Bascunan v. Elsaca
- George Daniels
- 1:15-cv-02009
- U.S. District Court · Southern District of New York
- 6
In Bascunan v. Elsaca, Judge Daniels denied plaintiffs’ request to reconsider refusing to dismiss defendants’ quantum-meruit counterclaim.
The plaintiffs’ motion for reconsideration was denied, leaving the court’s earlier refusal to dismiss the defendants’ quantum-meruit counterclaim unchanged.
What happened
In Bascunan v. Elsaca, the plaintiffs asked the court to reconsider its earlier refusal to dismiss the defendants’ counterclaim seeking payment for the value of services provided. They argued that Chilean law should apply, that New York law would bar the claim because of a written contract, and that the claim was untimely.
The plaintiffs specifically argued that the court had clearly erred by applying New York’s choice-of-law rules and that they should not be prevented from arguing for Chilean law. The court rejected those arguments, explaining that it had considered the relevant connections to New York, including where the business relationship and performance occurred and where funds were invested.
Judge Daniels denied the motion for reconsideration. The court did not decide whether the plaintiffs were legally prevented from arguing that Chilean law applied because it had not previously decided that issue.
The detailed version
- Bascunan v. Elsaca · No. 1:15-cv-02009
- George Daniels
- July 22, 2020
Background
Jorge Yarur Bascunan and several entities he owns and controls sued Daniel Yarur Elsaca, other defendants, and related entities under the Racketeer Influenced and Corrupt Organizations Act (RICO). The complaint also asserted state-law claims. After earlier proceedings, the defendants filed an answer to the second amended complaint containing counterclaims for quantum meruit and tortious interference.
The plaintiffs moved to dismiss both counterclaims. On December 18, 2019, the court granted the motion as to the tortious-interference counterclaim and denied it as to the quantum-meruit counterclaim. The plaintiffs then moved for reconsideration of the refusal to dismiss the quantum-meruit counterclaim.
Arguments on Reconsideration
The plaintiffs argued that the court had clearly erred by applying New York’s choice-of-law rules. They contended that Chilean law applied and did not permit a quantum-meruit claim. Alternatively, they argued that New York law barred the claim because of an express written contract and that the claim was untimely. They also argued that there was no legal basis to prevent them from asserting that Chilean law applied.
Court’s Analysis
The court explained that reconsideration is an extraordinary remedy generally limited to an overlooked controlling decision or evidence, an intervening change in controlling law, clear error, or manifest injustice. It found that the plaintiffs had not identified any of those grounds and were instead repeating arguments previously presented.
The court upheld its use of New York’s “center of gravity” choice-of-law test. That test considers the place of contracting, negotiation, performance, the location of the subject matter, and the parties’ domicile or place of business. The court stated that it had considered those factors, including the connections between the business relationship, performance, and investments and New York. It also gave substantial weight to the plaintiffs’ previous arguments that the case was closely connected to New York and that New York law should apply to their claims.
The court did not decide whether the plaintiffs were legally prevented from arguing that Chilean law applied. It stated that it had not previously reached that issue and therefore did not need to decide it after finding no clear error in applying New York law.
Disposition
Judge George B. Daniels denied the plaintiffs’ motion for reconsideration. The court also directed the Clerk of Court to close that motion. The earlier ruling granting dismissal of the tortious-interference counterclaim and denying dismissal of the quantum-meruit counterclaim was not changed by this order.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.