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Krantz & Berman, LLP v. Dalal

July 6, 2010


The opinion of the court was delivered by: Denise Cote, District Judge


Defendant Sandeep Dalal ("Dalal") moves for reconsideration of the May 11, 2010 Opinion and Order denying Dalal's motion to dismiss and granting plaintiff Krantz & Berman LLP's ("K&B") cross-motion to compel arbitration of its breach of contract and quantum meruit claims. See Krantz & Berman, LLP v. Dalal, No. 09 Civ. 9339 (DLC), 2010 WL 1875695 (S.D.N.Y. May 11, 2010) (the "May 11 Opinion"). For the following reasons, Dalal's motion is denied.


The Court assumes the parties' familiarity with the relevant facts and procedural history. This action concerns efforts by K&B to recover legal fees it claims it is owed by Dalal, its former client, pursuant to a March 7, 2002 Retainer Agreement (the "Retainer Agreement"), for services rendered in connection with related litigation before this Court. The Retainer Agreement contains an arbitration clause, which provides:

In the event that a dispute concerning fees arises under this agreement, any such dispute shall be resolved by arbitration and each party specifically waives its right to a jury trial. The arbitration shall be brought in New York County and the laws of the State of New York shall apply to any dispute. The interpretation of the choice of law provision in the arbitration clause is the principal source of the instant dispute between the parties.

Following a bench trial in the related litigation, during which Dalal was represented by K&B, judgment was entered in favor of Dalal in December 2002. On November 6, 2003, while the December 2002 judgment was on appeal, Dalal allegedly discharged K&B as his counsel. On November 11, K&B sent an invoice to Dalal for $288,264.50 for legal services rendered and unreimbursed expenses.*fn1 Dalal refused to pay. On March 2, 2004, K&B filed a Demand for Arbitration with the American Arbitration Association ("AAA"). Dalal did not consent to arbitration and the AAA closed its file.

Meanwhile, Dalal continued to press his claims in the related litigation before this Court and the Court of Appeals for the Second Circuit. Pursuant to an April 28, 2009 remand from the Court of Appeals, judgment was entered in Dalal's favor for $1,482,346.75, including interest, on December 31, 2009.*fn2

On November 10, 2009, K&B filed the complaint in the instant action against Dalal, asserting claims for breach of contract, quantum meruit, and for a charging lien pursuant to N.Y. Judiciary Law § 475. On November 30, Dalal filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(5), and 12(b)(6), or, in the alternative, for summary judgment pursuant to Fed. R. Civ. P. 56. On January 29, 2010, K&B filed its opposition to Dalal's motion, as well as a cross-motion to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq. The motions became fully submitted on March 5. On March 10, Dalal submitted an unauthorized surreply.

The May 11 Opinion found that service of process was sufficient and therefore denied Dalal's motion to dismiss for lack of personal jurisdiction. K&B's cross-motion to compel arbitration was granted. Pursuant to the arbitration clause in the Retainer Agreement, the parties were directed to submit K&B's breach of contract and quantum meruit claims to arbitration under AAA rules. The May 11 Opinion found that Dalal's statute of limitations defense had to be decided by the arbitrator because the arbitration provision did not evince an intent by the parties to be bound by New York's procedural rules. May 11 Opinion, 2010 WL 1875695, at *5. K&B's claim for a charging lien was stayed pending the outcome of the arbitration.

On May 25, Dalal timely moved for reconsideration of the May 11 Opinion.*fn3 Dalal also requested leave to file an affidavit related to service of process, which was denied pursuant to Local Civil Rule 6.3 by Order dated May 28.*fn4 Dalal's principal argument is that the May 11 Opinion improperly relied on the New York Court of Appeals' decision in Diamond Waterproofing Sys., Inc. v. 55 Liberty Owners Corp., 826 N.E.2d 802 (N.Y. 2005) ("Diamond Waterproofing"), when it concluded that the arbitrator, rather than the Court, should determine whether K&B's breach of contract and quantum meruit claims are time-barred. Dalal also argues that the May 11 Opinion should not have compelled arbitration because that relief was not demanded in the complaint and because K&B waived its right to arbitration by filing this action. K&B filed its opposition on June 16 and the motion became fully submitted on June 25. On June 25, Dalal also filed a motion styled as "Motion for Stay of Arbitration Pending Final Disposition of Arguments" in which he seeks a stay of the arbitration pending a decision on his motion for reconsideration.


The standard for reconsideration is strict. "Generally, motions for reconsideration are not granted 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." In re BDC 56 LLC, 330 F.3d 111, 123 (2d Cir. 2003) (citation omitted). "[A] motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Likewise, a party moving for reconsideration may not "advance new facts, issues, or arguments not previously presented to the Court." Nat'l Union Fire Ins. Co. of Pittsburgh v. Stroh Cos., Inc., 265 F.3d 97, 115 (2d Cir. 2001) (citation omitted). The decision to grant or deny the motion for reconsideration is within "the sound discretion of the district court." Aczel v. Labonia, 584 F.3d 52, 61 (2d Cir. 2009) (citation omitted). Dalal's motion fails to meet this standard.

First of all, Dalal's argument concerning the applicability of Diamond Waterproofing, 826 N.E.2d 802, is identical to an argument made in his unauthorized March 10 surreply. Dalal argues that the proper controlling precedent is, instead, Smith Barney, Harris Upham & Co., Inc. v. Luckie, 647 N.E.2d 1308 (N.Y. 1995) ("Luckie"). The May 11 Opinion acknowledged Dalal's surreply, but concluded that "[n]one of [the] arguments therein would alter the conclusion reached in [the] Opinion." May 11 Opinion, 2010 WL 1875695, at *2 n.3. Thus, because Dalal "seeks solely to relitigate an issue already decided," Shrader, 70 F.3d at 257, his motion for reconsideration on this ground must be denied.

In any event, Dalal's assertion that Diamond Waterproofing does not control here is simply incorrect. As the May 11 Opinion stated, the New York Court ...

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