USI Sys. AG v Gliklad

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USI Sys. AG v Gliklad 2017 NY Slip Op 32016(U) September 21, 2017 Supreme Court, New York County Docket Number: 152870/2016 Judge: Gerald Lebovits Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 1] NYSCEF DOC. NO. 88 RECEIVED NYSCEF: 09/26/2017 NEW YORK STATE SUPREME COURT NEW YORK COUNTY: PART 7 USI SYSTEMS AG, Index No.: 152870/2016 DECISION/ORDER Motion Seq. No. 004 Plaintiff, -againstALEXANDER GLIKLAD, Defendant. Recitation, as required by CPLR 2219 (a), of the papers considered in reviewing plaintiffs motion to reargue under CPLR 2221 (d). NYSCEF Documents Numbered Papers Plaintiffs Memorandum of Law, December 16, 2016, on Motion Seq. No 003 .......................... 24 Plaintiffs Notice of Motion, June 23, 2017 .................... : ............................................................. 69 Plaintiffs Memorandum of Law in Support, June 23, 2017 ................................................... 70, 71 Defendant's Memorandum of Law in Partial Opposition, July 5, 2017 ........................................ 72 Plaintiffs Memorandum of Law in Further Support, July 13, 2017 ............................................. 82 Affidavit of Oliver Cramer, July 7, 2017 ....................................................................................... 83 Defendant's Letter, July 13, 2017 .................................................................................................. 84 Plaintiffs Letter, July 17, 2017 ..................................................................................................... 85 Becker, Glynn. Muffley, Chassin & Hosinski LLP, New York (Jonathan E. Stem of counsel), for plaintiff US! Systems AG. Winston & Strawn LLP., New York (W. Gordon Dobie of counsel), for defendant Alexander Gliklad. Gerald Lebovits, J. Plaintiff moves under CPLR 2221 (d) to reargue this court's order of June 7, 2017. The motion is granted. This case involves a .dispute over the recognition of a Swiss judgment of April 5, 2006. The Swiss judgment awarded plaintiff damages in the amount of U.S. $30,000,000 plus interest and 707,951.85 Swiss Francs in costs and fees. On June 7, 2017, this court awarded plaintiff a money judgment for U.S. $30,000,000, with 10% interest from December 15, 1999, until June 7, 2017, and 9% interest from June 7, 2017, forward, plus costs.· Plaintiff moves to reargue this court's decision and order of June 7, 2017 on the ground on the following two issues: (I) The 10% interest from the awarded U:S. $30,000,000 should begin from October 18, 1999 and not December 15, 1999; and (2) in its order, this court should 2 of 7 INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 2] NYSCEF DOC. NO. 88 RECEIVED NYSCEF: 09/26/2017 add the 707,951.85 Swiss Francs that the Swiss judgment awarded, plus interest at 5% from April 5, 2006. (Plaintiffs Memorandum of Law in Support ofits_Motion, June_ 23: 2017, at~-) Plaintiff argues that this court should award the Swiss Franc portion of the Swiss Judgme~~ m Swiss Francs. This amount would be converted to U.S. dollars at the exchange rate prevailmg on the date of entry of the judgment according to Judiciary Law § 27. Defendant does not argue that plaintiffs motion is unjustified or untimely. Defendant agrees that the "Swiss default judgment awarded damages both in dollars (U.S. $30 million, ?!us interest at I 0% per year dating from October 18, 1999), and in Swiss Francs (707 ,951.85 Swiss Francs)." (Defendant's Memorandum of Law in Partial Opposition, July 5, 2017, at 2.) In his opposition papers, defendant agrees that the June 2017 order is erroneous but argues that this court should have awarded a lower interest rate. Defendant argues that until the entry of the Swiss judgment, the interest rate of 10% should apply. According to defendant, the Swiss statutory post-judgment interest rate of 5% should apply after the entry of the Swiss judgment. Defendant contends that the court failed "to apply the Swiss post-judgment rate of 5% during the Swiss post-judgment period." (Defendant's Memorandum of Law in Partial Opposition, July 5, 2017, at 3.) Defendant does not raise any argument regarding plaintiffs request to secure an award of 707,951.85 Swiss Francs, plus 5% interest from April 5, 2006. In reply, plaintiff notes that defendant agrees to the requested start date of the