Court Opinion

ID: 6350319
Source: CourtListenerOpinion
Date Created: 2022-06-16 15:00:20.464303+00
Date Added: 2024-06-11T09:16:40.510673
License: Public Domain

21-1790-cv
    Martin v. United Bridge Cap., LP, et al.

                             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 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 16th day of June, two thousand twenty-two.

    PRESENT:
                       DENNY CHIN,
                       JOSEPH F. BIANCO,
                       WILLIAM J. NARDINI,

                      Circuit Judges.
    _____________________________________

    Timothy G. Martin,

                                 Plaintiff-Appellant,

                       v.                                                       21-1790-cv

    United Bridge Capital, LP, United Bridge Capital
    Funding 3, LLC, CFAI Special Assets, LLC,
    Churchill Real Estate Holdings LLC, Justin Ehrlich,
    Sarper C. Beyazyurek, S. Travis Masters, Sorabh
    Maheshwari, Todd Billings,

                      Defendants-Appellees.
    _____________________________________

    FOR PLAINTIFF-APPELLANT:                                    TIMOTHY G. MARTIN,           pro    se,
                                                                Lakeville, CT.

    FOR DEFENDANTS-APPELLEES:                                   ANJALI S. DALAL, Wiggin and Dana
                                                             LLP, New York, NY (James I.
                                                             Glasser, Wiggin and Dana LLP, New
                                                             Haven, CT, on the brief).

       Appeal from the orders and judgment of the United States District Court for the District of

Connecticut (Dooley, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the orders and judgment of the district court are AFFIRMED.

       Timothy G. Martin, pro se, appeals from a district court decision dismissing his complaint

for lack of subject-matter jurisdiction. His complaint alleged that multiple defendants 1 conspired

to charge a usurious interest rate on a loan secured by a mortgage on a Massachusetts residence

owned by College Degree Express LLC (“College Degree”), leading to default and foreclosure

proceedings. After defendants moved to dismiss, the district court issued an order to show cause

why the complaint should not be dismissed for lack of subject-matter jurisdiction, given that it was

unclear whether Martin or College Degree had received the loan and, thus, whether Martin had

alleged an injury-in-fact sufficient for standing. College Degree was not a party to the lawsuit,

but Martin was its sole member. Following the parties’ responses, the district court determined

that College Degree had been issued the loan and Martin did not have standing. The district court

then issued an order staying the case for thirty days to provide an opportunity for Martin to secure

counsel and substitute College Degree as the named plaintiff and, in the absence of such action,

provided that the case would be dismissed without prejudice. When Martin did not respond

1
 The defendants were: United Bridge Capital, LP; United Bridge Capital Funding 3, LLC; CFAI Special
Assets, LLC; Churchill Real Estate Holdings LLC; Sarper Beyazyurek; S. Travis Masters; Sorabh
Maheshwari; Todd Billings; and Justin Ehrlich.

                                                 2
within the allotted time frame, the district court dismissed the case for lack of subject-matter

jurisdiction. Martin appeals the dismissal and also challenges a prior district court order denying

his motion to recuse the district court judge based on alleged judicial bias. We assume the parties’

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

to which we refer only as necessary to explain our decision to affirm.

       I.      Standard of Review

       On appeal from a district court’s dismissal for lack of subject-matter jurisdiction under

Federal Rule of Civil Procedure 12(h)(3), “we review factual findings for clear error and legal

conclusions de novo, accepting all material facts alleged in the complaint as true and drawing all

reasonable inferences in the plaintiff’s favor.” Liranzo v. United States, 690 F.3d 78, 84 (2d Cir.

2012); see also Atl. Specialty Ins. Co. v. Coastal Env’t Grp. Inc., 945 F.3d 53, 63 (2d Cir. 2019)

(finding clear error only where we have a “definite and firm conviction that a mistake has been

committed” (internal quotation marks omitted)). We review a pro se complaint with “special

solicitude,” interpreting it “to raise the strongest claims that it suggests.” Hill v. Curcione, 657

F.3d 116, 122 (2d Cir. 2011) (internal alterations adopted and quotation marks omitted). We

review a district court’s denial of a motion to recuse for abuse of discretion. LoCascio v. United

States, 473 F.3d 493, 495 (2d Cir. 2007) (per curiam). A district court abuses its discretion if its

decision “rests on an error of law or a clearly erroneous factual finding, or its decision cannot be

located within the range of permissible decisions.” Scott v. Chipotle Mexican Grill, Inc., 954 F.3d

502, 512 (2d Cir. 2020) (internal quotation marks omitted).

