United States District Court, S.D. New York
CHRISTINE SVENNINGSEN, 33 PROSPECT HILL ROAD, LLC, 34 PROSPECT HILL ROAD, LLC, AUTO I, LLC, BELDENS ISLAND, LLC, CUT-IN-TWO EAST, LLC, CUT-IN-TWO WEST, LLC, EAST CRJB ISLAND, LLC, GUILFORD DOCKOMINTUM I, LLC, HOME PALACE, LLC, JEPSON ISLAND, LLC, LINDEN POINT, LLC, REEL ISLAND, LLC, ROGERS ISLAND, LLC, SNOW PALACE, LLC, THE OLD ADAMS HOUSE, LLC, WEST CRIB ISLAND, LLC, WHALER I, LLC, and WHEELER ISLAND, LLC, Plaintiffs,
ULTIMATE PROFESSIONAL GROUNDS MANAGEMENT, INC., doing business as ULTIMATE SERVICES PROFESSIONAL GROUNDS MANAGEMENT, JOHN G. CHIARELLA, JR., DOMENIC A. CHIARELLA, and ULTIMATE SERVICES PROFESSIONAL GROUNDS MANAGEMENT, INC., Defendants.
OPINION & ORDER
S. ROMAN United States District Judge
Ultimate Professional Grounds Management, Inc.
("Ultimate") seeks reconsideration of this
Court's March 31, 2017 Opinion and Order (the
"Opinion") (ECF No. 167) resolving the parties'
cross-summary judgment motions. Ultimate argues the Court
should have dismissed the Property LLC Plaintiffs'
remaining claims on the bases of judicial estoppel and lack
of standing. (See Def. Reply at 1, 6, ECF No. 174.)
But, as the Property LLCs correctly observe (see
Pis. Opp'n at 6-11, ECF No. 172), neither of
Ultimate's positions are correct. Familiarity with the
Opinion and the factual background of this action is assumed.
of a Court's previous order is “an extraordinary
remedy to be employed sparingly in the interests of finality
and conservation of scarce judicial resources.” In
re Initial Pub. Offering Sec. Litig., 399 F.Supp.2d 298,
300 (S.D.N.Y. 2005) (internal citation and quotation
omitted), aff'd sub nom. Tenney v. Credit Suisse
First Boston Corp., Nos. 05 Civ. 3430, 05 Civ. 4759
& 05 Civ. 4760, 2006 WL 1423785, at *1 (2d Cir. 2006).
Motions for reconsideration are governed by Local Civil Rule
6.3 and Federal Rule of Civil Procedure 60(b), and
“[t]he standard for granting a motion for
reconsideration . . . is strict.” Targum v. Citrin
Cooperman & Company, LLP, No. 12 Civ. 6909 (SAS),
2013 WL 6188339, at *1 (S.D.N.Y. Nov. 25, 2013). Motions for
reconsideration are “addressed to the sound discretion
of the district court and are generally granted only upon a
showing of exceptional circumstances.” Mendell ex
rel. Viacom, Inc. v. Gollust, 909 F.2d 724, 731 (2d Cir.
a motion to reconsider “is not a vehicle for . . .
presenting the case under new theories . . . or otherwise
taking a second bite at the apple.” Analytical
Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52
(2d Cir. 2012) (quotation and citation omitted); see also
Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Stroh
Cos., 265 F.3d 97, 115 (2d Cir. 2001) (quoting
Polsby v. St. Martin's Press, No. 97 Civ. 0690
(MBM), 2000 WL 98057, at *1 (S.D.N.Y. Jan. 18, 2000)) (in
moving for reconsideration, “‘a party may not
advance new facts, issues, or arguments not previously
presented to the Court.'”). Generally, these
motions “‘will  be denied unless the moving
party can point to controlling decisions or data that the
court overlooked.'” Analytical Surveys,
684 F.3d at 52 (quoting Shrader v. CSX Transp.,
Inc., 70 F.3d 255, 257 (2d Cir. 1995)).
admonition to avoid making motions for reconsideration absent
“extraordinary” circumstances-such as
“point[ing] to controlling decisions or data that the
court overlooked, ” Shrader, 70 F.3d at
257-has not deterred Ultimate from asking for reconsideration
in this case. Primarily, Ultimate argues that the Court
“overlooked” its seven page argument regarding
the application of judicial estoppel to Plaintiff
Svenningsen's claims and its lengthy footnote argument
that the Property LLC Plaintiffs were similarly estopped or
lacked standing to assert claims against Ultimate.
(See Def. Mem. at 2, ECF No. 169.) What Ultimate
does not do, however, is point to controlling precedent or
information that the Court neglected to consider.
Opinion, this Court decided that Svenningsen and Chiarella
had mutually waived claims against each other by virtue of
their divorce agreement. (Opinion at 24; Svenningsen v.
Ultimate Prof'l Grounds Mgmt., Inc., No. 14 Civ.
5161 (NSR), 2017 WL 1234040, at *12 (S.D.N.Y. Mar. 31,
2017).) The Court concluded that the LLCs, not parties to
that personal divorce, could not be held to the same waiver.
