Ferrari Club of America, Inc. v. Bourdage

Filing 56

ORDER denying 47 Plaintiff's Motion for Summary Judgment without prejudice. However, Plaintiffs motion for summary judgment is denied with prejudice as to the cause of action for breach of fiduciary duty to the extent that the claim is based on transactions occurring prior to October 2, 2009, because those transactions are outside the three-year statute of limitations. The denial is without prejudice as to the remaining causes of action. Signed by Hon. Michael A. Telesca on 7/15/15. (JMC)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

FERRARI CLUB OF AMERICA, INC.,
Plaintiff,
-vs-

No. 6:12-CV-6530(MAT)
DECISION AND ORDER

LEON BOURDAGE,
Defendant.

INTRODUCTION
The Ferrari Club of America, Inc. (“Plaintiff” or “the FCA”)
commenced this action on October 2, 2012, seeking damages against
Leon Bourdage (“Defendant” or “Bourdage”) in excess of $450,000 for
breach of fiduciary duty, unjust enrichment, and conversion, based
on its allegations that from 2007 to 2011. The FCA alleges that
Bourdage, as a member of the FCA’s Empire State Region (“ESR”),
misappropriated money from two bank accounts owned by the FCA and
managed by Bourdage. In essence, the FCA accuses Bourdage of using
FCA-funds to pay for personal expenses unrelated to the FCA or the
various events held by the FCA.
FACTUAL BACKGROUND
The FCA Bank Accounts
Bourdage was a member of the FCA from approximately 1988 until
approximately 2010. In 2007, the ESR, comprised of FCA members
living in New York State, hosted the FCA’s Annual Meet. Bourdage
was the Chairperson of the 2007 Annual Meet. Pursuant to the FCA’s
customs and practices, a separate checking account is opened for

each year’s Annual Meet and is kept separate from the host Region’s
general checking account. In April of 2007, Bourdage opened a
checking account at Elmira Savings Bank for the 2007 Annual Meet
(the “Annual Meet Account”).
From August 29, 2007, through September 2, 2007, the Annual
Meet was held in Watkins Glen and Corning, New York. Pursuant to
the FCA’s customs and practices, an Annual Meet bank account is
required to be closed within a reasonable amount of time after the
event is concluded. The FCA asserts that Bourdage did not close the
Annual Meet Account following the conclusion of the 2007 Annual
Meet. Bourdage counters that the FCA’s Executive Director Patricia
Current, agreed to allow him to keep the Annual Meet Account open
to continue to develop “The Art of Ferrari” event that he allegedly
created

in

2001.

Starting

in

approximately

October

of

2008,

Bourdage used the 2007 Annual Meet Account as a personal checking
account. See Deposition of Leon Bourdage (“Bourdage Dep.”) at
258:18-24. The parties dispute whether the 2007 Annual Meet’s
finances ever were reconciled. Bourdages asserts that they were,
and that all of the Event’s expenses had been paid and Event income
stopped at the time he began using the 2007 Annual Meet Account as
a personal account. The FCA contends that 2007 Annual Meet Account
never was reconciled.
In early 2009, Bourdage was appointed to be the Regional
Director of the ESR. Typically, each FCA Region has a checking

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account that contains the Region’s entire treasury, and any income
and expenses for the Region are deposited into, and paid out of,
that account. In early 2009, Bourdage opened a checking account at
Elmira Savings Bank (the “ESR Account”) to serve as the ESR’s
general account during his tenure as Regional Director. At that
time,

the

ESR’s

previous

Regional

Director,

Robert

Coates,

transferred $70,000 to him, which Bourdage deposited into the ESR
Account. The FCA asserts that while Bourdage was Regional Director,
he was the only individual who ever deposited or withdrew funds
from the ESR Account. Bourdage contends that the ESR Treasurer at
that time, Pat Scopolleti, also deposited monies into the ESR
Account.
In early 2011, at the conclusion of his two-year term as
Regional Director, Bourdage was replaced by Roland Veit. As part of
the transition, Bourdage provided approximately $3,000 in cash to
Veit and Ben Roter, the new treasurer.
The Outside Accountant’s Review and Compilations
of the Accounts
In 2012, at the request of the FCA’s General Counsel, John
Hurabiell, Shawn Gregory, CPA, conducted a review and compilation
of the 2007 Annual Meet Account for the years 2007 through 2011.
E.g., Gregory Dep. 116:5-21. Following the completion of his
review, Gregory prepared a written report of his findings. See
Hurabiell Dep., Exhibit (“Ex.”) 15. Gregory’s findings included the
following

irregular

transactions
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during

2007

through

2011:

