New Falls Corp. v. Soni Holdings, LLC ( 2022 )

21-865-cv
New Falls Corp. v. Soni Holdings, LLC, et al.,
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 14th day of July, two thousand twenty-two.
PRESENT:
Rosemary S. Pooler,
Myrna Pérez,
Circuit Judges,
Jed S. Rakoff,
District Judge. *
_____________________________________________
New Falls Corporation,
Plaintiff-Appellee,
v. No. 21-865-cv
Soni Holdings, LLC, Kunal Soni, Anjali Soni, 632
MLK BLVD JR LLC, Kanwal Kapur, Om P. Soni,
Soni Capital Resources, LLC,
Defendants-Appellants,
Weanona Hugie, Richard Spears,
Defendants.
*
Judge Jed S. Rakoff, of the United States District Court for the Southern District of New York,
sitting by designation.
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_____________________________________________
FOR PLAINTIFF-APPELLEE: STEVEN P. GIORDANO,
Vlock & Associates, P.C.,
New York, NY.
FOR DEFENDANTS-APPELLANTS: WESLEY R. MEAD, The Mead
Law Firm, PC, New York,
NY
John R. Williams (on the
brief), New Haven, CT.
Appeal from a judgment of the United States District Court for the Eastern District of New
York (Feuerstein, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court entered on March 5, 2021, is AFFIRMED.
This case involves property located in Newark, New Jersey (“the Newark Property”) that
is the subject of a claim of fraudulent conveyance to avoid collection of a judgment debt. The
district court entered a preliminary injunction that would prohibit Defendants from encumbering
or disposing of their ownership interest in the Newark Property, pending the resolution of the
fraudulent conveyance action.
While Defendants initially appealed the preliminary injunction order, they subsequently
moved to withdraw their appeal. A panel of this Court granted that motion and dismissed
Defendants’ appeal with prejudice. See New Falls Corp. v. Soni Holdings, LLC, 19-2746, doc. 50
(2d Cir. Feb. 25, 2020). Defendants then moved for reconsideration of the preliminary injunction
order or, in the alternative, to modify the injunction in light of their offer to place an amount equal
to the judgment award owed to Plaintiff in a court-controlled bank account, pending the resolution
of the fraudulent conveyance action. The district court denied Defendants’ motion, concluding
that Defendants failed to point to any change in law or factual circumstances that justified
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reconsideration or modification.
We assume the parties’ familiarity with the underlying facts, procedural history, and
arguments on appeal, to which we refer only as necessary to explain our decision to affirm the
district court’s denial of Defendants’ motion for reconsideration and modification of the
preliminary injunction. 1
I. This Court Lacks Jurisdiction Over the Motion for Reconsideration
Section 1292(a)(1) of the Judicial Code permits appeals of “[i]nterlocutory orders . . .
granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or
modify injunctions.” See 28 U.S.C. § 1292(a)(1). While Section 1292 permits our interlocutory
review of orders denying or approving motions to modify or vacate a preliminary injunction upon
changed circumstances, see, e.g., Weight Watchers Int’l, Inc. v. Luigino’s, Inc., 423 F.3d 137, 141–
43 (2d Cir. 2005), it does not permit our review of parties’ efforts “simply to revisit the initial
injunction decision or resurrect an expired time for appeal,” see 16 CHARLES ALAN WRIGHT &
ARTHUR R. MILLER, FED. PRAC. & PROC. § 3924.2 (3d ed. 2002).
Defendants already had an opportunity to appeal the validity of the preliminary injunction.
The proper time for Defendants to have moved the district court for reconsideration was within 28
days of the preliminary injunction order, not after their appeal of that order was withdrawn and
dismissed with prejudice. 2 See Fed. R. Civ. P. 59(e); Lichtenberg v. Besicorp Grp., Inc., 204 F.3d
1Defendants also appeal the district court’s March 8, 2021 contempt order. We, however, lack
jurisdiction over a party’s interlocutory appeal of a civil contempt order. See Dinler v. City of New York,
607 F.3d 923, 934 (2d Cir. 2010) (explaining that a party may “only appeal a civil contempt sanction after
a final judgment”).
