Brennan v. The Roman Catholic Diocese of Syracuse New York, Inc.

Filing 137

DECISION & ORDER denying # 132 Plaintiff's Motion for Reconsideration. Counsel are directed to appear for a pretrial conference on 12/17/13 at 11:00 am in Syracuse with settlement authority. Plaintiff is directed to forward a written settlement demand to defendant no later than 12/4/13. In the event that settlement is unlikely, counsel may request in writing one week prior to the pretrial conference to participate via telephone conference for the limited purpose of scheduling a trial date. Signed by Judge Glenn T. Suddaby on 11/20/13. (lmw)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
_________________________________________
DENNIS BRENNAN,
Plaintiff,
v.

5:09-CV-1015
(GTS/ATB)

THE ROMAN CATHOLIC DIOCESE
OF SYRACUSE NEW YORK, INC.,
Defendant.
_________________________________________
APPEARANCES:

OF COUNSEL:

SCHLATHER STUMBAR PARKS & SALK, LLP
Counsel for Plaintiff
200 East Buffalo Street, P.O. Box 353
Ithaca, NY 14851

RAYMOND SCHLATHER, ESQ.
DIANE V. BRUNS, ESQ.

SEARCY DENNEY SCAROLA
BARNHART & SHIPLEY, P.A.
Co-Counsel for Plaintiff
2139 Palm Beach Lakes Boulevard
West Palm Beach, FL 33409

JOHN SCAROLA, ESQ.

HANCOCK & ESTABROOK, LLP
Counsel for Defendant
1500 AXA Tower I, 100 Madison Street
Syracuse, NY 13202

PAUL M. HANRAHAN, ESQ.
MAUREEN E. MANEY, ESQ.
JANET D. CALLAHAN, ESQ.

GLENN T. SUDDABY, United States District Judge
DECISION and ORDER
Currently before the Court, in this breach-of-contract action filed by Dennis Brennan
("Plaintiff") against The Roman Catholic Diocese of Syracuse New York, Inc. (“Defendant”), is
Plaintiff’s motion for reconsideration of the Court’s Decision and Order of August 14, 2013.
(Dkt. No. 132.) For the reasons set forth below, Plaintiff’s motion is denied.

I.

RELEVANT BACKGROUND
A.

Procedural History

Because this Decision and Order is intended primarily for the review of the parties, the
Court will not recite in detail this action’s procedural history, except to note the following
events: (1) on October 10, 2007, Plaintiff filed his original Complaint in this action; (2) on June
29, 2009, Plaintiff filed an unauthorized Amended Complaint, and on June 2, 2010, he filed a
(revised) Second Amended Complaint; (3) on January 10, 2012, the Court granted Defendant’s
motion to dismiss certain of Plaintiff’s claims for failure to state a claim pursuant to Fed. R. Civ.
P. 12(b)(6), dismissing his Third, Fourth and Fifth Causes of Action (for fraud, negligence and
breach of fiduciary duty), and leaving pending his First and Second Causes of Action (for
declaratory judgment and breach of contract); (4) on July 26, 2012, Defendant filed a motion for
summary judgment; (5) on August 10, 2012, Plaintiff moved for leave to file a Third Amended
Complaint, and on August 27, 2012, he filed an opposition to Defendant’s motion for summary
judgment; (6) on September 10, 2012, Defendant filed an opposition to Plaintiff’s motion to
amend and a reply to Plaintiff’s opposition; (7) on August 14, 2013, the Court issued a Decision
and Order dismissing Plaintiff’s First Cause of Action to the extent it was based on a tort theory
of liability, and denying Plaintiff’s motion to amend; (8) on August 28, 2013, Plaintiff filed a
motion for reconsideration of the Court’s Decision and Order of August 14, 2013; and (9) on
September 16, 2013, Defendant filed an opposition to that motion. (See generally Docket
Sheet.)

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B.

Parties’ Briefing on Plaintiff’s Motion for Reconsideration
1.

