Parfitt Way Management Corp. v. GSM by Nomad, LLC et al

Filing 53

DECISION AND ORDER granting # 32 Defendants' Motion to Dismiss Plaintiff's Third Claim, without prejudice. Signed by Chief Judge Glenn T. Suddaby on 6/25/18. (lmw)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
__________________________________________
PARFITT WAY MANAGEMENT CORP.
d/b/a HARBOUR PUBLIC HOUSE,
Plaintiff,
v.

8:17-CV-0299
(GTS/CFH)

GSM BY NOMAD, LLC d/b/a NOMAD
AIRSTREAM; GUILLAUME LANGEVIN;
and STEVE CLEMENT,
Defendants.
__________________________________________
APPEARANCES:

OF COUNSEL:

BRIGGS NORFOLK, LLP
Counsel for Plaintiff
2296 Saranac Avenue
Lake Placid, NY 12946

MATTHEW D. NORFOLK, ESQ.

THE WAGONER FIRM, PLLC
Counsel for Defendants
8 Thurlow Terrace
Albany, NY 12203

MATTHEW D. WAGONER, ESQ.
MATTHEW A. TOPOROWSKI, ESQ.

GLENN T. SUDDABY, Chief United States District Judge
DECISION and ORDER
Currently before the Court, in this breach-of-contract action filed by Parfitt Way
Management Corp. d/b/a Harbour Public House (“Plaintiff”) against GSM by Nomad, LLC d/b/a
Nomad Airstream, Guillaume Langevin, and Steve Clement (“Defendants”), is Defendants’
motion to dismiss Plaintiff’s Third Claim (against Defendants Langevin and Clement for breach
of contract under the doctrine of piercing the corporate veil) pursuant to Fed. R. Civ. P. 12(b)(6)

for failure to state a claim upon which relief can be granted .1 (Dkt. No. 32.) For the reasons set
forth below, Defendants’ motion is granted. However, Plaintiff’s Third Claim is dismissed only
without prejudice.
I.

RELEVANT BACKGROUND
A.

Plaintiff’s Complaint

Generally, liberally construed, Plaintiff’s Complaint asserts five claims. (Dkt. No. 1
[Pl.’s Compl.].) First, Plaintiff’s Complaint claims that Defendant Nomad breached the contract
with Plaintiff by failing to perform the contracted-for renovations and customization and failing
to deliver the contracted-for trailer at the specified time (“First Claim”). (Id. at ¶¶ 44-50.)
Specifically, Plaintiff alleges that it performed all of its obligations under the contract and that
Defendant Nomad’s material breach of the contract caused it to suffer damages. (Id.)
Second, Plaintiff’s Complaint claims that Defendant Nomad breached the warranties
contained in the contract by failing to perform the contracted-for renovations and customization
and failing to deliver the contracted-for trailer (“Second Claim”). (Id. at ¶¶ 51-61.) Specifically,
Plaintiff alleges that Nomad warranted that it (a) would perform the agreed-upon services in a
professional, competent, and timely manner, and (b) had the power to perform under the
agreement. (Id.)
Third, Plaintiff’s Complaint claims that the Court should permit piercing of the corporate
veil to hold Defendants Langevin and Clement personally liable for Nomad’s breach of the
contract and warranties because they (a) exercise complete dominion and control over Nomad as
to the transaction underlying the contract, (b) knew of, consented to, and directed the breach of
1

Defendants had also moved to dismiss based on insufficient service of process.
That aspect of Defendants’ motion was decided in this Court’s Decision and Order of May 24,
2018. (Dkt. No. 49 [Decision & Order, 5/24/2018].)
2

the agreement and its warranties, and (c) realized personal financial benefit from improper use of
monies paid to Nomad by Plaintiff (“Third Claim”). (Id. at ¶¶ 62-71.)
Fourth, Plaintiff’s Complaint claims that Defendants Langevin and Clement converted
monies paid to Nomad by Plaintiff (“Fourth Claim”). (Id. at ¶¶ 72-79.) Specifically, Plaintiff
alleges that Langevin and Clement took ownership and control over monies paid to Nomad,
wrongly transferred, acquired, and used the monies for their personal benefit rather than to
perform the work specified in the contract, and refused to return the monies when Plaintiff
demanded they be returned. (Id.)
Fifth, Plaintiff’s Complaint claims that Defendants Langevin and Clement were unjustly
enriched through acquiring and using the monies paid to Nomad by Plaintiff (“Fifth Claim”).
(Id. at ¶¶ 80-91.) Specifically, Plaintiff alleges that Defendants Langevin and Clement had full
knowledge of the benefit they received, that Plaintiff did not authorize their use of the monies
paid to Nomad, and that they refused to return those monies when Plaintiff demanded they be
returned. (Id.)
B.

