JOSEPH F. BIANCO, District Judge:
Plaintiff Jeffrey Lax (hereinafter "plaintiff" or "Lax") brought this action against defendants 29 Woodmere Boulevard Owners, Inc. (the "Co-op"), Alexander Wolf & Company, Inc. ("Wolf"), Steven Mirsky ("Mirsky"), Erik J. Kinney, Jeanne Kinney, Lon Samuelson, Lisa Arian, Francine Rosen, Angela Dalmazio (collectively the "Woodmere defendants"), Sylvia Berkowitz, Martin Berkowitz, and Murray Berkowitz (collectively the "Berkowitz defendants"), alleging that they violated the Fair Housing Act, 42 U.S.C. § 3604, and various state laws.
The Woodmere defendants and Berkowitz defendants separately moved to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). On September 16, 2011, following oral argument, plaintiff voluntarily dismissed all claims
The following facts are taken from the amended complaint and are not findings of fact by the Court. They are assumed to be true for the purpose of deciding this motion and are construed in a light most favorable to the plaintiff, the non-moving party.
On April 30, 2010, plaintiff executed a contract with Martin and Sylvia Berkowitz for the purchase of apartment 4J at 29 Woodmere Boulevard for a sum of $200,000, to be paid in cash. (Am. Compl. ¶¶ 5, 17.) All the negotiations had taken place between plaintiff and Murray Berkowitz, the son of Martin and Sylvia Berkowitz, who acted as his parents' agent. (Id. ¶¶ 16, 25.) Although the contract for the sale of apartment 4J was executed, the sale had to be approved by the Board of Directors of defendant Co-op because plaintiff was purchasing shares in a cooperative. (Id. ¶¶ 5-6.) Defendants Erik J. Kinney, Jeanne Kinney, Lon Samuelson, Lisa Arian, Francine Rosen and Angela Dalmazio were on the Board of Directors (hereinafter the "Board"). (Id. ¶¶ 9-14.) On or about May 13, 2010, plaintiff received from Wolf, the Co-op's managing agent, the application package that he had to complete and submit to the Board. (Id. ¶ 18.) Plaintiff submitted the completed application to the Board, meeting all of the requirements listed in the application package. (Id. ¶¶ 19-20.)
Mirsky contacted plaintiff to let him know that his application was denied without reason; plaintiff's request for reconsideration was similarly denied. (Id. ¶¶ 21-22.) Eventually, Murray Berkowitz indicated to plaintiff that he heard back from the Board and was told that the sale was rejected because the sale price for the apartment was too low. (Id. ¶ 25.) Murray Berkowitz insisted that, if plaintiff was willing to pay a higher price, he could convince the Board to approve the sale. (Id.) On or about July 23, 2010, plaintiff received an email from Murray Berkowitz that the Board was unwilling to sell to plaintiff regardless of how much he would be willing to offer for the apartment. (Id. ¶ 28.)
Murray Berkowitz was told by Wolf soon after July 23 that the Board rejected plaintiff's application because of his single male status. (Id. ¶ 29.) Before plaintiff made an offer to Berkowitz for apartment 4J, the official sales price for the apartment was listed as $219,000. (Id. ¶ 30.) On or about July 24, 2011, after Murray Berkowitz learned that there was no chance that plaintiff's application would be reconsidered, the apartment was listed for $215,000. (Id.) Two open-houses were scheduled for August 17 and 29 with the apartment still listed at $215,000. (Id. ¶ 33.) However, on or about August 30, 2010, the apartment was listed for an asking price of $200,000. (Id. ¶ 37.)
Approximately one month prior, on or about June 25, 2010, plaintiff learned from a "current unit owner and resident of the 29 Woodmere Co-Op . . . who had direct knowledge of the Board of Directors' activities[,]"
Plaintiff contacted Wolf via email on August 6, 2010, alleging a discriminatory scheme against plaintiff. (Id. ¶ 31.) Murray Berkowitz stated to plaintiff in a phone conversation that took place several days later on August 10, 2010 that plaintiff was rejected by the Board for "discriminatory reasons." (Id. ¶ 36.) However, on August 28, 2010, plaintiff received a letter from counsel for Wolf, the Board, and Co-op that plaintiff was rejected solely based on the "negotiated purchase price" for the apartment. (Id. ¶ 34.) Counsel did not respond to plaintiff's questions about why the Board was unwilling to consider plaintiff when he made it clear that he would be amenable to paying a price above $200,000. (Id. ¶ 35.)
