Opinion
1:23-cv-10724 (GHW) (SDA)
03-07-2024
Riaz Ahmed Shad, et al., Plaintiffs, v. Zachter PLLC, et al., Defendants.
TO THE HONORABLE GREGORY H. WOODS, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
STEWART D. AARON United States Magistrate Judge
Pending before the Court is a motion by Defendants Zachter PLLC (the “Zachter Firm”) and Jeffrey Steven Zachter (“Zachter,” and together with the Zachter Firm, the “Zachter Defendants”), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the First Amended Complaint (“FAC”) of Plaintiffs Riaz Ahmed Shad (“Shad”) and Monroe Place Association (“MPA,” and together with Shad, the “Plaintiffs”) for failure to state a claim. (Zachter Defs.' Not. of Mot., ECF No. 11.) For the reasons set forth below, I respectfully recommend that the Zachter Defendants' motion be GRANTED.
For purposes of the pending motion to dismiss, the Court accepts Plaintiffs' allegations as true and draws all reasonable inferences in their favor. See City of Providence v. BATS Glob. Mkts., Inc., 878 F.3d 36, 50 (2d Cir. 2017).
The Zachter Firm is a law firm with an office at 30 Wall Street, New York, New York, that is engaged in the business of collecting debts. (FAC, ECF No. 1-2, ¶ 3.) Zachter is an attorney and a partner at the Zachter Firm. (Id. ¶ 4.) Defendant RPG Ocean Holdings, LLC d/b/a Ocean Lending Group (“RPG”) is a merchant cash advance company engaged in the business of lending that was a client of the Zachter Firm. (See id. ¶¶ 7, 9.)
On February 27, 2020, the Zachter Defendants filed a lawsuit on behalf of RPG against Shad, who was a resident of Minnesota, in the Civil Court of the City of New York entitled, RPG Ocean Holdings, LLC d/b/a Ocean Lending Group v. Riaz Ahmed Shad (CV-004329-20/NY) (the “Underlying Action”). (FAC ¶¶ 1, 9.) The Complaint in the Underlying Action (the “UAC”) alleged that, on or about September 10, 2019, RPG and Shad had entered into an agreement (the “Agreement”) whereby RPG agreed to purchase all rights to future receivables of 2322 Logan, LLC (“Logan”) having an agreed upon value of $35,000.00. (UAC ¶ 3.) The UAC further alleged that Shad agreed to guarantee any and all amounts owed to RPG by Logan upon a breach in performance by Logan. (Id. ¶ 5.) According to the UAC, RPG remitted the purchase price for the future receivables to Logan, but Logan failed to meet all its obligations under the Agreement, causing damages to RPG in the amount of $9,750.00, plus interest, costs, disbursements and attorney's fees. (Id. ¶¶ 6-11.)
The UAC, which is annexed as Exhibit B to the FAC in this action, is filed at PDF pages 31 through 35 of ECF No. 12-1.
The FAC in this action alleges that RPG, Zachter and the Zachter Firm “engaged in sewer service”and never served the Summons and Complaint upon Shad in the Underlying Action. (FAC ¶ 12.) The FAC asserts that a fraudulent affidavit of service (the “Affidavit of Service”) was filed in the Underlying Action, which states that service was effected upon Shad at the address 4661 Moore St. NE, Minneapolis, Minnesota 55421, on March 6, 2020, March 9, 2020, March 11, 2020 and March 12, 2020. (Id. ¶¶ 13-14.) Thereafter, a default judgment was entered against Shad in the Underlying Action on November 9, 2021. (Id. ¶ 15.)
“Sewer service” is “the practice of failing to serve a summons and complaint and then filing a fraudulent affidavit attesting to service.” Guzman v. Mel S. Harris & Assocs., LLC, No. 16-CV-03499 (GBD), 2018 WL 1665252, at *1 (S.D.N.Y. Mar. 22, 2018) (citation omitted). The term “originated from a practice by which process servers would symbolically throw legal documents into the sewer, rather than delivering them to the intended recipient.” A. Gottshall, Solving Sewer Service: Fighting Fraud with Technology, 70 Ark. L. Rev. 813, 818 (2018).