Parties’ Briefing on Defendants’ Motion to Dismiss
1.

Defendants’ Memorandum of Law

As relevant to this Decision and Order, Defendants argue that Plaintiff has failed to state
a claim upon which relief can be granted as to its Third Claim against Defendants Langevin and
Clement. (Dkt. No. 32, Attach. 1, at 9-13 [Defs.’ Mem. of Law].) Specifically, Defendants
argue that Plaintiff’s allegations related to Langevin and Clement’s exercise of complete
dominance over Nomad in respect to the transaction attacked are either purely conclusory or
based only on information and belief and therefore do not plausibly suggest the facts required.

3

(Id.) In the alternative, Defendants argue that Plaintiff’s allegations related to the use of such
domination to commit fraud or wrongdoing against Plaintiff (resulting in injury) are also either
purely conclusory or based only on information and belief and therefore do not meet the
heightened pleading standard of Fed. R. Civ. P. 9(b). (Id.) Finally, Defendants also argue that
disregarding the corporate form is “highly disfavored” under New York law. (Id. at 12-13.)
2.

Plaintiff’s Opposition Memorandum of Law

As relevant to this Decision and Order, Plaintiff argues that it has sufficiently pled facts
to pierce the corporate veil and hold Langevin and Clement personally liable for Nomad’s
wrongdoing. (Dkt. No. 39, at 7-9 [Pl.’s Opp’n Mem. of Law].) Specifically, the pleading
standard under Fed. R. Civ. P. 12(b)(6) is the “appears beyond doubt that the plaintiff can prove
no set of facts” standard set forth in Conley v. Gibson, 355 U.S. 41 (1957). (Id. at 7.) Moreover,
Plaintiff argues that the Complaint alleges that Langevin and Clement had complete dominance
over Nomad for the relevant transaction because they were the only two members of the LLC,
they conducted the negotiations with Plaintiff, and Langevin signed the contract. (Id. at 8.)
Finally, Plaintiff argues that the Complaint alleges that Plaintiff paid money to Nomad, which
Langevin and Clement used to pay off personal debts rather than perform the contracted work,
and that such action constitutes a wrongful use of their domination of Nomad. (Id. at 8-9.)
3.

Defendants’ Reply Memorandum of Law

As relevant to this Decision and Order, Defendants argue that, at its core, Plaintiff’s
response argues that the corporate veil should be pierced because Nomad’s sole members were
Langevin and Clement. (Dkt. No. 41, Attach. 2, at 7-11 [Defs.’ Reply Mem. of Law].) More
specifically, Defendants argue that the Complaint contains no factual allegations plausibly
suggesting that Langevin and Clement exercised any more control over Nomad than that which
4

would be expected in any closely held, member-operated limited liability company. (Id.)
Moreover, Defendants argue that using money from the contract with Plaintiff to pay tax debts
owed to New York State was not a misuse of Nomad’s funds for personal purposes because the
tax debts were Nomad’s debts, not the personal debts of Langevin or Clement. (Id. at 9-10.)
Similarly, Defendants argue that Plaintiff has not alleged facts plausibly suggesting any of the
six factors related to showing fraud under the heightened pleading standard for fraud-based
claims. (Id.) Finally, Defendants argue that, under New York law, piercing the corporate veil
does not constitute a cause of action independent of the cause of action against the corporate
entity. (Id.)
II.

