Steinberger Ex Rel. Last Will & Testament of Steinberger v. Lefkowitz

15-1365
Steinberger v. Lefkowitz
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 ASUMMARY ORDER@). A PARTY CITING TO 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 15th day of December, two thousand fifteen.
PRESENT:
PETER W. HALL,
DENNY CHIN,
SUSAN L. CARNEY,
Circuit Judges.
_________________________________________
Simche Steinberger, as Executor of the last Will
and Testament of Tibor Steinberger,
Plaintiff-Appellant,
v. 15-1365
Jack Lefkowitz, Bluma Lefkowitz, Maskil El-Dal,
Inc., Care to Care Management, LLC,
Maimonides Medical Services LLC, Medscan
Mobile,
Defendants-Appellees,
“John Does” 1 through 10,
Defendants.
__________________________________________
FOR PLAINTIFF-APPELLANT: SOLOMON E. ANTAR, Brooklyn, NY.
FOR DEFENDANTS-APPELLEES
JACK LEFKOWITZ, BLUMA LEFKOWITZ,
MASKIL EL-DAL, INC., MAIMONIDES
MEDICAL SERVICES LLC,
MEDSCAN MOBILE: JAMES J. BEHA, II, MICHAEL B.
MILLER, Morrison & Foerster, LLP,
New York, NY.
FOR DEFENDANT-APPELLEE
CARE TO CARE MANAGEMENT, LLC: ROY W. BREITENBACH, MICHAEL J.
KEANE, JR., Garfunkel Wild, P.C.,
Great Neck, NY.
__________________________________________
Appeal from a judgment of the United States District Court for the Eastern District of New
York (Johnson, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-Appellant Simche Steinberger (“Simche”) appeals the district court’s order
dismissing all of his claims against defendants-appellees for lack of standing. We assume the
parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on
appeal. For the reasons stated below, we affirm.
We review the district court’s dismissal for lack of standing de novo. Hirsch v. Arthur
Andersen & Co., 72 F.3d 1085, 1091 (2d Cir. 1995). “Because ‘standing is challenged on the
basis of the pleadings, we accept as true all material allegations of the complaint, and must
construe the complaint in favor of the complaining party.’” W.R. Huff Asset Mgmt. Co. v. Deloitte
& Touche LLP, 549 F.3d 100, 106 (2d Cir. 2008) (quoting United States v. Vazquez, 145 F.3d 74,
81 (2d Cir. 1998)) (quotation marks omitted).
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In order to establish the court’s subject matter jurisdiction, “a plaintiff must show the three
familiar elements of standing: injury in fact, causation, and redressability.” Cacchillo v. Insmed,
Inc., 638 F.3d 401, 404 (2d Cir. 2011); see also Lujan v. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992). “It is a long-settled principle that standing cannot be inferred argumentatively
from averments in the pleadings, but rather must affirmatively appear in the record.” FW/PBS,
Inc. v. City of Dallas, 493 U.S. 215, 231 (1990) (citations and quotation marks omitted). The
plaintiff thus bears the burden “clearly to allege facts [in his complaint] demonstrating that he is a
proper party to invoke judicial resolution of the dispute.” Warth v. Seldin, 422 U.S. 490, 518
(1975); see also Raines v. Byrd, 521 U.S. 811, 818 (1997) (noting that the Article III standing
inquiry “focuses on whether the plaintiff is the proper party to bring [the] suit”). “If [the plaintiff]
fails to make the necessary allegations he has no standing.” Lupo v. Human Affairs Int’l, Inc., 28
F.3d 269, 273 (2d Cir. 1994) (quoting McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178,
189 (1936)).1
As executor of his father’s estate, Simche has standing to bring only those claims that his
father, Tibor Steinberger (“Tibor”), had standing to bring at the time of his death. See Sprint, 554
U.S. at 288. Simche therefore must plead facts that show a particularized injury to Tibor, one
distinct from any injury to Tibor’s solely-owned company, 178 Franklin Holding Corp.
(“Frankling Holding”). See Jones, 836 F.2d at 736 (“A shareholder—even the sole
1
The district court identified the standing issue in this case as one rooted in prudential concerns, rather than in
Article III. Steinberger v. Lefkowitz, 1:13-CV-5737, 2015 WL 1514407, at *3 (S.D.N.Y. Mar. 31, 2015); see Lerner
v. Fleet Bank, 318 F.3d 113, 126 (2d Cir. 2003) (noting one prudential standing tenet is “the general prohibition on a
litigant’s raising another person’s legal rights” (quotation omitted)). While prudential concerns may be at play here,
we think the issues in this case—which involve third-party standing and shareholder standing—are more appropriately
analyzed under our constitutional standing jurisprudence. See Sprint Commc’ns Co. v. APCC Servs., Inc., 554 U.S.