Plaintiff’s Memorandum of Law in Chief

Generally, in his motion for reconsideration, Plaintiff asserts two arguments. First, he
argues, the Court should reconsider its Decision and Order of August 14, 2013, dismissing the
tort-based portion of his First Cause of Action for declaratory judgment (on the ground of the
law-of-the-case doctrine, specifically, the Court’s Decision and Order of January 10, 2012,
dismissing all of Plaintiff’s tort claims), because of an intervening change of controlling law
(namely, the Florida Supreme Court’s decision of March 13, 2013, in Tiara Condo Assoc., Inc. v.
Marsh & McLennan Co., Inc., 110 So.3d 399 [Fla. 2013], limiting the application of the
economic-loss doctrine to products liability cases, and not permitting it to extend to other tort
cases or to contract cases). (Dkt. No. 132, Attach. 3, at 3-6 [attaching pages “2” through “5” of
Plf.’s Memo. of Law].)
Second, he argues, the Court should reconsider its Decision and Order of August 14,
2013, denying Plaintiff’s motion for leave to file a Third Amended Complaint on the ground that
Plaintiff’s claim of fraud in the inducement in his Second Amended Complaint had already been
rejected on the merits by the Court in its Decision and Order of January 10, 2012, because of
both clear error and manifest injustice, specifically, (a) the fact that the Second Amended
Complaint never intended to assert a claim of fraud in the inducement, and that such a claim was
dismissed based only on a pleading deficiency (and not on the merits), and (b) the fact that,
while the (PDF-formatted) version of the proposed Third Amended Complaint that was docketed
did not identify the proposed amendments through a red-lined process or equivalent means, the
(Word-formatted) version of the proposed Third Amended Complaint that was submitted

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contained proposed amendments that were “color-highlighted,” demonstrating Plaintiff’s goodfaith effort to comply with Local Rule 7.1(a)(4) of the Local Rules of Practice for this Court.
(Id. at 4, 6-8 [attaching pages “3,” and “5” through “7,” of Plf.’s Memo. of Law].)
2.

Defendant’s Opposition Memorandum of Law

Generally, in its response, Defendant asserts two arguments. First, it argues, the Tiara
Condo decision issued by the Florida Supreme Court did not effect a change in controlling law
relevant to this action, because (a) while it limited the economic loss rule to cases involving
products liability, it did not change the long-standing common-law rule that a party cannot
maintain causes of action for both breach of contract and tort where they arise out of the exact
same conduct, or where the allegations supporting the claim of breach of contract contradict the
tort claim, (b) Plaintiff’s First Cause of Action for declaratory judgment is not based on either
fraud or fraud in the inducement, and (c) his request to revisit the Court’s dismissal of his fraud
claim is untimely in that the dismissal occurred on January 10, 2012. (Dkt. No. 135, Attach. 1, at
4-8 [attaching pages “1” through “5” of Def.’s Opp’n Memo. of Law].)
Second, it argues, the standards of “clear error” and “manifest injustice” cited by Plaintiff
do not warrant reconsideration, because (a) a side-by-side comparison of the Second Amended
Complaint and the proposed Third Amended Complaint reveals that the Second Amended
Complaint did, in fact, attempt to assert a claim of fraud in the inducement, and in any event
such a claim cannot survive where, as here, it is based on the same facts as is a claim of breach
of contract (and, even if it were not, it is unsupported by sufficient factual allegations), and (b)
even if the Court were to excuse Plaintiff’s failure to provide a red-lined copy of his proposed
Third Amended Complaint, alternative grounds exist for denying Plaintiff’s motion (specifically,

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undue delay, lack of good cause, undue prejudice, and futility). (Id. at 8-10 [attaching pages “5”
through “7” of Def.’s Opp’n Memo. of Law].)
II.

LEGAL STANDARD
Local Rule 7.1(g) of the Local Rules of Practice for this Court provides as follows, in

