United States District Court, E.D. Pennsylvania
PATRICK ROSSIGNOL, Individually and as a Limited Partner in RUNNING PUMP ASSOCIATES, L.P., on behalf of RUNNING PUMP ASSOCIATES, L.P., Plaintiff,
LEE BLATT, Defendant.
DAVID S. NENNER, ESQUIRE, On Behalf of Plaintiff.
REBECCA D. WARD, ESQUIRE, JAMES T. SMITH, ESQUIRE, On Behalf of Defendant.
JAMES KNOLL GARDNER, District Judge.
This matter is before the court on defendant's Motion to Dismiss which seeks to dismiss plaintiff's Amended Complaint with prejudice. For the reasons expressed below, I grant in part and deny in part defendant's Motion to Dismiss.
Specifically, I grant the motion to the extent it seeks to dismiss the Amended Complaint as res judicata. I grant the motion to dismiss on that ground because plaintiff Patrick Rossignol prosecuted a prior civil action in New York state court against defendant Lee Blatt and others which arose from the same series of allegedly-improper transfers of partnership assets of Running Pump Associates, L.P. and that prior action was settled and discontinued with prejudice. Because I grant defendant's motion on claim-preclusion grounds, I do not reach defendant's alternative argument that plaintiff's claims are barred by the applicable statute of limitations.
However, I deny the Motion to Dismiss to the extent it seeks to dismiss this case for lack of subject matter jurisdiction because complete diversity of citizenship exists between the sole plaintiff and the sole defendant, and the amount in controversy exceeds $75, 000, exclusive of interests and costs.
Plaintiff invokes this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiff Patrick Rossignol is a citizen of New York and defendant Lee Blatt is a citizen of Massachusetts. Moreover, the amount in controversy exceeds the sum of $75, 000.00, exclusive of interest and costs. Thus, this court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1332.
Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events giving rise to this action occurred in Lancaster County, Pennsylvania, which is within this judicial district. See 28 U.S.C. §§ 118, 1391(b).
STANDARD OF REVIEW
A claim may be dismissed under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted." A Rule 12(b)(6) motion requires the court to examine the sufficiency of the complaint. Conley v. Gibson , 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84 (1957) (abrogated in other respects by Bell Atlantic Corporation v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Generally, in ruling on a motion to dismiss, the court relies on the complaint, attached exhibits, and matters of public record, including other judicial proceedings. Sands v. McCormick , 502 F.3d 263, 268 (3d Cir. 2008).
Except as provided in Federal Rule of Civil Procedure 9, a complaint is sufficient if it complies with Rule 8(a)(2), which requires "a short and plain statement of the claim showing that the pleader is entitled to relief". Rule 8(a)(2) does not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Twombly , 550 U.S. at 570, 127 S.Ct. at 1974, 167 L.Ed.2d at 949.
In determining whether a complaint is sufficient, the court must accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading, the plaintiff may be entitled to relief. Fowler , 578 F.3d at 210 (citing Phillips v. County of Allegheny , 515 F.3d 224, 233 (3d Cir. 2008)).
Although "conclusory" or "bare-bones allegations" will not survive a motion to dismiss, Fowler , 578 F.3d at 210, a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits. Phillips , 515 F.3d at 231. Nonetheless, to survive a Rule 12(b)(6) motion, the complaint must provide "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Phillips , 515 F.3d at 234 (quoting Twombly , 550 U.S. at 556, 127 S.Ct. at 1965, 167 L.Ed.2d at 940)(internal quotations omitted).
The court is required to conduct a two-part analysis when considering a Rule 12(b)(6) motion. First, the factual matters averred in the complaint, and any attached exhibits, should be separated from legal conclusions asserted. Fowler , 578 F.3d at 210. Any facts pled must be taken as true, and any legal conclusions asserted may be disregarded. Id. at 210-211.
Second, the court must determine whether those factual matters averred are sufficient to show that the plaintiff has a "plausible claim for relief." Id. at 211 (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. at 1950, 178 L.Ed.2d at 884).
