United States District Court, N.D. New York
DANIEL J. VENTRICELLI, Plaintiff,
WILLIAM F. NICKLIN; RIVERLIFE INVESTMENT HOLDINGS LLC; MULTI-PACK HOLDINGS, LLC; and LYNN E. GORGUZE, Defendants.
GLYNN MUFFLY CHASSIN & HOSINSKI LLP ALEC P. OSTROW, ESQ.
Counsel for Plaintiff
& HOSTETLER LLP JORIAN ROSE, ESQ. MICHELLE N. TANNEY,
ESQ. Counsel for Defendants Nicklin & Riverlife
POLSINELLI PC JASON A. NAGI, ESQ. Counsel for Defendant
HUGHES, HUBBARD & REED LLP DANIEL H. WEINER, ESQ. Counsel
for Defendant Gorguze
DECISION AND ORDER
GLENN T. SUDDABY CHIEF U.S. DISTRICT JUDGE.
pending before the Court, in this action to set aside
fraudulent conveyances filed by Daniel J. Ventricelli
(“Plaintiff”) against William F. Nicklin
(“Defendant Nicklin”), Riverlife Investment
Holdings LLC (“Defendant Riverlife”), Multi-Pack
Holdings LLC (“Defendant Multi-Pack”), and Lynn
E. Gorguze (“Defendant Gorguze”), are Defendant
Gorguze's motion to remand and Defendant Riverlife's
motion to transfer venue to the Southern District of New
York. (Dkt. No. 25; Dkt. No. 30.) For the reasons set forth
below, Defendant Gorzue's motion to remand is denied and
Defendant Riverlife's motion to transfer venue is
Relevant Procedural Background
September 13, 2017, C.L. King & Associates, Inc.
(“C.L. King”) filed a Complaint in the Supreme
Court of New York, Albany County, against Defendants Nicklin,
Riverlife, Multi-Pack, and Gorguze (both in her individual
capacity and as Trustee of the Lynn. E. Gorguze Separate
Property Trust and the Vincent & Gloria Gorguze Trust).
(Dkt. No. 1-1.) C.L. King also filed seven separate lawsuits
against various members of Defendant Nicklin's family.
(Nos. 1:19-cv-0229, 1:19-cv-0234, 1:19-cv-0243, 1:19-cv-0244,
1:19-cv-0245, 1:19-cv-0248, 1:19-cv-0250.) In October 2018,
Defendants Gorguze and Multi-Pack each filed a motion to
dismiss for lack of personal jurisdiction in the New York
State Supreme Court, Albany County. (Dkt. No. 1-9; Dkt. No. 40,
January 18, 2019, Defendant Nicklin filed a voluntary Chapter
7 petition in the United States Bankruptcy Court for the
Southern District of New York, Bankruptcy Petition No.
19-35092. (Dkt. No. 41, at ¶ 7 [Weiner Affidavit].) On
February 21, 2019, Daniel J. Ventricelli
(“Plaintiff”) was elected to serve as Trustee of
the Estate at Defendant Nicklin's Section 341 creditor
meeting. (Dkt. No. 46, at 2.)
February 19, 2019, Defendant Riverlife filed a notice of
removal pursuant to 28 U.S.C. §§ 1334, 1446, and
1452. (Dkt. No. 1.) In its Notice of Removal, Defendant
Riverlife indicated that it would move to transfer venue to
the Southern District of New York, the location of Defendant
Nicklin's Chapter 7 bankruptcy proceeding. (Dkt. No. 1,
at ¶ 13.)
March 21, 2019, Defendant Gorguze filed a motion to remand
this action back to the Supreme Court of New York, Albany
County. (Dkt. No. 25.) On June 7, 2019, Defendant Riverlife
filed a motion to transfer venue to the Southern District of
New York, pursuant to 28 U.S.C. § 1404(a). (Dkt. No.
30.) On September 13, 2019, Plaintiff submitted a reply to
both motions, in which he consented to Defendant
Riverlife's motion to transfer venue to the Southern
District of New York, and opposed Defendant Gorguze's
motion to remand this action to the New York Supreme Court,
Albany County. (Dkt. No. 39.)
Defendant Gorguze's Motion to Remand
Summary of Defendant Gorguze's Arguments
in her motion to remand, Defendant Gorguze asserts two
arguments. (Dkt. No. 25-2.) First, Defendant Gorguze argues
that remand is both required and appropriate under the
doctrine of mandatory abstention because all of the requisite
factors are met. (Dkt. No. 25-2, at 4-6.) In the alternative,
Defendant Gorguze argues that the Court should remand this
action under the doctrines of permissive abstention and
equitable remand. (Dkt. No. 25-2, at 6-10.)
Summary of Defendant Riverlife's Response
in response to Defendant Gorguze's motion, Defendant
Riverlife asserts two arguments. (Dkt. No. 35.) First,
Defendant Rivelife argues that Defendant Gorguze fails to
meet the elements for mandatory abstention because Defendant
Gorguze cannot establish that this matter would be
“timely adjudicated” in state court. (Dkt. No.
35, at 10-14.) Second, Defendant Riverlife argues that
Defendant Gorguze's permissive abstention and equitable
remand arguments are meritless because Defendant Gorguze
offers no compelling reason for permissive abstention. (Dkt.
No. 35, at 14-17.) Defendant Riverlife offers a similar
explanation regarding the doctrine of equitable remand. (Dkt.
