Frame v Maynard

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Frame v Maynard 2009 NY Slip Op 33314(U) January 30, 2009 Supreme Court, New York County Docket Number: 601736/2004 Judge: Paul G. Feinman Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 21512009 [* 1] SUPREME COURT OF THE STATE OF NEW YORK 4' NEW YORK COUNTY PART Justlce 60l736/&q Index Number : 601736/2004 FRAME, ALEXANDER M. INDEX NO. vs MOTION DATE MAYNARD, KENNETH L. Sequence Number : 008 la 2-3 MOTION SEQ. NO. --* OTHER MOTION CAL. NO. L I PAPER$ NUMBERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... I, -L " 3 Answering Affidavits - Exhiblta Repiylng Affidavlta Cross-Motion: 1711 Yes No Upon the foregoing papers, it is ordered that this motion Dated: 1-30 'L)4 J. S. C. u Check one: F I N A L DISPOSITION Check if appropriate: DO NOT POST u NON-FINAL DISPOSITION n REFERENCE [* 2] Intiex Number: 601 736/2004 Mot. Yeq. No.: 008 Submission Date: 12/3/08 C'al. No.: 2 DECISION AND ORDER Ci.nss-claiiiiant Paul 1-iiiiux moves tlic court pursuant to CPLR $ 4404 (b) for an order setting aside thc ilc*cision al'tcr trial of tlie C O L I It 11~nc1crt.d October 6, 2008. m d substituting in its stead a 011 decisioii divxting entry oi'jiiclgn1ent in Hines seck:, ;in ~ d c directin;: r ;I IICW frivoi. ol'tlie cross-claimanl Paul Hines. In the alternative, trial on the issue of "reasonable reliance'' in the interest of [* 3] Justice. For the reasons which follow, the motion is denied. The iinderlying casc, which IS the basis of the movant Paul Hines niotiou to set aside the court s dccision, involved nuriicrous causes of action, including a claim by the niovant for breach of fiduciary duty. At thc conclusion of the bcnch trial and 1-eviewof tlic trial tcstitnony and other evidcnce i n the case, the court rcridered a verdict linding that although the dcfendant Maynard owed a tiduciaiy duty lo thc limited partners, Hines, as a sophisticated investor, did not juslifiably 1-clyon the defendant s lctter regarding tlic value of-the partlicrship property. On this basis, the court thcn dismissed Hines claim for breach of fiduciary duty. Hines secks rearguimenl bascd on what he believes is the court s inisiiiterpretation of the facts and holding of Globirl M i n e r d s rxndMetuI Corp. v Homc, 35 AD3d 93 ( 1 Dept. 2006), lv [ denied 8 NY3d 804 (2007), whcii it Iouiid that like the plaintiff in Globnl Mineriils, Hines was a sophisticated investor who had a duty to investigate tlic ternis of Maynard s offer. Hc also seeks to introduce iiew evidcnce, certain items in his pcrsonal and profcssional life which he did not bring to the court s attention during the trial, in particular conccriiing his health, which he contends if known by the court at the lime it rendered its decision, would have caused it to treat him 110 differently from the other co-limited partncrs. Addressing the second argument first, at trial Hiiics testificd that he relicd on Maynard s representations based upon his fricndship with him and based on Maynard s fiduciary relationship, and that Hiiics was not rcpresented by counsel at the timc he received Maynard s offer lctter nor tlirough Fehniary 2002. He testified tliat he did 1101 participate i n the managemcnl or operation of the partnership s busiiicss, and that he had no notice or wrongdoing. J-Tc also testified that he I The li7llowing is takcn from the court s iiccision and order after tnal, Almrntlcr- M. F r a t w v Koiticth L Mq)titrnl, et cxl., Sup. Ct., N Y County, Oct. h, 2908. Page 2 of 4 [* 4] graduated from Harvard Business School as well as Columbia Business School, that he was a certified public accountant and although retired, is doing consulting work, that his employment history jncludcs 17 years at E.F. Hutton, where lie was an Executive Vice President, Member o1thc Exccutive Committee, and Director, and was also the Chief Financial Officer working for the former United States Secretary of the Treasury whcrc his job consisted priinarily of investing considerable assets in various fornis of invcstments, including a nuinher of sizeable real cstate projects. Hc tcstificd also that he had made a couple of additional personal investments, including an investment in Maiiott Hotels as a limited partiicr. Weighing the evidence, tlic court found that Hines is a sophisticatcd business person. Accordingly, it round that the decision in Glohd Minerals and Metal Corp. v Ilorne, is persuasive authority, and that Hincs had a duty to invesligatc Maynard s offer. CPLR 4404 (b) allows a court to set aside its decision or judgment entercd, and make new findings o r lbct or conclusions of law, render a new dccision, or ordcr a new trial of a cause of action or a separable issuc. Hines asks thc court to set aside its decision, consider his newly divulgcd evidence, and either order a new trial or issue a new decision that holds that similar to the other limited partiicrs, and unlike thc party in Globrxl Mziicrals, lie lacks the sophistication that WOLIM have triggcred a duty to iiivcstigate the offering plan. He submits an affidavit that prescnts a different picture of his cxperience. Hiiics states that he has not practiced as a certilied public 1 accountant, and has extremely limited real estate expcrience (Hiiies Aft . in Supp. 1 3). He states involve real cstate, although in his next position, he had that his position at E.F. Hutton did r 7 o ~ so~iie responsibility for overseeing real estate invcstmerits as they rclnted to [ 1 overall irivestnients, hut thal others actually made iiivestmcnt decisions (Hines Aff. in Supp. 1 4 [d], [e]). 1 Page 3 of 4 [* 5] He describes sevcral unsuccessful vcnlures (.Hines Aff. in Supp., pp. 3-5, 7). He also states that he has been disabled either physically or mentally, for most of thc last nineteen years, and that IIC suffers froin a heart condition as well as severe periodic mental illness (Hines Aff+in Supp. 7 3, pp. 5 et scq.). None of this was ititl-oduccd at thc very lciig~hy othcnvise coniprehcnsive bench trial, and althoirgli Hiries attempted to prove that Mayiard should bc held liable to him for the losses that he sustained because of Maynard s irivestnlcnt strategies. Hines states only that lie had riot believcd this personal infomiatioii was relevant to the case at hand (Hines Aff. in Supp. 1 2). In effect, he 1 seeks a new trial because of his decision to withhold pertinent, albeit sensitive infoinlation. The principal of claim preclusion embraces riot only the matters which are actually litigated but those relevant issues which could have been litigated (Pcxrker 1) Blauvelt Volunleev Fire Co., 93 NY2d 343, 347-348 [ 19991). Hiiies chosc not to put forward certain information at the time of trial which he argucs is relevant for the court lo have considered. Instead, lie chose to present hiriisclf in one light, aiid only when the court ruled against him, has lie come foiward with a completely different characterization of his business acumcn and background. Hc is not entitled to another bite of the apple and the court sees no reason to order a rctrial on this issue in the interest ofjustice. The intercst of justic,e also militatcs in favor of finality . The motion is deiiicd. It is ORDERED that thc motion by cross-claimant Paul I-lines to set aside thc decision and judgnicnt pin-suant to CPLR 4404 (b) is denicd. This conslitutcs the dccision and order or the court. F Datcd: Jaiiuary 30, 2009 New York, New York OOCJE, \ (2009 P 12 D k O 601730-2004 00Hlh) L

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