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finding that a state court's summary judgment order resolving some of the plaintiff's claims constituted a final judgment for claim preclusion purposes
Summary of this case from Noland v. City of AlbuquerqueOpinion
96 Civ. 8593 (AJP)
October 26, 2001
OPINION ORDER
Plaintiff Rafael Pantoja — technically pro se, but he is a disbarred lawyer — brought this action for, inter alia, violation of the Fair Housing Act against, among others, Kiska Construction Corp., the owner-sponsor of condominiums known as Huntington Condominiums in Manhattan.
Presently before the Court is defendant Kiska's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)-(c) on the grounds that: (1) Pantoja's Fair Housing Act ("FHA") claim was commenced after the Act's two year statute of limitations had expired, and (2) this action is barred by collateral estoppel/res judicata based on a prior decision by the New York Supreme Court. (Dkt. Nos. 40 41: Kiska Motion to Dismiss.) Co-defendant Steven Weisman (another disbarred lawyer appearing pro se) joins in Kiska's motion and also moves to dismissasto him for improper service of process. (Dkt. No. 39: Weisman Motion to Dismiss)
The parties have consented to disposition of this action by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Dkt. No. 37.)
For the reasons set forth below, defendants' motions are GRANTED on collateral estoppel/res judicata grounds.
BACKGROUND
Pantoja's Complaints
Pantoja's original complaint, dated September 3, 1996, asserted claims under 42 U.S.C. § 1983 and § 1985(3). (Dkt. No. 1: Compl.) In December 1996, Pantoja filed an Amended Complaint against Judge Arthur Scott, the City of New York, Kiska Construction Corp., and Steven Weisman, asserting claims under the Fair Housing Act ( 42 U.S.C. § 3601, 3604, 3605), as well as § 1983 and § 1985(3). (Dkt. No. 2: Am. Compl.)
The Amended Complaint alleges as follows:
Prior to August 1995, Pantoja, who is Puerto Rican, resided in an apartment at the Huntington Condominiums at 301 East 94th Street in New York City, under a lease with the right to purchase the apartment. (Am. Compl. ¶¶ 2, 6, 28.) Kiska was the owner/sponsor for the Huntington Condominiums. (Id. ¶ 5.) Pantoja asserts that it was Kiska's practice to provide secondary financing to purchasers but that Kiska refused to do so for him, based on discriminatory reasons. (Id. ¶¶ 7-9, 29-30.)
"On August 29, 1995 [sic — 1994], Defendants caused Plaintiff to be served with a warrant of eviction for the subject [condominium apartment] unit, which was the day Defendant Kiska scheduled the closing, and coerced plaintiff to appear at a closing wherein he fell victim to a scam by his attorney." (Id. ¶ 11.) Pantoja alleges that because of a "conspiracy" among the defendants, Pantoja lost the premises. (Id. ¶¶ 12, 19, 29.) The amended complaint also alleges that Kiska used a "pretext" of a balance of the purchase price to cancel the closing and return Pantoja's mortgage money to the mortgagor's attorney, Weisman. (Id. ¶ 32.) According to Pantoja, Kiska and Weisman filed "forged affidavits in a civil action for recission of the deed" to the apartment. (Id. ¶¶ 33-36.)
Kiska's Answer
On April 16, 1997, Kiska filed its Answer and Counterclaim. (Dkt. No. 12.) Kiska raised a statute of limitations defense (Answer ¶ 8), and also collateral estoppel/res judicata defenses, based on the March 23, 1995 decision of the Supreme Court, New York County, in which Justice Alice Schlessinger "granted Kiska's motion to rescind the deed . . . based on the lack of consideration by Plaintiff for the acquisition of the apartment." (Answer ¶ 11; see also id. ¶ 12.) Kiska annexed to the Answer a copy of the state court decision. (Answer ¶ 11 Ex. A.)
Prior Proceedings in This Case
On January 30, 1997, the City moved to dismiss the complaint as against it. (Dkt. Nos. 6-7, 9.) On July 31, 1997, Judge McKenna (to whom the case was then assigned) granted the City's motion, on the ground that the New York City Housing Court is a State not City entity, Judge Scott is a State official, and therefore "the City cannot be liable under § 1983 for Judge Scott's alleged conduct." (Dkt. No. 15:7/31/97 Memorandum Order at 7; see also id. at 3-6.)
After Judge McKenna's decision, Pantoja took no steps to advance the litigation and the case lay dormant until January 29, 2001, when Judge Swain (to whom the case had been reassigned) sua sponte issued an order to show cause as to why the case should not be dismissed for failure to prosecute. (Dkt. No. 17:1/29/01 Order.) After submissions from Pantoja, Kiska and Weisman, Judge Swain "decline[d] at this time to dismiss" for failure to prosecute (Dkt. No. 33:7/31/01 Order) and referred the matter to me. (Dkt. No. 34.)
At a conference on August 13, 2001, plaintiff Pantoja consented to the dismissal of the action without prejudice as to defendant Arthur Scott for failure to serve pursuant to Fed.R.Civ.P. 4(m). (Dkt. No. 36:8/13/01 Order.)
Thus, at this time only two defendants remain in the case: Kiska and Weisman, both of whom have moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)-(c). The parties have consented to my disposition of this action pursuant to 28 U.S.C. § 636(c). (Dkt. No. 37.)
