Summary
dismissing veil piercing claim where "the conclusory allegations in the complaint [were] insufficient"
Summary of this case from Goldin v. Tag Virgin Islands, Inc.Opinion
2012-05-29
BARNELI & CIE SA, Plaintiff–Respondent, v. DUTCH BOOK FUND SPC, LTD., et al., Defendants–Appellants.
The Law Offices of Neal Brickman, P.C., New York (Neal Brickman of counsel), for appellants. Hodgson Russ LLP, New York (Mark A. Harmon of counsel), for respondent.
The Law Offices of Neal Brickman, P.C., New York (Neal Brickman of counsel), for appellants. Hodgson Russ LLP, New York (Mark A. Harmon of counsel), for respondent.
FRIEDMAN, J.P., SWEENY, RENWICK, FREEDMAN, ABDUS–SALAAM, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 12, 2010, which, insofar as appealed from, denied defendants' motion to dismiss the fourth and fifth causes of action pursuant to CPLR 3211(a)(1) and (7) and 3016(b), unanimously reversed, on the law, with costs, and the motion granted. Appeal from order, same court and Justice, entered August 25, 2011, which, inter alia, upon reargument, adhered to the determination on the original motion, unanimously dismissed, without costs, as academic. The Clerk is directed to enter judgment in defendants' favor dismissing the complaint.
The fourth cause of action (for fraud) is not viable, given the representations and warranties that plaintiff made in the Subscription Agreement that it signed and the fact that it failed to investigate before investing $50 million in defendant Dutch Book Fund SPC, Ltd. (Fund) ( see e.g. MBIA Ins. Corp. v. Merrill Lynch, 81 A.D.3d 419, 916 N.Y.S.2d 54 [2011];Graham Packaging Co., L.P. v. Owens–Illinois, Inc., 67 A.D.3d 465, 892 N.Y.S.2d 1 [2009];Permasteelisa, S.p.A. v. Lincolnshire Mgt., Inc., 16 A.D.3d 352, 793 N.Y.S.2d 16 [2005] ). If neither plaintiff nor its representatives had expertise in algorithms or probability theory, then plaintiff should have “retain[ed] qualified outside consultants” ( HSH Nordbank AG v. UBS AG, 95 A.D.3d 185, 941 N.Y.S.2d 59, 67 [2012] ).
The fraud claim cannot be sustained as against defendants Dutch Book Partners, LLC (Partners) and Stanley R. Jonas for the additional reason that plaintiff relied solely on Fund documents ( see Valassis Communications v. Weimer, 304 A.D.2d 448, 758 N.Y.S.2d 311 [2003],appeal dismissed2 N.Y.3d 794, 781 N.Y.S.2d 293, 814 N.E.2d 465 [2004] ), and did not allege any actionable statements made by Partners or Jonas ( see e.g. Lai v. Gartlan, 28 A.D.3d 263, 811 N.Y.S.2d 917 [2006]; Handel v. Bruder, 209 A.D.2d 282, 618 N.Y.S.2d 356 [1994] ).
Because the fraud claim cannot stand as against Partners, there is no basis on which to hold Jonas liable as the alter ego of Partners (the fifth cause of action). In addition, the conclusory allegations in the complaint are insufficient to state a veil-piercing claim ( see e.g. Andejo Corp. v. South St. Seaport Ltd. Partnership, 40 A.D.3d 407, 836 N.Y.S.2d 571 [2007];Albstein v. Elany Contr. Corp., 30 A.D.3d 210, 818 N.Y.S.2d 8 [2006],lv. denied7 N.Y.3d 712, 824 N.Y.S.2d 604, 857 N.E.2d 1135 [2006] ).