Thornton v. Young

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

THEODORE K. THORNTON,

Plaintiff,

OPINION & ORDER

– against –

20 Civ. 10606 (ER)

JACQUELINE L. YOUNG,

Defendant.

RAMOS, D.J.:

Theodore K. Thornton brought this action against Jacqueline L. Young for an

alleged breach of contract. Thornton alleges that Young failed to pay him for the services

he performed pursuant to an agreement whereby he would attend to her financial affairs

while she was recovering from a stroke. Doc. 6. Pending before the Court is Thornton’s

motion to voluntarily dismiss the instant action, without prejudice, pursuant to Federal

Rule of Civil Procedure 41(a)(2). Doc. 14. Young argues that the motion should be

denied or the action dismissed, with prejudice, unless Thornton agrees to certain

conditions. Doc. 17. For the reasons set forth below, Thornton’s motion is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

Thornton and Young met several years ago by telephone through their

involvement with a start-up pharmaceutical company, Immune Therapeutics. ¶ 6.1 In

March 2019, Young was hospitalized after suffering a stroke. ¶ 5. At the time of her

hospitalization, Young’s financial condition was poor, largely due to the failure of

Immune Therapeutics to pay her for the royalties due for licensed drug patents, in breach

1 Unless otherwise noted, citations to “¶ _” refer to the Complaint, Doc. 6.

of a patent licensing agreement. ¶ 6.2 Additionally, Young’s expenses and financial

obligations far exceeded her ability to meet them. ¶ 7.

In March 2019, Young was receiving only $1,500 per month in Social Security

income. ¶ 7. Meanwhile, she owed $1,600 per month in co-op maintenance fees, for

which she was approximately $20,000 in arrears. Id. As a result, the co-op board

obtained a final judgment against her and served her with an eviction notice. Id. Further,

Young had approximately $45,000 in credit card debt, owed $38,000 to individuals for

services rendered, and had a general lien filed against her by the Internal Revenue Service

for approximately $55,000. Id.

Concerned for her long-term financial stability, a mutual friend requested that

Thornton help manage Young’s personal financial affairs during her recovery. ¶ 8.

Thornton agreed and devised a strategy to restructure Young’s personal financial affairs.

¶ 9. This strategy involved selling Young’s co-op unit, settling or renegotiating certain

debts, and relocating Young to a place with a lower cost of living. Id. Thornton reviewed

the strategy with Young’s personal attorney, William Pinzler, and her brother, Michael

Young. ¶¶ 8–9. During their discussions, a plan for Thornton’s compensation was

“proposed, orally agreed upon, and reviewed with Young,” which included

“reimbursement and interest profit on funds laid out by Thornton on Young’s behalf, and

a modest hourly rate for time spent.” ¶ 9. Further, Thornton also asked Young to execute

a general power of attorney. Id. This power of attorney was reviewed by Young’s

personal attorney and executed by Young. Id. Over the next nine months, all actions

taken by Thornton were taken under this power of attorney. Id.3

2 Young had previously licensed certain drug patents to Immune, which her deceased common law spouse,

Dr. Bernard Bihar, had developed. Doc. 6 ¶ 6.

3 Young’s attorney denies being engaged by Young for any purpose at the time of meeting Thornton. Doc.

9-1 ¶ 8. Young denies signing a power of attorney or, in the alternative, if she did sign it, claims she has no

recollection of doing so, as she was still suffering the effects of a severe stroke. Id. Furthermore, while

Young admits that Thornton devised a strategy to rearrange her personal financial affairs, she claims her

attorney had no authority to approve of such a strategy. Id. ¶¶ 9–10.

As Young recovered from her stroke, Thornton proceeded to execute the plan.

¶10. He prepared her co-op unit for sale by removing her personal effects and making

necessary repairs. Id. Specifically, Thornton restored the bathroom to make it code

compliant, as required by the board of directors of the co-op before the unit could be

offered for sale. Id. The restoration cost approximately $30,000, and was financed by a

real estate firm. Id. Additionally, Thornton hired a real estate agent to market the unit;

liquidated some of Young’s assets, including a small brokerage account, her 38-year-old

Jaguar, and her collection of jewelry; and advanced over $100,000 to pay delinquent

maintenance fees, late fees, income taxes, credit card balances, and other expenses. ¶¶

10–11. During the nine-month period in which Thornton executed these tasks, he worked

over 150 hours and kept both Young and her attorney informed of his actions. Id.

