United States District Court, E.D. New York
November 1, 2005.
DAVID McANANEY, CAROLYN McANANEY, individually and on behalf of all others similarly situated, CYNTHIA RUSSO, PHILLIP RUSSO, CONSTANCE REILLY, and JOHN REILLY, Plaintiffs,
ASTORIA FINANCIAL CORPORATION, ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, ASTORIA FEDERAL MORTGAGE COMPANY, LONG ISLAND BANCORP, INC., and LONG ISLAND SAVINGS BANK, FSB, Defendants.
The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
Presently before the Court is a motion by Astoria Financial
Corporation, Astoria Federal Savings and Loan Association,
Astoria Federal Mortgage Company, Long Island Bancorp, Inc., and
Long Island Savings Bank, FSB, (collectively, the "Defendants")
for an order, pursuant to Local Rule 6.3 for reconsideration of
this Court's February 17, 2005 Memorandum of Decision and Order,
McAnaney v. Astoria Financial Corp., 357 F. Supp.2d 578
(E.D.N.Y. 2005) (hereinafter the "Order"). In that Order, the
Court denied, in part, the Defendants' motion to dismiss the
claim asserted by the plaintiffs David McAnaney, Carolyn
McAnaney, Cynthia Russo, Phillip Russo, Constance Reilly, and
John Reilly (collectively, the "Plaintiffs") under the Truth in
Lending Act ("TILA"). Upon reconsideration, if granted, the
Defendants' seek dismissal of the Plaintiffs' TILA claims and the
remaining state law claims. In addition, the Plaintiffs seek
leave to amend the complaint to add a jurisdictional provision
and a cause of action. I. DISCUSSION
The background of this case is incorporated in the Court's
Memorandum of Decision and Order of February 17, 2005.
Familiarity with that decision is assumed.
B. MOTION TO RECONSIDER
The decision to grant or deny a motion for reconsideration is
within the sound discretion of the district court. See Devlin
v. Transportation Communications Int'l Union, 175 F.3d 121, 132
(2d Cir. 1999) (citing McCarthy v. Manson, 714 F.2d 234, 237
(2d Cir. 1983)). A motion for reconsideration, also known as
reargument, is governed by Local Rule 6.3 and Federal Rule of
Civil Procedure 59(e) ("Fed.R.Civ.P."). See Hertzner v.
Henderson, 292 F.3d 302, 303 (2d Cir. 2002); Yurman Design Inc.
v. Shieler Trading Corp., No. 99 Civ. 9307, 2003 U.S. Dist.
LEXIS 15070, at *2 (S.D.N.Y. Aug. 28, 2003).
The standards set forth in both Local Rule 6.3 and
Fed.R.Civ.P. 59(e) are identical. See Alexander v. The Turner Corp.,
No. 00 Civ. 4677, 2001 U.S. Dist. LEXIS 14559, at *1 (S.D.N.Y.
Sept. 10, 2001). "A motion for reconsideration should be granted
only where the moving party demonstrates that the Court has
overlooked factual matters or controlling precedent that were
presented to it on the underlying motion and that would have
changed its decision." In re Worldcom, Inc. Securities
Litigation, 308 F. Supp.2d 214, 224 (S.D.N.Y. 2004); Colodney
v. Continuum Health Partners, Inc., No. 03-7276, 2004 WL 1857568, at *1 (S.D.N.Y.
Aug 18, 2004); see also In Re BDC 56 LLC, 330 F.3d 111, 123
(2d Cir. 2003); E.D.N.Y. Local Civil Rule 6.3. Reconsideration
may also be granted to "correct a clear error or prevent manifest
injustice." Doe v. New York City Dep't of Soc. Servs.,
709 F.2d 782, 789 (2d Cir. 1983).
To preserve scarce judicial resources and to avoid piecemeal
litigation, a motion for reconsideration is "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 also Shrader v. CSX
Transp. Inc., 70 F.3d 255, 257 (2d Cir. 1995) (stating that
reconsideration "should not be granted where the moving party
seeks solely to relitigate an issue already decided"); In re
Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996) (stating
that a Rule 6.3 motion is "not a motion to reargue those issues
already considered when a party does not like the way the
original motion was resolved"). In addition, "a party in its
motion for reargument may not advance new facts, issues or
arguments not previously presented to the court." O'Brien v. Bd.
of Educ. of Deer Park Union Free Sch. Dist.,
127 F. Supp. 2d 342, 345 (E.D.N.Y. 2001).
In the Defendants' motion, they contend that the Court
overlooked and misapplied controlling law defining prepayment
penalties and finance charges under TILA. The Court disagrees. First, although the Defendants' argue
that the Court "overlooked" controlling law, it is clear from the
content of their memorandum of law that the Court clearly
addressed every case and statute that the Defendants cited to in
their original memorandum of law. Indeed, the Defendants points
to no case or statute that was not cited by the Court in its
original Order. As stated by the Defendants, the Court "correctly
set forth the standard established by the Second Circuit in
Pechinski[ v. Astoria Federal Savings and Loan Ass'n,
345 F.3d 78 (2d Cir. 2003),] for determining whether a particular fee
qualifies as a prepayment penalty" and "set out the governing
standard for determining whether a particular fee constitutes a
finance charge under TILA. . . ." (Defs.' Mem. in Supp. of Mot.
for Recons. 2, 5.)
