SHLD, LLC et al v. Hall et al

Filing 110

REPORT AND RECOMMENDATION re: 63 Amended Complaint, filed by Harvey Newman, SHLD, LLC, David Monteau, Laurence Wilneff, Stuart Salles. For the foregoing reasons, I recommend that the plaintiffs be awarded $265,000 on their breach of contract claim only, as well as interest in the amount of $65.34 per day from March 11, 2015, until judgment is entered. I recommend that neither Mr. Hall nor Mr. Shah be held personally liable for these amounts. I further recommend an award of costs in the amount of $710.00. Pursuant to 28 U.S.C. § 636(b) (1) and Rules 72, 6(a), and 6 (d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recomme ndation. Such objection shall be filed with the Clerk of the Court, with extra copies delivered to the Chambers of the Honorable Louis L. Stanton, Room 2250, and to the Chambers of the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will preclude appellate review. (Objections to R&R due by 4/13/2017.) (Signed by Magistrate Judge James C. Francis on 3/30/2017) Copies Transmitted this Date By Chambers. (anc)

me for a hearing on damages.

The Defaulting Defendants failed to

appear at the inquest held on February 14, 2017.
findings

are

plaintiffs.

therefore

based

on

evidence

The following

provided

by

the

I recommend that the plaintiffs be awarded $265,000

in damages plus prejudgment interest measured at 9% from March 11,
2015, until the date judgment is entered, and $710.00 in costs.
Background
The individual plaintiffs in this action are the members of
SHLD; each is a citizen of the United States and resides in either
Illinois or New York.

(SAC, ¶¶ 10-13, 194; Plaintiffs’ Proposed

Findings of Fact and Conclusions of Law (“Proposed Findings”), ¶
2).

The Defaulting Defendants are (or were, in the case of Tier

Hall Consulting, Ltd. (“Tier Hall Consulting”)) citizens of the
United Kingdom; Nicholas Hall and Amar Shah were the principals
and owners of Tier Hall Consulting.
Findings, ¶¶ 3, 5).
Ltd.

(“Tier

(SAC, ¶¶ 15, 20-21; Proposed

Most of the other defendants -- Tier Hall,

Hall”),

Independent

Broking

Solutions,

Ltd.,

Independent Services Group, Ltd., Minories Law Ltd., and Nigel
Frudd -- are citizens of the United Kingdom.
19, 22; Proposed Findings, ¶¶ 4, 6-8).

(SAC, ¶¶ 14, 16-17,

The Ivy Group, LLC, has

its principal place of business in Connecticut, and its members
are domiciled in Connecticut or Massachusetts; its principal,
Jeremy Bloomer, is a citizen of the United States and is domiciled
2

in Massachusetts. 1

(SAC, ¶¶ 18, 23; Proposed Findings, ¶ 9).

The individual plaintiffs “conceived of The Amalgamated Life
Insurance and Annuity Network Trust of New York (“ALIANT”) as a
project to deliver investor-funded life insurance to employee
associations and union groups in New York State.”
Findings, ¶ 10; SAC, ¶ 180).

(Proposed

Between January and September 2013,

the individual defendants met with Mr. Hall and Mr. Shah in New
York and elsewhere to discuss the project.
Proposed Findings, ¶¶ 11-18).

(SAC, ¶¶ 183-184, 192;

More specifically, a meeting in New

York between the individual plaintiffs and Mr. Hall on July 22,
2013, culminated in a draft proposal by which Tier Hall, Ltd.,
would manage the creation and structuring of an investment vehicle.
(SAC, ¶¶ 187-188; Draft Proposal, attached as Exh. 1 to SAC;
Proposed Findings, ¶¶ 13-14).

For an initial investment from the

plaintiffs of $300,000, Tier Hall would engage advisors with an
eye to recruiting investors and developing a business plan within
two to three months.

