United States District Court,
S.D. New York.
PHOENIX WAREHOUSE OF CALIFORNIA, LLC, Plaintiff,
v.
TOWNLEY, INC., Defendant.
and
Phoenix Holding Group, L.L.C., Additional Counterclaim–Defendant.
No. 08 Civ. 2856(NRB).
June 7, 2011.
MEMORANDUM AND ORDER
NAOMI REICE BUCHWALD, District Judge.
Phoenix Warehouse of California, LLC (“Phoenix”) initiated this action against Townley, Inc. (“Townley”) alleging that it is owed money for warehouse services rendered pursuant to a contract. Townley asserted two counterclaims against Phoenix, affiliated companies, and its principals, Alan and Christopher Antonucci. On March 29, 2011, this Court granted Phoenix’s motion for summary judgment dismissing Townley’s counterclaims inasmuch as they sought damages for cancelled orders and chargebacks, credits, and other cash incentives. We did not dismiss the counterclaims in their entirety, however, as there are outstanding issues of material fact as to whether Phoenix is liable to Townley for overpayments resulting from Phoenix’s alleged breaches of contract. Before the Court is Townley’s motion to reconsider the ruling of March 29, 2011 and vacate the portion dismissing their claims. For the following reasons, Townley’s motion is denied.
One of the affiliated companies and the individual defendants were previously dismissed pursuant to a stipulation between the parties.
FACTS AND PREVIOUS OPINION
The relevant facts are addressed in detail in our previous opinion and will not be recounted here. See Phoenix Warehouse of Calif., LLC v. Townley, Inc., No. 08 Civ. 2856, 2011 U.S. Dist. LEXIS 37206 (S.D.N.Y. Mar. 29, 2011). In that opinion, we applied the standard set forth in Kenford Co. v. County of Erie, 73 N.Y.2d 312 (1989) and determined that no reasonable jury could find that Phoenix “contemplated at the time of the contract’s execution that it assumed legal responsibility for [chargebacks, cancelled orders, and other cash incentives] upon a breach of contract.” Phoenix, 2011 U.S. Dist. LEXIS 37206 at (citing Kenford, 73 N.Y.2d at 320). We reached this conclusion based on the undisputed factual record, which provided no support for Townley’s position, and a rational understanding of the respective bargaining positions of the parties.
DISCUSSION
A. Legal Standard
A motion for reconsideration is “an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources,” In re Initial Public 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(2d Cir.2006), and appropriate only when a court overlooks “controlling decisions or factual matters that were put before it on the underlying motion” and which, if examined, might reasonably have led to a different result. Eisemann v. Greene, 204 F.3d 393, 395 n. 2 (2d Cir.2000). A motion for reconsideration is not, however, a “second bite at the apple” for a party dissatisfied with a court’s ruling. Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir.1998). Similarly, it is not appropriate to use a motion for reconsideration as a vehicle to advance new theories a party failed to articulate in arguing the underlying motion. See Griffin Ins., Inc. v. Petrojam, Ltd., 72 F.Supp.2d 365, 368 (S.D.N.Y.1999). The decision to grant or deny a motion for reconsideration is within the sound discretion of the district court. Id. (internal citations omitted).
B. Townley’s Arguments for Reconsideration
Townley fails to identify any “controlling decisions or factual matters” which, had we considered previously, might have altered our conclusions. Indeed, rather than “setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked” as required by this Court’s Local Civil Rule 6.3, Townley’s memoranda accompanying this motion to reconsider assert three reasons why it believes our initial decision was in error. First, Townley argues that we erroneously shifted the burden to Townley, the non-moving party, to demonstrate that Phoenix assumed liability for the damages at issue. Next, it claims that we did not address how the presence of a lien protected Phoenix from liability for failing to perform under the agreements of November 1, 2007 and November 8, 2007 (together, the “2007 agreements”). Finally, it contends that we substituted our judgment for that of the trier of fact with respect to the parties’ intentions and expectations in entering into the 2007 agreements. All of these contentions are without merit.
In its memorandum of law in reply to Phoenix’s opposition, Townley appears to only reassert the first and third of these arguments. It is unclear whether this is an oversight or if Townley intended to abandon the second argument. In the interest of completeness, we address all three claims in this opinion.
1. The Court Erroneously Shifted the Burden to Townley
Townley argues that this Court erroneously shifted the burden and found that it was “incumbent upon Townley to come forward with evidence to show that Phoenix assumed liability for charge-backs and cancelled orders.” Mem. of Law in Supp. of Mot. at 3. Townley paraphrases our opinion as holding that “Townley provides no evidence to support the conclusion that Phoenix assumed [more] liability for charge-backs than it had in previous agreements,” and argues that this was in error because it was “Phoenix’s burden to establish a prima facie showing that no genuine issue of fact exists with respect to the parties’ intentions in entering the November 1, 2007 Agreement and the November 8 th e-mail. Phoenix’s Motion does not sufficiently establish the requisite prima facie showing that would otherwise shift the burden to Townley on summary judgment.” Id.
