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Horizon Asset Management, Inc. v. Duffy

Supreme Court, New York

July 2, 2012

HORIZON ASSET MANAGEMENT, INC., Plaintiff,
v.
RAYMOND V. DUFFY, individually and derivatively on behalf of HORIZON ASSET MANAGEMENT SERVICES, LLC, Defendants and Counterclaim Plaintiffs,
v.
MURRAY STAHL and HORIZON ASSET MANAGEMENT SERVICES, LLC, Counterclaim Defendants Docket No. 602509/08

Unpublished Opinion

For Plaintiff: Schulte Roth & Zabel, LLP

For Defendants: Collier, Halpern, Newberg, Nolletti & Block, LLP

BERNARD J.FRIED, J.

Defendants/counterclaim plaintiffs Raymond V Duffy (Duffy) and Horizon Asset Management Services, LLC (Services) (together, the Duffy Parties) move, pursuant to CPLR 2221 (d), to reargue this court's decision and order dated October 14, 2011, which directed that the issue of damages be tried by a referee, and which directed the referee to hear and report on Duffy's damages from August 2008 to the present, as well as Duffy's future rights under the Operating Agreement. Plaintiffs/counterclaim defendants Horizon Asset Management LLC and Murray Stahl (together, the Stahl Parties) cross- move, pursuant to CPLR 2221 (e), to renew the same order, dated October 14, 2011, wherein I dismissed Horizon's breach of contract claim. The Stahl Parties also cross-move to strike the Duffy Parties' jury demand.

A motion for leave to reargue may be made "based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion" (CPLR 2221 [d]). Such a motion "may be granted only upon a showing that the court overlooked or misapprehended the facts or the law or for some reason mistakenly arrived at its earlier decision" (William P. Pahl Equip. Corp. v Kassis, 182 A.D.2d 22, 27 [1st Dept 1992]) (internal citations omitted).

The motion to reargue is granted only to the extent that the referee is to hear and report on the issue of damages sustained by Duffy, taking into account revenues generated by Horizon Management Services as far back as September 2007, as opposed to August 2008, and continuing to the present, taking into account amounts already paid to Duffy, as well as his future rights under the Operating Agreement.

As to that portion of the motion seeking to have Duffy's damages tried by a jury, the motion is denied. It is well settled that, where a plaintiff asserts equitable causes of action, or asserts both legal and equitable causes of action arising out of the same alleged wrongdoing, or seeks both legal and equitable relief, he waives his right to a jury trial (see Zimmer-Masiello, Inc. v. Zimmer, Inc., 164 A.D.2d 845, 846 [1st Dept 1990]; O'Rorke v Carpenter, 125 A.D.2d 223, 224 [1st Dept 1986]; Kaplan v Long Is. Univ., 116 A.D.2d 508, 509 [1st Dept 1986]). Here, the breach of contract and conversion claims were asserted derivatively, by Duffy on behalf of Services, making them equitable claims (Sakow v 633 Seafood Rest., Inc., 25 A.D.3d 418, 419 [1st Dept 2006], Iv denied, 7 N.Y.3d 701 [2006]; see also 15 NY Jur 2d Business Relationships § 1234). "[Generally, if a matter was historically cognizable at equity, where there were no juries, no right to a jury exists today" (Hudson View II Assoc, v Gooden, 222 A.D.2d 163, 164-165 [1st Dept 1996]). "[T]he derivative action originated at common law as an equitable proceeding by which shareholders could assert claims necessary to protect their interest in a corporation" (Caprer v Nussbaum, 36 A.D.3d 176, 187 [2d Dept 2006]).

With respect to the cross motion, motions for leave to renew are "based upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221 [e] [2]). They may be granted where they "contain reasonable justification for the failure to present such facts on the prior motion" (id., [e] [3]; see Grumman Aerospace Corp. v. Rice, 199 A.D.2d 365 [2d Dept 1993]).

Here, the Stahl Parties have made only vague allegations of "new evidence" in support of their motion to renew. The Stahl Parties do not assert, for example, whether Duffy's alleged failure to service accounts occurred before, or after September 2007, when Duffy was directed to remain off the Horizon premises and to refrain from any communication with potential or existing clients. Moreover, documents submitted by the Duffy Parties indicates that the Stahl Parties were aware of the alleged new information prior to their motion for summary judgment.

That portion of the cross motion to strike the jury demand is denied as moot.

Accordingly, based upon the foregoing, it is

ORDERED that the motion by the defendants/counterclaim plaintiffs to reargue is granted only to the extent that my original order, dated October 14, 2011 is modified to the extent that the referee is to hear and report on defendants/counterclaim plaintiffs damages from September 2007, as opposed to August 2008; and it is further ORDERED that the motion by defendants/counterclaim plaintiffs is otherwise denied; and it is further

ORDERED that the cross motion by plaintiffs/counterclaim defendants to renew and to strike the jury demand is denied.


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