451 Grand LLC, v. 84 George LLC et al

Filing 37

MEMORANDUM AND ORDER denying 20 Motion to Reopen Case; terminating 20 Motion to Dismiss for Lack of Jurisdiction; denying 20 Motion to Vacate. No costs of disbursements. Ordered by Senior Judge Jack B. Weinstein, on 6/4/2012. (Barrett, C)

Download PDF
- - . , - - - - - -- - - -- UNITED STATES DISTRICT COURT . EASTERN DISTRICT OF NEW YORK U.S. BANK, N.A., AS TRUSTEE FOR THE REGISTERED HOLDERS OF COUNTRYWIDE COMMERCIAL MORTGAGE TRUST 2007-MFl , COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2007MFI MEMORANDUM AND ORDER 09-CV-4553 Plaintiff, r- I. >., ...,'.' • ) IN CLE~ K'S ~r'l : .. , : U.S. DI STRICT CCU F,T [ .D.I'. Y * jUN 0 6 2012 * BROOKLYN OFFICE - against 84 GEORGE LLC, ISRAEL PERLMUTTER, MENACHEM STARK, THE DEPARTMENT OF HOUSING PRESERV A nON AND DEVELOPMENT OF THE CITY OF NEW YORK, AND THE ENVIRONMENTAL CONTROL BOARD OF THE CITY OF NEW YORK, ../ I Defendants. JACK B. WEINSTEIN, Senior United States District Judge: Defendant 84 George LLC seeks to reopen this case and vacate the amended final judgment entered two years ago in April 2010, arguing that the judgment was void for lack of jurisdiction. It relies upon Rule 60(b)(4) of the Federal Rules of Civil Procedure. Defendant contends that diversity jurisdiction to enter the default judgment was lacking, see 28 U.S.C § 1332; it asserts that (I) the plaintiff-trustee in this case lacks the customary powers of a trustee, (2) the trust assets are in fact managed by the beneficiaries, who are the real parties in interest in this case, and (3) some of those beneficiaries are citizens of New York, as is defendant. Complete diversity of citizenship, defendant claims, was absent. Defendant received notice of the complaint in December 2009 and did nothing to answer, relying, he says, on ongoing negotiations. No valid ground for failing to answer has been shown. Reliefunder Rule 60(b)(4) is exceptional. Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). In the context ofa Rule 60(b)(4) motion, ajudgment may be declared void for want of jurisdiction only when the court plainly usurped jurisdiction, or, put somewhat differently, when there is a total want of jurisdiction and no arguable basis on which it could have rested a finding that it had jurisdiction. Cent. Vt. Pub. Servo Corp. V. Herbert, 341 F.3d 186, 190 (2d Cir. 2003) (internal quotation marks omitted) (emphasis added). This rule serves the judicial system's interest in finality. Because "final judgments should not be lightly reopened, Rule 60(b) may not be used as a substitute for timely appeal. Since 60(b) allows extraordinary relief, it is invoked only upon a showing of exceptional circumstances." Jd. (internal quotation marks, bracketing, and ellipses omitted). "For purposes of diversity jurisdiction, the citizenship of the fiduciary-not the beneficiary-generally controls." Catskill Dev., L.L.c. v. Park Place Enter. Corp., 547 F.3d 115,124 (2d Cir. 2008). The parties in this case essentially dispute whether the trustee had power sufficient for its citizenship, rather than that of its beneficiaries, to be operative pursuant to 28 U.S.C. § 1332. That question is, given the facts and the nature of the trust instrument, at the very least, an "arguable" one. See Herbert, 341 F.3d at 190. There is the color of diversity jurisdiction. It can be assumed that without an answer the allegations of a jurisdictional basis in the instant case were true. See Fed. R. Civ. P. 8(b)(6) (effect offailing to deny); cf City ofNew York V. Mickalis · Pawn Shop, LLC, 645 FJd 114, 138-49 (2d Cir. 2011) (emphasizing effect of failing to assert personal jurisdiction defense and referring to cases analyzing subject matter jurisdiction). Defendant should have answered and denied two years ago. No equitable or legal ground for reopening the case is presented. is denied. No costs or disbursements. ck B. Weinstein Senior United States District Judge Date: June 4, 2012 Brooklyn, New York

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?