Motors Liquidation Co. v. Jpmorgan Chase Bank, N.A. (In re Motors Liquidation Co.), Case No. 09–50026 (MG) (Jointly Administered)
| Decision Date | 07 December 2016 |
| Docket Number | Case No. 09–50026 (MG) (Jointly Administered), Case No. 09–00504 (MG) Adversary Proceeding |
| Parties | IN RE: MOTORS LIQUIDATION COMPANY, f/k/a General Motors Corporation, et al., Debtors. Motors Liquidation Company Avoidance Action Trust, by and through the Wilmington Trust Company, solely in its capacity as Trust Administrator and Trustee, Plaintiff, v. JPMorgan Chase Bank, N.A., et al., Defendants. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
KING & SPALDING LLP, Attorneys for GMAM Investment Funds Trust, Lehman GMAM Investment Funds Trust, and Pension Inv. Committee of GM for GM Employees Domestic Group Pension Trust, 1185 Avenue of the Americas, New York, NY 10036, By: Arthur J. Steinberg, Esq., Edward L. Ripley, Esq.
BINDER & SCHWARTZ LLP, Attorneys for Plaintiff, 366 Madison Avenue, 6thFloor, New York, NY 10017, By: Eric B. Fisher, Esq., Neil S. Binder, Esq., Lindsay A. Bush, Esq., Lauren K. Handelsman, Esq.
Pending before the Court is the Notice of Moving Defendants' Motion to Dismiss the Action Against Them (the "Notice," ECF Doc. # 701), filed by GMAM Investment Funds Trust (the "GIFT Trust"), Lehman GMAM Investment Funds Trust ("Lehman GIFT"), and Pension Inv Committee of GM for GM Employees Domestic Group Pension Trust ("Pens Inv Comm," and together with GIFT Trust and Lehman GIFT, the "Moving Defendants") by and through General Motors Investment Management Corporation ("GMIMCo"). The Notice is supported by the Memorandum of Law in Support of Motion to Dismiss the Action Against Them (the "Motion," ECF Doc. # 701–1) and the Declaration of Arthur J. Steinberg (the "Steinberg Declaration," ECF Doc. # 701–2). In response, the Motors Liquidation Avoidance Action Trust (the "Plaintiff") filed the Memorandum of Law in Opposition to the Gift Trust's Motion to Dismiss the Amended Complaint (the "Opposition," ECF Doc. # 760). The Opposition is supported by the Declaration of Eric B. Fisher (the "Fisher Declaration," ECF Doc. # 761). The Moving Defendants filed a reply brief (the "Reply," ECF Doc. # 779), which is supported by the Affidavit of Jason Glass (the "Glass Reply Affidavit," ECF Doc. # 780).
For the reasons set forth below, the Motion is GRANTED .
A full discussion of the background of the case is given in this Court's prior opinion, In re Motors Liquidation Co ., 552 B.R. 253, 258–63 (Bankr. S.D.N.Y. 2016) (the "Dismissal Opinion"). A brief description of the relevant service extension orders and service attempts follows.
The Plaintiff filed a complaint initiating this adversary proceeding (the "Original Complaint") on July 31, 2009 against JPMorgan Chase Bank, N.A. ("JPMC"), and more than 400 other named defendants which were alleged to be lenders (the "Term Loan Lenders") under a $1.5 billion syndicated term loan (the "Term Loan") to General Motors Corporation ("GM"). (ECF Doc. # 1.) The Original Complaint named "Lehman GMAM Inv FDS TR" and "Pension Inv Comm of GM for GM" as defendants in the action, but did not name "GMAM Investment Funds Trust" (the GIFT Trust) as a defendant. (Mot. at 3–4.)
Until 2015, JPMC was the only defendant that was served with the summons for the Original Complaint. (Mot. at 3.) As discussed in the Dismissal Opinion, Judge Gerber approved a series of extension orders (the "Extension Orders") which In re Motors Liquidation Co. , 552 B.R. at 263.
On May 19, 2015, the Court entered a stipulation and order (the "May 2015 Stipulation," ECF Doc. # 90) between the Plaintiff and JPMC, extending the Plaintiff's time to serve a summons and Amended Complaint on the Term Loan Lenders other than JPMC. On May 20, 2015, the Plaintiff filed the First Amended Adversary Complaint (the "Amended Complaint"), naming "GMAM Investment Funds Trust" (the GIFT Trust) for the first time as a defendant to the action. (ECF Doc. # 91.) On August 13, 2015, the Court entered an order extending the Plaintiff's time to serve the Amended Complaint on the Term Loan Lenders other than JPMC to September 30, 2015. (ECF Doc. # 152.)
On June 30, 2016, the Court entered the Dismissal Opinion, which held, inter alia , that the Extension Orders were a sound exercise of the Court's discretion and would not be reconsidered. 552 B.R. at 274.
