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WECHSLER v. HUNT HEALTH SYSTEMS

September 30, 2004.

RAYMOND H. WECHSLER, ADMINISTRATIVE TRUSTEE OF THE TOWERS FINANCIAL CORPORATION ADMINISTRATIVE TRUST, Plaintiff,
v.
HUNT HEALTH SYSTEMS, LTD., P&G ENTERPRISES, INC., MHTJ INVESTMENTS, INC., ESPERANZA HEALTH SYSTEMS, LTD. AND FRIENDSHIP, INC., Defendants.



The opinion of the court was delivered by: PETER LEISURE, District Judge

OPINION AND ORDER

Plaintiff Raymond H. Wechsler, the administrative trustee overseeing the assets of Towers Financial Corporation ("Towers"),*fn1 brings this action against Hunt Health Systems, Ltd. ("Hunt Health") and affiliated entities for alleged breach of contract and fraudulent conveyance in connection with the parties' factoring agreement ("HCP agreement" or "agreement"). The Court bifurcated the case on August 8, 2003, separating the breach of contract and fraudulent conveyance claims. Wechsler v. Hunt Health Systems, Ltd., No. 94 Civ. 8294, 2003 U.S. Dist. LEXIS 13775, at *1 (S.D.N.Y. Aug. 8, 2003). After a ten day bench trial on the breach of contract claim,*fn2 this Court entered a final judgment on August 11, 2004 ("Order" or "August 11 Order") finding defendants materially breached the agreement and awarding plaintiff damages and prejudgment interest. Wechsler v. Hunt Health Systems, Ltd., No. 94 Civ. 8294, 2004 U.S. Dist. LEXIS 15926, at *1 (S.D.N.Y. Aug. 11, 2004). Defendants filed a notice of appeal on September 16, 2004.*fn3

  Plaintiff now moves this Court, pursuant to Rules 52(b) and 59(e) of the Federal Rules of Civil Procedure and Rule 6.3 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York ("Local Rule 6.3"), to amend or reconsider the Order due to "`manifest errors of law or fact'" and "`controlling authority or factual matters presented to the Court . . . and overlooked.'" Plaintiff's Memorandum in Support of Plaintiff's Motion to Amend the Court's Final Judgment Pursuant to Fed.R. Civ. P. 52(b) and 59(e) ("Pl.'s Mem.") at 2 (internal citations omitted). Plaintiff avers that this Court (1) failed to find defendants breached paragraph 8(ix) of the HCP agreement, thus converting all outstanding accounts into Rejected Accounts; (2) overlooked the effect of the acceleration clauses, including their effect on the prejudgment interest rate and; (3) erred in applying a 365 day limit on factoring fees. For the reasons set forth below, plaintiff's motion to amend or reconsider the judgment is denied.

  Background

  I. Factual History

  The detailed factual history giving rise to this litigation is painstakingly set out in this Court's August 11 Order, with which the Court assumes familiarity. Towers entered into an accounts receivable purchase contract with defendant Hunt Health on July 10, 1991. The contract failed on February 26, 1993, thereby giving rise to the contract claims in this action, discussed and decided by the August 11 Order. The Court held that defendants materially breached the contract by (1) retaining post-contract termination proceeds on accounts sold to Towers and; (2) terminating the contract without paying liquidated damages.*fn4 The Court awarded plaintiff $724,075 for damages arising from the breaches and awarded prejudgment interest totaling $746,719, calculated under New York's statutory rate of 9% per annum.

  Discussion

  I. The Motion for Reconsideration Standard

  "The standards governing motions for amendment of findings under Rule 52(b), motions to alter or amend a judgment pursuant to Rule 59(e), and motions for reconsideration pursuant to Local Rule 6.3 are the same." 4200 Ave. K LLC v. Fishman, No. 00 Civ. 8814, 2001 U.S. Dist. LEXIS 5938, at *2 (S.D.N.Y. May 10, 2001); see Defs.' Mem. at 1. For clarity's sake, the Court will refer to plaintiff's motion as a motion to reconsider the judgment under Local Rule 6.3. The motion to reconsider must be made within ten days of entry of the judgment. Fed.R. Civ. P. 52(b); 59(e); Local Rule 6.3.

