Narayanan v. Sutherland Global Holdings Inc.
Filing
148
DECISION AND ORDER denying 133 Motion to Vacate consistent with this Decision and Order. Signed by Hon. Michael A. Telesca on 5/7/19. (JMC)-CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
MUTHU NARAYANAN,
Plaintiff,
15-CV-6165 T
DECISION AND ORDER
v.
SUTHERLAND GLOBAL HOLDINGS, INC.,
Defendant.
________________________________________
INTRODUCTION
Plaintiff
Muthu
Narayanan
(“Plaintiff”)
commenced
the
instant action on March 25, 2015, alleging claims for breach of
contract
Global
and
unjust
Holdings,
Inc.
enrichment
against
(“Defendant”),
Plaintiff is a former director.
a
defendant
corporation
Docket No. 1.
Sutherland
of
which
On June 15, 2015,
Defendant filed an answer to Plaintiff’s complaint in which it
asserted a counterclaim for breach of fiduciary duty against
Plaintiff.
Docket No. 12.
Following discovery, Defendant filed a motion for partial
summary judgment (Docket No. 67) and Plaintiff filed a motion for
summary judgment (Docket No. 73).
On May 16, 2018, the Court
entered a Decision and Order (the “May 16th Decision”) (Docket
No. 116) granting in part and denying in part each of these
motions.
In particular, the Court granted summary judgment to
Plaintiff with respect to Defendant’s counterclaim for breach of
fiduciary duty and with respect to his claims for breach of the
Redemption Agreement and the 30% Net Exercise Agreement, and
granted summary judgment to Defendant with respect to Plaintiff’s
claim for unjust enrichment and breach of the 100% Net Exercise
Amendment.
On
Id. at 52.
June
reconsideration
14,
2018,
pursuant
to
Plaintiff
Federal
filed
Rule
of
a
motion
Civil
for
Procedure
59(e), asking the Court to revisit its grant of summary judgment
to Defendant on Plaintiff’s claim for breach of the 100% NetExercise Agreement.
Docket No. 120.
On August 8, 2018, the
Court denied Plaintiff’s motion for reconsideration.
126.
Docket No.
Following this denial, both parties filed a notice of
appeal.
Docket Nos. 127, 130.
The case is currently pending
before the Second Circuit Court of Appeals.
Thereafter, on December 28, 2018, Defendant filed a motion
to vacate, pursuant to Fed. R. Civ. P. 60(b) and 62.1(a).
No. 133.
Docket
Specifically, Defendant asks the Court to vacate the
portion of the May 16th Decision granting summary judgment in
favor of Plaintiff on Defendant’s counterclaim for breach of
fiduciary duty, based on newly-discovered evidence.
137 at 12.
Docket No.
For the reasons set forth below, Defendant’s motion
to vacate (Docket No. 133) is denied.
-2-
DISCUSSION
I.
Legal Standard
Motions to vacate are governed by Fed. R. Civ. P. 60(b),
which provides, in relevant part, “[o]n motion and just terms,
the court may relieve a party or its legal representative from a
final
judgment,
order,
or
proceeding
for
.
.
.
(2)
newly
discovered evidence that, with reasonable diligence, could not
have been discovered in time to move for a new trial under Rule
59(b)[.]”
See Fed. R. Civ. P. 60(b).
A motion to vacate based
on newly discovered evidence must be made within one year after
the entry of the judgment or order.
“[w]hile
the
federal
rules
do
(Id. at (c)(1)).
permit
the
district
Notably,
court
to
relieve a party or a party’s legal representative from a final
judgment
.
.
.
this
circuit
has
repeatedly
held
that
the
docketing of a notice of appeal ousts the district court of
jurisdiction except insofar as it is reserved to it explicitly by
statute or rule.”
Toliver v. Cnty. of Sullivan, 957 F.2d 47, 49
(2d Cir. 1992) (internal quotations and citations omitted).
Rule 62.1(a) provides that “[i]f a timely motion is made for
relief that the court lacks authority to grant because of an
appeal that has been docketed and is pending, the court may:
(1)
defer
considering
the
motion;
(2)
deny
the
motion;
or
(3) state either that it would grant the motion if the court of
-3-
appeals remands for that purpose or that the motion raises a
substantial issue.”
terms,
“[Rule
Fed. R. Civ. P. 62.1(a).
62.1(a)]
only
applies
when
a
By its very
‘timely
motion’
(typically a Rule 60(b) motion) has been made for relief that the
court lacks jurisdiction to grant, because of the pendency of an
appeal.”
Medgraph, Inc. v. Medtronic, Inc., 310 F.R.D. 208, 210
(W.D.N.Y. 2015).
“Courts in this Circuit routinely exercise
their authority pursuant to Rule 62.1 to deny Rule 60(b) motions
as meritless.”
