1997 U.S. Dist. LEXIS 13950, *
MASON TENDERS DISTRICT COUNCIL PENSION FUND,
et al., Plaintiffs, -against- JAMES MESSERA, et al., Defendants
95 Civ. 9341 (RWS)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK
1997 U.S. Dist. LEXIS 13950
September 12, 1997, Decided
September 15,
1997, Filed
DISPOSITION:
[*1] Funds' motion for reargument and the Cunningham Defendants'
cross-motion for reconsideration denied.
CORE TERMS:
Local Rule, reargument, reconsideration, statute of limitations,
cross-motion, six-year, tolling, overlooked, limitations period, summary
judgment, commencement, motion to amend, real estate, federal law, three-year,
untimely, discretionary power, time-barred, memorandum, evade, legal
malpractice, malpractice, unilateral, cross-move, reargue
COUNSEL: For Plaintiffs: MYRON D. RUMELD, ESQ.,
Of Counsel, PROSKAUER ROSE GOETZ & MENDELSOHN, New York, NY.
For Levin & Weissman, Roger Levin, Defendants: JOHN H. EICKEMEYER, ESQ.,
Of Counsel, VEDDER, PRICE KAUFMAN KAMMHOLZ & DAY, New York, New York.
For Cunningham & Lee, Gerard Cunningham, Defendants: PHILIP
TOUITOU, ESQ., Of Counsel, OHRENSTEIN & BROWN, New York, NY.
For Davis and Davis P.C., Wilfred L. Davis, Defendants: SIMONE MONASEBIAN,
ESQ., Of Counsel, LAW OFFICES OF MICHAEL KENNEDY, P.C., New York, NY.
JUDGES: ROBERT W. SWEET,
U.S.D.J.
OPINIONBY: ROBERT
W. SWEET
OPINION: OPINION
Sweet, D.J.
Plaintiffs the Mason
Tenders' District Council Trust Funds (the "Funds") have moved pursuant
to Local Rule 6.3 for reargument of the dismissal of the Funds' 58th claim for
relief against defendants Cunningham & Lee ("C & L") and Gerard
Cunningham ("Cunningham"), (collectively the "Cunningham Defendants").
Cunningham cross-moves for reconsideration of the denial of Cunningham's motion
for summary judgment to dismiss the 64th, 77th, and 80th claims for relief
stated in the Funds' [*2] amended complaint, (the "Amended
Complaint").
For the reasons set forth below, both motion and
cross-motion are denied.
The Parties
The
parties, prior proceedings and facts in this action have been set forth in three
prior opinions of the court, familiarity with which is assumed. See
Mason Tenders District Council Pension Fund v. James Messera,
1996 WL 351250 (S.D.N.Y. June 26, 1996); Mason Tenders District
Council Pension Fund v. James Messera, 1996 WL 578048 (S.D.N.Y. Oct. 8, 1996);
Mason
Tenders District Council Pension Fund v. James Messera, 958 F. Supp.
869, 873 (S.D.N.Y. 1997). The parties, facts and prior proceedings relevant
to the instant motions are set forth below.
The Funds consist of various
"employee pension benefit plans" or "employee welfare benefit plans" within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), 29
U.S.C. § 1002(3). The Funds provide benefits to members of local unions
affiliated with the Laborers' International Union of North America ("LIUNA"),
which local union together comprise the Mason Tenders' District
Council of Greater New York (the "District Council"). The Funds are administered
[*3] by the District Council and contributing employers in the
industry.
Cunningham is an attorney and C & L is his law firm. The
Cunningham Defendants served as counsel to both the Funds and the District
Council Board of Trustees' Real Estate Committee from 1987 until March 9, 1995,
when they resigned as counsel.
Facts and Prior
Proceedings
On December 27, 1994, the District Council entered
into a consent decree in a civil action brought by the Government, U.S. v.
Mason Tenders District Council, 94 Civ. 6487 (RWS), which
alleged violations of the Racketeer Influenced and Corrupt Organization Act
("RICO"), including certain improprieties with respect to the administration of
the Funds.
On November 2, 1995, this action was commenced by the Funds,
pleading eighty-four causes of action against nearly fifty separate defendants
based on the improper conduct of the Funds. The complaint alleged that between
November 1989 and February 1990, the Funds purchased eight properties in
Brooklyn, New York (the "Brooklyn Properties"), based on "false and fraudulent
real estate appraisals that grossly inflated the true value" of these
properties. The Brooklyn Properties were purchased [*4] from a
member of the Genovese Organized Crime Family, Charles Trentacosta, and
Trentacosta made a profit of $ 1,341,903.05 in the transaction.
