Associated Financial Corp. v. Kleckner

10-3619-cv
Associated Fin. Corp. v. Kleckner

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 11th day of May, two thousand twelve.
5
6 PRESENT: RICHARD C. WESLEY,
7 RAYMOND J. LOHIER, JR.,
8 Circuit Judges,
9 J. GARVAN MURTHA,
10 District Judge.*
11
12
13
14 ASSOCIATED FINANCIAL CORPORATION,
15 COMMUNITY HOUSING ENTERPRISES, INCORPORATED,
16
17 Plaintiffs-Appellants,
18
19 -v.- 10-3619-cv
20
21 STANLEY M. KLECKNER, POLAR INTERNATIONAL
22 BROKERAGE CORPORATION,
23
24 Defendants-Appellees.
25
26
27 FOR APPELLANTS: MITCHELL JAY ROTBERT, Law Office of
28 Mitchell Jay Rotbert, Rockville, MD.
29

*
The Honorable J. Garvan Murtha, of the United States
District Court for the District of Vermont, sitting by
designation.
 1 FOR APPELLEES: ADRIAN A. D’ARCY, Shields Mott Lund
2 L.L.P., New Orleans, LA (Lloyd N.
3 Shields, Shields Mott Lund L.L.P., New
4 Orleans, LA; Dwight Yellen, Ballon Stoll
5 Bader & Nadler, P.C., New York, NY, on
6 the brief).
7
8 Appeal from the United States District Court for the
9 Southern District of New York (Koeltl, J.).
10
11 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

12 AND DECREED that the judgment of the district court be

13 AFFIRMED.

14 Plaintiffs-Appellants Associated Financial Corporation

15 and Community Housing Enterprises, Incorporated appeal from

16 a judgment of the United States District Court for the

17 Southern District of New York (Koeltl, J.), granting

18 Defendants’ motion to dismiss Plaintiffs’ complaint pursuant

19 to Federal Rule of Civil Procedure 12(b)(6). The district

20 court ruled that Plaintiffs’ claims against Defendants

21 Stanley M. Kleckner and Polar International Brokerage were

22 barred by the doctrine of res judicata and failed to state a

23 claim upon which relief can be granted. Plaintiffs appeal

24 only the dismissal of their claim to recover damages from

25 Defendants’ breach of a covenant not to sue. We assume the

26 parties’ familiarity with the underlying facts and

27 procedural history of the case.

2
1 Plaintiffs contend that their claim seeking damages in

2 an amount equal to the attorneys’ fees they incurred in a

3 previous state court action is not barred by the res

4 judicata effect of the state court’s decision to deny their

5 post-judgment motion for those fees. We review de novo a

6 district court’s dismissal of a complaint for failure to

7 state a claim, Conopco, Inc. v. Roll Int’l, 231 F.3d 82, 86

8 (2d Cir. 2000), as well as its application of the principles

9 of res judicata, Legnani v. Alitalia Linee Aeree Italiane,

10 S.p.A., 400 F.3d 139, 141 (2d Cir. 2005) (per curiam).

11 Dismissal under Federal Rule of Civil Procedure 12(b)(6) is

12 appropriate when “it is clear from the face of the

13 complaint, and matters of which the court may take judicial

14 notice, that the plaintiff’s claims are barred as a matter

15 of law.” Conopco, 231 F.3d at 86. “Under both New York law

16 and federal law, the doctrine of res judicata, or claim

17 preclusion, provides that [a] final judgment on the merits

18 of an action precludes the parties . . . from relitigating

19 issues that were or could have been raised in that action.”

20 Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 600

21 F.3d 190, 195 (2d Cir. 2010) (alterations in original)

22 (internal quotation marks omitted).

3
1 Having conducted an independent review of the record in

2 light of these principles, we conclude that the state

3 court’s decision precludes Plaintiffs’ attempt to recoup the

4 attorneys’ fees in the form of damages in the federal action

5 for substantially the same reasons stated by the district

6 court in its Memorandum Opinion and Order. Because we

7 conclude that Plaintiffs’ claim for breach of a covenant not

8 to sue is barred by the doctrine of res judicata, we need

9 not address whether the claim is permissible under the

10 American Rule.

11 We have considered Plaintiffs’ remaining arguments and

12 find them to be without merit. For the foregoing reasons,

13 the judgment of the district court is hereby AFFIRMED.

14
15 FOR THE COURT:
16 Catherine O’Hagan Wolfe, Clerk
17
18

4