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Zell v. Suttle

United States District Court, E.D. Missouri, Eastern Division

November 15, 2016

EILEEN L. ZELL, Plaintiff,
v.
DAVID DALE SUTTLE, et al., Defendants.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motion (Doc. No. 4) of Defendants Michael Mindlin and Elizabeth Kurila to dismiss Plaintiff's complaint on res judicata grounds or, alternatively, to transfer this case to the Southern District of Ohio. For the following reasons, the Court will grant the motion to dismiss and will deny the motion to transfer as moot.

         Upon review of the record, the Court also notes that the file contains no proof of service upon the remaining Defendant in this case, David Dale Suttle, by Plaintiff, nor entry of appearance on behalf of Suttle. Because it does not appear that service of Plaintiff's complaint has been timely made upon Suttle, as required by Federal Rule of Civil Procedure 4(m), the Court will also dismiss Plaintiff's complaint against Suttle without prejudice.

         BACKGROUND

         The action arises out of Plaintiff Eileen Zell's attempts to collect a debt owed by Plaintiff's nephew, Mindlin, to whom Plaintiff loaned $90, 000. As alleged in the complaint, on January 30, 2001, Mindlin signed a $90, 000 promissory note payable to Plaintiff. Mindlin's wife, Kurila, and Mindlin's business partner, Suttle (Mindlin, Kurila, and Suttle, collectively, “Defendants”), co-signed the note. Defendants made some payments on the loan, but, eventually, the parties disagreed over the amount that remained due.

         On October 12, 2010, Mindlin and Kurila filed a complaint for declaratory relief in Ohio state court (the “Ohio state court action”), seeking a declaration as to the enforceability of the promissory note discussed above and as to any remaining amount due on the note. Plaintiff filed an answer and counterclaim against Mindlin and Kurila, together with a third-party complaint against Suttle and the architectural firm that Mindlin and Suttle owned, alleging that Defendants were in default under the terms of the note. On July 5, 2011, Mindlin and Kurila filed a motion for summary judgment, which the state court granted on statute-of-limitations grounds, applying Ohio's six-year statute of limitations.

         Plaintiff filed an appeal, and on August 7, 2012, the Ohio appellate court affirmed the trial court's judgment.[1] The appellate court applied Ohio choice-of-law rules and agreed with the trial court that Ohio's statute-of-limitations governed the promissory note, rather than Missouri's longer statute of limitations. The appellate court also rejected Plaintiff's arguments for tolling and waiver. Plaintiff filed three motions for reconsideration (again arguing that the statute of limitations should be tolled), each of which was denied by the state appellate court, in decisions dated October 25, 2012, December 31, 2012, and February 12, 2013.[2]

         Plaintiff alleges that on August 14, 2012, one week after the Ohio appellate court issued its initial decision, Mindlin sent Plaintiff an email from which Plaintiff asserts that she “discovered for the first time that the Defendants secretly never had any intention to fully repay the $90, 000 that they had borrowed from her.” (Doc. No. 1 at 28) (emphasis in original.) Plaintiff quotes Mindlin's email as stating “[W]e always intended to screw you out of the money.'” Id. at 27 (alteration in original). However, Plaintiff attached Mindlin's August 14, 2012 email to her complaint, and the portion of the email from which Plaintiff quotes reads in full:

         Congratulations Eileen. You win.

You can now go to your grave confident in the knowledge that you were right all along: we always intended to screw you out of the money. After all, it is so much easier to believe that lie than face your own demons. But, remember that we offered you over $104, 000 plus interest…twice. You accepted…twice. I put in writing that we would protect you if Suttle failed to perform. I was writing the contracts. We were willing to do just about anything to pay you back for helping us… short of putting my family at risk.

(Doc. No. 1-23 at 2) (ellipses in original.)

         Plaintiff filed the current complaint in this Court on August 6, 2016. She alleges that Defendants obtained the loan described above (and extensions for repayment) from Plaintiff under false pretenses, while secretly knowing that they never intended to repay the loan in full; falsely promised to repay the loan in full; and made false allegations before the trial court in the Ohio state court action. She asserts that these actions give rise to claims against Defendants for violation of the Racketeer Influenced and Corrupt Organization (“RICO”) Act, 18 U.S.C. §§ 1961-1968, fraud, fraudulent representation, breach of contract, breach of promissory note, and promissory estoppel.

         Mindlin and Kurila have moved to dismiss the complaint on res judicata grounds or, alternatively, to transfer this case to the Southern District of Ohio, pursuant to 28 U.S.C. § 1404(a). In support of their motion to dismiss, they argue that the Ohio state court action resulted in a valid, final judgment on the merits, arising out of the same transaction or occurrence that is the subject matter of Plaintiff's complaint in this case, and that Plaintiff's complaint in this case is therefore barred by res judicata. Alternatively, Mindlin and Kurila argue that the case should be transferred to the Southern District of Ohio, where Plaintiff's legal malpractice action is pending, for the convenience of the parties and witnesses, and in the interest of justice.

         In response to the motion to dismiss, Plaintiff argues that, with respect to her breach of contract, breach of promissory note, and promissory estoppel claims in this case-which she admits are “directly related to the subject matter of the Ohio [state court action]”-the Ohio state court's dismissal on statute-of-limitations grounds does not bar claims brought in a federal court sitting in a different state, such as this Court. (Doc. No. 7 at 11.) With respect to her fraud and RICO claims, Plaintiff argues that these claims are not barred because they “were based on Defendant Mindlin's admission [in his August 14, 2012 email] that the Defendants secretly never intended to fully repay the $90, 000 that they had borrowed.” Id. at 17. Plaintiff argues that because this email was sent after the state appellate court issued its initial decision in the Ohio state court ...


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