2
Defendants moved for reconsideration under Rule 60(b), which was procedurally defective
because the preliminary injunction was not a final order. See Fed. R. Civ. P. 60(b) (“On motion and just
terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding
. . . .” (emphasis added)). The district court considered the motion under Rule 54(b) which allows for the
reconsideration of non-final orders. See Fed. R. Civ. P. 54(b) (stating that nonfinal judgments “may be
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397, 401 (2d Cir. 2000) (applying Rule 59(e)’s former 10-day window and explaining that “if an
order granting a preliminary injunction is to be reviewed prior to appeal from the final judgment,
the appeal must be taken within 30 days after the date of the entry of the injunction unless a timely
motion has been made under Civil Rule 59(e))”). 3 Accordingly, while this Court has jurisdiction
to review the denial of Defendants’ motion to modify the preliminary injunction, it does not have
jurisdiction to review the denial of Defendants’ motion for reconsideration of the preliminary
injunction. See Weight Watchers, 423 F.3d at 141 (“An order reconsidering or interpreting a
preliminary injunction . . . is not appealable.”).
II. The District Court Did Not Abuse Its Discretion in Denying the Motion for Modification
We “review the denial of a motion to modify a preliminary injunction for abuse of
discretion.” Weight Watchers, 423 F.3d at 141. “The test of that discretion is measured by whether
the requested modification effectuates or thwarts the purpose behind the injunction.” Sierra Club
v. United States Army Corps of Eng’rs, 732 F.2d 253, 257 (2d Cir. 1984).
Defendants rely too heavily on their offer to place the judgment award in a court-controlled
account pending the resolution of the fraudulent conveyance action. In Grupo Mexicano de
Desarrollo S.A. v. All. Bond Fund, Inc. (“Grupo Mexicano”), the Supreme Court held that a district
court does not have “the power to issue a preliminary injunction preventing [a] defendant from
transferring assets in which no lien or equitable interest is claimed.” 527 U.S. 308, 310, 333 (1999)
revised at any time before the entry of a [final judgment]”).
3
We may have had jurisdiction to review a motion for reconsideration of a preliminary injunction
timely brought under Rule 59(e). See Lichtenberg, 204 F.3d at 401–04 (implicitly finding that motions for
reconsideration brought under Rule 59(e) are appealable); but see id. at 406 (Winter, J., dissenting)
(explaining that the majority implicitly—though incorrectly—deemed the motion for reconsideration to
have been brought under Rule 60, and that Rule 59(e) motions “are not generally appealable”). Defendants,
however, did not timely bring such a motion. Instead, they moved for reconsideration after their appeal of
the preliminary injunction was dismissed with prejudice.
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(emphasis added). While Defendants argue that their offer renders the preliminary injunction
invalid under Grupo Mexicano, Plaintiff here claims both a judgment lien and an equitable interest
in the Newark Property. See Gucci Am. v. Bank of China, 768 F.3d 122, 130 (2d Cir. 2014)
(explaining that Grupo Mexicano was “limited to actions for money damages in which plaintiffs
seek a preliminary injunction to prevent the defendant from transferring assets in which no lien or
equitable interest is claimed”) (internal quotation marks and citation omitted). 4 Defendants cite
no authority for the proposition that their offer can transform an action brought by a judgment
creditor for both equitable relief and damages into an action brought by an unsecured creditor for
money damages only. The district court therefore did not abuse its discretion when it declined to
modify the preliminary injunction.
Defendants forfeited their argument that the continued enforcement of the preliminary
injunction is inequitable because Defendants failed to properly raise this argument in their
objection to the 2020 report and recommendation. See Cephas v. Nash, 328 F.3d 98, 107 (2d Cir.
2003) (“As a rule, a party’s failure to object to any purported error or omission in a magistrate
judge’s report waives further judicial review of the point.”). In their objection, Defendants state
in a subheading that the preliminary injunction is “an instrument of wrong and inequitable.” Joint
App’x at 576. Defendants did not otherwise argue in their objection that the continued
enforcement of the preliminary injunction is inequitable. Consequently, the district court did not
4
Plaintiff has a lien on the Newark Property because of its judgment award. See Grupo Mexicano,
527 U.S. at 323 n.6. Judgment creditors have traditionally been able to obtain an injunction to prevent a
debtor from fraudulently dissipating assets. Id. at 319. A district court, furthermore, has “the equitable
power to . . . [enter a preliminary injunction] where the plaintiff is pursuing a claim for final equitable relief
and the preliminary injunction is ancillary to the final relief.” Gucci, 768 F.3d. at 131 (internal citation
omitted). The preliminary injunction here prevents any further transfer of the Newark Property, which is
ancillary to the final relief requested and permitted under New York law. See N.Y. Debt. & Cred. §§ 276,
278 (2019).
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address this argument. We decline to exercise our discretion to consider the argument for the first
time on appeal. See Spinelli v. NFL, 903 F.3d 185, 198–99 (2d Cir. 2018).
We have considered all of Defendants’ remaining arguments and conclude they are
without merit. For the foregoing reasons, we AFFIRM the order of the district court.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk of Court
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