Court Opinion

ID: 621157
Source: CourtListenerOpinion
Date Created: 2012-01-20 01:00:40+00
Date Added: 2024-06-11T17:50:55.397092
License: Public Domain

10-3199-cv
     Weisshaus v. State of New York

                            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 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
     York, on the 19th day of January, two thousand twelve.

     PRESENT:
                 ROBERT A. KATZMANN,
                 GERARD E. LYNCH,
                       Circuit Judges,
                 LEWIS A. KAPLAN,
                       District Judge.*
     ______________________________________________

     GIZELLA WEISSHAUS,

                       Plaintiff - Counterclaim-Defendant - Appellant,

                       v.                                                10-3199-cv

     EDWARD D. FAGAN,

                       Defendant - Counter-Claimant - Appellee,

     STATE OF NEW YORK, OFFICE OF COURT ADMINISTRATION OF THE UNIFIED
     COURT SYSTEM, JUDITH N. STEIN, in her official and individual capacity, THOMAS J.
     CAHILL, in his official and individual capacity, HAL R. LIEBERMAN, in his official and
     individual capacity, JOHN DOES, 1-20, JANE DOES, 1-20, ALAN W. FRIEDBERG, in his

              *
             Judge Lewis A. Kaplan, United States District Court for the Southern District of New
     York, sitting by designation.
official and individual capacity, MEL URBACH, SAUL E. FEDER,

            Defendants - Appellees.
______________________________________________

FOR APPELLANT:                Gizella Weisshaus, pro se, Brooklyn, NY.

FOR APPELLEES:                Barbara D. Underwood, Solicitor General; Michael S.
                              Belohavek, Senior Counsel to the Solicitor General; and Laura
                              R. Johnson, Assistant Solicitor General, on behalf of Eric T.
                              Schneiderman, Attorney General of the State of New York, for
                              the State of New York, the New York State Office of Court
                              Administration of the Unified Court System, Judith N. Stein,
                              Thomas J. Cahill, Hal R. Lieberman, and Alan W. Friedberg.

                              Thomas A. Leghorn, Wilson, Elser, Moskowitz, Edelman &
                              Dicker LLP, New York, NY, for Saul E. Feder.

                              Jonathan R. Harwood, Traub Lieberman Straus & Shrewsberry
                              LLP, Hawthorne, NY, for Mel Urbach.

                              Edward D. Fagan, pro se, Springfield, NJ.

      Appeal from a judgment of the United States District Court for the Southern District
of New York (Cote, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

       Appellant Gizella Weisshaus, proceeding pro se, appeals from the district court’s

judgment dismissing her action against her former (and now disbarred) attorney, Edward D.

Fagan, as well as several other defendants, in which she principally accused Fagan of various

wrongdoing during the course of their attorney-client relationship, and asserted civil rights

claims against all defendants relating to the alleged “whitewashing” of ethics complaints she

had filed against Fagan with a state disciplinary authority. We assume the parties’

familiarity with the underlying facts, procedural history of the case, and issues on appeal.

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I.     Recusal Decision

       Weisshaus first challenges the district court’s denial of her recusal motion. “Recusal

motions are committed to the sound discretion of the district court, and [we] will reverse a

decision denying such a motion only for abuse of discretion.” LoCascio v. United States,

473 F.3d 493, 495 (2d Cir. 2007) (per curiam). The timeliness of a recusal motion is a

“serious threshold question,” and it is “well-settled that a party must raise its claim of a

district court’s disqualification at the earliest possible moment after obtaining knowledge of

facts demonstrating the basis for such a claim.” Apple v. Jewish Hosp. & Med. Ctr., 829
F.2d 326, 333 (2d Cir. 1987). In considering the question of timeliness, “[a] number of

factors must be examined, including whether: (1) the movant has participated in a substantial

manner in trial or pre-trial proceedings; (2) granting the motion would represent a waste of

judicial resources; (3) the motion was made after the entry of judgment; and (4) the movant

can demonstrate good cause for delay.” Id. at 334 (internal citations omitted).

       In this case, Weisshaus’s recusal motion was untimely for the reasons articulated by

the district court in its thorough and well-reasoned decision. See Weisshaus v. New York,

No. 08 Civ. 4053(DLC), 2009 WL 4823932 (S.D.N.Y. Dec. 15, 2009). Briefly stated,

Weisshaus waited almost nineteen months after filing her complaint to file the recusal

motion, at which point the district court had already expended substantial judicial resources

overseeing and adjudicating Weisshaus’s claims. Moreover, Weisshaus’s contention that she

had good cause to delay until the other defendants were dismissed from the action is entirely

unfounded, as Weisshaus herself concedes that Fagan is “the primary defendant” in this

matter and that all facts concerning the district judge’s involvement in prior actions involving

Fagan and Weisshaus were already known. Although there was no dispositive ruling as to
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Fagan at the time Weisshaus brought her recusal motion, the district court aptly noted that

the motion came on the heels of its direction that Weisshaus submit to a deposition, thus

strongly suggesting that the motion was a mere fall-back position in response to an adverse

ruling. See In re Int’l Bus. Machs. Corp., 45 F.3d 641, 643 (2d Cir. 1995) (“[A] prompt

application avoids the risk that a party is holding back a recusal application as a fall-back

position in the event of adverse rulings on pending matters.”). The district court, therefore,

acted well within its discretion in finding Weisshaus’s recusal motion untimely.

