In re Randall's Island Family Golf Centers, Inc.
| Decision Date | 03 February 2003 |
| Docket Number | No. 00-41191(SMB).,No. 00-41181(SMB).,No. 00-41180(SMB).,No. 00-41192(SMB).,No. 00-41116(SMB).,No. 00-41171(SMB).,No. 00-41159(SMB).,No. 00-41178(SMB).,No. 00-41167(SMB).,No. 00-41145(SMB).,No. 00-41140(SMB).,No. 00-41123(SMB).,No. 00-41183(SMB).,No. 00-41154(SMB).,No. 00-41115(SMB).,No. 00-41125(SMB).,No. 00-41074(SMB).,No. 00-41173(SMB).,No. 00-41070(SMB).,No. 00-41150(SMB).,No. 00-41099(SMB).,No. 00-41174(SMB).,No. 00-41131(SMB).,No. 00-41120(SMB).,No. 00-41119(SMB).,No. 00-41077(SMB).,No. 00-41190(SMB).,No. 00-41189(SMB).,No. 00-41158(SMB).,No. 00-41073(SMB).,No. 00-41065(SMB).,No. 00-41122(SMB).,No. 00-41129(SMB).,No. 00-41100(SMB).,No. 00-41193(SMB).,No. 00-41137(SMB).,No. 00-41118(SMB).,No. 00-41163(SMB).,No. 00-41078(SMB).,No. 00-41133(SMB).,No. 00-41162(SMB).,No. 00-41144(SMB).,No. 00-41194(SMB).,No. 00-41076(SMB).,No. 00-41188(SMB).,No. 00-41142(SMB).,No. 00-41196(SMB).,No. 00-41177(SMB).,No. 00-41093(SMB).,No. 00-41103(SMB).,No. 00-41097(SMB).,No. 00-41168(SMB).,No. 00-41080(SMB).,No. 00-41085(SMB).,No. 00-41153(SMB).,No. 00-41114(SMB).,No. 00-41155(SMB).,No. 00-41106(SMB).,No. 00-41095(SMB).,No. 00-41141(SMB).,No. 00-41195(SMB).,No. 00-41176(SMB).,No. 00-41111(SMB).,No. 00-41108(SMB).,No. 00-41175(SMB).,No. 00-41186(SMB).,No. 00-41113(SMB).,Adversary No. 02-3147.,No. 00-41147(SMB).,No. 00-41160(SMB).,No. 00-41069(SMB).,No. 00-41169(SMB).,No. 00-41101(SMB).,No. 00-41138(SMB).,No. 00-41089(SMB).,No. 00-41092(SMB).,No. 00-41117(SMB).,No. 00-41170(SMB).,No. 00-41067(SMB).,No. 00-41172(SMB).,No. 00-41090(SMB).,No. 00-41068(SMB).,No. 00-41157(SMB).,No. 00-41127(SMB).,No. 00-41146(SMB).,No. 00-41139(SMB).,No. 00-41164(SMB).,No. 00-41084(SMB).,No. 00-41072(SMB).,No. 00-41124(SMB).,No. 00-41121(SMB).,No. 00-41075(SMB).,No. 00-41149(SMB).,No. 00-41112(SMB).,No. 00-41104(SMB).,No. 00-41184(SMB).,No. 00-41152(SMB).,No. 00-41088(SMB).,No. 00-41087(SMB).,No. 00-41185(SMB).,No. 00-41161(SMB).,No. 00-41083(SMB).,No. 00-41081(SMB).,No. 00-41143(SMB).,No. 00-41187(SMB).,No. 00-41110(SMB).,No. 00-41182(SMB).,No. 00-41066(SMB).,No. 00-41096(SMB).,No. 00-41094(SMB).,No. 00-41091(SMB).,No. 00-41166(SMB).,No. 00-41128(SMB).,No. 00-41082(SMB).,No. 00-41134(SMB).,No. 00-41107(SMB).,No. 00-41135(SMB).,No. 00-41109(SMB).,No. 00-41179(SMB).,No. 00-41098(SMB).,No. 00-41130(SMB).,No. 00-41126(SMB).,No. 00-41165(SMB).,No. 00-41151(SMB).,No. 00-41105(SMB).,No. 