Meisels v. Meisels

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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MINIA MEISELS,

Plaintiff,

MEMORANDUM & ORDER

-against- 19-CV-4767 (EK)(RML)

HENRY MEISELS, a/k/a HENICH MORDECHEI

MEISLISH, et al.,

Defendants.

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ERIC KOMITEE, United States District Judge:

This is a dispute over the ultimate ownership of

several Brooklyn rental properties. In an order dated May 13,

2021, familiarity with which is assumed here, I granted

plaintiff Minia Meisels’ request to dismiss defendant Jacob

Meisels, whose presence would otherwise have defeated diversity

jurisdiction. I also struck the Second, Third, and Sixth

affirmative defenses in the defendants’ answer, to the extent

those defenses relied on the Sale Deed and Agreement dated

January 23, 2017 (the “SD&A”), which I found facially invalid

for lack of consideration. See Memorandum & Order, ECF No. 108

(the “Order”).

Defendants Henry and Joel Meisels now move for

reconsideration of those conclusions and seek clarification

regarding the Order’s application to one of the five properties

at issue. They also seek certification to appeal certain

aspects of the Order under 28 U.S.C. § 1292(b). For the reasons

set out below, I deny the motions.

I. Discussion

A. Motion for Reconsideration

A motion for reconsideration will ordinarily be

granted only when the “moving party can point to controlling

decisions or data that the court overlooked — matters, in other

words, that might reasonably be expected to alter the conclusion

reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d

255, 257 (2d Cir. 1995). “There are generally three grounds for

reconsideration: (1) an intervening change in the law; (2) the

availability of evidence not previously available; and (3) the

need to correct clear error or prevent manifest injustice.” In

re Zyprexa Prods. Liability Litig., 653 F. Supp. 2d 181, 182

(E.D.N.Y. 2009). In their motion for reconsideration, Henry and

Joel rely on the third basis — that reconsideration is necessary

to prevent manifest injustice. I address their several

arguments in turn below.

On at least two points, Henry and Joel essentially

rehash the same arguments they raised earlier. These are

(1) whether Jacob was an indispensable party and (2) whether the

motion to strike was properly decided as a matter of civil

procedure. But a motion for reconsideration is not “a vehicle

for relitigating issues already decided.” Awadallah v. W. Union

Co., No. 14-CV-3493, 2017 WL 52584, at *1 (E.D.N.Y. Jan. 4,

2017) (cleaned up). Because these arguments merely “reiterate

or repackage an argument previously rejected by the court,” they

offer no basis for reconsideration. Id. I turn to defendants’

other contentions below.

1. The Validity of the Sale Deed and Agreement

a. Minia’s “Standing” to Challenge the SD&A

Henry and Joel claim that I misunderstood their

argument that Minia lacked standing to contest the validity of

the SD&A. In seeking reconsideration, Henry and Joel contend

that Minia lacked standing because she never “established” that

she had an ownership interest in the properties, and because she

is not a party to the SD&A. See Mem. of Law in Supp. of Defs.’

Mot. for Reconsideration (“Defs.’ Mot. for Reconsid.”) at 13,

ECF No. 110-1. The motion for reconsideration does not identify

the legal basis for this argument and cites no cases in support.

In their earlier brief, Henry and Joel cited only one

case going to the question of standing: Chen v. New Trend

Apparel, Inc., 8 F. Supp. 3d 406, 437 (S.D.N.Y. 2014). See

Henry Meisels’s and Joel Meisels’s Opp. to Minia Meisels’s 12(c)

Mot. (“Henry and Joel’s Opp. Br.”) at 14, ECF No. 76. Chen

applied a state-law rule that those who are “neither a party, an

assignee nor an intended third-party beneficiary” of a contract

“lack[] standing to challenge the validity of the contract.”

