Monahan v. Pena et al
Filing
46
ORDER granting 37 Motion to Dismiss. For the reasons set forth in the attached Memorandum and Order, the Court grants the individual defendants motion to dismiss. The remaining parties shall proceed with discovery at the direction of Magistrate Judge Lindsay. SO ORDERED. Ordered by Judge Joseph F. Bianco on 8/4/2011. (Nagiel, Svetlana)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 08-CV-2258(JFB)(ARL)
_____________________
PANAM MANAGEMENT GROUP, INC.,
Plaintiff,
VERSUS
RAYMOND PEÑA, DORIS PEÑA, ELADIO SANCHEZ,
YUMA BAY DEVELOPMENT CORPORATION, JUAN CARLOS LOPEZ, BRIGID
LENDERBORG, and LENDERBORG LENDING SERVICE,
Defendants.
___________________
MEMORANDUM AND ORDER
August 4, 2011
_____________________
JOSEPH F. BIANCO, District Judge:
Plaintiff Panam Management Group brings
this diversity action alleging breach of
contract and unjust enrichment.
The
defendants are Raymond Peña, Doris Peña,
Eladio Sanchez, Juan Carlos Lopez
(collectively the “individual defendants”),
Yuma Bay Development Corporation (“Yuma
Bay”), Brigid Lenderborg, and Lenderborg
Lending Service.1
The individual defendants, who are being
sued in their official capacity as officers of
1
Based on a review of the docket sheet, the
Lenderborg defendants were never served with
either the First Amended Complaint or the Second
Amended Complaint.
Yuma Bay, have renewed their motion to
dismiss the Second Amended Complaint
pursuant to Federal Rule of Civil Procedure
12(b), arguing that Yuma Bay’s corporate
veil cannot be pierced under either
Dominican or Panamanian law. Plaintiff
opposes, relying on New York law. As set
forth below, the Court grants the individual
defendants’ motion to dismiss. Specifically,
even if all the allegations in the Second
Amended Complaint are accepted as true,
the Court concludes that plaintiff cannot
pierce Yuma Bay’s corporate veil under
Panamanian law, which applies in this case.
In the alternative, the Court concludes,
based upon the allegations in the Second
Amended Complaint, that plaintiff cannot
pierce Yuma Bay’s corporate veil under
either Dominican or New York law.
filed an opposition brief on April 25, 2011,
and the individual defendants filed their
reply on June 20, 2011. The Court has fully
considered the submissions and arguments
of the parties.
I. BACKGROUND
The Court assumes familiarity with its
September 14, 2010, Memorandum and Order,
which sets out more fully the background of
this case. (See Docket No. 33.) In part, the
September 14, 2010, Memorandum and Order
addressed the individual defendants’ first
motion to dismiss the claims against them in
the Second Amended Complaint. The Court
concluded that it was unable to determine
whether Yuma Bay’s corporate veil could be
pierced to reach the individual defendants
because the parties failed to articulate which
jurisdiction’s laws should apply to that
determination. (Id. at 9.) The Court noted
that the law of the Dominican Republic might
apply because the January 2006 Agreement
between plaintiff and Yuma Bay contained a
choice-of-law clause. (Id.) The Court also
indicated that New York’s choice-of-law rules
pointed to Panamanian law because Yuma
Bay was incorporated in Panama. (Id.)
Finally, the Court noted that there was an
exception to New York’s choice-of-law rules
that would permit the use of New York
substantive law where both parties agreed to
apply New York law and the standards for
veil-piercing were “virtually identical” under
New York law and the law that would have
otherwise applied. (Id. n.8.) The Court thus
denied the individual defendants’ motion to
dismiss without prejudice to renewal. The
Court instructed that should they decide to
renew their motion to dismiss, the individual
defendants had to address the issues of what
law should apply and the substantive legal
standard of veil piercing under the applicable
law.
II. STANDARD OF REVIEW
When a Court reviews a motion to
dismiss for failure to state a claim for which
relief can be granted, it must accept the
factual allegations set forth in the complaint
as true and draw all reasonable inferences in
favor of the plaintiff. See Cleveland v.
Caplaw Enters., 448 F.3d 518, 521 (2d Cir.
2006). “In order to survive a motion to
dismiss under Rule 12(b)(6), a complaint
must allege a plausible set of facts sufficient
‘to raise a right to relief above the
speculative level.’” Operating Local 649
Annuity Trust Fund v. Smith Barney Fund
Mgmt. LLC, 595 F.3d 86, 91 (2d Cir. 2010)
(quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)). This standard does
not require “heightened fact pleading of
specifics, but only enough facts to state a
claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.