The Prior New York Supreme Court Decisions
In the earlier State court action by Kiska against Pantoja, Kiska moved for summary judgment to rescind the deed it had given Pantoja for the apartment in the Huntington, and also sought an immediate trial on damages. (Dkt. No. 40: Dogan Aff. Ex. D: 3/23/95 Opinion by Justice Schlessinger, at 1.) Pantoja opposed the motion and cross-moved to dismiss Kiska's complaint. (Id.) Pantoja's Answer in the State court litigation had raised as an affirmative defense and counterclaim his assertion that Kiska offered to provide "secondary financing" to him and that Kiska reneged on that promise because of discriminatory motive. (Dkt. No. 40: Dogan Aff. Ex. E: Pantoja State Court Answer ¶¶ 19, 22, 26, 28-29, 32-33.)
Justice Schlesinger's opinion set out the following facts which she found to be undisputed:
The undisputed facts are as follows. On November 16, 1993 Kiska and Pantoja entered into a contract to purchase unit 26-C for the sum of $550,000.00. He was required to obtain a mortgage for $500,000.00. Defendant GMAC Mortgage Corporation of PA ("GMAC") agreed to loan Pantoja $367,500.00. Pantoja was to obtain the balance due from his own funds. The deal closed on August 29, 1994. Pantoja tendered three checks to Kiska which totalled the sum of $172,281.44. At the closing, GMAC handed over to Kiska the sum of $352,829.56.
Kiska deposited the three checks into its account. Two of the checks for the sums of $127,500.00 and $20,148.24 were certified by UST Bank/Connecticut. The third check in the sum of $24,633.00 came from the IOLA account of Pantoja's attorney, Jonathan Diller.
UST Bank/Connecticut returned the two certified checks. In a sworn affidavit the bank manager, Geraldine Piascik states that the "checks were not genuinely certified by UST Bank/Connecticut, and for that reason were dishonored" (at ¶ 2).
In addition, the third check drawn on Diller's IOLA account was returned on the ground of insufficient funds.
GMAC's vice president, Frank J. Monteforte states in a sworn affidavit that the mortgage proceeds of $352,748.31 was returned to it after it was discovered that Pantoja's checks for the balance were dishonored. This statement is corroborated by Steven Weisman, counsel for GMAC who states C:\OPIN\PANTOJA that on October 5, 1994 he received the sum of $352,829.56 back which had been paid out by GMAC on behalf of Pantoja.
Pantoja does not dispute that the three checks were dishonored. Rather, his position appears to be that since he made some loan payments on the GMAC mortgage, GMAC is estopped from rescinding the note and mortgage.
GMAC acknowledges receiving the sum of $13,683.93 from Pantoja. It states that "these funds are being held in a segregated account either to reimburse GMAC for its . . . expenses or to be used in a manner directed by the court." (Monteforte affidavit, at ¶ 6).
(Dogan Aff. Ex. D: 3/23/95 Justice Schlessinger Opinion at 1-3, emphasis added.)
Based on these undisputed facts, Justice Schlessinger granted partial summary judgment for Kiska, rescinding the transfer of the apartment deed to Pantoja:
This defense [of partial payment] fails to defeat Kiska's right to rescind the deed. The three checks delivered by Pantoja were returned. The loan proceeds were returned. Therefore, Kiska did not receive consideration for the transfer of the deed. . . . Accordingly, it is undisputed that Kiska did not receive any consideration for the transfer of the deed.
Nor do Pantoja's other defenses create genuine issues of triable fact. . . . Contrary to Pantoja's contention, the documentary evidence is overwhelming that Kiska did not receive any consideration for the transfer of the deed. Clearly, Kiska's pleadings state a viable cause of action for re[s]c[i]ssion.
Under these circumstances equity dictates that the parties be restored to their status prior to the closing and transfer of the deed to unit 26-c.
Therefore, Kiska is granted partial summary judgment rescinding the transfer of deed to Pantoja. The cross-motion to dismiss the complaint is denied in all respects.
(Id. at 3-4, emphasis added.) Justice Schlessinger, however, denied Kiska's application for an immediate trial on damages, because there had been no discovery. (Id. at 4.) Justice Schlessinger later denied Pantoja's motion to vacate the March 23, 1995 Order. (Dkt. No. 40: Dogan Aff. Ex. D: 9/13/96 Order of Justice Schlessinger.) After the grant of partial summary judgment to Kiska in the State court action, the remaining claims in the state action were dismissed without prejudice. (See Dkt. No. 38: Pantoja Br. at 4-5.)
ANALYSIS
A district court should deny a motion to dismiss "'unless it appears to a certainty that a plaintiff can prove no set of facts entitling him to relief.'" IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir. 1993) (quoting Ryder Energy Distrib. Corp. v. Merrill Lynch Commodities Inc., 748 F.2d 774, 779 (2d Cir. 1984)), cert. denied, 513 U.S. 822, 115 S.Ct. 86 (1994); accord, e.g., Grandon v. Merril l Lynch Co., 147 F.3d 184, 188 (2d Cir. 1998); Leemon v. Burns, 99 Civ. 9432, 2001 WL 459752 at * 2 (S.D.N.Y. May 2, 2001) (Peck, M.J.); LaSalle Nat'l Bank v. Duff Phelps Credit Rating Co., 951 F. Supp. 1071, 1080-81 (S.D.N.Y. 1996) (Knapp, D.J. Peck, M.J.); In re Towers Fin. Corp. Noteholders Litig., 93 Civ. 0180, 1995 WL 571888 at * 11 (S.D.N.Y. Sept. 20, 1995) (Peck, M.J.), report rec. adopted, 936 F. Supp. 126 (S.D.N.Y. 1996) (Knapp, D.J.).