Chen, 8 F. Supp. 3d at 437 (citing Decolator, Cohen & DiPrisco,

LLP v. Lysaght, Lysaght & Kramer, P.C., 304 A.D.2d 86, 90 (1st

Dep’t 2003)). Given the lack of clarity about what argument

Henry and Joel were making, the Order addressed the only

argument that Chen conceivably supports — namely, that Minia’s

status as a non-party to the contract deprives her of state-law

standing to challenge it.

I need not address this argument again in full, but it

bears noting that, among other things, it misunderstands the

Order, misapplies Chen, and defies logic. First, the Order did

not decide Minia’s challenge to the validity of the contract as

such. Minia did not bring an action to invalidate the SD&A;

instead, the defendants invoked the contract as a defense to

Minia’s conversion claim, saying it established their

entitlement to rent proceeds from the properties at issue. It

should go without saying that Minia is entitled, under those

circumstances, to dispute the validity of the contract under the

rubric of an “insufficient defense” under Rule 12(f). Second,

Chen is inapposite anyway. Chen did not say that every third

party lacks standing to challenge the validity of a contract; it

merely noted the principle, articulated in Decolator, that a

third party must allege that it “suffered direct harm” from the

contract (or was intended as a third-party beneficiary thereof).

Chen, 8 F. Supp. 3d at 437 (citing Decolator, 304 A.D.2d at 90).

Where two parties jointly purchase an asset (as Minia has

alleged), and one purports to sell the asset to a third party

without consent of the other and with no sharing of proceeds, it

should go without saying that the contract of sale would, if

upheld, impose direct harm on the joint owner left behind.

Indeed, it defies logic to conclude that the purported owner

would have no ability to argue the contract’s invalidity in that

situation.

To the extent Henry and Joel are arguing that Minia

lacks Article III standing to sue (which they do not say

explicitly), that argument fails. A litigant’s constitutional

standing to sue is one necessary element of subject matter

jurisdiction. “The irreducible constitutional minimum of

standing” has three elements: (1) injury in fact that is (2)

fairly traceable to the challenged action of the defendant and

(3) is capable of redress by a favorable decision. Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). “The party

invoking federal jurisdiction bears the burden of establishing

standing,” and each element “must be supported in the same way

as any other matter on which the plaintiff bears the burden of

proof, i.e., with the manner and degree of evidence required at

the successive stages of the litigation.” Susan B. Anthony List

v. Driehaus, 573 U.S. 149, 158 (2014) (cleaned up). “At the

pleading stage, general factual allegations of injury resulting

from the defendant’s conduct may suffice.” See Lujan, 504 U.S.

at 561; see generally Wright & Miller Fed. Prac. & Proc. Juris.

§§ 3522, 3531.15 (3d ed.).     Article III standing is, of course,

an issue separate and aside from the merits of a claim. See

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 101

(1998) (explaining why the jurisdictional analysis should

precede determination of the merits).

Contrary to Henry and Joel’s assertions, the Court has

not decided the merits of Minia’s claims for relief. Instead, I

determined that Minia has established Article III standing. She

has sufficiently alleged an injury in fact, that is fairly

traceable to the defendants’ conduct, and that can be redressed

by a favorable decision of this court. Specifically, Minia

alleges that property in which she has an ownership interest has

been converted by Henry and Joel, and she asks this Court for

injunctive and monetary relief.

b. Statute of Frauds Issues

Henry and Joel go on to argue that I misapplied

Countrywide Home Loans, Inc. v. Brown, 223 F. App’x 13, 14 (2d

Cir. 2007) — which neither party cited in their original briefs

— insofar as it holds that a third party to a contract cannot

raise a statute-of-frauds defense to its validity. See Order at

16 n.5. But the Order did not cabin the affirmative defenses at

issue based on the applicable statute of frauds; instead, the

Order concluded that the agreement was void for lack of

consideration. Id. (explaining that Countrywide does not

control because the “crux of [Minia’s] argument is that the Sale

Deed and agreement is void for lack of consideration under basic

principles of contract law”); see also id. at 25 (holding that

the Sale Deed and Agreement is “illusory under elementary

principles of common law”). The Order’s analysis of

Countrywide, therefore, presents no basis for reconsideration.

c. Discovery Regarding the Validity of the SD&A

Henry and Joel also argue that I acted prematurely in

striking the affirmative defenses — specifically, that they

“should have been entitled to pursue discovery to support their

arguments concerning the validity of the Agreement.” See Defs.’