       II.     Standing

       The party invoking federal jurisdiction “has the burden of proving by a preponderance of
                                                 3
the evidence that it exists.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). As

part of this burden, plaintiffs must establish that they have standing to sue. Rajamin v. Deutsche

Bank Nat’l Trust Co., 757 F.3d 79, 84 (2d Cir. 2014). When assessing subject-matter jurisdiction,

courts “may refer to evidence outside the pleadings.” Makarova, 201 F.3d at 113 (discussing the

resolution of a Rule 12(b)(1) motion to dismiss); see Durant, Nichols, Houston, Hodgson &

Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 64 (2d Cir. 2009) (reviewing additional submissions,

including affidavits, while analyzing subject-matter jurisdiction under Rule 12(h)(3)).            To

establish Article III standing, a plaintiff must show (1) that he suffered an injury-in-fact, (2) that

is causally connected to the challenged conduct, and (3) that is likely to be “redressed by a

favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (internal quotation

marks omitted). A plaintiff’s injury-in-fact must be “concrete and particularized,” as well as

“actual or imminent, not conjectural or hypothetical.” Id. at 560 (internal quotation marks

omitted).

       The district court did not err in dismissing Martin’s complaint for lack of subject-matter

jurisdiction. Rule 12(h)(3) requires a district court to dismiss an action if it “determines at any

time that it lacks subject-matter jurisdiction.” Fed. R. Civ. P. 12(h)(3). Here, the district court

first determined that College Degree—not Martin—had been granted the loan on which Martin’s

claims were based. Therefore, Martin lacked standing to pursue claims that should have been

brought by College Degree. This determination was not clear error. As the district court noted,

the complaint “obscure[d] the distinction” between Martin and College Degree regarding the loan

and mortgage. Supp. App’x at 82. The defendants’ motion to dismiss stated that the loan and

subsequent default solely involved College Degree, and they submitted uncontroverted affidavits
                                                  4
with their motion stating that they had never engaged in “personal business” with Martin. See,

e.g., Dist. Ct. ECF No. 25-2 at 2. Moreover, in Martin’s response to the order to show cause, he

repeatedly stated that he brought claims “on behalf of [his] LLC.” Dist. Ct. ECF No. 39 at 2.

Although pro se litigants must be shown “special solicitude,” Hill, 657 F.3d at 122, the record does

not establish error in the district court’s finding that College Degree was the entity that suffered

the alleged injury.

        Accordingly, the district court correctly determined that Martin failed to establish standing.

Standing “must affirmatively appear in the record.” Spencer v. Kemna, 523 U.S. 1, 10–11 (1998)

(internal quotation marks omitted). Without specific factual allegations or submissions to support

the claim that he received and defaulted on the allegedly usurious loan, Martin failed to prove by

a preponderance of the evidence that he had suffered an injury-in-fact sufficient for Article III

standing. Because generally “a litigant must assert his or her own legal rights and interests, and

cannot rest a claim to relief on the legal rights or interests of third parties,” Hollingsworth v. Perry,

570 U.S. 693, 708 (2013) (internal quotation marks omitted), Martin did not and cannot establish

an injury-in-fact on behalf of College Degree, which was not a party.

        As he did before the district court, Martin argues on appeal that Connecticut law allows

members of an LLC to bring an action in state court to remedy a harm to the LLC, and, therefore,

he has standing to sue for an injury on behalf of College Degree in federal court because he is the

sole member of the LLC. As the district court noted, however, “standing in federal court is a

question of federal law, not state law.” Supp. App’x at 78 (quoting Hollingsworth, 570 U.S. at

715). Indeed, “state law can neither enlarge nor diminish” federal standing requirements. Fund

Liquidation Holdings LLC v. Bank of Am. Corp., 991 F.3d 370, 385 (2d Cir. 2021). As such,
                                                   5
Martin cannot impute Connecticut standing requirements in this case when federal law regarding

standing provides that he himself—as opposed to College Degree—must have suffered a concrete

injury. See Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (noting that the “irreducible

constitutional minimum of standing” requires that the plaintiff have suffered an injury in fact