Plaintiff filed his complaint on September 1, 2010. At a pre-motion conference held on October 13, 2010, plaintiff indicated he wanted to amend his complaint. In an Order dated October 19, 2010 the Court set a deadline for plaintiff to file his amended complaint ("Am. Compl."), which was filed by plaintiff on October 20, 2011. On November 30, 2010, the Woodmere and Berkowitz defendants filed their motions to dismiss. Plaintiff filed his opposition to the Woodmere defendants' motion to dismiss on January 5, 2011. On January 20, 2011 the Woodmere defendants filed their reply. Then, on January 24, 2011, plaintiff filed his opposition to the Berkowitz defendants' motion to dismiss. The Berkowitz defendants filed their reply on February 3, 2011. Plaintiff filed his motion for sanctions on February 2, 2011. Oral argument was held on September 9, 2011. As noted above, on September 16, 2011, plaintiff voluntarily dismissed all claims against the Berkowitz defendants without prejudice pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, thereby rendering the Berkowitz defendants' motion to dismiss moot. With respect to the remaining motion by the Woodmere defendants, the Court has fully considered the submissions and arguments of the parties.
When a Court reviews a motion to dismiss for failure to state a claim for which relief can be granted, it must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.2006). "In order to survive a motion to dismiss under Rule 12(b)(6), a complaint must allege a plausible set of facts sufficient `to raise a right to relief above the speculative level.'" Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86, 91 (2d Cir.2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). This standard does not require "heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
The Supreme Court recently clarified the appropriate pleading standard in Ashcroft v. Iqbal, setting forth a two-pronged approach for courts deciding a motion to dismiss. 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The Court instructed district courts to first "identify[] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 1950. Although
The Court notes that, in adjudicating this motion, it is entitled to consider: "(1) facts alleged in the complaint and documents attached to it or incorporated in it by reference, (2) documents `integral' to the complaint and relied upon in it, even if not attached or incorporated by reference, (3) documents or information contained in defendant's motion papers if plaintiff has knowledge or possession of the material and relied on it in framing the complaint, (4) public disclosure documents required by law to be, and that have been, filed with the Securities and Exchange Commission, and (5) facts of which judicial notice may properly be taken under Rule 201 of the Federal Rules of Evidence." In re Merrill Lynch & Co., Inc., 273 F.Supp.2d 351, 356-57 (S.D.N.Y.2003) (internal citations omitted), aff'd in part and vacated in part on other grounds sub nom., Dabit v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 395 F.3d 25 (2d Cir.2005), vacated on other grounds, 547 U.S. 71, 126 S.Ct. 1503, 164 L.Ed.2d 179 (2006); see also Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir.1991) ("[T]he district court . . . could have viewed [the documents] on the motion to dismiss because there was undisputed notice to plaintiffs of their contents and they were integral to plaintiffs' claim."); Brodeur v. City of N.Y., No. 04 Civ. 1859, 2005 WL 1139908, at *2-3, 2005 U.S. Dist. LEXIS 10865, at *9-10 (E.D.N.Y. May 13, 2005) (stating court could consider documents within the public domain on a Rule 12(b)(6) motion to dismiss).
The Fair Housing Act ("FHA") makes it unlawful "[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(a). Likewise, property owners and their agents may not "discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling." Id. § 3604(b).
The Woodmere defendants, including Wolf, Mirsky, the Co-op and Board, make a number of arguments in support of their motion to dismiss. First, they assert that a discrimination claim based on plaintiff's gender and marital status is not cognizable under the FHA.
As set forth below, the Court finds these arguments to be without merit and concludes that, accepting the allegations as true and drawing all reasonable inferences in plaintiff's favor, plaintiff has asserted a plausible "sex plus" housing discrimination claim against the Board and Co-op, as well as against Mirsky and Wolf, who can be held liable for discriminatory conduct in which they participated.
