Sanders v. WB Kirby Hill, LLC

DOUGLAS H. SANDERS, Plaintiff, v. WB KIRBY HILL, LLC, and BERNARD M. JANOWITZ, Defendants.

16-CV-4596 (NGG) (ARL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

June 4, 2019

MEMORANDUM & ORDER

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Douglas H. Sanders brings this suit for breach of contract, fraud, and negligence related to his purchase of a home in the "Stone Hill" development ("Stone Hill"), located at 6 Kingwood Court, Muttontown, New York (the "Sanders Home"). (Second Am. Compl. (Dkt. 62) ("SAC").) Before the court are briefs by Plaintiff and Defendants WB Kirby Hill, LLC ("WBK") and Bernard Janowitz, in response to this court's sua sponte order (May 22, 2018 Order), regarding whether non-parties the Village of Muttontown (the "Village") and Plaintiff's title insurer should be joined as parties to this suit pursuant to Federal Rule of Civil Procedure 19. (Pl. May 31, 2018 Letter ("Pl. Mem.") (Dkt. 70); Def. WB Kirby Hill LLC June 11, 2018 Resp. ("WBK Resp.") (Dkt. 71); Def. Bernard Janowitz June 12, 2018 Resp. ("Janowitz Resp.") (Dkt. 72); Pl. June 12, 2018 Reply ("Pl. Reply") (Dkt. 73); Def. WB Kirby Hill LLC June 12, 2018 Sur-Reply ("WBK Sur-Reply") (Dkt. 74).) Also before the court is Plaintiff's motion for the undersigned to recuse himself from this case pursuant to 28 U.S.C. § 455(a). (Pl. Mot. for Recusal ("Recusal Mot.") (Dkt. 81).)

I. BACKGROUND

A. Factual Allegations

Plaintiff alleges that, in January 2010, Plaintiff met with a WBK agent, Joanne Miller, to explore the possibility of purchasing a vacant lot in Stone Hill. (SAC ¶¶ 4, 24, 26-27.) Miller showed Plaintiff one- and two-acre lots available for purchase. (Id. ¶ 27.) Plaintiff expressed interest in a larger version of a particular model home he was shown. (Id. ¶ 30.) Miller advised Plaintiff to meet with Stone Hill's "owner/developer," Janowitz. (Id. ¶ 31.) Plaintiff scheduled a January 29, 2010 meeting with Janowitz. (Id. ¶¶ 32-35.)

At that meeting, Janowitz allegedly represented that a 6,000-square-foot home could not be built on any of the one-acre lots and would need to be built on a two-acre lot. (Id. ¶ 40.) Plaintiff stated that he could not afford any of the two-acre lots. (Id. ¶¶ 41-43.) Janowitz then advised Plaintiff that one particular lot, Lot #64, was only 1.3 acres yet could accommodate the larger house Plaintiff desired, along with a pool and other amenities Plaintiff wanted. (Id. ¶¶ 44-46.) Janowitz also told Plaintiff that the larger house would "not present a problem with the Village" and that he would ensure WBK's compliance with the Village's building codes in supervising the construction of Plaintiff's house. (Id. ¶¶ 50, 103.)

Plaintiff avers that, in reliance on Janowitz's representations, he agreed to purchase Lot #64, signing a purchase agreement with WBK on February 23, 2010. (Id. ¶¶ 55-58; Purchase Agreement (Dkt. 62-1)).) That same day, Plaintiff signed a contract with WBK (the "Construction Agreement") to build the Sanders Home on the land. (SAC ¶ 61; Construction Agreement (Dkt. 62-2).) Plaintiff paid WBK over $1,930,000 for services performed pursuant to the Construction Agreement. (SAC ¶¶ 121-22.) The Construction Agreement provided, and Janowitz represented, that WBK would build the Sanders Home in accordance with the provisions of the Stone Hill at Muttontown Community Offering Plan (the "Offering Plan"). (Construction Agreement ¶ 23; SAC ¶ 107.) Plaintiff alleges that WBK failed to do so and that WBK violated the Village's building codes, rules, and regulations in building the Sanders Home. (SAC ¶¶ 104-107.) WBK purported to deliver a "Certificate of Occupancy" to Plaintiff on or about September 21, 2011. (Id. ¶ 124.)

Plaintiff lived in the Sanders Home from March 2011 to August 2014 before moving to Puerto Rico. (Id. ¶ 125.) During that time, he installed a patio and pergola in the rear of the home, and also "installed landscaping." (Id. ¶ 126.) In late 2014, Plaintiff tried to sell the Sanders Home, and the purchaser told him that the purchaser's title company required Plaintiff to obtain approval from the Village's building department for the patio, pergola, and landscaping. (Id. ¶¶ 129-131.) After Plaintiff applied for a building permit, the Village issued a comment letter dated April 2, 2015 (the "2015 Comment Letter"), indicating that various conditions of the Sanders Home violated both the Village's building codes and the provisions of the Offering Plan that had been filed with the Village. (Id. ¶¶ 132-37.) Plaintiff claims that he did not have notice of these defects until receiving the April 2, 2015 comment letter. (Id. ¶ 161.) The Village required Plaintiff to correct the Sanders Home's improper conditions, which forced Plaintiff to terminate its potential sale of the home. (Id. ¶ 145.) On July 26, 2016, the Village issued another comment letter (the "2016 Comment Letter") indicating the Sanders Home exceeded the maximum building height and required a variance. (Id. ¶ 146.) Plaintiff claims that these comment letters have substantially reduced the value of the Sanders Home, rendered it unmarketable for sale, and have caused Plaintiff to incur significant damages. (Id. ¶¶ 163-72.) These comment letters allegedly resulted from WBK's failure to comply with the Village's building codes and the Offering Plan. (Id.)

