Doc #31658119.WPD UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x AMUSEMENT INDUSTRY, INC., dba WESTLAND INDUSTRIES; PRACTICAL FINANCE CO., INC., Plaintiffs, - against - MOSES STERN, aka MARK STERN; JOSHUA SAFRIN, FIRST REPUBLIC GROUP REALTY LLC, EPHRAIM FRENKEL, LAND TITLE ASSOCIATES ESCROW, Defendants. : : : : : : : : : : : : No. 07 Civ. 11586 (LAK) (GWG) (ECF) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x JOSHUA SAFRIN, Defendant/Third Party-Crossclaim- Counterclaim-Plaintiff, - against - STEPHEN FRIEDMAN, STEVEN ALEVY, BUCHANAN INGERSOLL & ROONEY, P.C., BANKERS CAPITAL REALTY ADVISORS LLC, and FIRST REPUBLIC GROUP CORP., Third Party Defendants, - and - MOSES STERN, aka MARK STERN, FIRST REPUBLIC GROUP REALTY LLC, EPHRAIM FRENKEL, and LAND TITLE ASSOCIATES ESCROW, Defendants/Crossclaim Defendants, - and - AMUSEMENT INDUSTRY, INC., dba WESTLAND INDUSTRIES, PRACTICAL FINANCE CO., INC. Plaintiffs/Counterclaim Defendants. : : : : : : : : : : : : : : : : : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT STERN AND FIRST REPUBLIC’S MOTION TO DISMISS THE CLAIMS ASSERTED AGAINST THEM IN SAFRIN’S AMENDED THIRD PARTY COMPLAINT Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 1 of 11 Doc #31658119.WPD Defendants and putative third-party defendants Mark Stern (“Stern”) and First Republic Realty Group LLC (“First Republic”) submit this memorandum of law in support of their motion, pursuant to Fed. R. Civ. P. 14(a) and 12(b)(6), to strike or dismiss the claims asserted against them in the amended third-party complaint (attached hereto as Exhibit A) filed by defendant and third-party plaintiff Joshua Safrin (“Safrin”) because: (i) a defendant cannot assert claims against a party in a third-party action where the defendant is already a defendant in the primary action under Fed. R. Civ. P. 14(a); and (ii), alternatively, Counts I, and V-VIII against Stern and First Republic fail to state claims upon which relief can be granted. PROCEDURAL HISTORY On December 27, 2007, plaintiffs Amusement Industry, Inc, dba Westland Industries (“Amusement”) and Practical Finance Co., Inc. (“Practical Finance”) filed a complaint (the “Complaint”) asserting claims against defendants Safrin, Stern, First Republic, Ephraim Frenkel (“Frenkel”) and Land Title Associates Escrow (“Land Title”). On February 27, 2008, all defendants moved to dismiss the claims against them in their entirety. Those motions are sub judice. On February 28, 2008, the Court held a pre-trial conference with all parties and entered a scheduling order (the “Scheduling Order”) which provided, inter alia, that additional parties be joined by May 1, 2008. On May 1, 2008, Safrin filed a third-party complaint in which he asserted purported cross-claims against defendants Stern, First Republic, Frenkel and Land Title, purported counterclaims against plaintiffs Amusement and Practical Finance and third-party claims against nonparties Stephen Friedman, Steven Alevy, Buchanan Ingersoll & Rooney P.C., Bankers Capital Realty Advisors LLC and First Republic Group Corp. The claims asserted Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 2 of 11 2Doc #31658119.WPD against Stern and First Republic include claims for contribution and indemnification (Count 1) and claims for violations of Sections 50 and 51 of the New York Civil Rights statute and of the California common law right of privacy/commercial misappropriation (Counts V-VIII). On May 29, 2008, Safrin filed an amended third party complaint (cited herein as “ATPC __”), which asserts the same claims for relief against the third-party defendants named in the original third-party complaint. ARGUMENT I. SAFRIN’S ASSERTION OF CLAIMS AGAINST STERN AND FIRST REPUBLIC IN A THIRD PARTY COMPLAINT IS NOT PERMITTED UNDER RULE 14(a) OF THE FEDERAL RULES OF CIVIL PROCEDURE AND THOSE CLAIMS SHOULD BE DISMISSED Safrin’s assertion of new claims against Stern and First Republic in its amended third-party complaint is a clear violation of the Federal Rules of Civil Procedure. Third party practice under the Federal Rules is governed by Rule 14(a), which provides in relevant part: A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or who may be liable to it for all or part of the claim against it. Fed. R. Civ. P. 14(a). That rule makes it absolutely clear that a defendant in the primary action may only bring a third-party complaint against nonparties; he cannot bring a claim against parties who are already defendants to the original litigation. See, e.g., Mauney v. Boyle, 865 F. Supp. 142, 153 (S.D.N.Y. 1994) (“[U]nder Rule 14(a) a third-party action may not be brought against a third-party defendant that is already a party to the action.”). The case law makes clear that the appropriate remedy for violation of Rule 14(a) is dismissal of the improperly brought claims. See, e.g., Henz v. Superior Trucking Co., 96 F.R.D. 219, 220 (M.D. Pa. 1982) (impleader by defendant against plaintiff improper); Atl. Nat’l Bank of Jacksonville v. First Nat’l Bank, 7 F.R.D. 573 (M.D. Pa. 1947) (striking fourth-party Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 3 of 11 1 Safrin’s characterization of Stern and First Republic in its third-party complaint as “crossclaim defendants” is, in and of itself, a recognition on Safrin’s part that its claims are cross-claims and not third-party claims. Accordingly, those claims should be asserted if, at all, in Safrin’s answer and not in a third-party complaint. 