Townley makes this assertion by referencing the following portion of our opinion:
“[No] rational trier of fact could review the record before the Court and determine that Phoenix was assuming greater liability for chargebacks in 2007 than it had in the past. Given the respective bargaining positions of the parties, it would be completely illogical for Phoenix to have done so. Indeed, Townley provides absolutely no evidence to support such a conclusion.”
Phoenix, 2011 U.S. Dist. LEXIS 37206 at *31.
Townley’s characterization is obviously a distortion. This statement is simply an observation that Phoenix had met its burden and that Townley had produced no evidence to raise a material issue of fact. Townley appears to argue that because Phoenix had the burden on summary judgment, it was mistaken for this Court to consider the fact that Townley provided no evidence to support its (entirely illogical) claim. However, simply noting that the record precludes a particular inference and that the non-moving party introduces no evidence to suggest otherwise is not tantamount to shifting the burden on summary judgment. In this regard, we refer Townley to our earlier opinion:
To defeat a motion for summary judgment, the non-moving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249–50 (internal citations omitted). The nonmoving party may not rest upon mere conclusory allegations or denials, but must set forth “concrete particulars” showing that a trial is needed. Nat’l Union Fire Ins. Co. v. Deloach, 708 F.Supp. 1371, 1379 (S.D.N.Y.1989) (quoting R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 77 (2d Cir.1984) (internal quotation marks omitted)). It is thus insufficient for a party opposing summary judgment “merely to assert a conclusion without supplying supporting arguments or facts.” BellSouth Telecomms., Inc. v. W.R. Grace & Co., 77 F.3d 603, 615 (2d Cir.1996) (internal citations and quotation marks omitted). Further, while credibility determinations, weighing evidence, and drawing legitimate inferences from facts are functions that the court must leave to the jury, if the nonmoving party does not present evidence from which a reasonable jury could return a favorable verdict, then summary judgment is appropriate. See, e.g., Golden Pac. Bancorp. v. F.D.I.C., 375 F.3d 196, 200 (2d Cir.2004).
Phoenix, 2011 U.S. Dist. LEXIS 37206 at *15–16.
We have no doubt that summary judgment is appropriate in circumstances such as this, where the non-moving party asks the Court to allow a jury to reach an illegitimate inference unsupported by any evidence.
We remind Townley that “in ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). In this case, “while for purposes of [summary judgment] we grant Townley every reasonable inference and resolve all factual disputes in [its] favor, it is ultimately Townley’s burden at trial to demonstrate that Phoenix assumed this liability.” Phoenix, 2011 U.S. Dist. LEXIS 37206 at *28.
Furthermore, we note that Townley focuses its contention that we shifted the burden specifically on our conclusion that no rational trier of fact could find that the omission of a provision in the 2007 agreements regarding chargebacks meant that Phoenix intended to assume more liability for chargebacks in 2007 than it had in 2001 or 2004. However, our opinion did not rely on the lack of this provision in finding that Townley could not recover for the damages sought; rather, the omission was noted to fortify the conclusion we had already reached from a review of other evidence.
Both the 2001 and 2004 agreements included provisions expressly limiting Phoenix’s liability for chargebacks. The November 1, 2007 agreement, which was titled a “Schedule of Services and Rates to be effective November 1, 2007,” did not expressly include such a provision, and neither did the November 8, 2007 email agreement.
2. The Impact of the Lien on the 2007 Agreements
In our previous opinion, we held that Phoenix could not be found to have assumed liability for consequential damages following the release of a lien it had exercised against Townley’s goods on November 14, 2007. In arriving at this conclusion, we determined that it would have been “entirely irrational for Phoenix to give up its legal right to hold Townley’s goods in exchange for a payment of $200,000, with another $50,000 or $150,000 placed in escrow, and an assumption of liability for almost $3,000,000 in consequential damages.” Phoenix, 2011 U.S. Dist. LEXIS 37206 at *23. The evidentiary record supported our determination. See Id. at *24–25.
As addressed in our previous order, while there is a dispute as to whether Phoenix had formally asserted the lien or used the actual phrase “warehouseman’s lien” in its conversations with Townley, there is no dispute that Phoenix informed Townley it was holding its goods until it received amounts that it believed it was owed. See Phoenix, 2011 U.S. Dist. LEXIS 37206 at *23–24 n. 14. Furthermore, in the escrow agreement formally executed by the parties on November 14, 2007, Townley conceded the validity of the lien, and the lien was released in exchange for Townley’s placing certain funds in escrow. Id. at *22–23.
Townley raises several objections to this finding. These arguments are logically inconsistent, irrelevant, or misguided. First, Townley claims that there is a dispute as to when the lien was asserted and what period of time it covered. While there may have been a dispute about the lien at some point in 2007, Townley stipulated on November 14, 2007 that “Phoenix is in possession of certain goods which are subject to a warehouseman’s lien” and that “Townley wishes Phoenix to release that lien.” See Phoenix, 2011 U.S. Dist. LEXIS 37206, at *13. Having done so, Townley cannot argue before this Court that the lien was not validly asserted as of that date.