In January 2020, relations between Thornton and Young started to break down. ¶

12. Young received an over-the-market bid of $720,000 for the co-op unit from a

prospective buyer, which Thornton as well as Young’s attorney, brother, personal

assistant, and psychologist at her care center strongly recommended she accept. Id.

Although the buyer waited for months, Young refused to accept the offer, despite

Thornton’s warning that the next offer would likely be $100,000 lower. Id.

Accordingly, Thornton advised Young and her attorney that he would no longer

pay her expenses and provided them a detailed accounting of all the expenses he had

undertaken. Id. He then discontinued his efforts to assist. Id. While some of the asset

sales covered the cost of his proposed compensation, Thornton alleges that Young still

owes him $122,006.04. ¶¶ 11, 13. This figure includes $30,000 for the bathroom

restoration that was financed by the real estate firm which sued Thornton for that amount.

¶ 13.

B. Procedural Background

Thornton commenced this action on December 17, 2020. Doc. 6. On January 19,

2021, Young answered the Complaint. Doc. 9-1. On April 12, 2022, the Court scheduled

an initial court conference for May 20, 2022. Doc. 10. On April 26, 2022, Thornton

requested a pre-motion conference for his anticipated motion for a voluntary dismissal

without prejudice. Doc. 11.

In his letter, Thornton’s counsel explained that he had reached out to Young’s

counsel on April 19, 2022 to request that Young sign a stipulation of voluntary dismissal

pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii). Docs. 11, 16. The next day,

Young’s counsel replied via email that Young would sign the stipulation only if the

dismissal was with prejudice and with the additional conditions that Thornton agree to

provide a full accounting and undergo an examination under oath by Young’s attorney.

Docs. 11, 12, 16. Thornton declined to agree to the additional terms. Doc. 11.

The Court granted Thornton leave to file a motion to dismiss without prejudice,

which was filed on May 26, 2022. Doc. 14.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 41(a)(2) provides that once a defendant has

answered, absent the defendant’s consent, “an action may be dismissed at the plaintiff’s

request only by court order, on terms that the court considers proper.” Fed. R. Civ. P.

41(a)(2); see also Lan v. Time Warner, Inc., No. 11 Civ. 2870 (AT) (JCF), 2016 WL

554588, at *1 (S.D.N.Y. Feb. 9, 2016). “Unless otherwise specified in the order, [such] a

dismissal . . . is without prejudice.” Fed. R. Civ. P. 41(a)(2).

Voluntary dismissal without prejudice is “not a matter of right.” Zagano v.

Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990). However, the presumption in this Circuit

is that voluntary dismissal should be granted without prejudice, absent a showing that

“the defendant would suffer some plain legal prejudice other than the mere prospect of a

second lawsuit.” Kwan v. Schlein, 634 F.3d 224, 230 (2d Cir. 2011) (quoting Camilli v.

Grimes, 436 F.3d 120, 123 (2d Cir. 2006)). Specifically, “plain legal prejudice” includes

“the plight of a defendant who is ready to pursue a claim against the plaintiff in the same

action that the plaintiff is seeking to have dismissed.” Ascentive, LLC v. Opinion Corp.,

No. 10 Civ. 4443 (ILG), 2012 WL 1569573, at *2 (E.D.N.Y. May 3, 2012) (quoting

Camilli, 436 F.3d at 124). Further, it requires that “the cause has proceeded so far that

the defendant is in a position to demand on the pleadings an opportunity to seek

affirmative relief and [s]he would be prejudiced by being remitted to a separate action.”

Paulino v. Taylor, 320 F.R.D. 107, 109 (S.D.N.Y. 2017) (quoting Jones v. S.E.C., 298

U.S. 1, 20 (1936)).

In Zagano, the Second Circuit identified additional factors relevant to determining

whether voluntary dismissal without prejudice is appropriate: “(1) the plaintiff’s

diligence in bringing the motion, (2) any undue vexatiousness on the plaintiff’s part, (3)

the extent to which the suit has progressed, including the defendant’s efforts and expense

in preparation for trial, (4) the duplicative expense of relitigation, and (5) the adequacy of

the plaintiff’s explanation for the need to dismiss.” Kwan, 634 F.3d at 230 (quoting

Zagano, 900 F.2d at 14). While courts “will analyze each of these factors individually, [ ]

no one factor is dispositive.” S.E.C. v. Chakrapani, No. 09 Civ. 1043 (RJS), 2010 WL

2605819, at *2 (S.D.N.Y. June 29, 2010).