A copy of what Plaintiffs refer to as the “fraudulent Affidavit of Service,” signed by Mike Sornberger (“Sornberger”), is filed at PDF page 36 at ECF No. 12-1. Between March 6, 2020 and March 12, 2020, the alleged dates of service, Shad actually resided at 4683 Monroe St NE, Hilltop, Minnesota 55421. (FAC ¶ 39.) Shad never resided at 4661 Moore St. NE, Minneapolis, Minnesota 55421, the alleged address of service. (Id. ¶ 40.) In fact, according to Plaintiffs, the address of 4661 Moore St NE, Minneapolis, Minnesota 55421 does not exist. (Id. ¶ 41.)
Plaintiff MPA is a non-profit homeowners' board association located in Minnesota, of which Shad is President. (FAC ¶¶ 2, 16-17.) MPA maintained a bank account at Wells Fargo Bank, NA (“Wells Fargo”) under the names of Shad, Zeena Dawson (MPA's Treasurer) and John Straight (MPA's Secretary). (Id. ¶¶ 18-19.) In June 2022, a “Restraining Notice to Garnishee and Information Subpoena” (the “Restraining Notice”) was served by the Zachter Firm upon Wells Fargo based upon the default judgment entered against Shad in the Underlying Action, and Wells Fargo froze MPA's bank account, which held the sum of $21,260.90. (Id. ¶¶ 21-23.) However, none of the funds in MPA's bank account were the property of Shad. (Id. ¶¶ 24-25.)
The Restraining Notice contained a caption inaccurately stating that the Underlying Action was pending in the Supreme Court of the State of New York, even though the Underlying Action was pending in the Civil Court. (FAC ¶¶ 49-50.) A copy of the Restraining Notice is filed at PDF pages 38 to 40 of ECF No. 121.
Between June and August 2022, RPG obtained a check, in the amount of $11,884.14, from New York City Marshal Biegel's Office, which presumably represented funds from MPA's Wells Fargo account. (See FAC ¶ 61.) On or about August 23, 2022, the Zachter Firm filed a satisfaction of judgment in the Underlying Action. (Id. ¶ 60.)
A copy of the satisfaction of judgment is filed at PDF page 218 of ECF No. 12-1. Wells Fargo did not return the remaining restrained funds, in the amount of $9,376.66, to MPA until May 2023. (FAC ¶¶ 62, 69.)
In November 2022, Shad filed an Order to Show Cause in the Underlying Action seeking to vacate the default judgment. (FAC ¶ 56.) On January 6, 2023, the Zachter Defendants and RPG filed opposition papers in the Underlying Action. (Id. ¶ 57.) On May 1, 2023, Judge Aija Tingling entered a Decision and Order finding that Shad potentially had demonstrated a reasonable excuse for his default in the Underlying Action and scheduled a traverse hearing for June 13, 2023.(Id. ¶¶ 63-66, 70.) The traverse hearing thereafter was adjourned until August 16, 2023. (Id. ¶ 72.)
A copy of Judge Tingling's May 1, 2023 Decision and Order is filed at PDF pages 227 to 229 of ECF No. 121. A “traverse hearing” is “a hearing held to determine if proper service has been effected.” Ramchandani v. CitiBank Nat'l Assoc., 616 F.Supp.3d 353, 357 n.4 (S.D.N.Y. 2022) (citation omitted).
On August 16, 2023, after Judge Tingling was advised that RPG's process server was unable to attend the traverse hearing, Judge Tingling entered a Decision and Order granting Shad's order to show cause to vacate the default judgment and dismissed the UAC. (FAC ¶¶ 7376.) However, RPG, Zachter and the Zachter Firm failed to return the wrongfully seized funds, in the amount of $11,884.14, to MPA. (Id. ¶¶ 77-80.)
A copy of Judge Tingling's August 16, 2023 Decision and Order is filed at PDF pages 232 to 233 of ECF No. 12-1.