GENERAL LEGAL STANDARD
“The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical

to that of a Rule 12(b)(6) motion for failure to state a claim.” Patel v. Contemporary Classics of
Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001) (collecting cases). It has long been understood
that a dismissal for failure to state a claim upon which relief can be granted, pursuant to Fed. R.
Civ. P. 12(b)(6), can be based on one or both of two grounds: (1) a challenge to the "sufficiency
of the pleading" under Fed. R. Civ. P. 8(a)(2); or (2) a challenge to the legal cognizability of the
claim. Jackson v. Onondaga Cnty., 549 F. Supp.2d 204, 211 nn. 15-16 (N.D.N.Y. 2008)
(McAvoy, J.) (adopting Report-Recommendation on de novo review).
Because such dismissals are often based on the first ground, some elaboration regarding
that ground is appropriate. Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a
pleading contain “a short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2) [emphasis added]. In the Court’s view, this tension between

5

permitting a “short and plain statement” and requiring that the statement “show[]” an entitlement
to relief is often at the heart of misunderstandings that occur regarding the pleading standard
established by Fed. R. Civ. P. 8(a)(2).
On the one hand, the Supreme Court has long characterized the “short and plain”
pleading standard under Fed. R. Civ. P. 8(a)(2) as “simplified” and “liberal.” Jackson, 549 F.
Supp.2d at 212 n.20 (citing Supreme Court case). On the other hand, the Supreme Court has
held that, by requiring the above-described “showing,” the pleading standard under Fed. R. Civ.
P. 8(a)(2) requires that the pleading contain a statement that “give[s] the defendant fair notice of
what the plaintiff’s claim is and the grounds upon which it rests.” Jackson, 549 F. Supp.2d at
212 n.17 (citing Supreme Court cases) (emphasis added).
The Supreme Court has explained that such fair notice has the important purpose of
“enabl[ing] the adverse party to answer and prepare for trial” and “facilitat[ing] a proper decision
on the merits” by the court. Jackson, 549 F. Supp.2d at 212 n.18 (citing Supreme Court cases);
Rusyniak v. Gensini, 629 F. Supp.2d 203, 213 & n.32 (N.D.N.Y. 2009) (Suddaby, J.) (citing
Second Circuit cases). For this reason, as one commentator has correctly observed, the “liberal”
notice pleading standard “has its limits.” 2 Moore’s Federal Practice § 12.34[1][b] at 12-61 (3d
ed. 2003). For example, numerous Supreme Court and Second Circuit decisions exist holding
that a pleading has failed to meet the “liberal” notice pleading standard. Rusyniak, 629 F.
Supp.2d at 213 n.22 (citing Supreme Court and Second Circuit cases); see also Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949-52 (2009).
Most notably, in Bell Atlantic Corp. v. Twombly, the Supreme Court reversed an
appellate decision holding that a complaint had stated an actionable antitrust claim under 15

6

U.S.C. § 1. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007). In doing so, the Court
“retire[d]” the famous statement by the Court in Conley v. Gibson, 355 U.S. 41, 45-46 (1957),
that “a complaint should not be dismissed for failure to state a claim unless it appears beyond
doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him
to relief.” Twombly, 127 S. Ct. at 1968-69. Rather than turn on the conceivability of an
actionable claim, the Court clarified, the "fair notice" standard turns on the plausibility of an
actionable claim. Id. at 1965-74. The Court explained that, while this does not mean that a
pleading need “set out in detail the facts upon which [the claim is based],” it does mean that the
pleading must contain at least “some factual allegation[s].” Id. at 1965. More specifically, the
“[f]actual allegations must be enough to raise a right to relief above the speculative level [to a
plausible level],” assuming (of course) that all the allegations in the complaint are true. Id.
As for the nature of what is “plausible,” the Supreme Court explained that “[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.” Ashcroft v. Iqbal,
129 S.Ct. 1937, 1949 (2009). “[D]etermining whether a complaint states a plausible claim for
relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense. . . . [W]here the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged–but it has not
show[n]–that the pleader is entitled to relief.” Iqbal, 129 S.Ct. at 1950 (internal quotation marks
and citations omitted). However, while the plausibility standard “asks for more than a sheer
possibility that a defendant has acted unlawfully,” id., it “does not impose a probability
requirement.” Twombly, 550 U.S. at 556.