Second, the Defendant's argument that the Court set forth the
controlling law but "misapplied" it "by ignor[ing] such standard"
(Defs.' Mem. in Supp. of Mot. for Recons. 5), is plainly an
"improper [argument] on a motion for reconsideration." JPMorgan
Chase Bank v. Cook, 322 F. Supp.2d 353, 356 (S.D.N.Y. 2004). "A
motion for reconsideration cannot be granted . . . solely on a
party's disagreement with the Court's ruling." Colodney, 2004
WL 1857568, at *3. "Moreover, the re-arguing of the applicability
of [Pechinski] in the guise of bringing `overlooked' [or
`misapplied'] authority to the Court's attention borders on the
contumacious. . . ." JPMorgan Chase Bank,
322 F. Supp.2d at 356. In other words, a reconsideration of the Defendants' belief that Pechinski forecloses, as a matter
of law, all of the Plaintiffs' claims under TILA at the pleading
stage an argument that was previously expressly rejected does
not alter the reasoning or conclusion of the Court's original
Finally, even assuming that the Court could appropriately
address the argument that it "misapplied" the controlling law,
the Court would still deny the Defendants' motion. The gravamen
of the Defendants' argument is that the Court failed to apply the
standards set forth in Pechinski by not "determining" that the
fees charged were not finance charges or prepayment penalties for
which disclosure is required under TILA. As stated in the Order,
"The issue [on a motion to dismiss] is not whether a plaintiff
will ultimately prevail but whether the claimant is entitled to
offer evidence to support the claims." Villager Pond, Inc. v.
Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (quoting
Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90,
94 S. Ct. 1683 (1974)). Under the modern rules of pleading, a plaintiff
need only provide "a short and plain statement of the claim
showing that the pleader is entitled to relief," and "[a]ll
pleadings shall be so construed as to do substantial justice."
Fed.R.Civ.P. 8(f). Recovery may appear remote and unlikely on
the face of the pleading, but that is not the test for dismissal.
Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir.
1995). In this light, the Court found that the Plaintiffs met this
burden and that discovery is necessary to determine whether the
fees were required for the extinguishment of the loan and
required to be disclosed under TILA or whether they were for a
service requested by the borrower and not actionable, as a
matter of law, such as the fees in Pechinski. Significantly,
the Court notes that it rejected the Defendants' previous attempt
to have the Court consider an affidavit and numerous exhibits and
determine the merits of this action at the pleading stage.
Nothing in the Defendants' current motion for reconsideration
persuades the Court to abandon the well-established motion to
dismiss standard at the pleadings stage. Accordingly, the
Defendants' motion for reconsideration is denied.
C. LEAVE TO AMEND
The Plaintiffs seek leave of the Court to file a Second Amended
Consolidated Class Action Complaint to make two additions to
their pleadings. First, the Plaintiffs request to include the new
class action jurisdictional provisions contained in the Class
Action Fairness Act, codified at 28 U.S.C. § 1332(d). Second the
Plaintiffs seek leave to add a claim under New York Real Property
Actions and Proceedings Law section 247-a, which involves the
charging of fees for payoff letters. The Defendants object only
to the Plaintiffs' request to amend the complaint to add
jurisdictional allegations. Rule 15(a) of the Federal Rules of Civil Procedure governs
amendments to pleadings. The Rule states that "leave [to amend]
shall be freely given when justice so requires." Fed.R.Civ.P.
15(a); see also Zenith Radio Corp. v. Hazeltine Research,
Inc., 401 U.S. 321, 331, 28 L. Ed. 2d 77, 91 S. Ct. 795 (1971)
(stating that granting leave to amend is within the discretion of
the trial court). The Second Circuit has held that a Rule 15(a)
motion "should be denied only for such reasons as undue delay,
bad faith, futility of the amendment, and perhaps most important,
the resulting prejudice to the opposing party." Richardson
Greenshields Securities, Inc. v. Lau, 825 F.2d 647, 653 n. 6 (2d
Cir. 1987); see also Foman v. Davis, 371 U.S. 178, 182,
83 S. Ct. 227, 9 L. Ed. 2d 222 (1962).
The Class Action Fairness Act became effective on February 18,
2005, and by its express terms is not retroactive. See Class
Action Fairness Act Pub.L. No. 109-2, § 9, 119 Stat. 4, 14
(2005); Exxon Mobil Corp. v. Allapattah Services, Inc.,
125 S. Ct. 2611, 162 L. Ed. 2d 502 (2005). This action was commenced on
March 16, 2004, and both parties agree that the proposed
amendment to assert a new cause of action under the New York Real
Property Actions and Proceedings Law "relates back" to the
original complaint and is deemed commenced as of the original
date of the filing of the complaint. In addition, "an amendment
to allege diversity jurisdiction relates back under Rule 15 of
the Federal Rules of Civil Procedure. . . ." LeBlanc v.
Cleveland, 248 F.3d 95, 99-100 (2d Cir. 2001). As such, the
Class Action Fairness Act has no bearing on this case, and an amendment to include such
provision would be futile. Accordingly, the motion to amend the
complaint to add the jurisdictional provision is denied.
There being no objection to the Plaintiffs' request to add a
cause of action under New York Real Property Actions and
Proceedings Law section 247-a, the motion for leave to amend in
that regard is granted. The Plaintiff may file the amended
complaint not later than 20 days from the date of this order.
Based on the foregoing reasons, it is hereby
ORDERED, that the Defendants' motion for reconsideration of
the Memorandum of Decision and Order of this Court dated February
17, 2005, is DENIED; and it is further
ORDERED, that the Plaintiffs' motion to file a Second Amended
Consolidated Class Action Complaint is GRANTED, as to the
proposed cause of action under New York Real Property Actions and
Proceedings Law section 247-a, and DENIED, as to the proposed
addition of a jurisdictional provision under the Class Action
Fairness Act; and it is further
ORDERED, that the Plaintiff may file an amended complaint as
set forth above not later than 20 days from the date of this
order. SO ORDERED.
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