Katz et al v. Travelers et al

Filing 38

MEMORANDUM OF DECISION & ORDER - For the reasons stated above, the Plaintiffs' 25 motion for reconsideration, or in the alternative, for leave to amend the complaint pursuant to Rule 15 is denied in its entirety. SEE ATTACHED DECISION for details. So Ordered by Judge Arthur D. Spatt on 9/20/2017. (Coleman, Laurie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------X
MICHAEL J. KATZ, M.D., MICHAEL J. KATZ, M.D.,
P.C.,

FILED 
CLERK 

2:38 pm, Sep 20, 2017

U.S. DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
LONG ISLAND OFFICE 

MEMORANDUM OF
DECISION & ORDER
16-cv-4389 (ADS) (SIL)

Plaintiffs,
-againstTRAVELERS its relevant servants, agents or employees
and relevant associated, affiliated or subsidiary
corporations a/k/a Travelers Insurance Company a/k/a
The Travelers Companies, Inc.,
Defendants.
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APPEARANCES:
Zisholtz & Zisholtz, LLP
Attorneys for the Plaintiffs
170 Old Country Road
Suite 300
Mineola, NY 11501
By:
Gerald Zisholtz, Esq.,
Stuart S. Zisholtz, Esq.,
Meng Cheng, Esq., Of Counsel
DLA Piper LLP
Attorneys for the Defendant Travelers
1251 Avenue of The Americas
27th Floor
New York, NY 10020
By:
Brett Ingerman, Esq.,
Colleen Michelle Gulliver, Esq., Of Counsel

White & Williams LLP
Attorneys for the Previously Dismissed Defendant Exam Works, Inc.
7 Times Square
Suite 2900
New York, NY 10036
By:
Andrew I. Hamelsky, Esq.,
Jenifer Ann Scarcella, Esq., Of Counsel

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SPATT, District Judge:
This diversity action was originally brought by the Plaintiffs Michael J. Katz, M.D. and
Michael J. Katz, M.D., P.C. (the “Plaintiffs” or “Dr. Katz”) against the Defendant Travelers
(“Travelers”) as well as Exam Works, Inc. (“Exam Works”), which was previously a Defendant
in this action (collectively, the “Defendants”), in New York State Supreme Court, Nassau County,
alleging various contract and tort claims under New York State common law. Travelers removed
the case to the United States District Court for the Eastern District of New York (the “EDNY”)
based on the diversity jurisdiction of the Court pursuant to 28 U.S.C. § 1332(a)(1).
Upon a motion by the Defendants to dismiss the complaint in its entirety pursuant to
Federal Rule of Civil Procedure (“Fed. R. Civ. P.” or “Rule”) 12(b)(6), on March 10, 2017, the
Court dismissed Exam Works from the action, and dismissed all of the Plaintiffs’ claims against
Travelers except for their breach of contract claim.
Presently before the Court is a motion by the Plaintiffs for reconsideration pursuant to
Rules 59(e), 60(b) and Local Civil Rule 6.3, asking the Court to reconsider its dismissal of the
Plaintiffs’ tortious interference claims against the Defendants. In the alternative, the Plaintiffs ask
that this Court grant leave to amend their complaint pursuant to Rule 15.
For the following reasons, the Plaintiffs’ motion is denied in its entirety.
I. DISCUSSION
A. The Relevant Legal Standard
Local Civil Rule 6.3 provides that:
Unless otherwise provided by the Court or by statute or rule (such as FED. R. CIV.
P. 50, 52, and 59), a notice of motion for reconsideration or reargument of a court
order determining a motion shall be served within fourteen (14) days after the entry
of the Court’s determination of the original motion, or in the case of a court order
resulting in a judgment, within fourteen (14) days after the entry of the judgment.
There shall be served with the notice of motion a memorandum setting forth
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concisely the matters or controlling decisions which counsel believes the Court has
overlooked. The time periods for the service of answering and reply memoranda, if
any, shall be governed by Local Civil Rule 6.1(a) or (b), as in the case of the original
motion. No oral argument shall be heard unless the Court directs that the matter
shall be reargued orally. No affidavits shall be filed by any party unless directed by
the Court.
Id. “The standard for granting such a motion is strict, and reconsideration will generally be denied
unless the moving party can point to controlling decisions or data that the court overlooked—
matters, in other words, that might reasonably be expected to alter the conclusion reached by the
court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). The decision to grant or
deny a motion for reconsideration is “committed to the sound discretion of the district court.”
Wilder v. News Corp., 2016 WL 5231819, at *3 (S.D.N.Y. Sept. 21, 2016) (internal quotation
marks omitted) (quoting Liberty Media Corp. v. Vivendi Universal, S.A., 861 F. Supp. 2d 262, 265
(S.D.N.Y. 2012)); see also Shrader, 70 F.3d at 257 (using an abuse of discretion standard to judge
a district court’s decision on a motion for reconsideration).
“[A] party may not advance new facts, issues[,] or arguments not previously presented to
the Court on a motion for reconsideration.” Steinberg v. Elkman, 2016 WL 1604764, at *1
(S.D.N.Y. Apr. 6, 2016) (internal quotation marks omitted) (quoting Nat'l Union Fire Ins. Co. of
Pittsburgh v. Stroh Cos., 265 F.3d 97, 115 (2d Cir. 2001)). Nevertheless, reconsideration may be
granted because of “an intervening change of controlling law, the availability of new evidence, or
the need to correct a clear error or prevent manifest injustice.” Luv n’ Care Ltd. v. Goldberg
Cohen, LLP, 2016 WL 6820745, at *1 (S.D.N.Y. Nov. 10, 2016) (internal quotation marks
omitted) (quoting Hollander v. Members of the Bd. of Regents, 524 F. App’x 727, 729 (2d Cir.
2013) (summary order)); accord Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245,
1255 (2d Cir. 1992) (citations omitted).