7

Because of this requirement of factual allegations plausibly suggesting an entitlement to
relief, “the tenet that a court must accept as true all of the allegations contained in the complaint
is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,
supported by merely conclusory statements, do not suffice.” Iqbal, 129 S. Ct. at 1949.
Similarly, a pleading that only “tenders naked assertions devoid of further factual enhancement”
will not suffice. Iqbal, 129 S. Ct. at 1949 (internal citations and alterations omitted). Rule 8
“demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id.
(citations omitted).
Finally, a few words are appropriate regarding what documents are considered when a
dismissal for failure to state a claim is contemplated. Generally, when contemplating a dismissal
pursuant to Fed. R. Civ. P. 12(b)(6) or Fed. R. Civ. P. 12(c), the following matters outside the
four corners of the complaint may be considered without triggering the standard governing a
motion for summary judgment: (1) documents attached as an exhibit to the complaint or answer,
(2) documents incorporated by reference in the complaint (and provided by the parties), (3)
documents that, although not incorporated by reference, are “integral” to the complaint, or (4)
any matter of which the court can take judicial notice for the factual background of the case.2

2

See Fed. R. Civ. P. 10(c) (“A copy of any written instrument which is an exhibit
to a pleading is a part thereof for all purposes.”); L-7 Designs, Inc. v. Old Navy, LLC, No. 10573, 2011 WL 2135734, at *1 (2d Cir. June 1, 2011) (explaining that conversion from a motion
to dismiss for failure to state a claim to a motion for summary judgment is not necessary under
Fed. R. Civ. P. 12[d] if the “matters outside the pleadings” in consist of [1] documents attached
to the complaint or answer, [2] documents incorporated by reference in the complaint (and
provided by the parties), [3] documents that, although not incorporated by reference, are
“integral” to the complaint, or [4] any matter of which the court can take judicial notice for the
factual background of the case); DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir.
2010) (explaining that a district court considering a dismissal pursuant to Fed. R. Civ. 12(b)(6)
“may consider the facts alleged in the complaint, documents attached to the complaint as
exhibits, and documents incorporated by reference in the complaint. . . . Where a document is
8

III.

ANALYSIS
After carefully considering the question of whether Plaintiff’s Third Claim should be

dismissed, the Court answers that question in the affirmative for the reasons stated in
Defendants’ memoranda of law, though the Court finds that such dismissal should be without
prejudice. (Dkt. No. 32, Attach. 1, at 9-10, 12-13 [Defs.’ Mem. of Law]; Dkt. No. 41, Attach. 2,
at 9-11 [Defs.’ Reply Mem. of Law].) To the relevant reasons stated in Defendants’ memoranda
of law, the Court adds the following analysis.3

not incorporated by reference, the court may neverless consider it where the complaint relies
heavily upon its terms and effect, thereby rendering the document ‘integral’ to the complaint. . . .
However, even if a document is ‘integral’ to the complaint, it must be clear on the record that no
dispute exists regarding the authenticity or accuracy of the document. It must also be clear that
there exist no material disputed issues of fact regarding the relevance of the document.”)
[internal quotation marks and citations omitted]; Chambers v. Time Warner, Inc., 282 F.3d 147,
152 (2d Cir. 2009) (“The complaint is deemed to include any written instrument attached to it as
an exhibit or any statements or documents incorporated in it by reference.”) (internal quotation
marks and citations omitted); Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72
(2d Cir.1995) (per curiam) (“[W]hen a plaintiff chooses not to attach to the complaint or
incorporate by reference a [document] upon which it solely relies and which is integral to the
complaint,” the court may nevertheless take the document into consideration in deciding [a]
defendant’s motion to dismiss, without converting the proceeding to one for summary
judgment.”) (internal quotation marks and citation omitted).
3

Plaintiff does not argue that Washington law should apply to this action for
determining whether it is appropriate to pierce the corporate veil. (Dkt. No. 39, at 7-9 [Pl.’s
Opp’n Mem. of Law].) Notably, Plaintiff cites to Second Circuit cases that apply New York law
when stating its understanding of the applicable legal standard and therefore appears to concede
that New York law is appropriate. (Id. at 7.) Notwithstanding, the Court would nonetheless
apply New York law even if the parties disagreed (and an actual conflict were present between
New York and Washington law) because the center of gravity in this case is in New York;
although Plaintiff is a Washington entity, Defendant Nomad is a New York entity, Defendants
Langevin and Clement were living and conducting business in New York before being refused
re-entry to the United States, and the work that is the subject of the contract was to be performed
in New York. (Dkt. No. 1, Attach. 2, at 2-3.) See also Beth Israel Med. Ctr. v. Horizon Blue
Cross and Blue Shield of New Jersey, Inc., 448 F.3d 573, 583 (2d Cir. 2006) (listing factors to be
considered as including “the place of contracting, negotiation and performance; the location of
the subject matter of the contract; and the domicile of the contracting parties”). Though not
determinative, the parties additionally agreed in the contract that the contract would be governed
9