The Second Circuit has held that res judicata challenges may properly be made via a threshold motion to dismiss. See, e.g., Thompson v. County of Franklin, 15 F.3d 245, 253 (2d Cir. 1994) ("Res judicata challenges may properly be raised via a motion to dismiss for failure to state a claim under Rule 12(b)(6)."); Clarkstown Recycling Ctr., Inc. v. Parker, Chapin, Flattau Klimpl, 1 F. Supp.2d 327, 329 (S.D.N.Y. 1998) (Parker, D.J.) ("A challenge based on res judicata grounds may be properly raised in a motion to dismiss pursuant to Rule 12(b)(6)."). Similarly, "[w]here the dates in a complaint show that an action is barred by the Ghartey v. St. John's Queens Hosp., 869 F.2d 160, 162 (2d Cir. 1989); see also, e.g., Joslin v. Grossman, 107 F. Supp.2d 150, 154 (D.Conn. 2000) ("It is proper to raise the defense of the statute of limitations through a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)."); Carrasco v. New York City Off-Track Betting Corp., 858 F. Supp. 28, 30 (S.D.N.Y. 1994), aff'd mem., 50 F.3d 3 (2d Cir. 1995).
I. PANTOJA IS BARRED FROM ASSERTING HIS PRESENT FHA CLAIM AGAINST KISKA UNDER PRINCIPLES OF RES JUDICATA AND COLLATERAL ESTOPPEL BASED ON THE STATE COURT GRANT OF PARTIAL SUMMARY JUDGMENT FOR KISKA IN THE PRIOR ACTION
"Under the Full Faith and Credit Clause to the United States Constitution, a federal court will accord the judgment of a state court the same preclusive effect as that of other courts within the state." Clarkstown Recycling Ctr., Inc. v. Parker, Chapin, Flattau Klimpl, 1 F. Supp.2d 327, 329 (S.D.N.Y. 1998) (Parker, D.J.); see also, e.g., Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 896 (1984); Domino Media, Inc. v. Kranis, Nos. 98-9039, 98-9131, 173 F.3d 843 (table), 1999 WL 248156 at * 2 (2d Cir. Apr. 26, 1999) ("Federal courts must afford state court judgments the same preclusive effect as they would be given by the courts of the state in which the judgment was rendered."); Schulz v. Williams, 44 F.3d 48, 53 (2d Cir. 1994); Cullen v. Margiotta, 811 F.2d 698, 732 (2d Cir.), cert. denied, 483 U.S. 1021, 107 S.Ct. 3266 (1987); Sikri v. Gilmore, 97 Civ. 2367, 1999 WL 156385 at *2 (S.D.N.Y. Mar. 23, 1999) ("the federal courts must give the factual determinations of [a state agency], in adjudicating claims under the FHA, the same preclusive effect that would be given them by the courts of New York."); 28 U.S.C. § 1738 (the Full Faith and Credit statute).
A. Res Judicata
"New York has adopted a transactional approach to res judicata." Clarkstown Recycling Ctr., Inc. v. Parker, Chapin, Flattau Klimpl, 1 F. Supp.2d 327, 329 (S.D.N Y 1998) (Parker, D.J.); see, e.g., Maharaj v. Bankamerica Corp., 128 F.3d 94, 97 (2d Cir. 1997); Schulz v. Williams, 44 F.3d 48, 53 (2d Cir. 1994); Hughes v. The Lillian Goldman Family, LLC, 153 F. Supp.2d 435, 447 (S.D.N.Y. 2001); Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. 1171, 1175 (S.D.N.Y. 1989). Under New York's transactional analysis approach, "'once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy.'" Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. at 1175 (quoting O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 688 (1981)); see also, e.g., John Street Leasehold, LLC v. Capital Mgmt. Resources, LP, 154 F. Supp.2d 527, 537 (S.D.N.Y. 2001); Hughes v. The Lillian Goldman Family LLC, 153 F. Supp.2d at 447 ("Under New York law, the transactional approach to res judicata prevents parties to the prior action or those in privity with them 'from raising in a subsequent proceeding any claim they could have raised in the prior one, where all of the claims arise from the same underlying transaction.'") (quoting Schulz v. Williams, 44 F.3d at 53 citing additional cases); Karamoko v. New York City C:\OPIN\PANTOJA Hous. Auth., 99 Civ. 9712, 2001 WL 459103 at * 3 (S.D.N.Y. Apr. 30, 2001) ("'the facts surrounding the transaction or occurrence . . . operate to constitute the cause of action [for res judicata purposes], not the legal theory upon which a litigant relies.'") (quoting Saud v. Bank of New York, 929 F.2d 916, 919 (2d Cir. 1991)); Risley v. Fordham Univ., 99 Civ. 9304, 2001 WL 118566 at * 4 (S.D.N.Y. Feb. 13, 2001)); Clarkstown Recycling Ctr., Inc. v. Parker, Chapin, Flattau Klimpl, 1 F. Supp.2d at 329 (the transactional approach "bars 'a later claim arising out of the same factual grouping as an earlier litigated claim even if the later claim is based on different legal theories or seeks dissimilar or additional relief.'") (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994)).