The Supreme Court recently clarified the
appropriate pleading standard in Ashcroft v.
Iqbal, setting forth a two-pronged approach
for courts deciding a motion to dismiss. 129
S.Ct. 1937 (2009). The Court instructed
district courts to first “identify[ ] pleadings
that, because they are no more than
conclusions, are not entitled to the
assumption of truth.” Id. at 1950. Although
“legal conclusions can provide the
framework of a complaint, they must be
supported by factual allegations.” Id.
Second, if a complaint contains
“well-pleaded factual allegations, a court
On December 22, 2010, the individual
defendants renewed their motion to dismiss
the Second Amended Complaint. Plaintiff
2
should assume their veracity and then
determine whether they plausibly give rise to
an entitlement to relief.” Id. “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. 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.” Id. at 1949 (internal
citations omitted) (quoting and citing
Twombly, 550 U.S. at 556–57).
plaintiff in the Dominican Republic. (Pl.’s
Opp. at 2, 5.) The Court concludes that
Panamanian law of veil-piercing must be
applied.
As an initial matter, the Court finds
unpersuasive plaintiff’s argument that the
individual defendants cannot rely on
Panamanian law because Yuma Bay did not
renew its corporate registration in Panama.
Plaintiff does not point to any statutes or
caselaw in support of its argument. The
individual defendants admit that Yuma Bay
did not pay its annual corporate registration
fee in Panama in 2008, 2009, and 2010.
(Defs.’ Reply at 3.) However, as the
individual defendants point out, under
Panamanian Law No. 49 of September 17,
2009, a company is not automatically
dissolved under Panamanian law until it
fails to pay the annual registration fee for
ten consecutive years. (Defs.’ Reply at 4.)2
Thus, Yuma Bay remains a corporation
registered under the laws of Panama and can
therefore rely on Panamanian law to the
extent it is applicable.3
III. DISCUSSION
For the reasons set forth below, plaintiff’s
claims against the individual defendants must
be dismissed.
As an initial matter,
Panamanian law applies to the issue of veilpiercing. However, in an abundance of
caution, the Court concludes that Yuma Bay’s
corporate veil cannot be pierced under
Panamanian, Dominican, or New York law.
A. Choice-of-Law
The individual defendants argue that
Dominican law should apply to the issue of
veil-piercing based on the choice-of-law
clause in the January 2006 Agreement. In the
alternative, they argue that Panamanian law
should apply. Plaintiff, on the other hand,
asserts that New York law should apply
because: (1) all the transactions under the
January 2006 Agreement took place in New
York; (2) the individual defendants cannot
rely on Panamanian law “for protection”
because Yuma Bay did not renew its corporate
registration in Panama; and (3) the individual
defendants also cannot rely on Dominican law
because Yuma Bay petitioned the Dominican
Court to refer to arbitration a dispute filed by
2
This Court can rely on the individual defendants
to provide the relevant excerpts of Panamanian
law even without reliance on expert testimony.
See infra Section III.B.
3
Plaintiff’s argument for why Dominican law
cannot be applied–namely, that the individual
defendants waived any ability to rely on
Dominican law because Yuma Bay petitioned the
Dominican Court to refer to arbitration a dispute
filed by plaintiff in the Dominican Republic–is
similarly unavailing. The suit in the Dominican
Republic on which plaintiff relies was filed by
plaintiff against Yuma Bay. (Pl.’s Opp. Ex. A.)
Plaintiff did not include the individual defendants
in that suit. Yuma Bay, not the individual
defendants, requested that the case be referred to
3
The Court concludes that Panamanian law
must apply to the issue of veil-piercing based
on New York’s choice-of-law rules. “Federal
courts exercising diversity jurisdiction apply
the choice-of-law rules of the forum state,
here New York, to decide which state’s
substantive law governs.” Celle v. Filipino
Reporter Enterprises Inc., 209 F.3d 163, 175
(2d Cir. 2000). New York’s choice-of-law
doctrine dictates that “the law of the state of
incorporation determines when the corporate
form will be disregarded.” Fletcher v. Atex,
Inc., 68 F.3d 1451, 1456 (2d Cir. 1995). This
is so because “the state of incorporation has
the greater interest in determining when and if
that insulation is to be stripped away.” Kalb,
Voorhis & Co. v. Am. Fin. Corp., 8 F.3d 130,
132 (2d Cir. 1993). The law of the state of
incorporation applies to the veil-piercing
analysis even if there is a choice-of-law
provision in a contract that governs the
relationship between the parties. Id. (“The
choice of law provision in the debentures are
irrelevant. The issue is the limited liability of
shareholders of a corporation–not Circle K’s
obligations under the debentures. The law of
the state of incorporation determines when the
corporate form will be disregarded . . . .”).
law rules, the law of Colorado governs the
plaintiff’s veil-piercing claim. The
plaintiff’s argument that the law of New
York should govern because it was chosen
by the parties to govern the Programming
Agreement is rejected.”); Impulse Mktg.