Plaintiff has alleged "sex plus" or "gender plus" discrimination based on his status as a single male. Plaintiff asserts that the Woodmere defendants discriminated against him as a member of a specific subset of a protected class. Specifically, plaintiff alleges that because the FHA explicitly protects against discrimination based on gender, it also prohibits discrimination based on marital status in conjunction with gender. However, defendants contend that a discrimination claim based on plaintiff's gender and marital status is not cognizable under the FHA. As discussed below, the Court disagrees with defendants' contention and, instead, concludes that plaintiff can bring a claim based on his membership in a class of single males, who are a protected class under the FHA.
It is well settled that a discrimination claim can be based on membership in a class based on gender plus another characteristic, where gender is itself a protected category under the statutory rubric.
Furthermore, "sex plus" discrimination claims are not solely limited to women and have been brought by men. See, e.g., Hedges v. Town of Madison, No. 3:09CV1468(PCD), 2010 WL 1279071, at *4, 2010 U.S. Dist. LEXIS 30415, at *11 (D.Conn. Mar. 30, 2010) (plaintiff alleged he was a member of a protected class of "male plus family responsibilities in a family with health issues"); Blitzer v. Potter, No. 03 Civ. 6124(DLC), 2005 WL 1107064, at *1, *10 (S.D.N.Y. May 6, 2005) (plaintiff alleged he was discriminated against based on his status as an "attractive male" and "unmarried man"); Longariello v. Sch. Bd. of Monroe Cnty. of Fla., 987 F.Supp. 1440, 1449 (S.D.Fla.1997) (plaintiff alleged discrimination based on his status as a single male).
More specifically, gender plus marital status, the very sub-class alleged by Lax, has been recognized as a protected category in numerous discrimination cases. See, e.g., Bass v. Chemical Banking Corp., No. 94 Civ. 8833(SHS), 1996 WL 374151, at *5 (S.D.N.Y. July 2, 1996); Fisher v. Vassar College, 852 F.Supp. 1193, 1225-26 (S.D.N.Y.1994), rev'd on other grounds 70 F.3d 1420 (2d Cir.1995); Bryant v. Int'l Schs. Servs., Inc., 675 F.2d 562, 573 n. 18 (3d Cir.1982); Sprogis v. United Air Lines, Inc., 444 F.2d 1194, 1197-98 (7th Cir.1971), cert. denied, 404 U.S. 991, 92 S.Ct. 536, 30 L.Ed.2d 543 (1971); Longariello, 987 F.Supp. at 1449 (collecting cases). Although none of these cases were in the context of the FHA, the Court finds that the Supreme Court and Second Circuit jurisprudence on "sex plus" claims under other discrimination statutes applies with equal force to the language of the FHA. In fact, in Back v. Hastings on Hudson Union Free Sch. Dist., 365 F.3d 107 (2d Cir.2004), the Second Circuit held that "sex plus" or "gender plus" discrimination is actionable under Section 1983 and emphasized the viability of such claims under the full range of antidiscrimination statutes:
365 F.3d at 119 n. 9.
In sum, this Court concludes that claims of "sex plus" discrimination based on the combination of gender and marital status are cognizable under the FHA. Accordingly, defendants' motion to dismiss on that ground is denied.
Claims of housing discrimination under the FHA are evaluated under the three-part burden-shifting analysis set forth by the Supreme Court in McDonnell Douglas Corporation v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). See Mitchell v. Shane, 350 F.3d 39, 47 (2d Cir.2003). Under McDonnell Douglas, the plaintiff bears the initial burden to establish a prima facie case of discrimination. See McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. 1817. To establish a prima facie case of housing discrimination under the FHA, plaintiff must show that: (1) he was a member of a protected class; (2) he sought and was qualified to purchase the home; (3) he was rejected; and (4) the home remained available to other purchasers after he was rejected. See Mitchell, 350 F.3d at 47. Defendants make various arguments under that rubric in support of their motion to dismiss—including (1) that plaintiff has failed to sufficiently plead a prima facie case of discrimination because there are no facts in the amended complaint corroborating an unnamed resident's assertion that the Board had a policy of rejecting single male applicants, and there is no evidence in the amended complaint of similarly situated single females who were treated more favorably; and (2) the defendants had a legitimate nondiscriminatory reason in rejecting the plaintiff purchaser's application. (Defs.' Mot. at 10; Defs.' Reply at 3-6.) However, as discussed below, the McDonnell Douglas burden-shifting analysis is not applied at the motion to dismiss stage. Therefore, to the extent that defendants suggest that plaintiff must allege sufficient evidence in the complaint to satisfy a prima facie case for housing discrimination in order to survive a motion to dismiss, this Court disagrees.
