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Wilmington Savings Fund Society, FSB v. Universitas Education, LLC

United States District Court, D. Connecticut

March 9, 2017

WILMINGTON SAVINGS FUND SOCIETY, FSB, as successor-in-interest to Christiana Bank & Trust Company, Plaintiff,
v.
UNIVERSITAS EDUCATION, LLC, and RIDGEWOOD FINANCE II, LLC, as successor-in-interest to Ridgewood Finance, Inc. Defendants.

          MEMORANDUM OF DECISION

          Vanessa L. Bryant United States District Judge

         The Court granted Universitas Education, LLC's (“Universitas”) Motion to Compel Arbitration between Universitas and Wilmington in a Memorandum of Decision dated February 17, 2016. [Dkt. No. 105.] Wilmington Savings Fund Society (“Wilmington”) timely moved for reconsideration. [Dkt. No. 107; Local R. Civ. P. 7(c).] For the reasons set forth below, the Motion for Reconsideration is DENIED.

         I. Facts

         The Court assumes the parties are familiar with the facts underlying this case. For the purpose of this Decision, the Court briefly states the facts relevant to the disputed arbitration agreement. Universitas' arbitration demand asserts that Holding Capital Group, Inc., a participating employer in a Multiple Employer Welfare Arrangement (“MEWA”) named Charter Oak Trust (“COT”), purchased two life insurance policies totaling $30 million for its chief executive officer, Sash A. Spencer. [Dkt. No. 1-1 at ¶ 48.] Universitas also asserts Spencer selected Universitas, the research and development arm of a charitable foundation, as his insurance beneficiary. Id. at ¶¶ 9, 48. Spencer died in 2008, and the insurance company tendered his death benefits to COT in 2009. Id. at ¶ 50. Universitas's demand for those benefits was unsuccessful. Id. at ¶ 51.

         Wilmington agreed to serve as insurance trustee for what Wilmington refers to as the Grist Mill COT.[1] [Dkt. No. 31-5 (Appointment Agreement).] By the terms of the Appointment Agreement, Wilmington agreed to arbitrate any and all disputes relating to its performance of its duties as trustee of the purported Grist Mill COT. [Dkt. No. 31-5 (Grist Mill COT).] As insurance trustee for the purported Grist Mill COT, Wilmington opened a corporate trust account with the identification number CH125161-0. [Dkt. Nos. 31-8 (Letter); 31-9 (New Account Form).] One of the Spencer policies was placed in the trust account numbered CH125161-0, opened by Wilmington incident to its appointment as insurance trustee. [Dkt. Nos. 31-11 (Trust Vault Receipt); 31-12 (Account Statement).] Both policies were monitored by Wilmington. Id.

         In its Memorandum of Decision, the Court concluded from the aforementioned evidence that Wilmington acted as insurance trustee for the Spencer policies. [Dkt. No. 107-1 at 30-32.] The Court also concluded Wilmington agreed to arbitrate any and all disputes relating to its performance of its duties as insurance trustee, as evidenced by the Appointment Agreement. Id. Wilmington disputes this finding in its Motion for Reconsideration.

         II. Statement of Law

         In the Second Circuit, the standard for granting a motion for reconsideration "is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). There are three grounds for granting a motion for reconsideration: intervening change in controlling law, the availability of newly discovered evidence or a need to correct a clear error or avoid manifest injustice. Virgin Atl. Airways Ltd. v. National Mediation Board, 956 F.2d. 1245, 1255 (2d Cit. 1992). Evidence is “newly discovered” for the purpose of a motion for reconsideration if the movant “could not have discovered the new evidence earlier had he exercised due diligence.” Patterson v. Bannish, 3:10-cv-1481, 2011 WL 2518749, at *1 (D. Conn. June 23, 2011); Robinson v. Holland, 3:02-cv-1943, 2008 WL 1924971, at *1 (D. Conn. Apr. 30, 2008) (same). If the Court “overlooked controlling decisions or factual matters that were put before it on the underlying motion, ” reconsideration is appropriate. Wiseman v. Greene, 204 F.3d 393, 395 (2d Cir. 2000) (per curium).

         III. Analysis

         Wilmington raises three arguments for reconsideration. Each fails to meet any of the three grounds for granting a motion for reconsideration.

         First, Wilmington disingenuously asserts the Court “ignore[d]” evidence that Universitas admitted in a 2010 arbitration that Universitas has no arbitration agreement with Grist Mill Capital. [Dkt. No. 107-1 at 8.] Wilmington supports this argument with a letter from Universitas to an arbitrator in the matter Universitas Education, LLC v. Nova Group, Inc., Wayne Bursey, Benistar Admin. Services, Inc., Donald Trudeau, Grist Mill Capital, LLC and Daniel E. Carpenter, dated August 19, 2010. [Dkt. No. 107-2.] In the letter, Universitas states “no arbitration agreement exists between Universitas and Grist Mill Capital.” Id. The letter was publicly filed on November 20, 2013 in a case pending in the Southern District of New York. Id. However, Wilmington asserts it did not discover the letter until January 2016. [Dkt. No. 107-1 at 4.] The letter was not filed with the Court in this case and thus the Court could not have “ignore[d]” evidence that Universitas admitted in the 2013.

         The letter Wilmington offers to assert Universitas has no arbitration agreement with Grist Mill is not “newly discovered” evidence for the purpose of a motion for reconsideration, as Wilmington has not established why it “could not have discovered the new evidence earlier had he exercised due diligence.” Patterson, 2011 WL 2518749 at *1. Wilmington discovered the letter in 2016 on a public docket, where it had been available since November 2013. Wilmington does not indicate why it could not have discovered the letter sooner with due diligence. Wilmington also asserts no intervening change in law or controlling legal decisions which made the letter relevant after the Court rendered its decision. Wilmington's first argument for reconsideration fails.

         Wilmington next argues the Court failed to resolve material factual disputes in its Decision, including whether Wilmington agreed to act as insurance trustee for the owner of the Spencer policies and whether any such agreement includes a binding arbitration clause. [Dkt. No. 107-1 at 11.] In its Order compelling arbitration, the Court addressed both of these issues.

         First, the Court found that Wilmington “agreed to serve as insurance trustee for the purported Grist Mill COT” based on (1) Wilmington's Appointment Agreement, (2) a New Account Form indicating Wilmington opened a corporate trust account as “Grist Mill's” trustee, and (3) trust vault receipts and account statements showing Wilmington monitored the Spencer policies placed in that trust account. [Dkt. No. 105 at 31 (citing Dkt. Nos. 31-5 (Appointment Agreement), 31-9 (New Account Form), 31-11 (Trust Vault Receipt, 31-12 (Account Statement)).] The Court also found Wilmington “agreed to arbitrate any and all disputes relating to the purported Grist Mill COT by virtue of its appointment as insurance trustee, ” as evidenced by the Appointment Agreement. [Dkt. No. 105 at 31 (citing Dkt. No. 31-5).] Based on those findings, the Court concluded that “Wilmington acted as ...


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