(SAC, ¶¶ 190-191; Draft Proposal; Proposed

Findings, ¶¶ 14-16).

After a September 30, 2013 meeting in New

York among the individual plaintiffs and Mr. Shah, a non-disclosure
agreement was entered into, with Mr. Shah signing on behalf of
Tier Hall.

1

(SAC, ¶¶ 192-193; Proposed Findings, ¶¶ 18-19).

Each of the non-defaulting defendants has been dismissed
from the action or has settled. (Proposed Findings, ¶¶ 64-68).
3

The individual plaintiffs formed SHLD in October 2013 as “a
vehicle to develop and fund the administrative structure and
reserves required for ALIANT through the bond” that Mr. Hall, Mr.
Shah, and Tier Hall Consulting were to create.
Proposed

Findings,

¶

20).

Immediately

(SAC, ¶ 194,

afterward,

Mr.

Shah

informed the plaintiffs that an additional $30,000 would be needed
to form an Irish bond company to hold the portfolio of “life
settlements” that would back the bond. 2
Findings, ¶¶ 20-21).
a

“Heads

Consulting,
Consulting.

of
3

This additional amount was incorporated into

Terms”
which

(SAC, ¶¶ 194-195; Proposed

agreement

Mr.

Hall

between

signed

on

SHLD

and

Tier

Hall

of

Tier

Hall

behalf

(SAC, ¶¶ 198-199; Heads of Terms Agreement; Proposed

Findings, ¶¶ 22-23). That agreement required Tier Hall Consulting
to form the aforementioned Irish bond company within three to six
months of the payment of the plaintiffs’ $330,000.

(SAC, ¶ 207;

Head of Terms Agreement at 1; Proposed Findings, ¶ 29).

It further

2

A “life settlement” describes the situation where “a life
insurance policy owner sells his or her policy to an investor in
exchange for a lump sum payment. The amount of the payment . . .
to the policy owner is generally less than the death benefit on
the policy, but more than its cash surrender value.”
Investor
Bulletin on Life Settlements, https://www.sec.gov/investor/alerts
/lifesettlements-bulletin.htm (last visited March 28, 2017).
3

The agreement misidentifies Tier Hall Consulting as Tier
Hall Consultancy, LLC.
(SAC, ¶ 200; Heads of Terms Tier Hall
Consultancy Limited and SHLD LLC dated Oct. 18, 2013 (“Heads of
Terms Agreement”), attached as Exh. 2 to SAC).
4

required, among other things, that within three to six months of
the execution of a binding agreement, Tier Hall Consulting would
(1) hire the company’s board and legal, actuarial, and accountancy
teams; (2) work with the bond distribution platform, (3) execute
a service agreement with the charitable trust that would own the
bond company, (4) “project manage the whole transaction including
the professional advisors,” and (5) recruit potential investors
and develop a business plan.

(SAC, ¶¶ 207-211; Heads of Terms

Agreement at 1; Proposed Findings, ¶¶ 29-33).
The Heads of Terms Agreement was later incorporated into the
parties’ final contract, which Mr. Hall signed as “partner” and
Mr. Shah signed as “director” of Tier Hall Consulting.

(SAC, ¶

202; Letter of David G. Monteau dated Oct. 31, 2013 (“Monteau
Letter”), attached as part of Exh. 3 to SAC; Proposed Findings, ¶
24).

The final contract was to be governed by the laws of the

United States, and required Tier Hall Consultants to perform the
services outlined in the Heads of Terms Agreement “in accordance
with

[its]

performance

milestones,”

supply

periodic

progress

reports, and provide a list of subcontractors, among other things
(SAC, ¶¶ 203-204, 212; Terms and Conditions of Engagement (“Final
Contract”), attached as part of Exh. 3 to SAC, ¶¶ 3.1, 3.2, 3.6,
12.5.1 & Schedule 1; Proposed Findings, ¶¶ 25-26, 34).

