ROSLYNN R. MAUSKOPF, District Judge.
Following a state court judgment rendered against her, plaintiff pro se Emma Fequiere brings this action, alleging that defendants violated various federal and state laws by engaging in, and conspiring to engage in, unlawful conduct to procure the foreclosure of her property. Defendants filed several motions to dismiss the claims.
On August 29, 2006, Fequiere obtained a mortgage loan (the "Mortgage") from defendant Tribeca Lending ("Tribeca"), which was secured by the property at 21 Howard Street (the "Property"), located in Nassau County, New York. (See Second Amended Complaint ("Complaint") (Doc. No. 42) at ¶ 26.) The Mortgage was obtained in the amount of $299,000 and required monthly payments of $3,223.93. (See id.) By 2006, Fequiere was making mortgage payments to defendant Franklin Credit Management Corp. ("Franklin"), a subsidiary of the same parent company as Tribeca.
In May 2007, Fequiere received a Notice of Assignment indicating that Tribeca had assigned the Mortgage to defendant mortgage servicer Litton Loan Servicing ("Litton"). (See id. at ¶ 15.) On July 17, 2007, after Fequiere defaulted under the terms of the Mortgage, Tribeca filed a Notice of Foreclosure
Tribeca moved for summary judgment in the State Action, which was granted by Order on October 22, 2008. (See Summary Judgment Order (Doc. No. 73-5) at 1-4.) The state court then appointed defendant Gerald Gardener Wright as Referee to compute the amount due to Tribeca under the Mortgage. (See id. at 2-3.) During those proceedings, several of the defendants, including Franklin and Litton, made repeated representations to Fequiere that she would be offered a loan modification that would provide her with more favorable terms, but no such modification ever materialized. (See Complaint at ¶¶ 21, 40.) Tribeca then informed Fequiere in January 2010 that her loan modification application was denied. (See Complaint at ¶ 40.)
On October 25, 2013, Fequiere brought the instant action in the United States District Court for the Southern District of New York, which transferred the case to this Court. (See Transfer Order (Doc. No. 13) at 1-7.) Fequiere moved for a temporary restraining order and preliminary injunction, seeking an order of protection for the Property and a "Stay Away" order prohibiting defendants from posting notices on the door of the Property, which this Court denied by Order on March 25, 2015. (See Order on TRO (Doc. No. 84).) In her twenty-two count Complaint, Fequiere alleges violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1962 et seq., the Consumer Fraud Protection Act ("CFPA"), 12 U.S.C. § 5491(a) et seq., the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2601 et seq., and various state laws. Defendants filed separate motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), claiming that the doctrines of Rooker-Feldman, claim preclusion, and issue preclusion bar Fequiere's claims, and further, that she fails to state a claim upon which relief could be granted.
The defendants each assert that Fequiere's claims should be dismissed because they (a) are barred by the Rooker-Feldman doctrine; (b) are barred by the doctrines of claim preclusion and issue preclusion; and (c) fail to state a claim upon which relief can be granted. Though the Court finds that Fequiere's claims are not barred by the Rooker-Feldman doctrine, the Court concludes that her claims are barred by the doctrines of claim and issue preclusion and that they fail to state a claim upon which relief can be granted.
Because the Rooker-Feldman doctrine is jurisdictional, the Court addresses its application first and finds that it does not preclude federal review of Fequiere's claims.
The Rooker-Feldman doctrine bars federal courts from exercising "jurisdiction over cases that essentially amount to appeals of state court judgments." Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 426 (2d Cir. 2014) (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283-84 (2005)). The doctrine, intended to be applied narrowly, "is confined to . . . cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Exxon Mobil Corp., 544 U.S. at 284. In light of the "narrow ground" of the Rooker-Feldman jurisdictional bar, the doctrine does not prohibit a plaintiff from "present[ing] some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party."
