NIGHTINGALE & ASSOCIATES, LLC v. DOWD
Filing
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OPINION. Signed by Judge William H. Walls on 6/30/11. (dc, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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NIGHTINGALE & ASSOCIATES, LLC,
Plaintiff,
v.
KEVIN DOWD,
Defendant.
OPINION & ORDER
Civ. No. 09-5703
Walls, Senior District Judge
Defendant Kevin Dowd moves pursuant to Federal Rule of Civil Procedure 59(e) for the
Court to reconsider and reverse its order of March 28, 2011. In that order, the Court denied
Dowd’s motion for summary judgment. Dowd brings this motion because he says the Court
overlooked certain uncontested claims, arguments and other matters which are dispositive of this
action. Dowd’s motion is denied.
FACTUAL AND PROCEDURAL BACKGROUND
The facts of this case are set out at length in the summary judgment opinion and need not
be repeated here. A brief recitation of the procedural history, however, is in order.
Nightingale sued Dowd in the Superior Court of New Jersey, Bergen County seeking at
least $84,078.86 in outstanding legal fees. Dowd counterclaimed for breach of contract—
asserting that Nightingale breached its operating agreement by filing this lawsuit against him
because Nightingale had a contractual duty to defend and indemnify him. The Court denied
Dowd’s motion for summary judgment. Dowd now moves for reconsideration of that order.
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STANDARD OF REVIEW
A motion for reconsideration must rely on one of three major grounds: (1) an intervening
change in controlling law; (2) the availability of new evidence not available previously; or (3)
the need to correct a clear error of law or prevent manifest injustice. North River Ins. Co. v.
CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). The motion “may not be used to
relitigate old matters, or to raise arguments or present evidence that could have been raised prior
to the entry of judgment.” Murray v. Beverage Distrib. Ctr., Civ. No. 09-5403, 2011 U.S. Dist.
LEXIS 14720, at *3 (D.N.J. Feb. 14, 2011) (quoting Exxon Shipping Co. v. Baker, 554 U.S. 471,
486 n.5 (2008)); see also Morris v. Siemens Components, Inc., 938 F. Supp. 277, 278 (D.N.J.
1996) (“A party’s mere disagreement with a decision of the district court should be raised in the
ordinary appellate process and is inappropriate on a motion for reargument.”) (citation omitted);
Oritani Sav. & Loan Ass’n v. Fid. & Deposit Co., 744 F. Supp. 1311, 1314 (D.N.J. 1990) (It is
improper for the moving party “to ask the Court to rethink what it had already thought through—
rightly or wrongly.”).
DISCUSSION
Dowd argues that the Court should reconsider and reverse its denial of summary
judgement because it overlooked certain matters that would have resulted in the opposite
outcome. Def. Br. 2. Specifically, Dowd contends that the Court: (1) overlooked that the
agreement upon which Nightingale’s claim rests is unenforceable because it lacks valid
consideration and (2) failed to consider that Nightingale is not a third party beneficiary of any
agreement between Dowd and the other members of the LLC because the parties to that
agreement did not intend the benefit as a gift or in satisfaction of a pre-existing obligation to the
intended beneficiary. Id.
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A. Consideration for the Agreement Between Dowd and the Other LLC Members
While the Court agreed with Dowd that any agreement between Dowd and Nightingale
itself to pay the costs of litigation lacked consideration, the same is not true with respect to any
agreement between Dowd and the other individual members of Nightingale. Considering the
facts most favorable to the plaintiff, the individual members of the LLC had no pre-existing duty
to agree among themselves to each pay a share of the litigation expenses once the reserve had
run out. Their exchange of promises to share the costs of litigation constituted consideration.
See, e.g., Martindale v. Sandvik, Inc., 173 N.J. 76, 87 (2002) (“The essential requirement of
consideration is a bargained-for exchange of promises or performance . . . .”) (citations omitted).
Moreover, despite his argument to the contrary, Dowd never raised the specific issue of
consideration related to this agreement among the members of Nightingale and waived his
right to now assert this theory as a defense. See, e.g., Talsania v. Kohl’s Dept. Store, Civ. No. 053892, 2009 WL 1562325, at *2 (D.N.J. June 3, 2009); Mr. Sprout, Inc. v. Merchants Dispatch
Transp. Corp., Civ. No. 87-1574, 1988 WL 166678, at *2 (D.N.J. Mar. 2, 1988).
B. Nightingale’s Status as a Third Party Beneficiary
Dowd also maintains that the Court overlooked the legal elements of a third party
beneficiary claim; namely that parties to an agreement must have intended the agreement to
benefit another as a gift or in satisfaction of an obligation to qualify as a third party beneficiary.
Def. Br. 9. The New Jersey Supreme Court has held that “[t]he contractual intent to recognize a
right to performance in a third person is key” in determining whether or not a party is a third
party beneficiary. Broadway Maintenance Corp. v. Rutgers, 90 N.J. 253, 259 (1982). “If that
intent does not exist, then the third party is only an incidental beneficiary, having no contractual
standing.” Id. (citations omitted). Whether or not a third party beneficiary is a donee or a creditor
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of the contractual promisee is relevant “only in ascertaining the intent of the parties.” Id.
Meaning, the main inquiry when ascertaining a party’s standing as a third party beneficiary to a
contract is whether the parties to the agreement intended the third party to benefit from the
contract, not whether the parties explicitly intended to gift the third party with prospect of
enforcing the agreement. See K. Hovnanian Cos. Northeast Inc. v. County of Essex, 2009 WL
2391971, at *7 (N.J. Super. App. Div. 2009); Insulation Contracting & Supply v. Kravco, Inc.
507 A.2d 754, 758-59 (N.J. Super. App. Div. 1986).
In Strulowitz v. Provident Life & Cas. Ins. Co., 815 A.2d 993 (N.J. Super A.D. 2003), the
Appellate Division of the New Jersey Superior Court highlighted this point when it held that
even though the plaintiff was not the “owner or payee of [an insurance] policy” he was clearly
more than an incidental beneficiary to the policy because he “sought the policy, paid for the
policy, was the insured under the policy, and would be the ultimate recipient of the policy’s
funds. . . .” Strulowitz, 815 A.2d at 996-97. Similarly, Nightingale was more than just an
incidental beneficiary to the agreement between Dowd and the individual members of
Nightingale to pay for their share of the litigation expenses. The money pooled by the members
paid for both the individual members’ and the LLC’s litigation expenses. Indeed, according to
Howard Hoffman, the managing member of Nightingale, “[w]ithout this separate agreement,
there would have been no Nightingale to defend the Hopkins litigation as continued operations
would not have made economic sense. Thus, Nightingale as an entity would have gone into
default and the individual member Defendants would have been left to manage their own
defenses. This agreement avoided that outcome . . . .” Hoffman Decl. ¶ 6. Enough evidence
exists for a reasonable fact finder to conclude that the agreement between Dowd and the
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members was for Nightingale’s benefit, making Nightingale a third party beneficiary that can
enforce the agreement.
CONCLUSION
IT IS ORDERED that Dowd’s motion for reconsideration is DENIED.
June 30, 2011
/s/ William H. Walls
United States Senior District Judge
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