Windward Bora, LLC v. The Bank of New York Mellon

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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WINDWARD BORA, LLC,

Plaintiff,

MEMORANDUM AND ORDER

-against- 19-CV-858 (RPK) (RML)

THE BANK OF NEW YORK MELLON FKA

THE BANK OF NEW YORK AS TRUSTEE FOR

THE CERTIFICATEHOLDERS OF CWALT,

INC., ALTERNATIVE LOAN TRUST 2007-

5CB, MORTGAGE PASS-THROUGH

CERTIFICATES, SERIES 2007-5CB,

Defendant.

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RACHEL P. KOVNER, United States District Judge:

Plaintiff brought this action under New York Real Property Actions and Proceedings Law

(“RPAPL”) § 1501(4) to cancel and discharge defendant’s mortgage on a property in Staten Island,

New York. Defendant moved to dismiss the complaint for failure to state a claim or, in the

alternative, asked the Court to abstain from deciding the case under the Colorado River abstention

doctrine. For the reasons set forth below, the Court declines to apply the Colorado River abstention

doctrine but instead exercises its inherent powers to stay the proceedings. The Court also denies

without prejudice defendant’s Rule 12(b)(6) motion to dismiss.

BACKGROUND

The following factual allegations are taken from the Amended Complaint and documents

incorporated in the Amended Complaint by reference. For the purposes of defendant’s pending

motion, I assume all factual allegations in the Amended Complaint are true.

Plaintiff Windward Bora, LLC (“Windward Bora”) is a limited liability company whose

sole member is a citizen of Morocco. Am. Compl. ¶ 4 (Dkt. #14). Defendant Bank of New York

Mellon (“BNYM”) is a bank headquartered in California. Id. ¶ 5. Plaintiff invokes this Court’s

diversity jurisdiction under 28 U.S.C. § 1332.

In 2007, Madeline and Gerald Castiglione (the “Borrowers”) executed a mortgage on the

real property at 15 Von Braun Avenue in Staten Island, to secure a mortgage note that is currently

assigned to BNYM. Id. ¶¶ 8, 11. The Borrowers subsequently executed a second mortgage on the

property to secure repayment of another note, held by plaintiff. Id. ¶ 13.

After the Borrowers defaulted on the BNYM mortgage, BNYM initiated a foreclosure

action on the property in 2008. Id. ¶ 15. BNYM won a judgment of foreclosure and sale. See id.

¶ 17. But the Richmond County Court determined that the Borrowers had not been properly

served. See id. at Ex. I. The court dismissed the foreclosure action, vacated the judgment of

foreclosure and sale, relieved the appointed referee, and canceled and discharged the filed notices

of pendency. Id. ¶ 17. In 2018, BNYM filed a motion in the Richmond County Court to vacate

the dismissal and reinstate the foreclosure action. Id. ¶ 18. The court denied the bank’s motion.

Ibid. BNYM filed an appeal from that denial, which is currently pending before the Appellate

Division, Second Department. See Mem. of Law in Supp. Of Def.’s Mot. to Dismiss

(“Def.’s Memo”) at 3 (Dkt. #24-1); Braunstein Decl. in Supp. Of Def.’s Mot. to Dismiss

(“Braunstein Decl.”) at Exs. 1-2 (Dkts. #24-3, #24-4).

In 2018, after BNYM’s foreclosure action was dismissed, plaintiff Windward Bora filed

its own foreclosure action and won a judgment of foreclosure and sale with respect to 15 Von

Braun Avenue. Am. Compl. ¶¶ 20-21, Ex. L. Windward Bora then prevailed as the highest bidder

at the foreclosure sale, and the property was conveyed to Windward Bora. Id. ¶ 22, Ex. M.

Windward Bora brings this action to quiet title to the property under RPAPL § 1501(4).

That section provides, in relevant part, that:

Where the period allowed by the applicable statute of limitation for the

commencement of an action to foreclose a mortgage . . . has expired, any person

having an estate or interest in the real property subject to such encumbrance may

maintain an action against any other person . . . to secure the cancellation and

discharge of record of such encumbrance, and to adjudge the estate or interest of

the plaintiff in such real property to be free therefrom.