(I) Bourdage wrote $95,000-worth of checks from the 2007 Annual
Meet Account, payable to himself and to his jewelry business;
(ii) Bourdage withdrew approximately $112,000 from the 2007 Annual
Meet Account by writing checks payable to “Cash” or by making ATM
withdrawals; (iii) Bourdage utilized the 2007 Annual Meet Account
for various miscellaneous expenses, including $30,000-worth of
transactions at convenience stores, gas stations, restaurants,
Wal-Mart,

and Sam’s

Club,

as

well

as loan

payments,

postage

expenses, and travel expenses; (iv) Bourdage utilized the 2007
Annual

meet

Account

for

various

personal

expenses,

including

$59,000-worth of transactions for auto repair, gifts, jewelry,
private school tuition and medical expenses.
Gregory also conducted a review and compilation of the ESR
Account for the years 2007 through 2010. Gregory identified a
number of irregular transactions, including checks that Bourdage
had

written

to

himself

or

to

his

jewelry

business

and

unsubstantiated cash withdrawals. Bourdage did not respond to
Gregory’s request for documentation in regards to the transactions
identified as irregular. Following the completion of his review,
Gregory prepared a written report. See Ex. 14 to Hurabiell Dep.
The Corning Enterprises Sponsorship Money
From 2006 to 2011, Corning Incorporated donated approximately
$80,000 to the FCA through its sponsorship of various events,
including the 2007 Annual Meet. All of those funds were deposited

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into Bourdage’s
account).

business

According

to

account
Thomas

(rather

Tranter,

than

an

President

FCA

or

ESR

of

Corning

Enterprises, all of the funds given by Corning to Bourdage were
intended to sponsor FCA events, and were in no way intended to
benefit Bourdage or his business. See Tranter Dep. at 7:7-24;
8:1-18; 11:6-16; 53:13-24; 54:1-4; 101:9-21.
PROCEDURAL STATUS
The FCA filed its Complaint in this Court on October 2, 2012,
asserting causes of action for breach of fiduciary duty, unjust
enrichment, and conversion, and seeking compensatory damages and
punitive damages. Bourdage answered the Complaint pro se, but
subsequently retained the firm of Lipsitz Scime Green Cambria LLP
to represent him. The parties conducted discovery and attempted
mediation, which was unsuccessful.
On

August

13,

2013,

the

FCA

filed

an

Amended

Complaint

(Dkt #27), reasserting the three causes of action from the original
Complaint, and adding causes of action for fraud, an accounting,
and a constructive trust. Bourdage, through his attorney, filed an
Answer

with

Counterclaim,

asserting

a

statute

of

limitations

defense with regard to almost all the claims, as well as other
equitable defenses. Bourdage also asserted a counterclaim alleging
that the FCA did not reimburse him for all of the personal monies
he expended while managing and organizing FCA events. The FCA filed

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a Reply and Affirmative Defenses to Counterclaim on September 10,
2013.
On December 4, 2013, Bourdage’s attorneys filed a Motion to
Withdraw based upon his continued nonpayment of legal fees owed to
them. The Court (Payson, M.J.) granted the motion, and Bourdage did
not retain another attorney.
On October 10, 2014, the FCA filed a Motion for Summary
Judgment (Dkt ##47-49). Bourdage filed opposition papers (Dkt #55),
and the FCA filed a Reply (Dkt #53). For the reasons discussed
below, Plaintiff’s motion for summary judgment is denied.
SUMMARY JUDGMENT STANDARD
A district court will grant summary judgment if “the movant
shows that there is no genuine dispute as to any material fact and
that the movant is entitled to judgment as a matter of law.” FED.
R. CIV. P. 56(a). A “genuine” factual dispute arises if “the
evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). A fact is “material” if it “might affect the
outcome of the suit under the governing law.” Id.

“Where the

record taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no ‘genuine issue for
trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986). “In ruling on a motion for summary
judgment, the district court must resolve all ambiguities, and

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credit all factual inferences that could rationally be drawn, in
favor of the party opposing summary judgment.” Cifra v. General
Elec. Co., 252 F.3d 205, 216 (2d Cir. 2001) (citing Anderson, 477
U.S. at 249; Matsushita Elec. Indus. Co., Ltd., 475 U.S. at 587).
DISCUSSION
I.