269, 288 (2008) (discussing constitutional limitations on third-party standing); Jones v. Niagara Frontier Transp.
Auth., 836 F.2d 731, 736 (2d Cir. 1987) (discussing constitutional limitations on shareholder standing).
3
shareholder—does not have standing to assert claims alleging wrongs to the corporation.”); accord
Serino v. Lipper, 123 A.D.3d 34, 39 (1st Dep’t 2014) (“It is black letter law that a stockholder has
no individual cause of action against a person or entity that has injured the corporation.”).
Because Simche does not clearly allege facts in his complaint demonstrating that his father
had standing at the critical time, Simche fails to establish the court’s jurisdiction over this matter.
On appeal, Simche highlights two particular allegations in his complaint that he argues clearly
show the transfer of the disputed funds from Franklin Holding to Tibor in his individual capacity.
The first allegation, Paragraph 30 of Simche’s complaint, explains that “Tibor Steinberger, as the
sole stockholder and beneficial owner of 178 Franklin Holding Corp, concluded a real estate
transaction . . . whereby the proceeds thereof, instead of being paid to him . . . were retained for his
use and benefit in the IOLA escrow account of Bernard Schafran, Esq., the attorney for the seller.”
J.A. at 21. Our reading of this statement is the same as the district court’s—that the property was
sold by the corporation, and the proceeds were retained in escrow by the corporation’s attorney,
and explicitly not paid to Tibor. Simche’s characterization of these proceeds as being “retained
for [Tibor’s] use and benefit” therefore appears accurate only insofar as Tibor had access to those
funds as the corporation’s sole shareholder. Id. While it is conceivable that in actuality Tibor
transferred the real estate to himself before selling it, or that some other series of events resulted in
Tibor being the owner of the proceeds from that sale, these facts are not alleged and the facts as
pleaded do not establish that Tibor had standing. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007) (“Because the plaintiff[] here ha[s] not nudged [his] claims across the line from
conceivable to plausible, [his] complaint must be dismissed.”).
4
Simche also cites Paragraph 34 of his complaint, which references a letter from defendant
Jack Lefkowitz, “as trustee,” on Maskil-El Dal, Inc. letterhead, to Tibor, dated around the same
time as the above-described real estate transaction. The letter, which is attached as an exhibit to
the complaint, reads:
Please be advised all monies transferred in to our account as per instruction of Mr.
Tibor Steinberger shell [sic] be held in trust for your benefit. Upon written request
from yourself monies will be released to you promptly as per your instruction and
direction. Maskil El-Dal may commingle the Steinberger funds in its account
without any further liability to Mr. Steinberger.
J.A. at 74. This letter is insufficient to constitute a plausible basis to find that Tibor acquired
ownership of the proceeds from the Franklin Holding real estate transaction at the relevant time.
To be sure, a conceivable interpretation of the letter implies that Tibor had somehow acquired
ownership of certain unspecified funds and then transferred them to Maskil El-Dal, but the letter
was neither written nor signed by Tibor and does not mention any specific transaction. That
interpretation therefore would require multiple inferences and is not readily apparent. See
FW/PBS, Inc., 493 U.S. at 231 (“[S]tanding cannot be inferred argumentatively from averments in
the pleadings, but rather must affirmatively appear in the record.” (quotation omitted)). Indeed,
Simche’s complaint is inconsistent with that reading of the letter. He alleges that Franklin
Holding’s attorney, against Tibor’s wishes, transferred the disputed funds into accounts controlled
by Jack and Bluma Lefkowitz. Simche’s failure clearly and plausibly to allege that the funds he
claimed were fraudulently taken by defendants belonged to Tibor, and not to Franklin Holding, is
fatal to his complaint.2
2
At oral argument, the parties discussed the fact that Franklin Holding was dissolved by Order of
Proclamation of the State of New York at some point after completion of the real estate transaction and before Tibor
Steinberger died. Because Simche alleged nothing in his complaint regarding this dissolution, however, we cannot
5
Even if Simche had plausibly alleged that Tibor owned the disputed funds, materials
submitted by defendants in support of their motion to dismiss indicate that Tibor may have
assigned to a third party, Barry Kretzmer, any claims he had against the defendants. While it is
not clear that Tibor’s putative assignment to Kretzmer was effective, the assignment is yet another
factor that raises questions as to whether Simche has standing to pursue this claim, questions that
are left unanswered by the unclear allegations of the complaint. For all of these reasons, we hold
that Simche has not met his burden of “demonstrating that he is a proper party to invoke judicial
resolution of th[is] dispute.” Warth, 422 U.S. at 518.
We have considered all of Simche’s remaining arguments and find them to be without
merit. The judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
determine whether and how the dissolution, or any subsequent distribution of assets to shareholders, may have
affected Tibor’s ownership of the funds.
6