menu bar

Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: federal court


LEON R. DONGELEWICZ, et al.,    :        No.  3:CV-95-0457

         Plaintiffs             :          (Judge McClure) 

        vs.                     : 

FIRST EASTERN BANK, et al.,     : 	

         Defendants             : 

                            O R D E R
July 7, 1999 BACKGROUND On June 17, 1994, plaintiffs, lot owners in a recreational housing development called the Valley of Lakes, commenced this action with the filing of a complaint pursuant to: the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968 (Count I); the Interstate Lands Sales Full Disclosure Act, 15 U.S.C. § 1701 (Count II); 42 U.S.C. § 1983 (Count III); the New Jersey Real Estate Full Disclosure Act, N.J.S.A. § 45:15- 16.47 (Count IV); and the common law of New Jersey for fraud and deceit (Count V). The complaint was filed in the United States District Court for the District of New Jersey and was transferred to this court by Order of Court dated March 15, 1995. Succinctly stated, plaintiffs allege a long history of mismanagement, broken promises, and fraud on the part of persons in ownership and management positions at Valley of Lakes over the years. Plaintiffs have been certified to proceed as a class pursuant to Fed. R. Civ. P. 23. On September 23, 1997, the court issued a memorandum and
order relating to plaintiffs' motion for entry of default, granting the motion as it related to defendant Frank M. Cedrone and denying the motion as it related to defendants C.B.G., Ltd., Oneida Water Co., and Valley Utilities Co., Inc. (respectively, CBG, Oneida, and Valley Utilities), based on pending bankruptcy proceedings. In denying the motion, we noted that we would reconsider the entry of default for those claims which arose after CBG, Oneida, and Valley Utilities filed their petitions in bankruptcy, since the automatic stay would not apply to post- petition claims. Before the court is plaintiffs' motion for reconsideration. DISCUSSION: I. STANDARD Generally, a motion for reconsideration may be granted based on (1) an intervening change in controlling law, (2) the availability of new evidence not previously available, or (3) the need to correct a clear error of law or to prevent manifest injustice. North River Insurance Co. v. Cigna Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995); Jubilee v. Horn, 959 F. Supp. 276, 278 (E.D. Pa. 1997); Cohen v. Austin, 869 F. Supp. 320, 321 (E.D. Pa. 1994). In this instance, we left open the possibility of reconsideration so that plaintiffs could distinguish between pre-bankruptcy petition claims and post-bankruptcy petition claims. Plaintiffs further contend that the court erred in its holding that the automatic stay barred the entry of default from 2
proceeding against CBG, Oneida, and Valley Utilities. The motion for reconsideration in this case therefore may be viewed as attempting to prevent a clear error of law. II. ERROR OF LAW The error to which plaintiffs point is the court's determination that the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a), prevents consideration of the claims against CBG, Oneida, and Valley Utilities until the bankruptcy court lifts the stay. Plaintiffs note that the stay as to the adversary proceeding was lifted, in effect, when the bankruptcy case was consolidated with the civil action in the District of New Jersey. Since the district court properly had the authority to assume jurisdiction over the matter, see 28 U.S.C. § 157(d), which means that the adversary proceeding actually became part of the matter transferred to this court, the automatic stay provision is inapplicable. We agree with plaintiffs that the automatic stay does not prevent them from proceeding against CBG, Oneida, and Valley Utilities. Since these defendants have not responded to the complaint, or to the motion for entry of default and for reconsideration, entry of default is appropriate as to all of these defendants on all claims, whenever accruing. NOW, THEREFORE, IT IS ORDERED THAT: 1. Plaintiffs' motion (record document no. 110 ) for 3
reconsideration of our Memorandum and Order of Court dated September 23, 1997, is granted. 2. The memorandum and Order of September 23, 1997, is vacated to the extent it is inconsistent herewith. 3. The clerk is directed to enter default against defendants C.B.G., Ltd., Oneida Water Co., and Valley Utilities Co., Inc. /s/ James F. McClure, Jr. United States District Judge 4
Valley of Lakes RICO Class Action against PNCBANK, et al.

Home| Court Decisions| News Articles| RICO Complaint| Exhibits