Opinion
99 Civ. 2246 (RWS)
February 20, 2003
MEMORANDUM OPINION
Pursuant to Fed.R.Civ.P. 59(e) and Local Rule 6.3, plaintiff Stahlex-Interhandel Trustee, Req. ("Stahlex"), has moved for reconsideration of the Court's opinion dated October 21, 2002 (the "October Opinion"). See Stahlex-Interhandel v. Western Union Financial Services Eastern Europe Limited, 2002 WL 31359011 (S.D.N.Y. Oct. 21, 2002). Familiarity with the October Opinion, which provides relevant factual background, identifies the parties, and defines terms, is assumed. For the reasons set forth below, the motion is granted in part and denied in part.
Discussion
Motions to reconsider or reargue "must be narrowly construed and strictly applied in order to discourage litigants from making repetitive argument on issues that have been thoroughly considered by the court."Range Road Music Inc. v. Music Sales Corp., 90 F. Supp.2d 390, 391 (S.D.N.Y. 2000). Reconsideration and reargument should be denied absent proof that the Court "overlooked" "controlling law or factual matters" placed before it on an underlying motion "that might reasonably be expected to alter the Court's decision" and "correct clear error [or] prevent manifest injustice." Montanile v. National Broadcasting Co., 216 F. Supp.2d 341, 342 (S.D.N.Y. 2002). Stahlex Entitled to Share of Net Income of WU-USSR in Former Soviet Union
Plaintiff's motion, filed on November 8, 2002, is not time barred under Local Rule 6.3. That rule requires that such a motion be served within 10 days after the entry of the decision. As the decision was entered on October 25, 2002, filing by November 8 was within the 10 day filing period. Mina Investment Holdings Ltd. v. Lefkowitz, 184 F.R.D. 245, 249 (S.D.N.Y. 1999).
The October Opinion found that, according to the Consulting Agreement at issue in this litigation, Stahlex was entitled 10% of the annual net income of Western Union Financial Services-USSR ("WU-USSR") arising from within Russia. Stahlex and defendants concur that Stahlex's interest extends to WU-USSR operations throughout the former Soviet Union, and is not limited to Russia. The limitation to Russia was in error and the Court finds that Stahlex is entitled to 10% of the net income of WU-USSR in the former Soviet Union during the relevant period.
Term of the Consulting Agreement Remains Undecided
Stahlex has requested that the Court reconsider its denial of Stahlex's motion for a declaratory judgement that the Consulting Agreement remains in full force in effect, and reverse its finding that there remains an issue of fact that precludes determination of the term of the contract. The term of the Consulting Agreement is tied to the existence of a Joint Venture, which continues to exist and operate. According to WU-USSR, the "joint venture," at least by a dictionary definition of the term. The Court has not ruled on whether or not a buy out of a joint venture, as a matter of law, terminates the joint venture, or determined whether, as a matter of fact, a buyout has taken place. (Documents purporting to record the buyout of the Joint Venture have not been translated into English, and there thus remains an issue of fact). Stahlex's motion for reconsideration is denied.
Stahlex Is Not Entitled to Portion of Profits Other Than WU-USSR
Stahlex repeats its argument that it is entitled to 10% of the net income derived in the former Soviet Union by the Western Union parent entity ("WU-FSI"), not only WU-USSR as provided in the Consulting Agreement and as determined by the Court in the October Opinion. According to Stahlex, the terms of the Consulting Agreement are inherently ambiguous, requiring that the Court refer to affidavits purporting to show that Joint Venture was to be the only Western Union money transfer network in the Soviet Union. The contract does not suggest more than one meaning, Scholastic, Inc. v. Robert Harris, 259 F.3d 73 (2d Cir. 2001), other than that Stahlex contracted with WU-USSR to establish a transfer network but without any suggestion of exclusivity. Stahlex's motion for reconsideration of this issue is denied, no facts or authorities having been shown to have been overlooked.
Question of Fact Regarding Piercing the Corporate Veil Does Not Preclude Dismissing Claims Against Parent
In the October Opinion, it was determined that an issue of fact exists as to whether the corporate veil between WU-USSR and WU-FSI should be pierced. In addition, the Court dismissed claims against WU-USSR's parent, WU-FSI. According to Stahlex, "[t]he dismissal of WUFSI with respect to Stahlex's claims based on the Consulting Agreement . . . is completely at odds with the Court's findings that there are material issues of fact with respect to piercing the corporate veil . . ." To support this position, Stahlex cites Quinn v. Tati, 234 F.3d 1262 (2d Cir. 2000) (unpublished opinion) finding that a breach of contract action brought against a corporate parent "depend(s) entirely on whether it is appropriate to pierce the corporate veil." Since at the current stage of proceedings there is not any claim against the parent, it is appropriate to dismiss those claims against WU-FSI. As Stahlex states, "if Stahlex is successful in piercing the corporate veil, WUFSI will be liable to Stahlex pursuant to the terms of the Consulting Agreement." If and when a trier of fact decides that there are grounds for piercing the corporate veil, Stahlex will be free to look to WU-FSI to pay WU-USSR's obligation, and thus it is not inconsistent to dismiss any claims against WU-FSI. As the Court stated in the October Opinion:
If, however, as alleged, WU-FSI has dominated WU-USSR and the corporate veil is pierced, Stahlex may be able to establish that it is entitled to 10% of the net profits from WU-USSR, whether garnered by parent or subsidiary, subject to the caps established in the Consulting Agreement.
October Opinion at pp. 20.
Conclusion
For the forgoing reasons, the motion for reconsideration is granted in part and denied in part.
It is so ordered.