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American Manufacturers Mutual Insurance Co. v. Payton Lane Nursing Home

February 20, 2010

AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY AND AMERICAN MOTORISTS INSURANCE COMPANY, PLAINTIFFS,
v.
PAYTON LANE NURSING HOME, INC., PERKINS EASTMAN ARCHITECTS, P.C., AND LINCOLN GENERAL INSURANCE COMPANY, DEFENDANTS.



The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge

MEMORANDUM AND ORDER

I. PRELIMINARY STATEMENT

Defendant Perkins Eastman Architects, P.C. ("Defendant" or "Perkins") moves [DE 217] for reconsideration of this Court's February 2, 2010 Memorandum and Order [DE 213] (the "February 2, 2010 Order") denying Defendant's motion for summary judgment. Plaintiffs American Manufacturers Mutual Insurance Company and American Motorists Insurance Company ("Plaintiffs" or "Sureties") have filed opposition [DE 217] to the motion, and Perkins served a reply [DE 219]. Based upon my review of the parties' submissions and the applicable law, I find that Perkins has not made the requisite showing that this Court overlooked controlling decisions or factual matters raised in the underlying motion which would warrant reconsideration of the February 2, 2010 Order. The motion for reconsideration is therefore GRANTED, and I am adhering to my original decision.

II. STANDARD OF REVIEW

Motions for reconsideration under Rule 59(e) are governed by Local Rule 6.3, which requires the moving party to "set forth concisely the matters or controlling decisions which counsel believes the court has overlooked." E.D.N.Y. Local R. Civ. P. 6.3; Myers v. Okada, No. 08-CV-1635, 2008 WL 4724579, at *1 (E.D.N.Y. Oct. 23, 2008). A motion for reconsideration is within the sound discretion of the district court. See Rates Tech. Inc., v. Mediatrix Telecom, Inc., CV 05-2755, 2007 WL 2581776, at *1 (E.D.N.Y. Sept. 5, 2007) (citing, inter alia, Bueno v. Gill, 237 F. Supp. 2d 447, 449 (S.D.N.Y. 2002)).

In the Second Circuit, the standard for granting a motion for reconsideration "is strict, and reconsideration 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) (holding that the lower court's reconsideration of a summary judgment motion was not an abuse of discretion because the moving party presented "data the court had not previously considered," such as extensive legislative history on the relevant statute and new case law); see also Bell Sports, Inc. v. Sys. Software Assocs., Inc., 71 F. Supp. 2d 121, 126 (E.D.N.Y. 1999). Motions for reconsideration "should not be granted where the moving party seeks solely to relitigate an issue already decided." Shrader, 70 F.3d at 257. This heightened burden is imposed "to dissuade repetitive arguments on issues that have already been considered fully by the Court." Ruiz v. Comm'r of the Dep't of Transp., 687 F. Supp. 888, 890 (S.D.N.Y. 1988), modified on other grounds, 934 F.2d 450 (2d Cir. 1991); see also Equal Employment Opportunity Comm'n v. Fed. Express Corp., 268 F. Supp. 2d 192, 195 (E.D.N.Y. 2003) (holding that a motion for reconsideration "is to be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the court"). The scope of a motion for reconsideration, therefore, is extremely narrow and is an "extraordinary remedy to be employed sparingly in the interest of finality and conservation of scarce judicial resources." In re Health Mgmt Sys. Inc. Sec. Litig., 113 F. Supp. 2d 613, 614 (S.D.N.Y. 2000).

III. DISCUSSION

In support of its motion for reconsideration, Perkins argues that Plaintiffs' breach of contract claim against Perkins "is a claim for malpractice, which requires expert proof in order to establish that there was a departure from accepted standards of practice, and that the departure was a proximate cause of [Plaintiff's alleged] injury." Def.'s Mem. [DE 217] at 10. The Sureties oppose, arguing that Perkins is urg[ing] the Court to reconsider the very same arguments and authorities cited... during the briefing of the summary judgment motion. Perkins points to no important matter of fact or controlling decision of law that this Court overlooked or misapprehended in any way. The fact that Perkins disagrees with the Court's ruling is not a basis for granting the extraordinary relief of reconsideration.

Pls.' Mem. [DE 219] at 2.

