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IN RE PAYROLL EXPRESS CORP.

April 3, 1996

In re: Payroll Express Corporation, et al., Debtors. John S. Pereira, Esq., as Chapter 11 Trustee of the Estate of Payroll Express Corporation, et al., Plaintiff, -against- Aetna Casualty & Surety Company, Federal Insurance Company, Chubb Group of Insurance Companies, and Certain Underwriters at Lloyd's, London and Certain London Market Companies, Defendants.


The opinion of the court was delivered by: SCHEINDLIN

 SHIRA A. SCHEINDLIN, U.S.D.J.:

 Defendants Certain Underwriter's at Lloyd's, London and Certain London Market Companies (the "London Defendants") move for reargument of the Court's determination that New Jersey law applies to Plaintiff's claims for bad faith failure to pay an insured's claim and punitive damages, or in the alternative, to certify the issue decided in this matter for appeal pursuant to 28 U.S.C. ยง 1292. For the reasons set forth below, the motion is denied.

 I. Background

 Plaintiff John S. Pereira is the bankruptcy trustee of Payroll Express Corp. and Payroll Express Corp. of New York (jointly "Payroll Express"). Plaintiff seeks coverage under various employee dishonesty and commercial crime insurance policies purchased from Defendants. On December 1, 1995, I held that New Jersey law applies to Plaintiff's bad faith and punitive damages claims. See Transcript of Oral Argument ("Tr."), at 48. I subsequently denied the London Defendants' motion to dismiss those claims. See Opinion and Order, 95 Civ. 4385, January 23, 1996. Familiarity with the underlying facts of this dispute is assumed. See id.

 II. Legal Standard

 Under Local Rule 3(j), a motion for reargument shall be granted "only if the moving party presents [factual] matters or controlling decisions the court overlooked that might materially have influenced its decision." Morser v. AT&T Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989); see also Violette v. Armonk Assocs., L.P., 823 F. Supp. 224, 226 (S.D.N.Y. 1993). Rule 3(j) "is to be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the court." Ades v. Deloitte & Touche, 843 F. Supp. 888, 890 (S.D.N.Y. 1994). Under Local Rule 3(j), a party may not "advance new facts, issues, or arguments not previously presented to the Court." Morse/Diesel, Inc. v. Fidelity & Deposit Co. of Md., 768 F. Supp. 115, 116 (S.D.N.Y. 1991). The decision to grant or deny a motion for reargument is within the sound discretion of the Court. See Schafer v. Sores, 1994 WL 592891 (S.D.N.Y. Oct. 31, 1994).

 III. Discussion

 The London Defendants assert four grounds for reargument.

 A. The 1981 Payroll Express Decision

 The London Defendants contend that the Second Circuit has already determined that New York law should apply to the interpretation of the Aetna insurance policy in Payroll Express Corp. v. Aetna Cas. & Sur. Co., 659 F.2d 285 (2d Cir. 1981), and that stare decisis requires this Court to abide by that determination. This is simply wrong. While applying New York law in the 1981 Payroll Express case, the Court neither addressed nor decided a choice of law question. When an issue was not raised in the circuit court, a district court is not bound by the resulting decision. See 1B James W. Moore et al., Moore's Federal Practice P 0.402[2] at I-27 (2d ed. 1995); see also Sweeney v. Westvaco Co., 926 F.2d 29, 40 (1st Cir.) (circuit court does "not normally take Supreme Court opinions to contain holdings on matters the Court did not discuss and which, presumably, the parties did not argue"), cert. denied, 502 U.S. 899, 116 L. Ed. 2d 226, 112 S. Ct. 274 (1991). The London Defendants have failed to offer any controlling decision contrary to this well settled principle of law. *fn1" Furthermore, the argument that stare decisis applies here was previously raised, considered, and rejected by this Court, see Tr. at 20-24, 49.

 B. Judicial Estoppel

 The London Defendants' argument is predicated on the assumption that Payroll Express, if it were the plaintiff in this action, would be judicially estopped from contending that New Jersey law applies to this case. A party will only be judicially estopped where: 1) it argued an inconsistent position in a prior proceeding; and 2) this position was adopted by the court in some manner. See Bates v. Long Island R. Co., 997 F.2d 1028, 1037-38 (2d Cir.), cert. denied, 126 L. Ed. 2d 452, 114 S. Ct. 550 (1993). The issues and circumstances in the 1980 case and the present action are distinctly different. *fn2" ...


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