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MARIO VALENTE COLLEZIONI, LTD. v. AAK LIMITED

March 26, 2004.

MARIO VALENTE COLLEZIONI, LTD., Plaintiff, -against- AAK LIMITED and MAURICE IAN KINDLER, Defendants


The opinion of the court was delivered by: ROBERT PATTERSON, Senior District Judge

OPINION AND ORDER

Defendants AAK Limited and Maurice Ian Kindler (collectively, defendants") move for the Court to reconsider a portion of its opinion dated September 8, 2003 pursuant to Fed.R.Civ.P. 60(b) and Rule 6.3 of the Local Civil Rules. The portion of the Court's opinion in question granted the summary judgment motion of Plaintiff Mario Valente Collezioni, Limited ("Plaintiff') against Defendants on the issue of collateral estoppel on the Plaintiff's claim of unfair competition.

I. Background

  Because the facts of the case as pleaded have been laid out in detail in the September 8, 2003 opinion, an abbreviated summary is provided below.

  A. Procedural History

  In 1997 Plaintiff brought an action for breach of contract, trademark infringement and unfair competition against Confezioni Semeraro Paulo, S.R.L, et. al. (the "Semeraro Defendants"). The Semeraro Defendants, who are located in Italy, did not respond; therefore a Page 2 default judgment was entered against them. See Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paulo, S.R.L., 115 F. Supp.2d 367, 369 (S.D.N.Y. 2000). Magistrate Judge Eaton held an inquest in order to determine a recommendation for damages to be awarded to Plaintiff. The Semeraro Defendants did not appear at the inquest. The Semeraro Defendants also defaulted on a subsequent action commenced by Plaintiff in Italy in order to collect the judgment awarded to them.

  The next actions in the Semeraro litigation were described by this Court in its September 8, 2003 opinion as follows:
On March 24, 1999, the Semeraro defendants filed a motion before Judge Kaplan, pursuant to Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure to vacate the default judgment entered against them, claiming lack of jurisdiction. [Mario Valente Collezioni, Ltd., 115 F. Supp.2d at 368-69.] After an evidentiary hearing conducted on February 8, February 9 and June 20, 2000, during which Defendant Kindler, Mr. Semeraro, his son-in-law and other witnesses testified, (id. at 376) Judge Kaplan denied the motion. Id. at 378. The decision was appealed by the Semeraro defendants, and the Second Circuit held that the district court properly found personal jurisdiction over the Semeraro defendants, but erred in failing to perform a federal due process analysis. Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo. S.R.L., 264 F.3d 32 (2d Cir. 2001. The Second Circuit affirmed and remanded the case back to Judge Kaplan on the due process issue. Id. at 38. On remand, Judge Kaplan found that the exercise of personal jurisdiction over the Semeraro defendants did not violate due process of law and the judgment became final. Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo. S.R.L., 174 F. Supp.2d 170, 176 (S.D.N.Y. 2001). No part of the judgement has been paid. (Selig Dep. at 244.)
Mario Valente Collezioni, Ltd. v. AAK Limited and Maurice Ian Kindler, 280 F. Supp.2d 244, 246-47 (S.D.N.Y. 2003).

  In January 2002, Plaintiff filed a complaint against Defendants alleging unfair competition, trademark infringement and breach of contract. On September 8, 2003, the Court issued an opinion granting Defendants' motion for summary judgment on Plaintiff's claims of Page 3 breach of contract and trademark infringement, and granting Plaintiff's cross-motion for summary judgment with respect to Defendants' liability for unfair competition. Id. Defendants now move the Court to reconsider its decision with respect to their liability for unfair competition.

  B. Summary of Facts

  In 1994 Paolo Semeraro and A.E.D. Imports, Ltd. entered into an agreement for the distribution of coats in the United States. (Defs.' Statement Material Facts As to Which There Is No Genuine Issue to be Tried at ¶ 6; Pl.'s Am. Counterstatement Undisputed Facts at ¶ 6.) The agreement stated, "Confezioni PAOLO SEMERARO hereby undertake that no clothing will be offered by them or anyone acting on their behalf for sale in the U.S.A. except through A.E.D. IMPORTS LTD. their appointed DISTRIBUTORS/IMPORTERS. THIS AGREEMENT IS VALID ONLY FOR PRODUCTION OF MEN'S OVERCOATS." (Notice of Mot, Mar. 13, 2003, Ex. 4.) Judge Kaplan found that "[b]y course of dealing, the parties had substituted Plaintiff for A.E.D. as the exclusive U.S. distributor of defendants' overcoats." Mario Valente Collezioni, 115 F. Supp.2d at 375 n.40.

