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Gramercy Advisors, LLC v. Ripley

United States District Court, S.D. New York

November 12, 2014

GRAMERCY ADVISORS, LLC and GRAMERCY GLOBAL RECOVERY FUND, LLC, Plaintiffs,
v.
ROBERT RIPLEY, FRANCES RIPLEY, THE ROBERT L. RIPLEY LIVING TRUST, ROBERT RIPLEY as trustee for the Robert L. Ripley Living Trust, and CARY INVESTMENTS, LLC, Defendants

For Gramercy Advisors LLC, Gramercy Global Recovery Fund, LLC, Plaintiffs: Michael Edward Petrella, Sean F. O'Shea, O'Shea Partners, LLP, New York, NY.

For Robert Ripley, Frances Ripley, the Robert L. Ripley Living Trust, as trustee for the Robert L. Ripley Living Trust, Defendants: David R. Deary, W. Ralph Canada, Wilson Edward Wray, PRO HAC VICE, Loewinsohn Flegle Deary, LLP, Dallas, TX; Jeven R. Sloan, Loewinsohn Flegle Deary, LLP, Dallas, TX; Neal Matthew Sher, Law Office: Neal M. Sher, New York, NY.

For Cary Investments LLC, Defendant: Neal Matthew Sher, LEAD ATTORNEY, Law Office: Neal M. Sher, New York, NY; David R. Deary, W. Ralph Canada, Wilson Edward Wray, PRO HAC VICE, Loewinsohn Flegle Deary, LLP, Dallas, TX; Jeven R. Sloan, Loewinsohn Flegle Deary, LLP, Dallas, TX.

MEMORANDUM OPINION AND ORDER

VALERIE CAPRONI, United States District Judge.

The Court assumes the parties' familiarity with the facts of the case and directs readers to its prior opinion. See Dkt. 57, Gramercy Advisors, LLC v. Ripley, No. 13-CV-9070(VEC), 2014 WL 4188099 (S.D.N.Y. Aug. 25, 2014) (" Ripley I "). Defendants move for reconsideration of the Court's August 25, 2014 Opinion denying in part their Motion to Dismiss the First Amended Complaint (" FAC") or, in the alternative, for certification of that Opinion to the Court of Appeals pursuant to 28 U.S.C. § 1292(b). Dkt. 62. For the following reasons, Defendants' motion is DENIED.

DISCUSSION

I. Defendants' Motion for Reconsideration Is Denied

Defendants first seek reconsideration of the Court's August 25, 2014 Opinion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure and Rule 6.3 of the Local Civil Rules. " A motion for reconsideration should be granted only when the defendant identifies 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2013) (quoting Virgin A. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)). These requirements are not to be taken lightly; " [t]he Second Circuit has instructed that Rule 60(b) provides 'extraordinary judicial relief' and can be granted 'only upon a showing of exceptional circumstances.'" Kubicek v. Westchester Cnty., No. 08-CV-372(ER), 2014 WL 4898479, at *1 (S.D.N.Y. Sept. 30, 2014) (quoting Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986)).

Defendants do not purport to identify a change in law or the availability of new evidence but assert that there are two errors with the Ripley I opinion that merit reconsideration. First, Defendants urge that the liability cap provision of the Investment Management Agreement (" IMA"), FAC Ex. A § 7(h), trumps the survival provision of the IMA, id . § 7(g). See Ripley I, 2014 WL 4188099, at *3, *9. Second, Defendants contend that the IMA does not unmistakably provide for indemnification for inter-party suits. See id. at *10. The Court is unpersuaded; Defendants' motion for reconsideration is denied.