If Tier

Hall Consulting failed to complete the services it was contracted
5

to perform, failed to complete them to SHLD’s satisfaction, or
failed to complete them on time, SHLD could demand a refund,
terminate

the

agreement,

or

both.

(SAC,

¶¶

205-206;

Final

Contract, ¶¶ 9, 10.1-10.3; Proposed Findings, ¶¶ 27-28).
By November 15, 2013, the plaintiffs had made the entire
$330,000 payment.

(SAC, ¶ 213; Proposed Findings, ¶ 35).

Three

months later, Mr. Shah provided a draft “teaser” for prospective
investors and informed the plaintiffs that he was “a month behind.”
(SAC, ¶ 218; Proposed Findings, ¶ 37).

The plaintiffs expressed

their dissatisfaction with the teaser, as well as with the absence
of monthly reports and lack of overall progress.
Proposed

Findings,

¶

38).

Over

the

next

(SAC, ¶ 219;

months,

Tier

Hall

Consulting continued to miss deadlines and failed to show progress
on funding. (SAC, ¶ 221-39; Proposed Findings, ¶ 40).

When no

investors had been found by December 2014, the plaintiffs requested
a list of itemized expenditures from Mr. Hall.
Proposed Findings, ¶¶ 40-41).

(SAC, ¶ 239, 242;

Mr. Hall detailed the following

expenditures:
1.

$40,000 to legal advisors Minories Law Limited;

2.

$85,000 to The Ivy Group;

3.

$65,000 to Independent Services Group;

4.

$120,000 to Tier Hall Consulting; and

5.

$20,000 in general expenses.
6

(SAC, ¶ 243; Proposed Findings, ¶ 42).

These expenses were either

unauthorized and therefore in violation of the parties’ agreement,
or unearned in light of the lack of “reasonably competent or timely
work-product.”

(SAC, ¶ 248, Proposed Findings, ¶¶ 44-48).

In

addition, as the bond company was never formed, the “defendants []
put to other uses the $30,000 that had been added to the start-up
fee allegedly to address additional expenses relating to the
formation of the bond company.”
247).

(Proposed Findings, ¶ 43; SAC, ¶

The plaintiffs terminated the contract on March 11, 2015,

and demanded a refund of their $330,000.
Findings, ¶ 49).
money.

(SAC, ¶ 249; Proposed

The Defaulting Defendants refused to return the

(SAC, ¶ 251; Proposed Findings, ¶ 49).

Discussion
A.

Legal Standards

Where a defendant has defaulted, all of the facts alleged in
the complaint, except those relating to the amount of damages,
must be accepted as true.

See Transatlantic Marine Claims Agency,

Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997);
Keystone Global LLC v. Auto Essentials, Inc., 12 Civ. 9077, 2015
WL 224359, at *3 (S.D.N.Y. Jan. 16, 2015).

The court may also

rely on factual allegations pertaining to liability contained in
affidavits and declarations submitted by the plaintiffs.

See,

e.g., Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir.
7

1993).

Nonetheless, a court “must still satisfy itself that the

plaintiff has established a sound legal basis upon which liability
may be imposed.”
(E.D.N.Y.

Jemine v. Dennis, 901 F. Supp. 2d 365, 373

2012).

Once

liability

has

been

established,

the

plaintiff must provide evidence establishing the amount of damages
with reasonable certainty.

Transatlantic Marine Claims Agency,

109 F.3d at 111.
B.

Liability 4
1.

Breach of Contract

“[A] federal court exercising diversity jurisdiction must
apply the choice-of-law rules of the state in which that court
sits to determine the rules of decision that would apply if the
suit were brought in state court.”

Liberty Synergistics Inc. v.

Microflo Ltd., 718 F.3d 138, 151 (2d Cir. 2013).