See generally, e.g., Waldman v. Village of Kiryas Joel, 207 F.3d 105, 110 (2d Cir. 2000) ("a plaintiff cannot avoid the effects of res judicata by 'splitting' his claim into various suits, based on different legal theories"); Irish Lesbian Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir. 1998) ("Res judicata bars litigation of any claim for relief that was available in a prior suit between the same parties or their privies, whether or not the claim was actually litigated."); Woods v. Dunlop Tire Corp., 972 F.2d 36, 38 (2d Cir. 1992) ("'[A] judgment upon the merits in one suit is res judicata in another where the parties and subject-matter are the same, not only as respects matters actually presented to sustain or defeat the right asserted, but also as respects any other available matter which might have been presented to that end.'") (quoting Grubb v. Public Utils. Comm'n of Ohio, 281 U.S. 470, 479, 50 S.Ct. 374, 378 (1930)), cert. denied, 506 U.S. 1053, 113 S.Ct. 777 (1993).
"To prove the affirmative defense [of res judicata] a party must show that (1) the previous action involved an adjudication on the merits; (2) the previous action involved the plaintiffs or those in privity with them; (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action." Monahan v. New York City Dep't of Corr., 214 F.3d 275, 285 (2d Cir.), cert. denied, 531 U.S. 1035, 121 S.Ct. 623 (2000); see also, e.g., Pike v. Freeman, No. 00-9161, 2001 WL 1164594 n. 14 (2d Cir. Sept. 26, 2001) ("there appears to be no significant difference between New York preclusion law and federal preclusion law" and "'[u]nder both New York law and federal law'" parties are precluded from relitigating issues that could have been raised in the state action); Cousins v. Duane Street Assoc., No. 00-7580, 2001 WL 327084 at *2 (2d Cir. Apr. 2, 2001); Maharaj v. Bankamerica Corp., 128 F.3d 94, 97 (2d Cir. 1997) ("Under both New York law and federal law, the doctrine of res judicata, or claim preclusion, provides that '[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action."). The prior judgment must be "final" before it can be given res judicata effect. Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. at 1177.
In the prior State court action, Pantoja's answer raised as an affirmative defense and counterclaim his assertion that Kiska discriminated against him by failing to provide secondary financing. (See page 5 above; see also Dkt. No. 38: Pantoja Br. at 4, conceding that he raised his FHA claims in the State Court action.) It is undisputed that the transaction at issue in the State court action was Pantoja's purchase of the condominium apartment from Kiska, the same transaction at issue here. (See pages 5-6 above.) The only issue, therefore, is whether the State court decision granting partial summary judgment for Kiska was a "final adjudication on the merits."
Pantoja argues that "[n]othing about Plaintiff's FHA claims that were raised in the state court action could be deemed res judicata by a New York court because these claims were not litigated on the merits in the state court, and were eventually 'marked off the calendar' without prejudice, and not for failure to comply wit any rule or order. . . [T]he state court partial summary judgment granting Kiska's equitable claim was not final, significantly because the state court decision set the matter down for discovery on the remaining claims and counterclaims" and those claims were never decided on the merits. (Dkt. No. 38: Pantoja Br. at 4-5.) Pantoja's argument lacks merit.
Contrary to Pantoja's assertion, a state court's grant of partial summary judgment constitutes a "final" judgment for res judicata purposes. See Hennessy v. Cement Concrete Worker's Union Local 18A, 963 F. Supp. 334, 338-39 n. 1 (S.D.N.Y. 1997) ("The requirement of finality for purposes of res judicata does not necessarily mean a final judgment in an action." Thus, where state court granted defendant partial summary judgment on its counterclaims while leaving defendant's damages and plaintiff's other claims for trial, defendant entitled to res judicata in federal action); United States v. McGann, 951 F. Supp. 372, 380-82 (E.D.N.Y. 1997); Stephens v. Lacy, No. 94-CV-1679, 1995 WL 743669 at * 3 (N.D.N.Y. Dec. 13, 1995) (Pooler, D.J.); Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. at 1175 (entry of partial summary judgment was a final decision even though it left four causes of action unlitigated because "[t]here was nothing of significance left to litigate").
Pantoja analogizes to Rule 54(b) of the Federal Rules of Civil Procedure, pursuant to which orders that adjudicate fewer than all claims do not terminate the action, and hence are not appealable. (Pantoja Br. at 5.) New York State practice, however, is different: an appeal as of right to the Appellate Division was available to Pantoja from Justice Schlessinger's grant of partial summary judgment for Kiska. CPLR § 5701(a)(2). Pantoja, however, did not appeal from Justice Schlessinger's grant of summary judgment to Kiska.