  As this Court made clear in a previous ruling in this case, see Wechsler v. Hunt Health Systems, Ltd., 186 F. Supp. 2d 402, 410 (S.D.N.Y. 2002), a motion to reconsider will generally be denied "unless the moving party can point to controlling decisions or data that the court overlooked — matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Further, the decision to grant or deny a motion for reconsideration or reargument is in the "`sound discretion of a district court judge and will not be overturned on appeal absent an abuse of discretion.'" Davidson v. Scully, 172 F. Supp. 2d 458, 462 (S.D.N.Y. 2001) (Leisure, J.) (quoting McCarthy v. Manson, 714 F.2d 234, 237 (2d Cir. 1983)). The motion to reconsider cannot properly advance "new facts, issues or arguments not previously presented to the court." Id. at 461. A party seeking reconsideration "is not supposed to treat the court's initial decision as the opening of a dialogue in which that party may then use such a motion to advance new theories or adduce new evidence in response to the court's rulings." Polsby v. St. Martin's Press, Inc., No. 97 Civ. 690, 2000 U.S. Dist. LEXIS 596, at *3 (S.D.N.Y. Jan. 18, 2000) (internal citations omitted). A motion for reconsideration "is not a substitute for appeal and may be granted only where the Court has overlooked matters or controlling decisions which might have materially influenced the earlier decision." Morales v. Quintiles Transnat'l Corp., 25 F. Supp. 2d 369, 372 (S.D.N.Y. 1998) (internal citations omitted). In determining whether a motion for reconsideration should be granted, Local Rule 6.3 should "be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Dellefave v. Access Temps., Inc., No. 99 Civ. 6098, 2001 U.S. Dist. LEXIS 3165, at *1 (S.D.N.Y. Mar. 22, 2001); see Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998) (noting that a motion for reconsideration should not sound as a dinner bell for a party wishing to take a second bite at the apple).

  II. Plaintiff's Motion to Reconsider the Judgment

  Plaintiff's arguments seem to be reincarnations of those settled by the August 11 Order. Plaintiff argues that the Court rendered its opinion blind to the evidence before it, but points to nothing on the record that the Court did not fully consider. Nor does plaintiff identify ignored precedent which, upon reconsideration, would materially alter the judgment of this Court. As a threshold matter, these arguments are not properly raised in a motion to reconsider. A favorable construction of plaintiff's argument coupled with the complex procedural and factual history of this litigation, however, prompt the Court to clarify the August 11 Order. Plaintiff's three arguments in support of reconsideration are addressed in turn below. A. Plaintiff's Claim that this Court Failed to Find Hunt Health Breached Paragraph 8(ix) of the HCP Agreement and Overlooked the Consequences Thereof

  Construed most favorably, plaintiff's first argument follows in three parts. First, plaintiff contends that this Court failed to consider defendants' actions as a material breach of paragraph 8(ix) of the agreement which warrants that Hunt Health "will do nothing to impair [Towers'] right in any Account purchased by [Towers]." HCP agreement, Plaintiff's Exhibit 2 ("Pl.'s Exh. 2"), ¶ 8. Because of this oversight, the Court failed to define all outstanding accounts as Rejected Accounts*fn5 counting toward the total indebtedness by which damages were determined. Thus, the Court underrepresented plaintiff's proper damages award.

  Upon outlining plaintiff's argument, however, the Court experiences an overwhelming sense of déjà vu. Plaintiff advanced and the Court accepted, in part, this claim in the August 11 Order. To remind plaintiff: "[P]laintiff contends that accounts for which Hunt Health received payment during 1993 became Rejected Accounts. . . . The Court therefore finds that accounts for which Hunt Health received and kept payments throughout 1993 became Rejected Accounts, and the advances on these accounts became an indebtedness." Wechsler, 2004 U.S. Dist. LEXIS 15926, at *54, 64. The Court also adjudged that all accounts coded as appealed were Rejected. Id. at *54-55. However, plaintiff failed to show by a preponderance ...


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