John Street Leasehold, LLC v. Capital Management Resources, L.P.
Docket: Docket No. 01-6096
Court: Court of Appeals for the Second Circuit; February 12, 2002; Federal Appellate Court
Plaintiff John Street Leasehold, LLC appeals a judgment from the United States District Court for the Southern District of New York, which granted summary judgment to the defendants based on multiple grounds: (1) res judicata barred the lawsuit; (2) the plaintiff failed to demonstrate spoliation; (3) the statute of limitations precluded the claim; (4) there was no violation of equal protection or due process; and (5) the plaintiff was not entitled to a continuance for further discovery.
John Street held a leasehold interest in a property at 127 John Street, New York City, secured by a $20,300,000 mortgage. After defaulting on payments in 1993, the FDIC, as a receiver for a failed bank involved in the loan, commenced foreclosure proceedings. In December 1993, John Street filed for Chapter 11 bankruptcy and subsequently sued the FDIC in 1995 for breach of contract and related claims, which was dismissed with summary judgment in favor of the FDIC, a decision affirmed by the Court of Appeals in 1999.
In the subsequent action, John Street alleged that non-FDIC defendants tortiously caused foreclosure by making false statements to the FDIC and failing to negotiate to avoid foreclosure. The District Court ruled in favor of the defendants, stating that the claims were barred by res judicata, as they were closely related to the previous action, sharing similar allegations, witnesses, and evidence, making it reasonable to treat them as a single trial unit.
Principles of res judicata apply, as confirmed by the District Court, barring John Street’s claims against both FDIC employees and non-FDIC defendants due to their privity with parties from a prior action. The District Court correctly deemed John Street’s assertion that these individuals acted outside their agency as frivolous, noting no evidence to support such a claim. The Court also rejected John Street’s request to remand the case to pursue a Fifth Amendment Bivens claim against non-FDIC defendants, referencing the Supreme Court's reversal of Malesko v. Correctional Services Corporation, which established that Bivens actions cannot be brought against private entities contracted by the government. The District Court determined that no viable Bivens action exists due to statute of limitations and case merits. Moreover, regarding other claims, including spoliation allegations, the District Court found no misconduct or document destruction by John Street. Consequently, the judgment of the District Court is affirmed, aligning with Judge Koeltl’s thorough opinion.
