Jericho Group Ltd et al v. Mid-Town Development Limited Partnership et al
ORDER ADOPTING REPORT AND RECOMMENDATIONS --- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, upon due consideration and review, and including those portions of the Report and Recommendation ("R & R") to which the pa rties did not object, the recommendations contained in the R & R 265 issued on December 5, 2016 by the Hon. Vera M. Scanlon, U.S.M.J., are adopted in their entirety. Accordingly, Goebel's motion to enforce the Settlement Agreement is granted, with the exception that the Guarantor Clause shall be removed. The terms of the proposed order annexed to the R & R as Exhibit A are approved and it is "So Ordered." SO ORDERED by Chief Judge Dora Lizette Irizarry on 9/22/2017. (Irizarry, Dora)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
JERICHO GROUP LTD.,
MEMORANDUM AND ORDER
ADOPTING REPORT AND
MID-TOWN DEVELOPMENT LIMITED
14-CV-2329 (DLI) (VMS)
PARTNERSHIP, et al.,
DORA L. IRIZARRY, Chief United States District Judge:
On April 10, 2014, Plaintiff Jericho Group Ltd. (“Plaintiff”) initiated this action against
Defendants Mid-Town Development Limited Partnership, Midtown Development L.P., Edward
G. Imperatore, Maurice L. Stone, Edward W. Ross, Arthur E. Imperatore, George Berger, Jeffrey
Shore, Philips Nizer LLP, Frederick E. Sherman, Todd R. Geremia, Jones Day, Michael A. Szegda,
Baystone Equities, Inc., Robert B. Goebel (“Goebel”), and Lisa Solomon (collectively,
“Defendants”), alleging twenty causes of action, ranging from breach of contract to perpetrating
frauds on Plaintiff as well as the New York State courts. See Complaint (“Compl.”), Dkt. Entry
No. 1. This is the latest suit in a chain of litigation that Plaintiff and its principal, Samuel Pfeiffer
(“Pfeiffer”), has pursued concerning a contract that it canceled over a decade ago. See, e.g., Jericho
Grp. Ltd. v. Mid-Town Dev. Ltd. P’ship, 129 A.D.3d 561 (1st Dep’t 2015); Jericho Grp. Ltd. v.
Midtown Dev., L.P., 67 A.D.3d 431 (1st Dep’t 2009); Jericho Grp. Ltd. v. Midtown Dev., L.P., 47
A.D.3d 463 (1st Dep’t 2008); Jericho Grp. Ltd. v. Midtown Dev., L.P., 32 A.D.3d 294 (1st Dep’t
In an August 6, 2015 Memorandum & Order, this Court dismissed 1 the Complaint with
prejudice, issued an injunction preventing Plaintiff or its principals from commencing any new
proceedings against Defendants or their attorneys for claims relating to the circumstances alleged
in the Complaint, ordered Plaintiff to pay $10,000 in sanctions, and referred Goebel’s request for
attorneys’ fees to United States Magistrate Judge Vera M. Scanlon for an inquest. See Aug. 6, 2015
Mem. & Ord., Dkt. Entry No. 150.
The parties appeared before the magistrate judge for a status conference on March 18, 2016.
See Mar. 18, 2016 Transcript of Conference Before the Hon. Vera M. Scanlon, U.S.M.J. (“Mar.
18, 2016 Tr.”), Dkt. Entry No. 235. At that conference, Goebel’s attorney informed the Court that
the parties had reached an agreement to settle the amount of reasonable attorneys’ fees owed to
Goebel by Plaintiff (“Settlement Agreement”). On consent of Plaintiff, Goebel, and Pfeiffer, the
terms of the Settlement Agreement were read into the record. See Id. Goebel’s attorney explained
that the terms were read into the record “so that it will be a binding agreement with regard to the
parties[,] subject to the memorialization and the conditions of the agreement they’ve reached.” Id.
at 3. The parties agreed that if they were unable to reduce the Settlement Agreement to writing,
the terms stated on the record would be binding, subject to two conditions that could be waived
only by Goebel. See Id. at 3-4, 10-12.