In a contract

case, New York choice of law principles require a court to apply
the “law of the jurisdiction with the most significant interest
in, or relationship to, the dispute,” taking into account “a
spectrum

4

of

significant

contacts,

including

the

place

of

Jurisdiction is predicated on diversity. 28 U.S.C. § 1332.
The plaintiffs plead sufficient facts to establish personal
jurisdiction over the Defaulting Defendants. (SAC, ¶¶ 25, 30-31,
35, 40-41, 45, 50-51, 55, 60-61). Moreover, a prior opinion by
the Honorable Louis S. Stanton, U.S.D.J., suggests that the
plaintiffs have adequately alleged personal jurisdiction over the
Defaulting Defendants. See SHLD, LLC v. Hall, No. 15 Civ. 6225,
2016 WL 659109, at *5 (S.D.N.Y. Feb. 17, 2016).
8

contracting,

the

places

of

negotiation

and

performance,

the

location of the subject matter, and the domicile . . . of the
contracting parties.”

Bank of New York v. Yugoimport, 745 F.3d

599, 609 (2d Cir. 2014) (alteration in original) (quoting Brink’s
Ltd. v. South African Airways, 93 F.3d 1022, 1031 (2d Cir. 1996)).
“New York choice-of-law rules also ‘require[] the court to honor
the parties’ choice [of law provision] insofar as matters of
substance are concerned, so long as fundamental policies of New
York

law

are

not

thereby

violated.’”

Id.

(alterations

in

original) (quoting Woodling v. Garrett Corp., 813 F.2d 543, 551
(2d

Cir.

1987)).

As

application of U.S. law.

noted,

the

Final

Contract

requires

The only two states with a relationship

to the agreements at issue here are Illinois, where Mr. Monteau
and Mr. Wilneff live (SAC, ¶¶ 10, 13), and New York, where Mr.
Newman and Mr. Salles live and where the agreements were largely
negotiated (SAC, ¶¶ 11-12, 187, 192-193; Proposed Findings, ¶¶ 1314, 18-19).
The elements of a breach of contract claim under New York law
are (1) the existence of an agreement; (2) adequate performance of
the contract by the plaintiff; (3) breach of contract by the
defendant; and (4) damages.

See Eternity Global Master Fund Ltd.

v. Morgan Guaranty Trust Co., 375 F.3d 168, 177 (2d Cir. 2004).
The elements are the same under Illinois law.
9

See Gonzalzles v.

American Express Credit Corp., 315 Ill. App. 3d 199, 206, 733
N.E.2d 345, 351 (Ill. App. Ct. 2000).

There is therefore no actual

conflict, and I will apply New York law as the law of the forum
state.

As should be obvious from the factual background discussed

above, each of these elements is met here:

The Final Contract is

an enforceable agreement; the plaintiffs performed by remitting
their $330,000; the defendants breached by failing to perform and
failing to return the $330,000; and this caused the plaintiffs
damages in the amount of the unreturned funds.
2.

Conversion

To determine what law applies to tort causes of action, courts
must engage in “[t]wo separate inquiries . . . : (1) what are the
significant contacts and in which jurisdiction are they located;
and[] (2) whether the purpose of the law is to regulate conduct or
allocate loss.”

Padula v. Lilarn Properties Corp., 84 N.Y.2d 519,

521, 620 N.Y.S.2d 310, 311 (1994).
significant
Kingdom.

contacts

are

New

Here, the jurisdictions with

York,

Illinois,

and

the

United

As to the second inquiry, where “conduct-regulating laws

are at issue, the law of the jurisdiction where the tort occurred
will generally apply because that jurisdiction has the greatest
interest in regulating behavior within its borders.”

Id. at 522,

620 N.Y.S. at 311 (quoting Cooney v. Osgood Machinery, Inc., 81
N.Y.2d 66, 72, 595 N.Y.S.2d 919, 922 (1993)).
10

Here, the tortious

conduct alleged -- conversion of the $330,000 that the plaintiffs
provided to the defendants -- took place in the United Kingdom.
See,

e.g.,

Pentagen

Technologies

International,

Ltd.

v.