PROCEDURAL HISTORY
On or about June 12, 2023, Plaintiffs filed a Complaint in the Supreme Court of the State of New York, New York County, against the Zachter Firm, Zachter, Sornberger and Platinum Courier (a process serving company that employed Sornberger). (Compl., ECF No. 1-1.) The Complaint alleged a claim against the Zachter Defendants under Section 349 of the New York General Business Law (First Cause of Action); a claim against the Zachter Defendants for conversion (Second Cause of Action); a claim against the Zachter Defendants, Sornberger and Platinum Courier for negligence (Third Cause of Action); and a claim against the Zachter Defendants, Sornberger and Platinum Courier for fraud (Fourth Cause of Action). (Id. ¶¶ 65-114.)
On or about August 28, 2023, the Zachter Defendants filed in state court a motion to dismiss the Complaint. (Not. of Removal, ECF No. 1, ¶ 3.) On October 5, 2023, Plaintiffs filed their FAC in state court, adding RPG as a defendant, dropping their claim under the New York General Business Law and adding other claims. (See FAC ¶¶ 7, 89-168.) On or about November 11, 2023, the Minnesota-based defendants, i.e., Sornberger and Platinum Courier Service, filed in state court a motion to dismiss the Complaint. (Not. of Removal ¶ 6.) On or about December 5, 2023, Plaintiffs filed in state court a stipulation of discontinuance with prejudice as to Sornberger and Platinum Courier. (Id. ¶¶ 6-7.)
On December 8, 2023, the Zachter Defendants timely removed the action to this Court on the basis of diversity of citizenship. (See Not. of Removal ¶ 8.) The FAC filed in state court, which is the operative pleading, contains the following claims against the Zachter Defendants: fraud (First Cause of Action); conversion (Second Cause of Action); Section 487 of the New York Judiciary Law (Third Cause of Action); negligence (Fourth Cause of Action); intentional infliction of emotional distress (Fifth Cause of Action); civil conspiracy (Sixth Cause of Action); and unjust enrichment (Seventh Cause of Action). (FAC ¶¶ 89-168.)
RPG had not been served as of the date of removal; thus, upon Plaintiffs' discontinuance of the action as to Sornberger and Platinum Services, there was complete diversity between all plaintiffs (i.e., Minnesota citizens) and all defendants who had been served and joined in the state court action (i.e., the Zachter Defendants, who are New Jersey citizens), making removal available pursuant to 28 U.S.C. § 1441(b)(2). (See Not. of Removal ¶¶ 14-16 (providing that the Zachter Firm is a PLLC, with a singlemember, Zachter, who is domiciled in New Jersey); see also Defs.' 2/16/24 Ltr., ECF No. 17, at 2 (responding to Order to Show Cause and confirming that the Zachter Defendants are citizens of New Jersey).)
On January 5, 2024, the Zachter Defendants filed the motion to dismiss that currently is before the Court, seeking to dismiss all the claims against them in the FAC. (See Zachter Defs.' Not. of Mot.) On January 26, 2024, Plaintiffs filed their opposition memorandum. (Pls.' Opp'n Mem., ECF No. 14.) On February 9, 2024, the Zachter Defendants filed their reply memorandum. (Zachter Defs.' Reply, ECF No. 16.)
LEGAL STANDARDS FOR MOTION TO DISMISS
A defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss under Rule 12(b)(6), “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)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
In deciding a motion to dismiss, the Court “must accept as true all of the factual allegations contained in a complaint[,]” but “[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 (citation omitted). This “tenet . . . is inapplicable to legal conclusions.” Id. Although Rule 8 “does not require ‘detailed factual allegations,' . . . it demands more than an unadorned, the-defendant- unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679 (citation omitted). “[T]he court's task is to assess the legal feasibility of the complaint; it is not to assess the weight of the evidence that might be offered on either side[.]” Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir. 2020).
DISCUSSION
The Zachter Defendants move to dismiss each of the claims against them, which are considered in turn below.
