Waheed v. Ballon Stoll Bader and Nadler PC

Background

Sehra Waheed, appearing without a lawyer, filed an amended complaint against Vano Haroutunian, Ballon Stoll Bader and Nadler PC (BSBN), and Billman Asset Management, LLC. She alleged that Haroutunian and BSBN committed legal malpractice and other state-law wrongs while representing her in several civil matters. She also alleged self-dealing and breach of fiduciary duty related to litigation financing, and alleged that Haroutunian engaged in improper sexual harassment. She sought $5 million in damages.

The court had previously allowed Waheed to proceed without prepaying filing fees. Because she was proceeding without prepaying fees, the court was required to screen her complaint. The court also noted that Waheed’s limited liability company was not a party and that she could not litigate on that company’s behalf without a lawyer; the court therefore treated her claims as personal claims.

Subject-Matter Jurisdiction

The court dismissed the amended complaint for lack of subject-matter jurisdiction, meaning the court determined that it lacked legal authority to hear the action as pleaded.

First, the court rejected federal-question jurisdiction. Waheed invoked federal-question jurisdiction, but the court found that all of her causes of action arose under state law, including legal-malpractice and tort claims. She did not assert a claim created by federal law, and the facts did not present an obvious federal claim.

Second, the court found that Waheed had not established diversity jurisdiction. Diversity jurisdiction requires every plaintiff to be a citizen of a different state from every defendant, along with a claim exceeding $75,000. Waheed gave a New York address for herself and stated that Haroutunian resided in New York. She alleged that BSBN was incorporated in Delaware and operated as a law firm in New York. She gave a New York address for Billman Asset Management, LLC, but did not provide facts about the citizenship of that company’s members. The court concluded that she had not shown complete diversity of citizenship.

Leave to Replead

The court granted Waheed 30 days’ leave to file a second amended complaint. Any new complaint must include facts showing subject-matter jurisdiction either through a claim arising under federal law or through naming only parties with diverse citizenship. If she relies on diversity jurisdiction, she must plead the domicile of individual parties and relevant citizenship facts for entities. The court also directed her to correct the defendants’ names if she files another complaint. If she does not file a second amended complaint within the permitted time, the Clerk will be directed to enter judgment dismissing the action for lack of subject-matter jurisdiction.

Pending Motions and Disposition

The court denied Waheed’s repeated motions for entry of default judgment. No summonses had issued, and the defendants had not been properly served, so default judgment was not available at that stage.

The court dismissed the defendants’ cross-motion to dismiss for lack of jurisdiction without prejudice to renewal because the court had already dismissed the amended complaint for lack of subject-matter jurisdiction and allowed Waheed to replead.

The court denied fee-free status for any appeal after certifying that an appeal would not be taken in good faith. It directed the Clerk to terminate all pending motions and to hold the matter open until a civil judgment is entered.