Belen v. Herman
- Alvin Hellerstein
- 1:22-cv-06455
- U.S. District Court · Southern District of New York
- 5
In Belen v. Herman, Judge Hellerstein denied reconsideration because Vanguard-related claims were time-barred and plaintiffs showed no basis to reopen them.
The plaintiffs' First and Third Counts against The Vanguard Group remain dismissed as time-barred; the order denied plaintiffs' motion for reconsideration.
What happened
In Belen v. Herman, plaintiffs asked the court to reconsider its earlier dismissal of their first and third counts against The Vanguard Group. Those counts alleged that Vanguard failed to disclose or restrain accounts connected to a judgment debtor after receiving a restraining notice.
Plaintiffs argued that their claims became timely later, when transfers allegedly occurred or when Vanguard's continuing duty ended. They also argued that Vanguard's responses concealed information and that a later subpoena response supported reconsideration.
Judge Hellerstein denied the motion. He held that the claims accrued when Vanguard allegedly gave a false response in October 2017, that the three-year limitations period had expired, and that plaintiffs had not shown a change in law, new evidence, clear error, or a basis for equitable estoppel.
The detailed version
- Belen v. Herman · No. 1:22-cv-06455
- Alvin Hellerstein
- Mar. 28, 2024
Background
Plaintiffs moved for reconsideration of the part of the court's January 17, 2024 order that dismissed the First and Third Counts of their First Amended Complaint. Those counts concerned The Vanguard Group's response to a restraining notice served under New York Civil Practice Law and Rules § 5222. Plaintiffs alleged that Vanguard failed to disclose accounts in which they were beneficial owners, failed to restrain transfers from those accounts, and was liable for those failures.
The earlier order held that the claims were subject to a three-year limitations period for actions based on a liability, penalty, or forfeiture created or imposed by statute. The court concluded that the claims accrued when Vanguard responded on October 3, 2017, and allegedly failed to disclose property it was required to disclose. Because the lawsuit was filed more than three years later, the court held that the claims were time-barred. The earlier order also rejected equitable tolling because the same act could not both cause the harm and conceal that harm.
Arguments for reconsideration
Plaintiffs argued that their claims accrued later—when transfers allegedly occurred between October and December 2018, or when Vanguard's continuing duty to identify and restrain accounts ended on September 26, 2018. They also argued that Vanguard's response concealed information and that equitable tolling or equitable estoppel should apply.
Plaintiffs separately argued that the court had overlooked Vanguard's response to a subpoena served in Florida in October 2020. The First Amended Complaint alleged that Vanguard objected to that subpoena on jurisdictional grounds and produced only minimal documents. The court found those allegations conclusory and insufficient to support equitable estoppel.
Legal standard
Reconsideration is an extraordinary remedy that is narrowly and strictly applied. The court stated that it should be granted only when there is an intervening change in controlling law, newly available evidence, or a need to correct clear error or prevent manifest injustice.
Ruling
The court held that plaintiffs identified none of those grounds. It concluded that the cause of action against Vanguard accrued when Vanguard issued the allegedly false October 2017 response, and that the limitations period barred the suit. The court also held that plaintiffs had not shown later, specific acts concealing the alleged deficiency in Vanguard's response. Plaintiffs' motion for reconsideration was denied. The Clerk was directed to terminate the open motion at ECF No. 59.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.