National Med. Health Card Sys., Inc. v Fallarino

Annotate this Case
[*1] National Med. Health Card Sys., Inc. v Fallarino 2006 NY Slip Op 50429(U) [11 Misc 3d 1068(A)] Decided on March 22, 2006 Supreme Court, Nassau County Austin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law ยง 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 22, 2006
Supreme Court, Nassau County

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC., Plaintiff,

against

JOSEPH FALLARINO, Defendant,



12519-05



COUNSEL FOR PLAINTIFF

Smith Campbell, LLP

110 Wall Street

New York, New York 10005

COUNSEL FOR DEFENDANT

Kreines & Engelberg, Esqs.

330 Old Country Road

Mineola, New York 11501

Leonard B. Austin, J.

ORDER

The following papers were read on Plaintiff's motion to renew and reargue:

Notice of Motion dated December 12, 2005;

Affirmation of Thomas M. Campbell, Esq. dated December 20, 2005;

Plaintiff's Memorandum of Law;

Affirmation of Melvyn Kreines, Esq. dated December 20, 2005;

Plaintiff's Reply Memorandum of Law.

Plaintiff National Medical Health Card Systems, Inc. ("National") moves to renew [*2]and reargue the order of this Court dated November 14, 2005 which denied National's motion to stay arbitration.

BACKGROUND

By written agreement dated June 15, 2004, National hired Defendant Joseph Fallarino ("Fallarino") as its Vice-President of Human Resources and Employee Development for a period of two (2) years. National alleges that it discharged Fallarino for cause of March 1, 2005.

Paragraph 13.13 of Fallarino's employment agreement provides that all disputes arising under the agreement, except for disputes relating to the disclosure and use of confidential information and the covenant not to compete, would be submitted to arbitration.

After Fallarino was unable to negotiate a severance package, he filed for arbitration as provided in his employment agreement.

National moved to stay arbitration asserting it had been fraudulently induced into entering into Fallarino's employment contract. National asserted that Fallarino's resume contained several material misrepresentations regarding his work experience. National also claimed that had it known of the these misrepresentations, it would not have offered Fallarino employment.

Fallarino denied the allegations relating to his discharge. He conceded that his resume contained certain inaccuracies. However, he claims that National had been advised of these inaccuracies before he was hired.

National commenced this action on August 8, 2005. In its complaint, National sought recision of Fallarino's employment agreement and to recover the sums previously paid to Fallarino. At that time, National filed an order to show cause seeking a preliminary injunction staying arbitration pending the determination of National's action.

By order dated November 14, 2005 (9 Misc 3d 1129[A]), this Court denied the motion and directed the parties to proceed to arbitration holding that the application to stay arbitration was not timely (CPLR 7503[c]) and that a claim of fraud in the inducement could be heard and decided by the arbitrator.

National now seeks renewal and/or reargument from that order and, upon reconsideration, seeks a preliminary injunction enjoining the arbitration pending the determination of this action.

DISCUSSION

A. Reargument

A motion to reargue must be based upon an assertion that the court overlooked or misapprehended matters of law or fact when it decided the prior motion. Such a motion must be made within thirty (30) days of service of the order with notice of entry from which reargument is sought. CPLR 2221 (d).

A motion to reargue is addressed to the discretion of the court and may granted upon a showing that the court overlooked relevant facts or misapplied or misapprehended the applicable law or for some other reason improperly decided the prior motion. Carrillo v. PM Realty Group, 16 AD3d 611 (2nd Dept. 2005); Hoey- [*3]

Kennedy v. Kennedy, 294 AD2d 573 (2nd Dept. 2003); and Foley v. Roche, 68 AD2d 558 (1st Dept. 1979).

A motion to reargue is based solely upon the papers submitted in connection with the prior motion. New facts may not be submitted or considered by the court. James v. Nestor, 120 AD2d 442 (1st Dept. 1986); and Philips v. Village of Oriskany, 57 AD2d 110 (4th Dept. 1997).

In this case, National has failed to establish that the Court misapprehended any relevant facts or misconstrued or misapprehended the applicable law with regard to that which was submitted in the prior motion. The arguments advanced by National in support of its motion for reargument are arguments that were not made in connection with the prior motion.

National asserts, for the first time on this motion to reargue, that the demand for arbitration was improperly served and, therefore, was a nullity. See, Jefferson v. Government Employees Ins. Co., 48 AD2d 855 (2nd Dept. 1975); and Chasin v. Chasin, 37 AD2d 839 (2nd Dept. 1971). National claims that the demand for arbitration was served by regular mail and not in the same manner as a summons or by certified or registered mail return receipt requested as required by CPLR 7503(c). In the prior motion, National did not seek to stay arbitration on these newly asserted grounds. Thus, this is a new and different argument. As such, it is an improper basis for granting reargument. Gellert & Rodner v. Gem Community Mgt., Inc., 20 AD3d 388 (2nd Dept. 2005).