The Breach of Fiduciary Duty Claims
The FCA’s first cause of action alleges that Bourdage, during

his term as Regional Director of the ESR, breached his fiduciary
duty to the FCA. See Amended Complaint (“AC”) ¶¶ 23-26. The Court
first addresses the statute of limitations defense with regard to
transactions occurring prior to October 2, 2009; and then discusses
whether the FCA has demonstrated entitlement to judgment as a
matter of law regarding its breach of fiduciary duty claim based on
transactions occurring after October 2, 2009.
A.

Timeliness of Claim
October 2, 2009

Based

on

Transactions

Prior

to

Bourdage asserts that even if the FCA were able to establish
that he misappropriated money from its bank accounts, it is barred
from recovering damages for many of the challenged transactions as
they are outside the applicable statute of limitations. Bourdage
correctly notes that under New York law, breach of fiduciary duty
claims are not covered by a single statute of limitations; instead,
“the choice of the applicable limitations period depends on the
substantive remedy that the plaintiff seeks.” IDT Corp. v. Morgan
Stanley Dean Witter & Co., 12 N.Y.3d 132, 139 (2009) (citation
-7-

omitted). Where the remedy sought is “purely monetary”, the claim
is construed as alleging an “injury to property” within the meaning
of New York Civil Practice Law & Rules (“C.P.L.R.”) § 214(4), which
has a three-year limitations period. Id. (citation omitted). Where
the relief sought is equitable in nature, a six-year limitations
period

applies.

Id.

(citation

omitted).

Bourdage

argues

that

because the FCA seeks purely monetary damages, the three-year
limitations period applies.
The Court agrees that the FCA solely seeks monetary relief, as
evidenced by its prayer for relief seeking compensatory damages “in
excess of $450,000 plus interest, for each and every one of the
causes of action” and “punitive damages[.]” AC, p. 6. Therefore,
application of the three-year statute of limitations is proper.
See, e.g., Cooper v. Parsky, 140 F.3d 433, 440-41 (2d Cir. 1998)
(“[U]nder New York law, a claim for breach of fiduciary duty would
be governed by a three-year limitations period if the action sought
monetary relief. . . .”). Applying the three-year period to the
FCA’s Complaint (Dkt #1), which was filed on October 2, 2012, any
breach of fiduciary duty claim based on transactions occurring
prior

to

October

2,

2009,

are

time-barred.

See

Glynwill

Investments, N.V. v. Prudential Securities, Inc., No. 92 Civ.
9267(CSH), 1995 WL 362500, at *3 (S.D.N.Y. June 16, 1997) (“Since
plaintiff

did

not

file

the

complaint

in

this

action

until

December 23, 1992, its claims for an accounting, fraud, and breach

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of fiduciary duty arising from trades executed before December 23,
1986 are untimely. The breach of fiduciary duty claim is untimely
in its entirety since all of the trades occurred more than three
years before the complaint was filed.”).
In their reply brief, the FCA does not address Bourdage’s
argument based on the statute of limitations. Nor does the FCA
argue that the limitations period should be equitably tolled.
Because the FCA has not addressed Bourdage’s argument that its
breach of fiduciary claims based on transactions occurring prior to
October 2, 2009, are untimely, the FCA has abandoned any objections
to that argument. E.g., Dudek v. Nassau Cty. Sheriff’s Dept., 991
F. Supp.2d 402, 410 (E.D.N.Y. 2013) (citing Anti-Monopoly, Inc. v.
Hasbro, Inc., 958 F. Supp. 895, 907 n. 11 (S.D.N.Y.), aff’d, 130
F.3d 1101 (2d Cir. 1997) (per curiam); other citation omitted).
B.

Breach of Fiduciary Claim Based on Transactions After
October 2, 2009

The elements of a claim for breach of fiduciary duty under
New York law are as follows: (1) a fiduciary relationship between
the parties; (2) a breach of that fiduciary duty; and (3) damages
resulting from the breach. E.g., Whitney v. Citibank, N.A., 782
F.2d 1106, 1115 (2d Cir. 1986). To determine whether a fiduciary
relationship exists between two parties, “New York law inquires
whether one person has reposed trust or confidence in the integrity
and fidelity of another who thereby gains a resulting superiority
or influence over the first.” Teachers Ins. & Annuity Assoc. of Am.
-9-

v. Wometco Ent., Inc., 833 F. Supp. 344, 349–50 (S.D.N.Y. 1993)
(citations omitted). Stated somewhat differently,

