party. See, e.g., McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007) (citing Foman, 371 U.S. at 182).

         Case law is clear that “[m]ere delay . . . absent a showing of bad faith or undue prejudice[] does not provide a basis for a district court to deny the right to amend.” State Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981) (citing Howey v. United States, 481 F.2d 1187, 1190-91 (9th Cir. 1973); and Middle Atl. Utils. Co. v. S.M.W. Dev. Corp., 392 F.2d 380, 384 (2d Cir. 1968)). On the issue of prejudice, a court considers, “among other factors, whether an amendment would require the opponent to expend significant additional resources to conduct discovery and prepare for trial or significantly delay the resolution of the dispute.” Ruotolo v. City of New York, 514 F.3d 184, 192 (2d Cir. 2008) (internal quotation marks omitted) (quoting Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993)). Obviously, “[u]ndue prejudice arises when an amendment comes on the eve of trial and would result in new problems of proof.” Id. (internal quotation marks and alteration omitted) (quoting Fluor Corp., 654 F.2d at 856). However, mere allegations that an amendment “will require the expenditure of additional time, effort, or money do not themselves constitute undue prejudice.” Christians of Cal., Inc. v. Clive Christian N.Y., LLP, 2014 WL 3605526, at *5 (S.D.N.Y. July 18, 2014) (internal quotation marks and alterations omitted) (quoting A.V. by Versace, Inc. v. Gianni Versace, S.p.A., 87 F.Supp.2d 281, 299 (S.D.N.Y. 2000)).

         None of the Foman factors suggest that leave to amend should be denied. There is no basis to believe that Sayyed's failure to move for leave to amend by the deadline was the result of bad faith. Indeed, the fact that Sayyed filed his Amended Answer by the deadline this Court set for moving for leave to amend suggests that he was merely mistaken as to the Court's requirements for amending his Answer. The timing of the filing also does not suggest that there has been any undue delay. Plaintiffs point to no prejudice resulting from the delay in making the motion to amend. At the time of Sayyed's filing, the parties had only just made their initial disclosures, and discovery was not scheduled to close until months later. See Scheduling Order at 1. As for futility, that issue is resolved in the next section in the context of plaintiffs' motion to dismiss. In sum, all other Foman factors favor permitting Sayyed to amend his Answer.

         Accordingly, the Court nunc pro tunc grants Sayyed leave to file the Amended Answer and Counterclaims that he filed on June 2, 2017.


         A. Facts Alleged in the Amended Answer and Counterclaims

         For the purpose of deciding plaintiffs' motion to dismiss Sayyed's Counterclaims, the Court assumes that the factual allegations in Sayyed's Amended Answer and Counterclaims are true and draws all reasonable inferences in his favor. See, e.g., Steginsky v. Xcelera Inc., 741 F.3d 365, 368 (2d Cir. 2014) (citation omitted).

         Sayyed alleges that on February 1, 2014, Khodeir and Elgahsh entered into a written agreement (the “Agreement”) to rent Apartment 1R at 2150 Chatterton Avenue in the Bronx. See Counterclaims ¶ 6. Sayyed signed the Agreement as “landlord.” See id. The Agreement obligated Khodeir and Elgahsh to pay $1, 400 per month to use and occupy the apartment. See id. It also obligated Khodeir and Elgahsh to pay $25 per week for any late rent payments and to pay “all legal costs.” See id. ¶ 8. The Agreement provided that no more than five persons would reside in the apartment. See id. ¶ 7. At the time they signed the Agreement, Khodeir and Elgahsh told Sayyed that they had two children, and that four persons in total would reside in the apartment. See id. ¶ 14. They paid Sayyed $2, 800 in cash as payment for rent for February and March 2014. See id. ¶ 9.

         Following their signing of the Agreement, plaintiffs stayed in the apartment until November 15, 2014. See id. ¶ 20. Sayyed alleges that Khodeir and Elgahsh breached the Agreement in several respects during that time. First, Sayyed alleges that Khodeir and Elgahsh failed to pay any rent after their initial $2, 800 payment. See id. ¶¶ 19, 21. He also alleges that plaintiffs allowed seven individuals to reside in the apartment. See id. ¶¶ 11, 17.

         Finally, Sayyed alleges that Khodeir assaulted him on October 16, 2014. See id. ¶ 23. Sayyed alleges that he and Khodeir were in the apartment on that date when Khodeir shoved him against the wall, strangled him, and threatened to “cut [his] throat like ISIS.” Id. Khodeir was subsequently arrested and charged with several state law criminal offenses. See id. In connection with the prosecution of these charges, Sayyed was granted orders of protection on October 19, 2014, and June 15, 2015. See id.

         In his prayer for relief, Sayyed states that he is seeking, inter alia, “actual and compensatory damages in an amount to be determined at trial” and “punitive ...

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