United States District Court, D. Maryland
BARRY J. BLUEFELD Plaintiff
BARRY S. COHEN, et ah, Defendants.
Xinis United States District Judge.
before the Court is Defendants' Motion to Dismiss. ECF
No. 100. The issues are fully briefed and the Court now rules
pursuant to Local Rule 105.6 because no hearing is necessary.
For the reasons stated below, the motion is granted.
September 22, 2015, Plaintiff Barry J. Bluefeld
("Bluefeld" or "Plaintiff), filed this action
on his own behalf and derivatively as a shareholder of
Annuity Associates, Inc. ("Annuity") against
Defendants Barry S. Cohen, Joel S. Meisel, and David H. Cohen
(collectively "Defendants"). Plaintiff was granted
leave to file an Amended Complaint, ECF No. 30, and did so on
April 13, 2016. ECF No. 31.
to Plaintiff, since Annuity's incorporation in 1984,
Defendant Barry Cohen has served as a director and
Secretary/Treasurer and Defendant Joel Meisel has served as a
director and President. As of September 19, 2012, Barry Cohen
and Joel Meisel owned 23.5% and 18.5% of Annuity's Class
A voting shares, respectively. Defendant David Cohen is the
property manager for the Benson Business Center, which a
commercial real estate building and Annuity's sole asset.
ECF No. 31 at 3. David Cohen acquired a small Class A
interest in July 2008.
Plaintiff's Amended Complaint asserts claims of
racketeering and conspiracy in violation of the Racketeer
Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. §§ 1962-1964, and state law claims of
fraudulent misrepresentation, conversion, unjust enrichment,
breach of fiduciary duty, and fraud. ECF No. 31 at 10-48.
First, Plaintiff contends that the Benson Business Center was
intentionally left unoccupied which "artificially"
reduced the value of the corporate assert and thus minority
shareholders stake in the corporation. ECF No. 31 at 7.
Plaintiff alleges that Defendants fraudulently hid the
vacancy status of the Benson building when communicating to
investors and on Annuity's profit and loss statements.
ECF No. 31 at 8.
Plaintiff alleges that Defendants defrauded Plaintiff and ten
other Class B minority non-voting shareholders by diverting
money "to pay personal expenses and expenses of other
companies in which the Defendants control and own"
without disclosing the transactions to minority shareholders.
ECF No. 31 at 2. These alleged fraudulent transactions
include the distribution monies to Defendants, the
over-payment of management fees, payments to outside
companies working on unrelated properties from the assets of
Annuity, and the excessive payment of distributions to
persons associated with Defendants. ECF No. 31 at 10.
September 21, 2016, Plaintiff's third and final counsel
withdrew his appearance. ECF No. 54. On October 4, 2016,
Plaintiff then informed the Court that he would not be
retaining new counsel and instead would proceed pro se. ECF
No. 59 at 1. On November 23, 2016, Defendants filed a
pre-motion letter seeking leave of the Court to file a motion
to dismiss. ECF No. 82. On, December 16, 2016, the Court
granted Plaintiff one month to obtain new counsel, after
which time Defendants could file their motion to dismiss. ECF
No. 91. Plaintiff appealed this Court's order on January
11, 2017, which is currently pending before the United States
Court of Appeals for the Fourth Circuit.
the Court's December 16, 2016 order, no counsel for
Plaintiff has entered an appearance. Thus, as permitted by
the Court's Order, Defendants filed the instant motion on
February 1, 2017. ECF No. 100.
threshold matter, the Court must determine whether it has
jurisdiction to adjudicate Defendants' motion to dismiss
in light of Plaintiff's most recent appeal of this
Court's December 16, 2016 Order. "[W]hile the filing
of a notice of appeal 'confers jurisdiction on the court
of appeals and divests the district court of control over
those aspects of the case involved in the appeal[,
]'" the district court does not lose jurisdiction
when the litigant takes an appeal from an unappealable order.
United States v. Jones, 367 F.App'x 482, 484
(4th Cir. 2010) (quoting Griggs v. Provident Consumer
Disc. Co., 459 U.S. 56, 58 (1982) (citing Ruby v.
Sec y of United States Navy, 365 F.2d 385, 389
(9th Cir. 1966) (en banc))); accord Wright &
Miller, 16A Fed. Prac. & Proc. Juris. § 3949.1 (4th
ed.) ("The weight of authority holds that an appeal from
a clearly non-appealable order fails to oust district court
authority; older cases holding to the contrary have been
rejected.") (footnotes omitted); McKesson HBOC, Inc.
v. Islamic Republic of Iran, 315 F.Supp.2d 63,
66 (D.D.C. 2004) ("[A] notice of appeal from an
unappealable order does not divest the district court of
jurisdiction."); U.S. v. Brooks, 145 F.3d 446,
456 (1st Cir. 1998) ("[A] district court can proceed,
notwithstanding the filing of an appeal, if the notice of
appeal is defective in some substantial and easily
discernible way (if, for example, it is based on an
unappealable order) or if it otherwise constitutes a
transparently frivolous attempt to impede the progress of the
case."); see also Hammon v. Barry, 752 F.Supp.
1087, 1092 (D.D.C. 1990) ("Instead of allowing [a party]
to willy-nilly deprive [a] Court of jurisdiction, thus
bringing . . . proceedings to a standstill while a
non-appealable ruling wends its way through the appellate
process, the Court [may] disregard the notice of appeal from
a non-appealable order and proceed with the case.")
(internal citations and quotation marks omitted).
Plaintiff appealed a non-final order for which no right to
appeal has been triggered. Nor did Plaintiff obtain a
certificate of appealability from this Court to pursue an
appeal from an interlocutory or collateral order. See
United States v. Hinton, 420 F.App'x 270, 270 (4th
Cir. 2011) (dismissing appeal where denial of motion for
recusal was "neither a final order nor an appealable
interlocutory or collateral order"); Poux v.
FCIBennettsville SC, 418 F.App'x 157, 157 (4th Cir.
2011) (dismissing appeal of order staying discovery);
Stephens v. Muncy,918 F.2d 174 ...