“‘Broadly speaking, the courts will disregard the corporate form . . . whenever necessary
to prevent fraud or to achieve equality.’” Cortlandt St. Recovery Corp. v. Bonderman, 96 N.E.3d
191 (N.Y. 2018) (quoting Morris v. Dep’t. of Taxation, 623 N.E.2d 1157 [N.Y. 1993]).
“Properly understood, ‘an attempt . . . to pierce the corporate veil does not constitute a cause of
action independent of that against the corporation; rather, it is an assertion of facts and
circumstances which will persuade the court to impose the corporate obligation on its owners.’”
Cortlandt St. Recovery Corp., 96 N.E.3d at 203. “[A] plaintiff seeking to pierce the corporate
veil must show 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 plaintiff’s injury.” Id.
While “allegations concerning the ‘domination element’ of the two-part test are subject to
the ‘basic pleading standard of [Fed. R. Civ. P.] 8,’” “allegations concerning the defendant’s
fraudulent acts ‘are subject to the heightened pleading standard of [Fed. R. Civ. P.] 9(b) to the
extent that they allege fraud.’” Ningbo Prods. Imp. & Exp. Co., Ltd. v. Eliau, 11-CV-0650, 2011
WL 5142756, at *6 (S.D.N.Y. Oct. 31, 2011) (quoting Wm. Passalacqua Builders, Inc. v.
Resnick Developers S., Inc., 933 F.2d 131, 139 [2d Cir. 1991]). “‘[P]urely conclusory
allegations cannot suffice to state a claim based on veil-piercing or alter-ego liability’ under
either pleading standard.” Ningbo Prods. Imp. & Exp. Co., 2011 WL 5142756, at *6.
Courts have considered the following factors, among others, as being relevant to
determining whether an individual has used his or her dominance to abuse the corporate form:
(1) failure to adhere to corporate formalities; (2) inadequate capitalization; (3) commingling of

by and construed in accordance with New York State law. (Id. at 5.)
10

assets; and (4) the personal use of corporate funds. Olivieri Constr. Corp. v. WN Weaver St.,
LLC, 41 N.Y.S.3d 59, 61 (App. Div. 2d Dep’t 2016); see also Koninklijke Philips Elecs. N.V. v.
The ADS Group, 694 F. Supp. 2d 246, 251-52 (S.D.N.Y. 2010) (quoting Wm. Passalacqua
Builders, Inc., 933 F.2d at 139) (outlining the factors broadly applicable to corporations).
A.

Whether Plaintiff Has Alleged Facts Plausibly Suggesting that Langevin and
Clement Exercised Complete Domination of Nomad with Respect to the
Transaction Attacked

In its opposition memorandum of law, Plaintiff relies heavily on the fact that the
Complaint alleged that Langevin and Clement solicited Nomad’s written agreement with
Plaintiff, and that Langevin executed that agreement on behalf of Nomad. (Dkt. No. 39, at 8
[attaching page “6” of Pl.’s Opp’n Mem. of Law].) With regard to that narrow argument, the
Court takes no issue. (Dkt. No. 1, at ¶¶ 17-20 [Pl.’s Compl.]; Dkt. No. 1, Attach. 2.)
However, in a breach-of-transaction action (such as here), the “transaction attacked” is
not merely the agreement to perform (i.e., Nomad’s agreement to renovate and customize
Plaintiff’s Airstream trailer), but the failure to perform (i.e., Nomad’s failure to perform on that
agreement).4 Here, the alleged failure to perform the agreement consisted of an alleged twopronged failure: (1) Nomad’s alleged failure (during the six-week period of May 13, 2016, to
August 5, 2016) to perform under the agreement or reasonably progress on the renovation and
customization of the trailer (despite making seven bi-weekly withdrawals of progress payments