interest, October 18, 1999, instead of December 15, 1999. Plaintiff also notes that defendant does not oppose plaintiffs claim for an award in "an amount equal to 707,951.85 Swiss Francs, plus interest at 5% dating from April 5, 2006." (Memorandum of Law in Further Support, July 13, 2017, at 2.) According to plaintiff, defendant waived his right to dispute plaintiffs entitlement to I 0% interest. Plaintiff argues that defendant failed to raise any argument regarding the interest rate before the court granted its order and may not do so now. In reply to defendant's request to reduce the interest rate to 5%, plaintiff submits an affidavit of Oliver Cramer, an attorney-at-law registered with the Geneva bar since 1994. (Affidavit of Oliver Cramer, July 7, 2017, at ii I.) Cramer states in his affidavit that according to the Swiss Code of Obligations, plaintiff is entitled to receive I 0% interest during the Swiss postjudgment period. Cramer argues that the Swiss statutory post-judgment interest rate of 5% applies only ifthe parties did not agree on a higher rate. (Affidavit of Oliver Cramer, July 7, 2017, at i1 4.) Here, the loan agreement provided a I 0% interest rate, and therefore plaintiff argues that it is entitled to 10% interest. Regarding the 707,951.85 Swiss Francs awarded in the Swiss judgment, plaintiff repeats its argument that this amount should be awarded in Swiss Francs and will be converted under Judiciary Law§ 27 "into the currency of the United States at the rate of exchange prevailing on the date of entry of the judgment." (Plaintiffs Memorandum of Law in Further Support, July 13, 2017, at 6.) In his letter of July 13, 2017, defendant argues that the question of the amount of the post-judgment interest rate is a choice-of-law issue. Defendant contends that the 9% postjudgment interest rate of New York, the forum, and not that of Switzerland applies. Defendant does not address the 707,951.85 Swiss Francs that plaintiff requested. Defendant does not oppose plaintiffs argument on the Judiciary Law§ 27 issue. 2 3 of 7 INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 3] NYSCEF DOC. NO. 88 RECEIVED NYSCEF: 09/26/2017 CPLR 2221 governs motions affecting prior orders. In a motion to reargue, a party must present matters of fact or law that the court allegedly overlooked or misapprehended in . determining the prior motion, but shall not include any matter of fact not of~ered on the pnor motion. Reargument is not designed to afford an unsuccessful party successive opportumties to reargue issues previously decided or to present arguments different from those originally asserted. (William P Pahl Equip. Corp. v Kassis, 182 AD.2d 22, 25 [!st Dept 1992].) Here, plaintiff alleges that the court overlooked matters of fact. According to plaintiff, it asked the court to recognize the Swiss judgment. This judgment awarded two different categories of damages: (I) U.S. $30,000,000 plus 10% interest since October 18, 1999, and (2) 707,951.82 Swiss Francs for costs and fees. In its Memorandum of Law in Support of the Plaintiffs Motion for Summary Judgment of December 16, 2016, plaintiff asked this court to "award summary judgment to USI on its claim for recognition of the Judgment pursuant to Article 53, in the amounts of (a) U.S. $30,000,000, plus interest that has been running at I 0% since October 18, 1999 and (b) 707,951.85 Swiss Francs, plus interest." (Plaintiffs Memorandum of Law, December 16, 2016, at 26.) Regarding the Swiss Francs, plaintiff argued that the court should render the Swiss franc portion of the Swiss judgment in Swiss Francs and not in U.S. dollars. Plaintiff urges that under Judiciary Law§ 27, this amount will be converted into U.S. dollars at the rate of exchange prevailing on the date of entry of the judgment. (Plaintiffs Memorandum of Law, December 16, 2016, at 26.) On June 7, 2017, this court granted plaintiffs motion for summary judgment but awarded solely U.S. $30,000,000 with interest of I 0% from December 15, 1999 until June 7, 2017, with costs and 9% interest from June 7, 2017. On June 23, 2017 plaintiff filed its motion to reargue under CPLR 2221 (d). In its motion, plaintiff asks the court to amend its June 2017 order to direct the clerk of the court to enter judgment to it in the amounts of(a) U.S. $30,000,000, plus interest at 10% dating from October 18, 1999 and (b) 707,951.85 Swiss Francs, plus interest at 