       Even if the motion had been timely, however, it was wholly without merit for the

reasons explained by the district court. Indeed, Weisshaus appears to have abandoned almost

all of the arguments she asserted below, contending on appeal only that the district court

could not impartially consider Weisshaus’s claim that Fagan breached his fiduciary duty by

failing to appeal a ruling issued by the district court in an earlier case. This argument is

entirely unavailing. Whether Fagan breached his fiduciary by allegedly ignoring his client’s

request to file an appeal, see Pl.’s Br. 11, is an issue divorced from the merits of the

underlying case. Moreover, recusal pursuant to 28 U.S.C. § 455(a) is generally limited to

those circumstances in which the alleged partiality “stems from an extrajudicial source.”

United States v. Carlton, 534 F.3d 97, 100 (2d Cir. 2008) (internal quotation marks and

brackets omitted). Accordingly, “judicial rulings alone almost never constitute a valid basis

for a bias or partiality motion,” and “opinions formed by the judge on the basis of facts

introduced or events occurring in the course of the current proceedings, or of prior

proceedings, do not constitute a basis for a bias or partiality motion unless they display a

deep-seated favoritism or antagonism that would make fair judgment impossible.” Liteky v.

                                                4
United States, 510 U.S. 540, 555 (1994). Because Weisshaus does not and cannot argue that

the district court’s opinion displayed even a hint of partiality, let alone a “deep-seated

favoritism or antagonism,” her challenge to the district court’s denial of her recusal motion

must be dismissed.

II.    Claims Against Fagan

       Weisshaus also seeks reversal of the district court’s July 15, 2010 Opinion and Order

granting Fagan’s motion for summary judgment and dismissing Weisshaus’s claims with

prejudice.2 Following our de novo review of the record, Miller v. Wolpoff & Abramson,

L.L.P., 321 F.3d 292, 300 (2d Cir. 2003), we affirm the judgment of the District Court for

substantially the same reasons stated in its careful and comprehensive opinion. See

Weisshaus v. Fagan, 08 Civ. 4053 (DLC), 2010 WL 2813490 (S.D.N.Y. July 15, 2010).

       Again, briefly stated, the district court properly concluded that Weisshaus’s claims

for breach of contract and fiduciary duty against Fagan were time-barred. Weisshaus’s

assertion on appeal that the applicable statute of limitations for her claims was tolled by her

filing of a RICO action against Fagan in 1999 is entirely without merit. Although the filing

of a complaint marks the interposition of a claim for statute-of-limitation purposes (and thus

tolls the limitations period), see N.Y. C.P.L.R. § 203(c); MacLeod v. Cnty. of Nassau, 75
A.D.3d 57, 64 (2d Dep’t 2010) (collecting cases), this provision does not support

       2
         In her appellate brief, Weisshaus raised no arguments concerning the district court’s
dismissal of her claims against the other defendants, or her 42 U.S.C. §§ 1983 and 1985 claims
against Fagan. Consequently, she has waived any arguments concerning these claims by
purporting to raise them for the first time in her reply brief. See Fed. R. App. P. 28(a)(9); JP
Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 428 (2d Cir. 2005);
LoSacco v. City of Middletown, 71 F.3d 88, 93 (2d Cir. 1995).

                                                5
Weisshaus’s novel argument that the filing of a complaint in a previous, unrelated RICO

lawsuit against a defendant tolled the limitations period for state-law claims raised in a

subsequent lawsuit against the same defendant.

       Weisshaus alternatively asserts that her case is timely under New York’s two-year

discovery rule for claims based on fraud because, while she “had suspicion that Fagan was

perpetrating a fraud, . . . that is all she had until the conclusive findings of the New Jersey

Office of Attorney Ethics [(NJ OAE)] in January of 2008.” Pl.’s Br. 14. This argument is

also without merit. “[A] fraud-based action must be commenced within six years of the fraud

or within two years from the time the plaintiff discovered the fraud or ‘could with reasonable

diligence have discovered it.’” Sargiss v. Magarelli, 12 N.Y.3d 527, 532 (2009) (quoting

N.Y. C.P.L.R. § 213(8)). “The inquiry as to whether a plaintiff could, with reasonable

diligence, have discovered the fraud turns on whether the plaintiff was possessed of

knowledge of facts from which the fraud could be reasonably inferred. Generally,

knowledge of the fraudulent act is required and mere suspicion will not constitute a sufficient

substitute.” Id. (internal quotation marks, citations, and brackets omitted).

       The district court correctly determined that Weisshaus possessed sufficient

knowledge from which Fagan’s fraudulent conduct could have been inferred as early as

1998, and certainly no later than 2005. For example, it is undisputed that in 1998 Weisshaus

was fully aware that Fagan had failed to turn over a portion of the escrow money despite a

court order directing him to do so and had allegedly forged a document bearing her signature

which gave him permission to invest the money. To claim now that she was previously

unaware of facts concerning Fagan’s fraudulent conduct relating to the escrow account defies

                                                6
credulity. Consequently, as she did not commence the present action until April 2008, the

district court correctly ruled that her breach of fiduciary duty claim was time-barred even

under New York’s discovery rule for claims based on fraud.

       We have considered Weisshaus’s remaining arguments and find them to be without

merit. For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.

                                             FOR THE COURT:
                                             Catherine O’Hagan Wolfe, Clerk

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