I. Fraud (First Cause Of Action)
A. Legal Standards
Under New York law, there are five elements of a fraud claim: “(1) a material misrepresentation or omission of fact, (2) made with knowledge of its falsity, (3) with an intent to defraud, (4) reasonable reliance on the part of the plaintiff, and (5) that causes damage to the plaintiff.” Schlaifer Nance & Co. v. Est. of Warhol, 119 F.3d 91, 98 (2d Cir. 1997). In addition, “[w]here fraud is alleged against multiple defendants, a plaintiff must plead with particularity by setting forth separately the acts complained of by each defendant.” Sofi Classic S.A. de C.V. v. Hurowitz, 444 F.Supp.2d 231, 248 (S.D.N.Y. 2006). And fraud claims generally are subject to Federal Rule of Civil Procedure 9(b)'s particularity requirement, under which “the plaintiff must ‘(1) detail the statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) state where and when the statements (or omissions) were made, and (4) explain why the statements (or omissions) are fraudulent.'” Olson v. Major League Baseball, 29 F.4th 59, 71 (2d Cir. 2022) (quoting Eternity Glob. Master Fund Ltd. v. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004)). “Rule 9(b) permits a plaintiff to allege scienter generally, but the Second Circuit has ‘repeatedly required plaintiffs to plead the factual basis which gives rise to a strong inference of fraudulent intent.'” Vasquez v. Walmart, Inc., No. 22-CV-06215 (JPO), 2023 WL 8257999, at *5 (S.D.N.Y. Nov. 29, 2023) (quoting U.S. ex rel. Tessler v. City of New York, 712 Fed.Appx. 27, 29 (2d Cir. 2017) (citation omitted)).
The Court applies the law of the State of New York, where the Underlying Action was pending and where the Zachter Defendants' office is located, since both sides rely upon New York law in their submissions to the Court. See Golden Pac. Bancorp v. F.D.I.C., 273 F.3d 509, 514 n.4 (2d Cir. 2001) (where parties' briefs assume New York substantive law governs “such implied consent is, of course, sufficient to establish the applicable choice of law”).
B. Application
The Court finds that Plaintiffs insufficiently pled their fraud claim in the FAC. Plaintiffs' fraud claim against the Zachter Defendants is premised upon the so-called fraudulent Affidavit of Service. Plaintiffs allege that the Zachter Defendants “filed a fraudulent [A]ffidavit of [S]ervice in the [Underlying Action], in order to wrongfully obtain a default judgment against [Shad].” (FAC ¶ 91.) However, as can be seen on PDF page 36 at ECF No. 12-1, the Affidavit of Service upon which Plaintiffs' fraud claim is based was signed under oath by Sornberger, who was the process server in Minnesota, not by the Zachter Defendants. Plaintiffs make no attempt, however, to explain how or why the Zachter Defendants knew that the Affidavit of Service was false or that the Zachter Defendant intended to submit an erroneous affidavit of service. See De Curtis v. Ferrandina, 529 Fed.Appx. 85, 86 (2d Cir. 2013) (“A process server's sworn statement of service creates a presumption that service has been effectuated.”).
With respect to their attempt to satisfy the requirements of Rule 9(b) of the Federal Rules of Civil Procedure, Plaintiffs assert in their opposition memorandum that “[t]he speakers in this case [who made the fraudulent statements] were the individuals who filed the fraudulent Affidavit of Service: Zachter Defendants.” (Pls.' Opp'n Mem. at 9.) This simply is not true. The statements in the Affidavit of Service plainly were made by Sornberger, not the Zachter Defendants. Relatedly, Plaintiffs allege in their FAC that “Platinum Courier and Mr. Sornberger knew that the alleged address of service [contained in the Affidavit of Service was] non-existent.” (FAC ¶ 96.) However, and for the same reasons provided supra, Plaintiffs have not plausibly alleged knowledge or intent with respect to the Zachter Defendants.
Accordingly, because Plaintiffs have not alleged the elements of a fraud claim against the Zachter Defendants, their fraud claim should be dismissed.