The Second Circuit recently clarified the bounds of the Rooker-Feldman doctrine in the context of a prior foreclosure proceeding in Vossbrinck. 773 F.3d at 427-28. There, a state court had granted foreclosure of plaintiff's property in a prior state proceeding and the plaintiff initiated a federal suit shortly thereafter, alleging violations of numerous state and federal laws in connection with the servicing of his mortgage. See id. at 425. In his request for relief, he sought "title to his property, immediate tender of the property, declaratory relief, and punitive damages," and asked the court to void the foreclosure judgment. Id. at 426. Still, the Second Circuit acknowledged that plaintiff's pro se complaint could be liberally construed to assert claims of fraud that were not barred by the Rooker-Feldman doctrine because they sought damages for injuries plaintiff suffered as a result of the alleged fraud in connection with the foreclosure proceedings. Id. at 427. The Second Circuit reasoned that the adjudication of such claims did "not require the federal court to sit in review of the state court judgment." Id. at 427, 428 n.2 (discussing similar holdings reached by the Fifth, Sixth, and Seventh Circuits); cf. Noel v. Hall, 348 F.3d 1148, 1164 (9th Cir. 2003) ("If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision, Rooker-Feldman bars subject matter jurisdiction in federal district court. If, on the other hand, a federal plaintiff asserts as a legal wrong an allegedly illegal act or omission by an adverse party, Rooker-Feldman does not bar jurisdiction.").
In light of this breadth of precedent, the Court construes Fequiere's submissions to assert claims that are not barred by the Rooker-Feldman doctrine because adjudication of her claims does not require this Court to sit in review of the state judgment. See Vossbrinck, 773 F.3d at 427. Though Fequiere appears to assert that she was aggrieved as a result of the state court's decisions, the heart of her claims arises out of defendants' alleged conduct in the procurement of the underlying mortgage and during the state court proceedings. Further, Fequiere's Complaint does not request reinstatement of her title to the Property, but rather requests that defendants be held liable for "damages," "prejudgment interest" in the amount of the loss she sustained, and an injunction "restrain[ing] all [d]efendants from committing future violations." (Complaint at ECF pg. 55 (emphasis added).) Because her claims are independent and do not arise out of the state court's judgment, but rather from defendants' alleged conduct, the Court finds that Rooker-Feldman does not deprive this Court of jurisdiction over her claims.
As the Second Circuit recently explained:
Marcel Fashions Group, Inc. v. Lucky Brand Dungarees, Inc., 779 F.3d 102, 107 (2d Cir. 2015) (citations and internal quotation marks omitted). Federal courts must use the res judicata doctrine of the state in which the state court judgment was granted. See Kesten v. Eastern Sav. Bank, No. 07-CV-2071 (JFB) (ARL), 2009 WL 303327, at *3 (E.D.N.Y. Feb. 9, 2009) (citing Kremer v. Chem. Constr. Corp., 456 U.S. 461, 466 (1982). As the prior decision here was rendered by a New York state court, New York's res judicata doctrine governs.
All defendants argue that Fequiere's claims are barred by the doctrine of claim preclusion. The Court finds that claim preclusion bars Fequiere's claims as to all defendants except Rosicki, Wright, and BHPPF.
"The doctrine of claim preclusion, or res judicata, bars the subsequent litigation of any claims that were or could have been raised in a prior action." Citigroup, Inc. v. Abu Dhabi Inv. Auth., 776 F.3d 126, 128 (2d Cir. 2015) (citing Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981)). The doctrine applies if "(1) there [wa]s a previous adjudication on the merits; (2) the previous action involved [the party against whom res judicata is invoked] or its privy; and (3) the claims involved were or could have been raised in the previous action." E.g., Swiatkowski v. Citibank, 745 F.Supp.2d 150, 171 (E.D.N.Y. 2010) (alteration in original) (quoting Whelton v. Educ. Credit Mgmt. Corp., 432 F.3d 150, 155 (2d Cir. 2005)), aff'd 446 F. App'x 360 (2d Cir. 2011).
