United States District Court, E.D. New York
OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF EXETER HOLDING, LTD., Plaintiff,
LINDA HALTMAN, Defendants.
MEMORANDUM & ORDER
pending before the Court are: (1) Defendant Bruce Frank's
motion to dismiss and for reconsideration (Docket Entry 196),
(2) Defendant Elise Frank's motion to dismiss (Docket
Entry 219), and (3) Defendant Bruce Frank's motion to
appoint counsel for his minor children, J.F. and B.F (Docket
Entry 218). For the following reasons, Defendant Bruce
Frank's motion to dismiss and for reconsideration is
DENIED, Defendant Elise Frank's motion to dismiss is
DENIED, and Defendant Bruce Frank's motion to appoint
counsel is DENIED WITHOUT PREJUDICE and with leave to renew.
the Official Committee of Unsecured Creditors
(“Plaintiff”) has requested that the Court: (1)
enter a discovery schedule (Docket Entry 201), (2) issue a
certificate of default against the unrepresented minors and
unrepresented trusts (Docket Entry 221), and (3) hold a
status conference (Docket Entry 238). The requests are
Court assumes familiarity with the facts of this case, which
are detailed in Judge A. Kathleen Tomlinson's Report and
Recommendation dated August 25, 2015 (R&R, Docket Entry
151) and this Court's Orders dated January 12, 2016 and
September 21, 2016 (Docket Entries 171, 225). Briefly,
Plaintiff brought this adversary proceeding against officers,
directors, and insiders of Exeter Holdings, Ltd.
(“Exeter” or “the Company”) following
the commencement of bankruptcy proceedings by Exeter.
(Compl., Docket Entry 3-9, ¶¶ 1-2.) The Defendants
include Arnold Frank and Sondra Frank; their three children
Linda Haltman, Bruce Frank, and Larry Frank; and their
grandchildren, trusts and other entities (collectively
“Defendants”). (Compl. ¶¶ 16-70.)
Plaintiff alleges that Defendants defrauded Exeter's
creditors by transferring funds to themselves, trusts, and
other entities they control and seeks to recover
approximately $29 million. (Compl. ¶¶ 3-7.)
Bruce Frank's Motion to Dismiss and For
February 2, 2015, Plaintiff filed a motion for sanctions for
spoliation of evidence. (Pl.'s Mot., Docket Entry 92.)
The undersigned referred the motion to Judge Tomlinson. Her
R&R recommended that the Court grant the motion in part
and issue an adverse inference at trial that the jury
“may infer that the spoliated evidence was largely
damaging to defendants.” (R&R, Docket Entry 151, at
43.) Several Defendants filed objections to Judge
Tomlinson's R&R, including Bruce Frank (“Mr.
Frank”); however, the Court overruled the objections
and adopted the R&R in its entirety. (Jan. 12, 2016
Order, Docket Entry 171, at 1.) Two of the individual
Defendants, Linda and Michael Haltman, subsequently filed a
motion for reconsideration of the sanctions decision.
(Haltman Mot., Docket Entry 175.) The motion for
reconsideration was denied. (Sept. 21, 2016 Order, Docket
April 25, 2016, Mr. Frank filed a “Request to be
dismissed in the motion of spoliation.” (Frank
Spoliation Mot., Docket Entry 196.) He argues that he was
listed as a defendant in the spoliation motion, but has
“never been an employee, manager, or officer of
Exeter.” (Frank Spoliation Mot. at 1.) Additionally, he
maintains that he never accessed any of Exeter's
computers or data, and that as far as he understands, no
files were deleted. He also requests that the Court instruct
Plaintiff to discontinue the case against him. (Frank
Spoliation Mot. at 1.)
for reconsideration are governed by Rules 59(e) and 60(b) of
the Federal Rules of Civil Procedure and Local Rule 6.3.