00-41156(SMB).,No. 00-41136(SMB).,No. 00-41079(SMB).,No. 00-41071(SMB).,No. 00-41132(SMB).,No. 00-41086(SMB).,No. 00-41148(SMB).,00-41065(SMB).,00-41066(SMB).,00-41067(SMB).,00-41068(SMB).,00-41069(SMB).,00-41070(SMB).,00-41071(SMB).,00-41072(SMB).,00-41073(SMB).,00-41074(SMB).,00-41075(SMB).,00-41076(SMB).,00-41077(SMB).,00-41078(SMB).,00-41079(SMB).,00-41080(SMB).,00-41081(SMB).,00-41082(SMB).,00-41083(SMB).,00-41084(SMB).,00-41085(SMB).,00-41086(SMB).,00-41087(SMB).,00-41088(SMB).,00-41089(SMB).,00-41090(SMB).,00-41091(SMB).,00-41092(SMB).,00-41093(SMB).,00-41094(SMB).,00-41095(SMB).,00-41096(SMB).,00-41097(SMB).,00-41098(SMB).,00-41099(SMB).,00-41100(SMB).,00-41101(SMB).,00-41103(SMB).,00-41104(SMB).,00-41105(SMB).,00-41106(SMB).,00-41107(SMB).,00-41108(SMB).,00-41109(SMB).,00-41110(SMB).,00-41111(SMB).,00-41112(SMB).,00-41113(SMB).,00-41114(SMB).,00-41115(SMB).,00-41116(SMB).,00-41117(SMB).,00-41118(SMB).,00-41119(SMB).,00-41120(SMB).,00-41121(SMB).,00-41122(SMB).,00-41123(SMB).,00-41124(SMB).,00-41125(SMB).,00-41126(SMB).,00-41127(SMB).,00-41128(SMB).,00-41129(SMB).,00-41130(SMB).,00-41131(SMB).,00-41132(SMB).,00-41133(SMB).,00-41134(SMB).,00-41135(SMB).,00-41136(SMB).,00-41137(SMB).,00-41138(SMB).,00-41139(SMB).,00-41140(SMB).,00-41141(SMB).,00-41142(SMB).,00-41143(SMB).,00-41144(SMB).,00-41145(SMB).,00-41146(SMB).,00-41147(SMB).,00-41148(SMB).,00-41149(SMB).,00-41150(SMB).,00-41151(SMB).,00-41152(SMB).,00-41153(SMB).,00-41154(SMB).,00-41155(SMB).,00-41156(SMB).,00-41157(SMB).,00-41158(SMB).,00-41159(SMB).,00-41160(SMB).,00-41161(SMB).,00-41162(SMB).,00-41163(SMB).,00-41164(SMB).,00-41165(SMB).,00-41166(SMB).,00-41167(SMB).,00-41168(SMB).,00-41169(SMB).,00-41170(SMB).,00-41171(SMB).,00-41172(SMB).,00-41173(SMB).,00-41174(SMB).,00-41175(SMB).,00-41176(SMB).,00-41177(SMB).,00-41178(SMB).,00-41179(SMB).,00-41180(SMB).,00-41181(SMB).,00-41182(SMB).,00-41183(SMB).,00-41184(SMB).,00-41185(SMB).,00-41186(SMB).,00-41187(SMB).,00-41188(SMB).,00-41189(SMB).,00-41190(SMB).,00-41191(SMB).,00-41192(SMB).,00-41193(SMB).,00-41194(SMB).,00-41195(SMB).,00-41196(SMB). |
| Citation | 288 B.R. 701 |
| Parties | In re RANDALL'S ISLAND FAMILY GOLF CENTERS, INC., et al., Debtors. Family Golf Centers, Inc., Plaintiff, v. Acushnet Company and Fortune Brands, Inc. |
| Court | U.S. Bankruptcy Court — Southern District of New York |
Golenbock, Eiseman, Assor, Bell & Peskoe, Jonathan L. Flaxer, Jacqueline G. Veit, Sydney R. Smith, of Counsel, New York City, for Plaintiff.