Here, the state court entered its summary judgment order in favor of Tribeca on the basis that "the entire unpaid balance secured [by the Property was] due and owing," and then entered a subsequent judgment of foreclosure of sale. (Summary Judgment Order at 1; Foreclosure Judgment at 10-17.) Each of these orders operates as a final adjudication on the merits for res judicata purposes. See, e.g., Yeiser v. GMAC Mortg. Corp., 535 F.Supp.2d 413, 421 (S.D.N.Y. 2008) ("It is long settled in this Court and in New York State courts that a summary judgment dismissal is considered a decision on the merits for res judicata purposes."); Swiatkowski, 745 F. Supp. 2d at 171 (noting that an "earlier state court action, which include[s] a Final Judgment of Foreclosure and Sale, [i]s a previous adjudication on the merits" in satisfaction of the first res judicata requirement).
Further, the requirement that "the previous action involved [the party against whom res judicata is invoked] or its privy" is met, as Fequiere was the defendant in the State Action and is the plaintiff here, and Tribeca was the plaintiff in the State Action and is a defendant here. See Hinds, 2012 WL 6827477, at *5 (finding this requirement satisfied where plaintiff was party to the state court proceeding as a defendant and now brings this federal action as a pro se plaintiff); Swiatkowski, 745 F. Supp. 2d at 172; Caldwell v. Gutman, Mintz, Baker & Sonnenfeldt, 701 F.Supp.2d 340, 352 (E.D.N.Y. 2010); Done v. Wells Fargo Bank, N.A., No. 08-CV-3040 (JFB) (ETB), 2009 WL 2959619, at *4 (E.D.N.Y. Sept. 14, 2009).
Fequiere argues that claim preclusion is inapplicable because some of the defendants were not parties to the State Action. (See Mem. in Opp'n (Doc. No. 73-14) at 19.) However, a non-party to an earlier action may still invoke claim preclusion if it can demonstrate that it was in privity with a party to the earlier action. See Houdet v. U.S. Tennis Ass'n, No. 13-CV-5131 (FB) (LB), 2014 WL 6804109, at *4 (E.D.N.Y. Dec. 3, 2014) (finding res judicata to apply "not just to the parties in a prior litigation but also to those in privity with them" where the "new defendants have a sufficiently close relationship to justify [its] application" (internal quotation marks omitted)); Quiroz v. U.S. Bank Nat'l Ass'n, No. 10-CV-2485 (KAM) (JMA), 2011 WL 2471733, at *7 (E.D.N.Y. May 16, 2011) (finding that the "privity requirement of [the] res judicata doctrine is met in this case as to all plaintiffs" where all plaintiffs were in privity with the plaintiffs in the prior action), adopted by 2011 WL 3471497 (E.D.N.Y. Aug. 5, 2011); see also Lacy v. Principi, 317 F.Supp.2d 444, 447 (S.D.N.Y. 2004) ("[A] party cannot avoid . . . res judicata . . . by bringing suit against a new defendant that is in privity with the original defendant."). "A relationship of privity `includes those who are successors to a property interest, those who control an action although not formal parties to it, [and] those whose interests are represented by a party to the action.'" Modular Devices, Inc. v. Alcatel Alenia Space Espana, No. 08-CV-1441 (JS) (WDW), 2010 WL 3236779, at *4 (E.D.N.Y. Aug. 12, 2010) (quoting Ferris v. Cuevas, 118 F.3d 122, 126 (2d Cir. 1997)).
Here, Fequiere's Complaint itself, taken as true, demonstrates that such privity exists between Tribeca, a party to both the state and federal actions, and each of the defendants except Rosicki, Wright, and BHPPF. First, Franklin is in privity with Tribeca as a result of Tribeca's representation of Franklin's interest in the State Action. Specifically, the Complaint alleges that "Fequiere as mortgagor executed [the Mortgage] with Defendant Tribeca Lending/Franklin Credit as [m]ortgagee." (See Complaint at 26.) Even ignoring the fact that Fequiere regularly conflates Tribeca and Franklin as a single entity, the Complaint indicates that she was making her mortgage payments to Franklin in 2006 — a year before Tribeca initiated the State Action. In fact, the ground on which Tribeca brought the State Action was that Fequiere defaulted on the terms of her Mortgage by failing to make her payments to Franklin, and Tribeca therefore adequately represented Franklin's interest to justify application of res judicata. See Modular Devices, Inc., 2010 WL 3236779, at *4.
