For the crime of being the ex-wife and children of a serial fraudster, clients of Farber Schneider Ferrari LLP ("FSF"), Ryan Clott, Erin Clott and Elisa Liebowitz (the "Clott Defendants") have been put through a decade and a half of hell. The Clott Defendants were sued for the first time in 2009 claiming, in essence, they received the fruits of and/or benefitted from a substantiated fraud committed by Michael Howard Clott, the Clott Defendant's family member. That case was dismissed long ago and, in 2022, the Clott Defendants again found themselves in Court based upon the same acts and occurrences from the 2009 cases. See Papapietro v. Clott, 22-cv-1318.
The Clott Defendants retained Daniel J. Schneider, Managing Partner of FSF to defendant them against a multi count complaint that wrongfully charged them with, among other things, violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), Fraud, Breach of Contract, Conversion, Unjust Enrichment, and Breach of Fiduciary Duty. These claims arose out Plaintiff's unsubstantiated claim that the Clott Defendants were somehow complicit with Michael Howard Clott and/or received stolen property.
The Clott Defendants worked with FSF and decided to move to dismiss pursuant to Fed. R. Civ. P. 12(b) prior to the filing of any pleadings or performing any discovery. In the first place, the Clott Defendants argued that the facts for this complaint took place before 2010 and therefore all claims were time barred by applicable statutes of limitation. Secondly, they argued that since the 2009 case had been dismissed and a judge in that case had declined to revive it even after dismissal, that this case had to be dismissed on the basis of issue preclusion (Collateral Estoppel). The basis of this claim is that the issues in this case had been fully and fairly litigated in the past, had been decided, and therefore, that prior decision had to control.
In addition, the Clott Defendants argued that the complaint failed to: (a) state a claim; and (b) meet pleading requirements as required by Fed. R. Civ. P. 8. The motion was referred to a Magistrate Judge who, on January 30, 2023, issued a report and recommendation (the "R&R"). Papapietro v. Clott, 2023 U.S. Dist. LEXIS 16492, 22-cv-1318(RPK)(VMS)(E.D.N.Y., January 30, 2023).
The R&R analyzed numerous grounds for dismissal, and with few exceptions, sided with the Clott Defendants. It agreed that the claims were time-barred, that the 2009 dismissal precluded further litigation in this case, that all but two of the claims failed to state a cause of action and that the complaint failed to meet Fed. R. Civ. P. 8 pleading requirements.
Ultimately, on March 31, 2023, the District Judge adopted the R&R in full, rejected Plaintiff's objections and directly credited a Clott Defendant argument. Papapietro v. Clott, 2023 U.S. Dist. LEXIS 56804, 22-cv-1318(RPK) (VMS), *14 (E.D.N.Y., March 31, 2023). As a result, this case was dismissed, as against the Clott Defendants, without leave to amend, which means, in essence, the case has been dismissed with prejudice. Id.
FSF's aggressive and zealous strategy together with its superlative work product resulted in this decisive dismissal for the Clott Defendants. Farber Schneider Ferrari LLP is delighted to have secured this victory for the Clott Defendants and hopefully has played a part in bringing this long-lived and painful saga to a close. While this Plaintiff has shown a propensity to appeal, absent that, this case is over.