N.Y. Real. Prop. Acts. § 1501(4). The statute of limitations to foreclose on a mortgage in New

York is six years. N.Y. CPLR § 213(4). Windward Bora argues that the statute of limitations

began to run when BNYM commenced foreclosure proceedings against the property in 2008,

accelerating the entire debt due under the mortgage. Am. Compl. ¶¶ 15-16. Accordingly,

Windward Bora contends that the statute of limitations for BNYM to foreclose on its mortgage

expired in 2014. Id. ¶ 19; see id. ¶¶ 24-40.

BNYM argues that Windward Bora’s lawsuit should be dismissed for failure to state a

claim because Section 1501(4) does not provide a cause of action to discharge a mortgage when

the mortgage-holder filed a timely foreclosure action that remains pending. See Def.’s Memo 4-

8. BYNM argues that it brought a foreclosure action in 2008, before the statute of limitations

expired. While BNYM’s foreclosure action was dismissed, BNYM notes that the Richmond

County Court’s refusal to vacate the dismissal is currently on appeal. Under these circumstances,

BNYM argues, “the state court foreclosure action” is still “pending,” and Section 1501(4) does

not authorize a cause of action. Id. at 1. Alternatively, BNYM argues that this Court should

abstain from exercising jurisdiction over this case under the Colorado River abstention doctrine.

Id. at 8-14.

STANDARD OF REVIEW

A motion to dismiss based on the Colorado River abstention doctrine is assessed under the

same standard as a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of

Civil Procedure 12(b)(1). United States v. Blake, 942 F. Supp. 2d 285, 292 (E.D.N.Y. 2013) (citing

City of New York v. Milhelm Attea & Bros., Inc., 550 F. Supp. 2d 332, 341-42 (E.D.N.Y. 2008)).

This standard is “essentially identical to the Fed. R. Civ. P. 12(b)(6) standard,” ibid., under which

the court must “constru[e] the complaint liberally, accepting all factual allegations in the complaint

as true, and drawing all reasonable inferences in the plaintiff’s favor,” Chambers v. Time Warner,

Inc., 282 F.3d 147, 152 (2d Cir. 2002) (citation omitted). However, “the tenet that a court must

accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

While a district court deciding a 12(b)(6) motion to dismiss for failure to state a claim

ordinarily “must limit itself to facts stated in the complaint or in documents attached to the

complaint as exhibits or incorporated in the complaint by reference,” Schwartz v. Asplundth Tree

Expert Co., Inc., 102 F.3d 660, 662 (2d Cir. 1996) (quotations omitted), “[i]n resolving a motion

to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), a district court . . . may refer

to evidence outside the pleadings,” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)

(citation omitted). Additionally, under either standard the court may take judicial notice of

documents in the public record, including state court filings. See Blue Tree Hotels Inv. (Canada),

Ltd., v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004).

DISCUSSION

I. Colorado River Abstention Is Not Appropriate

In Colorado River Water Conservation District v. United States, the Supreme Court

expanded the doctrine of abstention by recognizing that there are circumstances when federal

courts may, “for reasons of wise judicial administration,” abstain from exercising jurisdiction “due

to the presence of a concurrent state proceeding.” 424 U.S. 800, 818 (1976). But such

circumstances are strictly limited. There was “never a doctrine of equity that a federal court should

exercise its judicial discretion to dismiss a suit merely because a State court could entertain it.”

Id. at 813-14 (quotations omitted). Accordingly, abstention is “an extraordinary and narrow

exception to the duty of a District Court to adjudicate a controversy properly before it.” Id. at 813

(quotations omitted). But circumstances warranting abstention, “though exceptional, do

nevertheless exist.” Id. at 818.

A court deciding whether to abstain under Colorado River engages in a two-step inquiry.

First, as a precondition to abstention, the court must determine that the state and federal

proceedings are “parallel.” See Dittmer v. County of Suffolk, 146 F.3d 113, 117-18 (2d Cir. 1998)

(citation omitted). Two suits are parallel where the parties are “substantially the same, litigating

substantially the same issues in both actions.” Royal and Sun Alliance Ins. Co. of Canada v.

Century Intern. Arms, Inc., 466 F.3d 88, 94 (2d Cir. 2006) (citations omitted). While “[p]erfect

symmetry of parties and issues is not required,” Sitgraves v. Fed. Home Loan Mortg. Co., 265 F.

