Nem Re Receivables, LLC v. Fortress Re, Inc.
187 F. Supp. 3d 390
S.D.N.Y.2016Background
- NEM Re Receivables, LLC (assignee of Federated/NEM Re-Insurance Corp.) sued Fortress Re, Inc. seeking an accounting, a money judgment (including interest), and fees based on Fortress’s handling of reinsurance receivables.
- District Court converted Fortress’s motion to dismiss into a motion for summary judgment; the parties submitted a joint schedule allowing NEM Re to file a response by a deadline if necessary.
- The Court granted summary judgment for Fortress on March 24, 2016, holding (1) NEM Re failed to state a viable claim for an accounting (no unique equitable basis and an adequate legal remedy existed) and (2) NEM Re’s breach-of-contract claim was time-barred because the limitations period began in 2004.
- NEM Re moved for reconsideration under Local Rule 6.3/Rule 59(e) and Rule 60(b), arguing excusable neglect for failing to file additional opposition, that Fortress was a fiduciary (supporting an accounting and tolling), and that new evidence could be presented.
- Fortress opposed, arguing NEM Re did not meet Rule 60(b)’s excusable-neglect standard, offered no new evidence rebutting the prior holding on adequate legal remedies for accounting, and provided no tolling proof.
- The Court denied reconsideration: NEM Re’s proffered evidence was not newly discovered or shown to be diligent; the accounting claim still failed for lack of an inadequate legal remedy; and the breach-of-contract claim remained time-barred absent evidence of equitable tolling or estoppel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reconsideration under Local Rule 6.3 / Rule 59(e) is warranted due to new evidence or law | NEM Re said it could present admissible evidence (fiduciary relationship) that it failed to file earlier because it forgot the response deadline | Fortress said NEM Re had no newly discovered evidence and improperly tries to relitigate issues already decided | Denied — no intervening change in law; evidence was not newly discovered and could have been presented earlier |
| Whether NEM Re’s accounting claim survives because Fortress was a fiduciary | NEM Re asserted Fortress acted as a fiduciary for Federated, justifying an equitable accounting and tolling | Fortress maintained (and Court previously found) that money damages were the remedy and an accounting is improper when an adequate legal remedy exists | Denied — accounting claim fails because an adequate legal remedy (damages) exists |
| Whether the statute of limitations on the breach-of-contract claim was tolled by fiduciary duties or later communications | NEM Re argued fiduciary status tolled limitations until repudiation or that a 2009 communication restarted/tolled the limitations period | Fortress argued the cause of action accrued in 2004 when NEM Re (via the NY Commissioner) acquired the receivables; NEM Re produced no evidence of tolling or fraud-induced delay | Denied — statute began in 2004 and expired; NEM Re offered no evidence of equitable tolling or estoppel |
| Whether Rule 60(b)(1) relief is warranted for excusable neglect (failure to file further opposition) | NEM Re claimed excusable neglect and asked the Court to exercise discretion to vacate the judgment | Fortress argued the scheduling/deadline was unambiguous and NEM Re’s failure to comply was within its control; excusable neglect standards not met | Denied — Second Circuit Pioneer/Canfield framework applied; reason for delay predominates and NEM Re failed to justify missing a clear deadline |
Key Cases Cited
- Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245 (2d Cir. 1992) (grounds for reconsideration: intervening law, new evidence, or clear error/manifest injustice)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (U.S. 1993) (standard for excusable neglect in Rule 60 contexts)
- Silivanch v. Celebrity Cruises, Inc., 333 F.3d 355 (2d Cir. 2003) (focus on reason for delay when assessing excusable neglect)
- Canfield v. Van Atta Buick/GMC Truck, Inc., 127 F.3d 248 (2d Cir. 1997) (failure to follow clear court rules generally precludes excusable neglect)
- Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241 (2d Cir. 2004) (court must review the merits even when a summary-judgment motion is unopposed)
- CSI Inv. Partners II, L.P. v. Cendant Corp., 507 F. Supp. 2d 384 (S.D.N.Y. 2007) (accounting not appropriate where adequate legal remedy exists)