Madison v. Rightway Partners, LLC, et al
ORDER denying 23 Motion to Dismiss. See attached memorandum of decision. Signed by Judge Vanessa L. Bryant on 1/11/2012. (Fernandez, Melissa)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
: CIVIL ACTION NO. 3:10cv1912 (VLB)
: JANUARY 11, 2012
RIGHTWAY PARTNERS, LLC
A Texas limited liability company,
PATRICK MCMULLAN, individually :
EDWARD O’DONNEL, individually
ROSENBERG & ASSOCIATES
A Connecticut limited liability
DAVID E. ROSENBERG, individually :
MEMORANDUM OF DECISION DENYING THE ROSENBERG DEFENDANTS’ [DKT.
# 23] MOTION TO DISMISS
The Plaintiff, Thomas Madison, brings this action against Defendants,
Rightway Partners, LLC (“Rightway”) and Rosenberg & Associates, LLC
(“Rosenberg & Assoc.”), and against individual Defendants Patrick McMullan,
Edward O’Donnell and David Rosenberg. [Dkt. #1, Compl. General Allegations ¶¶
1–6]. McMullan and O’Donnell are partners in Rightway, and Rosenberg is an
attorney and a member of Rosenberg & Assoc. [Id. at ¶¶ 3-4, 6]. Only Rosenberg
& Assoc. and David Rosenberg (collectively referred to as the “Rosenberg
Defendants”) have moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss
Plaintiff’s Count II claim for breach of fiduciary duty and Count IV claim for
conversion on the basis that Plaintiff has failed to state a plausible claim.
Factual Allegations and Procedural Background
The following facts are taken from Plaintiff’s complaint. Plaintiff alleges
that Defendants approached the Plaintiff with a multi-step investment
opportunity. [Dkt. #1, Compl. at ¶ 10]. First, Rightway, the Plaintiff and two other
individuals would each deposit funds totaling $575,000 into several escrow
accounts. [Id.]. Plaintiff was to deposit $100,000 into his escrow account. The
funds in the escrow accounts were to be used as “an origination fee to secure the
issuance of a $100 million loan … from one or more banks pursuant to a bank
instrument known as a certificate of deposit (“CD”).” [Id. at ¶ 10]. “After the
funds needed for the origination fee had been secured, a Nevada company named
Accelerated Commercial Consultants (“Accelerated”) and its two principals,
Frank Albright and Terry Prichett, would actually secure the $100 million loan
from one or more banks.” [Id.]. The Defendants informed the Plaintiff that in
return for his investment, he would receive the $100,000 he deposited into the
escrow account plus an additional $100,000 within days. [Id.].
As alleged in the Complaint, the Plaintiff entered into an escrow agreement
(“Escrow Agreement”) dated March 20, 2010 with Defendants in which the
Rosenberg Defendants were designated as “Escrowee.” Under the terms of the
Escrow Agreement, Plaintiff’s $100,000 deposit was to be disbursed to “Sharon
Silver, Esq. as legal counsel for provider of the Bank instrument” upon (i) the
Lender providing “the Escrowee, Borrower, and Deposit Lender with evidence
that the Bank Instrument has been created (i.e. a CUSIP, ISIN or other marker) in
accordance with the terms and conditions specified by the Borrower and that the
Bank Instrument will be received upon payment of the Escrow Deposit”; (ii) the
Lender providing “the Escrowee, Borrower, and Deposit Lender that their funding
partner Accelerated Commercial Consultants is ready, willing and able to
monetize the Bank Instrument and secure funding;” and (iii) that the “Escrowee
shall receive from Deposit Lender written authorization to release the Escrow
Deposit to Sharon Silver, Esq.” [Dkt. #1, Ex. A, Escrow Agreement at Section
1(A)]. A CUSIP and an ISN are markers assigned to identify specific securities.
Although not clearly alleged in the Complaint, it appears that all the funds
deposited by the Plaintiff and the other investors were to be used to purchase a
bank instrument specifically a certificate of deposit, also known as a “CD” only
after evidence that the CD had been created was provided. After the funds in the
escrow accounts had been transferred into the CD, the CD would then be
transferred to the lender making the $100 million loan as an origination fee. Upon
the simultaneous funding of the loan, the Plaintiff would receive his original
investment together with the promised returned thereon. It is unclear from the
allegations in the complaint, whether the CD was supposed to be held in escrow
until it was used to pay the loan origination fee when the loan closed and the loan
proceeds were disbursed.