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B. Application to the Facts
The Plaintiffs’ arguments center on whether the Court was correct in holding that their
tortious interference claims are truly claims for defamation otherwise disguised.
First, the Court need not reengage in such an analysis, because the Court did not solely rely
on its holding that the Plaintiffs’ tortious interference claims were actually claims for defamation.
Indeed, the Court held that the Plaintiffs failed to identify specific business entities with which the
Plaintiffs had business relationships; failed to allege that the Defendants acted for a wrongful
purpose or used dishonest, unfair, or improper means; and failed to allege that the Defendants
intentionally procured a breach.
However, since the Plaintiffs alternatively ask this Court to grant them leave to amend their
complaint to cure these deficiencies, the Court shall explain why the Plaintiffs’ motion for
reconsideration must fail.
The Plaintiffs do not point to any intervening controlling law, nor do they put forward
controlling case law that the Court overlooked. In its decision, the Court cited to Second Circuit
case law that explicitly stated that “New York law considers claims sounding in tort to be
defamation claims where those causes of action seek damages only for injury to reputation, or
where the entire injury complained of by plaintiff flows from the effect on his reputation.” Hengjun
Chao v. Mount Sinai Hosp., 476 F. App’x 892, 895 (2d Cir. 2012) (internal citations and quotation
marks omitted, emphasis added). As the Court previously held, although the Plaintiffs allege
economic damages, these economic damages all flowed from the reputational injury to Dr. Katz.
For this reason, the Court did not err in relying, in part, on Lader v. Delgado, 941 F. Supp. 2d 267
(E.D.N.Y. 2013).

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Furthermore, while it is true that the original defamatory statements were made by Justice
Hart of the New York State Supreme Court, the Plaintiffs commenced this action because the
Defendants allegedly repeated and disseminated those defamatory statements. The Plaintiffs’
complaint specifically states that “[t]he [D]efendants, jointly and severally, devised a plan and
scheme to ruthlessly and aggressively disseminate throughout the negligence defense industry, the
false and irresponsible allegations and accusations leveled against Dr. Katz by Justice Hart so that
anyone and everyone in the industry knew that Dr. Katz was on the ‘Do Not Use List.’” (Compl.
¶ 140).
In this regard, one of the cases cited by the Plaintiffs is instructive. The New York State
Appellate Division First Department, when faced with this question, summarized the case law in
New York:
In [Classic Appraisals Corp. v. DeSantis, 159 A.D.2d 537, 552 N.Y.S.2d 402 (2d
Dep’t 1990)], the Court found that the plaintiff's complaint sounded in tortious
interference when it alleged that the defendant’s conduct had interfered with
prospective appraisal contracts. [Id. at] 403. In contrast, in Pasqualini v.
MortgageIT, Inc., 498 F. Supp. 2d 659 (S.D.N.Y. 2007) when the plaintiff alleged
harm to her professional reputation that had an indirect effect on her ability to form
business relationships, the court found that the complaint sounded in defamation
and applied the associated one-year statute of limitations. Id., at 669–71. The
instant case more closely resembles DeSantis as the plaintiffs have alleged a
specific business relationship—the prospective deal between the Fund and
Citadel—that has been harmed. Because the complaint does not rely merely on
generalized reputational harm, we find that it sounds in tortious interference.
Therefore, the plaintiffs’ complaint was timely under the applicable three-year
statute of limitations.
Amaranth LLC v. J.P. Morgan Chase & Co., 71 A.D.3d 40, 48, 888 N.Y.S.2d 489, 494–95 (1st
Dep’t 2009). Here, the Plaintiffs have alleged that the Defendants placed Dr. Katz’ name on a “Do
Not Use List” and disseminated Justice Hart’s defamatory statements. In the Court’s view, this is
more akin to the situation in Pasqualini, because the actions imputed to the Defendants had an

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indirect effect on the Plaintiffs’ ability to form business relationships. That is, the Plaintiffs do not
allege that the Defendants directly interfered with the Plaintiffs’ relationships and contracts;
instead, they allege that the Defendants disseminated Justice Hart’s statements and placed Dr. Katz
on the Do Not Use list, thus indirectly affecting his relationships and contracts.
Therefore, the Plaintiffs’ motion for reconsideration is denied. Furthermore, their motion
to amend pursuant to Rule 15 is denied because it is procedurally improper, and because the
Plaintiffs’ claims for tortious interference are still barred by the Statute of Limitations. See N.Y.
C.P.L.R. 215-4 (stating that actions to recover damages for libel, slander, false words causing
special damages, inter alia, shall be commenced within one year). No amendment can change
that fact. If the Plaintiffs wish to move to amend their complaint to replead their cause of action
for prima facie tort, they are granted leave to do so, in the event that it is filed as a formal motion
with a memorandum of law explaining why such an amendment is not futile.
III. CONCLUSION
For the reasons stated above, the Plaintiffs’ motion for reconsideration, or in the alternative,
for leave to amend the complaint pursuant to Rule 15 is denied in its entirety.

SO ORDERED:
Dated: Central Islip, New York
September 20, 2017
_____/s/ Arthur D. Spatt_____
ARTHUR D. SPATT
United States District Judge

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