Staudinger & Franke GMBH et al v. Casey et al

Filing 106

MEMORANDUM OPINION AND ORDER. The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, they are either moot or without merit. For the foregoing reasons, the plaintiffs' motion for partial summ ary judgment against MCA is granted, and judgment is granted for the plaintiffs on Count One of their Complaint against MCA in the amount of $400,484.97. The plaintiffs' motion to sever and bifurcate claims is denied. The Clerk is directed to close Docket No. 57. re: 57 MOTION for Partial Summary Judgment . MOTION to Sever filed by Staudinger & Franke GMBH, Andreas Franke. (Signed by Judge John G. Koeltl on 6/6/2015) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
_____________________________________
STAUDINGER+FRANKE GMBH and ANDREAS FRANKE,
13 Cv. 6124 (JGK)
Plaintiffs,
- against -

MEMORANDUM OPINION AND
ORDER

PATRICK CASEY, ET AL.,
Defendants.
_____________________________________
JOHN G. KOELTL, District Judge:
This is a motion by the plaintiffs for partial summary
judgment and for bifurcation and severance.

The plaintiff

Staudinger+Franke GMBH is a corporation engaged in commercial
photography, and the individual plaintiff Andreas Franke is a
photographer.

They hired the defendant MCA Creative Services

Inc. (“MCA”) as their agent to obtain business.

MCA collected

the fees from the clients and was to remit 70% of those fees to
the plaintiffs.
It is undisputed that MCA collected fees from clients for
whom the plaintiffs did work but failed to remit $400,484.97 to
the plaintiffs.

The plaintiffs sued not only MCA but also the

individual defendants for breach of contract and a variety of
other state law theories claiming that the individual defendants
were personally responsible for the debts of MCA and they had

made fraudulent transfers from MCA to which the plaintiffs
should be entitled.
The plaintiffs now move for partial summary judgment on
their breach of contract claim against MCA in the amount of
$400,484.97.

None of the defendants have opposed that motion

and it is clear that the plaintiffs are entitled to summary
judgment in that amount from MCA.

Therefore judgment will be

entered in favor of the plaintiffs against MCA in that amount.
Moreover, there is no just reason for delay and a partial
judgment will be entered in that amount pursuant to Rule 58.
The plaintiffs also move to sever the claims to set aside
and recover fraudulent transfers from the remaining claims
against the individual defendants and to try those fraudulent
transfer claims separately.
Under Federal Rule of Civil Procedure 42, a court may
bifurcate the trial of issues or claims “[f]or convenience, to
avoid prejudice, or to expedite and economize.” Fed. R. Civ. P.
42(b).

Whether to bifurcate and sever claims is committed to

the sound discretion of the trial court.

See Amato v. City of

Saratoga Springs, N.Y., 170 F.3d 311, 316 (2d Cir. 1999).

The

court should consider factors such as “whether bifurcation is
needed to avoid or minimize prejudice, whether it will produce
economies in the trial of the matter, and whether bifurcation
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will lessen or eliminate the likelihood of juror confusion.”
Crown Cork & Seal Co. Master Ret. Trust v. Credit Suisse First
Boston Corp., 288 F.R.D. 335, 337 (S.D.N.Y. 2013) (internal
quotation marks omitted).
In this case, there is no basis for bifurcation.

The

plaintiffs have not attempted to define precisely which claims
in the Complaint will be bifurcated and how the proof with
respect to those claims will not overlap with the proof of the
remaining claims.

It is plain that the individual defendants

would have to be witnesses at both trials because the issues
will be what roles and responsibility they had at MCA and
whether they transferred funds from MCA that they should not
have transferred.

Proof at both trials would overlap, with

increased expense and burden on the individual defendants and
the judicial system.
The plaintiffs argue that this Court recognized the complex
issues that would be raised by the fraudulent conveyance claims
at a discovery conference on May 8, 2014, and “deferred
discovery on that aspect of the case” as premature.
¶ 5.

Pikus Decl.

Unfortunately, the Court did not have a court reporter

present for that conference because the Court trusted the
parties to follow the Court’s directives.

But the defendants

more accurately depict what occurred at that conference.
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The

occasion for the discovery conference was a dispute over the
request for documents by the plaintiffs.

The plaintiffs claimed

that the defendants had failed to comply with the document
request and the defendants contended that the document request
was overly broad.
overbroad.

The document request was indeed egregiously

The plaintiffs asked the defendants for literally

every financial document that they had maintained or which
contained substantially the same information over an approximate
five year period including all canceled checks, bank statements,
securities transactions, electronic transfer records, deposit
slips, income tax returns, credit and debit card statements,
credit applications, mortgage or loan applications, purchases of
any cars, inventory, or equipment, and documents relating to
jewelry, antiques, and paintings.

And then for good measure,

the plaintiffs requested all documents relating to the
defendants’ ownership interest in any asset whatsoever “to the
extent not covered above.”

See Pikus Decl. Ex. F.

appeared to be calculated to burden and harass.
not bifurcate discovery.

The request

The Court did

Rather, the Court limited the

discovery request to documents that related to MCA.
There is no order of the Court that in any way bifurcated
discovery or directed that reasonable and relevant discovery be
held in abeyance.

After the conference, the Court entered a
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revised scheduling order dated September 23, 2014, that extended
the time to complete all discovery to October 31, 2014.

There

was no exception for discovery related to fraudulent transfers.
The Court also directed that motions for summary judgment were
to be submitted by November 21, 2014, and indicated that no premotion conference would be required.

The plaintiffs made no

applications to the Court for further discovery.

If there were

problems with discovery, they should have been brought to the
Court’s attention during discovery, not after the close of
discovery.
The plaintiffs seek to bifurcate the trial of the
fraudulent conveyance claims although the exact bifurcation is
unclear.

They also seek additional discovery on those claims

with the argument that discovery on those claims was severed and
deferred.
closed.

There was no severance and no deferral.

Discovery is

In response to the defendants’ protest that discovery

is closed, the plaintiffs respond that this is a “straw man.”
But it is not.

The plaintiffs use their motion for bifurcation

to argue for additional discovery, but discovery is closed and
there is no basis for additional discovery.
In their reply brief, the plaintiffs argue that judicial
estoppel prevents the defendants from arguing against severance
and bifurcation because the defendants had originally proposed
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that course of action to the Court.

However, the plaintiffs

opposed such bifurcation and the Court did not accept it.

In

order for the plaintiffs to invoke judicial estoppel, the Court
must have accepted the defendants’ position.
v. Maine, 532 U.S. 742, 750-51 (2001).

See New Hampshire

The Court did not and

has never approved bifurcation in this case.
Therefore, the motion for severance and bifurcation is
denied.
Conclusion
The Court has considered all of the arguments of the
parties.

To the extent not specifically addressed above, they

are either moot or without merit.

For the foregoing reasons,

the plaintiffs’ motion for partial summary judgment against MCA
is granted, and judgment is granted for the plaintiffs on Count
One of their Complaint against MCA in the amount of $400,484.97.
The plaintiffs’ motion to sever and bifurcate claims is denied.
The Clerk is directed to close Docket No. 57.
SO ORDERED.
Dated: New York, New York
June 6, 2015

____________/s/______________
John G. Koeltl
United States District Judge

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