10-3619-cv
         Associated Fin. Corp. v. Kleckner

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.


 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 11th day of May, two thousand twelve.
 5
 6       PRESENT: RICHARD C. WESLEY,
 7                RAYMOND J. LOHIER, JR.,
 8                         Circuit Judges,
 9                J. GARVAN MURTHA,
10                         District Judge.*
11
12
13
14       ASSOCIATED FINANCIAL CORPORATION,
15       COMMUNITY HOUSING ENTERPRISES, INCORPORATED,
16
17                                     Plaintiffs-Appellants,
18
19                      -v.-                                                        10-3619-cv
20
21       STANLEY M. KLECKNER, POLAR INTERNATIONAL
22       BROKERAGE CORPORATION,
23
24                                     Defendants-Appellees.
25
26
27       FOR APPELLANTS:               MITCHELL JAY ROTBERT, Law Office of
28                                     Mitchell Jay Rotbert, Rockville, MD.
29

                *
                The Honorable J. Garvan Murtha, of the United States
         District Court for the District of Vermont, sitting by
         designation.
 1   FOR APPELLEES:    ADRIAN A. D’ARCY, Shields Mott Lund
 2                     L.L.P., New Orleans, LA (Lloyd N.
 3                     Shields, Shields Mott Lund L.L.P., New
 4                     Orleans, LA; Dwight Yellen, Ballon Stoll
 5                     Bader & Nadler, P.C., New York, NY, on
 6                     the brief).
 7
 8        Appeal from the United States District Court for the
 9   Southern District of New York (Koeltl, J.).
10
11       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

12   AND DECREED that the judgment of the district court be

13   AFFIRMED.

14       Plaintiffs-Appellants Associated Financial Corporation

15   and Community Housing Enterprises, Incorporated appeal from

16   a judgment of the United States District Court for the

17   Southern District of New York (Koeltl, J.), granting

18   Defendants’ motion to dismiss Plaintiffs’ complaint pursuant

19   to Federal Rule of Civil Procedure 12(b)(6).   The district

20   court ruled that Plaintiffs’ claims against Defendants

21   Stanley M. Kleckner and Polar International Brokerage were

22   barred by the doctrine of res judicata and failed to state a

23   claim upon which relief can be granted.   Plaintiffs appeal

24   only the dismissal of their claim to recover damages from

25   Defendants’ breach of a covenant not to sue.   We assume the

26   parties’ familiarity with the underlying facts and

27   procedural history of the case.


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1        Plaintiffs contend that their claim seeking damages in

2    an amount equal to the attorneys’ fees they incurred in a

3    previous state court action is not barred by the res

4    judicata effect of the state court’s decision to deny their

5    post-judgment motion for those fees.    We review de novo a

6    district court’s dismissal of a complaint for failure to

7    state a claim, Conopco, Inc. v. Roll Int’l, 

, 86

8    (2d Cir. 2000), as well as its application of the principles

9    of res judicata, Legnani v. Alitalia Linee Aeree Italiane,

10   S.p.A., 

, 141 (2d Cir. 2005) (per curiam).

11   Dismissal under Federal Rule of Civil Procedure 12(b)(6) is

12   appropriate when “it is clear from the face of the

13   complaint, and matters of which the court may take judicial

14   notice, that the plaintiff’s claims are barred as a matter

15   of law.”   Conopco, 231 F.3d at 86.    “Under both New York law

16   and federal law, the doctrine of res judicata, or claim

17   preclusion, provides that [a] final judgment on the merits

18   of an action precludes the parties . . . from relitigating

19   issues that were or could have been raised in that action.”

20   Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 600

, 195 (2d Cir. 2010) (alterations in original)

22   (internal quotation marks omitted).


                                   3
1        Having conducted an independent review of the record in

2    light of these principles, we conclude that the state

3    court’s decision precludes Plaintiffs’ attempt to recoup the

4    attorneys’ fees in the form of damages in the federal action

5    for substantially the same reasons stated by the district

6    court in its Memorandum Opinion and Order.   Because we

7    conclude that Plaintiffs’ claim for breach of a covenant not

8    to sue is barred by the doctrine of res judicata, we need

9    not address whether the claim is permissible under the

10   American Rule.

11       We have considered Plaintiffs’ remaining arguments and

12   find them to be without merit.   For the foregoing reasons,

13   the judgment of the district court is hereby AFFIRMED.

14
15                              FOR THE COURT:
16                              Catherine O’Hagan Wolfe, Clerk
17
18




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