Levy v. Aaron Faber, Inc.

148 F.R.D. 114, 1993 U.S. Dist. LEXIS 5062, 1993 WL 116821
CourtDistrict Court, S.D. New York
DecidedApril 13, 1993
DocketNo. 91 CIV. 7470 (KMW)
StatusPublished
Cited by13 cases

This text of 148 F.R.D. 114 (Levy v. Aaron Faber, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Levy v. Aaron Faber, Inc., 148 F.R.D. 114, 1993 U.S. Dist. LEXIS 5062, 1993 WL 116821 (S.D.N.Y. 1993).

Opinion

OPINION AND ORDER

KIMBA M. WOOD, District Judge.

Defendants move for partial summary judgment and to dismiss the amended complaint in this thirteen count action for, among other things, breach of fiduciary duty, dissolution and liquidation of a limited partnership and a corporation, and RICO violations. Both parties also move for sanctions pursuant to Federal Rule of Civil Procedure 11. For the reasons discussed below, I grant, in part, defendants’ motion for partial summary judgment because applicable statutes of limitations bar many of plaintiffs claims. I also grant defendants’ motion to dismiss plaintiffs RICO1 count for failure to plead the predicate acts with sufficient particularity, and I dismiss the remaining pendent state law claims for lack of subject matter jurisdiction. Finally, I grant, in part, defendants’ motion for sanctions, and I deny plaintiffs cross-motion for sanctions.

I. BACKGROUND

The amended complaint alleges that in January 1977 plaintiff invested money in defendant Aaron Faber, Inc. (“the corporation”), for which he was to receive one-third of the corporation’s shares of stock, Amended Complaint ¶ 5, although he never actually received any certificates of stock, id. ¶ 76. It [117]*117further alleges that in September 1977, plaintiff and defendants Faber and Kiley formed defendant Aaron Faber Associates (“the partnership”), in which the corporation became the general partner and plaintiff and the individual defendants became limited partners. Id. ¶ 6. Although the amended complaint makes no mention of it, plaintiffs memorandum in opposition to defendants’ motion to dismiss explains that soon after consummating these transactions, Mr. Levy left the area in 1979 “because of personal concerns unrelated to this case,” and that he did not return until 1988. Plaintiffs Memorandum at 2-3.

During his absence, he alleges, the events giving rise to this action began to occur. “On or about January 1979,” for example, “the directors of the Corporation met in an illegal meeting and voted to dismiss Plaintiff LEVY as an officer and director of the Corporation.” Amended Complaint ¶ 30. Since that same date, defendants have allegedly excluded him from participation in the affairs of the corporation and the partnership. Id. ¶ 46. Defendants also allegedly failed to declare dividends or partnership distributions, id. ¶ 32, or to issue him shares of stock, id. ¶ 76, and have allegedly submitted fraudulent tax returns on behalf of the partnership and the corporation, id. ¶ 82.

Upon returning to the area, Mr. Levy began to assert his alleged rights as shareholder and limited partner; for example, in May 1991, he demanded that the corporation declare dividends. Id. ¶ 72. Defendants, however, refused to accede to that and other demands, asserting that Mr. Levy is not and was never a shareholder in the corporation, Defendants’ 3(g) statement ¶¶ 5-6, although admitting his role (in 1977, at least) as a limited partner in the partnership, id. ¶ 8. After seeking informal resolution of his claims, Mr. Levy filed this action in state court, and defendants removed it to this court.

Defendants then moved to dismiss, asserting, among other things, that various counts of the amended complaint fail to state a claim, fail to plead fraud with particularity, are barred by applicable statutes of limitations, or are improper because Mr. Levy lacks standing to bring them. Recognizing (a) that the amended complaint complains of wrongs dating back to the late 1970’s, see, e.g., ¶¶ 18, 30, 58, and “wherefore” clause (a)(i), (c)(i), but that certain facts might allow plaintiff to bring such remote claims, and (b) that much of the parties’ arguments focussed upon whether plaintiff had any evidence to support his claim to have held shares in the corporation during the applicable limitations periods, the Court notified the parties that it would partially convert the motion to dismiss into a motion for summary judgment on the statute of limitations defense. The parties conducted discovery and submitted statements pursuant to Local Rule 3(g) on that issue. Although the Court allowed the parties to submit additional briefing on the statute of limitations issue, neither party chose to do so.

II. DISCUSSION

A. Motion for Summary Judgment Based on Statute of Limitations Defense

Upon reviewing the 3(g) statements and the parties’ other submissions, I find that the respective statutes of limitation bar all claims arising from defendants’ alleged actions prior to the commencement of the various causes of action’s respective limitations periods, which range from three to six years prior to the commencement of this action, and bar all claims arising from Mr. Levy’s alleged status as a shareholder in the corporation. Before turning to my discussion of these findings, I will first state the standards governing my determination of the motion.

1. Standards Governing Motions for Summary Judgment

Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); Citizens Bank of Clearwater v. Hunt, 927 F.2d 707, 710 (2d Cir.1991). When deciding a motion for summary judgment, a court must “ ‘resolve all ambiguities and inferences ... in the light most favorable to [118]*118the party opposing the motion.’ ” Shockley v. Vermont State Colleges, 793 F.2d 478, 481 (2d Cir.1986) (citations omitted).

The moving party bears the initial burden of demonstrating that there exists no material issue of fact and that he or she is entitled to judgment as a matter of law. See Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir.1988) (citations omitted). The movant may carry her burden by demonstrating the absence of evidence to support the non-movant’s claims. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Motions for summary judgment must be denied if reasonable minds could differ as to the importance of the evidence and if “ ‘there is any evidence in the record from any source from which a reasonable inference in the [nonmoving party’s] favor may be drawn....’” Brady v. Town of Colchester, 863 F.2d at 210. However, when the moving party has met its burden under Rule 56(c) of the Federal Rules of Civil Procedure, a nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts,” Matsushita Electric Industrial Co. v. Zenith Radio Corp.,

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Bluebook (online)
148 F.R.D. 114, 1993 U.S. Dist. LEXIS 5062, 1993 WL 116821, Counsel Stack Legal Research, https://law.counselstack.com/opinion/levy-v-aaron-faber-inc-nysd-1993.