On May 28, 2015, Plaintiff filed the Affidavit of Service of Kimberly Gargan . The Gargan Service Affidavit attests that as an employee of the noticing agent for Plaintiff, she caused to be served the May 2015 Stipulation, the Amended Complaint, and the Amended Summons and Notice of Pretrial Conference in an Adversary Proceeding (the "Amended Summons," ECF Doc. # 92) upon the Moving Defendants, among other defendants, "by first class mail." The Gargan Service Affidavit states that the GIFT Trust was served at two locations, on or about May 20, 2015: 767 5thAvenue, New York, NY 10153 (the "Fifth Avenue Address"); and One Lincoln Street, 1stFloor, Boston, MA 02111 (the "Lincoln Street Address"). (Gargan Service Aff. Ex. A at 22.)
The GIFT Trust does not have a president, managing or general agent; rather, it has a trustee appointed by GMIMCo. (Affidavit of Jason Glass ¶ 8, Steinberg Decl. Ex. F (the "Glass Moving Affidavit").) The trustee of the GIFT Trust has been State Street Bank & Trust Company ("State Street") since 2011. (Affidavit of Kristen A. Kennedy, Steinberg Decl. Ex. G ¶ 2 (the "Kennedy Affidavit").) From at least the time the Original Complaint was filed in 2009, until State Street began serving as the trustee in February 2011, the trustee was General Motors Bank, N.A., d/b/a Promark Trust Bank, N.A. ("PTB"). (Glass Moving Aff. ¶ 3.) The Fifth Avenue Address was the address of PTB until it ceased operations and was liquidated in September of 2011. (Id. ¶ 5.) The Lincoln Street Address is the place of business of State Street, the GIFT Trust's current trustee. (Mot. at 13.)
The Moving Defendants argue that the Amended Complaint—the first complaint properly naming the Moving Defendants, including the GIFT Trust—is barred by the statute of limitations. (Mot. at 7.) The Moving Defendants argue that rather than simply "update[ing] the names of certain defendants," naming the GIFT Trust in the Amended Complaint was a wholesale addition of a new party rather than a correction to a previously incorrectly named defendant. (Id. at 8.) Therefore, the Moving Defendants argue, the GIFT Trust was impermissibly added as a defendant almost four years after the limitations period had run. (Id. at 7–8.) In the Reply, the Moving Defendants argue that the Amended Complaint does not relate back to the Original Complaint because the GIFT Trust has been prejudiced in defending on the merits, because of "foundationally sweeping changes" at the GIFT Trust that have taken place in the last six years. (Reply at 7.) The GIFT Trust argues that because it no longer holds an interest in the Term Loan and all but one of the investors in the Term Loan are no longer part of the GIFT Trust, any recovery would be "highly prejudicial to the existing investors in the GIFT Trust." (Id. at 8.) Additionally, the Moving Defendants argue that the GIFT Trust did not have knowledge of the action until it became aware of the default judgments in 2016. (Id. at 10.)
Relatedly, the Moving Defendants also argue that the time for proper service of the Amended Summons has expired and the applicable limitations period bars the issuance of any new summons. (Id. at 8.) Because the Moving Defendants argue that service of the Amended Summons was improper, it follows that Plaintiff has failed to comply with the Extension Orders and is, therefore, out of time to issue and serve a new summons.
The Moving Defendants argue that service on the GIFT Trust was defective because (i) the Amended Summons failed to properly identify the specific defendant to whom it was addressed; (ii) the Fifth Avenue Address was an improper address for service of process; and (iii) the Amended Complaint and Amended Summons were never actually received by the trustee at the State Street Address. (Mot. at 12–16.)
The Amended Summons did not appropriately identify the individual defendant to whom it was addressed, the Moving Defendants argue, because it included the names of all defendants in the action and did not identify State Street as a trustee, or in any capacity, on behalf of the GIFT Trust. (Id. at 16.) Therefore, "had it received the Amended Summons, State Street could not have known on whose behalf it was receiving legal process." (Id. )
The Moving Defendants also argue that the Fifth Avenue Address was improper because it was the location of PTB, which had not been the GIFT Trust's trustee since 2011 and is no longer in existence. (Id. at 13.)
Finally, the Moving Defendants—while conceding that the Lincoln Street Address is the place of business of State Street—dispute that State Street ever received the Amended Complaint and Amended Summons. (Id. at 14–15.) The Moving Defendants rely on an affidavit from the Senior Vice President and Senior Litigation Counsel of State Street, William...
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Andres v. Town of Wheatfield
...the public nature of an action does not satisfy the notice requirement for purposes of relation back. See In re Motors Liquidation Co., 563 B.R. 498, 508 (Bankr. S.D.N.Y. 2016) (finding that "the mere public nature of the litigation is insufficient to prove" that defendant was on notice of ......