Justice Schlessinger's opinion adjudicated claims arising from the purchase and sale of the condominium apartment in question, and granted summary judgment for Kiska. (See pages 5-6 above.) Justice Schlessinger specifically held that Kiska was entitled to rescind the sale for failure of consideration, and also specifically held that Pantoja's defenses — which included the defense that Kiska discriminatorily denied secondary financing to Pantoja — did not raise issues of fact precluding summary judgment for Kiska. (See pages 5-6 above.) Pantoja did not appeal Justice Schlessinger's grant of summary judgment, as he could have under State procedural rules. (See fn. 2 above.) The grant of (partial) summary judgment for Kiska is final for res judicata purposes. Therefore, Pantoja cannot now raise in his federal action any claims pertaining to the real estate transaction he raised or could have raised in state court. "Res judicata . . . prevents parties from relitigating any ground of recovery or defense that was available to the parties in the original action, even if it was not actually litigated or decided." Canadian St. Regis Band of Mohawk Indians v. State of New York, 146 F. Supp.2d 170, 187 (N.D.N.Y. 2001). Consequently, because Pantoja's Fair Housing Act discrimination claim arises out of the same set of facts as the claims adjudicated by Justice Schlessinger, Pantoja is barred under New York's transactional approach to res judicata from relitigating any and all claims arising out of the real estate transaction at issue in the State court litigation, including his Fair Housing Act claim. See Hennessy v. Cement Concrete Worker's Union Local 18A, 963 F. Supp. at 338 (res judicata applies to bar action where plaintiff's "ERISA claim arises out of the same set of facts as the claim dismissed by [the state court] and was a ground for recovery that was available in the prior action."); Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. at 1176.
B. Collateral Estoppel
Even if res judicata were not applicable, collateral estoppel bars Pantoja from raising his Fair Housing Act discrimination claim against Kiska.
"Collateral estoppel, or issue preclusion, bars a party and its privies from relitigating a claim it previously litigated and lost." Falbaum v. Pomerantz, Nos. 00-9039, 00-9049, 2001 WL 1019616 at * 1 (2d Cir. Sept. 6, 2001). Under New York law, collateral estoppel precludes a party from re-litigating an issue where: "(1) the issue in question was actually and necessarily decided in a prior proceeding, and (2) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the first proceeding." Hachamovitch v. DeBuono, 159 F.3d 687, 695 (2d Cir. 1998); see also, e.g., Domino Media, Inc., v. Kranis, Nos. 98-9039, 98-9131, 173 F.3d 843 (table), 1999 WL 248156 at * 2 (2d Cir. Apr. 26, 1999); Karamoko v. New York City Hous. Auth., 99 Civ. 9712, 2001 WL 459103 at * 5 (S.D.N.Y. Apr. 30, 2001); The Legal Aid Soc'y v. City of New York, 96 Civ. 5141, 1997 WL 394609 at *5 (S.D.N.Y. July 11, 1997); Creed Taylor, Inc. v. CBS, Inc., 718 F. Supp. 1171, 1175 (S.D.N.Y. 1989).
Pantoja does not address whether the State court "actually and necessarily" decided the issue of Kiska's alleged discrimination; rather, Pantoja challenges the fairness of the proceedings and argues that collateral estoppel should not apply to his FHA claim because "the record provides no indication that the Plaintiff was given a full and fair opportunity to litigate its FHA claims before the state court." (Dkt. No. 38: Pantoja Br. at 6.) Pantoja's argument has no merit.
Justice Schlessinger's opinion addressed the merits of both Kiska's and Pantoja's claims. In deciding Kiska's motion to "rescind a deed delivered to . . . Pantoja, dated August 29, 1994, for a residential condominium unit" (Dogan Aff. Ex. D: 3/23/95 Justice Schlessinger Opinion at 1), Justice Schlessinger found that none of Pantoja's "defenses [to Kiska's complaint] create genuine issues of triable fact" (id. at 3). Rejecting Pantoja's claim of Kiska's alleged "discriminatory practices" (Dogan Aff. Ex. E: Pantoja State Court Answer ¶¶ 13, 19, 22, 26, 28-29, 32-33), Justice Schlessinger found that "equity dictates that the parties be restored to their status prior to the closing and transfer of the deed," and granted partial summary judgment for Kiska, but found that additional discovery was necessary as to Kiska's damages (Dogan Aff. Ex. D: 3/23/95 Justice Schlessinger Opini on at 4). In granting summary judgment for Kiska, Justice Schlessinger "actually and necessarily" rejected Pantoja's discrimination defenses.
In any event, it is the "state court judgment, and not the court's opinion, [that] guides this Court's determination of whether to apply collateral estoppel." The Legal Aid Soc'y v. City of New York, 1997 WL 394609 at * 5. Justice Schlessinger ordered rescission of the deed to the apartment because Pantoja's checks for a portion of the purchase price were dishonored by the banks. (Dogan Aff. Ex. D: 3/23/95 Justice Schlessinger Opinion at 3.) Pantoja's defenses (and counterclaims) alleged that Kiska promised to provide secondary financing for that portion of the purchase price but discriminatorily refused to provide such financing to him. (Dogan Aff. Ex. E Pantoja State Court Answer ¶¶ 19, 22, 26, 28-29, 32-33.) If Kiska discriminatorily denied Pantoja such secondary financing, Kiska should have provided such financing and thus would have received consideration for the transfer of the deed. Accordingly, in ordering rescission for Kiska despite Pantoja's discrimination defenses (and counterclaims), Justice Schlessinger necessarily determined that Pantoja's discrimination allegations were without merit. Thus, Justice Schlessinger either explicitly or at least impli citly deci ded Pantoja's housing discrimination claims on the merits in granting partial summary judgment to Kiska.
