Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 91 Civ. 0341 (DNE).

• Citation: 955 F.Supp. 203
• Decision Date: 29 January 1997
• Docket Number: 91 Civ. 0341 (DNE).
• Parties: BONNIE & COMPANY FASHIONS, INC. and Bonnie Boerer, individually, Plaintiffs, v. BANKERS TRUST COMPANY, Defendant.
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

955 F.Supp. 203

BONNIE & COMPANY FASHIONS, INC. and Bonnie Boerer, individually, Plaintiffs, v. BANKERS TRUST COMPANY, Defendant.

91 Civ. 0341 (DNE).

United States District Court, S.D. New York.

January 29, 1997.

Budd Larner Gross Rosenbaum Greenberg & Sade, P.C., New York City (Paul A. Marber, of counsel), for plaintiffs.

Moses & Singer, L.L.P., New York City (Joel David Sharrow, of counsel), Kravet & Vogel, L.L.P., New York City (Joseph A. Vogel, of counsel), Bankers Trust Company, New York City (Jack H. Weiner, of counsel), for defendant.

OPINION & ORDER

EDELSTEIN, District Judge:

Currently before this Court is a motion for partial summary judgment brought by individual plaintiff Bonnie Boerer ("Boerer" or "plaintiff"). Defendant Bankers Trust Company ("defendant," the "Bank," or "BTC") opposes plaintiff's motion for summary judgment. For the following reasons, plaintiff's motion is granted in part and denied in part.

BACKGROUND

This case arises from an alleged breach of a factoring agreement (the "Factoring Agreement") between plaintiff Bonnie & Company Fashions, Inc. ("Bonnie & Co.") and BTC. The facts underlying this litigation are set forth in detail in Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 945 F.Supp. 693, 699-702 (S.D.N.Y.1996) (the "1996 Opinion"), and therefore, they will be recited herein only where necessary to resolve the instant motion for summary judgment. Boerer and Bonnie & Co.'s ("plaintiffs") Complaint contains six counts, all of which arise from BTC's alleged violations of the Factoring Agreement. See (Complaint and Jury Demand, Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 91 Civ. 0341 ("Complaint") ¶¶ 8-66 (Jan. 2, 1991).) BTC also filed eleven affirmative defenses, including seven counterclaims. See (Answer with Counterclaims, Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 91 Civ. 0341 ("Answer") ¶¶ 20-55 (Dec. 5, 1991).)

In the 1996 Opinion, this Court considered defendant's motion for summary judgment. The 1996 Opinion granted summary judgment to BTC in full and in part on several different Counts of plaintiffs' Complaint, as well as on a number of BTC's affirmative defenses and counterclaims. Bonnie & Co., 945 F.Supp. at 733-34. On January 21, 1997, this Court denied both parties' motions for reargument concerning the 1996 Opinion. Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 170 F.R.D. 111 (S.D.N.Y.1997). This Court will now describe the claims which the parties' each made and those which remain intact prior to this Court's resolution of the instant motion.

Plaintiffs' Complaint alleges the following counts against defendant: (1) breach of the Factoring Agreement; (2) breach of fiduciary duty; (3) negligence; (4) release of the $1,000,000 Treasury Bill which Boerer posted as collateral for Bonnie & Co.'s debts to BTC; (5) breach of the Factoring Agreement, breach of fiduciary duty, negligence, fraud, breach of duty of confidentiality, emotional distress, lost profits and salary, and emotional distress for breach of contract; and (6) litigation costs. (Complaint ¶¶ 8-66.)

Defendant's Answer sets forth the following affirmative defenses against plaintiffs: (1) failure to state a claim upon which relief can be granted; (2) plaintiffs' breach of the Factoring Agreement; (3) defendant did not breach the Factoring Agreement; (4) plaintiffs waived their claims by failing to timely object to defendant's alleged breaches of the Factoring Agreement. (Answer ¶¶ 20-29.) In its Answer, defendant's fifth through eleventh affirmative defenses simultaneously allege defendant's first through seventh counterclaims. These claims are: (1) BTC's Fifth Affirmative Defense/First Counterclaim for plaintiffs' unpaid liabilities of $127,608.35 plus interest; (2) BTC's Sixth Affirmative Defense/Second Counterclaim for indemnification pursuant to the Factoring Agreement; (3) BTC's Seventh Affirmative Defense/Third Counterclaim for payment of $127,608.35 pursuant to Boerer's Limited Guaranty contract; (4) BTC's Eighth Affirmative Defense/Fourth Counterclaim for costs and expenses pursuant to the Limited Guaranty; (5) BTC's Ninth Affirmative Defense/Fifth Counterclaim for a declaratory judgment affirming its superior interest in the Treasury Bill, an order foreclosing its perfected security interest in the Treasury Bill and a recovery of costs associated with the liquidation of the Treasury Bill; (6) BTC's Tenth Affirmative Defense/Sixth Counterclaim for an injunction ordering Boerer to direct the bank holding the Treasury Bill to release it to BTC; and (7) BTC's Eleventh Affirmative Defense/Seventh Counterclaim for costs attributable to BTC's efforts to obtain the Treasury Bill after Boerer allegedly wrongfully instructed the bank holding the collateral not to release it to BTC. Id. ¶¶ 31-55.