With respect to pleadings in discrimination cases, the Supreme Court in Swierkiewicz rejected the concept that there is a heightened pleading standard and, thus, held that the survival of a complaint in an employment discrimination case does not rest on whether it contains specific facts establishing a prima facie case under McDonnell Douglas. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) ("The prima facie case under McDonnell Douglas . . . is an evidentiary standard, not a pleading requirement."); see also Williams v. N.Y. City Hous. Auth., 458 F.3d 67, 71-72 (2d Cir.2006) (applying Swierkiewicz holding to retaliation claims); Leibowitz v. Cornell Univ., 445 F.3d 586, 591 (2d Cir.2006) (applying Swierkiewicz holding to discrimination claims under Title VII and ADEA claims). The Second Circuit has made clear that Swierkiewicz also applies to Fair Housing Act claims. Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir.2008) (applying Swierkiewicz to FHA claims). In Boykin, the Second Circuit stated:
Id.; see also Lindsay v. Yates, 498 F.3d 434, 439 (6th Cir.2007) ("The question on appeal is whether, at the pleading stage, a housing-discrimination plaintiff must establish each of the elements of the prima facie case to survive a motion to dismiss the complaint. As described above, the district court held that the Lindsays' complaint failed to state a claim because they did not plead facts showing that the Eckert Road property remained available to other potential buyers, and that therefore the Lindsays did not satisfy the fourth element of the prima facie case. Both the district court and the parties failed to consider controlling Supreme Court authority that contravenes the district court's judgment.").
The Supreme Court has reiterated that "courts should generally not depart from the usual practice under the Federal Rules [of Civil Procedure]," and explained that heightened pleading requirements can only be established through the legislative process. Jones v. Bock, 549 U.S. 199, 212-13, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007). No such heightened pleading requirement for discrimination claims exists in the Fair Housing Act. Therefore, the controlling standard for survival of a motion to dismiss lies not in McDonnell Douglas, but in Rule 8(a) of the Federal Rules of Civil Procedure, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R.Civ.P. 8(a)(2); see Swierkiewicz, 534 U.S. at 513, 122 S.Ct. 992 (complaints in discrimination cases "must satisfy only the simple requirements of Rule 8(a)").
The Second Circuit has emphasized that the Federal Rules "set forth a pleading standard under which a plaintiff is required only to give a defendant fair notice of what the claim is and the grounds upon which it rests." Leibowitz, 445 F.3d at 591. Such a pleading "will enable the adverse party to answer and prepare for trial, allow the application of res judicata, and identify the nature of the case so it may be assigned the proper form of trial." Simmons v. Abruzzo, 49 F.3d 83, 86 (2d Cir.1995). A clear statement from the plaintiff alleging discrimination by the defendant is sufficient to achieve these goals. See Ferro v. Ry. Express Agency, Inc., 296 F.2d 847, 851 (2d Cir.1961) (holding that a complaint stating "that defendants have in a willful and malicious manner discriminated against plaintiff" provided sufficient notice of the discrimination claim); see also Swanson v. Citibank, N.A., 614 F.3d 400, 405 (7th Cir.2010) ("[Plaintiff's] complaint identifies the type of [housing] discrimination that she thinks occurs (racial), by whom (Citibank, through Skertich, the manager, and the outside appraisers it used), and when (in connection with her effort in early 2009 to obtain a home-equity loan). This is all that she needed to put in the complaint."); see also Flores v. New York City Human Resources Admin., No. 10 Civ. 02407(RJH), 2011 WL 3611340, at *7 (S.D.N.Y. Aug. 16, 2011) ("Though not required to plead the elements of a prima facie case, the complaint must still nudge[] [plaintiff's] claims across the line from conceivable to plausible to survive a motion to dismiss." (internal quotation marks omitted)). As set forth below, in the instant case, plaintiff has pled sufficient allegations to support a plausible FHA discrimination claim under the above-referenced standard.
