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MORSE/DIESEL v. FID. & DEPOSIT CO.

July 23, 1991

MORSE/DIESEL, INC., PLAINTIFF AND COUNTERCLAIM DEFENDANT,
v.
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, DEFENDANT, THIRD-PARTY PLAINTIFF AND COUNTERCLAIMANT, V. T. FREDERICK JACKSON, INC., THIRD-PARTY DEFENDANT, AND TIMES SQUARE HOTEL COMPANY AND MARRIOTT CORPORATION, ADDITIONAL DEFENDANTS ON COUNTERCLAIMS.



The opinion of the court was delivered by: Leisure, District Judge.

MEMORANDUM ORDER

This diversity action is brought by plaintiff for damages resulting from an alleged overpayment to its subcontractor in connection with the Marriott Marquis Hotel project. Plaintiff Morse/Diesel, Inc. ("Morse/Diesel"), alleges, in addition to its breach of contract claim, fraud and breach of the covenant of good faith and fair dealing.

Defendant Fidelity and Deposit Company of Maryland ("F & D") asserted counterclaims of fraud and bad faith breach against plaintiff and additional counterclaim defendants, Times Square Hotel Company ("Times Square") and Marriott Corporation ("Marriott"). By order and opinion dated May 3, 1991, (the "Opinion"),*fn1 this Court granted the motion of Morse/Diesel, Times Square and Marriott (collectively, the "counterclaim defendants") to dismiss with prejudice F & D's counterclaims, and to strike F & D's ninth affirmative defense. The court denied the counterclaim defendants' motion for sanctions, as well as F & D's cross-motions for bifurcation of plaintiff's claims and for a stay of discovery proceedings.

F & D now moves for reargument of certain portions of the Opinion pursuant to Local Civil Rule 3(j).*fn2 Specifically, F & D moves the Court

  for entry of an Order . . . 1) modifying [the
  Opinion] to reflect that the dismissal of the
  counterclaims against Morse/Diesel, Inc. is
  without prejudice and with leave to replead and
  that the striking of the Ninth Affirmative Defense
  is with leave to replead; 2) modifying [the
  Opinion] to delete the alternative ground for
  dismissal of the counterclaims against Morse/Diesel
  based upon failure to plead damages; and 3)
  modifying [the Opinion] to reflect that the
  dismissal of the counterclaims against [Times
  Square] and Marriott Corporation is without
  prejudice.

Defendant's Notice of Motion at 1-2.

DISCUSSION

Familiarity with the factual background of this action is assumed, based on the Court's prior Opinion.

The standards governing motions for reargument are clear. "`The only proper ground on which a party may move to reargue an unambiguous order is that the court overlooked "matters or controlling decisions" which, had they been considered, might reasonably have altered the result reached by the court.'" Schonberger v. Serchuk, 742 F. Supp. 108, 119 (S.D.N.Y. 1990) (Leisure, J.) (quoting Adams v. United States, 686 F. Supp. 417, 418 (S.D.N.Y. 1988) (quoting Local Civil Rule 3(j))); see also Moll v. U.S. Life Title Ins. Co., 700 F. Supp. 1284, 1286 (S.D.N.Y. 1988) (Leisure, J.); Bozsi Ltd. Partnership v. Lynott, 676 F. Supp. 505, 509 (S.D.N.Y. 1987).

As this Court has previously held, "[t]he concerns reflected by these standards are sound. The provision for reargument is not designed to allow wasteful repetition of argument already briefed, considered and decided." Schonberger, supra, 742 F. Supp. at 119; see also Ruiz v. Commissioner of Dep't of Transp., 687 F. Supp. 888, 890 (S.D.N.Y.), aff'd, 858 F.2d 898 (2d Cir. 1988) ("The standard for granting a motion for reargument is strict in order to dissuade repetitive arguments on issues that have already been considered fully by the Court."). Additionally, a party making a motion for reargument may not, under Local Rule 3(j), advance new facts, issues or arguments not previously presented to the Court. See Weissman v. Fruchtman, 124 F.R.D. 559, 560 (S.D.N.Y. 1989) (Leisure, J.); Ruiz, supra; Morgan Guar. Trust Co. v. Garrett Corp., 625 F. Supp. 752, 756 (S.D.N.Y. 1986).

In dismissing F & D's counterclaims for fraudulent inducement and breach of the covenant of good faith and fair dealing, as well as its ninth affirmative defense based on fraud, the Court found that all of these claims arose from the same basic fraud claim. The Court also based its dismissal of the bad faith breach counterclaim on a finding of a lack of a duty of good faith and fair dealing running from the obligee of a bond, in this case, Morse/Diesel, to F & D, the surety on the bond.

F & D's first counterclaim, for fraud, asserted in pertinent part that

  in the event of any determination that
  Morse/Diesel relied upon any . . . representation
  by F & D [that there would be no cost overrun],
  then Morse/Diesel and the other counterclaim
  defendants fraudulently induced F & D into
  entering into the Reimbursement Agreement by
  misrepresenting at the time that it was their
  position, opinion and belief that [the
 ...

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