  Defendant Maurice Kindler is the principal owner of AAK, a United Kingdom limited liability corporation, which sells garments at whole-sale. (Defs.' Statement Material Facts As to Which There Is No Genuine Issue to be Tried at ¶¶ 3, 4; Pl.'s Am. Counterstatement Undisputed Facts at ¶¶ 3, 4.) Kindler testified at the evidentiary hearing before Judge Kaplan that AAK was the exclusive distributor in the United Kingdom of coats made by the Semeraro defendants. (Hr'g Tr. June 20, 2000 at 42-43 (No. 97 Civ. 2008, Docket Number 50).)

  Judge Kaplan found: Page 4

 
Kindler, AAK's chairman, knew that plaintiff had the exclusive right to sell Mario Valente overcoats in the United States. But he admitted that Semeraro told him that he had had a falling out with Selig*fn1 and that Selig no longer was buying from him. So Kindler set up a meeting with the Bloomingdale's buyer who previously had bought Mario Valente coats from plaintiff. He also solicited the aid of his friend, Joseph Sheer, in selling defendants' overcoats in the United States, and Sheer contacted Lord & Taylor, another of plaintiff's major customers.
Mario Valente Collezioni, Ltd., 115 F. Supp.2d at 374-75 (footnotes omitted). Judge Kaplan also found that as a consequence of the contacts of Kindler and Joseph Sheer (acting as Kindler's agent) with Bloomingdale's and Lord & Taylor, respectively, the two stores "dropped plaintiff as a supplier both for private label and Mario Valente brand coats." Id. Judge Kaplan concluded:
[I]t is more likely than not that Semeraro and Kindler together hatched a scheme to dump plaintiff as the U.S. distributor of Semeraro's products, to replace it with Kindler's firm, and to persuade plaintiff's existing U.S. customers and others that plaintiff no longer was a factor in the business and that AAK was the exclusive source in the United States of Mario Valente brand goods as well as Semeraro's other products. In such circumstances, Semeraro is legally responsible for all actions by Kindler and his agents in furtherance of the plan.
Mario Valente Collezioni, Ltd., 115 F. Supp.2d at 376. It is clear from Judge Kaplan's opinion that since Kindler acted as Semeraro's agent, Kindler's actions in New York to divert business away from Plaintiff subjected the Semeraro Defendants to the Court's jurisdiction on the tort claims under C.P.L.R. § 302(a)(2). See Mario Valente Collezioni, Ltd., 115 F. Supp.2d at 376-77.

  Kindler testified as a witness for the Semeraro Defendants on June 20, 2000, the last of the three days of hearings held by Judge Kaplan, on the jurisdictional issue of whether the Page 6 appropriate to do so. Fed.R.Civ.P. 60(b). The most relevant set of reasons provided is "mistake, inadvertence, surprise, or excusable neglect." Id. Local Rule 6.3 provides the filing guidelines for motions for reargument. Under Local Rule 6.3, a motion for reargument may be granted when there is a "need to correct a clear error or prevent manifest injustice" Morales v. Quinfiles Transnational Corp., 25 F. Supp.2d 369, 372 (S.D.N.Y. 1998) (quoting Doe v. New York City Dep't of Soc Servs., 709 F.2d 782, 789 (2d Cir. 1983)). Furthermore, a reargument may be granted when a court has "overlooked controlling decisions or factual matters which were placed before [it] in the underlying motion." Bonnie and Co. Fashions v. Banker's Trust Corp., 171 F.R.D. 79, 83-84 (S.D.N.Y. 1997). Nonetheless, the party requesting the reargument "may not advance new facts, issues, or arguments not previously ...


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