First, plaintiff clearly alleges in the amended complaint that he was discriminated against based on his gender in combination with his marital status. (See, e.g., Am. Compl. ¶ 23 (alleging that the Board implemented a "policy that systematically denied the application for purchase . . . to
In support of the claim, plaintiff alleged detailed facts to support his assertion that he sought and was qualified to purchase the apartment, but was rejected. As an initial matter, he alleges that he executed an agreement with the Berkowitz defendants for the purchase of the apartment. (Id. ¶ 17.) Further, according to the amended complaint, as part of his application package to the Co-op for Board approval, plaintiff was required to provide three letters each of both personal recommendation and business references, a letter from his employer, his salary, a copy of his last three paystubs, a letter of reference from his current landlord or managing agent, a copy of his income tax returns for the last two years with all schedules and W-2 forms attached, account verification from each financial institution in which plaintiff held assets, and a statement of plaintiff's prospective assets as compared to liabilities for the next year. (Id. ¶ 18.) Plaintiff alleges that he complied with all of these requirements. (Id. ¶ 19.) Plaintiff also alleges that he included a credit score, which indicated he had "[e]xcellent" credit. (Id. ¶ 20.h.)
Moreover, plaintiff has alleged other facts in connection with the rejection of his application to support his discrimination claim. As an initial matter, the apartment allegedly was placed back on the market after the Board rejected plaintiff's application so that it remained available to others for purchase. (See, e.g., Id. ¶¶ 33, 36.) According to the amended complaint, on August 18, 2010, plaintiff received an email from counsel of the Woodmere defendants confirming that his application was rejected "based solely on the negotiated purchase price." (Id. ¶ 34.) This was also the reason given to plaintiff by Murray Berkowitz as relayed to him by the Board. (Id. ¶ 32.) However, plaintiff alleges that he "in fact agreed to re-negotiate the contract price upward" in early July 2010 and Murray Berkowitz subsequently informed the Board that plaintiff was willing to pay more for the apartment. (Id. ¶ 35.) However, the Board allegedly "declined to consider an increased price for the unit, regardless of how high that new price might be." (Id.) According to the amended complaint, on August 10, 2010, after plaintiff sent a letter to the Board via its managing agent alleging discrimination against plaintiff, Murray Berkowitz phoned plaintiff and admitted to "knowing that the sale was denied `for discriminatory reasons.'" (Id. ¶¶ 31, 36.) A "current unit owner and resident" of the Co-op also allegedly told plaintiff that there was "discriminatory conduct against men who were single" by the Board "which was commonly known among building residents."
In sum, viewing the facts alleged in the amended complaint in the light most favorable to plaintiff, the Court concludes that Lax has sufficiently pled a plausible housing discrimination claim against the defendants.
In the amended complaint, plaintiff alleges that he was rejected by the Co-op through the Board, and that Mirsky and Wolf participated in the decision-making process. (Am. Compl. ¶ 21.) The Woodmere defendants argue, however, that Mirsky and Wolf cannot be held accountable for the actions of the Co-Op and Board. First, they argue that Mirsky and Wolf were disclosed agents of the Co-Op and that, as a result, they cannot be held liable. (Defs.' Mot. at 13.) The Woodmere defendants also argue, in the alternative, that plaintiff has failed to sufficiently plead Mirsky and Wolf's involvement in the rejection of plaintiff's application. (Id.) The Court concludes that Mirsky and Wolf can be held liable as agents, and that plaintiff has alleged sufficient facts regarding their involvement in the rejection of plaintiff's application to survive a motion to dismiss.
