The opinion of the court was delivered by: Ross, United States District Judge:
NOT FOR PRINT OR ELECTRONIC PUBLICATION
On July 30, 2009, plaintiff Safeco Insurance Company of America ("Safeco" or "plaintiff") filed a complaint in the instant case against defendants M.E.S., Inc. ("MES"), M.C.E.S., Inc. ("MCES"), and George Makhoul (collectively, "MES defendants"), and defendants Hirani Engineering & Land Surveying, P.C., Hirani/MES JV, Jitendra S. Hirani, and Sarita Hirani (collectively, "Hirani defendants" and, together with MES defendants, "defendants"). The complaint asserts multiple claims arising from written Indemnity Agreements among the parties. Presently before the court is Safeco's motion for reconsideration of the court's December 17, 2010 Order, Dkt. No. 133. For the reasons set forth below, and to the extent discussed herein, Safeco's motion is granted.
On November 22, 2010, this court held that Safeco is entitled to $6,614,634.41 in collateral security from MES defendants and $4,960,067.44 in collateral security from Hirani defendants. Nov. 22, 2010 Order, Dkt. No. 121, at 27. The court directed defendants to provide Safeco with the requisite collateral security by December 1, 2010. Id.*fn2
By letter dated November 24, 2010, MES defendants asked the court to reconsider its November 22 Order or, in the alternative, to grant a stay of that Order pending defendants' appeal to the Second Circuit. Dkt. No. 122. Hirani defendants joined that request by letter dated November 29, 2010. Dkt No. 123. The court denied defendants' motion for reconsideration on November 30, 2010, but it directed the parties to submit their briefs and supporting documents regarding defendants' motion for a stay. Dkt. No. 125 at 5. The court temporarily stayed its November 22 Order pending its ruling on defendants' motion for a stay pending appeal. Id. at 5.
On December 8, 2010, after it received the parties' submissions regarding defendants' motion for a stay, the court issued an Order to Show Cause. That Order directed the parties to submit briefs to the court regarding why, if this court granted a stay of its November 22 Order pending appeal, it should not also grant Safeco an assignment of claims pursuant to Paragraph 1.d. of the "Security to Surety" section of the Indemnity Agreements.
On December 17, 2010, the court granted defendants' motion for a stay of the court's November 22 Order pending their appeal of that Order to the Second Circuit. Dkt. No. 133 at 26. Prior to issuance of the stay, the court ordered the posting of court-approved bonds in the amount of $200,000.00 by MES defendants and $1,000,000.00 by Hirani defendants. Id. The court directed defendants to post those bonds by December 29, 2010 or to comply with the court's November 22 Order by that date. Id. The court also granted Safeco's motion for enforcement of its right to an assignment of defendants' claims related to the three bonded projects at issue in this litigation, and its right to exercise a power-of-attorney to effectuate that assignment, under the Indemnity Agreements. Id. The court denied defendants' request to stay the enforcement of Safeco's right to an assignment of defendants' claims and its right to a power-of-attorney pending defendants' appeal. Id. The court also denied Safeco's request to stay the entire proceeding pending defendants' appeal. Id.
By letter dated December 22, 2010, Safeco asks the court to reconsider the amount of the $200,000.00 bond imposed upon MES defendant's in the court's December 17 Order. Dkt. No. 137 at 1. Safeco argues that documents provided by MES defendants to Safeco after the court issued that Order demonstrate "that the MES defendants have the financial capacity to post a bond in a substantially higher amount than $200,000." Id. at 1-2. Specifically, Safeco argues that bank records it received from MES defendants on December 21, 2010 show that MES defendants "presently have bank account balances that total nearly $1.4 million." Id. at 2. Safeco argues that this new evidence contradicts "Mr. Makhoul's prior assertion that the MES defendants have a combined total of $800,000 held in bank accounts." Id. Safeco also contends that the court erred by not including the value of certain MES-owned equipment in calculating MES defendants' total assets in its December 17 Order. Id. Although Safeco has placed a lien on this equipment through a Uniform Commercial Code filing, because "MES still retains and owns this equipment," Safeco urges the court to include the alleged $730,000.00 value of this equipment in MES defendants' total assets. Id. When the value of this equipment is added to the approximately $1.4 million dollars in MES defendants' bank accounts and the $200,000.00 of equity in Mr. Makhoul's home, Safeco contends that MES defendants have at least $2.3 million in assets. Id. at 3. Safeco thus argues that the court's finding in its December 17 Order that MES defendants had only $1,029,000.00 in assets was inaccurate. Id. Based on "the true picture of MES Defendants' assets," Safeco asks the court to increase the amount of Safeco's bond from $200,000.00 to $1.5 million. Id. at 3.
By letter dated December 23, 2010, MES defendants make several arguments in response. Dkt. No. 138. First, MES defendants contend that this court "no longer has jurisdiction to adjudicate Safeco's motion for reconsideration." Id. at 2. On December 20, 2010, MES defendants filed with the Second Circuit a notice of appeal of the court's December 17 Order. Id. On December 23, 2010, they filed with that court a motion for a stay of the December 17 Order pending their appeal. Id. MES defendants assert that, in their motion for a stay pending appeal, they specifically challenge the amount of the bond that this court required them to post in its December 17 Order. Id. Thus, MES defendants contend that this court has been "divested of jurisdiction" because MES defendants' "notice of appeal from the court's order and its motion for a stay of the December 17th order unquestionably puts before the Second Circuit . . . the amount of security pending appeal . . . ." Id. Second, MES defendants dispute Safeco's contention that they have more than $2.3 million in assets. Id. MES defendants claim that bank records current as of December 23, 2010 demonstrate that MES defendants have liquid assets of $1,044,905.97, not approximately $1.4 million dollars as Safeco claims. Id. They also note that, in its December 17 Order, the court rejected Safeco's argument that the court should include the value of MES' equipment in calculating MES defendants' total assets. Id. at 1. Thus, MES defendants contend that the total value of MES defendants' assets is far less than $2.3 million and therefore "no increase in the bond requirement is warranted." Id. at 2.
For the reasons that follow, the court holds that it has jurisdiction to adjudicate Safeco's motion for reconsideration. The court grants that motion to a limited extent. Based upon the new evidence submitted by Safeco and MES defendants regarding MES defendants' financial condition, the court finds that a $245,000.00 increase in the amount of MES defendants' bond is justified.
MES defendants contend that this court has been divested of jurisdiction to adjudicate Safeco's motion for reconsideration of the court's December 17 Order. Specifically, MES defendants assert that, because they have filed a notice of appeal and a motion for a stay of the December 17 Order with the Second Circuit, this court no longer has jurisdiction to ...