23-86-cv (L) Travco Ins. Co. v. Dinerman

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.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 18th day of December, two thousand twenty-three.

PRESENT: DENNIS JACOBS, RAYMOND J. LOHIER, JR., WILLIAM J. NARDINI, Circuit Judges. ------------------------------------------------------------------ TRAVCO INSURANCE COMPANY, AS SUBROGEE OF ERIC VICTOR,

Plaintiff-Counter-Defendant-Appellee,

v. Nos. 23-86-cv(L), 23-163-cv(CON) SALLY DINERMAN, IRA DINERMAN,

Defendants-Counter-Claimants-Appellants.* ------------------------------------------------------------------

* The Clerk of Court is directed to amend the caption as set forth above. FOR PLAINTIFF-COUNTER- Daniel J. Krisch, Halloran & DEFENDANT-APPELLEE: Sage LLP, Hartford, CT

FOR DEFENDANTS-COUNTER- Sally Dinerman, pro se, CLAIMANTS-APPELLANTS Brooklyn NY; Ira Dinerman, pro se, Brooklyn, NY

Appeal from a judgment of the United States District Court for the Eastern

District of New York (Hector Gonzalez, Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the District Court is AFFIRMED.

Appellants Sally and Ira Dinerman, proceeding pro se, appeal the judgment

and various orders of the United States District Court for the Eastern District of

New York (Gonzalez, J.) granting the appellee’s motion for voluntary dismissal

with prejudice under Federal Rule of Civil Procedure 41(a)(2), denying their

motion for attorneys’ fees, and denying their motion for reconsideration. We

assume the parties’ familiarity with the underlying facts, the procedural history,

and issues on appeal, to which we refer only as necessary to explain our decision

to affirm.

This appeal stems from an action brought by Travco Insurance Company

(“Travco”) against the Dinermans as a result of fire and water damage to an

2 apartment insured by Travco. Travco blamed the Dinermans, who lived in an

adjoining apartment, for the damage and sought to recover over $161,000. Years

into the litigation, the Dinermans mailed Travco a check for $20,000—an amount

corresponding exactly to a settlement offer that they had previously made to

Travco. Travco cashed the check and informed the Dinermans that it fully

settled Travco’s claims against them. After the Dinermans refused to sign a

stipulation of dismissal, Travco moved under Rule 41(a)(2) to voluntarily dismiss

its case against the Dinermans with prejudice. The Dinermans filed a response

that the District Court construed as opposing Travco’s motion and also moving

for attorneys’ fees. The District Court granted Travco’s motion to voluntarily

dismiss the case with prejudice and denied the Dinermans’ motion for attorneys’

fees and their subsequent motion for reconsideration. 1

I. Voluntary Dismissal Under Rule 41(a)(2)

We review a voluntary dismissal under Rule 41(a)(2) for abuse of

1 Travco raises a challenge to this Court’s appellate jurisdiction. A party ordinarily lacks standing to appeal an order unless aggrieved by it, and by extension cannot appeal a judgment or decree entered in his or her favor. See Spencer v. Casavilla,

(2d Cir. 1994). Because the District Court’s judgment could be viewed as ratifying the existence of a settlement agreement that the Dinermans dispute, the Dinermans are sufficiently aggrieved by the District Court’s judgment to have standing to appeal. 3 discretion. Correspondent Servs. Corp. v. First Equities Corp.,

(2d

Cir. 2003). We “liberally construe pleadings and briefs submitted by pro se

litigants, reading such submissions to raise the strongest arguments they

suggest.” Publicola v. Lomenzo,

(2d Cir. 2022).

Here, the dismissal with prejudice of the claims against the Dinermans has

“the effect of a final adjudication on the merits favorable” to them. Nemaizer v.

Baker,

(2d Cir. 1986) (emphasis added). In other words, the

Dinermans won the case below and cannot be sued again by Travco for claims

arising from the apartment fire. See

at 60‒61. On appeal, they nevertheless

claim that they never agreed to settle with Travco and want Travco to return the

$20,000 payment. In effect, the Dinermans challenge the Rule 41(a)(2) dismissal

on the ground that it prevents them from recovering that payment.

We are not persuaded. While we review Rule 41(a)(2) dismissals for

possible harm to the defendant when the plaintiff’s claims are dismissed without

prejudice, we do not do the same for claims that are dismissed with prejudice.

Cf. Camilli v. Grimes,

(2d Cir. 2006) (finding, in the context of

evaluating a Rule 41(a)(2) dismissal without prejudice, that factors such as

“vexatiousness on the plaintiff’s part” and “the extent to which the suit has

4 progressed” have “little relevance” when “no possibility of relitigation at the

instance solely of the plaintiff exists”). And while the District Court here

assumed without deciding in its dismissal order that the parties had reached a

settlement, the dismissal was premised on the plaintiff’s desire to discontinue the

case, not the existence of a settlement. See Fed. R. Civ. P. 41(a)(2) (providing that

a dismissal pursuant to a court order may be conditioned on terms that the court

considers proper).

Because the District Court did not finally decide whether there was a

settlement, that issue remains unresolved. The dismissal itself does not prevent

the Dinermans from challenging the existence of the settlement and attempting

to recoup the $20,000 payment in a separate action. See Hoblock v. Albany Cnty.

Bd. of Elections,

, 94 (2d Cir. 2005) (noting that issue preclusion applies

under New York law only if “the issue in question was actually and necessarily

decided in a prior proceeding” (quotation marks omitted)); see In re Holocaust

Victim Assets Litig.,

(2d Cir. 2000) (finding a lack of prejudice in

denial of motion to intervene when a party “remain[ed] free to file a separate

action”); D’Alto v. Dahon California, Inc.,

(2d Cir. 1996)

(“[S]tarting a litigation all over again does not constitute legal prejudice.”).

5 In summary, the Dinermans have not shown that the District Court abused

its discretion in granting the motion for voluntary dismissal or denying the

motion for reconsideration. See Warren v. Pataki,

(2d Cir. 2016).

II. Motion for Attorneys’ Fees

We review the denial of attorneys’ fees for abuse of discretion. Scarangella

v. Grp. Health, Inc.,

(2d Cir. 2013). “Under the prevailing

American rule, in a federal action, attorneys’ fees cannot be recovered by the

successful party in the absence of statutory authority for the award.” Odeon

Capital Grp. LLC v. Ackerman,

(2d Cir. 2017) (quotation marks

omitted). However, “[p]ursuant to its inherent equitable powers . . . a court

may award attorneys’ fees when the opposing counsel acts in bad faith,

vexatiously, wantonly, or for oppressive reasons.”

(quotation marks

omitted). Here, the Dinermans failed to show that Travco’s subrogation claim

was meritless or brought for improper purposes. See Kerin v. U.S. Postal Serv.,

(2d Cir. 2000). We accordingly affirm the District Court’s

order denying the motion for attorneys’ fees.

CONCLUSION

We have considered the Dinermans’ remaining arguments and conclude

6 that they are without merit. For the foregoing reasons, the judgment of the

District Court is AFFIRMED.

FOR THE COURT: Cathrine O’Hagan Wolfe, Clerk of Court

7