II. Conversion (Second Cause Of Action)
A. Legal Standards
“[C]onversion ‘is the unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights.'” Swan v. Sotheby's Inc., No. 22-CV-10406 (MKV), 2023 WL 7183762, at *3 (S.D.N.Y. Nov. 1, 2023) (quoting Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400, 403-04 (2d Cir. 2006) (citations omitted)). In New York, “[t]wo key elements of conversion are (1) plaintiff's possessory right or interest in the property . . . and (2) defendant's dominion over the property or interference with it, in derogation of plaintiff's rights.” Colavito v. N.Y. Organ Donor Network, Inc., 8 N.Y.3d 43, 50 (2006) (internal citations omitted).
B. Application
In a conclusory fashion, the FAC alleges that the Zachter Defendants, in addition to RPG, are exercising control over Plaintiffs' property or that they are interfering with it. (See generally FAC ¶ 106-16.) Plaintiffs do not aver any facts to support this contention. (See generally id.) Rather, their conversion claim is premised on the Zachter Defendants preparing the paperwork to effectuate judgment enforcement on behalf of their client (RPG), and Plaintiffs' allegation that the Zachter Defendants “still have not instructed Defendant RPG to return the wrongfully seized funds, in the amount of $11,884.14, to Plaintiff MPA.” (Id. ¶ 113.)
The default judgment in the Underlying Action was entered against Plaintiffs on or around November 9, 2021, and Judge Tingling did not enter an order vacating the default judgment until May 1, 2023. (See id. ¶ 15, 63-66.) Plaintiffs cannot argue that the Zachter Defendants acted improperly with respect to Plaintiffs' property when they prepared judgment enforcement paperwork nor that the Zachter Defendants did so in an unauthorized manner since, at the time the default judgment was entered, they had no reason to doubt the veracity of the Affidavit of Service. Moreover, regardless of what the Zachter Defendants may have “instructed” their client, RPG, or whatever legal advice may have been given, Plaintiffs have not plausibly alleged that the Zachter Defendants are holding any funds belonging to Plaintiffs. Thus, the conversion claim should be dismissed.
III. New York Judiciary Law § 487 (Third Cause Of Action)
A. Legal Standards
Section 487 of the New York Judiciary Law provides:
An attorney or counselor who:
1. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or,
2. Wilfully delays his client's suit with a view to his own gain; or, wilfully receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for,
Is guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.N.Y. Jud. Law § 487.
To establish a claim under New York Judiciary Law § 487, a plaintiff must show, at a minimum, “that defendan[t]: (1) [is] guilty of deceit or collusion, or consent[ed] to any deceit or collusion; and (2) had an intent to deceive the court or any party.” Ray v. Watnick, 182 F.Supp.3d 23, 28 (S.D.N.Y. 2016) (citation omitted). “Relief under a cause of action based upon Judiciary Law § 487 ‘is not lightly given' . . . and requires a showing of ‘egregious conduct or a chronic and extreme pattern of behavior' on the part of the defendant attorneys that caused damages.” Facebook, Inc. v. DLA Piper LLP (US), 134 A.D.3d 610, 615 (1st Dep't 2015). A claim under the Section 487 must be pled with particularity. See Bryant v. Silverman, 284 F.Supp.3d 458, 469 (S.D.N.Y. 2018); see also Brake v. Slochowsky & Slochowsky, LLP, 504 F.Supp.3d 103, 116 n.6 (E.D.N.Y. 2020) (citing Bryant and discussing claims under New York Judiciary Law § 487 are subject to the heightened pleading standards of Rule 9(b) of the Federal Rules of Civil Procedure). “Further reinforcing the conclusion that liability under § 487 is reserved for extreme or egregious cases is the fact that [§ 487] has its ‘origin in the criminal law of England,' and thus, for this statute, ‘the more appropriate context for its analysis is not the law applicable to comparable civil torts but rather criminal law.'” Ray v. Watnick, 182 F.Supp.3d 23, 30 (S.D.N.Y. 2016) (quoting Amalfitano v. Rosenberg, 12 N.Y.3d 8 (2009)), aff'd, 688 Fed.Appx. 41 (2d Cir. 2017)).
