Patel v. Singh

CourtDistrict Court, E.D. New York
DecidedFebruary 28, 2023
Docket2:21-cv-00759
StatusUnknown

This text of Patel v. Singh (Patel v. Singh) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patel v. Singh, (E.D.N.Y. 2023).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

PRATIK PATEL and LALIT PATEL, MEMORANDUM & ORDER Plaintiffs, 21-CV-00759 (HG) (LGD)

v.

NODDY SINGH and ARJUN SINGH,

Defendants.

HECTOR GONZALEZ, United States District Judge: This decision resolves Defendants’ motion to dismiss Plaintiffs’ complaint, see ECF No. 22, and Plaintiffs’ motion to dismiss Defendants’ counterclaims, see ECF No. 19, including the issues related to those motions about which Judge Seybert requested additional briefing while she presided over this case, see ECF No. 28. As further set forth below, the Court has considered the parties’ submissions both related to their original motions and in response to Judge Seybert’s order and finds that diversity jurisdiction exists over Plaintiffs’ claims. The Court therefore denies Defendants’ motion to dismiss and grants Plaintiffs’ motion seeking permission to file their proposed amended complaint. The Court also denies Plaintiffs’ motion to dismiss Defendants’ counterclaims. PROCEDURAL HISTORY Plaintiff Pratik Patel alleges that he received $50,000 from Plaintiff Lalit Patel to invest with Defendants in a food services business, Pan King, Inc. ECF No. 1 ¶¶ 2–3. As a result of that investment, Pratik Patel allegedly received a 25% ownership interest in Pan King, and Defendants Noddy Singh and Arjun Singh split evenly between themselves the remaining 75% ownership interest in the corporation. Id. ¶¶ 2–4. Plaintiffs allege that despite Pratik Patel having done substantial work on behalf of Pan King, they never received any profits from the business, and Defendants instead caused Pratik Patel to become liable for unpaid taxes and penalties of $5,723.45 attributable to Pan King’s supposed profits. Id. ¶¶ 7–14; see ECF No. 1-2. Plaintiffs’ complaint asserted a variety of claims, some of which have been withdrawn in their proposed amended complaint, all of which were based on New York law and premised on the

Court’s diversity jurisdiction. ECF No. 1 ¶ 5. Defendants’ answer asserted counterclaims for attorneys’ fees and to recoup losses that Plaintiffs supposedly caused Pan King to incur. ECF No. 12 ¶¶ 143–54. They also moved to dismiss the complaint on the grounds that Plaintiffs did not adequately serve Arjun Singh and that Plaintiffs failed adequately to plead the amount-in-controversy requirement necessary for diversity jurisdiction. ECF No. 22. Plaintiffs moved to dismiss Defendants’ counterclaims. ECF No. 19. Judge Seybert, who previously presided over this case, responded to the parties’ motions by seeking further briefing about jurisdictional issues and directing Plaintiffs to file a proposed amended complaint addressing those issues. ECF No. 28. First, she directed Plaintiffs to

address the states of citizenship of the Patels and the Singhs. Id. at 4. Second, since Plaintiffs assert some derivative claims on behalf of Pan King, she directed Plaintiffs to address in their proposed amended complaint and supplemental memorandum of law whether Pan King should be aligned as a plaintiff or defendant in this case and whether the Court may exercise diversity jurisdiction based on that alignment. Id. at 5. Plaintiffs responded by filing an amended complaint with new allegations about the parties’ states of citizenship, along with allegations designed to show that Defendants exercised control over Pan King and that Pan King should, therefore, be aligned as a Defendant for purposes of Plaintiffs’ derivative claims. ECF No. 34. Plaintiffs’ proposed amended complaint asserts direct claims, in Plaintiffs’ individual capacity, for breach of contract and an accounting. Id. ¶¶ 32–37, 65–68. Plaintiffs also assert a derivative claim on behalf of Pan King for conversion and assert a breach of fiduciary duty claim that they allege as a derivative claim or, alternatively, as a direct claim. Id. ¶¶ 38–64. Plaintiffs had previously asserted each of these

claims in their original complaint. See ECF No. 1. However, Plaintiffs’ proposed amended complaint also asserts several new claims on behalf of Pratik Patel for alleged violations of the New York Labor Law related to the work that Pratik Patel performed on behalf of Pan King. ECF No. 34 ¶¶ 69–84. Specifically, Pratik Patel alleges that Defendants failed to pay him the full amount of minimum wages and overtime that he was owed for his work and failed to provide him with written statements of his wages at the time he was hired and with each paycheck. Id. LEGAL STANDARD To withstand a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).1 “A claim is plausible ‘when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Although all allegations contained in the complaint are assumed to be true, this tenet “is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678. When a defendant makes a facial challenge to the sufficiency of the allegations in a plaintiff’s complaint related to subject matter jurisdiction, rather than offering extrinsic evidence that attempts to rebut those allegations, the Court must still “accept[] the allegations in the

1 Unless noted, case law quotations in this order accept all alterations and omit all internal quotation marks, citations, and footnotes. complaint as true and draw[] all reasonable inferences in favor of the plaintiff.” Palmer v. Amazon.com, Inc., 51 F.4th 491, 503 (2d Cir. 2022) (applying same pleading standard to “district court’s grant of a motion to dismiss under Rules 12(b)(1) and 12(b)(6)”); see also Harty v. W. Point Realty, Inc., 28 F.4th 435, 441 (2d Cir. 2022) (explaining the difference between “facial”

and “fact-based” challenges to subject matter jurisdiction). DISCUSSION I. Diversity Jurisdiction A. Diversity of Citizenship Exists Between the Individual Parties The simplest issue that the Court must resolve to determine whether it has diversity jurisdiction is whether the citizenship of the parties is diverse. The Court concludes that Plaintiffs’ proposed amended complaint addresses the concerns raised by Judge Seybert regarding the individual parties’ states of citizenship and properly alleges that the individual Defendants are citizens of different states than Plaintiffs. “An individual’s citizenship, within the meaning of the diversity statute, is determined by his domicile[,] in other words the place

where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning.” Van Buskirk v. United Grp. of Cos., 935 F.3d 49, 53 (2d Cir. 2019). Plaintiffs allege that they are domiciled in New Jersey, at the specific address identified in the proposed amended complaint, and intend to remain there, and that Defendants are domiciled in New York and intend to remain there. ECF No. 34 ¶¶ 6–8. Defendants argue that Plaintiffs’ allegations about Defendants’ domicile are conclusory, but Defendants proffer no facts disputing that they are citizens of New York. If Defendants have contrary facts, then they may challenge Plaintiffs’ assertions of diversity of citizenship on summary judgment. B.

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Patel v. Singh, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patel-v-singh-nyed-2023.