On
August 20, 1996, the Funds moved to amend the complaint to add the Cunningham
Defendants. As counsel to the Funds, the Cunningham Defendants had been involved
in the acquisition of the Brooklyn properties as well as other real estate
transactions. The motion was granted on September 23, 1996, and the Amended
Complaint was filed on October 2, 1996.
On March 5, 1997, the Cunningham
Defendants moved for partial summary judgment dismissing the 58th, 64th, 77th
and 80th claims against them on statute of limitations grounds. These claims
alleged legal malpractice arising out of various real estate transactions.
On March 26, 1997, an opinion issued denying the Cunningham Defendants'
motion for summary judgment as to the 64th, 77th, and 80th claims, and granting
summary judgment on the 58th claim. The Court held that the 1996 amendment to
N.Y. Civ. Prac. Law & Rules § 214(6), which changed the statute of
limitations for legal malpractice claims from six years to three, did not apply
retroactively to the Amended Complaint, which was filed prior [*5]
to the change in the statute of limitations. Instead, the six-year statute of
limitations would apply to the Funds' malpractice claims against the Cunningham
Defendants. Mason
Tenders, 958 F. Supp. at 886-87. As a result, the 64th, 77th and
80th claims against the Cunningham Defendants were timely, because they arose
out of transactions that occurred less than six years prior to the filing of the
motion to amend the complaint in August 1996. Id.,
at 888. However, the Court held that 58th claim against the Cunningham
Defendants was time-barred, because it concerned the purchase of the Brooklyn
Properties in 1989 and 1990. n1 Id.
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- - -Footnotes- - - - - - - - - - - - - - - - - -
n1 The 70th claim
against the Cunningham Defendants was also dismissed as time-barred. Id.
at 888. This claim is not at issue in these motions for reconsideration.
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- - - - - - -
On April 10, 1997, the Funds moved for reargument of the
dismissal of the 58th claim. The Funds contend that the Court's decision that
the 58th claim was untimely under the six-year limitations period was
"unilateral" [*6] because the Cunningham Defendants argued the claim
was untimely based on application of the three-year limitation period. If
reargument were to be granted, the Funds would introduce two tolling agreements
entered between the Funds and the Cunningham Defendants in November 1995 when
the Funds filed their omnibus complaint. The agreements tolled the statute of
limitations for the period from November 29, 1995 through and including the
filing of the Funds' motion to amend the complaint. According to the Funds, as a
result of these agreements any time that elapsed after November 29, 1995 is
irrelevant to the determination of a motion to dismiss based on the statute of
limitations. The Funds had not raised this argument in the earlier motions, nor
had they presented the tolling agreements as part of the record.
The
Cunningham Defendants cross-moved for reconsideration of the denial of summary
judgment on the 64th, 77th, and 80th claims, on the grounds that the Court erred
in applying federal law rather than New York State law to determine the date of
commencement of the action. The statute of limitations ended for malpractice
claims against the Cunningham Defendants on September 4, 1996. [*7]
Application of federal law sets the commencement of the action when the motion
to amend was filed, which was on August 21, 1996. Application of New York State
law would set the commencement of the action when the Amended Complaint was
filed and served, which was on October 1, 1996.
Oral argument was heard
on May 21, 1997, at which time the motion was deemed fully submitted.
Discussion
A. The Funds' Motion for Reargument Will Be
Denied
Local Rule 6.3 n2 provides in pertinent part: "There
shall be served with the notice of motion a memorandum setting forth concisely
the matters or controlling decisions which counsel believes the court has
overlooked." Thus, to be entitled to reargument, the Funds must demonstrate that
the Court overlooked controlling decisions or factual matters that were put
before it on the underlying motion. See Ameritrust
Co. Nat'l Ass'n v. Dew, 151 F.R.D. 237, 238 (S.D.N.Y. 1993); Fulani
v. Brady, 149 F.R.D. 501, 503 (S.D.N.Y. 1993) aff'd sub nom. Fulani
v. Bentsen, 35 F.3d 49 (2d Cir. 1994); East
Coast Novelty Co. v. City of New York, 141 F.R.D. 245, 245 (S.D.N.Y. 1992);
B.N.E.
Swedbank, S.A. v. Banker, 791 F. Sup. 1002, [*8] 1008 (S.D.N.Y.
1992); Novak
v. National Broadcasting Co., 760 F. Supp. 47, 48 (S.D.N.Y. 1991); Ashley
Meadows Farm, Inc. v. American Horse Shows Ass'n, 624 F. Supp. 856, 857
(S.D.N.Y. 1985).
- - - - - - - - - - - - - - - - -
-Footnotes- - - - - - - - - - - - - - - - - -
n2 Amendments to the Local
Rules of the United States District Courts for the Southern and Eastern
Districts of New York were adopted as effective on April 15, 1997. As part of
the amendment, Local Rule 3(j) was renumbered as Local Rule 6.3. The provisions
governing motions to reargue remain the same.