B. Application
Plaintiffs' claim under New York Judiciary Law § 487, like Plaintiffs' fraud claim, is based upon the fraudulent Affidavit of Service signed under oath by Sornberger. (See FAC ¶ 119.) There is no plausible basis pled in the FAC to allege that the Zachter Defendants, as opposed to Sornberger, engaged in egregious conduct. In addition, no chronic or extreme behavior by the Zachter Defendants has been pled.Thus, the New York Judiciary Law § 487 claim should be dismissed.
This case stands in stark contrast to Sykes v. Mel Harris & Assoc., LLC, 757 F.Supp.2d 413 (S.D.N.Y. 2010), which was cited by Plaintiffs (see Pls.' Opp'n Mem. at 15), where the Court found that plaintiffs stated a New York Judiciary Law § 487 claim. In Sykes, plaintiffs alleged that, over a course of three years, default judgments were obtained due to alleged collusion among a debt-buying company, a law firm and a process service company to collect millions of dollars in fraudulently obtained default judgments. Id. at 419.
IV. Negligence (Fourth Cause Of Action)
A. Legal Standards
“[T]o establish a prima facie case of negligence under New York law, a plaintiff must show ‘(1) the existence of a duty on defendant's part as to plaintiff; (2) a breach of this duty, and (3) injury to the plaintiff as a result thereof.'” In re World Trade Ctr. Lower Manhattan Disaster Site Litig., 758 F.3d 202, 210 (2d Cir. 2014) (quoting Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 428 (2d Cir. 2013)). “[I]t is well settled ‘that an attorney may not be held liable for negligence in the provision of professional services adversely affecting one with whom the attorney is not in contractual privity.'” Ilkowitz v. Durand, No. 17-CV-00773 (PGG), 2018 WL 1595987, at *12 (S.D.N.Y. Mar. 27, 2018) (quoting Nat'l Westminster Bank USA v. Weksel, 124 A.D.2d 144, 145 (1st Dep't 1987)).
B. Analysis
In their Fourth Cause of Action, Plaintiffs allege that the Zachter Defendants negligently inflicted economic harm upon Plaintiffs due to the restraint of the Wells Fargo bank account. (FAC ¶¶ 127-31.) Because the Zachter Defendants owed no duty to Plaintiffs, Plaintiffs cannot state a negligence claim against the Zachter Defendants. As such, the negligence claim should be dismissed. See Benzemann v. Citibank N.A., 149 A.D.3d 586, 586 (1st Dep't 2017) (affirming dismissal of negligence claim against attorney and law firm based upon issuance of restraining notices due to lack of duty).
V. Intentional Infliction Of Emotional Distress (“IIED”) (Fifth Cause Of Action)
A. Legal Standards
To state a claim for IIED under New York law, a plaintiff must allege “(1) extreme and outrageous conduct; (2) intent to cause, or reckless disregard of a substantial probability of causing, severe emotional distress; (3) a causal connection between the conduct and the injury; and (4) severe emotional distress.” Chau v. Donovan, 357 F.Supp.3d 276, 287 (S.D.N.Y. 2019) (citing Stuto v. Fleishman, 164 F.3d 820, 827 (2d Cir. 1999)); see also Howell v. New York Post Co., 81 N.Y.2d 115, 121 (1993). “New York courts have imposed a very high threshold for intentional infliction of emotional distress claims, requiring that the conduct must be so outrageous and extreme ‘as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.'” Campoverde v. Sony Pictures Entm't, No. 01-CV-07775 (LAP), 2002 WL 31163804, at *11 (S.D.N.Y. Sept. 30, 2002) (quoting Murphy v. Am. Home Prod. Corp., 58 N.Y.2d 293, 303 (1983)).
