838 F. Supp. 2d 168
S.D.N.Y.2011Background
- Becnel and Jardine Ventures sue Deutsche Bank entities for state-law fraud, conspiracy, concealment, aiding/abetting, breach of fiduciary duty, breach of contract, and implied covenant claims; Deutsche Bank moves to dismiss as time-barred, which a prior September Order granted; final judgment entered September 8, 2011.
- Becnel moves post-judgment under Rule 59/60 to reinstate the fraud claim or to amend to a modified fraud theory based on a transaction where a market-rate loan with no premium was allegedly created via an interest rate swap.
- Becnel’s proposed theory shift alleges Deutsche Bank and Presidio conspired to convert an above-market loan with a loan premium into a market-rate loan via swaps, with concealment; discovery of relevant facts purportedly occurred in December 2010.
- Fabozzi report considered newly discovered but is found not to qualify under the criteria for new evidence or justify post-judgment relief; Becnel had access to facts earlier and did not diligently pursue the modified theory earlier.
- Court concludes Becnel cannot amend post-judgment; under NY law, discovery rule requires timely investigation; even if the Fabozzi report were admissible, the discovery period would have expired by 2005, making the proposed amendment time-barred; thus, amendment is futile and relief denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Post-judgment relief based on new evidence? | Becnel relies on Fabozzi report as newly discovered evidence. | Fabozzi report is not newly discovered and does not meet Rule 59(e)/60(b)(2) standards. | Denied; Fabozzi report not newly discovered evidence. |
| Whether Becnel may amend after judgment? | Modification of theory should allow a meritorious claim. | Post-judgment amendments require vacating judgment; here, amendment would be futile. | Denied; no viable post-judgment amendment. |
| Whether amended theory would be timely under NY discovery rule? | Discovery in 2010–2011 makes timely the modified fraud theory. | Discovery rule should have triggered earlier; Becnel knew or should have investigated in 2003–2005. | Time-barred; amended claim untimely. |
Key Cases Cited
- Soward v. Deutsche Bank AG, 814 F.Supp.2d 272 (S.D.N.Y.2011) (post-judgment reconsideration standards discussed)
- Williams v. Citigroup Inc., 659 F.3d 208 (2d Cir.2011) (discovery rule and timeliness considerations)
- Ruotolo v. City of New York, 514 F.3d 184 (2d Cir.2008) (finality and merits-oriented pleading concerns)
- National Petrochemical Co. of Iran v. M/T Stolt Sheaf, 930 F.2d 240 (2d Cir.1991) (standards for newly discovered evidence)
- Virgin Atlantic Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245 (2d Cir.1992) (factors for relief under Rule 59(e) and 60(b))
- Mitsubishi Aircraft Int’l v. Brady, 780 F.2d 1199 (5th Cir.1986) (context on discovery and amendment timing)
- TMG-II v. Price Waterhouse & Co., 175 A.D.2d 21, 572 N.Y.S.2d 6 (1st Dept.1991) (New York discovery rule considerations)