CACI

International Inc., No. 93 Civ. 8512, 1996 WL 435157, at *12
(S.D.N.Y.

Aug.

2,

1996)

(“The

locus

of

a

conversion

is

the

[jurisdiction] where the defendant’s acts respecting the allegedly
converted

property

are

committed.”),

adhered

to

on

reconsideration, 1996 WL 434551 (S.D.N.Y. Aug. 2, 1996).
The plaintiffs cite only New York law in support of this
claim.

They have not provided guidance on the law of conversion

in the United Kingdom.

Rule 44.1 of the Federal Rules of Civil

Procedure allows a court to determine the content of foreign law
based on “any relevant material or source . . . whether or not
submitted by a party.”

However, it does not require a court “to

undertake its own analysis to determine” the content of foreign
law.

In re Nigeria Charter Flights Contract Litigation, 520 F.

Supp. 2d 447, 458 (E.D.N.Y.2007); see also Aristocrat Leisure Ltd.
v. Deutsche Bank Trust Co. Americas, No. 04 Civ. 10014, 2010 WL
3306876, at *4 (S.D.N.Y. Aug. 20, 2010) (collecting cases).
decline to do so here and therefore apply New York law.

I

See,

e.g., In re Nigeria Contract Flights, 520 F. Supp. 2d at 458
(collecting cases holding that under New York choice of law rules,
forum law applies where litigant fails to establish content of
11

foreign law).
Under New York law, the plaintiffs’ claim fails.

Conversion

requires the “unauthorized assumption and exercise of the right of
ownership over goods belonging to another to the exclusion of the
owner’s rights.”

Polanco v. NCO Portfilio Management, Inc., 23

F. Supp. 3d 363, 370 (S.D.N.Y. 2014) (quoting Thyroff v. Nationwide
Mutual Insurance Co., 460 F.3d 400, 403–04 (2d Cir. 2006)).
[T]o state a claim for conversion, [a] plaintiff must
allege that ‘(1) the party charged has acted without
authorization, and (2) exercised dominion or a right of
ownership over property belonging to another[,] (3) the
rightful owner makes a demand for the property, and (4)
the demand for the return is refused.
Id. (second and third alterations in original) (quoting Sabilia v.
Richmond, No. 11 Civ. 739, 2011 WL 7091353, at *19 (S.D.N.Y. Oct.
26,

2011)).

“Where

the

original

possession

is

lawful,

a

conversion does not occur until the defendant refuses to return
the property after demand or until he sooner disposes of the
property.”

Usov v. Lazar, No. 13 Civ. 818, 2013 WL 3199652, at

*7 (S.D.N.Y. June 25, 2013) (quoting Thryoff v. Nationwide Mutual
Insurance Co., 360 F. App’x 179, 180 (2d Cir. 2010)).
“[A]n action will lie for the conversion of money where there
is a specific, identifiable fund and an obligation to return or
otherwise
question.”

treat

in

a

particular

manner

the

specific

fund

in

Manufacturers Hanover Trust Co. v. Chemical Bank, 160
12

A.D.2d 113, 124, 559 N.Y.S.2d 704, 712 (1st Dep’t 1990).

The

plaintiffs have not sufficiently identified the fund involved,
however.

When the alleged converted property is money, the money

must be “described or identified in the same manner as a specific
chattel.”

Interior by Mussa, Ltd. v. Town of Huntington, 174

Misc. 2d 308, 310, 664 N.Y.S.2d 970, 972 (2d Dep’t 1997) (quoting
9310 Third Ave. Associates, Inc. v. Schaffer Food Service Co., 210
A.D.2d

207,

208,

620

N.Y.S.2d

255,

256

(2d

Dep’t

1994)).

Generally, identification of a specific sum and a “specific, named
bank account” into which it was transferred is sufficient to state
a claim for conversion.