Shukla v. Sharma, No. 07-CV-2972 (CBA)(CLP), 2014
WL 4437278, at *3 (E.D.N.Y. Sept. 9, 2014).
II.
Relief From the Judgement is Not Warranted
“The party seeking relief from a judgment has an onerous
standard to meet.”
United States v. International Brotherhood of
Teamsters, 247 F.3d 370, 392 (2d Cir. 2001).
Specifically, the
moving party must demonstrate:
(1) the newly discovered evidence was of facts that
existed [at] the time of the prior dispositive
proceeding, (2) the movant must have been justifiably
ignorant of them despite due diligence, (3) the
evidence must be admissible and of such importance that
it probably would have changed the outcome, and (4) the
evidence must not be merely cumulative or impeaching.
Fero v. Excellus Health Plan, Inc., 304 F. Supp. 3d 333, 343
(W.D.N.Y. 2018) (quoting International Brotherhood of Teamsters,
247 F.3d at 392) (alteration in original); see also Weissmann v.
Freeman, 120 F.R.D. 474, 476 (S.D.N.Y. 1988).
-4-
In support of its motion to vacate, Defendant submits a
five-page confession of S. Venkataramana (“Ramanan”), Plaintiff’s
co-defendant in related criminal proceedings in India.
No. 134-3 (the “Ramanan confession”).
Docket
The Ramanan confession,
which Defendant had translated to the English language (id. at
6),
essentially
states
that
Plaintiff
directed
Ramanan
to
purchase lands in India for the “Southerland Company” between
2006 and 2009, and during that time, Plaintiff over paid Ramanan
by
31
crores,
a
Plaintiff in cash.
portion
of
which
(Id. at 3).
was
transferred
back
to
Ramanan also transferred some of
this money back to Kamalesh Kumar, another co-defendant and an
employee of RJK Investments, a land aggregation business.
(Id.).
Ramanan admitted that he used a portion of this money to purchase
“two or three assets at Eldams road in Alwarpet.” (Id.).
In response to Defendant’s argument, Plaintiff contends that
the new evidence identified by Defendant does not meet prongs two
and three of the above-mentioned standard on a motion to vacate;
that is, Defendant cannot show that it exercised due diligence to
obtain the Ramanan confession, and the Ramanan confession is
inadmissible.
The Court agrees.
-5-
A. Defendant was not Justifiably Ignorant of the Ramanan
Confession Despite Due Diligence
Defendant contends that it “was justifiably ignorant of the
evidence provided by Ramanan because he was hiding from Indian
authorities and Sutherland Global had no means to locate him.”
Docket No. 137 at 14-15.
aware
of
Ramanan’s
Defendant explains that it first became
admission
that
he
and
Plaintiff
jointly
perpetrated a crime against Sutherland Global on or about July 5,
2018, when it obtained Ramanan’s confession from Mohammed Rafi
(“Rafi”),
Defendant’s
criminal proceedings.
attorney
in
Id. at 15.
connection
with
the
Indian
Defendant states that “[o]nce
becoming aware of this information, Sutherland Global conducted
its own due diligence, and timely filed the within motion.”
The
timeline
confession,
which
regarding
does
not
the
appear
discovery
to
be
in
of
the
dispute,
follows: Ramanan gave his confession on April 7, 2018.
Nos. 134-3, 136 at 2).
Id.
Ramanan
is
as
(Docket
Rafi obtained a copy of the confession on
July 3, 2018, and provided it to Defendant on July 5, 2018.
(Docket No. 136 at 2).
Defendant began the process of obtaining
an English translation of the confession on September 13, 2018
(Docket
No.
134
at
2),
and
the
certification
page
of
the
translation is dated September 19, 2018 (Docket No. 134-4 at 6).
Over three months after obtaining the English translation of
-6-
Ramanan’s confession, and almost six months after obtaining a
copy of the confession, Defendant filed the instant motion on
December 28, 2018.
Docket No. 133.
See also Docket Nos. 137 at
15, 140 at 11-13, 145 at 8.
Defendant contends that it was justifiably ignorant of the
Ramanan confession which accounts for its not being brought to
the Court’s attention sooner until December 28, 2018.
However,
the above-described timeline reveals otherwise, and Defendant’s
efforts
in
obtaining
a
copy
characterized as “diligent.”
why
it
waited
until
over
of
the
confession
cannot
be
Notably, Defendant does not explain
two
months
(between
July
2018
and
September 2018) to obtain an English translation of the Ramanan
confession.
additional
Nor does Defendant explain why it waited over an
three
months
(between
September
2018
and
December
2018) to present this information to the Court, other than to
offer the conclusory statement that it was conducting its “due
diligence.”
