United States District Court, S.D. New York
Cornelia Fifth Avenue, LLC and GVK Limited Partners, Plaintiffs,
Michael Canizales, Harris Mylonas, Allen Hunt, Christopher Condy, and Paul O'Beirne, Defendants.
OPINION & ORDER
L. CARTER, JR., District Judge
Cornelia Fifth Avenue, LLC and GVK Limited Partners
(collectively "Plaintiffs") bring suit against Spa
Chakra, Inc. ("Spa Chakra") and its Board Members
Michael Conizales, Harris Mylonas, Allen Hunt, Christopher
Condy, and Paul O'Beirne (collectively
"Defendants"). The suit arises out of the
negotiation and execution of the February 2009 Asset Purchase
Agreement (the "APA") between Plaintiff Cornelia
Fifth Avenue, LLC ("Cornelia") and a non-party Spa
Chakra Fifth Avenue, LLC ("Spa Chakra Fifth"), a
wholly-owned subsidiary of Spa Chakra. The APA concerned the
assets of a luxury spa operated by Cornelia, located on Fifth
Avenue in New York City. By the time of negotiation of the
APA, Plaintiff Cornelia was suffering from severe financial
difficulties and had defaulted on almost all of its debts -
including its debt to its largest secured creditor, Plaintiff
GVK Limited Partners ("GVK"). GVK had secured its
loan by taking a security interest in all of Cornelia's
assets, giving GVK the power to block any sale of Cornelia.
In light of Cornelia's default, GVK had begun
contemplating foreclosing on its security interest in
Cornelia's assets. Thus, GVK's approval was a
necessary prerequisite for Cornelia to enter into any
order to induce GVK to forebear from foreclosing on
Cornelia's assets so that Spa Chakra could purchase the
assets, two Spa Chakra Board Members, Defendants Michael
Canizales and Christopher Condy, issued a guaranty, promising
that Spa Chakra Fifth and Spa Chakra would make scheduled
interest and principle payments to GVK until Cornelia's
loan was repaid. Shortly after the APA was executed, Spa
Chakra Fifth and Spa Chakra failed to make the promised
payments. Plaintiffs filed suit.
to Plaintiffs, throughout the period of negotiations and
closing, Defendants, each directors of Spa Chakra, made or
approved the making of fraudulent misrepresentations to
Plaintiffs Cornelia and GVK. Both, Plaintiffs detrimentally
relied upon these alleged misrepresentations - GVK by
agreeing to forbear on foreclosure and Cornelia by signing
over the assets of its Manhattan spa. Plaintiffs assert that
both were damaged as a result. Together, Plaintiffs seek
redress for Defendants' allegedly fraudulent
misrepresentations, asserting claims for New York common law
fraud, fraudulent concealment, constructive fraud, aiding and
abetting fraud, negligent misrepresentation, and breach of
the covenant of good faith and fair dealing.
moved for summary judgment on each of Plaintiffs' claims
and Plaintiffs cross-moved for summary judgment as to minimum
damages. The Court denied both parties' motions.
Cornelia Fifth Ave., LLC v. Canizales, 2016 WL
5390894, at *1 (S.D.N.Y. Sept. 26, 2016) (the
"Opinion"). Defendants now move for reconsideration
on the issue of damages pursuant to Federal Rule of Civil
Procedure 59(e) and Local Rule 6.3. For the reasons set forth
below, Defendants' motion for reconsideration is
ask the Court to reconsider their arguments contained within
Defendants' summary judgment briefing and dismiss each
and every cause of action against each of the Defendants.
According to Defendants, the Opinion contained an error of
law that necessitates reconsideration because the Court
failed to specifically address the controlling case law
regarding the economic loss doctrine. Defendants contend that
the Court should have granted summary judgment in favor of
Defendants because the economic damages sought by Plaintiffs
are inappropriate contract damages, rather than appropriate
tort damages. Defendants' argument is without merit.
initial matter, Local Rule 6.3 provides that "a notice
of motion for reconsideration . .. shall be served ... in the
case of a court order resulting in a judgment, within
fourteen (14) days after the entry of the judgment."
Defendants' motion for reconsideration was timely filed.
Under Federal Rule of Civil Procedure 59(e), reconsideration
of a previous order by the court lies squarely within the
court's sound discretion. See Devlin v. Transp.
Comm'ns Int'l Union, 175 F.3d 121, 132 (2d Cir.
of a prior order under Federal Rule of Civil Procedure 59(e)
"is an extraordinary remedy to be employed sparingly in
the interests of finality and conservation of scarce judicial
resources." Ferring B.V. v. Allergan. Inc.,
2013 WL 4082930, at *1 (S.D.N.Y. Aug. 7, 2013) (quoting
Sikhs for Justice v. Nath, 893 F.Supp.2d 598, 605
(S.D.N.Y. 2012)). For that reason, the standard of review
applicable to such a motion is "strict."
Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d
burden is on the movant to demonstrate that the Court
overlooked controlling decisions that were before it on the
original motion, and that might '"materially have
influenced its earlier decision.'" Anglo Am.
Ins. Group v. Cal Fed, Inc., 940 F.Supp. 554, 557
(S.D.N.Y. 1996) (quoting Morser v. AT & T Info.
Sys., 715 F.Supp. 516, 517 (S.D.N.Y. 1989)); see
also Analytical Surveys, Inc. v. Tonga Partners, L.P.,
684 F.3d 36, 52 (2d Cir. 2012) ("[T]he standard for
granting [a motion for reconsideration] is strict, and
reconsideration will generally be denied unless the moving
party can point to controlling decisions or data that the
court overlooked."); Virgin Atl. Airways, Ltd. v.
Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.
1992)); Schoolcraft v. City of New York, 298 F.R.D.
134, 136 (S.D.N.Y. 2014); Parrish v. Sollecito, 253
F.Supp.2d 713, 715 (S.D.N.Y. 2003).
seeking reconsideration may neither repeat "arguments
already briefed, considered and decided, " nor
"advance new facts, issues or arguments not previously
presented to the Court." Schonberger v.
Serchuk, 742 F.Supp. 108, 119 (S.D.N.Y. 1990) (citations
The Court Did Not Commit ...