Comm. of Unsecured Creditors of Exeter Holding v. Haltman, 13-CV-5475(JS)(AKT)

• Court: United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
• Writing for the Court: SEYBERT, District Judge
• Parties: OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF EXETER HOLDING, LTD., Plaintiff, v. LINDA HALTMAN, et al., Defendants.
• Docket Number: 13-CV-5475(JS)(AKT)
• Decision Date: 29 May 2020

OFFICIAL COMMITTEE OF UNSECURED CREDITORS
OF EXETER HOLDING, LTD., Plaintiff,
v.
LINDA HALTMAN, et al., Defendants.

13-CV-5475(JS)(AKT)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

May 29, 2020

MEMORANDUM & ORDER

APPEARANCES
For Plaintiff:

John D. Roesser, Esq.
Roesser PLLC
12 East 49th Street
New York, New York 10017

For Defendants:
Linda Haltman,
Michael Haltman, &
Samantha Haltman

Marc A. Pergament, Esq.
Marc J. Weingard, Esq.
Weinberg, Gross & Pergament, LLP
400 Garden City Plaza, Suite 403
Garden City, New York 11530

Larry Frank

Norma E. Ortiz, Esq.
Ortiz & Ortiz, L.L.P.
127 Livingston Street
Brooklyn, New York 11201

Bruce Frank

Bruce Frank, pro se
1926 South Pearl Street
Denver, Colorado 80210

Kathleen Frank

Kathleen Frank, pro se
1926 South Pearl Street
Denver, Colorado 80210

10295 Dowling Court
Highlands Ranch, Colorado 80126

Arnold & Sondra
Frank Irrevocable
Trust

Arnold & Sondra Frank, pro se
10873 Northgreen Drive
Lake Worth, Florida 33449

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SEYBERT, District Judge:

Upon referral from this Court (Oct. 8, 2019 Elec. Order), Magistrate Judge A. Kathleen Tomlinson recommends that the Court (1) DENY plaintiff The Official Committee of Unsecured Creditors of Exeter Holding, Ltd.'s ("Plaintiff") partial motion for summary judgment (Pl. Mot., D.E. 342) and (2) GRANT defendant Samantha Haltman's ("Samantha") motion for summary judgment (Def. Mot., D.E. 334). (Report and Recommendation ("R&R"), D.E. 358.) Plaintiff objects to the R&R in part. (Pl. Obj., D.E. 362). For the following reasons, Plaintiff's objections are OVERRULED and the R&R is ADOPTED in its entirety. Plaintiff's motion is DENIED and Samantha's motion is GRANTED.

I. Background and Proceedings

The Court assumes the parties' familiarity with the extensive procedural history of this case and will discuss the facts only as necessary for the pending motions. The Court directs the parties' attention to its Memorandum and Order concerning Defendants' Motion to Dismiss (Mar. 30, 2018 M&O, D.E. 278), along with Judge Tomlinson's R&R and previous R&Rs (D.E. 151, 152, 179, 252, 253, 301) for a full recitation of the facts and procedural history of this matter.

Plaintiff alleges that the various Defendants defrauded Exeter, their closely held family-run corporation, by transferring funds to themselves, to trusts, and to other entities in

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Defendants' control for their personal use. (See generally Compl., D.E. 3-9.) As relevant here, Plaintiff seeks summary judgment against defendants Linda Haltman, Michael Haltman, Bruce Frank, Kathleen Frank, Larry Frank, and the Arnold and Sondra Frank Irrevocable Trust with respect to: (1) Count IV (Constructive Fraudulent Transfer under Bankruptcy Code ("Bankr.") § 548(a)(1)(B)); (2) Count V (Constructive Fraudulent Conveyance under New York's Debtor and Creditor Law ("DCL") §§ 273, 274, 275); (3) Count VI (Set-Aside of Avoidable Preferences under Bankruptcy Code § 547); (4) Count VII (Breach of Fiduciary Duty of Care); (5) Count VIII (Breach of Fiduciary Duty of Loyalty); and (6) Count IX (Aiding and Abetting Breach of Fiduciary Duty). (Pl. Mot.; R&R at 3.) Plaintiff objects only to the portion of the R&R that this Court deny its motion as to its claims for breach of fiduciary duty and the aiding and abetting of the breach of fiduciary duty (Counts VII, VIII, and IX). (Pl. Obj. at 1-2, 17.)

Next, Samantha's motion seeks summary judgment in her favor on Count XII (Turnover) and Count XIII (Unjust Enrichment). (Def. Mot.; R&R at 3.). There are no objections to Judge Tomlinson's recommendation that the Court grant Samantha's motion for summary judgment.

II. Legal Standard

Rule 56(a) of the Federal Rules of Civil Procedure provides that a "court shall grant summary judgment if the movant

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shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." To determine whether the moving party has satisfied this burden, the Court is required to view the evidence and all factual inferences arising from that evidence in the light most favorable to the non-moving party. Doro v. Sheet Metal Workers' Int'l Ass'n, 498 F.3d 152, 155 (2d Cir. 2007); Woodman v. WWOR-TV, Inc., 411 F.3d 69, 75 (2d Cir. 2005). In reviewing an R&R, this Court "may accept, reject, or modify the recommended disposition" and "must determine de novo any part of the magistrate judge's disposition that has been properly objected to." FED. R. CIV. P. 72. "When a party makes no objections, or where it makes only conclusory or general objections, courts will review the magistrate's findings for clear error." Pagan v. Brown, No. 07-CV-0453, 2011 WL 3235769, at *1 (E.D.N.Y. July 28, 2011), aff'd, 485 F. App'x 454 (2d Cir. 2012).

"[E]ven in a de novo review of a party's specific objections, the court will not consider 'arguments, case law and/or evidentiary material which could have been, but were not, presented to the magistrate judge in the first instance.'" Brown v. Smith, No. 09-CV-4522, 2012 WL 511581, at *1 (E.D.N.Y. Feb. 15, 2012) quoting Kennedy v. Adamo, No. 02-CV-1776, 2006 WL 3704784, at *1 (E.D.N.Y. Sept. 1, 2006)); see also Wesley v. Alexander, No. 99-CV-2168, 2005 WL 1352593, at *6 (S.D.N.Y. June 8, 2005) (because magistrates play a crucial role within the federal judicial

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framework by assuming "some of the burden imposed on the district courts by a burgeoning caseload," . . . "the law is clear that when a dispositive motion is heard before a magistrate judge, the [litigants] must make all . . . arguments then and there, and cannot later add new arguments at subsequent stages of the proceedings" without a compelling reason) (internal quotation marks and citations omitted).

III. Samantha's Motion

The R&R recommends that Samantha's motion for summary judgment as to Count XII (Turnover) and Count XIII (Unjust Enrichment) be granted. (R&R at 19-28.) No party objects to this recommendation. This Court...