pertinent part:
Motion for Reconsideration. Unless Fed. R. Civ. P. 60 otherwise
governs, a party may file and serve a motion for reconsideration or
reargument no later than FOURTEEN DAYS after the entry of the
challenged judgment, order, or decree. All motions for reconsideration
shall conform with the requirements set forth in L.R. 7.1(a)(1) and (2).
The briefing schedule and return date applicable to motions for
reconsideration shall conform to L.R. 7.1(b)(2). . . . The Court will decide
motions for reconsideration or reargument on submission of the papers,
without oral argument, unless the Court directs otherwise.
N.D.N.Y. L.R. 7.1(g) (emphasis in original).
Generally, a court may justifiably reconsider its previous ruling if "[1] there has been an
intervening change in controlling law, [2] there is new evidence, or [3] a need is shown to
correct a clear error of law or to prevent manifest injustice." United States v. Sanchez, 35 F.3d
673, 677 (2d Cir.), cert. denied, 514, U.S. 1038 (1995); accord, Doe v. New York City Dep't of
Soc. Servs., 709 F.2d 782, 789 (2d Cir.), cert. denied, 464 U.S. 864 (1983); 18B Wright &
Miller, Federal Practice and Procedure § 4478, at 670-691 (2d ed. 2002 & Supp. 2009). Such is
the standard for motions for reconsideration filed under Local Rule 7.1(g) in this District. See,
e.g., In re C-TC 9th Ave. P'ship, 182 B.R. 1, 3 (N.D.N.Y.1995) (McAvoy, C.J.); Cayuga Indian
Nation of New York v. Pataki, 188 F. Supp .2d 223, 244 (N.D.N.Y.2002) (McCurn, S.J.); Sumner
v. McCall, 103 F.Supp.2d 555, 558 (N.D.N.Y.2000) (Kahn, J.).

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The standard for granting a motion for reconsideration is strict. Shrader v. CSX Transp.,
Inc., 70 F.3d 255, 257 (2d Cir. 1995). A motion for reconsideration "should not be granted
where the moving party seeks solely to relitigate an issue already decided." Shrader, 70 F.3d at
257. Furthermore, a motion for reconsideration is not to be used for "presenting the case under
new theories, securing a rehearing on the merits, or otherwise taking a 'second bite at the apple'. .
. ." Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998).
III.

ANALYSIS
A.

Reconsideration of Dismissal of Tort-Based Portion of Plaintiff’s First Cause
of Action (for Declaratory Judgment) Based on Purported Intervening
Change of Controlling Law

After carefully considering the matter, the Court denies this part of Plaintiff’s motion for
several alternative reasons.
As an initial matter, the Court notes that this is not a typical “intervening change of
controlling law” case, in which the law changes after the Court issues the decision challenged by
the motion for reconsideration (or perhaps after the briefing was completed on the underlying
motion). Rather, this is a case in which the decision challenged by the motion for
reconsideration was preceded by both the issuance of an earlier decision addressing the issue and
the occurrence of the purported change in controlling law. To the extent Plaintiff argues that he
did not know the “error” in the Court’s earlier decision was material until the Court issued its
second decision, that argument is unpersuasive. Defendant implicitly, if not explicitly, relied on
the economic-loss rule in its motion to dismiss; Plaintiff addressed that rule in his opposition
memorandum of law; and the Court expressly relied on that rule in its Decision and Order of
January 10, 2012. (See, e.g., Dkt. No. 86, Attach. 23, at 5-10; Dkt. No. 91, Attach. 3, at 10-13;

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Dkt. No. 101, at 17.) Simply stated, Plaintiff should have known that the “error” was material
when the Florida Supreme Court issued its decision on March 13, 2013. As a result, he should
have either (a) sought leave to file a belated motion for reconsideration at that time or (b) at the
very least sought leave to file either a supplemental response or sur-reply at that time. His
failure to do so has resulted in piecemeal briefing.
In any event, setting aside Plaintiff’s motion practice, the Court finds that the change of
law he references does not require reinstatement of his tort claims. The Court renders this
finding for the first and second of the three reasons stated by Defendant in its opposition
memorandum of law (the third reason having already been adopted in the preceding paragraph).
See, supra, Part I.B.2. of this Decision and Order. The Court would add only the following
analysis.
While parts of Plaintiff’s motion request reconsideration of the dismissal of the
tort-based portion of Plaintiff's First Cause of Action, other parts of Plaintiff’s motion request
reconsideration of the dismissal of only the fraud-based portion of Plaintiff's First Cause of
Action. (Dkt. No. 132, Attach. 3, at 3-6 [attaching pages “2” through “5” of Plf.’s Memo. of
Law].) Out of special solicitude to Plaintiff, the Court will liberally construe his motion as
containing the former request.
Before the Court issued its Decision and Order of January 10, 2012, there were pending
before it, inter alia, a claim of breach of contract and three tort claims: a claim of fraud (and/or
fraud in the inducement), a claim of negligence, and a claim of breach of fiduciary duty. (Dkt.