a fiduciary

relationship exists under New York law “when one [person] is under
a duty to act for or to give advice for the benefit of another upon
matters within the scope of relation.” Flickinger v. Harold C.
Brown & Co., 947 F.2d 595, 599 (2d Cir. 1991) (quotation omitted);
see also Teachers Ins. & Annuity Assoc. of Am., 833 F. Supp. at 350
(“[T]he Restatement of Agency defines a fiduciary as one ‘having a
duty, created by his undertaking, to act primarily for the benefit
of another in matters connected with his undertaking.’”) (quoting
Restatement (Second) of Agency § 13 cmt. a (1957)).
The FCA alleges that it entrusted Bourdage with managing the
FCA’s financial accounts (i.e., the ESR Account and the Annual Meet
Account) for the benefit of the FCA. Therefore, the FCA asserts,
there existed a fiduciary relationship between it and Bourdage
based on its trust in Bourdage to manage its accounts and funds. In
opposition, Bourdage argues that the FCA had no written rules or
guidelines for, inter alia, the management of its regions or its
finances. Bourdage asserts in his memorandum of law that when he
was

Regional

Director

of

the

ESR,

he

was

never

given

any

instruction or guidelines on running the region and its activities
and finances. As Bourdage points out, the outside accountant hired
by FCA stated in one of his reports that “there are no formal
procedures in place as to what expenses are considered necessary

-10-

and authorized for reimbursement to Regional Directors and other
club officials.” The accountant recommended that the “national
organization [i.e., the FCA] consider creating a training manual
for the Regional Directors and Treasurers explaining the fiduciary
responsibility

those

positions

have

with

regards

to

regional

finances and the members.”
Under New York law, “[t]he fiduciary duties of care, loyalty
and obedience are the legal standards that govern the conduct of
not-for-profit boards and individual directors in their day-to-day
relationship to the organizations they serve.” Consumers Union of
U.S., Inc. v. State, 5 N.Y.3d 327, 370-71 (2005) (citing N.Y. NONPROFIT CORP. LAW § 717(a) (“Directors and officers shall discharge the
duties of their respective positions in good faith and with that
degree of diligence, care and skill which ordinarily prudent men
would exercise under similar circumstances in like positions.”);
footnote omitted). Although the FCA is apparently a non-profit
corporation,

it

is

unclear

whether

Bourdage,

in

his

various

positions as Chairperson of the Regional Meet and as the Regional
Director of the ESR, was a “director” or “officer” of the FCA, as
that term is defined under New York law. The FCA has not cited to
its by-laws, articles of incorporation, or similar documents that
would provide the Court with clarification on the nature of the
positions held by Bourdage or the roles and responsibilities of FCA
members holding those positions. Therefore, on the present record,

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the Court cannot find that the FCA is entitled to judgment as a
matter of law based on its breach of fiduciary duty claim insofar
as such a claim relates to transactions occurring on or after
October 2, 2009.
B.

Unjust Enrichment

Plantiff’s second cause of action is based on a theory of
unjust enrichment and alleges that “Bourdage unjustly enriched
himself to the FCA’s detriment and holds benefits derived from that
unjust enrichment.” AC ¶ 29. “The basic elements of an unjust
enrichment claim in New York require proof that (1) defendant was
enriched; (2) at plaintiff’s expense, and (3) equity and good
conscience militate against permitting defendant to retain what
plaintiff is seeking to recover.” Briarpatch Ltd., L.P. v. Phoenix
Pictures,

Inc.,

373

omitted).

The FCA

F.3d

alleges

296,

306

(2d

that

Bourdage

Cir.
was

2004)

(citation

enriched

by

his

unauthorized use of the FCA’s bank accounts and funds for his own
personal benefit. For example, the FCA alleges that Bourdage
accepted more than $80,000 in funds from Corning that were intended
for the FCA’s use, and instead spent those monies on his personal
uses. See Tranter Dep., Exs. 92-102. In addition, the FCA states,
Plaintiff wrote numerous checks to himself from the FCA’s accounts,
and used these checks to pay for personal expenses, including
tuition for his children, the purchase of an automobile for his