Supp. 3d 411, 413 (S.D.N.Y. 2017) (citation omitted), the two actions must be “essentially the

same,” Shields v. Murdoch, 891 F. Supp. 2d 567, 577 (S.D.N.Y. 2012). Accordingly, two actions

are parallel when “there is a ‘substantial likelihood’ that the state court litigation will ‘dispose of

all of the claims presented in the federal case.’” Kingsway Fin. Servs., Inc. v.

Pricewaterhousecoopers, LLP, 420 F. Supp. 2d 228, 232 (S.D.N.Y. 2005) (quoting TruServ Corp.

v. Flegles, Inc., 419 F.3d 584, 593 (7th Cir. 2005)).

If the court determines that the state and federal proceedings are parallel, it then must assess

the six Colorado River factors to decide whether abstention is warranted. These are (1) whether

the controversy concerns a res over which one of the courts has already assumed jurisdiction;

(2) whether the state or federal forum is more convenient for the parties; (3) whether staying or

dismissing the action would avoid piecemeal litigation; (4) the order in which the two actions were

filed and whether the proceedings have advanced further in one forum than the other; (5) whether

state or federal law provides the rule of decision; and (6) whether state procedures are adequate to

protect the plaintiff’s federal rights. See Woodford v. Community Action Agency of Green County,

Inc., 239 F.3d 517, 522 (2d Cir. 2001) (internal citations omitted). In applying these factors, “the

balance [is] heavily weighted in favor of the exercise of jurisdiction.” Moses H. Cone Memorial

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16 (1983). “Only the clearest of justifications will

warrant dismissal.” Colorado River, 424 U.S. at 819. Accordingly, “the facial neutrality of a

factor is a basis for retaining jurisdiction, not for yielding it.” Woodford, 239 F.3d at 522.

A. The State and Federal Actions Are Parallel

The foreclosure dispute pending before the Appellate Division is parallel to this quiet title

action. As explained above, two actions are parallel where the parties are “substantially the same,

litigating substantially the same issues in both actions.” Royal and Sun Alliance Ins. Co. of

Canada, 466 F.3d at 94 (citation omitted). The defendant in this action, BNYM, is the plaintiff in

the foreclosure action pending before the Appellate Division. See Braunstein Decl. ¶ 2; id. at

Ex. 1. The plaintiff, Windward Bora, is a non-party respondent to the foreclosure appeal and is

the successor-in-interest to one of the defendants named in that action. See Am. Compl. ¶ 13;

Braunstein Decl. at Ex. 1; id. at Ex. 2. The parties to both the state and federal proceedings are

thus substantially the same. See, e.g., Credit-Based Asset Servicing and Securitization, LLC v.

Lichtenfels, 658 F. Supp. 2d 355, 359-60 (D. Conn. 2009) (finding parties were “substantially the

same” for the purposes of Colorado River abstention where the federal plaintiff was the successor-

in-interest to the state court defendant); see also Canaday v. Koch, 608 F. Supp. 1460, 1475

(S.D.N.Y. 1985) (“Where the interests of the [parties] in each of the suits are congruent, Colorado

River abstention may be appropriate notwithstanding the nonidentity of the parties.” (citation

omitted)), aff’d, 768 F.2d 501 (2d Cir. 1985).

Additionally, both actions concern substantially the same issue: the enforceability of

defendant’s mortgage. See Sitgraves, 265 F. Supp. 3d at 413. While plaintiff argues that the cases

are not parallel because the state foreclosure action seeks distinct relief from the federal quiet title

action, the fact that different forms of relief are sought “does not defeat parallelism, where the

underlying events remain identical.” Philips v. Citibank, N.A., 252 F. Supp. 3d 289, 296-97

(S.D.N.Y. 2017) (citations omitted). Indeed, courts in this circuit routinely find parallelism where

plaintiffs seek to enjoin foreclosure proceedings by filing novel claims in federal court. See Roy

v. Bank of New York Mellon, No. 17-CV-6729, 2018 WL 4771898, at *5 (E.D.N.Y. Sept. 30, 2018)

(collecting cases); Krondes v. Nationstar Mortg., LLC, No. 17-CV-4974, 2018 WL 2943774, at

*3 (S.D.N.Y. June 12, 2018) (stating that “courts agree” Colorado River abstention may be

warranted when litigants file “actions in district courts seeking . . . to enjoin an ongoing state

foreclosure action based on alleged violations of federal and state law.”).