Under these circumstances, Pantoja had a "full and fair" opportunity to litigate his claim on the merits even though the issue was decided on a motion for summary judgment. See Creed Taylor, Inc. v. CBS, Inc. . 718 F. Supp. 1171, 1177 (S.D.N.Y. 1989) (rejecting plaintiff's claim that issues decided on a partial summary judgment motion were not fully and fairly litigated; "Issues decided upon a motion for summary judgment may be accorded the same preclusive effect as issues decided following a trial. . . . 'It would be strange indeed if a summary judgment could not have collateral estoppel effect. This would reduce the utility of this modern device to zero.'") (quoting Exhibitors Poster Exch. v. National Screen Serv. Corp., 421 F.2d 1313, 1319 (5th Cir. 1970), cert. denied, 400 U.S. 991, 91 S.Ct. 454 (1971)).
Pantoja is barred by principles of res judicata and collateral estoppel from pursuing his present Fair Housing Act claim against Kiska.
Weisman was not a party to the prior State court action at the time of Justice Schlessinger's decision granting Kiska summary judgment. (Dkt. No. 40: Dogan Aff. Ex. D: 9/13/96 Order of Justice Schlessinger granting leave to add Weisman as a defendant.)
II. PANTOJA'S FAIR HOUSING ACT CLAIM IS BARRED BY THE TWO-YEAR STATUTE OF LIMITATIONS
In addition to being barred by the doctrines of res judicata and collateral estoppel as against Kiska, Pantoja's Fair Housing Act claim is barred by the FHA's two-year statute of limitations as against both Kiska and Weisman.
The Fair Housing Act prohibits, inter alia, "discriminat[ion] against any person in the terms, conditions, or privileges of sale or rental of a dwelling . . . because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604; see also id. § 3605; Huntington Branch, N.A.A.C.P. v. Town of Huntington, 844 F.2d 926, 937 (2d Cir.) (discriminatory effect under the Fair Housing Act may be proven by showing either (1) "adverse impact on a particular minority group" or (2) "harm to the community generally by the perpetuation of segregation"), aff'd, 488 U.S. 15, 109 S.Ct. 276 (1988).
The FHA contains a two year statute of limitations for private actions:
An aggrieved person may commence a civil action in an appropriate United States district court or State court not later than 2 years after the occurrence or the termination of an alleged discriminatory housing practice, or the breach of a conciliation agreement entered into under this subchapter, whichever occurs last, to obtain appropriate relief with respect to such discriminatory housing practice or breach.42 U.S.C. § 3613(a)(1)(A) (emphasis added).
Kiska's refusal to provide secondary financing (which Pantoja claims was due to a discriminatory motive) "occurred or terminated," at the latest, on August 29, 1994, the date of the real estate closing, when Pantoja purchased the apartment without secondary financing from Kiska (instead using subsequently-dishonored checks for the balance due above the primary mortgage). Had Pantoja's checks not been dishonored, he would have owned the apartment on August 29, 1994, and could have sued Kiska for its alleged discriminatory refusal to provide secondary financing. Alternatively, if Pantoja had not closed on the apartment as scheduled on August 29, 1994 because of Kiska's alleged discriminatory refusal to provide secondary financing, then he could have sued Kiska for damages (and injunctive relief). Instead, because Pantoja illegally used self-help — he closed the gap in the purchase price with bad checks — Kiska took action after August 29, 1994 to rescind the sale and evict Pantoja from the apartment. But that did not extend the "occurrence or the termination" of the alleged discriminatory housing practice — the failure to provide Pantoja with secondary financing — which occurred no later than, and terminated on, August 29, 1994 when Kiska sold the condominium apartment to Pantoja without providing secondary financing. Thus, under the FHA's two-year statute of limitations, Pantoja had until August 29, 1996 to initiate his suit. It is undisputed that Pantoja commenced this suit on September 3, 1996 (see Compl. at p. 1 verification page), five days after the statute of limitations expired.
Pantoja argues that the he timely filed his claim under the "continuing violation" doctrine. (Dkt. No. 38: Pantoja Br. at 1-3.)
The Supreme Court has held "that where a plaintiff, pursuant to the Fair Housing Act, challenges not just one incident of conduct violative of the Act, but an unlawful practice that continues into the limitations period, the complaint is timely when it is filed within 180 days [amended to two years] of the last asserted occurrence of that practice." Havens Realty Corp., v. Coleman, 455 U.S. 363, 380-81, 102 S.Ct. 1114, 1124 (1982); see also, e.g., United States v. Yonkers Bd. of Educ., 992 F. Supp. 672, 676 (S.D.N.Y. 1998) ("In a situation of ongoing wrong, it is as if the continuing policy of discrimination or violation repeatedly triggers and retriggers the statute of limitations clock."); cases cited at pages 19-23 fn. 6 below.
In 1988, the FHA was amended, along with the applicable statute of limitations period, which was changed from 180 days to two years. Fair Housing Act Amendments of 1988, Pub.L. No. 100-430, 102 Stat. 1619. See Rivera v. Golden Nat'l Mortgage Banking, 00 Civ. 4368, 2001 WL 716908 at * 3 n. 4 (S.D.N.Y. June 26, 2001).