Eldesouky v. Aziz, No. 11 Civ. 6986, 2014

WL 7271219, at *14 (S.D.N.Y. Dec. 19, 2014) (quoting Republic of
Haiti v. Duvalier, 211 A.D.2d 379, 384, 626 N.Y.S.2d 472, 475 (1st
Dep’t 1995)); see also DeAngelis v. Corzine, 17 F. Supp. 3d 270,
283 (S.D.N.Y. 2014) (holding funds properly identified as chattel
where

they

were

“segregated

and

identifiable”);

Manufacturers

Hanover Trust, 160 A.D.2d at 114, 125, 559 N.Y.S.2d at 706, 712
(finding conversion claim sufficient where plaintiff identified
amount and account number).

Here, the Second Amended Complaint

and Proposed Findings of Fact allege merely that “[o]n November 6,
2013, $33,000 was wired to defendant Tier Hall Consulting.

The

remaining $297,000 was wired to defendant Tier Hall Consulting on
November 14, 2013.”

(SAC, ¶ 213; Proposed Findings, ¶ 35).
13

No

account is identified; indeed, the plaintiffs do not even specify
that the entire amount was transferred to a single account.

Even

taking the plaintiffs’ allegations as true, then, they have not
established a conversion claim. 5

See, e.g., Sang Lan v. Time

Warner, Inc., No. 11 Civ. 2870, 2014 WL 764250, at *6 (S.D.N.Y.
Feb. 25, 2014) (dismissing conversion claim where complaint failed
to name account into which allegedly converted funds deposited).
C.

Damages
1.

Amount

The plaintiffs paid $330,000 under the parties’ agreements.
When they terminated the Final Contract, they were entitled to a
refund of the proportion of that amount “commensurate with that
part (if any) of the [s]ervices undertaken to [SHLD’s] satisfaction
(acting reasonably).”
have

alleged

unsatisfactory.

that

(Final Contract, ¶ 10.3).

Tier

Hall

(Proposed

Consulting’s

Findings,

¶¶

The plaintiffs

work

44-48;

product
SAC,

¶

was
248).

Therefore, they are entitled to a refund of the entire amount.
See, e.g., House of Diamonds v. Borgioni, LLC, 737 F. Supp. 2d

5

I express no opinion as to whether the other requirements
of the plaintiffs’ conversion claim, such as the breach of a legal
duty independent of the contract, see, e.g., Carvel Corp. v.
Noonan, 350 F.3d 6, 16-17 (2d Cir. 2003), are met. Cf. SHLD, 2016
WL 659109, at *9 (indicating that conversion claim was duplicative
of breach of contract claim, but that plaintiffs could plead it in
the alternative to breach of contract claim because liability under
contract was disputed).
14

162, 172 (S.D.N.Y. 2010) (noting that contract damages should put
plaintiff in same economic position as if defendant had performed).
However, they have already collected $65,000 from a settlement of
claims against Independent Services Group, Ltd., and Tier Hall.
(Proposed Findings, ¶ 67).

The amount of damages is therefore

$265,000.
2.

Prejudgment Interest

“In

a

diversity

prejudgment interest.”

case,

state

law

governs

the

award

of

Schipani v. McLeod, 541 F.3d 158, 165 (2d

Cir. 2008).

Under New York law, prejudgment interest for breach

of

is

contract

the

“earliest

ascertainable date that the cause of action existed.”

N.Y. CPLR

§§ 5001(b), 5004.

measured

at

9%

per

year

from

The plaintiffs seek prejudgment interest from

March 11, 2015, the date the Final Contract was terminated and
they demanded return of the money.

(Proposed Finding, ¶ 85).

As

interest accrues at a rate of $65.34 per day (i.e. 9% of $265,000
divided by 365), as of the date of this Report and Recommendation,
the plaintiffs are entitled to interest in the amount of [$49,005
as of March 30, 2017].
3.

