|Deep v Urbach, Kahn & Werlin LLP|
|2008 NY Slip Op 51139(U) [19 Misc 3d 1142(A)]|
|Decided on June 5, 2008|
|Supreme Court, Albany County|
|Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.|
|This opinion is uncorrected and will not be published in the printed Official Reports.|
John A. Deep, Plaintiff,
Urbach, Kahn & Werlin LLP; Legal And Scientific Analysis Group, Inc.; John Cavalier; Mapinfo, Inc.; Legal And Scientific Systems, LLC; Datamine LLC; Economic Resource Associates, Inc.; PI3, Inc.; PI2 Products LLC; PI2 Partners LLC; PI2 Inc.; and XYZ Company Nos. 1-25, Defendants.
Defendants move to dismiss plaintiff's amended complaint under CPLR 3211 (a) (7) for failure to state a cause of action. Certain defendants also move, in the alternative, for dismissal based on lack of personal jurisdiction. Plaintiff John A. Deep opposes the motions and cross-moves for additional time to oppose defendants' motions.
By Decision & Order dated December 14, 2007, the Court granted defendants' prior motions
for an order pursuant to CPLR 3024 (a) directing plaintiff to serve a complaint with a more
definite statement of the allegations supporting each of the ten causes of action asserted against
The original complaint alleged that defendants, referred to collectively as "Accountants, Officers and Directors," violated their relationship of trust and confidence with plaintiff by operating under conflicts of interest, manipulating his assets and transferring them to unknown entities, engaging in self-dealing, and fraudulently concealing their wrongdoing all for the purpose of enriching themselves and their associates.
The original complaint sought to incorporate by reference the complaint and other pleadings filed in Deep v. Boise et al. (Supreme Court, Albany County, Index No. 6453-05), an action by plaintiff against his former attorneys that currently is pending before this Court.
Each of the ten causes of action asserted by plaintiff alleged wrongful conduct by "Accountants, Officers and Directors", but the complaint did not disclose the role that particular defendants played in the alleged misconduct. Further, the Complaint disclosed few, if any, details regarding the transactions and occurrences alleged to give rise to liability on the part of defendants.
In granting defendants' motion, the Court identified the following defects in plaintiff's complaint: (1) it failed to particularize the role that each of the defendants played in the causes of action asserted therein, instead treating defendants collectively; (2) it failed to disclose the specific transactions and occurrences alleged to have given rise to liability and relate them to the specific causes of action asserted therein; (3) it improperly sought to incorporate by reference the complaint and "all prior pleadings and proceedings" in an action to which the instant defendants are not parties and failed to relate those pleadings and proceedings to the allegations against [*2]defendants here; and (4) it failed to provide detailed allegations of the facts and circumstance giving rise to the causes of action sounding in fraud, misrepresentation and breach of trust. Further, the Court rejected plaintiff's contention that he was entitled to discovery, both in this action and in Deep v. Boise et al. (Supreme Court, Albany County, Index No. 6453-05), prior to amending his complaint.
Thus, the Court held that "[e]ven liberally construed, plaintiff's complaint simply is too vague and ambiguous as to allow defendants to frame a meaningful response, thereby prejudicing their substantial rights." Accordingly, the Court granted defendants' motion and gave plaintiff thirty days in which to serve an amended complaint. Plaintiff filed an amended complaint on January 23, 2008.
On this motion, defendants contend that the amended complaint fails to correct the defects
identified by the Court in its prior Decision & Order. On that basis, defendants seek dismissal of
the amended complaint for failure to state a cause of action. Further, defendants John Cavalier,
Datamine, LLC and Economic Resources Associates, Inc. also seek dismissal on the basis that
they were not served with the amended complaint (or the original complaint). Plaintiff opposes
the motions through a memorandum of law and an affidavit, and cross-moves for additional time
to respond to defendants' motions.[FN1]
"Statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense" (CPLR 3013). Further, "[w]here a cause of action or defense is based upon misrepresentation, fraud, mistake, wilful default, breach of trust or undue influence, the circumstances constituting the wrong shall be stated in detail" (CPLR 3016 [b]). Nonetheless, it is well established that "[p]leadings shall be liberally construed," and "[d]efects shall be ignored if a substantial right of a party is not prejudiced" (CPLR 3026).
A review of the amended complaint reveals that it fails to overcome the major defects identified in this Court's Decision & Order of December 14, 2007.
First, the amended complaint continues to refer in a collective fashion to the defendants, including a corporation that develops geographic information software, the corporation's chief executive, and a local accounting firm. In the original complaint, these defendants were referred to as "Accountants, Officers and Directors"; the amended complaint now refers to them as "Professional Advisors". Clearly, this is a distinction without a difference.
