The opinion of the court was delivered by: RICHARD CASEY, District Judge
Memorandum Opinion & Order
On April 6, 2004, the Court issued a Memorandum Opinion & Order
granting in part and denying in part the defendants' motions to
dismiss. The plaintiffs now move for reconsideration on two issues. First, they contend that the Court erroneously
applied the statute of limitations applicable to their claims for
aiding and abetting breach of fiduciary duty under New York State
law. Second, they maintain that the Court incorrectly denied them
the opportunity to replead their common-law fraud claims. For the
reasons that follow, the plaintiffs' motion for reconsideration
is GRANTED IN PART AND DENIED IN PART.
This suit, filed on February 2, 1999, arises out of the conduct
of A.R. Baron & Co. ("Baron"), a now-bankrupt securities
broker-dealer. The plaintiffs were Baron customers who were
allegedly harmed by Baron's fraudulent activities. Most of the
defendants are alleged to have aided Baron and its employees in
defrauding the plaintiffs. The Court set forth the background of
the case in detail in its prior opinion and will not do so here.
See Fezzani v. Bear, Stearns & Co., No. 99 Civ. 0793 (RCC),
2004 WL 744594 (S.D.N.Y. Apr. 6, 2004). The complaint includes
claims under the federal securities laws, the Racketeer
Influenced and Corrupt Organizations Act, for aiding and abetting
breach of state-law fiduciary duties, and for common-law fraud.
The claims relevant to the instant motion allege that the
defendants aided and abetted Baron in violating its fiduciary
duties owed to the plaintiffs, and that the defendants' conduct
constituted common-law fraud. On the aiding and abetting claims,
the plaintiffs sought damages in the amount of $6,500,000.
(Compl. ¶ 317.) The defendants filed various motions to dismiss,
which the Court granted in part and denied in part. With regard
to aiding and abetting, the Court held that New York law imposes
a three-year statute of limitations on claims for breach of
fiduciary duties. See Fezzani, 2004 WL 744594, at *24.
Therefore, the Court dismissed as time-barred any claim arising
out of Baron's conduct occurring prior to February 2, 1996. See
id. In addition, the Court dismissed the plaintiffs' common-law fraud claims on the grounds that the
complaint failed to allege the necessary elements under New York
law and was insufficiently specific. See id. at **25-26.
The plaintiffs now move the Court to reconsider its decisions
on the fiduciary-duty and common-law fraud claims. The plaintiffs
argue that the Court clearly overlooked controlling precedent
recognizing a six-year statute of limitations on
breach-of-fiduciary-duties claims, rather than the three-year
statute the Court applied. The Court also erred, according to the
plaintiffs, when it refused leave to replead the common-law fraud
claims that arose from the defendants' conduct before February 2,
A. Standard on Motion for Reconsideration
Motions for reconsideration are permitted under Local
Rule 6.3 and Federal Rule of Civil Procedure 59(e) on the grounds that the
Court overlooked factual matters or controlling legal decisions.
See Fed.R.Civ.P. 59(e); S.D.N.Y.R. 6.3; Kunica v. St. Jean
Fin., Inc., 63 F. Supp.2d 342, 345 (S.D.N.Y. 1999). Such motions
are not permitted to repeat arguments already considered by the
Court, and are not a substitute for an appeal. Allen v. Pataki,
207 F. Supp.2d 126, 126 (S.D.N.Y. 2002); Kunica, 63 F. Supp.2d at
346; Morser v. AT&T Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y.
1989). The rules are to be strictly applied to avoid repetitive
arguments that the Court has already fully considered.
Ameritrust Nat'l Ass'n v. Dew, 151 F.R.D. 237, 238 (S.D.N.Y.
1993) (interpreting Local Rule 3(j), the predecessor to
B. Breach-of-Fiduciary-Duty Claims
In their memorandum in support of the motion, the plaintiffs
argued that the Court overlooked the doctrine of equitable
tolling, which preserves common-law fraud claims until a plaintiff is on actual or constructive notice of the actionable
conduct. (See Pls. Mem. of Law in Support of Mot. for
Reconsideration or Re-Argument at 3.) The plaintiffs cite for
this proposition Meredith International Bank Ltd. v. Government
of the Republic of Liberia, 23 F. Supp.2d 439, 451 (S.D.N.Y.
