United States District Court, S.D. New York
OPINION AND ORDER
G. SCHOFIELD, District Judge
Jody Kriss and Michael Chu'di Ejekam commenced this
action asserting violations of the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968
(“RICO”), and various state laws. The Court
previously dismissed some claims and one defendant in an
Order and Opinion dated December 2, 2016 (the
“Opinion”), Kriss v. Bayrock Group LLC,
No. 10 Civ. 3959, 2016 WL 7046816 (S.D.N.Y. Dec. 2, 2016).
Defendants Felix Satter; Alex Salomon, Jerry Weinreich and
Salomon & Co., P.C. (collectively, the “Salomon
Defendants”); Elliot Pisem and Roberts & Holland
LLP (collectively, the “R&H Defendants”); and
Mel Dogan timely move for reconsideration of the
Opinion's denial in part of their motion to dismiss the
Third Amended Complaint (“TAC”). For the
following reasons, the R&H Defendants' and
Dogan's motions are granted, and Satter's and the
Salomon Defendants' motions are denied.
with the Opinion, the underlying facts and procedural history
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)
(internal quotation marks omitted). The standard “is
strict, and reconsideration will generally be denied unless
the moving party can point to controlling decisions or data
that the court overlooked.” Analytical Surveys,
Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.
2012) (internal quotation marks omitted). A motion for
reconsideration is “not a vehicle for relitigating old
issues, presenting the case under new theories, securing a
rehearing on the merits, or otherwise taking a second bite at
the apple.” Id. at 52 (internal quotation
marks omitted). The decision to grant or deny a motion for
reconsideration, whether under Local Rule 6.3, Rule 59(e) or
60(a), rests within “the sound discretion of the
district court.” See Aczel v. Labonia, 584
F.3d 52, 61 (2d Cir. 2009).
explained below, Satter's and the Salomon Defendants'
motions are denied, and the R&H Defendants' and
Dogan's motions are granted.
moves for reconsideration of the order to sustain the RICO
claims against him. Satter argues that the Opinion erred in
concluding that (1) the TAC adequately alleges violations of
the National Stolen Property Act, 18 U.S.C. §§
2314, 2315 (“NSPA”), as RICO predicate acts and
(2) Defendants had a duty to disclose three categories of
information under the “special facts doctrine.”
motion is denied to the extent it seeks reconsideration of
the Opinion's conclusion that the TAC adequately alleges
NSPA violations as predicate acts.
Satter argues that Plaintiffs' alleged membership
interests in various Bayrock Entities are not
“securities” within the meaning of the NSPA.
Defendants raised this argument in their motion to dismiss,
but in a single sentence in a footnote with no citations to
case law. That alone is reason to deny reconsideration,
because a motion for reconsideration is not a vehicle to
“plug the gaps of a lost motion.” Almazo v.
M.A. Angeliades, Inc., No. 11 Civ. 1717, 2016 WL
5719748, at *3 (S.D.N.Y. Sept. 29, 2016).
nonetheless argues that reconsideration is warranted
“to correct clear error and prevent manifest
injustice.” Satter does not meet that standard because,
whether or not his reading of the NSPA is correct, it would
not change the outcome of the motion to dismiss. The TAC
alleges multiple instances of mail or wire fraud as RICO
predicate acts, and only two predicate acts are necessary to
state a RICO claim. See 18 U.S.C. § 1961(5);
Kalimantano GmbH v. Motion in Time, Inc., 939
F.Supp.2d 392, 405 (S.D.N.Y. 2013) (predicate acts
requirement satisfied based on several instances of alleged
mail or wire fraud). Also, because the TAC pleads both mail
or wire fraud and NSPA violations for most of the alleged
wrongdoing, dismissing the predicate acts based on NSPA
violations would not narrow the scope of the case.
Satter's motion to reconsider based on the definition of
“securities” is therefore denied, but he may
raise this issue on summary judgment.
Satter argues that Plaintiffs' alleged membership
interests could not be “stolen” or
“converted” within the meaning of the NSPA
because their disposition was governed by contract. To the
extent Satter argues that Plaintiffs' membership
interests had not vested, the Opinion addressed that argument
and explained that it involves factual determinations that do
not go to the sufficiency of the pleadings at issue on a
motion to dismiss. Kriss, 2016 WL 7046816, at *14.
Satter's alternative argument that Plaintiffs did not
have a “present possessory interest” in the
membership interests is not persuasive. The cases Satter
relies on for this argument involved claims for conversion.
See Orchid Constr. Corp. v. Gonzalez, 932 N.Y.S.2d
125, 127 (2d Dep't 2011); Onanuga v. Pfizer,
Inc., No. 03 Civ. 5405, 2003 WL 22670842, at *4
(S.D.N.Y. Nov. 7, 2003). Under New York law,
“[i]ntangible property, such as ownership interests,
generally cannot be converted unless a physical or electronic
record of the intangible property, such as a stock
certificate, is converted.” Kriss, 2016 WL
7046816, at *22 (citing Thyroff v. Nationwide Mut. Ins.
Co., 864 N.E.2d 1272, 1275-78 (N.Y. 2007)). The Opinion
recognized that requirement and dismissed Plaintiffs'
conversion claims. Id. The NSPA, however, applies
not only to property that has been “unlawfully
converted” but also to property that was
“stolen” or “taken.” 18 U.S.C.
§§ 2314, 2315. These concepts are not limited to
the taking of tangible property. See, e.g.,
People v. Barden, 98 ...