More importantly, Townley argues that “even if the lien was properly asserted in October 2007, it could not have applied to the obligations set forth in the November 8 th e-mail agreement, negotiated by counsel in connection with the Escrow Agreement which extinguished Phoenix’s purported lien.” Mem. of Law in Supp. of Mot. at 4. This argument is entirely irrelevant, as our opinion explicitly noted that the lien did not protect Phoenix after its release on November 14. However, we found that no reasonable jury could conclude that Phoenix would both release the lien and assume the massive liability Townley alleges. Phoenix, 2011 U.S. Dist. LEXIS 37206, at n. 15 (“It is true that after the lien was lifted by payment of $200,000 and an amount placed in escrow, Phoenix did not have the blanket protection of the lien. Nevertheless, no reasonable trier of fact could conclude that Phoenix exchanged that blanket protection for an assumption of consequential damages many times the amount it received to release the lien.”).
Townley itself acknowledges, on the very next page of its memorandum, that our opinion “recognizes that after the lien was lifted … Phoenix did not have the protection of the lien.” Mem. of Law in Supp. of Mot. at 5. Townley argues, however, that this Court “immediately leap [ed] to the conclusion that no reasonable trier of fact could conclude that once the lien was lifted, Phoenix did not (sic) assume any liability for Townley’s damages incurred as result of Phoenix’s failure to perform” under the 2007 agreements. Id. This is also incorrect; in no way did we suggest that Phoenix is not liable for any damages suffered by Townley. We only found that Phoenix did not assume liability for consequential damages in the form of chargebacks, cancelled orders, and other cash incentives.
Townley next argues that this Court misapplied the rule of Kenford. Townley makes this contention by misstating the holding of Kenford and claiming that the “object of damages as a remedy in a contract is to make the parties finish in a position they would have been in had the contract been properly performed.” Mem. of Law in Supp. of Mot. at 6. Townley asserts that since Phoenix was “on notice” of the potential for the damages at issue and promised to process Townley’s orders within certain timeframes, there is a material issue of fact regarding Phoenix’s assumption of liability for the damages in question.
Not only do these arguments misstate and misapply the rule of Kenford, but they were made and rejected in our previous opinion. Since a motion for reconsideration is not a “second bite at the apple” for a party dissatisfied with a court’s ruling, Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir.1998), we will not address these arguments in any depth. For the reasons stated in our previous order, we conclude that no rational trier of fact could find that Phoenix assumed legal responsibility for the damages in question, or that the parties would have concluded that Phoenix assumed such responsibility had they considered the question.
3. The Court Usurped the Role of the Jury
Townley’s final argument is that this Court “seized a material issue of fact appropriately reserved for the jury” in finding that the absence of language in the 2007 agreements limiting Phoenix’s liability for chargebacks could not be read as an assumption of the liability Townley suggests.
This claim mirrors the first point regarding burden shifting, and is rejected for largely the same reasons. Townley asserts that “since the parties submit opposing views of what the contract(s) encompassed, a question of what the parties’ intended is appropriately reserved the for jury.” Mem. of Law in Supp. of Mot. at 8 (alteration in original). However, as noted above, it is insufficient for a party opposing summary judgment “merely to assert a conclusion without supplying supporting arguments or facts.” BellSouth Telecomms., Inc. v. W.R. Grace & Co., 77 F.3d 603, 615 (2d Cir.1996) (internal citations and quotation marks omitted). If the non-moving party does not present evidence from which a reasonable jury could return a favorable verdict, then summary judgment is appropriate. See, e.g., Golden Pac. Bancorp. v. F.D.I.C, 375 F.3d 196, 200 (2d Cir.2004). This is precisely what this Court found: applying the standard for summary judgment, we determined that no reasonable trier of fact could find that Phoenix assumed the liability in question.
Furthermore, Townley’s argument suffers from a more fundamental misunderstanding. According to Townley, Phoenix either intentionally or negligently omitted the provision relating to chargebacks in the 2007 agreements. Townley “respectfully submits that [whether it was intentional or negligent] is a question of fact to be submitted to the jury.” Mem. of Law in Supp. of Mot. at 8. Presumably, Townley believes that if Phoenix negligently forgot to include the “exculpatory language,” as Townley describes it, it should be liable for the consequential damages. This argument makes little sense. In the absence of a contractual provision addressing whether certain damages are available, the “commonsense rule to apply is to consider what the parties would have concluded had they considered the subject.” Kenford, 73 N.Y.2d at 320 (emphasis in original). As we discussed previously, whether or not Phoenix intentionally omitted the provision, it is impossible for a reasonable trier of fact to determine that Phoenix would have assumed the liability in question had the parties considered the subject.
CONCLUSION
For the aforementioned reasons, Townley’s motion is denied. The parties are ordered to comply with the directive in our previous opinion to report to this Court within three weeks on the status of settlement negotiations. If the parties are unable to reach a resolution, the Court will set a trial date.
SO ORDERED.