Moreover, because defendant’s foreclosure remains pending as a matter of New York law,

see Mizrahi v. U.S. Bank, N.A., 156 A.D.3d 617, 617 (2d Dep’t 2017), adjudicating plaintiff’s quiet

title claim would require making a determination as to whether the state trial court erred in denying

defendant’s motion to vacate the dismissal of that foreclosure. I cannot well conclude that

defendant’s mortgage should be “cancel[ed] and discharge[d] of record,” and that plaintiff’s

interest in the property should be “adjudged . . . free therefrom,” RPAPL § 1501(4), unless I

determine that defendant’s pending foreclosure on that mortgage is without merit, see Nucci v.

PHH Mortg. Co., 679 Fed. Appx. 48, 51 (2d Cir. 2017) (noting that a plaintiff asserting a quiet

title claim must adequately plead” that “title to the subject property is wrongfully encumbered.’”

(quoting Acocella v. Wells Fargo Bank, NA, 139 A.D.3d 647, 649 (2d Dep’t 2016)) (emphasis

added)); Acocella, 139 A.D.3d at 649 (holding that a plaintiff can only maintain an equitable quiet

title claim if they allege the existence of a removable cloud on the property . . . that is actually

invalid or inoperative.” (emphasis added)); see also Carbone v. U.S. Bank Nat’l Assoc., 156

A.D.3d 678, 679 (2d Dep’t 2017) (finding that quiet title action could not be maintained where

defendant had won a valid judgment of foreclosure). Indeed, plaintiff implicitly acknowledges as

much by arguing extensively in its opposition that the trial court was right to deny defendant’s

motion to vacate the dismissal of its foreclosure and that defendant’s appeal of that denial is

unlikely to be successful. See Pl.’s Mem. in Opp’n 9-10 (Dkt. #26). Plaintiff’s quiet title claim

thus cannot be decided without passing on the merits of the issues currently pending before the

Appellate Division, rendering the two actions parallel. See U.S. Bank Nat’l Assoc. v. East

Fordham DE LLC, 804 Fed. Appx. 106 (2d Cir. 2020) (finding actions parallel when the federal-

court claims “cannot be resolved without also resolving the state-court claims”).

Finally, the parallel nature of the suits is further established by the substantial likelihood

that the state court’s decision will dispose of Windward Bora’s quiet title claim. See Kingsway,

420 F. Supp. 2d at 232 (S.D.N.Y. 2005) (quoting TruServ Corp., 419 F.3d at 593). A decision

from the Appellate Division allowing BNYM to reinstate its foreclosure action would likely

eliminate any “bona fide justiciable controversy” as to whether plaintiff’s property is “wrongfully

encumbered” by defendant’s mortgage. Acocella, 139 A.D.3d at 649. On the other hand, if the

Appellate Division affirms the trial court’s denial order, BNYM’s efforts to foreclose on its

mortgage will likely be unsuccessful. In either scenario, plaintiff’s quiet title claim will effectively

be resolved. The substantial likelihood that the action pending before the Appellate Division will

dispose of plaintiff’s quiet title claim thus further supports finding these two actions parallel.

B. The Colorado River Factors Do Not Favor Abstention

Having determined that the state and federal actions are parallel, I move to the second step

of the Colorado River inquiry. At this step, six factors are applied to determine whether abstention

is warranted. As stated above, because the assessment of these factors is “heavily weighted” in

favor of the exercise of jurisdiction, Moses H. Cone Memorial Hosp., 460 U.S. at 16, the “facial

neutrality” of any given factor “is a basis for retaining jurisdiction, not for yielding it,” Woodford,

239 F.3d at 522. In deciding whether to abstain, the court does not treat the factors as “a

mechanical checklist.” Moses H. Cone Memorial Hosp., 460 U.S. at 16. Rather, the analysis rests

on “a careful balancing of the important factors as they apply in a given case.” Ibid. Accordingly,

“[t]he weight to be given to any one factor may vary greatly from case to case, depending on the

particular setting of the case.” Ibid.