4

See, e.g., Network Enters. v. Reality Racing Inc., 09-CV-4664, 2010 WL
3529237, at *5 (S.D.N.Y. Aug. 24, 2010) (“With respect to the domination inquiry, Plaintiff
must allege facts that plausibly suggest Defendants dominated Reality Racing when the company
executed and then breached the Agreement and the July Agreement.”) (emphasis added). This
makes sense given that the piercing of a corporate veil is not an independent claim but merely a
doctrine sought to be applied to another claim (here, Plaintiff’s First Claim for breach of contract
and its Second Claim for breach of warranty).
11

from Plaintiff’s bank account during that time period), and (2) Nomad’s alleged failure (on or
after August 4, 2016) to either deliver the trailer in completed condition or return the $150,000
paid by Plaintiff. (Dkt. No. 1, at ¶¶ 30-33, 37-38, 44-59 [Pl.’s Compl.].) As a result, the
question is whether Plaintiff’s Complaint has alleged facts plausibly suggesting that Langevin
and Clement exercised complete domination of Nomad in respect to those two failures.
The Court has learned through the parties’ motion papers that a third employee of Nomad
existed during the time period in question (Luis Edward Marin, a consultant), suggesting that it
may have been that third party (and/or another employee) who controlled the work (or lack
thereof) on the Airstream trailer. However, the Court cannot consider the fact of that third
employee’s existence on the current motion, because it was presented outside the four corners of
the Complaint and no exception to the four-corner rule applies. See, supra, Part II of this
Decision and Order. Rather, any argument that it was Mr. Marin (and/or some other employee)
who caused the two failures in question is more appropriately evaluated on a motion for
summary judgment.
After carefully considering the matter, and liberally construing the factual allegations of
the Complaint,5 the Court finds that Plaintiff has (albeit barely) alleged facts plausibly
suggesting that Langevin and Clement, who were owners and operators of Nomad, controlled the
work (or lack thereof) on the Airstream trailer. (Dkt. No. 1, at ¶¶ 9, 12 [Pl.’s Comp.].) At the
very least, Plaintiff has alleged facts plausibly suggesting that Langevin and Clement, who were
officers of Nomad with the authority to solicit and enter into contracts on behalf of Nomad,
possessed the authority to return Plaintiff’s $150,000 upon Nomad’s alleged failure to perform
on or after August 4, 2016. (Id. at ¶¶ 9, 12, 17-18, 21.)

5

The Court notes that all complaints (not just civil rights complaints) must be
liberally construed. Fed. R. Civ. P. 8(e).
12

B.

Whether Plaintiff Has Alleged Facts Plausibly Suggesting that Langevin and
Clement Used Such Domination to Commit Fraud or Wrongdoing Against
Plaintiff (Resulting in Injury)

In its opposition memorandum of law, Plaintiff argues that the Complaint alleges that
Langevin and Clement used their domination over Nomad to commit two forms of fraud or
wrongdoing against Plaintiff: (1) they regularly withdrew funds from Plaintiff’s bank account as
progress payments for the work done on the Airstream trailer knowing that no such work was
being performed on the trailer, and (2) they used the funds paid by Plaintiff to pay off their
personal debts (including New York State sales tax owed by each individual) rather than for
work on the Airstream trailer. (Dkt. No. 39, at 8-9 [attaching pages “6” and “7” of Pl.’s Opp’n
Mem. of Law].)
With regard to the first form of alleged fraud or wrongdoing, by Plaintiff’s own
admission, the parties’ written agreement expressly permitted Nomad to make the withdrawals.
(Dkt. No. 1, at ¶¶ 29, 31 [Pl.’s Compl.]; Dkt. No. 1, Attach. 2, at Section1.4.) Granted, the
Complaint alleges that the withdrawals “were intended to be progress payments” (thus implying
that Nomad’s making of the withdrawals was conditioned on services already performed by
Nomad). (Dkt. No. 1, at ¶ 30 [Pl.’s Compl.].) However, such an allegation of intent is rendered
implausible by four facts: (1) the fact that the Complaint also twice alleges that the withdrawals
were “installment payments” that followed an initial down payment (plausibly suggesting that
they were intended to constitute periodic payments to an installment sale);6 (2) the fact that,
consistent with the first fact, the agreement itself (attached to the Complaint) identifies the
6