Rather than appealing the 2015 and 2016 Comment Letters, Plaintiff obtained variances from the Village. (See Pl. Mem. at 6; WBK Resp. at 8-9; Pl. Reply at 3.) To explain this, Plaintiff notes that he "has had [the 2015 Comment Letter] independently tested, and found that the objections raised by the Village are valid." (Pl. Mem. at 6.) WBK contends that the 2015 Comment Letter was erroneous and inconsistent with the Certificate of Occupancy the Village issued in 2011. (WBK Resp. at 6-8.)

B. Procedural History

Plaintiff filed this suit on August 17, 2016. (Compl. (Dkt. 1).) The case was originally assigned to District Judge Leonard B. Wexler and Magistrate Judge Arlene R. Lindsay. Plaintiff amended his complaint twice, filing the most recent version on December 4, 2017. (SAC.) In his most recent complaint, Plaintiff brings claims against WBK for breach of contract and Bernard Janowitz for fraudulent inducement and negligent misrepresentation. (SAC ¶¶ 173-99.) After Judge Wexler's death, the case was reassigned to Judge Spatt on April 9, 2018, and then reassigned to this court on May 2, 2018.

On May 22, 2018, this court held a pretrial conference, after which the court rejected the parties' proposed joint pretrial order because it did not comply with the court's Individual Rules. (May 22, 2018 Order.) The court also directed the parties to brief the issue of whether the Village and Plaintiff's title insurer should be joined as parties to this suit pursuant to Federal Rule of Civil Procedure 19. (Id.) The parties have since done so. (Pl. Mem.; WBK Resp.; Janowitz Resp.; Pl. Reply; WBK Sur-Reply.) Defendants contend that the Village is a necessary party and, further, that this suit should be dismissed as unripe for adjudication because Plaintiff was required to appeal the 2015 Comment Letter to the Village's Zoning Board of Appeals ("ZBA") before bringing this suit. (WBK Resp. at 2, 15; Janowitz Resp. at 1 (joining WBK's arguments).) Defendants note that the 2015 Comment Letter conflicts with the Village's approvals of the Sanders Home in 2011. (WBK Resp. at 2.) WBK states that, "[b]y failing to name the Village in this lawsuit and by commencing this lawsuit without challenging the Building Department's 2015 findings, Plaintiff has tasked this Court, without the benefit of a record, with the initial review and determination of the Building Inspector's 2015 findings." (Id.) In Defendants' view, Plaintiff could have brought this suit—naming the Village as a defendant—only after the ZBA resolved Plaintiff's appeal. (WBK Resp. at 15; Janowitz Resp. at 1.)

Plaintiff has also requested a pre-motion conference in anticipation of moving for a pre-judgment order of attachment against WBK pursuant to Article 62 of the New York Civil Practice Law and Rules. (Pl. Jan. 17, 2019 Appl. For Pre-Mot. Conf. (Dkt. 77).) The court granted Plaintiff's request and directed the parties to delay scheduling the conference until after entry of the court's order regarding the Rule 19 issue. (Jan. 29, 2019 Order.)

Plaintiff has also moved for the undersigned to recuse himself from this case pursuant to 28 U.S.C. § 455(a). (Recusal Mot.) In Plaintiff's view, the court "has created an appearance of partiality, non-neutrality, and bias" by (1) asking the parties, sua sponte, to brief the Rule 19 issue addressed above; (2) not issuing a decision on this question for several months; and (3) not granting Plaintiff's requests to schedule a pre-motion or pre-trial conference in the interim. (Pl. Mem. in Supp. of Mot. for Recusal ("Recusal Mem.") at 5-7.) According to Plaintiff, "this case was taken out to the proverbial woodshed and left there to rot." (Recusal Mem. at 6.)

II. DISCUSSION

A. Whether the Village and Plaintiff's Title Insurer Should be Joined Pursuant to Rule 19

1. Legal Standard

Under Rule 19, a party is necessary where (1) complete relief may not be effected among those already parties in the person's absence; or (2) the absent party claims some interest relating to the subject matter of the action and their absence would either impair the absent party's ability to protect that interest or leave persons already parties subject to substantial risk of incurring multiple or inconsistent obligations as a result of the claimed interest.

Bodner v. Banque Paribas, 114 F. Supp. 2d 117, 137 (E.D.N.Y. 2000) (citing Fed. R. Civ. P. 19(a)); accord ConnTech Dev. Co. v. University of Connecticut Educ. Props., Inc., 102 F.3d 677, 681 (2d Cir. 1996). The burden is on Defendants "to show that the person who was not joined is needed for a just adjudication." 7 Charles A. Wright & Arthur R. Miller,...