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personal use, and non-business travel. See Hurabiell Dep. at 269:223; 270:1-3; 282:12-23 & Exs. 12, 14-15.
Bourdage argues that an unjust enrichment cause of action is
not available because an adequate remedy at law exists through the
FCA’s breach of fiduciary duty or conversion claims. Bourdage also
asserts that

the

FCA’s unjust

enrichment

cause

of

action

is

improperly duplicative of its claims based on contract or tort
theories. In response, the FCA argues that its breach of fiduciary
duty claim seeks damages resulting from Bourdage’s mismanagement of
the ESR and 2007 Annual Meet Accounts by failing to substantiate
withdrawals, and failure to provide accurate accountings[,] while
its

unjust

enrichment

claim

arises

mainly

from

Bourdage’s

acceptance and unauthorized use of more than $80,000 from Corning
Enterprises that was intended for the FCA’s use. This is by no
means clear from the Amended Complaint, however, which simply
asserts that Bourdage “intentionally participated in a scheme,
plan, and/or purpose to unjustly enrich himself to the FCA’s
detriment” and does not provide any other specifics.
As the New York Court of Appeals has explained, “unjust
enrichment . . . is available only in unusual situations when,
though the defendant has not breached a contract nor committed a
recognized

tort,

circumstances

create an

equitable

obligation

running from the defendant to the plaintiff.” Corsello v. Verizon
N.Y.,

Inc.,

18

N.Y.3d

777,

790

-13-

(2012).

In

a

typical

unjust

enrichment case, the defendant, “though guilty of no wrongdoing,
has received money to which he . . . is not entitled.” Id. This
case does not present the “unusual” circumstances supporting an
unjust enrichment claim, given the FCA’s allegations that Bourdage
is in fact guilty of multiple instances of wrongdoing. See Miller
v. Wells Fargo Bank, N.A., 994 F. Supp.2d 542, 557 (S.D.N.Y. 2014)
(dismissing

unjust

enrichment

defendants

unjustly

enriched

claim

where

themselves

by

plaintiff

alleged

providing

grossly

overpriced force-placed insurance policies and by “backdating”
policies; “[t]hese allegations undermine[d] any claim by plaintiff
that the [defendants] are “‘guilty of no wrongdoing’”) (quoting
Corsello, 18 N.Y.3d at 790). Moreover, the FCA’s unjust enrichment
claim is based on the same allegations supporting its claims for
breach of fiduciary duty and conversion, namely, that
repeatedly

misappropriated

monies

belonging

to

the

Bourdage
FCA.

See

Corsello, 18 N.Y.3d at 790 (“An unjust enrichment claim is not
available where it simply duplicates, or replaces, a conventional
contract or tort claim.”) (citations omitted). For these reasons,
summary judgment in Plaintiff’s favor is unwarranted on the unjust
enrichment claim.
C.

Conversion

The FCA’s third cause of action, for conversion, alleges that
Bourdage “intentionally and willfully misappropriated funds from
the General Account and the Annual Meet Account which rightfully

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belonged to the FCA and which he converted to his own use and to
his own account.” AC ¶ 31. Under New York law, to maintain a tort
action for conversion, “a plaintiff must show legal ownership of,
or a superior possessory right in, the disputed property, and ‘that
the

defendant

exercised

an

unauthorized

dominion

over

that

property, . . . to the exclusion of the plaintiff’s rights.’”
Middle East Banking v. State St. Bank Int’l, 821 F.2d 897, 906
(2d Cir. 1987) (quotation and citations omitted; ellipsis in
original). When the defendant’s original possession of the property
is lawful, “‘conversion does not occur until the defendant refuses
to return property after demand or until he sooner disposes of the
property.’” Schwartz v. Capital Liquidators, Inc., 984 F.2d 53, 54
(2d Cir. 1993) (quotation omitted). Although a conversion action is
unavailable to enforce a simple obligation to pay money, see
Ehrlich v. Howe, 848 F. Supp. 482, 492 (S.D.N.Y. 1994) (collecting
cases), “an action will lie for the conversion of money where there
is a specific, identifiable fund and an obligation to return or
otherwise

treat in

a

particular

manner

the specific

fund

in

question[.]” Manufacturers Hanover Trust Co. v. Chemical Bank, 160
A.D.2d 113, 559 N.Y.S.2d 704, 712 (1st Dep’t 1990). Conversion does
not

require

a

“‘defendant’s

knowledge

that

he

is

acting

wrongfully[.]’” LoPresti v. Terwilliger, 126 F.3d 34, 42 (2d Cir.
1997) (quotation omitted).

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Plaintiff argues that the specific, identifiable funds in this
case are the monies that were deposited into the Annual Meet
Account and the ESR Account, which Bourdage had an obligation to
use

for

the

benefit

of

the

FCA.

