Aghaeepour et al v. Northern Leasing Systems, Inc. et al

Filing 29

OPINION & ORDER: the Defendants' Motion for Reconsideration is DENIED. The Court corrects subsection (3) in the Conclusion of the December Opinion to dismiss the FCRA and NYFCRA claims based on inaccurate reporting of plaintiffs Higgins, Norris, Shilber, and Schilco, Inc. The Clerk of Court is respectfully requested to terminate the pending Motion. (ECF No. 20.) SO ORDERED. (Signed by Judge Nelson Stephen Roman on 2/25/2016) (lnl)

---~~---

USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

t

I

DOC#:
DATE FILED: 2- 2.-S' '2'tlf(O

ELAINE AGHAEEPOUR, ASHLEY GLASGOW,
JULIE HIGGINS, SHANE MOORE, MICHELE
NORRIS, JESUS RIVERA, SCHILCO, INC. and
RAY SHILBER,
Plaintiffs,
14 cv 5449 (NSR)
-againstOPINION & ORDER
NORTHERN LEASING SYSTEMS, INC., MBF
LEASING, LLC, LEASE FINANCE GROUP, LLC,
LOUIS CUCINOTTA, JENNIFER CENTENO a/k/a
JENNIFER NUGENT, JAY COHEN, SARA
KRIEGER, JOSEPH I. SUSSMAN, and JOSEPH I.
SUSSMAN, P.C.,
Defendants.
NELSONS. ROMAN, United States District Judge:
Elaine Aghaeepour ("Aghaeepour"); Ashley Glasgow ("Glasgow"); Julie Higgins
("Higgins"); Shane Moore ("Moore"); Michele Norris ("Norris"); Jesus Rivera ("Rivera");
Schilco, Inc. ("Schilco"); and Ray Schilber ("Schilber") (collectively, "Plaintiffs") filed the
instant Complaint against Jay Cohen ("Cohen"); Sara Krieger ("Krieger"); Jennifer Centeno
("Centeno"); Louis Cucinotta ("Cucinotta") (collectively, "Individual Defendants"); Joseph I.
Sussman ("Sussman"); Joseph I. Sussman, P.C. ("Sussman, P.C.") (collectively, "Sussman
Defendants"); Lease Finance Group, LLC ("LFG"); MBF Leasing, LLC ("MBF"); and Nmthern
Leasing Systems, Inc. ("NLS") (collectively, "Corporate Defendants") (with Individual
Defendants and Sussman Defendants, collectively, "Defendants"), alleging claims under the
federal Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962, 1964; the
federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 b(f), 1681s-2(b)(A); New York's
Anti-Deceptive Trade Practices Act ("NYFCRA"), N.Y. Gen. Bus. Law§§ 349, 380; and

I\I
\

common law fraud (See First Am. Compl. (“Compl.”), ECF No. 6.) On December 1, 2015, this
Court ruled on Defendants’ motion to dismiss pursuant to Federal Rules of Civil Procedure 8(a),
9(b), and 12(b)(6). (See Opinion & Order, ECF No. 19.) (the “December Order”). Presently
before the Court is Defendants’ Motion for Reconsideration of the December Order.
For the reasons set forth below, the Defendants’ motion (ECF No. 20) is DENIED.
LEGAL STANDARD
Motions for reconsideration are governed by Local Civil Rule 6.3 and Federal Rule of
Civil Procedure 60(b). The standard for granting a motion for reconsideration pursuant to Local
Rule 6.3 is strict. Targum v. Citrin Cooperman & Conipany, LLP, 2013 WL 6188339, at *1
(S.D.N.Y. Nov. 25, 2013). Motions for reconsideration are “addressed to the sound discretion of
the district court[.]” Mendell ex rel. Viacom, Inc. v. Gollust, 909 F.2d 724, 731 (2d Cir. 1990). A
motion to reconsider “is not a vehicle for . . . presenting the case under new theories . . . or
otherwise taking a ‘second bite at the apple . . . .’” Analytical Surveys, Inc. v. Tonga Partners,
L.P., 684 F.3d 36, 52 (2d Cir. 2012) (quoting Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d
Cir. 1998); see also Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Stroh Cos., 265 F.3d 97, 115
(2d Cir. 2001) (in moving for reconsideration, “‘a party may not advance new facts, issues, or
arguments not previously presented to the Court.’”) (quoting Polsby v. St. Martin’s Press, No. 97
Civ. 690(MBM), 2000 WL 98057, at *1 (S.D.N.Y. Jan. 18, 2000) (Mukasey, J.)). They “‘will
generally be denied unless the moving party can point to controlling decisions or data that the
court overlooked.’” Analytical Surveys, 684 F.3d at 52 (quoting Shrader v. CSX Transp., Inc., 70
F.3d 255, 257 (2d Cir. 1995)). Reconsideration of a court’s previous order is “an extraordinary
remedy to be employed sparingly in the interests of finality and conservation of scarce judicial
resources.” In re Initial Pub. Offering Sec. Litig., 399 F. Supp. 2d 298, 300 (S.D.N.Y. 2005)

