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FRANKEL v. ICD HOLDINGS S.A.

September 30, 1996

ALFRED M. FRANKEL, et ano., Plaintiffs, against ICD HOLDINGS S.A., et al., Defendants.


The opinion of the court was delivered by: KAPLAN

 LEWIS A. KAPLAN, District Judge.

 On June 10, 1996, the Court granted plaintiffs' motion for summary judgment against defendant ICD Holdings, S.A. ("Holdings") on two promissory notes and against defendants De Geus and Loeffelhardt (the "Guarantors") on their guarantees of the notes. Frankel v. ICD Holdings, S.A., 930 F. Supp. 54 (S.D.N.Y. 1996) (" Frankel I "). The Guarantors subsequently moved for reargument or, alternatively, for relief from the judgment against them pursuant to FED. R. CIV. P. 60(b). The Court granted the Guarantors' motion for a stay of enforcement of the judgment pending the briefing and determination of that motion, Frankel v. ICD Holdings, S.A., 168 F.R.D. 19 (S.D.N.Y. 1996) (" Frankel II "), which now is before the Court for decision. The Court assumes familiarity with Frankel I and Frankel II and therefore limits this discussion to matters essential to clear exposition.

 A motion for reargument is appropriate where "the court overlooked controlling decisions or material factual matters that were before the court on the underlying motion." Violette v. Armonk Associates, L.P., 823 F. Supp. 224, 226 (S.D.N.Y. 1993). Its office is "to correct mistakes made because relevant information was disregarded." Morin v. Trupin, 823 F. Supp. 201, 205 (S.D.N.Y. 1993). No affidavits or new material may be submitted. S.D.N.Y. CIV. R. 3(j). Thus, such a motion is limited to the record that was before the Court on the original motion.

 The Guarantors contend that the Court overlooked no less than nine "facts" which, they contend, demonstrate that summary judgment should not have been granted. (Def. Mem. 3-4) Five of the nine "facts" allegedly overlooked are varying formulations of a single proposition: that the Court mistakenly believed that the Preliminary Balance Sheet prepared by Eisner accounted for the so-called "open items" *fn1" or, to put it another way, mistakenly concluded that defendants failed to adduce sufficient evidence to support their contention that it did not. *fn2" Frankel I, however, clearly stated that the Court assumed in deciding the motion for summary judgment that Eisner did not account for the open items. 930 F. Supp. at 66. *fn3" The basis for the Court's decision instead was that "there is no legally sufficient basis for concluding that their inclusion [ i.e., inclusion of the "open items"] would have made any material difference." Id.

 The remaining facts allegedly overlooked by the Court all go to defendants' assertion that the omission of the "open items" resulted in an $ 8.7 million overstatement of the purchase price. As is perfectly obvious from a review of defendants' memorandum and the opinion in Frankel I, none of them was overlooked. Indeed, the two most prominent bits of evidence -- the Moret reports -- were discussed extensively in the decision.

 Defendants devote several pages of their memorandum to demonstrating the extent of the work that Moret did in order to render the November 1995 and March 1996 reports and its familiarity with the accounting records and corporate structure of the ICD entities, to rearguing the significance of the statements and disclaimers in the Moret reports, and other such matters. (Def. Mem. 4-10) To a substantial extent, this discussion is based on affidavits submitted in support of defendants' Rule 60(b) motion that were not before the Court on the motion for summary judgment and that therefore are not properly considered on the motion for reargument. But the result would not change even if the evidence concerning the extent of Moret's efforts in preparing the November 1995 and March 1996 reports were considered, because it would be quite immaterial. The Court relied upon the contents of the reports in reaching its decision, not upon an assumption as to how many or few hours of work went into their preparation. Hence, while the Court's comments characterizing the amount of effort devoted by Moret to its activities, considered in light of the materials newly submitted after the decision was rendered, are broader than now seems appropriate, those comments were not material to the result, and the new information would warrant no change.

 The motion for reargument is denied.

 The Motion to Vacate the Judgment

 As Rule 60(b) "allows extraordinary judicial relief, it is invoked only upon a showing of exceptional circumstances." Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). It is not "a substitute for a timely appeal," and it cannot be used to overcome counsel's tactical judgments about what evidence to offer. Id. at 61, 63; Martin v. Chemical Bank, 940 F. Supp. 56, 1996 U.S. Dist. LEXIS 13479, 1996 WL 527336, at *1-2 (S.D.N.Y. 1996). With these principles in mind, there is no basis for relief under Rule 60(b)(2).

 The recent Moret report said to constitute newly discovered evidence is dated June 19, 1996. (Goedkoop Aff. Ex. 1) It contains a more detailed statement of what Moret did in order to render the November 1995 and March 1996 reports. It argues that the conclusions of those reports were justified. It argues also, at some length, with the conclusions set forth in the Court's opinion. Nonetheless, it is crystal clear that all of the factual information contained in the new report -- as distinguished from Moret's rejoinder to the Court's opinion -- existed at the time the motion for summary judgment was briefed and argued. There is no suggestion that new facts had come to light or that Moret had done any work between the time of the Court's decision on June 10 and the issuance of the new report on June 19 that added anything of substance to what had been done before.

 Rule 60(b) may not be used to "relitigate matters settled by the original judgment." Donovan v. Sovereign Security, Ltd., 726 F.2d 55, 60 (2d Cir. 1984). In order to gain relief under Rule 60(b)(2), the movant must demonstrate that (1) the newly discovered evidence was of facts that existed at the time of trial or other dispositive proceeding, (2) the movant must have been justifiably ignorant of them despite due diligence, (3) the evidence must be admissible and of such importance that it probably would have changed the outcome, and (4) the evidence must not be merely cumulative or impeaching. E.g., ...


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