Mirsky and Wolf can be sued as disclosed agents of the Co-Op and Board. Disclosed agents "cannot be held personally
At this stage of the litigation, plaintiff has sufficiently pled participation by Wolf and Mirsky in the Board's consideration and rejection of his application to survive a motion to dismiss. Although Mirsky acted as a conduit of information between the Board, Co-Op and plaintiff, he was also alleged to be "actively involved in advising and discussing applications for unit purchases (including Mr. Lax's)" with the Board. (Am. Compl. ¶¶ 8, 21.) There are also numerous allegations that Wolf was a participant in the application process. (Id. ¶¶ 27, 32-33, 37 (alleging that Wolf, the Co-Op and Board refused to allow the sale of the apartment to plaintiff).) Viewing the facts alleged in the complaint in the light most favorable to plaintiff and drawing all reasonable inferences in plaintiff's favor, this Court concludes that plaintiff has sufficiently alleged that Mirsky and Wolf were involved in the decision-making process regarding the sale of apartments and, more specifically, with plaintiff's application to survive a motion to dismiss. See, e.g., Carpenter v. Churchville Greene Homeowner's Ass'n, Inc., No. 09-CV-6552, 2011 WL 710204, at *5, 2011 U.S. Dist. LEXIS 17042, at *13-14 (W.D.N.Y. Feb. 22, 2011) ("[Defendants] argue that, as an agent of the HOA, Realty was merely assisting the HOA with its business and Plaintiffs have not pointed to any facts to suggest Realty was individually
In sum, accepting the allegations in the complaint as true and drawing all reasonable inferences in plaintiff's favor, the Court concludes that Lax has sufficiently pled a plausible FHA discrimination claim—namely, that he sought and was qualified to purchase the apartment, but that his application was rejected by the Co-op through the Board, and with the involvement of Wolf and Mirsky in the decision-making process, based upon his status as a single male—that survives a motion to dismiss.
Plaintiff has moved for sanctions against counsel for the Woodmere defendants under Rule 11 of the Federal Rules of Civil Procedure ("Rule 11"). Specifically, plaintiff asserts that counsel should be sanctioned for: (1) attaching exhibits to the Woodmere defendants' motion papers that were "unrelated to the pleadings"; (2) referring in those motion papers to the original complaint filed by plaintiff; (3) "arguing facts" on a motion to dismiss; (4) making arguments with "no basis in law" or that were not based on "any allegation in the amended complaint"; and (5) violating E.D.N.Y. local rules as well as this Court's individual rules. (Pl.'s Mot. at ii.) For the reasons that follow, plaintiff's motion for sanctions is denied.
Under Rule 11, to avoid the risk of sanctions, counsel must undertake reasonable inquiry to "ensure that papers filed are well-grounded in fact, legally tenable, and not interposed for any improper purpose." Gal v. Viacom Int'l, Inc., 403 F.Supp.2d 294, 307 (S.D.N.Y.2005) (internal quotation marks omitted) (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)). In considering a motion for sanctions under Rule 11, this Court applies an objective standard of reasonableness. See MacDraw, Inc. v. CIT Grp. Equip. Fin., Inc., 73 F.3d 1253, 1257-58 (2d Cir.1996). Moreover, Rule 11 "is violated only when it is patently clear that a claim has absolutely no chance of success." Oliveri v. Thompson, 803 F.2d 1265, 1275 (2d Cir. 1986) (internal quotation marks omitted). Additionally, "when divining the point at which an argument turns from merely losing to losing and sanctionable, . . . courts [must] resolve all doubts in favor of the signer" of the pleading. Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir. 1993) (emphasis in original).
The Court has no reason to believe that any of the factual allegations or legal arguments have been made in bad faith by counsel. Plaintiff asserts that counsel inappropriately referred to the Servicing Agreement in the motion papers.
In sum, there is no basis to conclude that any grounds for sanctions are present. Accordingly, plaintiff's motion for sanctions under Rule 11 is denied.
For the foregoing reasons, the Woodmere defendants' motion to dismiss is denied. Furthermore, the Court denies plaintiff's motion for sanctions against counsel for the Woodmere defendants. The remaining parties shall proceed to discovery at the direction of Magistrate Judge Wall.
SO ORDERED.
