IRVING ACQUISITION INC et al v. KAPLAN et al

Filing 30

ORDER Overruling 28 Objection to Magistrate Judge's Memorandum Decision. By JUDGE JOHN A. WOODCOCK, JR. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
IRVING ACQUISITION, INC., et al., )
)
Plaintiff,
)
)
v.
)
)
MARJORY A. KAPLAN, et al.,
)
)
Defendant.
)

2:13-cv-00271-JAW
2:13-cv-00275-JAW

ORDER OVERRULING OBJECTION TO MAGISTRATE JUDGE’S
MEMORANDUM DECISION
On January 31, 2014, Magistrate Judge Rich issued a memorandum decision
granting a motion to stay advanced by the Kaplan Parties1 in this case. Mem. Dec.
on Motion to Stay (ECF No. 27). The Meriturn Defendants2 opposed this motion,
and now file a “limited objection” to the Memorandum Decision. Limited Objection
to Magistrate Judge’s Mem. Dec. on Mot. to Stay (ECF No. 28). They limit their
objection to a request to strike one sentence from the Memorandum Decision
regarding whether they were in privity with certain entities in the related
bankruptcy proceeding. Id. at 4. The Meriturn Defendants are concerned that the
Magistrate Judge’s comment about privity will become “law of the case,” and
prejudice them at later proceedings. Id. at 5. They also object to the substance of

The “Kaplan Parties” are Michael W. Kaplan, M. Stephen Kaplan, Marjory A. Kaplan,
Glenyce S. Kaplan Lifetime Trust-1994, Prime Tanning Co., Inc. Voting Trust 1994, Estate of
Leonard D. Kaplan, Steven A. Goldberg, Glenyce S. Kaplan, Eliseo Pombo, and Robert P. Moore.
Mem. Dec. at 1.
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The “Meriturn Defendants” are Meriturn Partners, LLC, Mark W. Kehaya, Franklin Staley,
and Lee C. Hansen. Id. at 2.
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the privity conclusion. Id. at 5-9. The Kaplan Parties oppose the objection, arguing
that the Magistrate Judge’s comment about privity does not give rise to law of the
case and is correct on the merits. Id. at 1-2.
The Magistrate Judge’s comments regarding privity were:
The Meriturn parties next assert that “there are no issue- or claimpreclusion princip[le]s under which the outcome of the Adversary
Proceeding could bear on the disposition of this case[,]” because they
“are not parties to, or in privity with the parties to, the Adversary
Proceeding[.]” Opposition at 2. This is incorrect. The Meriturn parties
are in privity with the Prime entities that are parties to the Adversary
Proceeding, Reply at 2 n.1; see also In re El San Juan Hotel Corp., 841
F.2d 6, 10 (1st Cir. 1988) (claim preclusion appropriate if new party
has close and significant relationship with original party), but privity
would not be the decisive factor in any event. That is because the
bankruptcy court’s ruling on the Release Agreement would be binding
on the Kaplan parties, potentially mooting their claims in this action.
Thus, the case law cited by the Meriturn parties, Opposition at 2, is
not on point.
Mem. Dec. at 4.
The Magistrate Judge’s statement about privity is not law of the case for
purposes of future proceedings. As the Magistrate Judge wrote, “privity would not
be the decisive factor.”

Id.

As it was not necessary to determine whether the

Meriturn parties were in privity with the Prime in order to rule on the motion to
stay, the Magistrate Judge’s observation about privity was not a decision “upon a
rule of law” that binds subsequent proceedings. Negrón-Almeda v. Santiago, 579
F.3d 45, 50 (1st Cir. 2009).
With that clarification, it is unnecessary to strike anything from the
Memorandum Decision, and the Meriturn Defendants offer no other objection. The
Court OVERRULES the Meriturn Defendants’ Limited Objection (ECF No. 28).

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SO ORDERED.

/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
CHIEF UNITED STATES DISTRICT JUDGE
Dated this 7th day of March, 2014

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