Epstein, Becker & Green, P.C., Robert D. Goldstein, of Counsel, New York City, for Defendants.
After an earlier action was dismissed for procedural reasons at the defendants' urging, the plaintiff immediately refiled this adversary proceeding curing the infirmity. The defendants have now moved to dismiss this lawsuit pursuant to FED. R. CIV. P. 12(b)(6), contending that the claims are time-barred. For the reasons that follow, the motion is denied.
The plaintiff is one of a family of debtors formerly engaged in the business of owning and operating golf facilities, ice rinks and family entertainment centers. (Complaint, dated Sept. 30, 2002 (the "Complaint"), ¶ 5.) The defendant, Acushnet Company ("Acushnet"), sells golf equipment and apparel through its Titleist and Footjoy divisions, and is a subsidiary of the defendant, Fortune Brands, Inc. ("Fortune Brands.") (Id. ¶ 7.) The debtors filed their chapter 11 petitions on May 4, 2000, (id. ¶ 6), and the two year period within which the debtor could commence avoidance actions, see 11 U.S.C. § 546(a)(1)(A), was due to expire on May 3, 2002.
Four days before the deadline, on April 29, 2002, the plaintiff commenced a single adversary proceeding (Adv.Pro. no. 02-2278) against over eighty defendants to recover unrelated preferences (the "First Action"). Acushnet and Fortune Brands were among the defendants in the First Action, and the plaintiff alleged that they had received preferences aggregating $584,601.97. (Complaint ¶ 12.)
On June 4, 2002, Acushnet and Fortune Brands moved to dismiss the claims asserted against them in the First Action on four grounds: (1) the Complaint did not contain the names of all of the plaintiffs, see Fed. R. Civ. P. 10(a); (2) it did not contain a short and plain statement of the claim showing that the pleader was entitled to relief, see Fed. R. Civ. P. 8(a); (3) it did not contain separate counts for separate claims, see Fed. R. Civ. P. 10(b); and (4) it improperly joined parties in violation of Fed. R. Civ. P. 20(a).
I heard oral argument and granted the motion to dismiss without prejudice, (Complaint ¶ 16), noting on the record that the plaintiff must renew the claim in a separate adversary proceeding. Neither Acushnet nor Fortune Brands protested the terms of the dismissal. Acushnet and Fortune Brands subsequently settled a proposed order, which I signed on September 20, 2002, and the clerk entered on September 26th. (Adv. Pro. no. 02-2278, ECF Doc. no. 164.) Consistent with my ruling, the order provided for a dismissal without prejudice.
Five days later, on October 1, 2002, the plaintiff commenced this adversary proceeding against Acushnet and Fortune Brands to recover the same transfers sought in the First Action. The defendants have moved to dismiss, but do not challenge the legal sufficiency of the preference allegations. Instead, they contend that this adversary proceeding was commenced after the statute of limitations had expired. The plaintiff has responded that under the doctrine of "equitable tolling," the statute of limitations stopped running, and permitted it to file this adversary proceeding.
"Equitable tolling is a doctrine that permits courts to extend a statute of limitations on a case-by-case basis to prevent inequity." Warren v. Garvin, 219 F.3d 111, 113 (2d Cir.2000). It has been allowed in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading within the period of limitations, or has been induced or tricked by his adversary into permitting the deadline to pass. Young v. United States, 535 U.S. 43, 122 S.Ct. 1036, 1041, 152 L.Ed.2d 79 (2002); Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). While federal courts have typically extended equitable relief only sparingly, id., they have not hesitated to do so when the circumstances call for it.