The facts alleged in paragraph 28 of the Complaint and in the Referee's Deed also establish privity between Tribeca and both Vantium and U.S. Bank, as Tribeca assigned its winning auction bid to Vantium. See Yeiser, 535 F. Supp. 2d at 423 (stating that "[s]ince the loan was transferred to GRP in May 2005," almost one year after the state foreclosure action, "GRP is a successor to that interest and is also in privity with MERS," which was the plaintiff in the foreclosure litigation); Hinds, 2012 WL 6827477, at *4 n.8 (finding the privity requirement satisfied where Wells Fargo was not a party in the state court proceeding, but "as Trustee of Option One, bought the subject property at the foreclosure sale, rendering it a successor to Option One's property interest"). Crediting Fequiere's allegation that U.S. Bank is the current holder of the Mortgage, (see Complaint at ¶¶ 10, 28, 33), U.S. Bank is in privity with Tribeca as successor-in-interest of the Property. However, for privity purposes, the Court need not determine which entity is, in fact, the current holder of the Mortgage — because the Mortgage was the interest litigated in the State Action, and serves as the basis of the claims against both Vantium and U.S. Bank, claims arising out of the Mortgage interest must be barred. Further, Tribeca represented the interests of those with a property interest in the Mortgage in the State Action.
Ocwen and Litton were similarly in privity with Tribeca for purposes of these claims. By plaintiff's own contention, Litton serviced plaintiff's mortgage until Ocwen "acquired [the mortgage] from Litton [] and became the successor in interest to Litton" in 2011. (Complaint at ¶ 7.) Under New York law, both the party servicing the mortgage and the party that later acquires it (becoming a successor in interest) are considered to be in privity with the party to the original action concerning the mortgage for purposes of res judicata. See Yeiser, 535 F. Supp. 2d at 423 ("GMAC and GRP were in privity with MERS in the state court action [because] GMAC serviced the loan at the time of the foreclosure action [and since] the loan was transferred to GRP . . ., GRP is a successor to that interest and is also in privity with MERS"); see also Council v. Homes Depot, Inc., No. 04-CV-5620 (NGG) (KAM), 2006 WL 2376381, at *4 (E.D.N.Y. Aug. 16, 2006) ("New York state case law provides that privity extends to parties `who are successors to a property interest, those who control an action although not formal parties to it, those whose interests are represented by a party to the action, and possibly coparties to a prior action.'") (quoting Watts v. Swiss Bank Corp., 27 N.Y.2d 270, 277, (1970)).
Lastly, all of the claims Fequiere asserts here either were, or could have been, raised in the State Action. New York has adopted a "tranComplainttional" approach to claim preclusion, which provides that a later claim could have been raised in the prior action if it "aris[es] out of the same factual grouping as [the] earlier litigated claim even if the later claim is based on different legal theories or seeks dissimilar or additional relief." Segreto v. Town of Islip, No. 12-CV-1961 (JS) (WDW), 2013 WL 303327, at *11 (E.D.N.Y. Feb. 12, 2013) (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994)). This approach is designed to prevent a party from "remain[ing] silent in the first action and then bring[ing] a second one on the basis of a preexisting claim for relief that would impair the rights or interests established in the first action." Munsch v. Evans, No. 11-CV-2271 (JFB) (ETB), 2012 WL 528135, at *8 (E.D.N.Y. Feb. 17, 2012) (quoting Henry Modell & Co. v. Minister, Elders & Deacons of Ref. Prof. Dutch Church, 502 N.E.2d 978, 981 n.2 (N.Y. 1986)); see also Dolan v. Select Portfolio Serv'g, No. 13-CV-1552 (PKC), 2014 WL 4662247, at *4 (E.D.N.Y. Sept. 18, 2014) (noting that though New York adopts a permissive counterclaim rule, which does not require a party to assert all counterclaims in the original action, that party may not bring a subsequent lawsuit that amounts to an attack on a judgment previously issued by the state court); In re Merhi, 518 B.R. 705, 714 (Bankr. S.D.N.Y. 2014) (holding that debtor was barred by res judicata in bringing a later claim, where any successful challenge via the later claim would "impair the validity of the Foreclosure Judgment," and "undermine the relief granted in the Foreclosure Action").