An “installment payment” is “[o]ne of a serious of periodic payments made under
an installment plan. See installment sale.” Black's Law Dictionary at 1244 (9th ed. 2009). An
“installment sale” is a “conditional sale in which the buyer makes a down payment followed by
periodic payments and the seller retains title or a security interest until all payments have been
received.” Id. at 868.
13

withdrawals as merely “bi-weekly payments,” each of which consisted of one-seventh of the
remaining balance owed by Plaintiff following the payment of a deposit; (3) the fact that,
consistent with the first and second facts, the Complaint also alleges that Nomad retained title to
the Airstream trailer until August 4, 2016; and (4) the fact that conspicuously omitted from
Plaintiff’s Complaint is any factual allegation plausibly suggesting by whom the intent was
possessed, how the intent was expressed, and when the intent was mutually shared. (Dkt. No. 1,
at ¶¶ 21, 23, 27-30 [Pl.’s Compl.]; Dkt. No. 1, Attach. 2, at Section 1.4.)
Granted also, Plaintiff alleges that (1) no work was actually performed on the Airstream
trailer before August 4, 2016, and (2) Langevin and Clement represented to Plaintiff that Nomad
was performing such work. (Dkt. No. 1, at ¶¶ 32-33 [Pl.’s Compl.].) However, the first
allegation is difficult to square with the factual allegation that the Airstream trailer was never
delivered to Plaintiff after August 5, 2016, given that, without seeing the trailer, Plaintiff would
have no personal knowledge as to whether Defendants had performed any work on the trailer.
(Id. at ¶ 37.) More important, the second allegation (which is one of fraud and thus must be
particular pursuant to Fed. R. Civ. P. 9[b]) is so bereft of dates, individuals, means of
communication and/or statements as to be conclusory. (Id. at ¶ 32.)
For all of these reasons, the Court finds that Plaintiff’s Complaint does not allege facts
plausibly suggesting that Langevin and Clement used their presumed domination of Nomad to
commit fraud related to taking payment from Plaintiff while allegedly performing no work on the
Airstream trailer.
With regard to the second form of alleged fraud or wrongdoing, this argument contains
three assumptions: (a) that the Complaint alleges facts plausibly suggesting that the funds paid
by Plaintiff had to be used by Nomad to pay for work on the Airstream trailer; (b) that the
14

Complaint alleges facts plausibly suggesting that the funds paid by Plaintiff were not used by
Nomad to pay for work on the Airstream trailer; and (c) the Complaint alleges facts plausibly
suggesting that the funds paid by Plaintiff were used by Langenvin and Clement to pay off their
“personal debts.” (Dkt. No. 1, at ¶¶ 30-31, 33, 37-38, 42 [Pl.’s Compl.].)
With regard to the first assumption, as the Court has explained above, the funds paid by
Plaintiff were (based on the Complaint’s factual allegations) not progress payments but
installment payments. As a result, the corporate funds could be used for any of Nomad’s
corporate purposes. Certainly, Nomad could have chosen to use other corporate funds to work
on the Airstream trailer.
With regard to the second assumption, based on the facts alleged, the payments from
Plaintiff could have been used to pay for work on the Airstream trailer in part, in its entirety, or
not at all. Plaintiff has no idea. Plaintiff merely assumes that, because the Airstream trailer was
not delivered by August 5, 2016 (and because Nomad owed state taxes from 2012 and 2013 as of
March 4, 2015), no funds must have been spent towards work on it between April 23, 2016, and
August 5, 2016. (Dkt. No. 1, at ¶ 37 [Pl.’s Compl.].) This is precisely why Plaintiff’s
allegations of misuse of corporate funds are made “upon information and belief.” (Id. at ¶¶ 4143.)7
7

In response to any argument that Plaintiffs’ “upon information and belief”
pleading suffices under the Second Circuit’s reasoning in Arista Records LLC v. Doe 3, 604 F.3d
110, 120 (2d Cir. 2010), the Court rejects the notion that the facts in question are peculiarly
within the possession and control of Defendants Langevin and Clement. Setting aside the fact
that (due to their removal from the United States) Langevin and Clement do not to appear any
longer have access to many of the facts in question, those facts would also appear to be available
from the following (rather common) sources: (1) a former employee of Nomad (i.e., Luis
Edward Marin), (2) any other former employees of Nomad (who are referenced in paragraph 4 of
Mr. Marin’s declaration), (3) the subcontractors and/or suppliers used by Nomad for work on
trailers (and possibly Nomad’s payroll company), and/or (4) a physical inspection of the
Airstream trailer in question. The Court also rejects the notion that Plaintiff’s belief is based on
15