Grp., Inc. v. Nat’l Small Bus. Alliance, No.
05-CV-7776 (KMK), 2007 WL 1701813, at
*7 (S.D.N.Y. June 12, 2007) (“The
Contract’s choice of law provision applies
only to construction and interpretation of the
Contract, not to all collateral claims arising
from the Contract.”); Rondout Valley Cent.
Sch. Dist. v. Coneco Corp., 339 F. Supp. 2d
425, 440 (N.D.N.Y. 2004) (“The
Agreement’s choice of law clause should
not govern the piercing the corporate veil
analysis because that issue is distinct from
the formation and interpretation of the
Agreement itself.”).
In this case, it is apparent that Yuma Bay
is incorporated in the Republic of Panama.
Thus, Panama’s veil-piercing doctrine is
controlling in this case. See, e.g., Id.; Time
Warner Cable, Inc. v. Networks Grp., LLC,
No. 09 Civ. 10059(DLC), 2010 WL 3563111,
at *4 (S.D.N.Y. Sept. 9, 2010) (“Networks
and TMG were both incorporated in Colorado.
Therefore, applying New York’s choice of
B. Piercing the Corporate Veil
In sum, the Court concludes Panamanian
law applies here. However, in an abundance
of caution, the Court addresses veil-piercing
under Panamanian, Dominican, and New
York laws, all of which lead to the
conclusion that Yuma Bay’s corporate veil
cannot be pierced in this case.
Under Federal Rule of Civil Procedure
44.1, which “controls determinations of
foreign law in federal court[,] . . . the court
may consider any relevant material or
source, including testimony, whether or not
submitted by a party or admissible under the
Federal Rules of Evidence” in determining
foreign law. Bigio v. Coca-Cola Co., No. 97
Civ. 2858(BSJ), 2010 WL 3377503, at *4
(S.D.N.Y. Aug. 23, 2010); Fed. R. Civ. P.
44.1. Courts may conduct “their own
independent research to determine foreign
arbitration pursuant to the arbitration clause in the
January 2006 Agreement. The dispute filed in the
Dominican court system was referred to arbitration
before the ICC. (Id. at 7.)
4
law[,] . . . [but] the party claiming foreign law
applies carries . . . the burden of proving
foreign law to enable the district court to
apply it in a particular care.” Bigio, 2010 WL
3377503, at *4 (citation omitted) (citing Baker
v. Booz Allen Hamilton, Inc., 358 F. App’x
476, 481 (4th Cir. 2009)); see also Alfadda v.
Fenn, 149 F.R.D. 28, 34 (S.D.N.Y. 1993) (the
burden is on the party relying on foreign law).
Either oral or written testimony from expert
witnesses who are “not required to meet any
special qualifications” is the “basic mode of
proving foreign law” Bigio, 2010 WL
3377503, at *4, though such reports “are not
necessary . . . to carry the[] burden of
establishing aspects of foreign law.” In re
Alstom SA Sec. Litig., 253 F.R.D. 266, 291
(S.D.N.Y. 2008). However, “[t]he purpose of
expert testimony . . . is to aid the Court in
determining the content of the applicable
foreign law-not to apply it to the facts of the
case. Furthermore, the Court is not obliged to
credit the parties’ partisan application of the
governing law.” Bigio, 2010 WL 3377503, at
*4. The Court may also rely on the decisions
of other courts in its analysis of foreign law.
See In re Alstom SA Sec. Litig., 253 F.R.D. at
291.4
Republic of Panama, “shareholders,
directors and officers are not liable to pay
with their personal assets for their rights and
obligations acquired by the corporation,
regardless of whether they acted on behalf
of the corporation.” (Defs.’ Mem. Ex. E at 4
(Legal Opinion from Cedabo Cedeño
Abogados).)