Whether cast as violations of RICO, FDCPA, CFPA, RESPA, or of any of the numerous state laws enumerated in the Complaint, Fequiere effectively alleges that defendants improperly obtained the Foreclosure Judgment through conspiracy and fraud. (See Complaint at ¶¶ 9, 12-25, 29-48.) However, Fequiere asserted these claims in the State Action in her proposed verified answer submitted in support of her motion to amend her answer. (Proposed Verified Answer at pgs. 15-19.). Specifically, she raised a variety of affirmative defenses purporting to attack the validity of the underlying mortgage and the propriety of the State Action, including that Tribeca: (1) "lack[ed] the standing to sue because it was not the legal owner of the" Mortgage; (2) failed to plead "facts sufficient to establish that the alleged debt is valid"; (3) "c[ame] to the court with unclean hands"; (4) "engaged in fraud to procure" the Mortgage; and (5) did "not possess a valid lien upon the [Property] and [could not] pursue a Mortgage Foreclosure." (Id.) The state court considered and ultimately denied that motion.
The Court therefore concludes that Fequiere's claims are barred against those defendants that were either present in, or in privity with the parties present in, the State Action — Tribeca, Franklin, Litton, Ocwen, Vantium, and U.S. Bank — but that claim preclusion does not bar her claims against remaining defendants Rosicki, Wright, and BHPPF.
While not barred by claim preclusion, Fequiere's claims against Rosicki and Wright
The doctrine of issue preclusion "is a narrower species of res judicata, [which] precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same." Tsirelman v. Daines, 19 F.Supp.3d 438, 449 (E.D.N.Y. 2014) (quoting Ryan v. N.Y. Tel. Co., 62 N.Y.2d 494, 500 (1984)). "The party invoking collateral estoppel need not have been a litigant in the prior action." Yeiser, 535 F. Supp. 2d at 424; see also Swiatkowski, 745 F. Supp. 2d at 169. Rather, for issue preclusion to apply, the following four requirements must be met: "(1) the identical issue was actually raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the part[ies] had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits." Wyly v. Weiss, 697 F.3d 131, 141 (2d Cir. 2012) (alteration in original). The party seeking to apply issue preclusion bears the "burden of showing that the issues are identical and were necessarily decided in the prior action," and the party opposing its application bears the "burden of showing that the prior action did not afford a full and fair opportunity to litigate the issues." Id. (quoting Kulak v. City of New York, 88 F.3d 63, 72 (2d Cir. 1996)); Proctor v. LeClaire, 715 F.3d 402, 414 (2d Cir. 2013).
In order for the "identity" and "actually litigated" requirements of issue preclusion to be satisfied, the issue "must have been properly raised by the pleadings or otherwise placed at issue and actually determined in the prior proceeding." Evans v. Ottimo, 469 F.3d 278, 282 (2d Cir. 2006).
Fequiere filed a motion in the State Action to reargue and amend her answer after the state court decided that Tribeca was entitled to foreclosure based on the amount that Wright computed was due. Attached to that motion, Fequire filed a proposed verified answer, in which she raised various affirmative defenses for the first time. (See Proposed Verified Answer at pgs. 15-19.) Among the newly raised affirmative defenses were the assertions that Tribeca lacked standing to pursue the foreclosure and that the Mortgage was fraudulently procured. (See id.) By raising these defenses in her Proposed Verified Answer, Fequiere placed them "at issue," meaning that they were "actually litigated" in the prior proceeding and qualify as "identical issue[s]." Sanchez v. Abderrahman, No. 10-CV-3641 (CBA) (LB), 2013 WL 8170157, at *4-5 (E.D.N.Y. July 24, 2013) (citing Evans, 469 F.3d at 281). Upon consideration, the state court, acknowledging that it had considered all of the responsive affirmations and exhibits, denied Fequiere's motions, determining that she offered no "reasonable excuse for her failure to oppose [Tribeca's] motion for summary judgment," failed to present "a potentially meritorious defense to the action," and that "failure to make such showing [wa]s preclusive." (Denial of Mot. to Reargue and Amend at 54.)