On April 14, 2016, Goebel moved to enforce the Settlement Agreement and filed a
proposed order for the Court to endorse. See Goebel Apr. 14, 2016 Ltr. (“Mot. to Enf.”), Dkt. Entry
No. 240. Plaintiff opposed that motion and submitted its own proposed order for the Court’s
consideration. See Pl. Apr. 19, 2016 Ltr. (“Pl. Opp.”), Dkt. Entry No. 243. Pfeiffer filed a personal
Prior to that Memorandum & Order, various parties and claims were dismissed at different stages. See Not.
of Vol. Dismiss., Dkt. Entry No. 86; Mar. 4, 2015 Min. Entry; Not. of Vol. Dismiss., Dkt. Entry No. 124.
opposition to the motion as well. See Apr. 18, 2016 Ltr. (“Pf. Opp.”), Dkt. Entry No. 244. Goebel
replied to both filings. See Apr. 29, 2016 Ltr. (“Reply”), Dkt. Entry No. 249.
On July 13, 2016, this Court referred Goebel’s motion to enforce the Settlement Agreement
to Magistrate Judge Scanlon for a Report and Recommendation (“R & R”). The magistrate judge
issued her extremely thorough and well reasoned R & R on December 5, 2016. See R & R, Dkt.
Entry No. 265. After applying the four-prong test articulated by the United States Court of Appeals
for the Second Circuit in Winston v. Mediafare Entm’t Corp., 777 F.2d 78 (2d Cir. 1985), the
magistrate judge determined that the parties clearly intended to be bound by the terms of the
Settlement Agreement read into the record, despite the absence of a written document executed by
both sides. See R & R at 14-23. However, the magistrate judge found that a term requiring that
Chana Pfeiffer be included as a guarantor (“Guarantor Clause”) was unenforceable, because she
was not represented at the conference and did not assent to be bound by the terms of the Settlement
Agreement. Id at 24. Accordingly, the magistrate judge recommended that the Court grant
Goebel’s motion to enforce the Settlement Agreement, with the “caveat” that the Guarantor Clause
be stricken, and that the Court “So Order” a proposed order annexed to the R & R as Exhibit A.
Id. On December 19, 2016, Plaintiff timely filed objections to the R & R. See Objs. to R & R
(“Objs.”), Dkt. Entry No. 267. On December 21, 2016, Plaintiff amended those objections. See
Am. Objs. to R & R (“Am. Objs.”), Dkt. Entry No. 268. Goebel did not respond.
As set forth below, the objections are overruled, and the R & R is adopted in its entirety.
When a party objects to an R&R, a district judge must make a de novo determination as to
those portions of the R & R to which a party objects. See FED. R. CIV. P. 72(b)(3); United States
The Court assumes familiarity with underlying facts and extensive history between the parties, as set forth
in the R & R and in this Court’s August 6, 2015 Memorandum & Order.
v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997). Pursuant to the standard often articulated by the
district courts of this Circuit, “[i]f a party simply relitigates his original arguments, the Court
reviews the Report and Recommendation only for clear error.” Antrobus v. New York City Dep’t
of Sanitation, No. 11-CV-5434 (CBA) (LB), 2016 WL 5390120, at * 1 (E.D.N.Y. Sept. 26, 2016)
(internal citations and quotation marks omitted); see also Rolle v. Educ. Bus Transp., Inc., No. 13CV-1729 (SJF) (AKT), 2014 WL 4662267, at *1 (E.D.N.Y. Sept. 17, 2014) (“[A] rehashing of the
same arguments set forth in the original papers . . . would reduce the magistrate’s work to
something akin to a meaningless dress rehearsal.”) (internal citations and quotation marks
omitted). On the other hand, the Second Circuit Court of Appeals has suggested that a clear error
review may not be appropriate “where arguably ‘the only way for [a party] to raise . . . arguments
[is] to reiterate them.’” Moss v. Colvin, 845 F.3d 516, 520 n.2 (2d Cir. 2017) (quoting Watson v.
Geithner, No. 11-CV-9527 (AJN), 2013 WL 5441748, at *2 (S.D.N.Y. Sept. 27, 2013)).