Joint and Several Liability

The plaintiffs contend that each of the Defaulting Defendants
is jointly and severally liable for the damages award.
Findings, ¶ 72).

(Proposed

A preliminary question is whether Mr. Hall and
15

Mr. Shah can be held personally liable for the breach of the Final
Contract.

The

plaintiffs

assert

that

personal

liability

is

appropriate here because Mr. Hall and Mr. Shah (1) both signed the
contract, (2) negotiated the contract, (3) were to perform the
services for which the plaintiffs contracted, (4) were the sole
points of contact during the period the contract was in force, (5)
“interchangeably used different companies which they owned and
controlled to interact with [the] plaintiffs,” and (6) controlled
both Tier Hall Consulting, the contracting party, and Tier Hall,
the entity used during negotiations.

(Proposed Findings, ¶ 73).

Pursuant to New York law, “an agent who signs an agreement on
behalf of a disclosed principal will not be individually bound to
the terms of the agreement ‘unless there is clear and explicit
evidence of the agent’s intention to substitute or superadd his
personal liability for, or to, that of his principal.’”

Cement

and Concrete Workers District Council Welfare Fund, Pension Fund,
Legal Services Fund and Annuity Fund v. Lollo, 35 F.3d 29, 35 (2d
Cir. 1994) (quoting Lerner v. Amalgamated Clothing and Textile
Wokers Union, 938 F.2d 2, 5 (2d Cir. 1991)).

In analyzing this

issue, courts consider
various iterations of the following factors: (1) the
length [in pages] of the contract; (2) the placement of
the liability clause [personally binding the signatory
to the terms of the contract]; (3) the appearance of the
signatory’s name in the agreement itself; (4) the nature
16

of the negotiation that surrounded the contract; and (5)
the signatory’s role in the company.
Raymond Weil, S.A. v. Theron, 585 F. Supp. 2d 473, 482 (S.D.N.Y.
2008).
As the second factor indicates, and as the cases confirm, a
contract generally must include a provision assigning personal
liability to the individual signatory for a court to impute such
liability to that individual.

See, e.g., Lollo, 35 F.3d at 35

(citing “provision unequivocally fix[ing] personal liability on
the signatory”); USHA Holdings, LLC v. Franchise India Holdings,
Ltd., No. 12 CV 3492, 2015 U.S. Dist. LEXIS 133644, at *33
(E.D.N.Y. Sept. 11, 2015) (“[T]he first page of the Agreement
clearly identifies [the individual defendant and signatory] as a
party to the Agreement.”); Raymond Weil, 585 F. Supp. 2d at 483
(citing provision stating that agreement “shall bind and inure to
the benefit of [the individual defendant and signatory]”); Porter
v. Property Damage Control Group, Inc., No. 03 CV 5972, 2007 WL
2907403, at *3 (E.D.N.Y. Sept. 28, 2007) (“[T]he contract’s first
sentence identifies [the individual defendant and signatory] as
among the parties it binds . . . .”); Paribas Properties, Inc. v.
Benson, 146 A.D.2d 522, 524-26, 536 N.Y.S.2d 1007, 1008-10 (1st
Dep’t 1989) (identifying provision making contractual obligations
joint

and

several

among

individual
17

signatories

and

corporate

entity).

Indeed, the first factor -- the page-length of the

contract -- matters only insofar as the length makes it more or
less probable that the individual signatory was aware of the
provision imposing personal liability.