Prior
Defendant
Docket. 137 at 15.
to
filed
the
parties
papers
with
filing
the
an
Court
appeal
on
July
in
this
16,
case,
2018,
in
connection with Plaintiff’s motion for reconsideration (Docket
No. 123); without revealing to the Court the existence of the
Ramanan confession.
Defendant could have informed the Court of
Ramanan’s confession before filing the appeal and, therefore,
-7-
would not be making this motion pursuant to Rule 61.2(a).
See
Lorusso v. Borer, 260 F. App’x 355, 357 (2d Cir. 2008) (“Rule
60(b)
does
not
exist
to
provide
a
remedy
for
plaintiffs’
counsel’s tactical decisions[.]”); Nemaizer v. Baker, 793 F.2d
58, 62
(2d
Cir.
1986)
(“[A]n
attorney’s failure
to
evaluate
carefully the legal consequences of a chosen course of action
provides no basis for relief from a judgment.”).
The Court also notes that the Final Report of the Inspector
of
Police
in
India
(“the
Final
Report”)
discusses
Ramanan’s statement implicating his co-defendants.
No. 142-1 at 26-31.
at
length
See Docket
According to Plaintiff, the Final Report was
issued on May 21, 2018.
Docket No. 140 at 11.
not dispute this fact.
Presumably Rafi, who was retained in
January
2018
to
be
Defendant’s
counsel
for
Defendant does
the
criminal
proceedings in India, would have received a copy of the Final
Report at the time of its issuance.
However, Rafi’s declaration
attached to Defendant’s motion papers does not mention the Final
Report; rather, Rafi states that “[o]n or about June 26, 2018, I
made
an
application
to
the
Metropolitan
Magistrate
Court
in
George Town, Chennai requesting a copy of a confession executed
by Ramanan in or about April 2018.”
Docket No. 136 at 1-2.
Defendant, in its reply papers, states that it received a copy of
the Final Report on June 19, 2018.
-8-
See Docket No. 145 at 8.
Finally, in a separate declaration provided by Rafi attached to
Defendant’s reply papers, Rafi states that he “receiv[ed] notice
of the existence of the Final Report in the first week of June
2018” and
that
he
“filed an
application
.
.
.
on
June 14, 2018, to obtain a copy of the Final Report.”
or about
Docket No.
146 at 1.
Despite
discovered
Rafi’s
these
the
various
existence
declarations,
nor
filings
of
the
explaining
Ramanan
Defendant
in
when
Defendant
confession,
its
papers,
neither
offer
a
sufficient or meaningful explanation as to why Defendant failed
to learn of the Ramanan confession upon issuance of the Final
Report on May 21, 2018.
In causing a six-month delay in bringing
the existence of the Ramanan confession to the Court’s attention,
Defendant cannot be said to have exercised “due diligence” in
pursuing and discovering this new evidence.
See Reese v. Bahash,
574 F. App’x 21, 23 (2d Cir. 2014) (“The party seeking relief
from judgment bears the burden of meeting the following “onerous”
standard.
.
561(DGT),
2003
(“Given
.
.”);
WL
plaintiff’s
concession
that
he
Boxill
v.
21554498,
weak
Brooklyn
at
*5
proffers
possessed
the
College,
(E.D.N.Y.
of
due
evidence
No.
July
10,
diligence
at
the
CV-962003)
and
time
his
of
judgment, plaintiff’s proffered evidence is not newly discovered
-9-
within
the
meaning
of
Rule
60.”),
aff’d,
115
F.
App’x
516
attempt
to
(2d Cir. 2004).
Defendant
establish
the
contends
motion
as
that
Plaintiff,
untimely,
in
“conflates
an
the
Rule
60(c)
timing requirements (that the motion must be brought within a
year) with the substantive requirements of Rule 60(b)(2), which
require that the new evidence ‘could not have been found by due
diligence’ prior to the expiration of the time in which to move
under Rule 59(b).”
(Dkt. 145 at 6).
Defendant contends that it
could not have known of the Ramanan confession by June 14, 2018,
the deadline for filing a motion for reconsideration, pursuant to
Fed. R. Civ. P. 59(b).
diligence,
it
would
have
However, had Defendant exercised due
learned
of the
confession
upon the
release of the Final Report on May 21, 2018 – well in advance of
the
expiration
of
the
time
for
filing
a
motion
for
reconsideration.
In
sum,
diligence
confession.
Defendant
needed
to
has
not
discover
established
the
contents
the
of
requisite
the
Ramanan
Defendant failed to promptly take steps to obtain
copies of the Final Report and the Ramanan confession, and to
obtain an English translation immediately after obtaining the
confession.