(Id.; Svenningsen, 2017 WL 1234040, at
*12.) The Court then held that Ultimate's remaining
arguments were either “unnecessary” or
“unpersuasive.” (Id. at 25;
Svenningsen, 2017 WL 1234040, at *13.) Though
Ultimate appears to think the word “unpersuasive”
was the only instance in which the Court dismissed its other
arguments against the LLCs, the Court also indicated that:
(1) Ultimate's arguments regarding “statute of
limitations and waiver  address[ed] a significant portion
of Plaintiffs' claims in th[e] action;” (2)
“Defendants' remaining arguments d[id] not impact
the remaining viable claims;” and, specifically, (3)
Ultimate did not “articulate any viable
defenses to claims brought by the LLCs.” (Id.
at 11, 24; Svenningsen, 2017 WL 1234040, at *6,
12-13 (emphasis added).)
failing to demonstrate its entitlement to reconsideration,
the Court will explain in greater detail why Ultimate's
arguments were unpersuasive, i.e., why judicial
estoppel does not apply to the Property LLCs' claims and
why the LLCs have standing to pursue this action.
Judicial Estoppel Does Not Apply to the LLCs Claims
Connecticut law, the law applicable to this action, judicial
estoppel requires that “(1) ‘a party's later
position is clearly inconsistent with its earlier
position, ' (2) ‘the party's former position
has been adopted in some way by the court in the earlier
proceeding, ' and (3) ‘the party asserting the two
positions would derive an unfair advantage against
the party seeking estoppel.'” Barton v. City of
Norwalk, 326 Conn. 139, __ A.3d __, at *9 (2017)
(quoting Dep't of Transportation v. White Oak
Corp., 319 Conn. 582, 612 (2015) and citing Dougan
v. Dougan, 301 Conn. 361, 372-73 (2011); DeRosa v.
National Envelope Corp., 595 F.3d 99, 103 (2d Cir.
2010)) (emphasis added). “[G]enerally speaking, the
doctrine will not apply ‘if the first statement or
omission was the result of a good faith mistake . . . or an
unintentional error.'” Id. (citation
omitted). And, “[l]ike all equitable remedies, judicial
estoppel requires the party invoking the doctrine to do so
with clean hands.” David M. Somers & Assocs.,
P.C. v. Kendall, 1 A.3d 217, 220 (Conn. App. Ct. 2010).
Furthermore, where the parties in the two proceedings differ,
the Court must determine whether they are in sufficient
privity for the doctrine to apply. See Central Hudson Gas
& Elec. Corp. v. Empresa Naviera Santa S.A., 56 F.3d
359, 368 (2d Cir. 1995) (for res judicata purposes,
determination of whether party is in privity with former
litigant requires court to inquire whether “party
controlled or substantially participated in the control of
the presentation on behalf of a party to the prior
action” and that its interests were “identical to
the interests” of former litigant) (internal quotation
marks and alterations omitted).
the bankruptcy context, the federal courts have developed a
basic default rule: If a plaintiff-debtor omits a pending (or
soon-to-be-filed) lawsuit from the bankruptcy schedules and
obtains a discharge (or plan confirmation), judicial estoppel
bars the [pending] action.” Ah Quin v. Cty. of
Kauai Dep't of Transp., 733 F.3d 267, 271 (9th Cir.
2013); see BPP Illinois, LLC v. Royal Bank of Scotland
Grp. PLC, 859 F.3d 188, 192 (2d Cir. 2017)
(“Judicial estoppel will ‘prevent a party who
failed to disclose a claim in bankruptcy proceedings from
asserting that claim after emerging from
bankruptcy.'”) (citations omitted); see,
e.g., In re Crossover Fin. I, LLC, 477 B.R.
196, 204 (Bankr. D. Colo. 2012) (noteholders took
“positions to suit their litigation tactics regardless
of whether they conflict[ed] with each other”). The
doctrine has similarly been applied to an LLC as a result of
a position previously taken by its sole owner-member during a
personal bankruptcy. See, e.g., Patriot Mfg. LLC
v. Hartwig, Inc., No. 10 Civ. 1206 (EFM) (KGG), 2014 WL
4538059, at *1 (D. Kan. Sept. 11, 2014) (plaintiff's
“sole member” omitted “his ownership
interest in [the plaintiff LLC] or th[e] lawsuit in his
personal bankruptcy filing, ” requiring application of
judicial estoppel to LLC's breach of contract claims).
of the doctrine is more nuanced in a case, such as this,
where the parties have intertwined their personal and
professional matters. The thrust of Ultimate's argument
at summary judgment was that judicial estoppel should apply
to the LLCs', as well as Svenningsen's, claims
“as a matter of equity and public policy, ”
because “[i]f parties could circumvent the court and
avoid the consequences of judicial estoppel simply by
bringing the same claims on behalf of their solely owned
LLCs, they would be free to advance inconsistent positions in
different courts with impunity, rendering the doctrine
powerless.” (Def. S.J. Mem., at 8 n.3; see also
Id. at 2 (“Christine, either personally or through
her solely owned  LLCs, should not be permitted to now take
a completely inconsistent position before this
court”).) Ultimate tellingly omitted any case
citations for this proposition and omitted the fact that
Chiarella also had an intimate relationship with the
LLCs. In fact, it is the complexity of the relationship
between Ultimate and the LLCs, Chiarella and Svenningsen,
that undermines the application of judicial estoppel in this
Is Svenningsen's Prior Position, Taken During the
Divorce, Clearly Inconsistent with ...