Specifically, Section 444
states:
Directors shall not assume any
personal liability for the
corporation’s obligations, but they
shall be liable personally or jointly
and severally, as the case may be, to
the corporation and to third parties:
for the validity of the payments
made by the shareholders, for the
real existence of the dividends
decided, for the good management of
the accounting and, in general for the
good or bad performance of their
mandate and any violation of any
law, the Article of Incorporation, the
Bylaws or any resolution by the
General Meeting. . . . Liability may
only be demanded based on a
resolution by the Shareholders’
General Meeting.
1. Panamanian Law
(Id. at 4-5.) According to the expert opinion
provided by the individual defendants,
The individual defendants have satisfied
their burden of demonstrating that veilpiercing is not available in this case under
Panamanian law. Under Law No. 32 of
February 26, 1927 (which relates to
shareholder liability), in conjunction with
Section 444 of the Commercial Code of the
Panamanian legislation does not
provide for mechanisms to pierce the
Corporate Veil . . . . [U]nder
exceptional circumstances
[Panama’s] Supreme Court of Justice
has allowed it . . . [where] a
corporation has been used for the
sole purpose of defrauding third
parties or violating the law, thus
resulting in a case of abuse of the
4
The Court notes that plaintiff has failed to provide
any evidence regarding Panamanian or Dominican
law on veil-piercing, whether in the form of expert
reports or otherwise.
5
the “corporate formalities including legal
status and corporate capacity and
capitalization” (where allegedly Yuma
Bay’s bank account, address, email and
phone number belonged to the individual
defendants and corporate funds were
funneled “through to Defendants’ trade
company”); and (3) that it actually owned
land in the Dominican Republic, which
belonged to the individual defendants. (Pl.’s
Opp. at 4.)
Plaintiff attaches various
documents to its opposition papers that
allegedly support plaintiff’s assertions. As
an initial matter, the Court cannot consider
allegations and documents clearly outside of
the pleadings on a motion to dismiss.
However, even if these allegations are true,
they are insufficient to pierce the corporate
veil under Panamanian law.
legal personality. . . . The criterion
used by [the courts] to pierce the
corporate veil always has, as a
common denominator, the fact that the
[shareholders or directors] have not
respected the legal entity, as well as
the breach of the principle of the
separation of personalities, in order to
thus punish those hiding behind it.
(Id. Ex. E at 6-7 (quotation marks omitted).)
According to the Supreme Court of Justice,
piercing of the corporate veil “is an
exceptional measure that is only admissible on
a provisional basis for purposes of interim
relief . . . .” (Id. at 7.) In sum, the corporate
veil may be pierced under Panamanian law
where it is demonstrated that directors or
shareholders controlled and used the
corporation for the sole purpose of
perpetrating fraud or “violating the law,”
thereby abusing the corporate form and hiding
behind it to avoid liability.
First, these alleged misrepresentations
do not suggest that the individual defendants
“have not respected the legal entity” and
breached the “principle of the separation of
personalities” to perpetrate fraud. In fact,
the allegations in plaintiff’s opposition
largely focus on misrepresentations by
Yuma Bay without explaining how the
individual defendants were involved in the
alleged misrepresentations.6
Second,
Plaintiff has failed to allege conduct that
rises to the level of abuse of the corporate
form as required under Panamanian law to
pierce the corporate veil. In the Second
Amended Complaint (“SAC”) plaintiff does
not make any allegations of fraud against the
individual defendants or Yuma Bay. Nor does
plaintiff allege in the SAC that Yuma Bay was
a corporation solely created for the purpose of
perpetrating fraud or otherwise violating the
law. In its opposition papers, plaintiff asserts
that Yuma Bay misrepresented: (1) that it was
a “corporation legitimately registered to do
business in any jurisdiction”5; (2) that it had
Mem. Ex. E at 9 (Legal Opinion of Cedabo
Cedeño Abogados).)
6
Plaintiff’s sole allegation against the individual
defendants is that they “did not disclose to
Plaintiff that [Yuma Bay] was not legally able to
do business in the State of Florida, New York, nor
the Dominican Republic.” (Pl.’s Opp. at 4.) First,
this statement is entirely conclusory. Second, it is
at least partially incorrect because Yuma Bay was
able to do business in the Dominican Republic.
See infra note 9. In any event, it does not suggest
that Yuma Bay was created for the sole purpose of
5
As noted supra, Yuma Bay was, in fact, a
corporation registered to do business in Panama
despite the fact that it had not renewed its corporate
registration three years in a row. (See also Defs.’
