Quinn v. Fishkin

117 F. Supp. 3d 134, 2015 U.S. Dist. LEXIS 101518, 2015 WL 4635770
CourtDistrict Court, D. Connecticut
DecidedAugust 4, 2015
DocketCivil No. 3:14-cv-1092(AWT)
StatusPublished
Cited by9 cases

This text of 117 F. Supp. 3d 134 (Quinn v. Fishkin) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quinn v. Fishkin, 117 F. Supp. 3d 134, 2015 U.S. Dist. LEXIS 101518, 2015 WL 4635770 (D. Conn. 2015).

Opinion

RULING ON MOTION TO DISMISS

ALVIN W. THOMPSON, District Judge.

The plaintiff, Susan ■ Quinn (“Quinn”),brings this action against defendants Stanley Fishkin (“Fishkin”) and Lee Shalov (“Shalov”). Quinn seeks an order that would permit her to declare a settlement agreement in a previous case before this court null and void, so that she may pursue claims against Fishkin, her former financial advisor, for breach of fiduciary duty, professional negligence, sale of securities by an unregistered investment advisor, sale of securities by an unregistered broker-dealer, unjust enrichment, and imposition of a collective trust. Quinn also brings claims against Shalov, her former lawyer, for legal malpractice and breach of fiduciary duty. Although Quinn ultimately seeks to pursue her claims arising out of Fishkin’s failed investment of Quinn’s money and Shalov’s representation of Quinn, the predicate claim that must be resolved in Quinn’s favor first is her declaratory judgment claim.

Fishkin has moved, pursuant to Fed. R.Civ.P. 12(b)(2), 12(b)(3), 12(b)(6), and 12(b)(7), to dismiss the complaint. For the reasons set forth below, Fishkin’s motion to dismiss is being denied.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Complaint, “which [the court] must accept as true for purposes of testing its sufficiency,” alleges the following circumstances. Monsky v. Moraghan, 127 F.3d 243, 244 (2d Cir.1997).

Quinn’s claims against Fishkin, her former financial advisor and money manager, arise out of Fishkin’s investment of $1.5 million on Quinn’s behalf in the hedge fund Stewardship Credit Arbitrage Fund LLC (“Stewardship”), which in turn invested in “short-term notes issued by Thomas J. Petters and Petters Group Worldwide, LLC, and its subsidiaries and affiliates (together, ‘Petters’).” (Complaint (Doc. No. 1) ¶ 21.) Quinn’s investment “evaporated” when the federal government learned that the notes that Petters sold to Stewardship were part of a $3 billion Ponzi scheme. (Complaint ¶ 23.) Fishkin “[failed] to disclose the true risk of the investment, [and Fishkin] actively sought to preclude [Quinn] from obtaining this information by advising her not to read offering memoranda and other materials provided by Stewardship and, in some instances, by failing to even provide those materials to [Quinn],” (Complaint ¶24.)

In early 2009, Quinn retained Shalov, on a contingency basis, to represent her in recovering her losses. On April 9, 2009, Quinn and another investor, Marsha'Wiggins, initiated a lawsuit against Fishkin and Crow Hill Capital, LTD, a company owned by Fishkin, in Connecticut Superior Court, asserting claims for breach of fiduciary duty, professional negligence, violations of investment advisory registration requirements, sale of securities by an unregistered broker-dealer, and unjust enrichment (the “Underlying Action”). The defendants subsequently removed the Underlying Action fo this court. (See Quinn, et al. v. Stanley Fishkin, et al., Civil Action No. 3:09-CV-845-JBA (D.Conn.).)

Fishkin sought to settle the Underlying Action because, among other things, the Underlying Action threatened to bankrupt him. During pre-mediation discovery, Fishkin produced approximately 5,000 pages of financial documents to Shalov. [137]*137One document indicated that he had total assets of approximately $468,000, liabilities of $1,313,067, and a net worth of negative $844,704 (the “July 31, 2009 Financial Statement”). Shalov provided one page of the July 31, 2009 Financial Statement to Fishkin. On June 17, 2010, the parties executed a Contingent Confidential Settlement Agreement and General Release (the “Settlement Agreement”), which provided:

The parties hereto represent and declare that in executing this Agreement they rely solely upon their own judgment, belief and knowledge and the advice and recommendations of their own independently chosen counsel, if any, concerning the nature, extent and duration of their rights and claims hereunder and that, except as provided herein, they have not been influenced to any extent whatsoever in executing this Agreement by any representations, statements, or omissions pertaining to any of the foregoing matters by the other party or any persons representing the other party except as to the material accuracy of the financial statement dated July 31, 2009 and related material of Fishkin provided to the Plaintiffs. In the event the financial statement and related materials are found by a court to have been materially inaccurate/incomplete, the Plaintiffs shall be permitted to declare this Agreement null and void and shall be permitted to reinstitute their laivsuit provided that it is filed before July 31, .2011 with the amount paid credited against any recovery, or returned to Defendant Fishkin if no recovery is received.

(Complaint ¶ 39 (quoting Settlement Agreement § 10).) As a result of the settlement, Quinn received $100,000 from the defendants, of which Shalov received $25,000. On July 7, 2010, after counsel reported that the Underlying Action had settled, the court dismissed the Underlying Action without prejudice, and set a deadline of August 6, 2010 for the parties to move to reopen the case. {See Order of Dismissal on Report of Settlement (Underlying Action, Doc. No. 48).)

Quinn alleges that the July 31, 2009 Financial Statement is materially inaccurate in that:

Fishkin did not disclose, or did not adequately disclose: (a) that he had formed, the limited liability company Mountain Top Farm Consulting, LLC and was the only principal of that company; (b) that he had made' an investment with Split Rock Ventures, LLC; and (c) that he had an ownership or partnership interest in various businesses such as Starlight, LP, Sanders Morris Harris, Inc., the Furman Selz Holdings Liquidating Trust, and Vantagepoint Communications Partners, LP. Furthermore, Fish-kin did not disclose that he had a financial interest in Acorn Capital Group, which served as a financial conduit between Petters Group Worldwide', LLC and Stewardship, and that he was receiving revenue from Acorn Capital Group.

(Complaint ¶ 40.)

Quinn now seeks an order of the court determining that the financial statement and related material that Fishkin disclosed were materially inaccurate or incomplete, so that she can “reinstate” the Underlying Action. The court construes this as a claim for a declaratory judgment (the “Declaratory Judgment Claim”). See 28 U.S.C. § 2201 (“In a case of actual controversy within its jurisdiction ... any court of the 'United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have [138]*138the force and effect of a final judgment or decree and shall be reviewable.as such.”)

Quinn also brings claims against Shalov for legal malpractice and breach of fiduciary duty.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gamble v. DeJoy
D. Connecticut, 2024
Kulwicki v. Aetna, Inc.
D. Connecticut, 2024
Su v. Su
N.D. Illinois, 2023
Florestal v. Henry
D. Connecticut, 2022
Keane v. Velarde
D. Connecticut, 2021
Window World of St. Louis, Inc. v. Window World, Inc.
2015 NCBC 77 (North Carolina Business Court, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
117 F. Supp. 3d 134, 2015 U.S. Dist. LEXIS 101518, 2015 WL 4635770, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quinn-v-fishkin-ctd-2015.