2

(internal citation and quotation omitted), aff’d sub nom. Tenney v. Credit Suisse First Boston
Corp., Nos. 05 Civ. 3430, 05 Civ. 4759, & 05 Civ. 4760, 2006 WL 1423785, at *1 (2d Cir.
2006).
DISCUSSION
Familiarity with the December Order is presumed. Defendants, on the instant motion,
argue that the December Order (i) does not contain any discussion of or decision on Defendants’
motion to dismiss Count XII of the FAC, fraud; (ii) does not address Defendants’ argument
regarding Plaintiffs’ failure to properly plead “control of an enterprise” in order to maintain
claims against the individual Defendants; (iii) should have dismissed with prejudice the
inaccurate reporting claims of Plaintiffs Glasgow, Moore and Norris for the same reason that
their claims for RICO violations were dismissed, res judicata; and (iv) in its concluding
paragraph, subsection (3), does not accurately reflect the claims dismissed. (See Defendants’
Memorandum of Law in Support of Motion to Seek Reconsideration of Decision and Order on
Motion to Dismiss the First Amended Complaint (“Defs. Memo”), ECF No. 21, at 1.) Each
argument will be addressed in turn.
I.

Defendants’ Motion to Dismiss Count XII for Fraud
Defendants argue that “dismissal [of the fraud claims] was [] warranted because the

common law fraud claim does not specify the content of any fraudulent communications to any
Plaintiff, who sent them, where and when they took place, that Plaintiff reasonably relied on
them, or why they were fraudulent.” (Defs. Memo, at 2.) Defendants’ attempt to distinguish this
argument from the pleading requirement under Fed. R. Civ. P. 9(b) is meritless. Plaintiffs
addressed this argument in their memorandum (Plaintiffs’ Memorandum of Law in Opposition to
Defendants’ Motion to Dismiss the First Amended Complaint, ECF No. 17, at 2-8.), and the

3

Court addressed this argument sufficiently in its opinion. 1 (See December Opinion, at 8-12.)
Defendants have not provided the Court with any new decisions or data that the Court
overlooked, and they may not simply rehash this argument on a motion for reconsideration. See
Analytical Surveys, 684 F.3d at 52.
Defendants further argue that the claims for common law fraud of Plaintiffs Glasgow,
Moore and Norris should have been dismissed because their claims were barred by res judicata.
In their motion to dismiss, Defendants did not move to dismiss these fraud claims on the basis of
res judicata. In light of this failure, the Court did not venture out to decide whether these
additional claims were barred by res judicata. This argument is therefore presented for the first
time on this motion for reconsideration and is improper. 2 See Nat’l Union Fire Ins. Co. of
Pittsburgh, PA, 265 F.3d at 115 (in moving for reconsideration, “a party may not advance new
facts, issues, or arguments not previously presented to the Court.”) (internal citations omitted).
II.

Direction or Control of the Enterprise
Next, Defendants repeat their argument that the Plaintiffs’ RICO claims should be

dismissed “[b]ecause the [Complaint] does not adequately allege that each Defendant directed or
controlled the affairs of the RICO enterprise.” (Defs. Memo, at 5-6.) Not only was this argument
improperly asserted in Defendants’ original reply papers—rather than moving papers—but the
Court specifically addressed the exact argument notwithstanding Defendants’ error in raising it:
Moreover, despite Defendants’ argument that the “allegations are
insufficient to plausibly allege that each of these defendants
controlled the alleged fraudulent scheme,” Plaintiffs have
sufficiently described each defendant’s participation. … Defendant
misapplies the control requirement. As outlined in the very case
1
Contrary to Defendants’ contention, the Court devotes over 4 pages to this very argument. (See December
Opinion, at 8-12.) Defendants’ claim that the December Order “does not contain any discussion of” their argument
to dismiss based on inadequately specific pleading is therefore completely baseless and incomprehensible.
2
Defendants additionally assert that res judicata bars “all of the claims that these Plaintiffs seek to assert in
this case.” Similarly, this is a new argument, and the Court will not consider it here.