Nonetheless, a court will not “ordinarily . . . consider arguments, case law and/or evidentiary
material which could have been, but [were] not, presented to the magistrate judge in the first
instance.” Santiago v. City of New York, No. 15-CV-517 (NGG) (RER), 2016 WL 5395837, at *1
(E.D.N.Y. Sept. 26, 2016) (internal citation and quotation marks omitted). After its review, the
district court may then “accept, reject, or modify the recommended disposition; receive further
evidence; or return the matter to the magistrate judge with instructions.” FED. R. CIV. P. 72(b)(3);
see also 28 U.S.C. § 636(b)(1).
Plaintiff’s four objections are that: (1) the magistrate judge erred in issuing the R & R prior
to ruling on Plaintiff’s request to file a sur-reply; (2) removing the Guarantor Clause rendered the
entire Settlement Agreement unenforceable; (3) the Settlement Agreement requires Plaintiff to pay
more than would have been awarded pursuant to an inquest; and (4) the magistrate judge
misapplied the last prong in Winston. Objs. at 1-2.
A. THE MAGISTRATE JUDGE DID NOT ERR IN ISSUING THE R & R BEFORE ENTERING AN
ECF ORDER DENYING PLAINTIFF’S REQUEST TO FILE A SUR-REPLY
Plaintiff argues that it was erroneous for the magistrate judge to deny its application for a
sur-reply after issuing her R & R. Objs. at 2. The ECF Order denying leave to file a sur-reply was
entered the same day as the R & R. 3 See R & R; Dec. 5, 2016 Min. Dkt. Entry. Plaintiff does not
explain why this was improper or what prejudice was suffered as a result of the magistrate judge
entering her orders in this fashion. In fact, the entire objection is contained in a single, conclusory
sentence. Objs. at 2. Finding no clear error, the objection is overruled. See Pall Corp. v. Entegris,
Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008) (explaining that general or conclusory objections only
compel review for clear error).
B. REMAINING ARGUMENTS ARE PRESENTED FOR THE FIRST TIME IN THE OBJECTIONS
“In this district and circuit, it is established law that a district judge will not consider new
arguments raised in objections to a magistrate judge’s report and recommendation that could have
been raised before the magistrate, but were not.” Sci. Components Corp. v. Sirenza Microdevices,
Inc., No. 03-CV-1851 (NGG) (RML), 2006 WL 2524187, at *2 (E.D.N.Y. Aug. 30, 2006)
(collecting cases). Indeed, “[f]iling objections to a report and recommendation is not the tool for
mopping up any inadvertent omissions.” Gutman v. Klein, No. 03-CV-1570 (BMC) (RML), 2010
WL 4916722, at *5 (E.D.N.Y. Nov. 24, 2010) (internal citation omitted). Yet, in Plaintiff’s
remaining objections, it goes beyond trying to “mop up” omissions and argues positions
diametrically opposed to what it argued before the magistrate judge.
In the original iteration of the Settlement Agreement, the parties agreed that Chana Pfeiffer
would “guarantee absolutely and unconditionally, all amounts and obligations under” the
In fact, according to the docketing system’s filing receipts, the ECF Order and the R & R were issued less
than one hour apart.
contract’s terms. See Mar. 18, 2016 Tr. at 6-7. In the R & R, the magistrate judge found that this
term was unenforceable because Chana Pfeiffer neither was present nor had an authorized
representative at the March 18, 2016 appearance. R & R at 24. Accordingly, the magistrate judge
recommended that the Guarantor Clause be removed, but that the remainder of the Settlement
Agreement be enforced. Id. Plaintiff now argues, for the first time, that the Guarantor Clause was
an essential term of the Settlement Agreement, and that, by removing it, the magistrate judge
actually rendered the entire contract “null and void.” Objs. at 2.
