STATE OF NEW YORK

SUPREME COURT : COUNTY OF CHAUTAUQUA

________________________________________________

TRUSTEES OF THE NATIONAL AUTOMATIC

SPRINKLER INDUSTRY PENSION FUND,

WELFARE FUND, LOCAL 669 U.A. EDUCATION

FUND, AND SPRINKLER INDUSTRY SUPPLEMENT

PENSION FUND,

Plaintiff,

-vs- Index #H-08090

DAVID SANDBERG;

CARLA SANDBERG BABCOCK;

FALARE SANDBERG; AND

BRUCE SANDBERG,

Defendants.

________________________________________________

E. JOSEPH GIROUX, JR.

(William E. Grande, Esq.

of Counsel) for Plaintiffs

BECKSTROM & PLUMB

(John K. Plumb, Esq. of

Counsel) for Defendants

DECISION AND ORDER

GERACE, J.

Plaintiff moves for Reconsideration of the following

holdings of this Court's Decision and Order of August 28,

1995.

3. A notice under BCL 630 reciting only the amount of

a judgment obtained against the corporation, plus

unspecified "post-judgment delinquencies", is

insufficient to hold shareholders responsible for

subsequent unstated delinquencies.

4. Plaintiffs may not amend their complaint to permit

an increase in damages to include the unspecified

post judgment delinquencies.

The Court interprets this Reconsideration Motion as

one to renew and/or reargue.

A motion to reargue is based on no new proof; it

simply seeks to convince the Court that it was wrong and

ought to change its mind. The motion to renew is based on

new or additional proof not used the first time around.

DAVID D. SIEGEL, NEW YORK PRACTICE, Sec. 254.

The Court may treat this application as a motion for

rehearing on additional papers. See GOLD v TRAVELERS INS.

Co. 263 AD 817.

On May 7, 1993, the Funds gave defendants notice under

Section BCL. After asserting an intention to pursue the

shareholders for the amount of pre-bankruptcy judgment for

delinquencies, the notice recited:

"PLEASE BE FURTHER ADVISED that the FUNDS intend to

hold you personally liable under Section 630 for all

post-judgment delinquencies for employee benefits plus

interest thereon and accompanying statutory

penalties."

The question plaintiffs ask the Court to reconsider

is: to impose liability on the shareholders, should that

notice have recited the amount set out in the claim

plaintiff filed in bankruptcy court?

Both parties have submitted some additional proof;

defendants provided the Court with a Bankruptcy Court

Claims Register indicating plaintiff knew the amount due as

of June 15, 1993 because the Funds filed their claim for

$45,264.68 on that date; defendant attached a copy of the

Order of Hon. Beryl E. McGuire, U.S. Bankruptcy Judge,

requiring the debtor corporation to make an accounting to

the NASI funds of all hours worked by its employees from

7/1/92.

On the earlier motion, defendants claimed the

statutory notices were insufficient because the notices did

not apprise them of the full liability for which plaintiffs

seek to hold them responsible, nor did the complaint give

them notice of liability beyond the judgment.

The Funds' BCL 630 notices recited the original

judgment of $5,292.74 and any "post-judgment

delinquencies". Defendants argued that such a notice does

not apprise the shareholders of a lawsuit seeking some

$80,000.

Holding that BCL 630 should be strictly construed in

favor of the shareholders because it is an exception to the

general limited liability role for shareholders, this Court

said the notice was nothing more than a recital of

liability imposed by Section 630; that it had no more

effect to impose specific liability than if the Funds had

served such a notice before there was any deficiency.

Yet, until distribution, if any, by bankruptcy court

of any funds collected by the bankruptcy trustee, plaintiff

could not have known as of either May 6, 1993, the date of

their notice to the shareholders, nor as of June 15, 1993,

the amount they would ultimately seek from the

shareholders.

Unlike the situation where an execution is returned

unsatisfied, the plaintiff could not have known the actual

amount of any claim against shareholders at the time

plaintiff's claim was filed in bankruptcy court; plaintiff

could not have determined the net amount until after the

$16,160.35 distribution to plaintiff of funds collected by

the trustee in bankruptcy.

Plaintiff's affidavit and memorandum in support of the

motion for reconsideration justify a rehearing on

additional papers; or a renewal of the motion.

The Court will hear arguments on the renewed motion on

the 18th day of December, 1995, at 1:00 o'clock in the

afternoon of that day. The Court will consider the papers

submitted on plaintiff's original motions for summary

judgment and leave to serve an amended complaint, and on

defendant's motion for leave to serve an amended answer.

Any additional affidavits, papers or briefs of law must be

filed with the Court no later than December 11, 1995.

THIS IS THE DECISION AND ORDER OF THIS COURT. NO

FURTHER ORDER SHALL BE NECESSARY.

Dated: November , 1995

Mayville, New York

_____________________________

JOSEPH GERACE

Supreme Court Justice

To all Counsel:

Please take notice that a DECISION and ORDER of

which the within is a copy, is duly granted in the above

entitled action on the day of , 1995, and

duly entered in the office of the Clerk of the County of

Chautauqua on the same date.