See, e.g., Lollo, 35 F.3d

at 35 (finding personal liability for one individual signatory
where

provision

signature

line,

fixing
and

liability

rejecting

appeared

personal

immediately

liability

for

above
other

individuals where provision allegedly fixing liability on them
appeared on “page 34 of a 55-page contract”); USHA Holdings, 2015
U.S. Dist. LEXIS 133644, at *32-33 (noting provision at issue
appeared on first page of agreement of “only fifteen pages”);
Raymond Weil, 585 F. Supp. 2d at 483 (provision at issue appeared
immediately above signature block); Porter, 2007 WL 2907403, at *3
(“[T]he contract is only eleven pages long, and few pages separate
the page identifying [the individual signatory] as a party from
the page on which his signature appears . . . .”); Paribas
Properties, 146 A.D.2d at 525-26, 536 N.Y.S.2d at 1009 (“The letter
agreement . . . is only three pages long and the critical paragraph
appears distinctly above the signature.”).

Likewise, the nature

of the negotiation is relevant because it sheds light on whether
the “liability clause” was bargained for.

See, e.g., Lollo, 35

F.3d at 35 (noting that “the provision was expressly bargained for
and reached after much negotiation”); Porter, 2007 WL 2907403, at
18

*3 (“[The individual signatory] participated in negotiating the
contract, and presumably had an opportunity to insist that he not
be identified as a party.”); Paribas Properties, 146 A.D.2d at
525,

536

N.Y.S.2d

at

1009

(noting

that

individual

signatory

negotiated contract and “had [he] . . . not wished to undertake [a
personal] obligation, [his] name[] . . . could have been deleted”).
Here, the plaintiffs do not claim that the Final Contract
includes a provision making Mr. Hall or Mr. Shah personally liable.
Indeed, the agreement throughout denominates the “Consultant,”
identified as “Tier Hall Consultancy, Limited,” as the party to be
bound.
6.1-6.3,

(Final Contract, ¶¶ 2, 3.1-3.6, 3.8-3.9, 4.1-4.2, 5.2,
7.1-7.3,

8.1-8.2,

10.1,

12.1-12.2

&

Schedule

1).

Furthermore, SHLD expressly disavows that it has any obligations
to the “Consultant’s Staff,” identified as Mr. Hall and Mr. Shah
(and referred to only three times in the agreement).

(Monteau

Letter at 1; Final Contract, ¶¶ 3.7, 12.1 & Schedule 1).
The plaintiffs make much of the fact that the Final Contract
is the only agreement that both Mr. Hall and Mr. Shah signed, and
that Mr. Hall’s signature identifies him only as “partner” with no
corporate title, while Mr. Shah’s signature identifies him as
“director” but includes no reference to Tier Hall Consulting in
the signature block itself.

(Proposed Findings, ¶ 73).

This,

they argue, establishes that Mr. Hall and Mr. Shah intended to be
19

“personally committed to perform under the contract,” because
otherwise “there would be no purpose in both of them signing the
contract and in [Mr.] Hall self-identifying as a ‘partner’ rather
than with a corporate title.”

(Proposed Findings, ¶ 73).

While

this could be interpreted as some evidence that each intended to
be personally bound, it does not constitute the “clear and explicit
evidence,” Lollo, 35 F.3d at 35, that is required.

See, e.g.,

Lerner, 938 F.2d at 5 (noting that “New York courts have found
individual liability in rare cases” and citing the “overwhelming
evidence” presented in Paribas Properties).
D.

Costs

The plaintiffs claim costs in the amount of $710 -- $400 for
the filing fee and $310 for service.
and reasonable.

These amounts are recoverable

See, e.g., Conceria Vignola SRL v. AXA Holdings,

LLC, No. 09 CIV. 6684, 2010 WL 3377476, at *5 (S.D.N.Y. Aug. 3,
2010),

report

and

recommendation

adopted,

2010

WL

3385260

(S.D.N.Y. Aug. 23, 2010).
Conclusion
For the foregoing reasons, I recommend that the plaintiffs be
awarded $265,000 on their breach of contract claim only, as well
as interest in the amount of $65.34 per day from March 11, 2015,
until judgment is entered.

I recommend that neither Mr. Hall nor

Mr. Shah be held personally liable for these amounts.
20

I further