Plaintiff alleges that Rosenberg, McMullan and O’Donnell represented to
the Plaintiff that the investment opportunity was safe, and that they had
successfully used this same process before. [Dkt. #1, Compl. at ¶ 14]. The
Defendants also assured the Plaintiff that Rightway would not contribute its own
funds if it were not sure about the investment. [Id. at ¶ 13]. Plaintiff alleges that
“although the investment arrangement was extremely complicated, Rosenberg,
McMullan and O’Donnell represented to Plaintiff that this arrangement was safe
and secure and a proven financial process which they had successfully utilized in
the past and that Plaintiff’s investment would be doubled within a matter of
days.” [Id. at ¶ 14]. Plaintiff alleges that he “relied upon these representations.”
Plaintiff alleges further that despite its repeated representations that it was
placing $275,000 of its own money into the transaction as part of the origination
fee, Defendant Rightway never paid any part of the origination fee. [Id. at ¶ 15].
Plaintiff asserts that these representations made by McMullan and O’Donnell
were false and made with the intent to induce Plaintiff to contribute his own
funds. [Id. at ¶ 18].
Accelerated and its two principals were sued in a Nevada Federal District
Court by an investor who claimed that they had fraudulently induced her to invest
$450,000 and then proceeded to use her money for their personal use. [Id. at ¶
16]. Plaintiff asserts that Defendants knew that Accelerated and its two principals
had been sued for fraud by an investor and that they failed to disclose this
information to Plaintiff. [Id. at ¶¶ 16–17].
Relying on the Defendants’ representations, Plaintiff contributed $100,000
into the escrow account. [Id. at ¶ 14]. Plaintiff alleges that the Rosenberg
Defendants then represented to Plaintiff that “they had evidence that the CD was
issued when in fact they had no such evidence.” [Id. at ¶ 19]. Plaintiff further
alleges that the Rosenberg Defendants contrary to the terms of the escrow
agreement and contrary to Plaintiff’s instructions released Plaintiff’s $100,000 out
of the escrow account on or about March 26, 2010. [Id. at ¶ 20].
Rosenberg, McMullan and O’Donnell told the Plaintiff on multiple
occasions after the escrow funds had been released that “the CD had been
procured but that they were only waiting on receipt of the identifying number.”
Despite Plaintiff’s repeated requests for information pertaining to the
procurement and validation of the CD, Plaintiff alleges no evidence was ever
provided to him of the issuance of the CD. [Id. at ¶¶ 21–23]. Plaintiff has also not
received his $100,000 despite his repeated demands. [Id. at ¶ 23].
The Plaintiff filed his five count complaint in federal district court on
December 6, 2010, alleging breach of contract (Count I), breach of fiduciary duty
(Count II), negligent misrepresentation (Count III), conversion (Count IV), and
fraud (Count V). The Rosenberg Defendants moved to dismiss the breach of
fiduciary duty and conversion claims, Counts II and IV respectively, on the
grounds that the Plaintiff has failed to state legal claims on which relief may be
In Count II, the Plaintiff alleges that under the “Escrow Agreement,” the
Rosenberg Defendants had a fiduciary duty to Plaintiff. [Dkt. #1, Compl. Count II,
¶ 32]. This duty included, but was not limited to, the duty to follow the terms of
the agreement, and to disclose any relevant and material facts that the Rosenberg
Defendants knew or should have known. [Id.]. The Plaintiff alleges that the
Rosenberg Defendants breached their duty by failing to disclose material facts to
the Plaintiff, by failing to exercise reasonable care and diligence to correct
misrepresentations they knew or should have known were false, and by releasing
the Plaintiff’s investment funds before they were authorized to do so. [Id. at ¶ 34].
In Count IV, the Plaintiff maintains that the Defendants wrongfully
exercised ownership over the Plaintiff’s property, without authorization to do so,
and to the exclusion of the Plaintiff’s rights. [Dkt. #1, Compl. Count IV, ¶ 43]. The
Plaintiff alleges that the Defendants exercised dominion and control over the
Plaintiff’s funds deposited into escrow, and therefore deprived the Plaintiff of his
property rights in the funds. [Id. at ¶ 44].
“Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a
‘short and plain statement of the claim showing that the pleader is entitled to
relief.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While Rule 8 does not
require detailed factual allegations, “[a] pleading that offers ‘labels and
conclusions’ or ‘formulaic recitation of the elements of a cause of action will not
do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of
‘further factual enhancement.’” Id. (internal quotations omitted). “To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’ A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Id. (internal citations omitted).
In considering a motion to dismiss for failure to state a claim, the Court
should follow a “two-pronged approach” to evaluate the sufficiency of the
complaint. Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). “A court ‘can
choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.’” Id. (quoting Iqbal, 129
S.Ct. at 1949-50). “At the second step, a court should determine whether the
‘well-pleaded factual allegations,’ assumed to be true, ‘plausibly give rise to an
entitlement to relief.’” Id. (quoting Iqbal, 129 S.Ct. at 1950). “The plausibility
standard is not akin to a probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1949
(internal quotation marks omitted).
Analysis of Breach of Fiduciary Duty Claim
The Plaintiff alleges that the Rosenberg Defendants as escrow agent owed
the Plaintiff a fiduciary duty. [Dkt. #1, Compl. Count II ¶ 32]. He alleges that this
fiduciary duty included the obligation to “affirmatively disclose any relevant and
material facts and information which they knew, or by the exercise of reasonable
care and diligence should have known, relating to the business proposition, and
the duty to release the Plaintiff’s $100,000 only in accordance with the terms of
the Escrow Agreement and Plaintiff’s approval.” [Id.]. According to the Plaintiff,
the Rosenberg Defendants breached this duty when they failed to disclose such
relevant and material facts, when they made material misrepresentations to the
Plaintiff, when they failed to correct misrepresentations they knew or should have
known were false, and when they released Plaintiff’s funds contrary to the terms
of the Escrow Agreement. [Id. at ¶ 34].
The Rosenberg Defendants concede that Attorney Rosenberg “owed
plaintiff a duty to perform under the terms of the Escrow Agreement,” but deny
that he owed plaintiff a fiduciary duty beyond strict compliance with the terms of
the Escrow Agreement. [Dkt. #23-1, Mem. of Law in Supp. Of Def.’s Mot. To
Dismiss 5–6]. Accordingly, the Rosenberg Defendants acknowledge they had a
duty to comply with the terms of the Escrow Agreement, but contend that he had
no duty beyond compliance with the Escrow Agreement.
Under Connecticut law, an escrow agent is a person who “is held to strict
compliance with the terms of the escrow agreement; and [who] may not perform
any acts with reference to handling the deposit, or its disposal, which are not
authorized by the contract of deposit.” Norwich Lumber Co. v. Yatroussis, 5
Conn.Cir.Ct. 95, 101 (Cir. Ct. Conn. 1967) (quoting 28 Am.Jur.2d 24, Escrow).
Therefore, an escrow agent is a neutral third-party who is authorized only to
abide by the terms of the agreement, and who has no discretion or further
involvement in the transaction. See id.
A fiduciary or confidential relationship under Connecticut law “is
characterized by a unique degree of trust and confidence between the parties,
one of whom has superior knowledge, skill or expertise and is under a duty to
represent the interests of the other.” Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255
Conn. 20, 38 (2000). Connecticut courts have “refrained from defining a fiduciary
relationship in precise detail,” preferring to leave the definition open to account
for new situations where imposing fiduciary duties may be warranted. Id. at 38.
Therefore, the question of whether a fiduciary duty exists under the
circumstances of a given case is usually a question of fact that cannot be
decided on a motion to strike or motion to dismiss. Govin v. Chaplin Lodge, No.
CV054001136, 2006 WL 1102690 at *4 (Conn. Super. 2006).
