United States District Court, E.D. New York
MEMORANDUM AND ORDER
VITALIANO UNITED STATES DISTRICT JUDGE.
Prescott commenced this action on behalf of herself and
Prescott Coverage, LLC d/b/a Prescott Insurance &
Financial Services (collectively "Prescott"),
against Nationwide Mutual Insurance Company
("Nationwide") alleging fraud in the assignment of
servicing rights to plaintiffs in 2008 in that it concealed
the existence of a federal lawsuit filed by Carlos Balcarcel
("Balcarcel"), who was the previous assignee of the
servicing rights. See Complaint ¶¶ 31 -33.
Before the Court is the August 27, 2019 Report and
Recommendation ("R&R") of Magistrate Judge
Steven L. Tiscione, which recommends that (1)
Nationwide's motion for summary judgment be granted and,
(2) Nationwide's motion for sanctions be denied. Dkt. 36;
see also Dkts. 34, 35. On September 10, 2019,
Prescott filed timely written objections to portions of the
R&R, and, on September 24, 2019, Nationwide
responded. See Dkts. 37
("Objections"), 38 ("Response to
Objections"). For the reasons that follow, the R&R
is adopted in its entirety as the opinion of the Court.
Court presumes the parties' familiarity with the
procedural history and underlying facts, which relate to
Nationwide's relationship with Balcarcel, the agent
previously contracted to handle the service territory that
was the subject of Prescott's contract and whether
Nationwide's supposed concealment of facts related to its
prior relationship with Balcarcel masked a fraud in the
inducement of Prescott to contract with Nationwide. Any
further recitation of them here would be merely redundant and
not helpful to an understanding of the R&R and the
Court's adoption of it.
reviewing a magistrate judge's R&R, a district judge
"may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate
judge." 28 U.S.C. § 636(b)(1). The district judge
need only be satisfied "that there is no clear error on
the face of the record" to accept the R&R, provided
no timely objection has been made in writing. Urena v.
New York, 160 F.Supp.2d 606, 609-10 (S.D.N.Y. 2001)
(quoting Nelson v. Smith, 618 F.Supp. 1186, 1189
(S.D.N.Y. 1985)); see also Thomas v. Am, 474 U.S.
140, 150, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985).
district judge, on the other hand, is required to
"determine de novo any part of the magistrate
judge's disposition that has been properly objected
to." Fed.R.Civ.P. 72(b)(3); see also Arista Records,
LLC v. Doe 3, 604 F.3d 110, 116 (2d Cir. 2010).
Significantly, though, objections that are general or
conclusory, or that "merely recite the same arguments
presented to the magistrate judge," do not constitute
proper written objections and are reviewed only for clear
error. Sanders v. City of New York, No. 12-CV-0113
(PKC) (LB), 2015 WL 1469506, at *1 (E.D.N.Y.Mar. 30, 2015)
(citation omitted). Clear error exists "where, upon a
review of the entire record, [the district judge] is left
with the definite and firm conviction that a mistake has been
committed." Saveria JFK, Inc. v. Flughafen Wien,
AG, No. 15-CV-6195 (RRM) (RLM), 2017 WL 1194656, at *2
(E.D.N.Y. Mar. 30, 2017).
pre-emptive strike, Nationwide puts the rules of engagement
in issue, contending that all of Prescott's objections
either restate original objections or attack the R&R in a
general or conclusory manner, and as such, should be reviewed
for clear error. Practically speaking however,
Nationwide's contention is of no matter, because even if
the objections are reviewed de novo, they fail and
adoption of the R&R in its entirety as the opinion of the
Court is warranted.
their overarching objection, plaintiffs attack the
R&R's conclusion that Nationwide's failure to
disclose the "circumstances" under which the
Brooklyn territory was available and offered to Prescott was
not material to the fraudulent inducement claim. Prescott
argues, essentially, that the R&R is wrong on the law and
that, in any event, there is a genuine dispute of fact as to
the material terms of contract formation. Dkt. 37 at 1. The
argument cannot withstand de novo scrutiny, much
less the properly applicable clear error standard of
begin, there can be no substantial dispute as to controlling
New York law, which requires a party to establish the
following four elements to prevail on a claim of fraud:
" a misrepresentation or a material omission of fact
which was false and known to be false by defendant,  made
for the purpose of inducing the other party to rely upon it,
 justifiable reliance of the other party on the
misrepresentation or material omission, and  injury."
Premium Mortg. Corp. v. Equifax, Inc., 583 F.3d 103,
108 (2d Cir. 2009) (quoting Lama Holding Co. v. Smith
Barney Inc., 88 N.Y.2d 413, 421 (N.Y.1996)).
further, a party may be liable under New York law for either
fraud in the inducement, requiring a misrepresentation, or
concealment, requiring a duty to disclose material
information. See 28 N.Y. Prac, Contract Law
§§ 5:5, 5:18. To prevail on a claim of fraudulent
concealment, "a plaintiff must also prove that the
defendant had a duty to disclose the material
information." Banque Arabe et Internationale
D'Investissement v. Maryland Nat. Bank, 57 F.3d 146,
153 (2d Cir. 1995). Though Prescott alleges "Fraud in
the Inducement", the substance of the complaint focuses
on fraudulent concealment, namely, that Nationwide failed to
disclose the existence of the Balcarcel lawsuit. Therefore,
Prescott must satisfy the four elements of common law fraud,
plus show that Nationwide had a duty to disclose the
existence of the suit.
conclusory allegations cannot save plaintiffs' claim.
See BellSouth Telecommunications, Inc. v. W.R. Grace
& Co.-Conn., 77 F.3d 603, 615 (2d Cir. 1996). Worse
yet, Prescott engaged in the baldest of speculation in her
objections that the R&R was erroneous because there was a
genuine dispute as to other fraudulent conduct by Nationwide,
namely the post-motion invention of a putative redlining
claim against Nationwide, which the R&R effectively short
circuited. This last resort argument, if anything,
illustrates the baselessness of Prescott's objection.
Judge Tiscione correctly found, the existence of the lawsuit
was not material, much less an "essential fact"
whose nondisclosure would render the transaction
"inherently unfair". Id. Prescott's
objections do not compel a different conclusion. No
reasonable jury could find Nationwide had a duty to disclose
the lawsuit. In sum, Nationwide did not have a duty, as a
matter of law, to disclose the existence of Barcarcel's
litigation and Prescott's conclusory assertions seeking
to establish a material fact dispute undermining that
conclusion, revived here in their objections, are not
sufficient to upset the R&R's award of summary
judgment to Nationwide. Bu ...