Mot. for Reconsid. at 19, ECF No. 110-1; see also id. at 9

(asserting that the Order “dove deep into the merits of the case

without allowing Henry and Joel to substantiate their arguments

with evidence outside the pleadings”). Henry and Joel do not

say what this evidence might have been. More importantly, they

do not argue why I should have awaited discovery to decide the

enforceability of a written contract that is, unambiguously and

on its face, lacking in consideration. See, e.g., Van Brunt v.

Rauschenberg, 799 F. Supp. 1467, 1471, n.2 (S.D.N.Y. 1992)

(granting motion to dismiss a breach of contract claim where

plaintiff sought to enforce promises supported only by

consideration that predated the promises’ making, on the

“elementary” legal basis that “past consideration is not

consideration”); see also Jofen v. Epoch Biosciences, Inc., No.

01-CV-4129, 2002 WL 1461351, at *9 (S.D.N.Y. 2002) (quoting

Schuman v. Gallett, Dreyer & Berkey, L.L.P., 180 Misc. 2d 485,

689 (New York Sup. Ct. 1999) (“Where the language of a contract

is plain and unambiguous, resort to extrinsic facts is

inappropriate in interpretation.”).

B. Motion for Clarification

Henry and Joel also seek clarification that the Order

does not apply to one of the five properties in question (4900

15th Avenue). They argue that this property, unlike the others,

falls outside the scope of the Order because Vilmos did not

purport to convey it via the SD&A, but rather in a separate

document as a “gift” requiring no consideration. No

clarification is required here, but I provide the following

observation anyway: The Second, Third, and Sixth affirmative

defenses were stricken “to the extent they [were] based on the

validity of the Sale Deed and Agreement.” Order at 29; see also

id. at 18 (the motion to strike, as construed by the Court, was

confined to the Second, Third, and Sixth Defenses, “only to the

extent they are based on the Sale Deed and Agreement — not in

their entirety”). The Order does not preclude Henry and Joel

from asserting those defenses to the extent they are based on

something other than the SD&A. Because the Order is clear on

its face, the motion for clarification is superfluous and

denied.

C. Motion to Certify the Order for Interlocutory Appeal

Lastly, Henry and Joel ask that I certify the Order

for interlocutory appeal under 28 U.S.C. § 1292(b). District

courts may certify a non-final order for interlocutory appeal

where it “involves a controlling question of law as to which

there is substantial ground for difference of opinion” and where

“an immediate appeal from the order may materially advance the

ultimate termination of the litigation.” Id. They seek to

appeal my conclusions that Jacob is dispensable, Minia has

standing, and the SD&A is void because the consideration

thereunder is illusory.

The case for certifying the last of these issues is

exceedingly weak, as a reversal of my conclusion that the

contract is illusory would have little effect on the procedural

course of this action. The parties would still, in that case,

be left to resolve several factual disputes, including who owned

the properties when the family initially acquired them: Vilmos,

Minia, or both, see Compl. ¶ 5; Answer ¶ 5; how the will

operated, see Compl. ¶ 43; Henry and Joel Answer ¶ 43; how the

properties at issue are currently being managed, see Compl. ¶

13; Answer ¶ 13. Moreover, the unusual (and highly

idiosyncratic) nature of the contract at issue renders this

question ill-suited for interlocutory appeal. See Koehler v.

Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir. 1996)

(explaining that certification under § 1292(b) should be “rare”

and reserved for “exceptional circumstances”).