Although the parties have mainly focused their memoranda on whether an
escrow agent has a fiduciary duty under Connecticut law, the Court construes
Plaintiff’s Complaint to plausibly allege that the Rosenberg Defendants served
both as a financial advisor as well as escrow agent. The allegations in the
Complaint illustrate that the Rosenberg Defendants undertook a role beyond that
of a neutral third-party escrow agent and instead provided investment advice to
Plaintiff in order to induce him to deposit $100,000 with them in escrow. On a
motion to dismiss the Court must accept all factual allegations in the complaint
as true and draw all reasonable inferences in favor of the plaintiff. Chambers v.
Time Warner, Inc., 282 F.ed 147, 152 (2d Cir. 2002). In addition the Second Circuit
has instructed that dismissal pursuant to Rule 12(b)(6) is “inappropriate unless it
appears beyond doubt that the plaintiff can prove no set of facts which would
entitle him or her to relief.” Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000).
Since the Court must assume all the factual allegations in the Complaint are true
and draw all reasonable inferences in favor of the Plaintiff, the allegations in the
Complaint regarding Attorney Rosenberg’s role in presenting the “investment
opportunity” as “safe” and offering his advice regarding the “opportunity” based
on his experience support a reasonable inference that Attorney Rosenberg also
assumed the role of a financial advisor; a role that went beyond the neutral role
and duties of an escrow agent and was instead characterized by a unique degree
of trust, confidence and superior knowledge that traditionally establish a
Plaintiff’s allegations therefore support a reasonable inference that the
relationship between the Rosenberg Defendants and Plaintiff was characterized
by superior knowledge, expertise, trust and confidence. Specifically, Plaintiff
alleges that the Rosenberg Defendants, together with the other Defendants,
approached the Plaintiff with the investment opportunity, and represented to the
Plaintiff that “the investment opportunity they were presenting … was a safe
investment and such a great investment opportunity that Rightway would be
investing $275,000 of its own money which it would not do if McMullan and
O’Donnell were not certain of the return.” [Dkt. #1, Compl. General Allegations ¶
13]. Plaintiff alleges that the Rosenberg Defendants represented to him “that this
arrangement was safe and secure and a proven financial process which they had
successfully utilized in the past and that Plaintiff’s investment would be doubled
within a matter of days.” [Id. at ¶ 14]. These facts as alleged, which the Court
must assume to be true on a motion to dismiss, suggest that Attorney Rosenberg
undertook a role that was similar to a financial advisor and therefore held himself
out as an individual with superior knowledge, skill and expertise with respect to
this particular type of investment opportunity and transaction. Further, Plaintiff
alleges that he relied on these representations regarding the safe nature of this
type of investment to his eventual detriment which supports a plausible inference
that the Rosenberg Defendant’s representations had created a relationship
characterized by a degree of trust and confidence. [Id. at ¶ 14.]
The Connecticut Supreme Court’s decision in Alaimo v. Royer, 188 Conn.
36 (1982) is particularly instructive to the present case. In Alaimo, the plaintiff
sought advice from the defendant regarding the management of her savings, and
the defendant, holding himself out as a knowledgeable real estate advisor,
represented that he would take care of the plaintiff financially, that he would
safeguard the plaintiff’s money, and that the plaintiff should place her trust in the
defendant. Id. at 37, 41–42. Relying on these representations, the plaintiff
entered a series of monetary transactions with the defendant, and later sued him
for fraud. Id. at 37. The defendant argued that the facts which the trial court
charged the jury with were insufficient to support a finding of a fiduciary
relationship. Acknowledging that Connecticut courts leave the definition of a
fiduciary relationship open in order to adapt to new circumstances, the
Connecticut Supreme Court held that it could not conclude that the record in the
case was as a matter of law inadequate to support a finding of a fiduciary
relationship. Id. at 41. Like in Alaimo, Plaintiff has alleged that Attorney
Rosenberg made representations to the Plaintiff eliciting the Plaintiff’s trust and
confidence and representing that Attorney Rosenberg did have superior
knowledge. See [Dkt. #1, Compl. General Allegations ¶¶ 13–14]. Plaintiff alleges
that Attorney Rosenberg assured the Plaintiff that the investment opportunity
was a “safe secure investment,” and that the other Defendants would not be
investing their own funds if the transaction were not a proven success. See [Id. at
¶ 13]. Therefore, Attorney Rosenberg’s alleged conduct was similar to the
defendant’s conduct in Alaimo which the Connecticut Supreme Court
acknowledged could constitute a fiduciary relationship.