No. 35, at 14-17.)
Summary of Defendant Gorguze's Reply
in reply to Defendant Riverlife's opposition, Defendant
Gorguze asserts that the first five factors for mandatory
abstention are undisputed, and that the New York State
Supreme Court can timely adjudicate the immediate action.
(Dkt. No. 43, at 5-11.) In the alternative, Defendant Gorguze
reiterates her argument that the Court should apply the
doctrines of permissive abstention and equitable remand in
the interest of justice. (Dkt. No. 43, at 11-15.)
Defendant Riverlife's Motion to Transfer Venue
Summary of Defendant Riverlife's
in its motion to transfer venue, Defendant Riverlife argues
that this action could have been originally filed in the
Southern District of New York because all Defendants reside
in New York State and the interests of justice, as well as
the convenience of the parties and witnesses, weigh in favor
of transferring venue to the Southern District of New York.
(Dkt. No. 30-1, at 5-9.)
Summary of Defendant Gorguze's Arguments
in its opposition to Defendant Riverlife's motion to
transfer venue, Defendant Gorguze argues that this action
could not have originally been filed in the Southern District
of New York because not all Defendants in fact reside in New
York State, and that the interests of justice weigh against
transferring venue. (Dkt. No. 40, at 8-13.) Defendant Gorguze
emphasizes the fact that multiple Defendants are domiciled
outside of New York State and argues that the conveyances
pursuant to a settlement agreement to non-family members are
not related to the alleged fraudulent conveyances at issue in
this action. (Dkt. No. 40, at 13.)
Summary of Defendant Riverlife's Reply
in its reply memorandum of law, Defendant Riverlife
reiterates its argument that the interest of justice favors
transferring venue to the Southern District of New York.
(Dkt. No. 42, at 7-10.) Additionally, Defendant Riverlife
argues that the Court has original jurisdiction over this
matter. (Dkt. No. 42, at 5-6.)
GOVERNING LEGAL STANDARDS
Legal Standard Governing Motions to Remand
motion to remand the case on the basis of any defect other
than lack of subject matter jurisdiction must be made within
30 days after the filing of the notice of removal under
1446(a).” 28 U.S.C. § 1447(c).
Upon timely motion of a party in a proceeding based upon a
State law claim or State law cause of action, related to a
case under title 11 but not arising under title 11 or arising
in a case under title 11, with respect to which an action
could not have been commenced in a court of the United States
absent jurisdiction under this section, the district court
shall abstain from hearing such proceeding if an
action is commenced, and can be timely adjudicated, in a
State forum of appropriate jurisdiction.
28 U.S.C. § 1334(c)(2) (emphasis added).
Legal Standard Governing Motions to Transfer Venue
action can only be brought in “(1) a judicial district
where any defendant resides, if all defendants reside in the
same State, [or] (2) a judicial district in which a
substantial part of the events or omissions giving rise to
the claim occurred, or a substantial part of property that is
the subject of the action is situated . . . .” 28
U.S.C. § 1391. When a plaintiff's choice of venue is
improper, a district court may sua sponte transfer
the case in the interest of justice and for the convenience
of the parties and witnesses. See 28 U.S.C. §
1406(a) (“The district court of a district in which is
filed a case laying venue in the wrong division or district
shall dismiss, or if it be in the interest of justice,
transfer such case to any district or division in which it
could have been brought.”); Concession Consultants,
Inc. v. Mirisch, 355 F.2d 369, 371 n.3 (2d Cir. 1966)
(noting that § 1406(a) allows the district judge to
dismiss the case or transfer venue sua sponte, even
when venue is improper); Lead Indus. Assoc. v.
Occupational Safety & Health Admin., 610 F.2d 70, 79
n.17 (2d Cir. 1979) (“The broad language of 28 U.S.C.
§ 1404(a) would seem to permit a court to order transfer
[s]ua sponte . . . .”); Flaherty v. All Hampton
Limousine. Inc., 01-CV-9939, 2002 WL 1891212, at *3
(S.D.N.Y. Aug. 16, 2002). “The purpose of [transferring
venue] ‘is to prevent the ‘waste of time, energy
and money' and ‘to protect litigants, witnesses and
the public against unnecessary inconvenience and
expense.'” Flaherty, 2002 U.S. Dist. LEXIS
15171, at *3.
Court will decide Defendant Gorguze's motion to remand
before turning to Defendant Riverlife's motion to
transfer venue, because, setting aside its aversion to
transferring undecided motions to other district courts, the
Court finds it improper to decide a motion to transfer a case
over which it should abstain from exercising jurisdiction.
Whether Defendant Gorguze's Motion to Remand Should Be
Granted Because Abstention Is
carefully considering the matter, the Court answers this
question in the negative for the reasons stated below.
28 U.S.C. § 1452(a), any party to a state court civil
action may remove a claim or cause of action to the local
district court provided that the claim or cause of action
meets the jurisdictional requirements of 28 U.S.C. §
1334. 28 U.S.C. § 1452(a). Federal district courts have
“original but not exclusive jurisdiction of all civil
proceedings arising under title 11, or arising in or related
to cases under title 11.” 28 U.S.C. § 1334(b).
Litigation is “related to” “a pending
bankruptcy proceeding [if] its outcome might have any
‘conceivable effect' on the bankrupt estate.”
In re Cuyahoga Equip. Corp., 980 F.2d 110, 114 (2d
Cir. 1992). In general, the ...