6
defendants provided two reports from
Dominican attorneys explaining Dominican
law on veil-piercing. According to both
reports, this Court has to look to the
Commercial Code of the Dominican
Republic of 2006, the year the January 2006
Agreement was executed. (Defs.’ Mem. Ex.
C at 2 (Legal Opinion of José Gregori
Cabrera Cuello), Ex. D at 2 (Legal Opinion
from E&M International Consulting, S.A.).)
Under Section 32 of the Commercial Code
of 2006, Board Members “do not assume, by
reason of management, any personal or
joint-and-several obligation related to the
company’s commitments” so that they “may
not be deemed to be personally liable,
whether for their management of or jointly
and severally, for the contractual and/or
financial commitments of the company,
even if such board members have acted as
the[] company’s attorneys-in-fact or legal
representatives.” (Id. Ex. C at 2; see also id.
Ex. D at 2.)8 While Law No. 479-08
enacted on December 12, 2008 provides for
piercing the corporate veil in cases of fraud,
among others, the law is not retroactive and
is “only applicable to any legal relationship
formed or situation that in fact took place”
after the enactment of the new veil-piercing
law. (Id. Ex. D at 2; Defs.’ Mem. at 5;
Defs.’ Reply Ex. C at 1.) Since the conduct
complained of, along with the signing of the
January 2006, Agreement, took place prior
to the enactment of law No. 479-08 (SAC ¶¶
12-20; Pl.’s Opp. at 4), that law is
inapplicable to this case. (See also Defs.’
Mem. Ex. C at 1-2, Ex. D at 2.) Nor did
plaintiff does not allege in its opposition
papers that Yuma Bay was created for the sole
purpose of perpetrating fraud.7 In sum, the
Court concludes that Yuma Bay’s corporate
veil cannot be pierced under Panamanian law
because plaintiff has failed to either allege that
Yuma Bay was created for the purpose of
perpetrating fraud or that the individual
defendants abused the corporate form to
perpetrate that fraud. Cf. Cantley v.
Ducharme, No. 09-23424, 2011 WL 611623,
at *3, *6-7 (S.D. Fla. Feb. 15, 2011) (where
plaintiff alleged that the individual defendants
committed fraud and conversion, which the
court determined could constitute a tort under
Panama’s Article 1644, the corporate veil
could be pierced under Panamanian law to
sustain claims against the individual
defendants “who, within the course of
soliciting and negotiating a contract on a
corporation’s behalf, without being part of the
contract, make false representation with the
intent to induce a party to enter into a contract
with the corporation, if harm is caused to the
party induced to enter into said contract, due
to the wilful conduct or negligence of an
individual inducing the harmed party to enter
into said contract.”)
2. Dominican Law
Yuma Bay’s corporate veil also cannot be
pierced under Dominican law. The individual
perpetrating fraud.
7
The individual defendants assert that all of the
allegations made by plaintiff in its opposition are
false, citing to and attaching documents outside of
the SAC. As noted above, the Court cannot consider
matters outside of the pleadings on a motion to
dismiss. However, even if plaintiff’s allegations
were true, they are insufficient to pierce the
corporate veil for the reasons stated above.
8
Additionally, under Section 33 of the
Commercial Code of 2006, shareholders “are only
liable for the loss of the capital they hold in the
company.” (Id. Ex. C at 2; see also id. Ex. D at
2.)
7
plaintiff argue in its opposition papers that the
2008 law should apply here. In fact, plaintiff
did not discuss Dominican law at all. Thus, it
is apparent that the corporate veil cannot be
pierced in this case under Dominican law.9
(1) the absence of the formalities and
paraphernalia that are part and parcel
of the corporate existence, i.e.,
issuance of stock, election of
directors, keeping of corporate
records and the like, (2) inadequate
capitalization, (3) whether funds are
put in and taken out of the
corporation for personal rather than
corporate purposes, (4) overlap in
ownership, officers, directors, and
personnel, (5) common office space,
address and telephone numbers of
corporate entities, (6) the amount of
business discretion displayed by the
allegedly dominated corporation, . . .
(8) whether the corporations are
treated as independent profit centers,
(9) the payment or guarantee of
debts of the dominated corporation
by other corporations in the group,
and (10) whether the corporation in
question had property that was used
by other of the corporations as if it
were its own.
3. New York Law
Finally, plaintiff cannot pierce Yuma
Bay’s corporate veil under New York law.
“Generally . . . piercing the corporate veil
requires a showing that: (1) the owners
exercised complete domination of the
corporation in respect to the transaction
attacked; and (2) that such domination was
used to commit a fraud or wrong against the
plaintiff which resulted in the plaintiff’s
injury.”