Further, Fequiere has not met her burden in showing that she lacked a "full and fair opportunity to litigate" in the prior proceedings. Evans, 469 F.3d at 281-82 (noting that the party attempting to defeat the application of collateral estoppel has the burden of establishing its absence). In order to satisfy the "full and fair opportunity to litigate" requirement, the "state proceedings need do no more than satisfy the minimum procedural requirements of the Fourteenth Amendment's Due Process Clause." Wilson v. Ltd. Brands, Inc., No. 08-CV-3431, 2009 WL 1069165, at *2 (S.D.N.Y. Apr. 17, 2009) (quoting Kremer, 456 U.S. at 481).
Fequiere raised affirmative defenses including allegations of fraud and lack of standing in in a motion responding to the state court's summary judgment order, which the court denied for the reasons stated above. (See id. at ¶¶ 12-26; see also Proposed Verified Answer at pgs. 15-19; Denial of Mot. to Reargue and Amend at 54.) In finding that Tribeca was entitled to foreclose on the Property, the state court implicitly and necessarily resolved the issues of: (a) any alleged impropriety in the procurement of the Mortgage or foreclosure; (b) Tribeca's alleged lack of standing or rightful entitlement to the Property; (c) the propriety of Wright's conduct in reporting the amount due under the Mortgage; and thereby (d) whether any benefit received by the foreclosure would be "unjust."
As all four requirements of issue preclusion are met, the Court finds that the doctrine bars relitigation of the issues relating to the allegedly fraudulent procurement of the Mortgage or Tribeca's lack of standing. Fequiere's claims pertaining to violations of: (a) RICO; (b) CFPA; (c) RESPA; (d) FDCPA; (e) TILA; (f) Section 1983 and 1985
Issue preclusion similarly bars all claims against BHPPF arising out of fraudulent procurement of the Mortgage or lack of standing. Though BHPPF was neither a party to the state court claims, nor in privity with a party in that action, the Second Circuit does not require mutuality of parties for issue preclusion. See Deng v. Aramark Educ. Grp., Inc., No. 04-CV-453 (DRH) (MLO), 2006 WL 752826, at *6 (E.D.N.Y. Mar. 23, 2006) aff'd sub nom. Yaohua Deng v. Aramark Educ. Grp., Inc., 253 F. App'x 84 (2d Cir. 2007) ("Under non-mutual collateral estoppel, third parties unrelated to the original action can bar the litigant from relitigating the same issue in a subsequent suit"); Cent. Hudson Gas & Elec. Corp. v. Empresa Naviera Santa S.A., 56 F.3d 359, 367 n.3 (2d Cir. 1995) ("Following the Supreme Court[] . . . this Circuit generally no longer considers mutuality for preclusion purposes") (citing Nevada v. United States, 463 U.S. 110, 143-44 (1983)). Therefore, even though BHPPF was not in privity with any parties to the original action, preclusion applies with equal force to all issues litigated in the prior action.
The only remaining claim is BHPPF's alleged breach of fiduciary duty, insofar as Fequiere's claim revolves around BHPPF's current representation of Tribeca, which could not have been raised or litigated in the State Action.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In order to plead "facial plausibility," a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. This standard of plausibility does not require the plaintiff to demonstrate "probability," but requires a showing of "more than a sheer possibility that a defendant has acted unlawfully." Id. "[A] plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal quotation marks omitted). To that end, the reviewing court must "accept as true the facts alleged in the complaint, and may consider documents incorporated by reference in the complaint and documents upon which the complaint relies heavily." In re Citigroup ERISA Litig., 662 F.3d 128, 136 (2d Cir. 2011) (citation and internal quotation marks omitted). All reasonable inferences must then be drawn in favor of the plaintiff. See id. at 152. However, the Court is not bound to accept as true legal conclusions couched as factual allegations and therefore, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).
Fequiere's last remaining claim — that BHPPF breached its fiduciary duty — must be dismissed because Fequiere has failed to state a plausible claim for relief. Fequiere contends that BHPPF established a fiduciary duty to her when it represented her in a former unrelated proceeding in 2003, and that BHPPF breached that duty by: (a) representing some of the defendants in the instant matter; (b) submitting false documents in the furtherance of its clients' participation in the alleged RICO enterprise; and (c) failing to disclose material information to her.