1998). As the defendants correctly point out, however, this is
not controlling legal authority and thus not a proper basis on
which to grant reconsideration. See McCullaugh v. Merrill,
Lynch & Co., No. 01 Civ. 7322 (DAB), 2004 WL 744484, at *1
(S.D.N.Y. Apr. 7, 2004) (refusing reconsideration because, among
other things, other district court cases not controlling
Recognizing this deficiency, the plaintiffs raise a different
argument in their reply brief. They argue in their reply that the
Court overlooked the controlling precedent of Golden Pacific
Bank Corp. v. FDIC, 273 F.3d 509 (2d Cir. 2001). (See Pls.
Reply Mem. of Law in Support of Mot. for Reconsideration or
Re-Argument at 2.)*fn1 In Golden Pacific the Second
Circuit noted, "The statute of limitations in New York for claims
of unjust enrichment, breach of fiduciary duty, corporate waste,
and for an accounting is generally six years." Id. at 518. The
statutory provision that the Second Circuit cited in coming to
this conclusion states in relevant part, "The following must be
commenced within six years: 1. an action for which no limitation
is specifically prescribed by law. . . ." N.Y.C.P.L.R. 213(1).
However, Golden Pacific is not controlling here because
C.P.L.R. 213(1) only governs claims for breach of fiduciary
duties when the plaintiff is seeking equitable, not monetary,
relief. See Loengard v. Santa Fe. Indus., Inc.,
514 N.E.2d 113 (N.Y. 1987).
In Loengard, a case on which the Golden Pacific court
relied, the Second Circuit certified to the New York Court of
Appeals the question whether claims for unjust enrichment from a
breach of fiduciary duty were governed by a six-year statute of
limitations under C.P.L.R. 214(4) or a three-year limitations
period under C.P.L.R.213(1).*fn2 See id. at 114. The
Court of Appeals first stated, "We have held that the choice of
the applicable Statute of Limitations depends on the substantive
remedy which the plaintiff seeks." Id. at 115. The plaintiffs
in Loengard were minority shareholders alleging that the
majority shareholders breached fiduciary duties by forcing the
plaintiffs to sell their shares in a freeze-out merger at an
undervalued price. Id. The relief sought in the plaintiffs'
complaint was restoration of the plaintiffs to their status as
shareholders or a determination of their shares' fair value and
an order directing the defendants to pay that value, both
equitable remedies. See id. The Court of Appeals held that
the plaintiffs sought equitable relief and therefore the six-year
statute of limitations applied rather than the three-year period.
See id.; see also Carlingford Ctr. Point Assocs. v. MR
Realty Assocs. L.P., 772 N.Y.S.2d 273, 274 (App. Div. 2004) ("A
breach of fiduciary duty claim is governed by either a three-year
or six-year limitation period, depending on the nature of the
relief sought. . . . The shorter time period applies where
monetary relief is sought, the longer where the relief sought is
equitable in nature. . . .").
The Second Circuit has recognized that a six-year statute of
limitations only controls claims for breach of fiduciary duties
seeking equitable relief. See Cooper v. Parsky, 140 F.3d 433,
440-41 (2d Cir. 1998). As the Cooper court put it, "Ordinarily,
under New York law, a claim for breach of fiduciary duty would be
governed by a three-year limitations period if the action sought
monetary relief but by a six-year period if the action sought
equitable relief." Id. When the court in Golden Pacific noted
that the New York statute of limitations on claims for breach of
fiduciary duty is "generally" six-years, it was speaking of claims for equitable
remedies consistent with Loengard, which it cited, and with its
earlier decision in Cooper. See Golden Pacific, 273 F.3d at
518. Here, the plaintiffs seek only damages for the alleged
aiding and ...