Similarly, National, did not assert in the prior motion that its time to move to stay arbitration did not run because the demand for arbitration did not contain language indicating that an application to stay arbitration must be made within twenty (20) days of the service of the demand for arbitration. See, Application of 64 Fulton St. Development, 240 AD2d 226 (1st Dept. 1997); and Matter of Filippazzo, 120 AD2d 663 (2nd Dept. 1986). Since this argument was not presented in the prior motion as a ground to stay arbitration, it is not a proper basis for a motion to reargue and must be deemed to have been waived.

National also asserts that Fallarino's employment contract is so permeated with fraud that the entire agreement including the arbitration clause is void. In the prior motion, National asserted that the agreement was procured through fraud. However, National it did not assert or press, in the prior motion, the permeation with fraud argument so as to vitiate the entire agreement including the arbitration clause. This is also a new and different argument relating to the previously decided issue.

Finally, National asserts that the arbitrator's authority under the terms of the Agreement is limited to "interpreting and enforcing" the terms of the Agreement. This, too, is an argument asserted for the first time on reargument.

While National's arguments may have merit, they are an improper basis for granting reargument. A motion to reargue is not a means by which the unsuccessful party can obtain a second opportunity to argue issues decided in the prior motion or to present new and different arguments relating to the previously decided issues. Gellert & Rodner v. Gem Community Mgt., Inc., supra; and McGill v. Goldman, 261 AD2d 593 (2nd Dept. 1993). National is now offering new and different arguments relating to issues previously decided. This cannot properly be done. [*4]

Since National's motion to reargue is premised exclusively upon new and/or different arguments than those made is support of the prior motion, it must be denied.

B. Renewal

A motion to renew must be based upon new facts not presented to the court in connection with the prior motion that would change the court's prior determination or which demonstrate that there has been a change in the law either of which would change the prior decision and provide a reasonable justification for the failure to present the new facts on the prior motion. CPLR 2221(e).

The court must find that the party presenting the new facts has a reasonable excuse for failing to present those facts on the prior motion. Kaufman v. Kunis, 14 AD3d 542 (2nd Dept. 2005); and Yarde v. New York City Transit Auth., 4 AD3d 352 (2nd Dept. 2004). A party establishes a reasonable excuse when the facts existed but were not known to that party when the prior motion was made. Johnson v. Marquez, 2 AD3d 786 (2nd Dept. 2003); and Riccio v. Deperalta, 274 AD2d 384 (2nd Dept.), app. dism., 95 NY2d 957 (2000)

The new facts upon which National relies in connection with its application for renewal are the same facts upon which it based its application for reargument.

While these are new facts which were not considered by the court in deciding the prior motion, these facts were clearly known to National when the prior motion was made.

National certainly knew the method used to serve the demand for arbitration when the prior motion was made. National also knew that the demand for arbitration did not contain the notice that an application to stay arbitration must be made within twenty (20) days of the service of the demand. None of these facts were provided to the Court nor were they asserted as a basis for staying arbitration in the prior motion.

The purported limitations on the authority of the arbitrator under the terms of Fallarino's employment agreement were also known to National when the prior motion was made and were not asserted as a basis for staying arbitration in the prior motion.

To the extent that the motion seeks renewal on the grounds that Fallarino's employment agreement was so permeated with fraud as to void the agreement, National has failed to place before the court any new facts.

National is attempting to remedy or supplement the deficiencies in its prior arguments in its motion to renew. A motion to renew is not a second chance given to a party who failed to exercise due diligence when making their initial factual presentation. Renna v. Gullo, 19 AD3d 472 (2nd Dept. 2005); and O'Dell v. Caswell, 12 AD3d 492 (2nd Dept. 2004).

Accordingly, it is,

ORDERED, that National's motion to renew and/or reargue this Courts' order of November 14, 2005 is denied; and it is further,

ORDERED, that the parties are directed to proceed forthwith to arbitration before the American Arbitration Association; and it is further,

ORDERED, that counsel for the parties are directed to appear for a conference on April 21, 2006 at 9:30 a.m. to discuss what, if any, further action is required in this matter.

This constitutes the decision and order of this Court. [*5]

Dated: Mineola, NY________________________________

March 22, 2006 Hon. LEONARD B. AUSTIN, J.S.C.



Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.