Further, federal law imposes fiduciary duties on financial advisors. 15
U.S.C.A. § 80a-35 (a) authorizes the Securities and Exchange Commission to
bring an action alleging that a person who is an investment advisor engaged in
an act constituting breach of fiduciary duty involving personal misconduct in
respect of any registered investment company. The Connecticut Supreme
Court’s decision in Alaimo and 15 U.S.C.A. § 80a-35 (a) suggests that “advisors”
who hold themselves out as knowledgeable about financial matters, and who
encourage individuals to rely on their purported expertise create a relationship
warranting imposition of a fiduciary duty.
Although the question of whether a fiduciary duty exists is a question of
fact that generally should not be decided on a motion to dismiss, Connecticut
courts have dismissed such claims in cases where the parties were equals
dealing at arm’s length, or otherwise not in a relationship of trust and confidence.
See Hi-Ho Tower, 255 Conn. at 40 (holding that the defendants did not owe a
fiduciary duty as a matter of law since the parties were equals in an arm’s length
transaction, in which the defendants were only to provide technical assistance
and limited management services to the plaintiff and therefore plaintiff was not
placing a unique degree of trust in the defendants and was able to protect its own
business interests); see also R. S. Silver Enterprises Co., Inc. v. Parcarella,
No.FSTCV065002499S, 2010 WL 3259869, at *28-29 (Conn. Super. 2010) (holding
no fiduciary duties were created as the parties dealt with each other at arm’s
length since the parties “were each experienced professionals, thoroughly
familiar with commercial real estate transactions in the Greenwich market”).
Unlike these cases, Attorney Rosenberg had superior knowledge, skill and
expertise with respect to the specific kind of investment opportunity that he
allegedly presented to Plaintiff, leaving Plaintiff reliant on his expertise. See [Dkt.
#1, Compl. General Allegations ¶¶ 13–14]. In addition, the factual allegations
support a plausible inference that the parties were not dealing at arms-length or
that the Plaintiff could not protect his own business interest as a result of
Attorney Rosenberg’s representation that he had prior experience with and
touted his superior knowledge of the transaction, thereby inducing the Plaintiff to
trust and rely upon his expertise. Under the facts as alleged, Plaintiff has stated a
plausible claim that the Rosenberg Defendants had a fiduciary duty to Plaintiff.
Accordingly, the Rosenberg Defendants’ motion to dismiss Count II is denied.
The Court’s denial of the Rosenberg Defendants’ motion to dismiss is
based on its finding that the factual allegations in Plaintiff’s complaint support a
reasonable inference that Attorney Rosenberg also acted as a financial advisor in
holding himself out as someone with superior knowledge and expertise in the
particular transaction thereby plausibly creating a fiduciary relationship.
Analysis of Conversion Claim
The Rosenberg Defendants have moved to dismiss Plaintiff’s conversion
claim on the basis that Plaintiff has not plausibly stated that Attorney Rosenberg
exercised dominion and control over his investment as required to state a claim
for conversion under Connecticut law since Plaintiff has alleged that the
Rosenberg Defendants released Plaintiff’s funds out of the escrow account and
have not alleged that the Rosenberg Defendants have converted the funds for
their own use. The Rosenberg Defendants argue that a claim for conversion
cannot be maintained where the allegations do not establish that the defendant
actually took possession or control over the converted property for his own use.
See [Dkt. #23-1, Mem. of Law in Supp. Of Def.’s Mot. To Dismiss 7–8]; [Dkt. # 35,
Pl.’s Response to Def.’s Mot. To Dismiss 6–7]. The Rosenberg Defendants reason
that since Plaintiff has alleged that Attorney Rosenberg released the funds out of
the escrow account, these allegations do not support a plausible inference that
the Rosenberg Defendants actually took possession or control over the funds.
The Plaintiff argues that the Defendants “wrongfully assumed and
exercised the right of ownership over the property belonging to Plaintiff, without
authorization and to the exclusion of Plaintiff’s rights.” [Dkt. #1. Compl. Count IV
¶ 43]. Plaintiff’s allegations support an inference that the Rosenberg Defendants
exercised dominion and control over his funds when Attorney Rosenberg
allegedly released the funds out of the escrow account contrary to the terms of
the Escrow Agreement and contrary to Plaintiff’s instruction regardless of
whether the Rosenberg Defendants converted the funds for their own use or
released the funds to another party or parties who then used the funds for their
Under Connecticut law, “conversion occurs when one, without
authorization, assumes and exercises ownership over property belonging to
another, to the exclusion of the owner's rights.” Deming v. Nationwide Mut. Ins.