A. The Breach Of Contract Claim

Perkins takes issue with the Court's finding that "[t]he Sureties bring their Eighth Claim, as subrogees of Payton Lane, against Perkins for breach of the PEA Agreement, not for architectural malpractice." Feb. 2, 2010 Order [DE 213] at 19 (emphasis in original). Perkins further disputes the Court's finding that "the Sureties do not allege malpractice or negligence, and Perkins has not provided any evidence to persuade the Court that such assertions should be read into the Sureties' Eighth Claim." Id. at 21. In the motion for reconsideration, Perkins argues that this Court "overlooked the law in New York that a breach of contract for professional services is considered a claim for malpractice...." Def.'s Mem. at 3*fn1 (emphasis in original).

Perkins relies on R.M. Kliment & Frances Halsband, Architects v. McKinsey & Co., Inc., 3 N.Y.3d 538, 788 N.Y.S.2d 648 to support its argument that "if the claim is 'essentially a malpractice claim couched in breach of contract terms,' it is a claim for malpractice." Def's Mem. at 3-4 (quoting Kliment, 3 N.Y.3d at 542, 788 N.Y.S.2d 651). Perkins contends that because "the need for Plaintiffs' claim to be supported by expert proof was the focal point of Perkins' [summary judgment] motion," the Court may have "overlooked" the authority cited by Perkins, namely, Kliment. However, counsel's current assertion that Kliment provided controlling authority for its summary judgment motion is belied by the fact that counsel failed to include any discussion of Kliment in its original moving brief. In fact, Perkins did not reference the Kliment decision until pages 8-9 of its Reply Brief [DE 182] and, it is worth noting, such reference was done in the form of a "see" directive as an attempt to distinguish a case cited by Plaintiffs. Kliment was cited for the proposition that "[t]he claim that PEA improperly certified the payment requisitions is not even close to being akin to failing to achieve a particular promised result." DE 182 at 8. In the explanatory parenthetical, Perkins stated that Kliment "[held] that an architect's failure to abide by its contractual obligations to comply with the relevant building codes was a malpractice claim and consistent with an architect's ordinary professional obligations and did not guarantee a particular result." Id. at 9.

Notwithstanding the placement to which Perkins relegated the Kliment citation in its summary judgment papers, this Court did consider Kliment in the context of Perkins' dispositive motion and determined that Kliment did not apply to the circumstances presented there. In reviewing Perkins' motion for reconsideration, the Court has again thoroughly reviewed Kliment. The issue in that case stemmed from an architectural services agreement which provided that disputes arising from the contract would be subject to arbitration. Kliment, 3 N.Y.3d at 540, 788 N.Y.S.2d at 649. Following the building owner's submission of a demand for arbitration, the architect commenced an Article 75 special proceeding for a permanent stay of arbitration, arguing that the claim was barred by the three-year statute of limitations in Article 214(b) with regard to non-medical malpractice actions.*fn2 Id. The issue addressed by the New York Court of Appeals was "whether the breach of a provision in an architectural contract requiring that plans, drawings and specifications comply with applicable building codes is governed by the three-year statute of limitations for malpractice claims or the more generous six-year contract limitations period." Id. at 539, 648. In deciding this issue, the Court of Appeals thoroughly analyzed the C.P.L.R. provision, finding that "[t]he Legislature specifically amended this statute in 1996 to counteract the effect of decisions by this Court that 'abrogat[ed] and circumvent[ed] the original legislative intent' by allowing actions that were technically malpractice actions to proceed under a six-year contract statute of limitations." Id. at 541, 649-50 (citation omitted).

Prior to passage of Article 214(6), New York courts determined the appropriate statute of limitations in non-medical malpractice actions based upon the proposed remedy rather than the theory of liability. Id. at 541, 650 (citations omitted). This resulted in a situation where "parties were permitted to maintain a malpractice action under a breach of contract theory within the six-year statute of limitations, but were limited to damages available in a contract action if the three-year malpractice limitations period had expired." It was this discrepancy which the Legislature sought to correct in passing Article 214(6). Id. The court in Kliment further noted the statute was intended to, inter alia, "reduce potential liability of insurers and corresponding malpractice premiums, and to restore a reasonable symmetry to the period in which all professionals would remain exposed to a malpractice suit." Id. at 542, 649. Even though the claims against the architect involved failure to comply with provisions contained within the architectural agreement,*fn3 the court held the action still fell within the three year statute of limitations. Id. at 542-43, 651. In reaching this decision, the court specifically found that "[a]llowing this claim to proceed would accomplish the precise result the Legislature sought to prevent -- allowing what is essentially a ...


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