Opinion
00 Civ. 0364 (RWS)
September 26, 2002
RAAB, STURM GOLDMAN, New York, NY, By: IRA A. STURM, ESQ., Attorney for Plaintiffs of Counsel.
JASINSKI AND PARANAC, Newark, NJ, By: DAVID M. WALSH, ESQ., Attorney for Defendant of Counsel.
OPINION
The plaintiffs Building Service 32B-J Health Fund, Building Service 32B-J Pension Fund, and Building Service 32B-J Annuity Fund (the "Funds") have moved to reopen the opinion and order of this Court of September 27, 2001 (the "September 27 Order") enforcing a settlement with defendant Vanderveer Estates Holding, LLC ("Vanderveer"), for reargument and reconsideration pursuant to Local Rule 6.3 of the Rules of the Southern and Eastern Districts of New York, for relief pursuant to Rule 52(b) and 59(e), Fed.R.Civ.P., or, alternatively, for relief pursuant to 60(b), Fed.R.Civ.P. The motion under Rule 60(b) will be granted as specified below, and the other motions denied.
The course of this litigation has been jagged and uneven as what follows will demonstrate. This characteristic persists as a result of an inattention to important details.
Prior Proceedings
The September 27 Order recited the litigation between the Funds, the Union, and Vanderveer since 1998. These proceedings had culminated in a summary judgment, Building Services 32B-J Health Fund v. Vanderveer Estates Holding, LLC, 121 F. Supp.2d 750 (S.D.N.Y. 2000), reconsidered, 127 F. Supp.2d 490 (S.D.N.Y. 2001), which established the liability of Vanderveer to the Funds.
As set forth in the September 27 Order, the resolution by way of summary judgment was the subject of an appeal by Vanderveer to the Court of Appeals noticed on April 24, 2001 when the ongoing settlement discussions were reported to Vanderveer as complete. Vanderveer acting in reliance did not perfect its appeal by filing Forms C and D within 10 days. The appeal was dismissed on June 14, 2001 for failing to perfect the appeal.
The motion by Vanderveer to enforce the settlement which had been confirmed in a written agreement (the "Agreement") was submitted on August 1, 2001. On August 8, 2001, Vanderveer filed for bankruptcy. The September 27 Order was entered on that date enforcing the settlement.
On October 15, 2001, counsel for the Funds by letter notified the Court of the bankruptcy "shortly before the Court rendered its opinion of September 27, 2001." On the same day, the Funds filed a notice of settlement of a judgment and two affidavits relating to attorneys' fees. Receiving the October 15 letter on October 22, 2001, on November 1 this action was dismissed by the Court with leave granted to reopen.
On June 5, 2002, the instant motions were heard and marked submitted.
The September 27 Order Is Vacated
Under Rule 60(b) the court "may relieve a party . . . from a final judgment, order or proceeding for the following reasons: 1) mistake . . .," the motion seeking such relief being made within one year after the order. This timely motion must be granted as to the September 27 Order as a result of the stay resulting from the August 8, 2001 bankruptcy filing which was unknown to the Court at the time of the entry of the order.
Section 362 of the Bankruptcy Code provides that the filing of a bankruptcy petition creates an automatic stay against "the commencement or continuation . . . of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case." 11 U.S.C. § 362(a)(1). The stay is effective immediately upon the filing of the petition, Shimer v. Fugazy (In re Fugazy Express, Inc.), 982 F.2d 769, 776 (2d Cir. 1992); Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1204 (3d Cir. 1991), and any proceedings or actions described in section 362(a)(1) are void and without vitality if they occur after the automatic stay takes effect, see 48th St. Steakhouse, Inc. v. Rockefeller Group, Inc. (In re 48th St. Steakhouse, Inc.), 835 F.2d 427, 431 (2d Cir. 1987), cert. denied, 485 U.S. 1035, 108 S.Ct. 1596, 99 L.Ed.2d 910 (1988).Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 527 (2d Cir. 1994).
Since the September 27 Order was void ab initio by operation of law, it is appropriate to relieve the parties of that order which is vacated.
The submissions on this motion pursuant to 60(b)(3), allowing for relief from judgment where there is fraud, appear to establish that paragraph 1 of the Agreement which follows was accurate but misleading:
1. Abraham Wieder no longer holds any interest in the facility known as Vanderveer Estates Holding LLC, the Employer herein.
Based on affidavits and testimony on the subject, the reorganization represented by Michael Koenig ("Koenig") to the Funds in the course of the settlement resulted in Koenig becoming in effect the general partner of Vanderveer, while Abraham Wieder ("Wieder") remained the owner of 51% of the equity securities. The securities were not held by Wieder but in escrow by Michael Silberberg, Esq.
The Funds have not established to this Court's satisfaction that the paragraph was materially misleading. The Funds have not established that the stock ownership, as opposed to the control, of Vanderveer was an appropriate and material consideration in the settlement.
The Motion To Reconsider Is Denied
The motion to reargue and reconsider the September 27 Order is denied as untimely under Local Rule 6.3. The motion under 60(b) is granted as set forth above. The motions for alteration or modification under Rule 52(b) and 59(e) are denied in the absence of any proceeding pending in this Court.
Conclusion
The September 27 Order is vacated and the motion to reargue and reconsider is denied.