See Wilson v. Pessah, No. 05-CV-3143, 2007 WL
812999, at *2 (E.D.N.Y. Mar. 14, 2007). A motion for
reconsideration is appropriate when the moving party believes
that the Court overlooked important facts or controlling law
in a prior decision. Shamis v. Ambassador Factors
Corp., 187 F.R.D. 148, 151 (S.D.N.Y. 1999). However, a
motion for reconsideration is not a proper tool to relitigate
arguments and issues already considered by the Court in
deciding the original motion. See United States v.
Gross, No. 98-CR-0159, 2002 WL 32096592, at *4 (E.D.N.Y.
Dec. 5, 2002) (“A party may not use a motion to
reconsider as an opportunity to reargue the same points
raised previously.”). Nor is it proper to raise new
arguments and issues. See Lehmuller v. Inc. Vill. of Sag
Harbor, 982 F.Supp. 132, 135 (E.D.N.Y. 1997).
Reconsideration may only be granted when the Court failed to
evaluate controlling legal authority or facts
“‘that might reasonably be expected to alter the
conclusion reached by the court.'” Wechsler v.
Hunt Health Sys., 186 F.Supp.2d 402, 410 (S.D.N.Y. 2002)
(quoting Davidson v. Scully, 172 F.Supp.2d 458, 461
Frank appears to argue that the Court should reconsider its
decision to impose sanctions. However, the Court declines to
do so. Judge Tomlinson's R&R and this Court's
prior Orders carefully considered this issue, including the
alternative reasons offered by Defendants for the data loss.
Moreover, Mr. Frank offers no new facts or controlling law
that would cause this Court to revisit that decision.
Finally, the Court declines to instruct Plaintiff to dismiss
Mr. Frank as a defendant in this action. Accordingly, Mr.
Frank's motion to dismiss and for reconsideration (Docket
Entry 196) is DENIED.
Elise Frank's Motion to Dismiss
August 2, 2016, Defendant Elise Frank (“Ms.
Frank”) filed a request to be dismissed from this case.
(Frank Dismissal Mot., Docket Entry 219.) She argues that she
“was a minor during the time period that the events
took place in this action” and has “never
received any money directly or indirectly for [her] benefit
from Exeter Holding, Ltd.” (Frank Dismissal Mot. at 1.)
She contends that she was an investor in Exeter but never
received any distribution of that investment.
August 17, 2016, Plaintiff opposed the motion and argued that
Ms. Frank's motion was duplicative of an earlier filed
motion to dismiss which remains sub judice.
(Pl.'s Opp., Docket Entry 222, at 1.) The Court agrees.
Upon review, it appears that the prior motion to dismiss,
which was originally filed in the Bankruptcy Court, was
improperly docketed. Although this Court directed that it be
docketed, the motion was not docketed separately nor was it
filed as a motion.
of background, Plaintiff commenced this matter in the
Bankruptcy Court in the Eastern District of New York on
October 23, 2012. (Adversary Proceeding 12-8401, Compl.,
Docket Entry 1.) On January 11, 2013, numerous Defendants,
including Ms. Frank, filed a motion to dismiss. (Adversary
Proceeding 12-8401, Mot. to Dismiss, Docket Entry 9.) Before
the motion could be determined, Plaintiff filed a motion to
withdraw the reference to the bankruptcy court. (Mot. to
Withdraw Reference, Docket Entry 1.) On September 18, 2013,
this Court granted the motion and held that the matter would
proceed in this Court. (Sept. 18, 2013 Order, Docket Entry
2.) In that Order, the Court directed the parties to file a
joint letter attaching as exhibits the relevant filings from
the Bankruptcy Court docket and directed the Clerk of the
Court to docket the filings. (Order at 3-4.) They were never
separately docketed. Further, the parties did not indicate in
their correspondence to the Court that the motion was pending
and inexplicably failed to bring the motion to the
Court's attention until Ms. Frank filed the instant
the Court finds that Ms. Frank's motion to dismiss is
duplicative and her motion (Docket Entry 219) is DENIED. The
Clerk of the Court is directed to docket Defendants'
motion to dismiss and related briefing (Docket Entries 3-5,
3-6, 3-7, 3-8) as separate entries, designating ...