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Alliance Industries, Inc v. Longyear Holdings

May 18, 2012


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court



Plaintiff, Alliance Industries, Inc. ("Alliance") commenced this diversity action on July 2, 2008 alleging, inter alia, that Defendant Longyear Holdings, Inc., ("Longyear") unlawfully withheld funds from an escrow account pursuant to the sale of Alliance's subsidiary, Prosonic Corp. ("Prosonic"). Longyear answered and asserted eleven counterclaims, alleging that it withheld the funds because Alliance breached the Stock Purchase Agreement ("Agreement"), which memorialized the sale. Each party eventually moved for summary judgment. (Docket Nos. 88, 95.) The Honorable Hugh B. Scott, United States Magistrate Judge, entered a Report and Recommendation advising this Court to grant in part and deny in part Alliance's motion for summary judgment and to deny in full Longyear's motion. (Docket No. 112.) By Decision and Order dated February 28, 2012, this Court adopted in part and set aside in part that Recommendation. (Docket No. 127.) In the Decision, this Court granted Longyear's motion for summary judgment regarding several of Alliance's claims and Longyear's counterclaims. Alliance now moves for reconsideration of that Decision under Fed. R. Civ. P. 59(e). For the following reasons, Alliance's motion is denied.


A. Facts

This Court assumes the parties' familiarity with the underlying facts. Some explanatory factual background, however, remains necessary.*fn1

This action arises from complications surrounding Longyear's full stock purchase of Alliance's subsidiary, Prosonic for $72.5 million. (Pl.'s State. of Facts ¶ 1; Docket No. 91.)*fn2 That purchase was finalized December 6, 2006 by the Agreement. (Id., ¶ 5.)

In September of 2006, a Prosonic employee, covered by Alliance's health insurance, had a child who was born with serious medical ailments.*fn3 (Id., ¶ 30.) Tragically, the child never recovered from these birth defects, and after several months in the hospital, died in December of 2007. (Id.; Def.'s State. of Facts, ¶ 150.)*fn4 According to Longyear, the total medical costs, which ultimately became its responsibility, amounted to nearly $3 million.*fn5 (Def.'s State. of Facts, ¶¶ 142, 149). Longyear had its own insurance policy for these employees, which became effective January 1, 2007. (Id., ¶ 146.) But this policy did not cover the infant's claim because it excluded any dependant of an employee who was already hospitalized at the time the policy began. (Id., ¶¶ 146-147.)

Alliance learned of the child's birth in October of 2006 and by November, it was aware that the medical costs had exceeded $400,000. (Pl.'s State. of Facts, ¶¶ 33, 37; Def.'s State. of Facts, ¶ 107.) However, Alliance did not affirmatively disclose this event as a liability during the purchase negotiations or due diligence period because the liability was covered by its stop-loss insurance. (Pl.'s State. of Facts, ¶ 25.) Pursuant to Alliance's standard accounting practice, health benefit related costs were not booked until the expense was actually incurred. (Id., ¶ 29.) In this case it booked $50,000, but nothing over that amount, because its insurance provider covered the remainder. (Id., ¶¶ 28, 41, 42.)

Longyear contended that Alliance's failure to disclose the infant's claim violated § 2.1(f)(ii) of the Agreement, which provides: "There are no liabilities of [Prosonic] or any [Prosonic] Subsidiary, except: . . . (B) those arising subsequent to September 30 2006, in the ordinary course of business consistent with past practice."


A. "Motion for Reconsideration" Standard

Although the Federal Rules of Civil Procedure do not explicitly provide for "motions for reconsideration," courts typically consider motions of this kind under Fed. R. Civ. P. 59(e). Hill v. Lashburn, No. 08-CV-6285-CJS-JWF, 2011 WL 4807921, at *1 (W.D.N.Y. Oct. 11, 2011) (citing Hamilton v. Williams, 147 F.3d 367, 371 n. 10 (5th Cir. 1998)). "The standard for granting such a motion 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). While district courts may alter or amend judgment "to correct a clear error of law or prevent manifest injustice," Munafo v. Metropolitan Transportation Authority, 381 F.3d 99, 105 (2d Cir. 2004), reconsideration is not a proper tool to repackage and relitigate arguments and issues already considered by the court in deciding the original motion, United States v. Gross, No. 98--CR--0159, 2002 WL 32096592, at *4 (E.D.N.Y. Dec. 5, ...

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