"To allege a breach of fiduciary duty, the defendant must allege `the existence of a fiduciary relationship, misconduct by the defendant, and damages directly caused by the defendants' misconduct." Kerik v. Tacopina, No. 14-CV-2374 (JGK), 2014 WL 6791615, at *15 (S.D.N.Y. Dec. 2, 2014) (quoting Magrabe v. Sexter & Warmflash, P.C., 353 F. App'x 547, 549 (2d Cir. 2009)); Berman v. Sugo LLC, 580 F.Supp.2d 191, 204 (S.D.N.Y. 2008).
Fequiere's claim must be dismissed because she cannot demonstrate that any fiduciary duty actually existed with respect to this matter. As the Court previously noted in denying Fequiere's motion to disqualify BHPPF as counsel, "Fequiere [here] cannot demonstrate any substantial connection between the subject matter of BHPPF's prior representation of her and the subject matter of its current representation of Tribeca." (Order Adopting R&R ("March 20, 2015 Order") (Doc. No. 84) at 7.) "New York Rule of Professional Conduct 1.9 governs an attorney's duties to former clients, and it deals with client representations that are forbidden by a conflict of interest with a former client, and preserving the former client's confidential information." Kerik, 2014 WL 6791615, at *19 (citing N.Y. Rules of Prof'l Conduct § 1.9). Specifically, the Rule provides that "[u]nless the former client gives informed consent, confirmed in writing, a lawyer shall not knowingly represent a person in the same or substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client whose interests are materially adverse to that person." N.Y. Rules of Prof'l Conduct § 1.9(b)(1) (emphasis added). Fequiere cannot argue that BHPPF's former representation of her is remotely related to its current representation of defendants in this matter, as they deal with entirely different subject matters, and she demonstrates no other basis for the existence of a fiduciary relationship.
The Complaint also fails to allege with any specificity which filed documents were false, or which facts were misrepresented or not disclosed to her. See Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake."); Lerner, 459 F.3d at 290 ("[I]n order to comply with Rule 9(b), the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." (internal quotation marks omitted)). Because the Complaint fails to establish that a fiduciary duty existed and is devoid of any particularized facts as to BHPPF's alleged fraud, Fequiere's remaining claims must be dismissed.
"The Second Circuit instructs that a district court should not dismiss a pro se complaint `without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated." Estes v. Toyota Fin. Serv., No. 14-CV-1300 (JFB) (SIL), 2015 WL 222137, at *2 (E.D.N.Y. Jan. 12, 2015) (quoting Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000)). "Where, however, the problems with the causes of action are `substantive' and would not be cured with `better pleading,' repleading would be futile and any such request should be denied." Poles v. Brooklyn Cmty. Hous. & Servs., No. 10-CV-1733 (BMC) (LB), 2010 WL 1992544, at *2 (E.D.N.Y. May 14, 2010) (quoting Cuoco, 222 F.3d at 112); see also 28 U.S.C. § 1915(e)(2)(B). Accordingly, the Court finds that amendment would be futile in the instant case. Fequiere has already amended her complaint twice and has had ample time to formulate her allegations with sufficient particularity to state a claim, yet has failed to do so. Even reading the allegations in the Complaint to afford her every favorable inference to which as a pro se litigant is entitled, it does not, and cannot, state a viable claim. For these reasons, the Court declines to grant Fequiere leave to amend.
All but one of Fequiere's federal and state law claims are barred by res judicata. Fequiere's remaining claim of a breach of fiduciary duty against BHPPF fails to state a claim for relief. Accordingly, each of the defendants' motions to dismiss (Doc. Nos. 73 and 78) is GRANTED, Fequiere's second amended complaint is DISMISSED in its entirety, and leave to replead is DENIED.
The Clerk of Court is directed to enter judgment accordingly, send a copy of this Memorandum and Order and the accompanying judgment to plaintiff pro se, and to close the case.
SO ORDERED.
Hoblock v. Albany Cnty. Bd. of Elecs., 422 F.3d 77, 87-88 (2d Cir. 2005).
