Niles v. Wilshire Investment Group, LLC
859 F. Supp. 2d 308
E.D.N.Y2012Background
- Pro se plaintiffs Rosaría Niles and Salvatore A. Bono filed a federal action in EDNY on August 21, 2009 alleging a CIA-conspiracy to seize estates and asserting fraud across multiple state and federal proceedings tied to Laura J. Niles and Henry E. Niles estates, including former conservatorship, probate, and foreclosure actions.
- Prior state proceedings included (i) a New Jersey Superior Court action resulting in an undue-influence finding and a substantial monetary judgment against plaintiffs, (ii) New York Surrogate’s Court probate litigation with a Settlement Agreement paying Rosaría $1.25 million, (iii) a New York foreclosure action in Suffolk County securing TierOne Bank’s mortgage on Rosaría’s Brightwaters residence, and (iv) related bankruptcy and appellate procedures culminating in foreclosure and eviction.
- The Suffolk County foreclosure judgment of 2007 and the subsequent eviction/foreclosure-related orders led to the sale of the premises to Wilshire and American Key in 2009, with eviction and possession judgments entered thereafter.
- The EDNY action was referred by the district court to Magistrate Judge Lindsay, who issued a Report and Recommendation granting all motions to dismiss and recommending a litigation injunction; the district court adopted the R&R with a narrowed injunction.
- The court dismissed the federal claims, declined supplemental jurisdiction over any surviving state-law claims, and entered a memorandum and order enjoining the plaintiffs from filing new actions in the EDNY relating to the estates or the 223 Lakeview Avenue foreclosure without prior court permission.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rooker-Feldman doctrine bars the federal claims. | Plaintiff Niles contends Rooker-Feldman does not apply to foreclosure, surrogate’s court, New Jersey actions, or conservatorship litigation. | Defendants argue plaintiffs seek review of state-court judgments and are barred by Rooker-Feldman, res judicata, and collateral estoppel. | Yes; Rooker-Feldman bars the federal claims arising from state-court judgments. |
| Whether the federal claims are barred by res judicata/claim preclusion. | Plaintiffs argue claims are independent of state judgments and not barred. | Defendants contend final state judgments and settlement preclude federal claims arising from the same transactions. | Yes; preclusion applies under New York/New Jersey law. |
| Whether collateral estoppel precludes the remaining federal claims. | Plaintiffs allege issues were not fully litigated or are not properly framed for estoppel. | Defendants maintain issues were decided in prior actions and are precluded. | Yes in principle, though the record is indecipherable to quantify; court relies on preclusion grounds. |
| Whether a litigation injunction is warranted to curb vexatious litigation. | Plaintiffs contend no injunction is needed to deter litigation. | Defendants urge injunction due to history of duplicative and burdensome filings. | Warranted; court narrows injunction to prohibit new actions relating to the estates/foreclosure without permission. |
| Whether the court should exercise supplemental jurisdiction over state-law claims. | Plaints may have state-law claims worthy of consideration. | With federal claims dismissed, supplemental jurisdiction should be declined. | Declined; Court exercises no supplemental jurisdiction over state-law claims. |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (U.S. 1923) (establishes that federal review of state-court judgments is barred; foundational for Rooker-Feldman)
- D.C. Ct. of Appeals v. Feldman, 460 U.S. 462 (U.S. 1983) ((origins of Rooker-Feldman doctrine))
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (clarifies limits of federal jurisdiction in relation to state judgments)
- Hoblock v. Albany Cty. Bd. of Elecs., 422 F.3d 77 (2d Cir. 2005) (articulates four-part test for Rooker-Feldman applicability)
- Kropelnicki v. Siegel, 290 F.3d 118 (2d Cir. 2002) (applies Rooker-Feldman to bar review of state judgments)
- Triestman v. FBI, 470 F.3d 471 (2d Cir. 2006) (standard for pro se pleadings and related review)
- Safir v. United States Lines, Inc., 792 F.2d 19 (2d Cir. 1986) (factors governing issuance of a litigation injunction)
- Lipin v. Hunt, No. 08 Civ. 11641, 2008 (S.D.N.Y. 2008) (pro se status and court’s sensitivity in sanctions context (contextual))
- Swiatkowski v. Citibank, 745 F. Supp. 2d 149 (E.D.N.Y. 2010) (abstention when federal claims disposed; pendent jurisdiction considerations)
- Done v. Wells Fargo Bank, N.A., No. 08-CV-3040 (JFB)(ETB), 2009 WL 2959619 (E.D.N.Y. 2009) (treats foreclosure-related dismissals and res judicata)