Dorchester Fin. Sec., Inc. v. Banco BRJ S.A.
| Decision Date | 22 October 2014 |
| Docket Number | 11-CV-1529 (KMW) |
| Parties | DORCHESTER FINANCIAL SECURITIES, INC., Plaintiff, v. BANCO BRJ S.A., Defendant. |
| Court | U.S. District Court — Southern District of New York |
On February 21, 2014, the Court denied Banco BRJ S.A.'s ("BRJ") motion to dismiss Dorchester Financial Securities, Inc.'s ("Dorchester") First Amended Complaint. See Feb. 21, 2014 Order [ECF No. 45]. BRJ's motion to dismiss contended, in part, that the tolling provisions of N.Y. C.P.L.R. § 205(a) do not apply to the instant action because Dorchester's previous suit against BRJ was not "timely commenced," as the statute requires. See Mot. to Dismiss Mem. 5-6 [ECF No. 28]. The Court disagreed, holding that BRJ's prior action was "timely commenced" under § 205(a) because it was timely filed. See Feb. 21, 2014 Order 7-9. BRJ now moves for reconsideration — or, alternatively, certification for interlocutory appeal — of the Court's decision that Dorchester's prior action was timely commenced. See Mot. for Recon. Mem. [ECF No. 50]. For the reasons that follow, BRJ's motion is DENIED.
On September 17, 2002, Dorchester filed a diversity action in this Court against BRJ for fraud and breach of contract under New York law. See Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., No. 02-CV-7504 (S.D.N.Y. 2002) (Dorchester I). BRJ failed to appear, and the Court granted default judgment for Dorchester. See Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., No.11-CV-1529, 2012 WL 231567, at *3 (S.D.N.Y. Jan. 24, 2012). Because Dorchester had not used letters rogatory to serve process on BRJ, however, it could not enforce its judgment in Brazilian court. See id. To address that issue, Dorchester moved to vacate the judgment without prejudice so that it could refile its action and serve BRJ through letters rogatory. See id.
On February 24, 2011, the Court vacated the default judgment against BRJ "without prejudice to re-commence the action pursuant to New York State C.P.L.R. § 205." See Dorchester I, No. 02-CV-7504, ECF No. 73. That provision, often referred to as New York's "savings statute," tolls the statute of limitations for a state-law claim where two conditions are met. First, the plaintiff must have "timely commenced" a prior action based "upon the same transaction or occurrence." N.Y. C.P.L.R. § 205(a). Second, that prior action must have been "terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits." Id. If those two conditions are met, a plaintiff may "commence" a new suit within six months of the prior action's dismissal, as long as the new suit "would have been timely commenced at the time of commencement of the prior action" and "service upon defendant is effected within such six-month period." Id.
There is no dispute that Dorchester filed its current suit and served BRJ using letters rogatory within six months of the vacatur of its prior action. Nevertheless, in its September 16, 2011 motion to dismiss the First Amended Complaint, BRJ argued that Dorchester's new suit does not qualify for tolling under § 205(a) because the prior action was not "timely commenced." See Mot. to Dismiss Mem. 5-6. According to BRJ's motion, commencement under § 205(a) requires proper service of process, which Dorchester failed to perform in its 2002 suit. See id. at 4-6. BRJ cited two cases to support its interpretation of "timely commenced" as requiringproper service of process: Meneely v. Hitachi Seiki USA, 571 N.Y.S.2d 809 (2d Dep't 1991), and Bishop v. Uno Pizza, 725 N.Y.S.2d 840 (Sup. Ct. 2001). See Mot. to Dismiss Mem. 5-6.
In its February 14, 2014 Order, the Court rejected BRJ's argument that timely commencement under § 205(a) requires proper service. The Court acknowledged that before 1992, New York law defined commencement of a civil action as "the service of a summons." Id. at 8. In 1992, however, amendments to the C.P.L.R. redefined commencement as "filing a summons and complaint or summons with notice." Id. (quoting N.Y. C.P.L.R. § 304(a)). Applying that revised statutory framework, the Court concluded that Dorchester's prior action was timely commenced "by Plaintiff's filing of its complaint in September 2002," regardless of whether subsequent service was proper.1 Id. The two cases that BRJ cited in its motion to dismiss — Meneely and Bishop — did not alter that analysis, the Court explained, because both draw their definitions of commencement from pre-1992 case law (and one of the cases, Meneely, was decided before 1992). See Feb. 21, 2014 Order at 8 n.5. BRJ had thus failed to offer support for the proposition that § 205(a) still requires proper service after the 1992 amendments.