Upon review, Plaintiff squarely argued that the Guarantor Clause was unenforceable before
the magistrate judge in the first instance, but said nothing about the Guarantor Clause affecting the
enforceability of the entire Settlement Agreement. Pl. Opp. at 4. Indeed, while advocating for the
removal of the Guarantor Clause, Plaintiff requested that the Court enforce the remaining terms of
the Settlement Agreement as stated on the record. Id. at 3. Plaintiff even asked the Court to enter
a written order that contained terms “reflective of the terms of the” Settlement Agreement. Id. The
Court will not countenance Plaintiff’s attempt to change its position in order to salvage its
arguments. As the Court finds no clear error in the magistrate judge’s finding, this objection is
Plaintiff also argues that the magistrate judge erred in recommending enforcement of the
Settlement Agreement because the amount paid to Goebel in attorneys’ fees is more than what
would have been awarded after an inquest. See Objs. at 5-6. Plaintiff insinuates that its reason for
agreeing to the fee amount is connected to an off-the-record representation that Goebel would
“comply” with certain aspects of the parties’ pre-existing Release Agreement. 4 Id. at 6. Here again,
The Court discussed the terms of the Release Agreement in its August 6, 2015 Memorandum & Order and
held that Plaintiff breached the Release Agreement, thus entitling Goebel to attorneys’ fees for this action. See Aug.
6, 2015 Mem. & Ord. at 11-13. Accordingly, the Court will not recount its discussion here. In separate filings, Plaintiff
asked this Court to take judicial notice of the existence of the Release Agreement so that it may seek Goebel’s
the Court encounters an argument that is wholly opposed to what Plaintiff argued before the
magistrate judge. As Plaintiff argued in its opposition papers, “[O]nly the terms that clearly appear
on the transcript on March 18, 2016 make up the entire [Settlement] Agreement and no extraneous
understanding are [sic] to be included in this agreement other than the terms read into the record.”
Id. at 3. Indeed, “The Court’s language [was] unambiguous: ‘Let’s be clear, there is an agreement.
We went through this on the record that these were the only terms of the agreement. So any side
conversation is not part of the agreement.’” Id. (quoting Apr. 5, 2016 Transcript of Conference
Before the Hon. Vera M. Scanlon, U.S.M.J., Dkt. Entry No. 238 at 11). The proposed order
submitted by Plaintiff reinforces that position, as it clearly contains the fees agreed to before the
magistrate judge. See Pl. Prop. Order, Dkt. Entry No. 243-3 (identifying $200,000 as the
“Settlement Amount” and $350,000 as the amount owed in event of default). The Court finds no
clear error in the magistrate judge’s analysis. The objection is overruled.
Plaintiff’s final objection challenges the magistrate judge’s findings as to the application
of the four-prong test delineated in Winston. See Objs. at 6-7. In Winston, the Second Circuit
described four factors for a court to consider when determining whether parties intended to be
bound by a settlement agreement in the absence of an executed document:
(1) whether there has been an express reservation of the right not to
be bound in the absence of a writing; (2) whether there has been
partial performance of the contract; (3) whether all of the terms of
the alleged contract have been agreed upon; and (4) whether the
agreement at issue is the type of contract that is usually committed
777 F.2d at 80 (internal citations omitted). After applying these factors, the magistrate judge
determined that all four aligned with the conclusion that the Settlement Agreement was binding.
compliance with its terms. See Mot. to Compel Compliance with Release Agr’mt, Dkt. Entry No. 261; Am. Mot.
Compel Compliance with Release Agm’t, Dkt. Entry No. 262. These motions are denied as moot.
R & R at 23. As to the final prong, Plaintiff contends that the very fact that the parties were unable
to arrive at a final, signed document, supports the conclusion that the Settlement Agreement’s
terms are so complex that they must be reduced to a signed writing. Objs. at 6-7. However, this
new position stands in stark contrast to Plaintiff’s previous request to the magistrate judge that the
Court approve its proposed order, which, from its perspective, reduced the entire Settlement
Agreement to a written instrument. Pl. Opp.; See also Pf. Opp.; Pl. Prop. Order. Reviewing this
objection for clear error and finding none, this objection is overruled.
For the reasons set forth above, upon due consideration and review, and including those
portions of the R & R to which the parties did not object, the recommendations contained in the R
& R are adopted in their entirety. Accordingly, Goebel’s motion to enforce the Settlement
Agreement is granted, with the exception that the Guarantor Clause be removed. The terms of the
proposed order annexed to the R & R as Exhibit A are approved and it is “So Ordered.”
Dated: Brooklyn, New York
September 22, 2017
DORA L. IRIZARRY
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