1. Jurisdiction Over a Res

The first factor is whether the controversy concerns a res over which one of the two courts

has already assumed jurisdiction. “In cases where a court has custody of property, that is,

proceedings in rem or quasi in rem . . . the state or federal court having custody of such property

has exclusive jurisdiction to proceed.” F.D.I.C. v. Four Star Holdings Co., 178 F.3d 97, 122 (2d

Cir. 1999) (quoting Donovan v. City of Dallas, 377 U.S. 408, 412 (1964)) (emphasis in Four Stars

Holdings Co.). A foreclosure action is an in rem proceeding. Id. at 102. Accordingly, defendant

argues that the Appellate Division has exclusive jurisdiction over the property. Def.’s Memo at

11-12. However, because the trial court vacated defendant’s foreclosure action without expressly

retaining jurisdiction, see Am. Compl. Ex. I, that court surrendered jurisdiction over the property.

See Gustavia Home LLC v. VVS1 Corp., No. 17-CV-4330, 2019 WL 2527291, at *5 (E.D.N.Y.

June 19, 2019), aff'd, 805 F. App’x 82 (2d Cir. 2020); La Barbera v. J F H Mak Trucking, No. 98-

CV-7291, 2007 WL 1827833, at *3 (E.D.N.Y. June 22, 2007) (citing Kokkonen v. Guardian Life

Ins. Co. of America, 511 U.S. 375, 381-82 (1994)). Defendant has not cited any authority

establishing that the Appellate Division acquired exclusive jurisdiction over the property on

appeal. Nor does this Court have exclusive jurisdiction, because a quiet title action is not an in

rem proceeding. See Nevada v. United States, 463 U.S. 110, 143-44 (1983) (“[Q]uiet title actions

are in personam actions”); Oneida Indian Nation of Wisconsin v. New York, 732 F.2d 261, 265 (2d

Cir. 1984) (“Ordinarily a judgment in . . . a quiet title action will not affect the interests of others

than the parties or those in privity with them. Such actions do not operate in rem upon the land

itself.”). Since neither this Court nor the Appellate Division has exclusive jurisdiction over the

property at issue in this case, this factor is neutral and thus favors exercising jurisdiction.

2. Convenience

The second Colorado River factor is whether the state or federal forum is more convenient

for the parties. Both the Appellate Division, Second Department and this Court are located in

Brooklyn, New York and are just a few blocks from each other. “Where the federal court is just

as convenient as the state court, that factor favors retention of the case in federal court.” Village

of Westfield v. Welch’s, 170 F.3d 116, 122 (2d Cir. 1999) (quotations omitted).

3. Piecemeal Litigation

The third Colorado River factor is whether staying or dismissing the action will avoid

piecemeal litigation. In assessing this factor, courts in the Second Circuit bear in mind that “[t]here

is no bar against parallel in personam actions proceeding in two or more courts.” Woodford, 239

F.3d at 525; see, e.g., Buhannic v. Schroeder, No. 18-CV-10170, 2019 WL 4735378, at *5

(S.D.N.Y. Sept. 27, 2019) (Ramos, J.), appeal dismissed sub nom. Buhannic v. Tradingscreen Inc.,

No. 19-CV-3498, 2020 WL 6265085 (2d Cir. Apr. 30, 2020); CVR Energy, Inc. v. Wachtell,

Lipton, Rosen & Katz, 14-CV-6566 RJS, 2014 WL 7399040, at *4 (S.D.N.Y. Dec. 29, 2014)

(Sullivan, J.). The “primary context” in which Colorado River abstention has been invoked to

avoid piecemeal litigation has been in suits “that posed a risk of inconsistent outcomes not

preventable by principles of res judicata and collateral estoppel.” Niagara Mohawk Power Corp.

v. Hudson River-Black Regulating Dist., 673 F.3d 84, 102 (2d Cir. 2012) (quoting Woodford, 239

F.3d 524).

Here, the third Colorado River factor weighs against abstention because collateral estoppel

will be able to prevent inconsistent outcomes in the parallel actions. Collateral estoppel will

preclude a federal court from deciding an issue if “(1) the issue in question was actually and

necessarily decided in a prior proceeding, and (2) the party against whom the doctrine is asserted

had a full and fair opportunity to litigate the issue in the first proceeding.” McKithen v. Brown,

481 F.3d 89, 105 (2d Cir. 2007) (internal citation omitted). As explained above, the parallel

actions here “actually and necessarily,” ibid., concern the enforceability of defendant’s mortgage,

see supra Section I.A. And in either action, the parties will have a “full and fair opportunity” to

litigate the enforceability of defendant’s mortgage. McKithen, 481 F.3d at 105. Therefore,

whenever a judgment is rendered in one of the parallel actions, that judgment will have preclusive

effect in the second parallel action.