3Doc #31658119.WPD complaint brought by third-party defendant against original plaintiff noting that Rule 14(a) only permits the joinder of additional parties not already a party to the action); Horton v. Cont’l Can Co., 19 F.R.D. 429, 432 (D. Neb. 1956) (denying defendant’s motion to bring a third-party action against a party already a defendant to the primary action). Commentators examining Rule 14(a) have reached the same conclusion. See 3 Moore’s Federal Practice § 14.09 (3d ed. 2008) at 14-45. (“The impleader rule expressly provides for the joinder of a ‘nonparty.’ On its face then, the rule precludes impleader of one who is already a party to the litigation. In fact, the proper procedural devices for asserting claims against those who are already parties are counterclaims (which are asserted against an opposing party) and crossclaims (which are asserted against a ‘coparty’).”); See also Steven Baicker- McKee, Federal Civil Rules Handbook 440-441 (West 2008). In explaining the application of Rule 14(a), the authors of the handbook state that “Rule 14 permits parties who are defending against claims to join other persons, not yet parties, who may be obligated to reimburse the party defending the claim for some or all of that party’s liability,” id. at 440, and that “[o]nly persons not already parties may be impleaded,” id. at 441. Thus, under the plain application of Rule 14(a) and applicable caselaw, Safrin cannot assert claims in a third-party complaint against Stern and First Republic because Stern and First Republic are already defendants to the primary action.1 Accordingly, this Court should dismiss all claims asserted against Stern and First Republic in Safrin’s amended Third Party Complaint. Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 4 of 11 2 Stern and First Republic move to dismiss all claims asserted against them in the Amended Third Party Complaint, other than the declaratory judgment claim (Count II). 3 The pleading standard announced by the Supreme Court in Bell Atl. is not limited to the antitrust context in which that case arose. Indeed, the Second Circuit has “declined to read Twombly’s . . . ‘plausibility standard’ as relating only to antitrust cases.” See ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 n.2 (2d Cir. 2007). 4Doc #31658119.WPD II. THE CLAIMS ASSERTED AGAINST STERN AND FIRST REPUBLIC IN THE AMENDED THIRD PARTY COMPLAINT SHOULD BE DISMISSED Even if Safrin could assert claims against Stern and First Republic in his amended third-party complaint (which he cannot for the reasons demonstrated in Point I), none of those claims state causes of action and all of the claims should be dismissed.2 A. The Indemnification and Contribution Claim Against Stern and First Republic Should Be Dismissed The first count, asserted against all “Defendants” - i.e., each of the defendants in the amended third-party complaint - asserts that Safrin is innocent of any wrongdoing or fault and to the extent he “is found liable to Plaintiffs for the wrongful conduct alleged in the Complaint” (referring to plaintiffs’ claims against Safrin in the primary action), that “Safrin is entitled to indemnity and/or contribution from one or more of the Defendants.” (ATPC ¶ 69.) This conclusory assertion is insufficient to state a claim against either Stern or First Republic. In order to defeat this motion to dismiss, Safrin must meet the pleading standard of “plausibility” announced by the Supreme Court in Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007) - that is, the complaint must “amplify a claim with some factual allegations to render the claim plausible.”3 See Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007). In complying with this “plausibility” standard, the complaint must provide “the grounds upon which [the plaintiff’s] claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative level.’” ATSI, 493 F.3d at 98 (quoting Bell Atl., 127 S. Ct. at 1965). The complaint cannot rely Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 5 of 11 5Doc #31658119.WPD on mere “labels and conclusions.” Bell Atl., 127 S. Ct. at 1965. Nowhere in his amended third-party complaint does Safrin provide any factual allegations to support a plausible claim for indemnification or contribution or raise his right to relief above the speculative level. Safrin does not sufficiently plead the factual basis for either claim, i.e, he does not sufficiently allege whether he had a contractual or common law right of indemnity from either Stern or First Republic and what the factual basis of that claim would be and he does not sufficiently allege the factual basis for a contribution claim