B. Analysis
Plaintiffs allege that the Zachter Defendants and RPG intentionally inflicted emotional distress upon Plaintiffs by “wrongfully restrain[ing] funds belonging to Plaintiff MPA, even after being informed of their error and receiving a court order to release the funds.” (FAC ¶ 149.) Focusing solely on the Zachter Defendants' conduct, the Zachter Defendants, in representing their client (RPG), obtained a default judgment based upon an Affidavit of Service provided to them by a process server from Minnesota. This conduct cannot be said to be extreme or outrageous. See Grossinger v. Canetti & Troodler, LLP, No. 06-CV-04437 (HB), 2009 WL 2337348, at *3 (S.D.N.Y. July 29, 2009) (finding the act of “sending a single letter seeking to collective a debt . . . does not rise to the level of ‘extreme and outrageous conduct' and [p]laintiff points to no facts that would even tend to support an inference that [d]efendants intended to cause or recklessly disregard the probability of causing severe emotional distress.”). And, there is nothing pled in the FAC to suggest that the Zachter Defendants, as opposed to RPG, are holding any funds belonging to Plaintiffs nor any indication that the Zachter Defendants acted with the requisite intent. Accordingly, Plaintiffs' IIED claim should be dismissed.
VI. Civil Conspiracy (Sixth Cause Of Action)
A. Legal Standards
“New York does not recognize an independent tort of conspiracy.” See Kirch v. Liberty Media Corp., 449 F.3d 388, 401 (2d Cir. 2006) (citing Alexander & Alexander of N.Y., Inc. v. Fritzen, 68 N.Y.2d 968, 969 (1986)). Where the underlying tort is not properly alleged, a civil conspiracy claim cannot be stated. See Kalola v. Int'l Bus. Machines Corp., No. 19-CV-09900 (VB), 2019 WL 6879307, at *4 (S.D.N.Y. Dec. 16, 2019) (dismissing civil conspiracy claim where “the complaint fail[ed] to state a cognizable tort claim”).
B. Analysis
Because Plaintiffs have not pled a cognizable tort claim, they cannot state a civil conspiracy claim. Thus, Plaintiffs' Sixth Cause of Action should be dismissed.
VII. Unjust Enrichment (Seventh Cause Of Action)
A. Legal Standards
“To prevail on a claim for unjust enrichment in New York, a plaintiff must establish (1) that the defendant benefitted; (2) at the plaintiff's expense; and (3) that equity and good conscience require restitution.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573, 586 (2d Cir. 2006) (quotation marks omitted). “The ‘essence' of such a claim ‘is that one party has received money or a benefit at the expense of another.'” Shih v. Petal Card, Inc., No. 18-CV-05495 (JFK), 2020 WL 5659429, at *14 (S.D.N.Y. Sept. 23, 2020) (quoting Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000)).
B. Analysis
In the Seventh Cause of Action, Plaintiffs assert that the Zachter Defendants and RPG are unjustly enriched because they “continue to withhold funds from the frozen Wells Fargo account, despite a court order and knowledge that the funds rightfully belong to Plaintiff MPA.” (FAC ¶ 165.) Again, however, there is nothing pled in the FAC to suggest that the Zachter Defendants, as opposed to RPG, are holding any funds belonging to Plaintiffs. Accordingly, Plaintiffs' Seventh Cause of Action should be dismissed.
CONCLUSION
For the reasons set forth above, it is respectfully recommended that the Zachter Defendants' motion to dismiss be GRANTED. The Court notes that Plaintiffs did not request leave to amend.
Where a plaintiff does not request leave to amend, a district court may decline to grant leave to amend sua sponte. See Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 125-26 (2d Cir. 2013) (“While leave to amend under the Federal Rules of Civil Procedure is freely granted, no court can be said to have erred in failing to grant a request that was not made.” (citations and internal quotation marks omitted)); Murray v. N.Y. Univ. Coll. of Dentistry, 57 F.3d 243, 251 (2d Cir. 1995) (affirming district court's dismissal for failure to state claim where Plaintiff made no request for leave to amend).
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1). Any requests for an extension of time for filing objections must be addressed to Judge Woods.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).