5% dating form April 5, 2006. Plaintiffs CPLR 2221 (d) motion to reargue is granted. Plaintiffs timely motion shows that the court overlooked a matter of fact. Defendant does not raise any argument regarding plaintiffs reargument motion. Plaintiff shows that it asked this court to recognize the Swiss judgment containing damages in U.S. dollars plus interest from October 18, 1999, and in Swiss Francs for costs and fees. In its June 2017 order, the court recognized the Swiss judgment and awarded the U.S. dollar portion of the Swiss judgment but awarded interest from December 15, 1999. The order does not award the Swiss Franc portion of the Swiss judgment. Both the beginning of the interest rate and the awarded 707.951.85 Swiss francs are part of the Swiss judgment recognized in this court's order. Plaintiff asks the court to amend its order regarding ( 1) the beginning of the interest rate; and (2) the 707,951.85 Swiss Francs plus interest. I. Plaintiff's Request to Amend the Date When the Interest Rate Begins and Defendant's Request to Change the Amount of the Interest Rate Both parties agree that the interest from the awarded U.S. $30,000,000 should begin on October 18, 1999 and not on December 15, 1999. The parties disagree on the amount of the 3 4 of 7 INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 4] NYSCEF DOC. NO. 88 RECEIVED NYSCEF: 09/26/2017 interest rate from the time the Swiss judgment was entered until the day this court issued its order. Based on its motion papers and the oral argument on plaintiffs summary-judgment motion and in its motion to reargue, plaintiff claims that the interest rate for this post-judgment period is 10% as awarded in the June 2017 order. Plaintiff alleges that the parties agreed to a I 0% interest rate in the loan agreement and therefore that the I 0% interest rate accrues from October 18, 1999 through the date of this court's June 2017 order. Defendant did not oppose plaintiffs claim regarding the interest rate in his motion papers. Before this court entered its order, defendant stated only that the Swiss judgment is not enforceable at all. In his papers, defendant alleges that the court should "apply the Swiss post-judgment rate of 5% to the time period between US I's Swiss judgment and recognition of that judgment in New York." (Defendant's Memorandum of Law in Partial Opposition, July 5, 2017, at 3.) One week later, in his letter of July 13, 2017, defendant alleged that the post-judgment interest rate is a procedural matter governed by the law of the forum -that New York's post-judgment interest rules apply. (Defendant's letter, July 13, 2017, at 2.) Neither in his Memorandum of Law in Partial Opposition nor in his letter does defendant allege that he ever before argued this subject, the amount of the interest rate. In response to defendant's letter of June 13, 2017, plaintiff points out that defendant changed his position on the amount of the interest rate several times and that the court should disregard these inconsistent positions. (Plaintiffs letter, July 17, 2017, at I.) A motion to reargue is not designed to afford the unsuccessful party successive opportunities to reargue issues previously decided or to present arguments different from those originally asserted. (William P Pahl Equip. Corp., 182 AD2d at 25.) Before the court decided its June 2017 order, defendant had the opportunity to argue the issue of the amount of the interest rate, but he did not do so. He does not get another bite of the apple now. Defendant and plaintiff agree that the beginning of the interest rate is October 18, 1999, instead of December 15, 1999. The start date of the interest is a matter plaintiff raised before. (Plaintiffs Memorandum of Law, December 16, 2016, at 26.) The amount of the interest rate defendant challenged is not a matter of law or fact the court overlooked. Plaintiffs request to amend the start date of the interest is granted. Defendant's request to lower the amount of the interest rate, to 5% (as requested in Defendant's Memorandum of Law in Pa~ial O?position, July 5, 2017, at 3) or 9% (as requested in Defendant's letter, July 13, 2017, at 2), 1s dented. This court amends its June 7, 2017, decision and order to reflect that the start date of the interest must begin from October 18, 1999. Therefore, that aspect of this court's decision and order is amended to the following extent: Plaintiff is awarded a money judgment for U.S. $30,000,000, with 10% interest from October 18, 1999, until June 7, 2017, and statutory interest of9% from June 7, 2017, forward, plus costs. 