In Gravatt, the Second Circuit established that, under Rule 41(a)(2), a district

court, in conditioning a voluntary dismissal on terms it considers proper, “may convert a

dismissal sought to be entered without prejudice to one with prejudice.” Gravatt v.

Columbia Univ., 845 F.2d 54, 56 (2d Cir. 1988). However, fundamental fairness requires

interpreting Rule 41(a)(2) to afford the plaintiff “an opportunity to withdraw a motion for

dismissal without prejudice . . . before the dismissal is converted to one with prejudice.”

Id.; see also Shady Records, Inc. v. Source Enterprises, 371 F. Supp. 2d 394, 396

(S.D.N.Y. 2005).

III. DISCUSSION

The Court finds that dismissing the action without prejudice will not cause Young

to suffer some plain legal prejudice other than the mere prospect of a second lawsuit.

Further, the Zagano factors weigh in Thornton’s favor.

As to the first Zagano factor, Thornton acted with diligence under the

circumstances in this case. See Zagano, 900 F.2d at 14. Less than two weeks elapsed

between the time the Court scheduled the initial pretrial conference and Thornton’s email

to Young’s counsel requesting consent to dismiss the case voluntarily. When his request

was rejected, Thornton acted diligently to alert the Court and Young before filing the

instant motion, when he filed a letter seeking a pre-motion conference. Doc. 14; see

Patterson v. Cruz, No. 15 Civ. 9405 (ER), 2016 WL 6583702, at *2 (S.D.N.Y. Nov. 2,

2016); see also Ascentive, LLC, 2012 WL 1569573, at *4.

As to the second factor, Thornton was not unduly vexatious in bringing this action

or filing the instant motion. Vexatiousness refers to instances where “the case was

brought to harass the defendant,” Hinfin Realty Corp. v. Pittson Co., 206 F.R.D. 350, 356

(E.D.N.Y. 2002), or the plaintiff had “ill-motive,” Shaw Family Archives, Ltd. v. CMG

Worldwide, Inc., No. 05 Civ. 3939 (CM), 2008 WL 4127549, at * 6 (S.D.N.Y. Sept. 2,

2008). Courts will find ill-motive where, for example, “the plaintiff never had any

intention of providing discovery . . . but nonetheless permitted the case to proceed,

thereby seeking the advantage of filing its charges without having to support them; or

where the plaintiff filed duplicative actions relating to the same injury; or where the

plaintiff assured the court it would proceed with its claims but then go[es] back on their

word and seeks dismissal.” Paulino, 320 F.R.D. at 109 (quoting Banco Cent. De

Paraguay v. Paraguay Humanitarian Found., Inc., No. 01 Civ. 9649 (JFK), 2006 WL

3456521, at *2 (S.D.N.Y. Nov. 30, 2006)). The Court finds unpersuasive Young’s claim

that the sole reason Thornton seeks to dismiss this action is to avoid providing a full

accounting or an examination under oath. Nothing in the limited record before the Court

suggests Thornton initiated this lawsuit or filed this motion either with ill motive or with

the expectation that he could recover $122,006.04 without submitting proof of his actions

taken under the general power of attorney. Likewise, there is nothing to suggest he

brought this case to harass Young.

As to the third and fourth factors, both weigh in Thornton’s favor. Young argues

that dismissal without prejudice is inappropriate because she intended to bring

counterclaims and if this action is dismissed, it will be “close to impossible” to bring a

separate action against Thornton because he lives in Canada. Doc. 12. First, Thornton

argues that the burden on and expense to Young are minimal because discovery has not

yet commenced, there are no counterclaims, and only initial pleadings have been filed

and served in this matter. Doc. 11. Second, Thornton contends that, if this action is

dismissed without prejudice, Young would still be free to pursue a claim against him. Id.

Moreover, Thornton argues that she would not be barred from serving him with process

simply because he may live outside of the United States. Id. Third, while Young may

have always intended to file a counterclaim or separate action, she has done neither.

Thus, she cannot argue that dismissal is appropriate pursuant to Rule 41(a)(2) only if her

counterclaim can remain pending for independent adjudication, as there is no

counterclaim in this action. Doc 16. If she believed she had a cognizable counterclaim,

she could have asserted that claim at the outset of this action, rather than wait until after

discovery. Id.