Co., 279 Conn. 745, 770 (2006). Conversion is an unauthorized act through which
a person wrongfully exercises powers over the owner’s property in a manner
inconsistent with the owner’s right to dominion over his property. Id.
Connecticut courts have recognized that conversion can occur in two general
classes: first in which possession of the allegedly converted goods is wrongful
from the onset; and second in which the conversion arises subsequent to an
initial rightful possession. Luciani v. Stop & Shop Companies, Inc., 15 Conn.
App. 407, 410 (1988). Where possession was initially rightful, conversion could
occur when the defendant wrongfully detained the property, wrongfully used the
property, or wrongfully exercised dominion over the property. Id.
Plaintiff’s allegations support an inference that Attorney Rosenberg
exercised dominion and control over his funds by releasing Plaintiff’s funds from
the escrow account without authorization. To the extent that Attorney Rosenberg
can be said to be in possession of the funds in the escrow account as escrow
agent, such possession would have been initially rightful. However, once he
released the funds without authorization, Plaintiff has alleged that he committed
conversion by wrongfully using and exercising domain over the funds. Plaintiff
has alleged that Attorney Rosenberg never presented evidence that the CD had
been issued, which was a condition precedent to the release of funds under the
terms of the Escrow Agreement, and that contrary to Plaintiff’s instructions
Attorney Rosenberg released the funds out of the escrow account. These
allegations support a plausible inference that the Rosenberg Defendants
exercised dominion and control without authorization over Plaintiff’s property to
state a claim for conversion.
Under Connecticut law, it does not appear that a plaintiff need allege that a
defendant converted the funds for their own use to maintain a cause of action for
conversion. As noted earlier, the Connecticut Supreme Court has not defined
conversion as explicitly requiring that the Defendant must maintain possession
of the converted property in order to exercise control over it. The Court sees no
reason why the Rosenberg Defendant’s allegedly unauthorized action of
releasing the funds out of the escrow account would not constitute control over
property for purposes of a conversion claim.
Furthermore, Connecticut courts have held that a conversion claim can be
maintained where the defendant did not maintain possession over the converted
property but where the defendant exercised dominion over the property in a
manner that deprived the plaintiff of his ownership rights. See Luciani v. Stop &
Shop Companies, Inc., 15 Conn. App. 407 (1988) (holding that defendant
converted plaintiff’s property by removing and destroying fixtures and equipment
from a leased property where such fixtures were plaintiff’s property even though
possession was initially rightful); Epstein v. Automatic Enterprises, 6 Conn. App.
484, 486-89 (1986) (holding there was ample evidence to support jury verdict that
defendant was liable for conversion when Defendant defaulted on his lease
payments for a vending machine and then transferred the machine to his
daughter); First National Bank of Park Ridge v. Broder, 107 Conn. 574 (1928)
(noting that conversion could have occurred if defendant attorney failed to return
to plaintiff a certain note to which plaintiff claimed title and instead delivered the
note to another who did not have a right of possession in the note). Here,
Plaintiff has alleged that the Rosenberg Defendants converted the Plaintiff’s
funds when he wrongfully released the funds to someone who had no right of
possession. The act of releasing the funds contrary to the Escrow Agreement
constituted the wrongful assumption and exercise of the right of ownership over
the property belonging to Plaintiff, without authorization and to the exclusion of
Plaintiff’s rights. Therefore, it does not matter who actually maintains current
possession of the funds, since the act of releasing the funds completed the
conversion by the Rosenberg Defendants. Accordingly, the Plaintiff has alleged
sufficient facts to support a legally valid claim for conversion. The motion to
dismiss Plaintiff’s Count IV is denied.
Based upon the above reasoning, the Rosenberg Defendants’ [Dkt. #23]
motion to dismiss is DENIED.
IT IS SO ORDERED.
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: January 11, 2012
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