4

Defendant cites, “[o]f course, the word ‘participate’ makes clear that
RICO liability is not limited to those with primary responsibility for
the enterprise's affairs, just as the phrase ‘directly or indirectly’
makes clear that RICO liability is not limited to those with a formal
position in the enterprise, but some part in directing the enterprise's
affairs is required.” Reves v. Ernst & Young, 507 U.S. 170, 179, 113
S. Ct. 1163, 1170, 122 L. Ed. 2d 525 (1993). A defendant, therefore,
does not need to have complete control over the affairs of the
Enterprise—he or she must only play some part in directing the
scheme.
The Complaint plainly meets this standard as to each defendant. As
outlined above, Plaintiffs provide the job titles of each Individual
Defendant, as well as how their individual responsibilities
demonstrate their participation in the scheme. For example, the
Complaint describes how defendant Krieger, the Vice President of
Operations for Defendant NLS, is responsible for day-to-day
operations and lease originations. (Compl. ¶¶ 111-112, 132.) Given
that the fraudulent scheme stems from the origination of leases,
defendant Krieger’s direction in the scheme is clear. In addition, the
Complaint states both the Corporate Defendants and the Sussman
Defendants involvement in the scheme (i.e., the forging of leases
and collections practices, and the filing of fraudulent lawsuits,
respectively). The allegations, when viewed in the light most
favorable to Plaintiffs, are sufficient to support an inference that
each defendant played some part in directing the scheme.
(December Opinion, at 12.) Again, Defendants have failed to present the Court with any new
issue to consider, and this Court will not re-entertain an argument that it has already decided.
III.

Dismissal of Inaccurate Reporting Claims of Plaintiffs Glasgow, Moore & Norris
The inaccurate reporting claims of Plaintiffs Glasgow, Moore, and Norris were dismissed

without prejudice, because the Complaint was missing any allegation that the Defendants
received notice of these Plaintiffs’ disputes as to the guaranty default entries—an allegation that
is required to sustain a claim of inaccurate reporting under the FCRA and NYFCRA. (See
December Opinion, at 21-22.) These claims were not dismissed “due to the application of the
res judicata doctrine,” as Defendants argue in their current motion. For the same reasons
explained above—particularly, Defendants did not move to dismiss the inaccurate reporting
5

claims on the basis of res judicata-the Court did not apply the doctrine to the inaccurate
reporting claims, and the claims were dismissed without prejudice in order to allow these
Plaintiffs to properly replead, if possible. The Court will not alter its judgment to cure
Defendants' failure to properly move in their motion to dismiss.

IV.

Concluding Paragraph
The concluding paragraph in the December Opinion currently dismisses: "(2) all FCRA

and NYFCRA claims of plaintiffs Moore and Rivera; (3) the FCRA and NYFCRA claims based
on inaccurate reporting of plaintiffs Higgins and Norris." Defendants argue that subsection (3)
should also dismiss the claims of Plaintiffs Moore, Rivera, Schilber and Schilco, Inc. However, it
is abundantly clear that all FCRA and NYFCRA claims of Plaintiffs Moore and Rivera were
dismissed in subsection (2). Therefore, only Plaintiffs Shilber and Schilco, Inc. should be added
to this clause. 3

CONCLUSION
For the foregoing reasons, the Defendants' Motion for Reconsideration is DENIED. The
Comt corrects subsection (3) in the Conclusion of the December Opinion to dismiss the FCRA
and NYFCRA claims based on inaccurate reporting of plaintiffs Higgins, Norris, Shilber, and
Schilco, Inc. The Clerk of Comt is respectfolly requested to terminate the pending Motion. (ECF
No. 20.)

Dated:

FebruaryZ-5, 2016
White Plains, New York

SO ORDERED:

~
Nfil:SONS:ROMAN
United States District Judge

3 The Comt notes that although the conclusion of the December Opinion omits these two parties, the body
of the opinion clearly states that Schilber and Schilco, lnc.'s inaccurate reporting claims were dismissed.

6