The seminal case of Burnett v. New York Cent. R.R. Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965), exemplifies the application of equitable tolling to a situation involving a defective pleading. There, Burnett commenced a timely action under the Federal Employers' Liability Act ("FELA") in Ohio state court. Id. at 424-25, 85 S.Ct. 1050. The state court action was dismissed for improper venue, and Burnett brought an identical action in federal district court eight days later. Id. at 425, 85 S.Ct. 1050. By then, the statute of limitations had run on the FELA claim. Id. The district court dismissed the action, and the Court of Appeals affirmed, paving the way for Supreme Court review. Id. at 425-26, 85 S.Ct. 1050.
The Supreme Court reversed, holding that the statute of limitations had been equitably tolled. The Court observed that the basic inquiry was whether the "congressional purpose is effectuated by tolling the statute of limitations in given circumstances." Id. at 427, 85 S.Ct. 1050. This requires an examination of the purposes and policies underlying the statute of limitations, the law itself, and the remedial scheme developed by Congress for the enforcement of the rights created by that law. Id.
Equitable tolling is a counterweight to the policies that underlie a statute of limitations. Statutes of limitations are primarily designed to ensure fairness by preventing the revival of stale claims after the evidence has been lost and the witnesses' memories have faded. Id. at 428, 85 S.Ct. 1050. "This policy of repose, designed to protect defendants, is frequently outweighed, however, where the interests of justice require vindication of the plaintiff's rights." Id. These competing considerations favor tolling where the plaintiff has not slept on his rights, and commences a timely state court action in a court of competent jurisdiction, and the particular defect in the complaint is waivable and frequently waived. Id. at 429, 85 S.Ct. 1050. In those circumstances, the defendant "could not have relied upon the policy of repose embodied in the limitation statute, for it was aware that [the plaintiff] was actively pursuing his ... remedy," as evidenced by the defendant's motion in state court to dismiss for improper venue. Id. at 429-30, 85 S.Ct. 1050.
In addition, both federal and state law view improper venue as the type of defect that does not require dismissal. Both state and federal courts are authorized to transfer an improperly venued case to the proper forum rather than dismiss the action. See id. at 430-32, 85 S.Ct. 1050. This, according to the Supreme Court, indicated that Congress did not intend the statute of limitations to bar timely FELA actions brought in a state court of competent jurisdiction and later dismissed for improper venue. Id. at 432, 85 S.Ct. 1050.
Accordingly, the Court concluded, equitable tolling applied to preserve the timeliness of Burnett's second action. He brought his FELA action in a state court of competent jurisdiction, and served process. His first action was...
To continue reading
Request your trial
-
In re Williams
...It "permits courts to extend a statute of limitations on a case-by-case basis to prevent inequity." In re Randall's Island Family Golf Centers, 288 B.R. 701, 705 (Bankr.S.D.N.Y.2003), quoting Warren v. Garvin, 219 F.3d 111, 113 (2d Cir.2000), cert. denied 531 U.S. 968, 121 S.Ct. 404, 148 L.......
-
In re Randall's Island Family Golf Centers, Inc.
...dismiss this adversary proceeding on statute of limitations grounds. See Family Golf Ctrs., Inc. v. Acushnet Co. (In re Randall's Island Family Golf Ctrs., Inc.), 288 B.R. 701 (Bankr.S.D.N.Y.2003) (the "Opinion"). The defendants, Acushnet Company ("Acushnet") and Fortune Brands, Inc. ("Fort......
-
New Mexico Dep't of Workforce Solutions v. Martinez (In re Martinez)
...tolling should be applied)(citations omitted). 9.See also, Family Golf Centers, Inc. v. Acushnet Company and Fortune Brands, Inc. (In re Randall's Island Family Golf Centers, Inc.), 288 B.R. 701, 704 (Bankr.S.D.N.Y. 2003), adhered to on reargument by 290 B.R. 55 (Bankr.S.D.N.Y. 2003)(observ......
-
Tidewater Finance Co. v. Williams
...the trustee was unable to file a timely proceeding. See Randall's Island Family Golf Centers, Inc. v. Acushnet Co., et al. (In re Randall's Island Family Golf Centers, Inc.), 288 B.R. 701, 706 (Bankr. S.D.N.Y.2003). Similarly, the "three-year lookback period" for determining whether federal......