Plaintiff

asserts

that

“in

derogation of this obligation, Bourdage used and withheld the funds
for his own personal benefit.” Plaintiff’s Memorandum of Law
(Dkt #48) at 14 (citing Bourdage Dep. at 258:18-24, 259:22-26,
260:2-6).

However, the

transcript

pages

cited

at

page

14

of

Plaintiff’s Memorandum of Law are not contained in the exhibit that
the FCA indicates is comprised of excerpts from the transcript of
Bourdage’s deposition, taken on September 6, 2013. See Declaration
of Edward P. Hourihan (“Hourihan Decl.”) ¶ 20. Because Plaintiff
has not included the cited pages from Bourdage’s deposition in its
submissions to the Court, the Court is unable to verify whether
Bourdage’s testimony at pages 258 to 260 of his deposition stand
for the proposition urged by the FCA.
Bourdage’s counter-argument is similarly deficient in record
support. He contends that the FCA has failed to show

the source of

the monies that were in the FCA’s Event Account, after the 2007
Event ended and the account was reconciled. Defendant’s Memorandum
of Law (Dkt #55-1), p. 3 of 4. According to Defendant, all of the
money that was deposited into the Event Account, after the account
was reconciled, actually belonged to him, which he purports to
“show with documentation of their sources, into an account [he] was

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given permission to use.” Id. However, Bourdage does not provide
any

citations

to

any

specific

exhibits

to

substantiate

this

statement.
At this juncture, the record is insufficient for the Court to
grant judgment as a matter of law either to the FCA or to Bourdage
on the conversion claim.
D.

Fraud

The Court notes that Plaintiff has not moved for summary
judgment on its cause of action for fraud. Although “a district
court’s independent raising and granting of summary judgment . . .
is ‘an accepted method of expediting litigation.’” Ramsey v.
Coughlin, 94 F.3d 71, 74 (2d Cir. 1996) (quotation omitted), the
Court declines to do so here given that the record does not
“clearly establish both ‘the losing party’s inability to enhance
the evidence supporting its position and the winning party’s
entitlement

to

judgment.”

Ramsey,

94

F.3d

at

74

(quotation

omitted).
E.

Equitable Accounting

“The right to an accounting is premised upon the existence of
a confidential or fiduciary relationship and a breach of the duty
imposed by that relationship respecting property in which the party
seeking the accounting has an interest.” Lawrence v. Kennedy,
95 A.D.3d 955, 959 (2d Dept. 2010). “To be entitled to an equitable
accounting, a claimant must demonstrate that he or she has no

-17-

adequate remedy at law.” Unitel Telecard Distribution Corp. v.
Nunez, 90 A.D.3d 568, 569 (1st Dept. 2011).
As discussed above, the Court has declined to rule as a matter
of law that there existed a confidential or fiduciary relationship
between Bourdage and the FCA. Accordingly, it would be premature
for the Court to rule as a matter of law the FCA is owed an
equitable accounting. The FCA’s motion for summary judgment on this
basis is denied without prejudice.
F.

Constructive Trust

The elements generally required for establishment of a
constructive

trust

are

as

follows:

“‘(1)

a

confidential

or

fiduciary relation, (2) a promise, (3) a transfer in reliance
thereon and (4) unjust enrichment.’” Counihan v. Allstate Ins. Co.,
194 F.3d 357, 361-62 (2d Cir. 1999) (quoting Sharp v. Kosmalski, 40
N.Y.2d 119, 123 (1976)).

Courts in New York State “insist upon .

. . a showing that property is held under circumstances that render
unconscionable
property and

and
that

inequitable
the

remedy

the
is

continued

essential

to

holding
prevent

of

the

unjust

enrichment.” Id. at 362.
For the same reasons that the Court declines to rule as a
matter of law the FCA is owed an equitable accounting, the Court
likewise declines to impose a constructive trust at this stage of
the proceeding.

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CONCLUSION
For

the

reasons

discussed

above,

Plaintiff’s

motion

for

summary judgment is denied without prejudice. However, Plaintiff’s
motion for summary judgment is denied with prejudice as to the
cause of action for breach of fiduciary duty to the extent that the
the claim is based on transactions occurring prior to October 2,
2009, because those transactions are outside the three-year statute
of limitations.
SO ORDERED.
S/Michael A. Telesca
HONORABLE MICHAEL A. TELESCA
United States District Judge
DATED:

July 15, 2015
Rochester, New York

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