On March 7, 2014, BRJ moved for reconsideration — or, alternatively, certification for interlocutory appeal — of the Court's decision that Dorchester's prior action was "timely commenced" under § 205(a). BRJ contends that the Court committed "clear error" when it failed to recognize that under Meneely and Bishop, "to be entitled to the benefit of tolling" under § 205(a), "plaintiff must demonstrate that it had obtained 'personal jurisdiction' over thedefendant" in the prior action. Mot. for Recon. Mem. 3. According to BRJ, because Dorchester failed to properly serve process in its prior action, the Court never acquired personal jurisdiction over BRJ, rendering § 205(a) inapplicable. Id. at 6-7.
A motion for reconsideration should be granted only where "the moving party can point to controlling decisions or data that the court overlooked," Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995), or where necessary to "correct a clear error or prevent manifest injustice," Banco de Seguros del Estado v. Mut. Marine Offices, Inc., 230 F. Supp. 2d 427, 428 (S.D.N.Y. 2002) (Scheindlin, J.). This standard "must be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Jordan (Bermuda) Inv. Co. v. Hunter Green Investments Ltd., No. 00-CV-9214, 2003 WL 21263544, at *2 (S.D.N.Y. June 2, 2003) (Sweet, J.). Moreover, "[a] motion for reconsideration is not an opportunity for making new arguments that could have been previously advanced." Liberty Media Corp. v. Vivendi Universal, S.A., 861 F. Supp. 2d 262, 265 (S.D.N.Y. 2012) (Scheindlin, J.) (internal quotation marks omitted).
To certify interlocutory appeal of an order under 28 U.S.C. § 1292(b), the Court must "'be of the opinion' (i) that the 'order involves a controlling question of law as to which there is a substantial ground for difference of opinion,' and (ii) 'that an immediate appeal from the order may materially advance the ultimate termination of the litigation.'" Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC, 987 F. Supp. 2d 309, 311 (S.D.N.Y. 2013) (Rakoff, J.) (quoting 28 U.S.C. § 1292(b)). "A substantial ground for difference of opinion exists when (1) there is conflicting authority on the issue, or (2) the issue is particularly difficult and of firstimpression for the Second Circuit." In re Facebook, Inc., IPO Sec. & Derivative Litig., 986 F. Supp. 2d 524, 539-40 (S.D.N.Y. 2014) (Sweet, J.) (internal quotation marks omitted). "The Second Circuit cautions that in applying these criteria, 'only exceptional circumstances will justify a departure from the basic policy of postponing appellate review until after the entry of judgment.'" Bernard L. Madoff Inv. Sec. LLC, 987 F. Supp. 2d at 311 (quoting Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro In Amministrazione Straordinaria, 921 F.2d 21, 25 (2d Cir. 1990)).
In its motion to dismiss, BRJ argued that § 205(a) does not apply to Dorchester's current suit because the words "timely commenced" in the statute require proper service of a prior action, which Dorchester failed to perform. See Mot. to Dismiss Mem. 5 (using the heading "CPLR § 205 Does Not Save This Action Because The Prior Action Was Not 'Timely Commenced'"). BRJ cited Meneely and Bishop exclusively for that proposition. See id. at 5-6. In defining "timely commenced," BRJ did not mention the term "personal jurisdiction" except to distinguish the dismissal of a prior action "for insufficient service of process and/or a failure to obtain personal jurisdiction" as "separate" from, and "irrelevant" to, its argument based on § 205(a)'s "'timely commencement' requirement." Mot. to Recon. Mem. 6.
BRJ's motion for reconsideration does not renew its argument that the term "timely commenced" requires proper service. Instead, BRJ now contends that "to be entitled to the benefit of tolling" under § 205(a) as a whole, "plaintiff must demonstrate that it had obtained 'personal jurisdiction' over the defendant." Mot. for Recon. Mem. 3. That contention, as BRJ acknowledges, is not grounded in the meaning of the term "timely commenced." The motion for reconsideration explicitly distinguishes the necessity of personal jurisdiction in a prior actionfrom the "issue of 'commencement' by service or filing."2 Id. at 4. Rather, BRJ describes its personal jurisdiction argument as "precisely [what the] Court suggested in footnote 6 of its [February 21, 2014] Order: that CPLR 205(a) 'invites the court to assess whether service in a prior action was proper.'" Id. at 3 (quoting Feb. 21, 2014 Order 9 n.6). The Court's analysis in footnote 6 had nothing to do with the meaning of "timely commenced." It related instead to § 205(a)'s separate language denying tolling where a prior action was "'terminated . . . by . . . a failure to obtain personal jurisdiction over the defendant.'" Feb. 21,...
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