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VALDAN SPORTSWEAR v. MONTGOMERY WARD & CO.

July 24, 1984

VALDAN SPORTSWEAR T/A VALDAN CLOTHING CO., MAURICE UCHITEL, JACK UCHITEL and DANIEL RUBIN, Plaintiffs, against MONTGOMERY WARD & CO., INCORPORATED, JOEL M. BERLIN, JOHN DOE and RICHARD ROE, Defendants.


The opinion of the court was delivered by: WEINFELD

EDWARD WEINFELD, D.J.

Plaintiff, Valdan Sportswear, trading as Valdan Clothing Co. ("Valdan"), a maker of men's clothing, *fn1" commenced this diversity action against Montgomery Ward & Co., Inc. ("Ward"), Joel Berlin ("Berlin"), at relevant times Ward's merchandise manager for men's clothing, and two unnamed individuals. The complaint alleges seven distinct claims. The first six, which are not directly at issue here, assert claims for damages caused by Ward's alleged breaches of five contracts under which Ward was obligated to purchase men's suits from Valdan. The seventh alleges that Ward, Berlin, and the unnamed defendants entered into a "conspiracy" to "destroy Valdan," whereby Berlin "would [falsely] represent" Ward's intention to continue doing business with Valdan after Ward went out of the suit business in 1982. *fn2" Plaintiff further alleges that it "relied upon defendants' false representations, as aforesaid," *fn3" entering into a lease for new production facilities, and foregoing business opportunities with others.

 Two sets of motions are before the Court. In the first, plaintiff moves to amend the complaint by naming, as additional defendants and members of the conspiracy alleged in the seventh claim, Raleigh Warner, Jr. ("Warner"), the chairman of Mobil Oil Co., Ward's parent corporation, and Steven L. Pistner ("Pistner"), Ward's president. Defendants oppose the motion to amend and cross-move to dismiss plaintiff's seventh claim.

 The second series of motions relates to the parties' discovery disputes. Defendants move for an order imposing sanctions pursuant to Rule 37, Fed. R. Civ. P., claiming that plaintiff has failed to comply with an order entered August 4, 1983, by Judge Robert J. Ward of this Court, *fn4" which requested plaintiff to comply with defendants' request for the production of documents and answers to deposition questions, among other matters. *fn5" Plaintiff opposes the motion and cross-moves for an order compelling defendants to comply with plaintiff's document requests, which, in turn, defendants oppose.

 MOTIONS TO AMEND AND TO DISMISS

 Although Rule 15 provides that leave to amend shall be granted freely, leave need not be granted to permit an amendment embodying plainly defective claims. *fn6" The Court is convinced, upon a careful study of the proposed amended complaint, that the motion to amend the seventh claim would be futile and that the defendants' motion to dismiss the existing seventh claim must be granted.

 The allegations of the proposed amended complaint, except for those seeking to add Warner and Pistner as defendants and participants in the alleged "conspiracy," are identical to those of the original complaint. As originally pleaded, the seventh claim is at best a hodgepodge of allegations drawing in seeming random fashion from the law of fraud, prima facie tort, and civil conspiracy. The averments do not properly plead a claim upon which relief can be granted. An essential element of a fraud claim is that defendant actually made to plaintiff a false or materially misleading statement. *fn7" In this regard, however, the complaint alleges only as follows:

 Upon information and belief, it was part of said conspiracy that defendant Berlin would represent to and assure plaintiff[], repeatedly, that the relationship between defendant Montgomery Ward and plaintiff Valdan was alike unto the relationship of "partners."

 It was further part of said conspiracy, upon information and belief, that defendant Berlin would represent to and assure plaintiff[], repeatedly, that when defendant Montgomery Ward went out of the suit business follwoing the spring season, 1982, said defendant would continue its business relationship with plaintiff Valdan through the purchase from said plaintiff of "separates" which defendant Montgomery Ward was substituting for suits in its retail business.

 Upon information and belief, it was further part of said conspiracy that defendant Berlin . . . would go to plaintiff Valdan's factory in Los Angeles, further assuring defendants of the continuing business relationship. *fn8"

 Allegations that a defendant "would" make statements are no indication that statements actually were made. Even assuming that plaintiff's allegation that it "relied upon defendants' false representations, as aforesaid" *fn9" impliedly alleges that the statements referred to actually were made, the complaint fails to allege the "fraud" with the particularity required by Rule 9(b), Fed. R. Civ. P. The precise statements made, and the date and place they were made, must be alleged to comply with the Rule. *fn10" The seventh claim lacks these allegations and, accordingly, fails properly to allege fraud.

 Plaintiff's contention that the seventh claim pleads a cause of action for prima facie tort is also without merit. An essential element of such a claim is the existence of special damages. *fn11" The complaint asserts that false representations "caused plaintiff Valdan to enter into a new lease for premises in which to have production facilities with which to make the separates and caused plaintiff Valdan not to seek and obtain business from others." *fn12" The ad damnum clause then avers that "[p]laintiff[] ha[s] been damaged in at least the sum of $1,000,000.00." *fn13" No attempt is made to allocate the damage between out-of-pocket expenses unnecessarily incurred and losses due to foregone opportunities. In the absence of such specification, the seventh claim must fail under a prima facie tort theory. *fn14"

 As plaintiff acknowledges, "in New York there is not substantive tort of civil conspiracy." *fn15" Allegations of a civil conspiracy, therefore, are proper only for the purpose of establishing joint liability by co-participants in tortious conduct. *fn16" Because the seventh claim fails to allege any act of tortious conduct, the claim must be dismissed. And, entirely apart from the foregoing, dismissal is also required, because the alleged conspirators consist of only the corporation, Ward, and its employees. The law is well settled that "there is no conspiracy when two or more agents of a corporation take action on behalf of the corporation. . . ." *fn17" As noted above, the proposed amended complaint is identical to the original except insofar as it names Warner and Pistner as additional co-conspirators. The proposed amended complaint thus contains the same defects noted above.

 Even without these defects, however, the proposed amendment to include other defendants is patently without substance. The amendment is sought on the basis of an affidavit, not by any officer of plaintiff, ...


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