(internal quotation marks omitted)); Fleming v. ISCO Indus., Inc., No. 3:17-cv-648 (VAB), 2018

WL 1141358, at *4 (D. Conn. Mar. 2, 2018) (“[A] limited liability company provides certain

protections against individual liability, but without individual liability, an individual, even the sole

member of the LLC, lacks standing to bring a claim as the LLC.”), aff’d, 750 F. App’x 62, 63 (2d

Cir. 2019) (summary order) (“We agree with the District Court that [the pro se sole-member

plaintiff] lacks standing to pursue this action . . . . [T]o the extent [he] asserts claims on his own

behalf, the complaint does not sufficiently allege that he—as opposed to [the LLC]—suffered a

concrete injury.”).

       State law may “supply the answers to certain antecedent questions relevant to whether those

federal requirements are satisfied,” particularly concerning “the legal relationships between people

and things.” Fund Liquidation Holdings LLC, 991 F.3d at 385. However, Connecticut law

offers Martin no support as to such legal relationships. Indeed, Connecticut courts have identified

that an LLC is a “distinct legal entity whose existence is separate from its members.” Channing

Real Est., LLC v. Gates, 326 Conn. 123, 137 (2017) (internal quotation marks omitted); see also

Conn. Gen. Stat. § 34-243h(a) (2018) (“A limited liability company has the capacity to sue and be

sued in its own name and the power to do all things necessary or convenient to carry on its activities

and affairs.”). Under Connecticut law, “[a] debt, obligation or other liability of a limited liability

company is solely the debt, obligation or other liability of the company” and “[a] member or
                                                   6
manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a

debt, obligation or other liability of the company solely by reason of being or acting as a member

or manager.” Conn. Gen. Stat. § 34-251a(a) (2020). Because Connecticut law identifies that an

LLC’s members are legally distinct from the LLC and its debts, any injury suffered by College

Degree cannot be imputed to Martin for the purpose of establishing his standing in federal court.

          Martin also claims for the first time on appeal that he has standing because of his (1) role

as guarantor, (2) shareholder stake in College Degree, and (3) antitrust claims. However, because

he did not raise these arguments before the district court, they are waived. In re Nortel Networks

Corp. Secs. Litig., 539 F.3d 129, 132 (2d Cir. 2008) (per curiam) (“It is a well-established general

rule that an appellate court will not consider an issue raised for the first time on appeal.” (internal

quotation marks omitted)).

          Accordingly, the district court correctly held that Martin lacked standing to sue in this

case. 2

          III.   Recusal Claim

          Finally, the district court did not abuse its discretion by denying Martin’s motion for

recusal. Martin’s motion alleged judicial bias on the sole basis that the same district judge had

denied the majority of motions he made in a separate case before her. Since Martin offered no

reason here for recusal outside of the court’s adverse rulings, the district court properly denied the

motion.      This Court has held that “[g]enerally, claims of judicial bias must be based on

2
   The district court also properly determined that Martin cannot appear pro se on behalf of College Degree,
despite being its sole member. See Lattanzio v. COMTA, 481 F.3d 137, 138 (2d Cir. 2007) (“[B]ecause
[the pro se plaintiff] is not an attorney, he cannot represent [an LLC], notwithstanding that he is [the LLC’s]
sole member.”).
                                                      7
extrajudicial matters, and adverse rulings, without more, will rarely suffice to provide a reasonable

basis for questioning a judge’s impartiality.” Chen v. Chen Qualified Settlement Fund, 552 F.3d

218, 227 (2d Cir. 2009) (per curiam). The record does not contain any allegation of extrajudicial

bias, nor do the district court’s adverse rulings in a separate case provide a basis for recusal.

Therefore, the district court’s denial was “within the range of permissible decisions.” Scott, 954

F.3d at 512 (internal quotation marks omitted).

                                  *               *              *

       We have considered all of Martin’s remaining arguments and find them to be without merit.

Accordingly, we AFFIRM the orders and judgment of the district court.

                                              FOR THE COURT:
                                              Catherine O=Hagan Wolfe, Clerk of Court

                                                  8