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No. 73, at ¶¶ 110-140; Dkt. No. 101, at 5-6.)1 In the Court’s Decision and Order of January 10,
2012, Plaintiff’s claim of fraud (and/or fraud in the inducement) was dismissed based on three
alternative grounds: (1) the economic-loss rule, (2) the failure to allege tortious conduct
independent of acts giving rise to a breach of contract, and (3) the failure to allege facts giving
rise to a claim of fraud or fraud in the inducement (particularly, an intent to defaud). (Dkt. No.
101, at 16-22.) Plaintiff’s claim of negligence was dismissed based on two alternative grounds:
(1) the “undertaker’s doctrine” and (2) the physical-impact rule. (Id. at 12-16.) Plaintiff’s claim
of breach of fiduciary duty was dismissed based on two alternative grounds: (1) the
“undertaker’s doctrine” and (2) the failure to allege a fiduciary relationship. (Id. at 22-25.)
Because of the alternative natures of these dismissals (and because two of the dismissals were in
no way based on the economic-loss rule), none of the dismissals needs to be vacated due to the
change in the economic-loss rule.
Granted, upon further reflection, some uncertainty may exist regarding the second reason
for the dismissal of Plaintiff’s claim of fraud or fraud in the inducement (i.e., the failure to allege
tortious conduct independent of acts giving rise to a breach of contract), due the fact that Fed. R.
Civ. P. 8(d)(2) generally allows for the pleading of alternative claims.
However, even if that second reason was without merit, an independent reason existed to
dismiss that claim: Plaintiff’s Second Amended Complaint fails to allege facts plausibly
suggesting that Defendant intended to defraud Plaintiff when it made the representations in
question; to the contrary, Plaintiff has alleged facts plausibly suggesting that Defendant intended

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The Court notes that, in Tiara, there was no breach-of-contract claim still pending
in the action when the Supreme Court answered the certified question. Tiara, 110 So.3d at 40001.
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to keep its promise to pay for Plaintiff’s reasonable medical treatment. The Court reaches this
conclusion for the reasons stated by Defendant in its memoranda of law on its prior motion to
dismiss, as well as the additional reasons stated by the Court in its Decision and Order of January
10, 2012. (Dkt. No. 86, Attach. 23, at 5-8; Dkt. No. 93, at 4-8; Dkt. No. 101, at 16-22; see also
Dkt. No. 73, at ¶¶ 1-104, 110-27.)
As explained by Justice Barbara Pariente in her concurring decision in Tiara, the
majority’s decision did nothing to unsettle Florida’s long-standing contract and tort law. “For
example, in order to bring a valid tort claim, a party still must demonstrate that all of the required
elements for the cause of action are satisfied . . . .” Tiara, 110 So.3d at 408. Elements of a
claim of fraud in the inducement include, inter alia, (1) knowledge by the person making the
statement that the representation is false and (2) intent by that person that the representation
induce another to act on it. (Dkt. No. 101, at 17.)
Finally, as yet another alternative ground for this part of the Court’s decision, the Court
finds that Plaintiff’s First Cause of Action fails to allege facts plausibly suggesting that his
request for declaratory relief is based on his claim of fraud or fraud in the inducement: rather,
Plaintiff’s First Cause of Action is expressly based on “the Diocese’s promise to pay for his
psychological treatment . . . [,] the Diocese[‘s] undertaking to perform, . . . the Charter[,] . . .
Policy and Report of the Diocese, and related policies of the Diocese . . . .” (Dkt. No. 73, at ¶¶
105-09.)
B.

Reconsideration of Denial of Motion to Amend Based on Purported Clear
Error of Law and/or Manifest Injustice