- - - - - - - - - -
- - - - - - -End Footnotes- - - - - - - - - - - - - - - - -
Local Rule
6.3 is to be narrowly construed and strictly applied so as to avoid repetitive
arguments on issues that have been considered fully by the court. American
Alliance v. Eagle Ins., 163 F.R.D. 211, 213 (S.D.N.Y. 1995) (citing Caleb
& Co. v. E.I. DuPont De Nemours & Co., 624 F. Supp. 747, 748 (S.D.N.Y.
1985)). In deciding a Local Rule 6.3 motion, the court must not allow a
party to use the motion to reargue as a substitute for appealing from a final
judgment. See Morser,
715 F. Supp. at 517; Korwek
[*9] v. Hunt, 649 F. Supp. 1547, 1548 (S.D.N.Y. 1986).
Therefore, a party in its motion for reargument "may not advance new facts,
issues or arguments not previously presented to the court." Litton Indus., Inc.
v. Lehman Bros. Kuhn Loeb Inc., 1989 WL 162315, at *3 (S.D.N.Y. August 4, 1989).
The tolling agreements advanced by the Funds were not previously
presented to the Court and are therefore barred from reconsideration. In order
to evade the strictures of Local Rule 6.3, the Funds contend that the Court
overlooked the fact that the Cunningham Defendants had not sought dismissal
based on application of a six-year limitations period, but only on the new
three-year limitations period. Therefore, dismissal of the 58th claim as
untimely under the six-year period was a "unilateral" action by the Court, and
deprived the Funds an opportunity of presenting the tolling agreements as
relevant evidence. However, the question of whether to apply the six or
three-year statute of limitations period was precisely the issue argued by the
parties, in their briefs and at oral argument. The Cunningham Defendants
specifically contended that the claims were timely even under the six-year
period in [*10] their moving memorandum. The Funds had ample
opportunity to present the tolling agreements as part of their assertion that
the six-year limitations period applied and that all their claims were timely
under this application. To permit reargument of this issue would directly
contradict the purpose of Local Rule 6.3 to "preclude arguments raised for the
first time on motion for reconsideration." Caribbean
Trading and Fidelity Corp v. Nigerian Nat'l Petroleum Corp, 948 F.2d 111, 115
(2d Cir. 1991). See also United
States v. Certain Funds on Deposit, 988 F.2d 129, 132 (2d Cir. 1993) ("the
principle underlying Rule 3(j) is that a party, on a motion for reargument,
should not be permitted 'to advance new facts, issues, or arguments'").
B. The Cunningham Defendants' Motion for Reconsideration Will Be
Denied
Having filed their cross-motion after the ten-day limit
assigned by Local Rule 6.3, the Cunningham Defendants cross-move for
reconsideration under the Court's inherent discretionary power to review
interlocutory orders. Krome
v. Merrill Lynch & Co., Inc., 110 F.R.D. 693, 694-95 (S.D.N.Y. 1986); Lund
v. Chemical Bank, 675 F. Supp. 815, 817 (S.D.N.Y. 1987). The
[*11] grounds for their cross-motion do not warrant exercise of
discretionary power to review, because neither the interests of justice nor
judicial economy would be served thereby. See Lund,
675 F. Supp. at 817. Moreover, even if the Court were to permit the
Cunningham Defendants to evade the timeliness standard of Local Rule 6.3, the
cross-motion does not meet the other standard presented by the rule; it does not
"demonstrate that the court overlooked controlling decisions or factual matters
that were put before the Court on the underlying motion." Houbigant,
Inc. v. ACB Mercantile, Inc., 914 F. Supp. 964, 977, 1001 (S.D.N.Y. 1996);
Violette
v. Armonk Assoc., L.P., 823 F. Supp. 224, 226 (S.D.N.Y. 1993).
The
cross-motion asserts that the Court erred in applying federal law rather than
New York State law to determine the commencement of the action against the
Cunningham Defendants. This matter was raised and briefed on the preceding
motion in letter briefs submitted by the Funds on March 19, 1997, and by the
Cunningham Defendants on March 12, 1997. The issue was addressed and resolved in
the opinion. Mason
Tenders, 958 F. Supp. at 887-88 & n. 3. In the instant
cross-motion, the [*12] Cunningham Defendants merely repeat their
earlier assertions with additional authority. This is not sufficient to meet the
requirements of Local Rule 6.3.
Conclusion
For the reasons set forth above, the Funds' motion for reargument and
the Cunningham Defendants' cross-motion for reconsideration are denied.
It is so ordered.
New York, N. Y.
September
12, 1997
ROBERT W. SWEET
U.S.D.J.