The opinion of the court was delivered by: BAER
Hon. Harold Baer, Jr., U.S.D.J.
Plaintiffs filed this cause of action to recover unincorporated business taxes owed for the years 1981 and 1984 from defendants. Pursuant to Fed. R. Civ. P. 12(b)(6), defendants Realty Growth Investors ("RGI") and American Invsco Corporation ("AIC") moved to dismiss plaintiffs' complaint for failure to state a claim. RGI and AIC are Guarantors of a Note signed by Twin Rivers and American National Bank and Trust Company ("ANB") which promises payment to the City of monies owed.
In an Order and Opinion dated March 11, 1996, I found that the City had satisfied the two conditions precedent to commence this action against defendants RGI and AIC and, accordingly, denied defendants' motion to dismiss. Defendants now move pursuant to Local Civil Rule 3(j) for reargument of my March 11, 1996 decision. Reargument is granted. For the reasons stated, defendants' motion for relief of the Court's prior decision is granted in part and denied in part.
Familiarity with the facts of this case is presumed. For a full account see New York City Dept. of Finance v. Twin Rivers, Inc., et al., 920 F. Supp. 50 (S.D.N.Y. 1996).
Defendants move pursuant to Local Civil Rule 3(j) for reargument of their motion to dismiss. Rule 3(j) states in relevant part:
A notice of motion for reargument shall be served within ten (10) days after the docketing of the court's determination of the original motion and . . . shall be served with . . . a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked. No oral argument shall be heard unless the court grants the motion and specifically directs that the matter shall be reargued orally. . . .
Local Civil Rule 3(j). It follows that to satisfy this rule, the moving party must set forth a matter or controlling decision which the court overlooked in its initial review of the motion. See, e.g., Farkas v. Ellis, 783 F. Supp. 830, 832 (S.D.N.Y.), aff'd, 979 F.2d 845 (2d Cir. 1992) (strict standard to grant reargument to avoid reconsideration of issues already considered); Mancuso v. Consolidated Edison Co. of New York, Inc., 905 F. Supp. 1251, 1255 (S.D.N.Y. 1995) ("moving party must demonstrate . . . court overlooked controlling decisions or factual matters" (citing Violette v. Armonk Assocs., 823 F. Supp. 224, 226 (S.D.N.Y. 1993)). If the Court finds that the motion for reargument is warranted, the Court may either direct the parties to reargue their motion orally or rely on the submissions as made.
Defendants argue that the Court overlooked two dispositive factors when it denied defendants' previous motion to dismiss. First, defendants argue that the Court should have dismissed the complaint as against AIC on the basis that the provision of the RGI Guarantee on which the Court relied appears only in the RGI Guarantee and therefore, cannot excuse exhaustion as to AIC. Second, defendants contend that the Court should have dismissed both RGI and AIC because the provision of the Guarantees on which the Court relied to excuse plaintiffs' failure to exercise due diligence excuses only delay in exercising rights under the guarantee, not delay in exercising rights under the note, the relevant delay here.
a. The complaint should be dismissed as against AIC.
In its March Order and Opinion, the Court noted that the City satisfied the terms of the Guarantees of Collection when the December 29, 1992 Judgment of Consent Foreclosure was entered against defendants in Chicago, Illinois. Twin Rivers, 920 F. Supp. at 53. The Court further noted that "because the provision is not contained in the AIC guaranty, the plaintiff can invoke the use of this provision only against RGI and not against AIC." Id. at 54. Defendant argues that the Court's ...