Immediate review might “advance the ultimate

termination of the litigation” if the Second Circuit were to

determine that I should have dismissed the case either because

Minia lacks Article III standing — an argument that Defendants

do not clearly assert — or because Jacob is an indispensable

party. Unlike the question of the SD&A’s validity, these are

“controlling question[s] of law” because, if reversed, the case

would be dismissed. See, e.g., In re Lloyd’s Am. Tr. Fund

Litig., No. 96-CV-1262, 1997 WL 458739, at *5 (S.D.N.Y. Aug. 12,

1997) (“A controlling question of law exists if . . . reversal

of the district court’s opinion could result in dismissal of the

action.”).

But Henry and Joel have not shown that a “substantial

ground for difference of opinion” exists as to whether Jacob is

dispensable or Minia has standing. A substantial ground exists

where there “is genuine doubt as to whether the district court

applied the correct legal standard in its order.” Consub Del.

LLC v. Schahin Engenharia Limitada, 476 F. Supp. 2d 305, 309

(S.D.N.Y. 2007). Such doubt may arise where the challenged

decision “is in conflict with other decisions within the same

district” or elsewhere, In re Facebook, Inc., IPO Sec., 996 F.

Supp. 2d 524, 540 (S.D.N.Y. 2014), or if it involves a question

that is “particularly difficult and of first impression for the

Second Circuit.” In re Citigroup Pension Plan Erisa Litig., No.

05-CV-5296, 2007 WL 1074912, at *2 (S.D.N.Y. Apr. 4, 2007)

(internal citation omitted).

As noted above, Henry and Joel cite no cases in

support of their position that Minia lacks constitutional

standing, and the application of ordinary standing principles

forecloses that argument. And Henry and Joel have not shown

that a “difficult” question of first impression or intra-Circuit

split exists with respect to my analysis of Jacob’s

dispensability. They point to cases holding that parties to a

contract generally are indispensable in cases challenging the

validity of a contract. Vision en Analisis y Estrategia, S.A.

de C.V. v. Andersen, No. 14-CV-8016, 2015 WL 4510772, at *5

(S.D.N.Y. July 24, 2015) (non-party was indispensable because he

signed the disputed contract and played an “integral role” in

the misconduct alleged in the complaint); Errico v. Stryker

Corp., 281 F.R.D. 182, 188 (S.D.N.Y. 2012) (absent signatories

to merger agreement were indispensable because they were joint

obligees who “may seek to enforce [the defendant’s] obligation

to them in a subsequent lawsuit”). But the Second Circuit has

rejected this “bright-line” rule. See CP Sols. PTE, Ltd. v.

Gen. Elec. Co., 553 F.3d 156, 159 (2d Cir. 2009) (district court

erred by “adopt[ing] a bright-line rule that all parties to a

contract are indispensable”). And Henry and Joel identify no

case holding a contracting party indispensable where the party

argued the contract was void and asked to be dismissed. Finding

no substantial difference of opinion on these questions, I deny

Henry and Joel’s motion for certification under Section 1292(b).

D. Amending the Caption

As part of their motion for reconsideration, Henry and

Joel point out that the case caption is incorrect, in that it

refers to Plaintiff as suing, in part, derivatively on behalf of

several limited liability companies. Henry and Joel are correct

that this is not a derivative action, as Minia has not sued to

enforce rights on behalf of the LLCs. While the incorrect case

caption appeared in certain prior orders, the case caption on

the docket is correct. Accordingly, the case caption as listed

on the docket will be used going forward.

II. Conclusion

For the reasons stated above, Henry and Joel’s motions

for reconsideration, clarification, and certification for

interlocutory appeal are denied. A telephone status conference

is scheduled for Wednesday, January 26, 2021 at 2:30 p.m. The

parties are directed to call 888-808-6929 five minutes before

the scheduled start of the conference and use access code 564-

7824.

SO ORDERED.

__/s/ Eric Komitee__________

ERIC KOMITEE

United States District Judge

Dated: December 28, 2021

Brooklyn, New York