611 F.Supp. 281 (S.D.N.Y. 1985), 82 Civ. 3954, WM. Passalacqua Builders, Inc. v. Resnick Developers South, Inc.
|Docket Nº:||82 Civ. 3954 (DNE).|
|Citation:||611 F.Supp. 281|
|Party Name:||WM. PASSALACQUA BUILDERS, INC., Safeco Insurance Company of America and General Insurance Company of America, Plaintiffs, v. RESNICK DEVELOPERS SOUTH, INC., Jack Resnick, Burton Resnick, 90079, Inc., Jack Resnick & Sons, Inc., Sunrise Builders of Florida, Inc., Resnick of Boca, Inc., PJFAM Investments, Inc., Resnick Development Corporation, Pearl R|
|Case Date:||July 12, 1985|
|Court:||United States District Courts, 2nd Circuit, Southern District of New York|
Peterson Young Self & Asselin, Atlanta, Ga. (David J. Larson, Atlanta, Ga., of counsel), and Frank J. Franzino, New York City, for plaintiffs.
Kronish, Lieb, Shainswit, Weiner & Hellman, New York City (Brian J. Gallagher and Richard L. Wynne, New York City, of
counsel), for defendants other than Resnick Developers South, Inc.
OPINION AND ORDER
EDELSTEIN, District Judge:
Defendants other than Resnick Developers South, Inc. ("Defendants") have filed a motion for reargument of this court's May 16, 1985 Opinion and Order ("Opinion"), 608 F.Supp. 1261, pursuant to Rule 3(j) of the Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York ("Local Rules") and seek appellate certification of legal issues pursuant to 28 U.S.C. § 1292(b). Defendants have also moved to dismiss the amended complaint filed as a result of the Opinion. Familiarity with the Opinion is assumed.
MOTION FOR REARGUMENT
Defendants seek reargument of the Opinion arguing that the court overlooked three points:
(i) the effect of the constitutional prohibition against enforcing a judgment against an "alter ego" of the judgment debtor unless that "alter ego" was a properly served party to the underlying action ...;
(ii) the proper application of [the] analysis [in Conklin v. Furman, 48 N.Y. 527 (1872) ] of the nature and accrual of the statute of limitations applicable to suits against corporate principals for corporate debts; and
(iii) [The] limited holding [of Port Chester Electric Construction Co. v. Atlas, 40 N.Y.2d 652, 389 N.Y.S.2d 327, 357 N.E.2d 983 (1976) ] which permits only the enforcement of judgments by levy upon debts owed to the judgment debtor.
Memorandum Supporting Defendants' Motion for: (1) Reargument Pursuant to Rule 3(j) of the Civil Rules of this Court and (2) Appellate Certification of a Controlling, Dispositive Legal Issue Pursuant to 28 U.S.C. § 1292(b) at 2-3.
The " 'only proper ground for a motion for reargument is that the court has overlooked "matters or controlling decisions" which, had they been considered, might reasonably have altered the result reached by the court.' " United States v. International Business Machines Corp., 79 F.R.D. 412, 414 (S.D.N.Y.1978) (quoting United States v. International Business Machines Corp., No. 69 Civ. 200 (DNE), slip op. at 2 (S.D.N.Y. Oct. 10, 1975)); see Civil Rule 3(j) of the Local Rules. Only one of Defendants' points satisfies this standard.
The court has considered the application of Conklin and Port Chester to the facts of this case, 608 F.Supp. at 1264; thus the court did not overlook these decisions and they are not proper grounds for a motion for reargument. The first point raised by Defendants satisfies this standard; however, the court's decision would not be altered.
Defendants contend that a judgment cannot be enforced against an "alter ego" who was not a party to the underlying action. The principal case relied upon to support this contention is Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969). In Zenith, the Supreme Court refused to enforce a judgment against a corporation that was found by the trial court to be the "alter ego" of a defendant corporation. The Court noted that one is not bound by a judgment in personam "resulting from a litigation in which he is not designated as a party or to which he has not been made a party by service of process." Id. at 110, 89 S.Ct. at 1569. The Court's holding, however, does not preclude the enforcement of the judgment in this case. In fact, enforcement of the judgment would be consistent with Zenith.
The crux of Zenith is that a judgment cannot be enforced against an alleged "alter ego" who has not had a day in court to litigate whether or not there is such a relationship. In Zenith, the alleged "alter ego" was not a party to the lawsuit. A stipulation was entered into between the parties to the suit that such an "alter ego"
relationship did exist. The Court noted that "[i]t was error to enter the injunction against [the 'alter ego'], without having made this determination in a proceeding to which [the 'alter ego'] was a party." Id. at 112, 89 S.Ct. at 1570. Courts have followed this reasoning by refusing to enforce court orders against unserved alleged "alter egos." E.g., Panther Pumps & Equipment v. Hydrocraft, Inc., 566 F.2d 8, 23 (7th Cir. 1977) (court did not direct order to show cause to alleged "alter ego" of party which the court did not have jurisdiction over), cert. denied, 435 U.S. 1013, 98 S.Ct. 1887, 56 L.Ed.2d 395 (1978). On the...
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