Gabayzadeh v. Khodabakhsh

Background

Pro se plaintiff Mehdi Gabayzadeh sought permission to file an amended complaint against Fereshte Khodabakhsh, Jacob Khobian, and Paper Source Converting & Manufacturing, Inc. He also moved for sanctions under Federal Rule of Civil Procedure 11. The defendants separately moved for Rule 11 sanctions against him.

The proposed amended complaint concerned alleged agreements made between 2001 and 2005. Gabayzadeh alleged that the defendants agreed to purchase assets of American Tissue Mills of Greenwich in bankruptcy and hold them in trust for him while he was incarcerated. He also alleged agreements concerning loan accounts, payment for equipment, and oversight of an American Tissue Mills account.

On February 19, 2019, the court had granted the defendants’ motion to dismiss under Rule 12(b)(6), which concerns whether a complaint states a legally sufficient claim. The court had allowed Gabayzadeh to amend. He filed the proposed amended complaint on March 20, 2019.

Motion to Amend

The court explained that leave to amend is generally allowed, but may be denied when amendment would be futile. An amendment is futile when the proposed complaint would not survive another motion to dismiss.

The court found that the proposed amended complaint contained no new factual allegations and was virtually identical to the original complaint, with some allegations omitted. The court’s earlier order had determined that all of Gabayzadeh’s claims were either time-barred or failed to state a claim. Because the proposed amendment did not cure those defects, the court held that amendment would be futile.

The court therefore denied with prejudice Gabayzadeh’s motion for leave to file the proposed amended complaint.

Plaintiff’s Sanctions Motion

Gabayzadeh argued that the defendants attempted to intimidate and harass him by sending an April 4, 2019 letter that included a draft Rule 11 sanctions motion and demanded that he withdraw his motion to amend within 21 days.

The court found that the letter was sent to comply with Rule 11’s safe-harbor requirement. That requirement gives the opposing party an opportunity to withdraw or correct the challenged filing before a sanctions motion is filed. The court concluded that the letter did not threaten or harass Gabayzadeh and provided no basis for sanctions.

The court also noted that Gabayzadeh’s sanctions motion was not directed at a filing by the defendants certified under Rule 11(b), and that he did not comply with Rule 11’s timing requirements. The court denied his sanctions motion.

Defendants’ Sanctions Motion

The defendants argued that Gabayzadeh’s motion to amend repeated his opposition to dismissal, that the proposed amended complaint was substantively identical to the original complaint, and that he was pursuing the case to harass them.

The court agreed that the first two contentions were correct. It found the alleged threats concerning additional lawsuits troubling, but emphasized that the motion to amend had been filed with the court’s explicit permission. The court also found no reason to believe that Gabayzadeh’s pleadings were prepared by or with the assistance of a lawyer. Considering his pro se status, the court determined that sanctions were not warranted at that time.

The court therefore denied the defendants’ sanctions motion. It warned Gabayzadeh that filing another meritless action or motion related to these claims could result in monetary sanctions.

Disposition

The court denied with prejudice the motion to amend and denied both parties’ motions for sanctions. It directed the Clerk to terminate the motions and close the case.