4. Order of the Actions and Relative Progress

The fourth factor is the order in which the two actions were filed and whether the

proceedings have advanced further in one forum than the other. This factor supports abstention.

While the instant quiet title action was filed a few weeks before defendant noticed its appeal of the

trial court’s denial order to the Appellate Division, the decision to abstain “[d]oes not rest on a

race to the courthouse.” Arkwright-Boston Mfrs. Mut. Ins. Co. v. City of New York, 762 F.2d 205,

211 (2d Cir. 1985). Rather, “this factor is considered in a common-sense manner by examining

how much progress has been made in each forum.” Ibid. (citing Moses H. Cone Memorial Hosp.,

460 U.S. at 21-22). The foreclosure dispute pending in state court was initiated over a decade ago

and has gone through multiple rounds of decisions. It is currently awaiting further decision on

appeal, whereas this action remains in pre-answer motion practice. As such, this dispute has

advanced much further in state court than here, which weighs in favor of abstention. Cf. Colorado

River, 424 U.S. at 820 (finding significant “the apparent absence of any proceedings in the District

Court, other than the filing of the complaint, prior to the motion to dismiss”).

5. Whether Federal Law Provides the Rule of Decision

The fifth factor is whether state or federal law provides the rule of decision. This factor

weighs in favor of abstention. Plaintiff’s quiet title action is asserted under New York real property

law and does not pose or even implicate any federal law issues. While plaintiff argues that courts

in this district are “well-versed” in the RPAPL, Pl.’s Mem. in Opp’n at 16, there can be no doubt

that New York State courts have far more experience interpreting and applying its provisions,

making them “particularly well suited to decide the issue[s]” presented by this case. Sitgraves,

265 F. Supp. 3d at 415; see Arkwright-Boston, 762 F.2d at 211 (“[I]f either forum is in a better

position to sort out the issues presented by this case, it is the state court, as the case involves

exclusively questions of local law.”). Moreover, adjudicating this dispute requires much more

than a mechanical application of the six-year statute of limitations to defendant’s foreclosure

action. Rather, as explained above, this case cannot be decided without passing on the state law

issues presented in defendant’s pending appeal. Those issues are complex—this is far from a

“‘garden variety’ federal diversity suit applying well-settled state law principles.” Arkwright-

Boston, 762 F.2d at 211 (quoting Giardina v. Fontana, 733 F.2d 1047, 1051 (2d Cir. 1984)).

6. Adequacy of State Procedures to Protect Federal Rights

The sixth factor is whether state procedures are adequate to protect the plaintiff’s federal

rights. This factor does not favor abstention, because plaintiff has not mounted a credible argument

that the procedures afforded by the New York State courts are insufficient to protect its rights.

While plaintiff argues that it is being prejudiced by defendant’s “egregious delays” and untimely

filings, Pl.’s Mem. in Opp’n at 16-17, there is no reason why the state court cannot enforce its own

rules against any practices that plaintiff finds objectionable. See Sitgraves, 265 F. Supp. 3d at 415.

Similarly, plaintiff has offered no reason to believe that the Appellate Division is incapable of

rendering a “complete and prompt resolution of the issues between the parties.” Niagara Mohawk,

673 F.3d at 103 (quotations omitted). While it is true that this foreclosure dispute has been working

its way through state court for years, it is dubious that a federal court could “unravel the various

unsettled state law issues and fashion appropriate relief more easily and quickly than the state

system can rule on its own law.” Canaday, 608 F. Supp. at 1475. Because plaintiff has not shown

that state procedures are inadequate, this factor does not favor abstention. But because “this factor

is significant only if it militates in favor of federal jurisdiction,” Zemsky v. City of New York, 821

F.2d 148, 153 (2d Cir.1987), I do not assign it much weight in the Colorado River analysis.

