United States District Court, D. New Jersey
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
case returns to the Court after remand from the Third
Circuit. Goldstein v. Roxborough Real Estate LLC,
677 Fed.Appx. 796 (3d Cir. 2017). The Third Circuit vacated
and remanded this Court's prior decision granting
Defendants Roxborough Real Estate, LLC (hereinafter,
“RRE”) and Brenda Hopkins' motion compel
arbitration. The Third Circuit held that there was
insufficient evidence in the record for this Court to
determine whether Plaintiff Michael Goldstein, pro
se, proceeds on his own behalf, or on behalf of limited
partnerships. Id. at 800. As such, the Third Circuit
remanded this matter to the Court for additional
fact-finding. Id. Specifically, the Third Circuit
identified three issues for the Court to consider on remand:
(1) whether Plaintiff proceeds on his own behalf; (2) if so,
whether Plaintiff has standing to bring those claims under
Pennsylvania law; and (3) whether the Court still has
jurisdiction. Presently before the Court is Defendants'
motion for judgment on the pleadings pursuant Federal Rule of
Civil Procedure 12(c) (ECF 29).
case arises from the failed real estate ventures of four
limited partnerships during the real estate market collapse.
In late 2006, Plaintiff and Richard Diamond, Defendant
Hopkins' estranged husband, formed four limited
partnerships to purchase properties in the Roxborough area of
Philadelphia, Pennsylvania. (Amended Complaint at ¶ 22).
The four limited partnerships were: 6112 Ridge, LP; 6210
Ridge, LP; 6212 Ridge, LP; and 6214 Ridge, LP. (Id.
at ¶ 23). According to the Amended Complaint, the
founding partners of the limited partnerships were Diamond,
RRE, and Euthena, LLC, an entity wholly owned by Plaintiff.
(Id.). RRE was responsible for managing the limited
partnerships and their assets, as well as handling property
management, renovation, and repair activities. (Id.
at ¶ 24). Euthena was responsible for obtaining
investors to fund the limited partnerships. (Id.).
Defendant Hopkins was an RRE employee, responsible for
managing its financial accounts and bookkeeping.
(Id. at ¶ 12). In forming these limited
partnerships, the parties also drafted limited partnership
agreements, which contained a choice of law provision,
agreeing to be governed by Pennsylvania law, and a dispute
resolution provision, which states:
(e) Disputes - Any controversy or claims arising out
of or relating to this Agreement, or the breach thereof,
shall be submitted to mediation using such system of
mediation that is employed by the American Arbitration
Association of the State of Pennsylvania. Any such
controversy or claim that is not resolved by such mediation
shall be settled by arbitration in accordance with the rules
of the American Arbitration Association provided that the
laws of Pennsylvania shall be applied in such arbitration,
and judgment upon the award may be entered in any court
having jurisdiction thereof.
(ECF No. 29-2 at 41, “Limited Partnership
limited partnership purchased mix-use commercial properties
at locations reflected by their name; for example, 6112
Ridge, LP purchased property at 6112 Ridge Avenue
(hereinafter, “Properties”). (Id. at
¶ 22). In order to secure the purchase of these
properties, 6112 Ridge, LP and 6210 Ridge, LP entered
separate loans with St. Edmonds Federal Savings Bank for
$280, 250 and $251, 250, respectively. (Id. at
¶¶ 28, 30). Similarly, 6212 Ridge, LP and 6214
Ridge, LP obtained loans from Stonebridge Bank for $425, 000
and $320, 000, respectively. (Id. at ¶¶
33, 37). Plaintiff, along with Diamond and Michael Fitzgerald
(another silent partner), was a personal guaranty for these
two loans. (Id. at ¶ 52).
2008, Plaintiff audited RRE's accounting, focusing on
labor timesheets, receipts for material purchases, and the
accuracy of quarterly financial and operational reports.
(Id. at ¶ 42). According to Plaintiff, the
audit revealed that RRE and Hopkins failed to maintain proper
accounting of financial records and identified various
discrepancies with its financial statements. (Id. at
¶ 43). Plaintiff claims that this misconduct caused the
Properties to fall below market rate and forced the limited
partnerships to sell the properties to their lenders.
(Id. at ¶ 51). As a personal guaranty to the
two Stonebridge Loans, Plaintiff claims the bank secured
final judgments against him and Fitzgerald. (Id. at
now claims to have assumed RRE's former role as general
partner of all four limited partnerships, and has acquired
all third-party limited partnership interest. (Id.
at ¶¶ 14-17). Plaintiff also asserts that he has
consolidated all ownership and guaranty related claims to
himself. (Id. at ¶ 18). Given that the limited
partnerships are insolvent and cannot afford legal counsel,
Plaintiff asserts that the present matter is brought by
himself, as a limited partner. (Id.). In his
Complaint, Plaintiff alleges claims of fraud, breach of
contract, negligent supervision, and detrimental reliance
against RRE. He also asserts claims of breach of fiduciary
duty and conversion against Hopkins. Specifically, Plaintiff
claims that “RRE acted fraudulently, intentionally, and
in bad faith, in negotiating and entering into the
[a]greements” with the limited partnerships; and that
RRE, as general partner, owed a duty of care to the limited
partnerships and breached this duty by permitting Hopkins to
engage in tortious conduct against the limited partnerships.
(Id. at ¶¶ 66, 79-80). He also claims to
have detrimentally relied on assurances made in the limited
partnership agreements to personally guarantee loans with
Stonebridge Bank. (Id. at ¶¶ 84-86). As
for Hopkins, Plaintiff claims that, as RRE's employee,
she owed the limited partnerships a fiduciary duty of care
and breached that duty by “routinely mismanaging the
accounting and finances of the Limited Partnerships”
and “skimming monies from the Limited
Partnerships.” (Id. at ¶¶ 90-93).
Rule of Civil Procedure 12(c) permits a party to dismiss a
suit “[a]fter the pleadings are closed . . . but early
enough not to delay trial.” Fed.R.Civ.P. 12(c).
“A Rule 12(c) motion for judgment on the pleadings is
treated like a motion to dismiss under Rule 12(b)(6).”
Syncsort Inc. v. Sequential Software, Inc., 50
F.Supp.2d 318, 324 (D.N.J. 1999). Under either rule, the
Court must accept all well-pleaded factual allegations in the
complaint as true and draw all reasonable inferences in favor
of the nonmoving party. Id. For a complaint to
survive dismissal, it “must contain sufficient factual
matter, accepted as true, to 'state a claim to relief
that is plausible on its face.'” Wireless Media
Innovations, LLC v. Maher Terminals, LLC, 100 F.Supp.3d
405, 407 (D.N.J. 2015) (Ashcroft v. Iqbal, 556, U.S.
662 (2009)). As such, “[a] complaint should not be
dismissed unless it appears beyond doubt that ‘the
facts alleged in the complaint, even if true, fail to support
the claim.'” Syncsort Inc., 50 F.Supp.2d
Whether Plaintiff Proceeds on His Own Behalf
preliminary issue, the Court must determine whether Plaintiff
pursues these claims on his own behalf, or on behalf of the
limited partnerships. Defendants contend that because
Plaintiff, a non-attorney, pursues this cause of action on