After carefully considering the matter, the Court denies this part of Plaintiff’s motion for
the reasons stated by Defendant in its opposition memorandum of law. See, supra, Part I.B.2. of
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this Decision and Order. The Court would add only the following four points.
First, fraud in the inducement was not the only claim that Plaintiff attempted to assert in
his proposed Third Amended Complaint: he also attempted to assert, inter alia, a claim of
Intentional Infliction of Emotional Distress. (Dkt. No. 115, Attach. 3, at ¶¶ 155-164 [Plf.’s
Proposed Third Am. Compl.].) However, he does not discuss that claim in his motion for
reconsideration, even though the motion seeks to vacate the entire denial of his motion to amend.
(Dkt. No. 132, Attach. 3, at 6-8 [attaching pages “5” through “7” of Plf.’s Memo. of Law].) As a
result, to the extent Plaintiff’s motion for reconsideration requests leave to file his proposed
claim of Intentional Infliction of Emotional Distress, that motion is denied.
Second, Plaintiff’s current argument that he never intended to assert a claim of fraud in
the inducement in his Second Amended Complaint is unpersuasive. In his opposition to
Defendant’s motion to dismiss his Amended Complaint, Plaintiff argued that he was attempting
to assert a claim of fraud in the inducement. (See, e.g., Dkt. No. 91, Attach. 3, at 6-8 [“Those
promises were made before Dennis Brennan entered into the oral contract with the Diocese and
induced him to enter into the contract. . . . [T]here was fraud on the part of the Diocese that
began before the contract was formed, induced the Plaintiff to enter into the contract, and
continued throughout its execution to induce the Plaintiff to continue to rely on the Defendant’s
contract promises. . . . It was that fraud in the inducement to enter into and maintain the contract
. . . that caused the non-economic injuries which are the primary focus of Count 3.”] [emphasis
added].) Moreover, if Plaintiff never intended to assert a claim of fraud in the inducement in his
Second Amended Complaint, then he should have moved for reconsideration of that dismissal on
January 24, 2012 (i.e., 14 days after the Court’s Decision and Order of January 10, 2012). He

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did not do so. Instead, he has made that argument more that one year and seven months later
(i.e., in his motion for reconsideration of August 28, 2013).
Third, even assuming the truth of Plaintiff’s intent argument, the denial of his motion to
amend was also based on the fact that the deadline for such motions expired two years and two
months before Plaintiff filed his motion, and Plaintiff failed in his motion to show good cause for
his delay. (Dkt. No. 131, at 11-12, 22, 25.) In his motion for reconsideration, Plaintiff has not
pointed to how the Court erred in basing its decision on that failure. (See generally Dkt. No.
132, Attach. 3, at 6-8 [attaching pages “5” through “7” of Plf.’s Memo. of Law].) To the extent
he argues that sufficient discovery had not yet been produced to permit him to successfully plead
that claim, Plaintiff has neither adduced evidence of that fact nor shown how that evidence was
previously unavailable to him (i.e., when he made his motion to amend).
Fourth, in addition to being based on a lack of good cause, the denial of Plaintiff’s
motion to amend was based on his counsel’s failure to identify the proposed changes through a
red-lined method or other equivalent means. (Dkt. No. 131, at 25.) Regarding the good-faith
defense proffered by Plaintiff, good faith is of little materiality to a violation of Local Rule
7.1(a)(4). The issue, strictly stated, is willfulness. See Fed. R. Civ. P. 83(a)(2). Moreover, even
if a movant nonwillfully fails to identify the changes in a proposed amended pleading, the Court
is unable to identify those changes without guessing what they might be, at its own peril. (At
most, then, a movant’s nonwillfulness might cause the Court to deny his motion merely without
prejudice.) In any event, there was no nonwillfulness here. For the sake of brevity, the Court
will not linger on his certification (upon admission to practice in this Court) that he read and
understood the Court’s Local Rules of Practice, or his decision to use highlighting (rather than

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the “redline/strikeout” method in WordPerfect, the “Track Changes” method in Word, or a lesssophisticated method such as simple underlining or bold or italic typeface). More important is
the fact that Plaintiff’s counsel could have noticed the error by opening the document in Portable
Document Format (“PDF”) before docketing it (in order to confirm that conversion had
occurred). Finally, setting aside the failure to identify the inserted words, Plaintiff’s counsel
failed to attempt to identify the deleted words through “strikeout” marks (or an equivalent
method).
ACCORDINGLY, it is
ORDERED that Plaintiff’s motion for reconsideration (Dkt. No. 132) is DENIED; and it
is further
ORDERED that counsel are directed to appear on DECEMBER 17, 2013 at 11:00 a.m.
in chambers for a pretrial conference, at which counsel are directed to appear with settlement
authority, and in the event that the case does not settle, trial will be scheduled at that time.
Plaintiff is further directed to forward a written settlement demand to defendants no later than
DECEMBER 4, 2013, and the parties are directed to engage in meaningful settlement
negotiations prior to the pretrial conference. In the event that counsel feel settlement is unlikely,
counsel may request to participate via telephone conference for the limited purpose of
scheduling a trial date by electronically filing a letter request at least one week prior to the
scheduled conference.
Dated: November 20, 2013
Syracuse, New York

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