against either Stern or First Republic. Accordingly, the indemnification/contribution claim against Stern and First Republic fails. See Bell Atl., 127 S. Ct. at 1965; ATSI Commc’ns, 493 F.3d at 98; See also, e.g., Corley v. Country Squire Apartments, Inc., 32 A.D.3d 978, 979, 820 N.Y.S.2d 900 (2d Dep’t 2006) (“Country Squire failed to sufficiently plead the elements of common-law indemnification as its cross claim did not allege that the plaintiff's injury was due solely to the appellant's negligent performance or nonperformance of an act solely within its province.”). B. The Civil Rights Law Claims (Counts V and VII) Should Be Dismissed Against Stern and First Republic Section 50 of the Civil Rights Law plainly does not apply to Safrin's claims against either Stern or First Republic. Section 50 of the Civil Rights Law is a criminal statute which does not provide for a civil remedy: A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, . . . is guilty of a misdemeanor. N.Y. Civ. R. § 50. Section 51 provides in pertinent part: Any person whose name, portrait, picture or voice is used within this state for advertising purposes or for the purposes of trade Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 6 of 11 6Doc #31658119.WPD without the written consent first obtained as above provided may maintain an equitable action in the supreme court of this state against the person, firm or corporation so using his name, portrait, picture or voice, to prevent and restrain the use thereof; and may also sue and recover damages for any injuries sustained by reason of such use and if the defendant shall have knowingly used such person’s name, portrait, picture or voice in such manner as is forbidden or declared to be unlawful by section fifty of this article, the jury, in its discretion, may award exemplary damages. N.Y. Civ. R. § 51. The New York State Civil Rights Law statutes do not apply, and were not intended to apply to Safrin’s claims that his name was allegedly forged on business documents. Sections 50 and 51 of the Civil Rights Law are found in “Article 5 - Right of Privacy” in the New York Civil Rights Law. “[I]n this state, there is no common-law right of privacy and the only available remedy is that created by Civil Rights Law §§ 50 and 51.” Freihofer v. Hearst Corp., 65 N.Y.2d 135, 140, 490 N.Y.S.2d 735 (1985). The statute “created a limited right of privacy, which had not existed prior to [its] enactment” and hence the New York State Court of Appeals has taken “cognizance of the limited scope of the statute as granting protection only to the extent of affording a remedy for commercial exploitation of an individual’s name, portrait or picture, without written consent.” Id. Further, the New York State Court of Appeals has underscored that the statute is to be narrowly construed and “‘strictly limited to nonconsensual commercial appropriations of the name, portrait or picture of a living person.’” Messenger v. Gruner + Jahr Printing & Publ’g, 94 N.Y.2d 436, 441, 706 N.Y.S.2d 52 (2000) (quoting Finger v. Omni Publ’ns Intl., Ltd., 77 N.Y.2d 138, 141 (1990)). Narrow construction of the statute, in accordance with the statute’s purpose, warrants dismissal of the Civil Rights Law claims. Indeed, “[t]he primary purpose of this legislation was to protect the sentiments, thoughts and feelings of an individual.” Flores v. Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 7 of 11 4 Furthermore, Counts V and VII should be dismissed for the additional reason that Safrin indiscriminately claims that “defendants” violated his rights under New York Civil Rights Law, §§ 50 and 51 without ascribing any particular conduct to either Stern or First Republic. 5 Indeed, Safrin expressly incorporated by reference this argument in support of the his motion to dismiss the twenty-fifth claim in the Complaint for conspiracy to commit conversion and fraud. See Memorandum of Law in Support of Defendant Joshua Safrin’s Motion to Dismiss the Complaint, Docket No. 33 at 34 (entered Feb. 28, 2008). 7Doc #31658119.WPD Mosler Safe Co., 7 N.Y.2d 276, 280, 196 N.Y.S.2d 975 (1959). See generally, Meeropol v. Nizer, 381 F. Supp. 29, 39 n.6 (S.D.N.Y. 1974) (“Generally, the law of defamation protects an individual from harm to relational interests, while the right of privacy has developed to compensate an individual for the injury to his feelings, to prevent inaccurate portrayal of private life, and, in some instances, to prevent one’s private life from being depicted at all.”), aff’d on other grounds, 560 F.2d 1061 (2d Cir. 1977). Safrin does not claim his “sentiments, thoughts and feelings” were hurt by the alleged conduct, nor do the facts he alleges fall within the scope of a Civil Rights Law privacy claim. Thus, the circumstances alleged by Safrin - the alleged forgery of his signature on business documents - fail to state a claim under New York Civil Rights Law, § 51, and the claims should therefore be dismissed.4 Furthermore, Count VII, asserting a conspiracy to violate the Right of Privacy statutes cited in Count V, should be dismissed for an additional, independent ground. “‘New York does not recognize civil conspiracy to commit a tort as an independent cause of action.’” Salvatore v. Kumar, 45 A.D.3d 560, 563, 845 N.Y.S.2d 384 (2d Dep’t 2007) (quoting Pappas v. Passias, 271 A.D.2d 420, 421 (2d Dep’t 2000)); see also Alexander & Alexander, Inc. v. Fritzen, 68 N.Y.2d 968, 969, 510 N.Y.S.2d 546 (1986); 85 Fifth Ave. 4th Floor, LLC v. I.A. Selig, LLC, 45 A.D.3d 349, 350, 845 N.Y.S.2d 274 (1st Dep’t 2007).5 This basic principle of law fully applies here. Accordingly, for the foregoing reasons, Counts V and VII should be dismissed. Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 8 of 11 8Doc #31658119.WPD C. The California Common Law Right of Privacy/Commercial Misappropriation Claims (Counts VI AND VIII) Should Be Dismissed Against Stern and First Republic Counts VI and VIII allege, respectively, that “defendants” violated Safrin's California common law right of privacy/commercial misappropriation and conspired to violate his California common law right of privacy. Once again, as with all his claims, Safrin simply does not - because he cannot - ascribe any particular wrongful conduct to either Stern or First Republic, resorting, instead, to wholesale and misplaced references to “Defendants.” Aside from the foregoing fundamental defect in his pleading, Safrin can hardly claim rights under California law. Safrin alleges he is a citizen and resident of the State of New York. (See ATPC ¶ 4.) Safrin further alleges, upon information and belief, that First Republic is a Delaware limited liability company with its principal place of business in the State of New York, (ATPC ¶ 14), and that Mark Stern is a citizen of the State of New York, (ATPC ¶ 12.) Thus, the amended Third Party Complaint does not allege that either Safrin, Stern or First Republic had any contacts with the State of California and Safrin cannot claim a violation of his supposed California common law rights which presumably apply to California citizens. CONCLUSION For all of the foregoing reasons, Safrin’s amended third party complaint against Stern and First Republic should be dismissed. Dated: June 9, 2008 New York, New York By: /s/ Michael A. Lynn Arthur Brown (AB-0627) Michael Lynn (ML-6052) Efrem Schwalb (ES-5288) KAYE SCHOLER LLP 425 Park Avenue New York, New York 10022 Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 9 of 11 9Doc #31658119.WPD Tel: (212) 836-8000 Fax: (212) 836-8689 Email: mlynn@kayescholer.com Stephen R. Stern (SS-5665) HOFFINGER STERN & ROSS LLP 150 East 58th Street New York, New York 10155 Tel: (212) 421-4000 Fax: (212) 750-1259 Email: srstern@hsrlaw.com Attorneys for Mark Stern and First Republic Group Realty LLC To: FLEMMING ZULACK WILLIAMSON ZAUDERER LLP Jonathan D. Lupkin (JL-0792) Jean Marie Hackett (JH-1784) One Liberty Plaza New York, New York 10006 Tel: (212) 412-9500 Fax: (212) 964-9200 Email: jlupkin@fzwz.com Attorneys for Defendant-Third Party Plaintiff Joshua Safrin SILLS CUMMIS & GROSS, P.C. Philip R. White Marc D. Youngelson One Rockefeller Plaza New York, New York 10020 Tel: (212) 643-7000 Fax: (212) 643-5000 Email: myoungelson@sillscummis.com SRAGOW & SRAGOW Allen P. Sragow 6665 Long Beach Blvd, Suite B-22 Long Beach, California 90805 (310) 639-0782 Attorneys for Plaintiffs/Counterclaim Defendants Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 10 of 11 10Doc #31658119.WPD KAVANAGH MALONEY & OSNATO LLP James J. Maloney David F. Bayne Steven M. Cordero Meredith D. Balkin 415 Madison Avenue New York, New York 10017 Attorneys for Third Party Defendants Buchanan Ingersoll & Rooney P.P. and Steven Friedman Case 1:07-cv-11586-LAK-GWG Document 119 Filed 06/09/2008 Page 11 of 11 EXHIBIT A Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 1 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 2 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 3 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 4 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 5 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 6 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 7 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 8 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 9 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 10 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 11 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 12 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 13 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 14 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 15 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 16 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 17 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 18 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 19 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 20 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 21 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 22 of 23 Case 1:07-cv-11586-LAK-GWG Document 119-2 Filed 06/09/2008 Page 23 of 23