To successfully assert a continuing violation claim under the FHA, Pantoja would have to show that he is challenging "not just one incident of conduct violative of the Act, but an unlawful practice." Havens Realty Corp. v. Coleman, 455 U.S. at 381, 102 S.Ct. at 1124. In an attempt to create a "pattern or practice" of discrimination, Pantoja alleges that Kiska denied him secondary financing to purchase a condominium due to discriminatory motive on August 29, 1994, the date of the real estate closing, and then, on and after September 3, 1994, "conspired with defendant Weisman to illegally convert and plunder Plaintiff's mortgage proceeds." (Pantoja Br. at 2.) That act, if true, is separate and apart from
Pantoja's FHA discriminatory refusal to provide financing claim. While Pantoja repeatedly alleges that Kiska did not give him secondary financing because he is Puerto Rican (Am. Compl. ¶¶ 9, 23-25, 30), that alleged discriminatory act concluded with the closing on the apartment on August 29, 1994. Pantoja does not allege that Kiska thereafter denied secondary financing to him or to other Puerto Rican or Hispanic would-be purchasers. It is that type of allegation, absent here, that has allowed a "continuing violation" extension of the limitations period. Compare, e.g., Havens Realty Corp. v. Coleman, 455 U.S. at 381, 102 S.Ct. at 1125 (pattern or practice of discrimination found where plaintiffs' claims are based on "not solely on isolated incidents involving the two respondents, but a continuing violation manifested in a number of incidents — including at least one . . . that is asserted to have occurred within [the limitations] period"); Cornwell v. Robinson, 23 F.3d 694, 704 (2d Cir. 1994) (under federal law, "a continuing violation [of discrimination statutes] may be found where there is proof of specific ongoing discriminatory policies or practices, or where specific and related instances of discrimination are permitted . . . to continue unremedied for so long as to amount to a discriminatory policy or practice."); Eastern Paralyzed Veterans Ass'n v. Lazarus-Burman Assocs., 133 F. Supp.2d 203, 212 (E.D.N.Y. 2001) (ongoing policy of excluding people with wheelchairs from housing complex, due to the absence of ramps, sufficiently wide doors and hallways, accessible light switches and environmental controls constitutes an ongoing practice for statute of limitations purposes); Greenbaum v. Handelsbanken, 67 F. Supp.2d 228, 257 (S.D.N.Y. 1999) (Sotomayor, D.J.) (there was evidence of an ongoing discriminatory corporate practice violating Title VII, where plaintiff repeatedly applied for a promotion over a five-year period, but, due to discriminatory procedures, was consistently denied); United States v. Yonkers Bd. of Educ., 992 F. Supp. at 676 ("[T]here can be no doubt that the discriminatory activities in question were not discrete, individual acts in violation of [federal antidiscrimination statutes] but, rather, an unremitting failure on the part of the [defendant] to remedy the segregative condition in the Yonkers housing market.") with McIntosh v. United States, No. 96-5505, 97 F.3d 1464 (table), 1996 WL 534147 at *2 (10th Cir. Sept. 20, 1996) (continuing violation doctrine did not apply to the alleged exclusion of two African-American real estate appraisers from business opportunities because injury was "'definite and discoverable, and nothing prevented [plaintiffs] from coming forward to seek redress'") (quoting Tiberi v. Cigna Corp., 89 F.3d 1423, 1431 (10th Cir. 1996)); Link v. Village of Wadsworth, No. 95 C 7075, 1996 WL 197513 at *5 (N.D.Ill. Apr. 19, 1996) (no continuing violation where Village refused to grant plaintiff a zoning variance because alleged unjury was caused "by one identifiable act" rather than an "ongoing" series of acts; "Plaintiff's [continuing violation] theory would eliminate the statue of limitations . . .").
Even if true, this allegation would not state a claim under the FHA, much less help establish a pattern or practice that would permit Pantoja to sue on the August 29, 1994 denial of a loan.
Moreover, Pantoja does not sufficiently allege any specific facts supporting his allegations that a conspiracy against him existed' under the FHA or 42 U.S.C. § 1983 or § 1985(3). Pantoja alleges that "Defendant Weisman and Defendant Kiska conspired unlawfully to deprive Plaintiff the use of the primary financing funds" (Am. Compl. ¶ 34) and "then conspired to testify against Plaintiff and commit perjury at a grand jury proceeding investigating this transaction in order to convict Plaintiff illegally for stealing the subject premises in violation of his constitutional rights" (Compl. ¶ 35). "'A complaint containing only conclusory, vague, or general allegations of conspiracy to deprive a person of constitutional rights cannot withstand a motion to dismiss.'" Leon v. Murphy, 988 F.2d 303, 310 (2d Cir. 1993) (quoting Sommer v. Dixon, 709 F.2d 173, 175 (2d Cir. 1981), cert. denied, 464 U.S. 857, 104 S.Ct. 177 (1983)); Posr v. Court Officer Shield # 207, 180 F.3d 409, 491 (2d Cir. 1999) (affirming dismissal of conspiracy claim because "[t]he mere assertion of racial motivation . . . is not sufficient to state a conspiracy claim"); Zemsky v. City of New York, 821 F.2d 148, 150 (2d Cir.), cert. denied, 484 U.S. 965, 108 S.Ct. 456 (1987).