A. The Recovery Cap in Section 7(h)

Defendants contend, as they did in their Motion to Dismiss, that Section 7(h) of the IMA limits their liability to zero dollars. In their Motion for Reconsideration, Defendants now rely on the first word in Section 7(h) -- " [n]otwithstanding" -- arguing that any other potential ambiguities in the language are solved by this one participial preposition.[1] They did not advance this argument in their Motion to Dismiss, see Dkt. 35 at 4-5, 19-20; Plaintiffs contend that Defendants have therefore forfeited this argument by failing to advance it in their initial papers, Mem. Opp. at 5-6; see, e.g., Deng v. 278 Gramercy Park Grp., LLC, No. 12-CV-7803(DLC), 2014 WL 4996255, at *1 (S.D.N.Y. Oct. 7, 2014) (" [A] party moving for reconsideration may not advance new facts, issues, or arguments not previously presented to the Court.") (quotation marks and citation omitted). The Circuit has consistently reaffirmed this principle, although noting that it does have the discretion to decide purely legal issues that were waived. See, e.g., Sompo Japan Ins. Co. of Am. V. Norfolk S. Ry. Co., 762 F.3d 165, 188 (2d Cir. 2014) (" The Railroads waived their principal argument . . . because they raised that argument for the first time in their second motion for reconsideration."); Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 53 (2d Cir. 2012) (the Circuit " generally will not consider an argument on appeal that was raised for the first time below in a motion for reconsideration") (quotation marks and alteration omitted); Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 159 (2d Cir. 2003); Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Stroh Cos., Inc., 265 F.3d 97, 115 (2d Cir. 2001); Randell v. United States, 64 F.3d 101, 109 (2d Cir. 1995); Caribbean Trading and Fid. Corp. v. Nigerian Nat'l Petrol. Corp., 948 F.2d 111, 115 (2d Cir. 1991).[2]

Defendants concede that insofar as they did not raise their argument in the motion to dismiss briefing it is forfeited. Reply at 2 (quoting Mohsen v. Morgan Stanley & Co., No. 11-CV-6751(PGG), 2014 WL 4593919, at *3 (S.D.N.Y. Sept. 15, 2014)). As a result, the Court must evaluate Defendants' assertion that the " notwithstanding" argument was raised in their briefing papers on the motion to dismiss. Id. at 1-2. Defendants identify four pages in their motion papers that they claim addressed the scope of the " notwithstanding" clause. Id. (citing Dkt. 35 at 3, 17, and 20 n.13, and Dkt. 50 at 3).

First, in the " brief factual and procedural background" section of their brief, Defendants quoted Section 7(h) in its entirety. Dkt. 35 at 3. This does not preserve the argument that its language must be read as trumping Section 7(g)'s survival clause (or any other argument for that matter, as it simply quotes the IMA). Second, on page 17 the brief again quotes Section 7(h) in its entirety. Because it contains no argument about the interaction of that section with other parts of the IMA, it did not preserve the argument Defendants are now making. Id. at 17.

Footnote 13 asserts, without citation to authority, that " Plaintiffs' argument that the 'survival' language of paragraph 7(g) of the IMA trumps paragraph 7(h) is belied by the opening language of 7(h): 'Notwithstanding anything in this Agreement to the contrary ....'" Id. at 20 n.13. There are several problems with Defendants' assertion that this single sentence preserves their current argument. First, courts generally do not consider an argument mentioned only in a footnote to be adequately raised. Niagara Mohawk Power Corp. v. Hudson River-Black River Regulating Dist., 673 F.3d 84, 107 (2d Cir. 2012); see also Gross v. Rell, 585 F.3d 72, 95 (2d Cir. 2009); Tolbert v. Queens Coll., 242 F.3d 58, 75 (2d Cir. 2001); Norton v. Sam's Club, 145 F.3d 114, 117 (2d Cir. 1998) (" [A]n argument made only in a footnote was inadequately raised."); United States v. Restrepo, 986 F.2d 1462, 1463 (2d Cir, 1993). The absence of citations to authority further supports the Court's conclusion that this argument was not properly raised. Finally, Defendants' language failed to address Plaintiffs' argument, which was not that Section 7(g) " trumps" Section 7(h), but rather that Defendants' interpretation of Section 7(h) would needlessly render Section 7(g) meaningless and therefore render the contract " absurd." Dkt. 47 at 18 (citing Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992)). While Defendants now argue that the canon of interpretation affording " notwithstanding" ...


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