The Sands Harbor Marina Corp. v. USI Insurance Service National, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

X

THE SANDS HARBOR MARINA CORP.,

SANDS HARBOR MARINA LLC, THE MEMORANDUM &

SANDS HARBOR MARINA OPERATING ORDER

CORP., SANDS MARINA OPERATING LLC, 09-CV-3855(GRB)(ARL)

GREG W. EAGLE, PINE CREEK RANCH, FILED

LLC, and UNIVERSITY 1248, LLC, CLERK

3:15 pm, Dec 06, 2022

Plaintiffs,

U.S. DISTRICT COURT

-against- EASTERN DISTRICT OF NEW YORK

LONG ISLAND OFFICE

USI INSURANCE SERVICE NATIONAL,

INC. f/k/a WELLS FARGO INSURANCE

SERVICES OF OREGON, INC., EVMC REAL

ESTATE CONSULTANTS, INC., LARRY

ESACOVE, THE ESTATE OF AIDA

ESACOVE, DAVID P. GUILOT, ANTHONY

B. CHOPRA, TISDALE & NICHOLSON, LLP,

JEFFREY A. TISDALE, and GUY C.

NICHOLSON,

Defendants.

X

GARY R. BROWN, United States District Judge:

Plaintiff Greg Eagle filed a motion for reconsideration of this Court’s order finding pro se

defendant Michael Reis covered by the Release Agreement, and thereby releasing him from

Eagle’s claims. See Electronic Order dated 08/03/2022; Docket Entry (“DE”) 402. For the reasons

that follow, the motion for reconsideration is DENIED.

Relevant Facts

The background of this matter, set forth in detail in this Court’s February 18, 2022

Memorandum and Order, DE 382, is incorporated by reference and familiarity with which is

assumed. For the sake of clarity, the Court will summarize additional facts related to the motion

for reconsideration.

In June 2006, Reis and EVMC – the entity which allegedly defrauded Eagle – signed an

independent consulting agreement entitling Reis to commissions on referrals that he made to

EVMC. DE 345-1 at ¶ 95; DE 402-1. In 2007, one of Eagle’s associates, Jay Jones, told Eagle

that he believed that Reis had a personal agenda, should not be trusted, and would

unquestioningly make any representation at EVMC’s request. DE 345-1, ¶ 235. Nonetheless,

in September 2008, Eagle executed a release in favor of EVMC in exchange for a funding

capacity letter that he could provide to creditors and sellers. DE 345-1 at ¶ 275. The Release

Agreement covered EVMC, “as well as its agents, officers, shareholders, employees,

consultants and attorneys.” DE 374-1 at § 2.2 (emphasis added). Eagle testified as follows with

regard to the consulting agreement with EVMC:

Q. Are you aware that Mr. Reis had a consulting agreement with EVMC personally

separate from his work for Wells Fargo?

A. I’m not sure if I technically knew that, but I knew he had. I mean, he’s the one that

told us about – about how [Esacove] can make things happen.

Q. All right. And are you – were you aware or are you aware that he signed the

Consulting Agreement before he became an employee of Wells Fargo?

A. I’m not really aware of that, no.

Q. Do you know anything about his consulting agreement with EVMC?

A. Not really, no.

Q. Do you know if he had an agreement that he was entitled to be paid certain monies

by EVMC to the extent he successfully introduced them or assisted them in finding

clients who would – who they could provide loans to?

…

[A.] I really didn’t. I wasn’t paying attention. I was paying attention to this stuff. It was

a long, winding road and I thought we were to the end of it.

DE 402-3 at 2.

Standard of Review

“[R]econsideration of a previous order is an extraordinary remedy to be employed

sparingly in the interests of finality and conservation of scarce judicial resources.” In re Health

Mgmt. Sys. Inc. Sec. Litig., 113 F.Supp.2d 613, 614 (S.D.N.Y. 2000) (citation omitted). “The

provision for reargument is not designed to allow wasteful repetition of arguments already briefed,

considered and decided.” Schonberger v. Serchuk, 742 F.Supp. 108, 119 (S.D.N.Y. 1990). “The

major grounds justifying reconsideration are ‘an intervening change of controlling law, the

availability of new evidence, or the need to correct a clear error or prevent manifest injustice.’”

Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (quoting 18

C. Wright, et al., Federal Practice & Procedure § 4478 at 790). Thus, a request for reconsideration

under Local Rule 6.3 must advance controlling law or factual matters that the movant believes the

Court overlooked in its decision on the underlying matter and that “might reasonably be expected

to alter the conclusion reached by the Court.” See Shrader v. CSX Transp., Inc., 70 F.3d 255, 257

(2d Cir. 1995). “Rule 6.3 is intended to ‘ensure the finality of decisions and to prevent the practice

of a losing party . . . plugging the gaps of a lost motion with additional matters.’” SEC v. Ashbury

Capital Partners, No. 00 Civ. 7898, 2001 WL 604044, at *1 (S.D.N.Y. May 31, 2001) (quoting

Carolco Pictures, Inc. v. Sirota, 700 F.Supp. 169, 170 (S.D.N.Y.1988)). A court must narrowly

construe and strictly apply Rule 6.3 so as to avoid duplicative rulings on previously considered

issues and to prevent Rule 6.3 from being used either to advance different theories not previously

argued or as a substitute for appealing a final judgment. See Shamis v. Ambassador Factors Corp.,

187 F.R.D. 148, 151 (S.D.N.Y. 1999). Having examined the submissions, plaintiff has not met

this exacting standard.

Discussion

Plaintiff argues that the Release Agreement does not cover Reis because his independent

consulting agreement with EVMC is missing the essential terms of a valid, enforceable

agreement, and, furthermore, Eagle was unaware of any relationship between Reis and EVMC

that would cover Reis under the language of the Release Agreement. DE 402 at 15-18. Even

supposing that the independent consulting agreement was missing essential terms, Reis would

still be covered under the Release Agreement as an agent of EVMC. “[W]hether an agency

relationship has been created or exists is determined by the relation of the parties as they in fact

exist by agreement or acts …, and the primary right of control is particularly persuasive.” Secci

v. United Independent Taxi Drivers, Inc., 8 Cal. App. 5th 846, 855, 214 Cal. Rptr. 3d 379, 385

(2017).1 Thus, an agency relationship may still exist between Reis and EVMC even if the

employment contract was missing essential terms and thus unenforceable. Here, it is apparent

that Reis acted as EVMC’s agent since one of Eagle’s own associates attested that Reis would

make any representation EVMC wanted and Eagle knew Reis had a consulting agreement with

EVMC. DE 345-1, ¶ 235; DE 402-3 at 2. Even if Eagle did not know Reis was entitled to

receive commissions from EVMC, it is clear he understood that Reis acted on behalf of EVMC

and was controlled by them. An agent need not be paid by the principal. See United

Independent Taxi Drivers, Inc., 8 Cal. App. 5th at 855 (listing various factors to consider when

determining if an independent contractor is acting as an agent). Thus, even after viewing the

evidence in the light most favorable to Eagle, the record establishes that EVMC had the requisite

level of control over Reis to establish an agency-principal relationship, and that Eagle was aware

of said relationship between Reis and EVMC. As such, Reis was the intended beneficiary of

1 The Release Agreement is governed by California law. See Release Agreement, DE 374-1 at § 3.5.

the Release Agreement and therefore is covered under the Release Agreement as an agent of

EVMC.

Finally, although plaintiff disputes the Court’s power to decide a dispositive matter through

a pre-motion letter, DE 402 at 18, the Second Circuit has upheld this practice. See In re Best

Payphones, Inc., 450 F. App’x 8, 15 (2d Cir. 2011) (“In this Circuit, district judges have, in some

cases, construed pre-motion letters as the motions themselves and denied the motions.”) (citation

omitted). Any perceived injustice arising from this Court’s dismissal of Eagle’s claims against

Reis without the benefit of full briefing has been remediated through the instant motion for

reconsideration, wherein the Court has carefully considered all of Eagle’s arguments.

CONCLUSION

For the foregoing reasons, the motion for reconsideration is DENIED. The Eagle plaintiffs

are directed to serve a copy of this Memorandum & Order upon Michael Reis and file a certificate

of service forthwith.

Dated: Central Islip, New York

December 6, 2022

/s/ Gary R. Brown

GARY R. BROWN

United States District Judge