Upon
obtaining
the
English
translation
of
the
Ramanan confession, Defendant failed to reveal the confession for
-10-
over two months, during which it took an appeal from the judgment
it now seeks to vacate.
prong
two
for
Accordingly, Defendant has not satisfied
seeking
relief
from
a
judgment
pursuant
to
Rule 59(b), and its motion is therefore denied.
B. The Ramanan Confession is Inadmissible Hearsay
Moreover, even if Defendant was able to demonstrate that it
was justifiably ignorant of the Ramanan confession despite due
diligence, it cannot show that the evidence is admissible and of
such importance that it probably would have changed the outcome
of the Court’s decision.
In support of its argument that the Ramanan confession is
admissible,
Defendant
contends
that
the
confession
is
a
“statement against interest,” and therefore not excluded by the
rule
against
hearsay,
Docket No. 137 at 16.
pursuant
to
Fed.
R.
Evid.
804(b)(3).
Specifically, Defendant contends that “the
assertions made in the Ramanan Confessions are prototypically
against self-interest.
in
with
Plaintiff
The conduct he describes having engaged
amounts
to
outright
larceny,
undeniably
subjecting him to both civil and criminal liability.”
Id. at 17.
In response, Plaintiff contends that Ramanan’s confession is not
admissible evidence against Plaintiff, and that the confession
itself is unreliable and contains several falsities.
140 at 15-23.
-11-
Docket No.
Based on the contents of the final report, the Court has
reservations regarding the ultimate admissibility of the Ramanan
confession.
III.
Re-opening of Discovery is Not Warranted
In the alternative, Defendant asks the Court to provide an
indicative ruling “allowing it to take Ramanan’s deposition for
use at trial and to request relevant documentation.”
(Dkt. 137
at 23).
“In deciding whether to reopen discovery, courts consider
whether good cause exists.”
Bakalar v. Vavra, 851 F. Supp. 2d
489, 493 (S.D.N.Y. 2011) (citing Gray v. Town of Darien, 927 F.2d
69 (2d Cir. 1991)).
“A significant consideration is whether
there has already been adequate opportunity for discovery.”
Id.
A court will also consider, inter alia: (4) whether the moving
party was diligent in obtaining discovery within the guidelines
established by the court; . . .”
Leong v. 127 Glen Head Inc.,
No.
WL
CV
13-5528
(ADS)(AKT),
2016
845325,
at
*4
(E.D.N.Y.
Mar. 2, 2016) (internal quotation and citations omitted).
This case was filed in March 2015.
Docket No. 1.
After the
initial scheduling order was set on July 22, 2015 (Docket No.
18), multiple amended scheduling orders were issued, granting the
parties additional time to complete discovery and extensions for
filing
dispositive
motions.
(Docket
-12-
Nos.
43,
55,
63).
Dispositive
No. 67).
motions
were
filed
in
November
2017.
(Docket
Over thirty months had elapsed between the commencement
of the case and the filing of motions for summary judgment,
during which the parties could have been conducting discovery.
Although Defendant contends that Ramanan was a fugitive for most
of the pendency of the case, Ramanan was apprehended in December
2017 (Docket No. 142-1 at 4), when the parties were making their
summary judgment submissions.
Yet, Defendant did not move to re-
open discovery at that time to take Ramanan’s deposition.
This
case is already on appeal before the Second Circuit and, based on
the
contents
of
the
Final
Report,
the
Court
has
serious
reservations regarding the ultimate admissibility of the Ramanan
confession.
Accordingly,
after
consideration
of
the
above-
mentioned factors – particularly including the timing of the
request,
the
diligence
of
the
requesting
party,
and
the
likelihood of finding relevant evidence – the Court declines to
issue an indicative ruling based on Defendant’s request to reopen
discovery.
Defendant’s motion is therefore denied.
CONCLUSION
Accordingly, after consideration of the above factors, which
include
the
timing
of
the
request,
the
diligence
of
the
requesting party and the questionable relevance of the evidence
presented,
the
Court
declines
to
-13-
issue
an
Order
vacating
a
portion of the May 16, 2018 Court’s Order filed by Defendant on
December
28,
2018
pursuant
Procedure 60(b) and 62.1(a).
that
the
granting
Court
vacate
summary
the
judgment
to
Federal
Rule
of
Civil
Accordingly, Defendant’s request
portion
in
of
favor
its
of
May
the
16th
Decision
Plaintiff
on
Defendant’s counterclaim for breach of fiduciary duty based on
newly discovered evidence is denied.
Also, for the reasons set
forth above, Defendant’s motion to vacate (Docket No. 133) is
denied.
ALL OF THE ABOVE IS SO ORDERED.
S/Michael A. Telesca
HONORABLE MICHAEL A. TELESCA
United States District Judge
DATED:
Rochester, New York
May 7, 2019
-14-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?