Second, the amended complaint still does not disclose the specific transactions and [*3]occurrences alleged to give rise to liability on defendants' part and relate them to the specific causes of action asserted by plaintiff. The transactions referred to in the original complaint as "related party transactions" are now referred to as "Blind Trust transactions", but the amended complaint fails to provide specific factual allegations with respect to the nature of these so-called "Blind Trust transactions", the dates upon which such transactions allegedly occurred, the specific defendants who were allegedly involved in such transactions, and the specific role that each defendant is alleged to have played with respect thereto.
Similar deficiencies are apparent in each of the causes of action asserted by plaintiff. Thus, for example, plaintiff alleges that his Professional Advisors breached a contract, but the amended complaint fails to disclose any details regarding the alleged contract(s). Further, while plaintiff now incorporates a portion of the allegations from Deep v. Boise directly within the amended complaint, plaintiff fails to relate those allegations, which pertain to a claim of legal malpractice and misappropriation by Deep's former attorneys, to specific acts or omissions on the part of his so-called Professional Advisors.
Plaintiff's memorandum of law does not shed any light of these issues. Indeed, plaintiff himself acknowledges the ill-defined nature of his claims:
Simply put, I believed that I entered into agreements in which my Professional Advisors and my Lawyers represented my interests in "blind trusts", whereas my Professional Advisors actually entered into materially different and undisclosed agreements, one that had the purpose of enriching themselves and their associates, causing harm to me.
Third, the amended complaint again fails to particularize the role that each defendants played with respect to each of the ten causes of action asserted therein, and instead alleges collective wrongdoing on the part of the diverse group of defendants denominated as "Professional Advisors". While the amended complaint does amplify to some extent the allegations against William Duker and plaintiff's former lawyers all non-parties to this action the complaint fails to apprise the defendants in this action of the role that each is alleged to have played in the claimed wrongful conduct.
Indeed, the inadequacy of plaintiff's amended complaint can be seen most vividly from the opposition papers filed by defendant MapInfo, a developer of software for geographic information systems. Defendant MapInfo submits an affidavit in which it denies being a professional advisor or having any contractual, fiduciary or other business relationship with plaintiff. It further notes that as a corporation, it lacks the capacity to serve as an officer or director of plaintiff's business. It is apparent that defendants cannot be expected to respond in a meaningful way to generic allegations that a diverse group of so-called Professional Advisors collectively engaged in unspecified (but wrongful) conduct at unspecified times.
Fourth, the amended complaint continues to allege various causes of action sounding in fraud, misrepresentation and breach of trust without making any effort to specify with particularity the fraudulent conduct or statements that form the basis of these causes of action (see CPLR 3016 [b]).
Even liberally construing plaintiff's amended complaint, the Court concludes that it fails to put defendants on notice of the specific transactions or occurrences alleged to give rise to liability and the role that each defendant is alleged to have played with respect to such transactions or occurrences. In the absence of such information, the amended complaint fails to provide an adequate basis upon which defendants can frame a meaningful response, thereby [*4]prejudicing their substantial rights (Della Villa v. Constantino, 246 AD2d 867 [3d Dept 1998]; Di Pace v. Figueroa, 128 AD2d 942, 943 [3d Dept 1987] ["In essence, the complaint simply includes vague, general allegations of wrongdoing which do not meet the minimum requirements of [the CPLR]."]; Stoianoff v. Gahona, 248 AD2d 525 [2d Dept 1998]).
Under these circumstances, and in view of the opportunity that plaintiff already has been provided to amend his complaint to overcome these defects, the Court concludes that the appropriate remedy is dismissal of the complaint with prejudice (see Deacon's Bench v. Hoffman, 101 AD2d 971 [3d Dept 1984); Caniglia v. Chicago Tribune-N.Y. News Syndicate, 204 AD2d 233 [1st Dept 1994]).
Accordingly,[FN2] it is
ORDERED that defendants' motions to dismiss are granted; and it is further
ORDERED that plaintiff's amended complaint is dismissed with prejudice for failure to state a claim; and it is further
ORDERED that plaintiff's cross-motion is granted to the extent that plaintiff's unsworn affidavit and memorandum of law shall be deemed timely received, and the motion is denied in all other respects.
This constitutes the Decision and Order of the Court. All papers, including this Decision and
Order are returned to Dreyer Boyajian LLP. The signing of this Decision and Order shall not
constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable
provisions of that Rule respecting filing, entry and Notice of Entry.
Dated: Albany, New York
June __, 2008
Richard M. Platkin