With regard to the third assumption, although Plaintiff’s opposition memorandum of law
argues that the Complaint alleges that Langevin and Clement used funds paid by Plaintiff to pay
off personal debts (including New York State sales tax owed by each individual), the Complaint
does not actually allege that Langevin and Clement used Plaintiff’s payments to pay “personal
debts.” To the contrary, the only “debts” alleged by Plaintiff in the Complaint are those that
were owed to creditors by Defendant Nomad. (Dkt. No. 1, at ¶¶ 40, 42 [Pl.’s Compl.].)
Similarly, the Complaint does not actually allege that Langevin and Clement personally owed
state sales taxes. Rather, the Complaint expressly alleges that Langevin and Clement had a
“history” of using Nomad’s assets for personal uses rather than “paying debts or monies owed to
creditors by Defendant Nomad,” which included failure to pay New York State sales tax
(plausibly suggesting that the sales taxes were owed by Nomad). (Id. at ¶ 42.) Indeed, if the
Court were to consider the New York State Department of Taxation and Finance press release
provided by Plaintiff with its opposition memorandum of law (as incorporated by reference in, or
integral to, this allegation), the Court would find that the document tends, if anything, to
plausibly suggest that the sales taxes in question were owed by Nomad due to deficiencies in its
quarterly sales tax returns from 2012 to 2013. (Dkt. No. 37, Attach. 3.)
More importantly, any allegation that Langevin and Clement used the payments from
Plaintiff either for their own personal use or to pay Nomad’s tax debts rather than pay for work
on the Airstream trailer is completely speculative. Based on the above-described press release,

factual information that makes the inference of culpability plausible. The only factual
information possessed by Plaintiff is that (1) it paid the funds, (2) the Airstream trailer was not
delivered by August 5, 2016, and (3) as of March 4, 2015, Nomad owed state taxes from 2012
and 2013. The assumptions that need to be made to connect these dots are so numerous and
tenuous as to render the inference of culpability merely possible, not sufficiently reliable (and
thus not plausible).
16

Nomad’s tax debts were declared due before March 4, 2015, more than a year before Nomad
entered into a written agreement with Plaintiff on April 22, 2016, by which time they could have
been paid in part, or in their entirety, or not at all. Again, Plaintiff merely speculates that the tax
debts were not paid by April 22, 2016, and that Langevin and Clement used Plaintiff’s funds to
pay those debts after April 22, 2016.
For all of these reasons, the Court finds that Plaintiff’s Complaint does not allege facts
plausibly suggesting that Langevin and Clement used their presumed domination of Nomad to
commit wrongdoing.
However, because it is conceivable to the Court that Plaintiff already possesses (or can
obtain through discovery) the facts necessary to allege grounds to pierce the corporate veil, the
Court will dismiss Plaintiff’s Third Claim only without prejudice. Plaintiff is advised, however,
that, should it move for leave to amend its Complaint to re-assert its entitlement to this doctrine,
the Court agrees with Defendants that the doctrine does not properly constitute an independent
cause of action under New York law. See, e.g., Morris v. N.Y. State Dep't of Taxation & Fin., 82
N.Y.2d 135, 141 (N.Y. 1993) (“The concept [of piercing the corporate veil] is equitable in nature
and assumes that the corporation itself is liable for the obligation sought to be imposed. Thus, an
attempt of a third party to pierce the corporate veil does not constitute a cause of action
independent of that against the corporation; rather it is an assertion of facts and circumstances
which will persuade the court to impose the corporate obligation on its owners.”); DiMauro v.
United, LLC, 122 A.D.3d 568, 569 (N.Y. App. Div., 2d Dept. 2014) (“New York does not
recognize a separate cause of action to pierce the corporate veil.”); ARB Upstate Comm’ns LLC
v. R.J. Reuter, L.L.C., 93 A.D.3d 929, 931 (N.Y. App. Div., 3d Dept. 2012) (“Piercing the
corporate veil is not a separate cause of action . . . .”); 9 East 38th St. Assocs., L.P. v. George
17

Feher Assocs., Inc., 640 N.Y.S.2d 520, 521 (N.Y. App. Div., 1st Dept. 1996) (“[Under New
York law], “a separate cause of action to pierce the corporate veil does not exist independent
from the claims asserted against the corporation.”).
ACCORDINGLY, it is
ORDERED that Defendants’ motion to dismiss (Dkt. No. 32) is GRANTED, and
Plaintiff’s Third Claim is DISMISSED without prejudice.
Dated: June 25, 2018
Syracuse, New York
________________________________
Hon. Glenn T. Suddaby
Chief U.S. District Judge

18