Morris v. N.Y. State Dep’t of
Taxation and Fin., 623 N.E.2d 1157, 1160-61
(N.Y. 1993). Factors to be considered in
assessing complete domination include:
9
To the extent plaintiff is suggesting that Yuma
Bay’s failure to pay its corporate registration fees in
Panama somehow affects its ability to rely on the
laws of the Dominican Republic, that argument is
without merit. “The expiration of the main
company’s registration in Panama does not affect its
branch in the Dominican Republic unless the
Company is declared dissolved in Panama or decides
itself to proceed with the dissolution.” (Defs.’ Reply
Ex. C at 2 (Memorandum from Jimenez Cruz Peña
Abogados).) As noted above, under Panamanian
law, Yuma Bay is not dissolved at this time.
Furthermore, under Dominican law, there is no
special provision for piercing the corporate veil
where the parent corporation has not complied with
registration fees in its country of incorporation. (Id.
at 2-3.) Furthermore, the fact that Yuma Bay
allowed its Certificate of Registry with the
Dominican Tax Department to expire in 2008 “does
not affect either the validity of the Company, or its
operations.” (Id. at 4.)
Wm. Passalacqua Builders, Inc. v. Resnick
Dev. S. Inc., 933 F.2d 131, 139 (2d Cir.
1991). To satisfy the second prong set out
in Morris, plaintiff must demonstrate “1) the
existence of a wrongful or unjust act toward
that party, and 2) that the act caused that
party’s harm.” JSC Foreign Econ. Ass’n
Technostroyexport v. Int’l Dev. & Trade
Services, Inc., 386 F. Supp. 2d 461, 465
(S.D.N.Y. 2005).
Plaintiff cannot satisfy these
requirements based upon plaintiff’s
allegations in the Second Amended
Complaint. As noted above, plaintiff does
not allege fraud or domination by the
individual defendants in the SAC.
8
Plaintiff’s allegations relating to fraud and
domination are entirely in its opposition
papers, and cannot be considered on a motion
to dismiss. In any event, even if the Court
considers them and assumes them to be true,
plaintiff’s reliance on New York’s corporate
veil-piercing doctrine is misplaced for the
same reasons as discussed supra with respect
to Panamanian law. See supra Section III.B.1.
In particular, plaintiff has failed to allege
“complete domination” with respect to the
“transaction attacked.” In fact, it is not clear
what “transaction” plaintiff is actually taking
issue with. On the one hand, plaintiff’s SAC
and opposition focus on breach of contract
but, on the other hand, plaintiff’s opposition
also alleges fraudulent conduct on the part of
Yuma Bay.
To the extent plaintiff is
suggesting that it was fraudulently induced to
enter into the January 2006 Agreement, there
are no specific allegations that the individual
defendants were somehow involved in the
contract negotiations. With respect to claims
of fraud, once again there are no allegations
that the individual defendants were somehow
involved in misrepresenting certain
information to plaintiff.
IV. CONCLUSION
For the reasons set forth above, the
Court grants the individual defendants’
motion to dismiss. The remaining parties
shall proceed with discovery at the direction
of Magistrate Judge Lindsay.
SO ORDERED.
_____________________
JOSEPH F. BIANCO
United States District Judge
Dated: August 4, 2011
Central Islip, New York
* * *
Plaintiff is represented by Edward Robert
Adams, Obermayer and Adams, LLP, 225
Broadway, Suite 1400, New York, NY
10007.
The moving defendants are
represented by Samuel B. Reiner, Reiner
and Reiner, P.A., 9100 S. Dadeland Blvd.,
Suite 901, Miami, FL 33156.
* * *
In sum, the Court concludes that Panama’s
doctrine on piercing the corporate veil applies
in this case. However, in an abundance of
caution, the Court finds that plaintiff cannot
pierce Yuma Bay’s corporate veil under
Panamanian, Dominican, and New York
law.10
referring to various cases explaining how
liquidated and other damages are evaluated.
Having reviewed the damages provisions in the
January 2006 Agreement, namely Section 4.2, the
Court does not see a basis for allowing plaintiff to
pursue claims against the individual defendants.
10
Plaintiff also argues that it should be permitted to
pursue claims against the individual defendants
because of damages provisions in the January 2006
Agreement. (Pl.’s Opp. at 3-4.) Plaintiff does not
cite any case law for this proposition, simply
9
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