J.J. Cranston Constr. Corp. v. City of New York

MEMORANDUM & ORDER On October 12, 2020, Plaintiffs J. J. Cranston Construction Corp. (“Cranston”) and East Harlem Management Group, Inc. (“East Harlem”) (together, “Plaintiffs”) brought this action seeking money damages pursuant to 11 U.S.C. §105 (“Section 105″) for Defendant The City of New York’s alleged violation of the automatic stay imposed by the United States Bankruptcy Court for the Eastern District of New York in Case No. 91-16978-cbd under 11 U.S.C. §362(a). See generally Complaint (“Compl.”), ECF No. 1.¹ On January 14, 2021, this case was reassigned to the undersigned. Pending before the Court is Defendant’s motion to dismiss the Complaint. See Notice of Motion to Dismiss the Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) (the “Motion”), ECF No. 21; Defendant’s Memorandum of Law in Support of Defendant’s Motion to Dismiss the Complaint (“Def.’s Br.”), ECF No. 22; Defendant’s Reply Memorandum of Law in Further Support of Defendant’s Motion to Dismiss the Complaint (“Def.’s Reply”), ECF No. 24. Defendant seeks dismissal of Plaintiffs’ Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) (“Rule 12(b)(1)”) and Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). See Motion at 1; Def.’s Br. at 1. Plaintiffs oppose the Motion. See Plaintiffs’ Memorandum of Law Opposing Motion to Dismiss (“Pls.’ Br.”), ECF No. 23. For the reasons set forth below, Defendant’s motion to dismiss is granted and the Complaint is dismissed without prejudice to refiling in an appropriate court. BACKGROUND I. Factual Background² In 1974, Cranston obtained title to real property (the “Property”) located at 1650 Madison Avenue, New York, NY and 22 East 110th Street, New York, NY. See Compl. 1. On October 24, 1991, Cranston filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Eastern District of New York, Case No. 91-16978-cbd (the “Bankruptcy Action”). See id. 2. On April 1, 1992, Defendant — a creditor in the Bankruptcy Action — filed a proof of claim in the Bankruptcy Action. See id.

3, 5. On or about May 19, 1992, East Harlem obtained subleases for the Property’s first and second floors, which gave East Harlem an interest in the Property that allegedly “differed from whatever interest Cranston’s general unsecured creditors had in [the] Property.” See id.