In addition, to the extent that Pantoja bases his claim of a conspiracy on allegations that Kiska and Weisman falsified papers and committed perjury in the state action against him (Am. Compl. ¶¶ 33, 35), any such claims are barred by the Rooker-Feldman doctrine. See, e.g., Drew v. Chase Manhattan Bank, N.A., 95 Civ. 3133, 1998 WL 430549 at * 6 (S.D.N.Y. July 30, 1998) (rejecting plaintiff's § 1983 claims that defendants made false representations in court papers as "'merely a thinly-veiled effort to invalidate [a] State Court foreclosure judgment, in contravention of Rooker-Feldman'"); see generally Holmes v. State of New York Office of Court Admin., 00 Civ. 7871, 2001 WL 5035 at * 1-2 n. 2 (S.D.N.Y. Jan. 2, 2001) (Peck, M.J.) (general discussion of Rooker-Feldman doctrine) (citing cases).
See also, e.g., Spann v. Colonial Village, Inc., 899 F.2d 24, 35 (D.C. Cir.) (a series of real estate advertisements placed by defendants featuring white models to the exclusion of black models from 1985 through 1986 presented a continuing violation of the Fair Housing Act), cert. denied, 498 U.S. 980, 1046, 111 S.Ct. 508-09, 751 (1990); Inland Mediation Bd. v. City of Pomona, 158 F. Supp.2d 1120, 1146-48 (C.D.Cal. 2001) (continuing violation doctrine found to apply where alleged Fair Housing Act violations consisted of discrimination against African-Americans in rental housing, "racial steering" of testers who spoke to management regarding rentals, and statements at landlord meetings and in letters with respect to excluding African-Americans from apartment complex); Hargraves v. Capital City Mortgage Corp., 140 F. Supp.2d 7, 18-19 (D.D.C. 2000) (continuing violation doctrine applied to toll the statute of limitations where mortgage company consistently employed discriminatory loan practices, interest rates and fees, "churned" loans and engaged in "predatory" lending with respect to several different plaintiffs); Dews v. Town of Sunnyvale, 109 F. Supp.2d 526, 563 (N.D.Tex. 2000) (approximately 50 years of planning and zoning regulations geographically limiting multifamily and affordable single family housing constituted continuing violation); Honorable v. Easy Life Real Estate Sys., Inc., 182 F.R.D. 553, 563-64 (N.D.Ill. 1998) (ongoing practice of maintaining a "dual housing market" arrangement of selling homes at different prices based on race constituted a continuing violation); Simovits v. Chanticleer Condominium Ass'n, 933 F. Supp. 1394, 1404 (N.D.Ill. 1996) (restrictive covenant prohibiting children from living in housing complex constituted "discriminatory practice" and "last asserted occurrence" of discrimination was when Condominium Association enforced the covenant against the plaintiffs); Ragin v. Gilbert Charles Beylen, Inc., 89 Civ. 8558, 1990 WL 4008 at * 1-3 (S.D.N Y Jan. 17, 1990) (continuing violation present where defendant, a marketing agency, advertised property for several years by depicting "none or very few" black models and failed to display Equal Housing Opportunity Logo on its advertisements).
As these cases demonstrate, "[t]he continuing violations theory should be applied where the type of violation is 'one that could not reasonably have been expected to be made the subject of a lawsuit when it first occurred because its character as a violation did not become clear until it was repeated during the limitations period.'" Hargraves v. Capital City Mortgage Corp., 140 F. Supp.2d at 18 (quoting Taylor v. FDIC, 132 F.3d 753, 765 (D.C. Cir. 1997)); see also Petrosky v. New York State Dep't of Motor Vehicles, 72 F. Supp.2d 39, 47-53 (N.D.N.Y. 1999) (in a Title VII sex discrimination case, finding that "the continuing violation doctrine does not apply" because plaintiff "'knew from the beginning that [s]he was being sexually harassed,'" and noting that "[t]he continuing violation doctrine is disfavored in this circuit . . . . [and] is applicable only under the most 'compelling circumstances'") (collecting cases). Pantoja's complaint does not allege that he did not know Kiska was discriminating in secondary financing until some later date after the closing on his apartment on August 29, 1994; to the contrary, Pantoja's complaint alleges that Kiska told him before the closing that it would not give him secondary financing because Kiska did not like his kind. (Am. Compl. ¶ 29.) Pantoja's complaint does not allege facts to bring him within the continuing violation theory.
Because Pantoja did not establish a continuing pattern or practice of discrimination, he had two years after the last occurrence of discrimination to file suit. The alleged denial of secondary financing, on which Pantoja's FHA claim is based, occurred at the latest, and terminated, on August 29, 1994, the date of the real estate closing when Pantoja was required to pay the purchase price with alternate financing because Kiska did not provide secondary financing. Pantoja did not commence this suit until September 3, 1996, five days after expiration of the limitations period, and he is therefore barred by the FHA's two-year statute of limitations from bringing his FHA claim against Kiska or Weisman.
CONCLUSION
For the reasons set forth above, the motion to dismiss of defendants Kiska and Weisman is granted. The Clerk of the Court shall enter judgment dismissing plaintiff Pantoja's complaint.
SO ORDERED.