In the 1996 Opinion, this Court granted in part and denied in part defendant's motion for summary judgment. This Court granted summary judgment to defendant on Counts Two and Three, plaintiffs' claims for, respectively, breach of fiduciary duty and for negligence. Bonnie & Co., 945 F.Supp. at 733. This Court granted in part and denied in part defendant's motion for summary judgment on Count One, plaintiffs' claim for breach of the Factoring Agreement. Id. This Court denied summary judgment because a factual issue exists as to defendant's alleged breach, but granted summary judgment on plaintiffs' claim for punitive damages. Id. at 711. This Court also denied defendant's motion for summary judgment on that part of Count Four in which plaintiffs sought release of the Treasury Bill and compensatory damages, but granted summary judgment to defendant on plaintiffs' claim in Count Four for punitive damages. Id. at 733.

This Court granted defendant's motion for summary judgment on Count Five on plaintiffs' claims for breach of fiduciary duty, negligence, fraud, breach of duty of confidentiality, emotional distress, and for damages for emotional distress for breach of contract. Id. This Court, however, denied defendant's motion for summary judgment on plaintiffs' Count Five claims for breach of the Factoring Agreement and for damages from lost profits and salary. Id.

Finally, this Court denied defendant's motion for summary judgment on that part of Count Six in which plaintiffs seek payment for their costs associated with Count One, and granted defendant's motion for summary judgment on that part of Count Six in which plaintiffs seek payment of their costs associated with Count Two. Id.

In addition, this Court granted in part and denied in part defendant's motion for summary judgment on its eleven affirmative defenses and seven counterclaims. Id. at 733-34. This Court denied defendant's motion for summary judgment on its first four affirmative defenses, as well as on its Fifth Affirmative Defense/First Counterclaim, Seventh Affirmative Defense/Third Counterclaim, Ninth Affirmative Defense/Fifth Counterclaim, Tenth Affirmative Defense/Sixth Counterclaim and Eleventh Affirmative Defense/Seventh Counterclaims. Id. This Court, however, granted defendant's motion for summary judgment on defendant's Sixth Affirmative Defense/Second Counterclaim and Eighth Affirmative Defense/Fourth Counterclaim. Id. at 733.

This Court also denied all of the following in its 1996 Opinion: (1) plaintiffs' request for additional time to conduct discovery; (2) plaintiffs' motion for leave to file additional affidavits in response to defendant's motion for summary judgment; and (3) plaintiffs' motion to take a second deposition of a non-party witness; and (4) plaintiffs' request for a jury trial. This Court also dismissed as moot defendant's motion for a protective order.

The instant motion for summary judgment was brought by plaintiffs after defendants filed the motion for summary judgment which was the primary subject of the 1996 Opinion, but before this Court issued the 1996 Opinion. In the instant motion, Boerer asserts that she is entitled to summary judgment on: (1) Count Four which seeks the return of the Treasury Bill, (Plaintiff Bonnie Boerer's Memorandum of Law In Support of Her Motion For Partial Summary Judgment, Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 91 Civ. 0341 ("Pltf. Memo") at 6 (Nov. 7, 1996)); and (2) defendant's counterclaims which seek attorneys' fees, id. at 12-13. Specifically, plaintiff moves for summary judgment with respect to three of defendant's counterclaims for attorneys' fees: (1) defendant's Sixth Affirmative Defense/Second Counterclaim which seeks attorneys' fees based on Section 6.2 of the Factoring Agreement; (2) defendant's Eighth Affirmative Defense/Fourth Counterclaim which seeks attorneys' fees based on the Limited Guaranty; and (3) defendant's Eleventh Affirmative Defense/Seventh Counterclaim which seeks attorneys' fees arising from Boerer's alleged wrongful instruction to the bank holding the Treasury Bill not to release it to defendant. Id. at 12-13 & 21. Defendant opposes Boerer's motion for summary judgment. (Defendant's Memorandum of Law in Opposition to Plaintiffs' Motion For Partial Summary Judgment, Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 91 Civ. 0341 ("BTC Opp. Memo") (Dec. 16, 1996).)

DISCUSSION

This Court will consider each of the issues on which plaintiff seeks summary judgment individually. As a preliminary matter, however, this Court will set forth the legal standard controlling motions for summary judgment.

I. SUMMARY JUDGMENT STANDARD

Pursuant to Federal Rule of Civil Procedure ("Rule") 56, summary judgment is appropriate where "the pleadings, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144,...