The Court agrees. Although the case had been pending for over a year-and-a-half

when Thornton moved for voluntary dismissal, it was still in its early stages. See Jaskot

v. Brown, 167 F.R.D. 372, 373 (S.D.N.Y. 1996) (granting motion for voluntary dismissal

without prejudice, pursuant to Rule 41(a)(2), filed approximately 18 months after plaintiff

commenced the action). The standard for concluding that a case “has progressed far

enough to weigh against dismissal is high, and is usually satisfied only where substantial

discovery, summary judgment motion practice, or trial preparation has occurred.” Am.

Fed’n of State, Cty. & Mun. Employees Dist. Council 37 Health & Sec. Plan v. Pfizer,

Inc., No. 12 Civ. 2237 (JPO), 2013 WL 2391713, at *4 (S.D.N.Y. June 3, 2013). Since

the parties have not incurred significant costs or expended significant efforts, any

duplicative expenses or efforts of relitigation would be minimal. See Patterson, 2016 WL

6583702, at *3.

Further, granting Thornton’s motion would not deprive Young of her day in court.

Young has not filed any counterclaims in this action. Doc. 17. Thus, the Court need not

consider whether such claims “can remain pending for independent adjudication.” Fed.

R. Civ. P. 41(a)(2). If Young decides to bring an action against Thornton for conduct

arising out of this same incident, she is free to do so. Moreover, the Court is not required

to consider the convenience of service of process on Thornton in a future action. See

generally Zagano, 900 F.2d at 12; Fed. R. Civ. P. 41(a)(2).

Lastly, that Young, who has not filed a counterclaim, merely wants to conduct

discovery relevant to claims she might bring at a later time is not a legally sufficient basis

for denying a motion to dismiss under Rule 41(a)(2).4 Young did not cite a single legal

authority to support her argument. Moreover, she conceded that “[t]here is no question

that the Court has the power to dismiss this case” and that “[t]he Court has the power to

order a voluntary dismissal here.” Docs. 17, 17-2.

As to the fifth factor, Thornton’s purported reason for the instant motion is

sufficient. Doc. 11; see Pfizer, Inc., 2013 WL 2391713, at *5; Ascentive, 2012 WL

1569573, at *6. The explanation Thornton provides for moving to voluntarily dismiss the

action without prejudice is simply that he now wishes to do so. Doc. 16. Young contends

that the reason Thornton seeks dismissal is that he intends to keep Young’s possessions,

which he stole from her, without having to account for his actions. Doc. 12. The Court

appreciates that Thornton’s explanation is conclusory; however, there is no evidence that

he seeks dismissal “to avoid the prospect of an adverse decision on a dispositive motion.”

Galasso v. Eisman, Zucker, Klein & Ruttenberg, 310 F. Supp. 2d 569, 573 (S.D.N.Y.

2004); see Banco Cent. De Paraguay, 2006 WL 3456521, at *7. Further, because

4 Young explained that she has not filed a counterclaim because “she has no idea what she would be suing

for.” Doc. 17.

dismissal is not contingent on the reason underlying a plaintiff’s decision to voluntarily

dismiss his claims, Thornton has the right to voluntarily dismiss this action. See

Camillli, 436 F.3d at 124 (explaining that the Supreme Court clearly established the

“right to dismiss . . . is absolute. It does not depend on the reasons which the plaintiff

offers for his action. The fact that he may not have disclosed all his reasons, or may not

have given the real one, cannot affect his right.”) (quoting In re Skinner & Eddy

Corporation, 256 U.S. 86, 93–94 (1924)).

In sum, nothing about the procedural posture or the facts of this case compels the

Court to convert what would otherwise be a dismissal without prejudice into one with

prejudice, or to condition the dismissal on the terms Young proposed. Young has not

demonstrated that she would suffer some legal prejudice—other than the mere prospect of

a second lawsuit—which is required to overcome the presumption in this Circuit that

voluntary dismissal should be granted without prejudice. See Kwan, 634 F.3d at 230

(quoting Camilli, 436 F.3d at 123). Likewise, absent any counterclaims for the Court to

consider, Young has failed to persuade the Court why it should condition a voluntary

dismissal without prejudice on Thornton’s compliance with discovery requests.

IV. CONCLUSION

For the reasons discussed above, Thornton’s motion for voluntary dismissal

without prejudice is GRANTED.

The Clerk of Court is respectfully directed to terminate the motion, Doc. 14, and

close the case.

It is SO ORDERED.

Dated: October 24, 2022

New York, New York

Edgardo Ramos, U.S.D.J.