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BMC, LLC v. Verlan Fire Insurance Co.

July 22, 2008

BMC, LLC, FORMERLY KNOWN AS PLASLOK CORPORATION, PLAINTIFF,
v.
VERLAN FIRE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge United States District Court

DECISION AND ORDER

INTRODUCTION

Currently before the Court is the motion of plaintiff BMC, LLC ("BMC"), pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure, to vacate, in part, the Court's award of attorney's fees and expenses to the defendant Verlan Fire Insurance Company ("Verlan"). Verlan does not oppose the motion.

For the reasons stated herein, the Court grants BMC's motion to vacate.

BACKGROUND

In January 2001, Verlan issued an insurance policy to BMC covering a building and property located at 80 French Road in Cheektowaga, New York.

On or about January 10, 2002, the roof on BMC's building collapsed. A court-appointed Umpire conducted an appraisal of the loss suffered, and issued a report quantifying the amount owed to BMC for the roof collapse.

BMC then commenced this lawsuit, challenging certain portions of the Umpire's report. Verlan subsequently filed a motion to compel discovery and for attorney's fees and expenses. BMC cross-moved to limit discovery and for summary judgment. On September 26, 2006, Magistrate Judge Scott issued a Decision and Order and Report and Recommendation, granting Verlan's motion to compel discovery, awarding attorney's fees and expenses to Verlan, and denying without prejudice BMC's cross-motion for summary judgment. On November 16, 2006, Magistrate Judge Scott issued a Decision and Order, denying BMC's motion for reconsideration of the issuance of the award, but reducing the amount awarded. On February 2, 2007, this Court affirmed Magistrate Judge Scott's Orders.

The parties have now agreed to settle this action, contingent upon the vacatur of the sanction Orders. BMC argues that vacatur is proper because:

(1) the parties' interest in completing the settlement far outweighs the public's interest in keeping the Orders intact; (2) it will save the parties the considerable time and expense of further litigation, and conserve judicial resources; (3) the sanction Orders do not involve a novel application of law and therefore are of little precedential value; and (4) it will not have an adverse impact on any nonparties to the litigation.

DISCUSSION

Rule 60(b)(6) allows the court, upon a party's motion, to relieve a party from a final judgment, order, or proceeding for "any other reason that justifies relief." See Fed. R. Civ. P. 60(b)(6). A motion that seeks relief pursuant to Rule 60(b)(6) is "addressed to the sound discretion of the district court . . . ." See Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986).

Vacatur of a judgment or order as part of a settlement is an "extraordinary remedy" and should be granted only in "exceptional circumstances". See U.S. Bankcorp Mortgage Co. v. Bonner Mall P'ship, 513 U.S. 18, 26, 29 (1994). The Supreme Court has held that "exceptional circumstances" must exist because "[j]udicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur." See Id. at 27 (citation omitted). The burden is on the party or parties seeking vacatur to show that such relief "is equitably justified by exceptional circumstances." Major League Baseball Props. Inc. v. Pac. Trading Cards Inc., 150 F.3d 149, 151 (2d Cir. 1998); see also Microsoft Corp. v. Bristol Tech. Inc., 250 F.3d 152, 154 (2d Cir. 2001).

The Court finds that exceptional circumstances are present in this case making vacatur appropriate. The private interest of the parties in settling this litigation outweighs any public interest in preserving the ...


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