4 5 of 7 INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 5] NYSCEF DOC. NO. 88 II. RECEIVED NYSCEF: 09/26/2017 Plaintiff's Request to Add Damages Awarded in Swiss Francs Plaintiff asks this court to amend its June 2017 order because the court allegedly forgot to award plaintiff 707 .951,85 Swiss Francs. Plaintiff alleges that the Swiss judgment awarded plaintiff707.951,85 Swiss Francs in costs and fees. According to plaintiff, this court overlooked this fact in its order, even though plaintiff requested the court to do so. (Plaintiffs Memorandum of Law, December 16, 2016, at 26.) Plaintiff further asks this court to render the Swiss Franc portion of the foreign judgment in Swiss Francs and, according to Judiciary Law§ 27, that the amount be converted into U.S. dollars. Defendant does not raise any argument in opposition. According to Judiciary Law§ 27 (a), judgments and accounts must be computed in dollars and cents. In addition to this general rule, Judiciary Law § 27 (b) provides that when "the cause of action is based upon an obligation denominated in a currency other than currency of the United States, a court shall render or enter a judgment or decree in the foreign currency of the underlying obligation." Any award in a foreign currency must be converted into United States currency at the rate of exchange prevailing on the date of entry of the judgment or decree. (Korea Life Ins. Co. v Morgan Guar. Trust Co., 2004 US Dist LEXIS 16436, at *41, 2004 WL 1858314, at *14 [SD NY 2004].) In Dynamic Cassette Intl. v Mike Lopez & Assoc., plaintiff, Dynamic Cassette International Limited, moved to enforce an English judgment awarding damages in British Pounds. (923 F Supp 8, 9 [ED NY 1996].) The District Court found that "[a]lthough it might be argued that the 'judgment or decree' referred to in Section 27(b) is the English judgment, such a reading of the statute is belied by its mandate that an American court 'render or enter a judgment or decree in the foreign currency of the underlying obligation.' Moreover, a brief review of the cases decided before Section 27(b) was enacted confirms that the 'judgment or decree' referred to is the judgment entered in the enforcing jurisdiction, which in this case is the United States." (Id. at 12.) Plaintiff's motion to amend its June 2017 order regarding the damages awarded in Swiss Francs is granted. The amount of707,951.85 Swiss Francs plus interest must be converted at the rate of exchange on the date of entry of this court's order, June 7, 2017. (See Rienzi & Sons, Inc. v N. Puglisi & F. lndustria Paste Alimentari Sp.A., 638 F App'x 87, 92 [2d Cir 2016] [calculating damages under New York law by reference to the conversion rate in effect on the date of the district court's summary-judgment decision, rather than the rate in effect on the date judgment was entered].) Therefore, that portion of the court's decision and order from June 7, 2017 is amended to the following extent: Plaintiff is awarded a money judgment for 707, 951.85 Swiss Francs, converted into U.S. dollars at the exchange rate on June 7, 2017, with interest at 5% from April 5, 2006 until June 7, 2017, and thereafter the interest will be at the statutory rate of9%; 5 6 of 7 INDEX NO. 152870/2016 [*FILED: NEW YORK COUNTY CLERK 09/26/2017 03:09 PM 6] NYSCEF DOC. NO. 88 RECEIVED NYSCEF: 09/26/2017 Accordingly, it is hereby ORDERED that plaintiffs motion to reargue is granted and the decision and order of June 7, 2017, is amended as follows: Plaintiff is awarded a money judgment for (a) U.S. $30,000,000, with interest of I 0% JTom October 18, 1999, until June 7, 2017 and thereafter the interest will be at the statutory rate of9% plus costs and (b) 707, 951.85 Swiss Francs, converted into U.S. dollars at the exchange rate on June 7, 2017, with interest at 5% from April 5, 2006 until June 7, 2017, and thereafter the interest will be at the statutory rate of9%; and it is further ORDERED that plaintiff shall serve a copy of this decision and order on defendant and on the County Clerk's Office, which is directed to enter judgment accordingly. /; Dated: September 21, 2017 J.S.C. HON. GERALD LEBOVITS J.S.C. 6 7 of 7

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