* * *

In sum, four of the Colorado River factors are neutral, and thus favor retaining the case,

and two of the factors favor abstention. Of course, the decision whether to abstain “does not rest

on a mechanical checklist, but on a careful balancing of the important factors as they apply in a

given case.” Niagara Mohawk, 673 F.3d at 104 (internal quotation marks omitted). Nevertheless,

the Court remains bound by the “virtually unflagging obligation” to exercise

jurisdiction, Colorado River, 424 U.S. at 817, and concludes that the Colorado River factors—

“heavily weighted in favor of the exercise of jurisdiction,” Niagara Mohawk, 673 F.3d at 100—

do not support abstention here. Although this approach will undoubtedly result in two courts

considering the same legal issues at the same time, duplicative litigation, by itself, does not justify

abstention under Colorado River. See Woodford, 239 F.3d at 522 (“[G]enerally, as between state

and federal courts, the rule is that the pendency of an action in the state court is no bar to

proceedings concerning the same matter in the Federal court having jurisdiction.”

(quoting Colorado River, 424 U.S. at 817)). Accordingly, defendant’s motion for Colorado River

abstention is denied.

II. A Discretionary Stay Is Appropriate

Even when a court does not abstain under Colorado River, it may, “in the exercise of its

discretion,” “stay[] proceedings in the action before it pending a decision by the state court, with

a view to avoiding wasteful duplication of judicial resources and having the benefit of the state

court’s views.” Giulini v. Blessing, 654 F.2d 189, 193 (2d Cir. 1981) (internal citations omitted);

see, e.g., Glenclova Inv. Co. v. Trans-Res., Inc., 874 F. Supp. 2d 292, 313–14 (S.D.N.Y. 2012)

(declining to abstain under Colorado River but granting a discretionary stay); Chartis Seguros

Mexico, S.A. de C.V. v. HLI Rail & Rigging, LLC, No. 11-CV-3238, 2011 WL 13261585, at *2

(S.D.N.Y. Nov. 3, 2011) (same); cf. Carmona v. Loma Negra Compania Indus. Argentina

Sociedad Anonima, No. 18-CV-11323, 2019 WL 3783328, at *2-3 (S.D.N.Y. Aug. 9, 2019)

(recognizing, but declining to exercise, the right to grant a discretionary stay after denying a motion

to abstain under Colorado River). When deciding whether to stay a proceeding, courts commonly

weigh seven factors: “(1) considerations of comity; (2) promotion of judicial efficiency; (3)

adequacy and extent of relief available in the alternative forum; (4) identity of parties and issues

in both actions; (5) likelihood of prompt disposition in the alternative forum; (6) convenience of

the parties, counsel and witnesses; and (7) possibility of prejudice to a party as the result of the

stay.” De Carvalhosa v. Lindgren, 546 F. Supp. 228, 230 (S.D.N.Y. 1982); see, e.g., Furman v.

Rich, No. 19-CV-2748 (EK) (JO), 2020 WL 3975469, at *9 (E.D.N.Y. July 14, 2020) (quoting De

Carvalhosa); Chartis, 2011 WL 13261585, at *2 (same).

After considering all of these factors, I find that a discretionary stay is appropriate. The

interests of comity and judicial efficiency are particularly weighty here. The parties are disputing

complex questions of New York law, on which state courts have particular expertise. And their

foreclosure dispute has already been the subject of litigation for years in state court—a convenient

forum that is capable of providing adequate relief. Expending federal judicial resources on parallel

quiet-title litigation would be inefficient. The state courts’ expertise and the long-running nature

of the state litigation militate strongly in favor of staying federal proceedings pending resolution

of the parties’ state dispute. In the event that the state court does not resolve plaintiff’s claim

within six months, either party may request that the stay be lifted. In light of the stay, defendant’s

Rule 12(b)(6) motion to dismiss is denied at this time, without prejudice to renewal once the stay

is lifted.

CONCLUSION

For the reasons set forth above, the Court declines to apply the Colorado River abstention

doctrine. Nevertheless, the Court exercises its inherent powers to grant a discretionary stay of the

proceedings pending the resolution of the parallel state court proceeding. Defendant’s Rule

12(b)(6) motion to dismiss is denied without prejudice and may be renewed if the stay is lifted.

SO ORDERED.

/s/ Rachel Kovner

RACHEL P. KOVNER

United States District Judge

Dated: Brooklyn, New York

November 30, 2020