Ultimately, this two-part analysis is "context-specific" and requires the court to draw on "its judicial experience and common sense" to determine if the facts pled in the complaint have "nudged [plaintiff's] claims" over the line from "[merely] conceivable [or possible] to plausible." Iqbal , 556 U.S. at 679-680, 129 S.Ct. at 1949-1951, 178 L.Ed.2d at 884-885.
A well-pled complaint may not be dismissed simply because "it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely." Twombly , 550 U.S. at 556, 127 S.Ct. at 1965, 167 L.Ed.2d at 940-941 (internal quotations omitted).
Accepting all factual allegations in the Amended Complaint as true, and construing the Amended Complaint in the light most favorable to the plaintiff, as I am required to do under the forgoing standard of review, the pertinent facts are as follows.
Running Pump Associates is a Pennsylvania general partnership which was created in December 1996. Defendant Lee Blatt was, and is, the general partner in Running Pump Associates. The following are the limited partners: Allyson Gerber, Randi Rossignol, plaintiff Patrick Rossignol, Henry Rossignol, Max Rossignol, Kathi Thonet, John Thonet, Hannah Thonet, Rebecca Thonet, and Sydelle Blatt.
Running Pump Associates is a family business which owns and operates, among other things, the Western Corners Shopping Center in Lancaster County, Pennsylvania.
Lee and Sydelle Blatt are the parents of Allyson Gerber, Randi Rossignol, and Kathi Thonet. Plaintiff and his then-wife, Randi Rossignol, are the parents of Henry and Max Rossignol. Kathi and John Thonet are the parents of Hannah and Rebecca Thonet.
In May 2007, plaintiff's wife began divorce proceedings against him in the Supreme Court of the State of New York, County of Westchester.
Defendant Lee Blatt and/or the other limited partners in Running Pump Associates control seven other business entities, each of which is a New York limited liability company. Plaintiff Patrick Rossignol has never had any interest in, or control over, those New York entities.
Beginning in 2004, and continuing until 2008, defendant Blatt caused amounts of money in the tens and hundreds of thousands of dollars to be transferred from Running Pump Associates to certain of its limited partners (other than plaintiff) and certain of the New York limited liability companies controlled by defendant Blatt and/or the other limited partners.
None of the amounts which defendant Blatt caused to be transferred were (1) for payment of legitimate expenses incurred by Running Pump Associates, (2) intended to be reasonable investments for the benefit of Running Pump Associates, or (3) intended to be the principal amount of loans made by Running Pump Associates.
The payments made to limited partners Randi Rossignol, Kathi Thonet, and Hannah Thonet in 2006 and 2008 were greater than the portion of the profits of Running Pump Associates to which those individuals were entitled pursuant to the Running Pump Associates partnership agreement.
Moreover, the payments which defendant Blatt caused to be made to those limited partners were not (1) for payment of legitimate expenses incurred by Running Pump Associates, (2) intended to be a reasonable investment for the benefit of Running Pump Associates, or (3) intended to be the principal amount of a loan from Running Pump Associates to any of those limited partners.
By letter dated June 21, 2013, plaintiff demanded that defendant Blatt take every available and appropriate action to recover the assets of Running Pump Associates which defendant had improperly transferred to the New York limited liability companies and to Randi Rossignol, Kathi Thonet, and Hannah Thonet.
Plaintiff initiated this action by filing a Complaint in this court on July 26, 2013, which invoked this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332.
In his initial Complaint, plaintiff asserted claims against defendant Lee Blatt and then-defendant Running Pump Associates, L.P. ("RPA"). Although plaintiff named Running Pump Associates as a defendant in his initial Complaint and purported to assert his claim in Count I of the Complaint against Running Pump Associates, plaintiff nonetheless (in his prayer for relief on Count I) requested the court to "[e]nter judgment in favor of RUNNING PUMP ASSOCIATES, L.P. and against Defendant Lee ...