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November 19, 1984

HERBERT BARNESS, JOHN E. BISHOP, EDGAR H. CHAPPELL, CHARLES W. CORBITT, GEORGE S. MANN, BROOKS WALKER, JR., LOUIS M. WALKER, and CHARLES M. WILLIAMS, individually and as Trustees of, and DAVID R. BRYANT as Trustee of, San Francisco Real Estate Investors, and KEITH L. BROWN, individually, and SAN FRANCISCO REAL ESTATE INVESTORS, INC., Defendants; SAN FRANCISCO REAL ESTATE INVESTORS, INC., a Delaware corporation, successor in interest to SAN FRANCISCO REAL ESTATE INVESTORS, a California real estate investment trust, Counterclaimant and Third-Party Plaintiff, vs. TERRYDALE LIQUIDATING TRUST, a New York business trust, TERRYDALE REALTY TRUST, a Missouri business trust, OLIVER R. GRACE. OLIVER R. GRACE, JR., EMILIO G. COLLADO, WILLIAM BOLTON, and ROBERT A. POSNER, individually and as Trustees of TERRYDALE LIQUIDATING TRUST, Counterdefendants and Third-Party Defendants.

The opinion of the court was delivered by: SAND



 Plaintiff, Terrydale Liquidating Trust (hereinafter "TLT"), a New York business trust, brings this action against San Francisco Real Estate Investors, Inc. and the individual trustees of San Francisco Real Estate Investors, seeking to hold them liable as aiders and abettors of an alleged breach of fiduciary duty and constructive trustees of property sold to them in violation of the seller's fiduciary duties and Declaration of Trust. *fn1" Defendants have moved for summary judgment pursuant to F.R.Civ.P. 56. Plaintiff has cross-moved for partial summary judgment pursuant to F.R.Civ.P. 56 on the issue of liability.

 For the reasons detailed below and applying Missouri law, we conclude that, after extensive discovery, plaintiff is unable to show that defendants had actual knowledge of an alleged breach of fiduciary duty. We therefore grant defendant's motion for summary judgment in part and dismiss the claim that they were aiders and abettors of said breach. Concluding, however, that material questions of fact exist as to whether there was a breach of fiduciary obligation or Declaration of Trust and, if so, whether defendants had sufficient notice thereof such that they held the acquired assets as constructive trustees for plaintiff's benefit, we deny defendants' motion for summary judgment as to plaintiff's equitable claim for restitution. Plaintiff's motion for partial summary judgment is also denied.


 Plaintiff is a successor in interest to Terrydale Realty Trust (hereinafter "TRT"), a Missouri real estate investment trust *fn2" (hereinafter "REIT") which was the entity in existence at the time of the conduct at issue in this case. Defendant SFREI, Inc. was formerly a California REIT, known as San Francisco Real Estate Investors, whose acts (and the acts of its trustees) are relevant to the instant action. San Francisco Real Estate Investors and its trustees shall be collectively referred to as "SFREI."

 The instant case arises out of the actions of TRT trustees taken in response to an unsolicited tender offer for TRT shares. *fn3" On January 9, 1981, BCG Associates (hereinafter "BCG"), a New York limited partnership in which third party defendants William Bolton, Oliver Grace, Jr., and Robert Posner are general partners, commenced an unsolicited tender offer for 160,000 TRT shares, or approximately 34.7% of its outstanding shares, at a price of $33.50 per share. This offer, if successful, would have given BCG virtual majority ownership of TRT. *fn4" According to the BCG Offer to Purchase, the offer was made in order to obtain control of TRT and to defeat proposed amendments to its Declaration of Trust. The offer was set to expire on February 10, 1981.

 On January 19, 1981, the TRT trustees met to consider the BCG tender offer. *fn5" After discussing both the merits of, and a number of perceived problems with, the BCG offer, the trustees decided to continue to pursue alternatives to the offer. According to the minutes of a subsequent meeting of TRT trustees, TRT met or otherwise communicated with seven other bidders for the purpose of soliciting either a tender offer for all or part of the TRT shares or an offer to purchase the assets of TRT. The trustees also attempted, without success, to persuade BCG to amend its offer to provide for the purchase of all outstanding TRT shares. *fn6"

 Just prior to this meeting of TRT trustees, TRT was contacted by George Mann, president of Unicorp Financial Corporation, a Canadian company which owned approximately 40% of SFREI. Mann expressed Unicorp's interest in making a tender offer for at least some portion of TRT shares. *fn7" After considering the opportunity to bid for TRT shares, Unicorp decided not to enter into the battle for control of TRT. Mann, however, notified SFREI of the opportunity to acquire TRT shares. *fn8" Discussions ensued between representatives of TRT and SFREI. Although SFREI was initially interested in acquiring all of the outstanding TRT shares, SFREI eventually proposed instead to purchase approximately 80% in value of TRT's assets, specifically, four office buildings located in Denver, Colorado. The TRT trustees met on February 2, 1981 to consider the SFREI proposal, as well as to review various other alternatives to the BCG tender offer. An additional meeting of "independent" trustees, i.e., those who were not members of the Gramlich family (see n.5 supra), was held on February 5; at this meeting, the trustees concluded that the sale of the Denver properties to SFREI was in the best interests of all TRT shareholders. On February 6, the sale to SFREI was unanimously approved by all of the TRT trustees. In addition, the trustees adopted and disclosed a plan to liquidate the trust and to distribute the proceeds of the SFREI sale, along with the remaining trust assets, to TRT shareholders. The trustees also announced that a liquidating dividend of $24 per share was to be distributed on February 23 to all TRT shareholders of record as of February 19.

 After the trustees' decision to sell and liquidate was announced, BCG extended its tender offer expiration date to February 19 and adjusted its offering price to $9.50 per share in order to take account of the $24 per share liquidating dividend. BCG acquired 80,884 shares pursuant to its tender offer, leaving it with 208,629 shares, or approximately 38% of the outstanding TRT shares. During 1981, BCG continued to purchase TRT shares through a series of open market purchases. By January 1982, BCG had apparently acquired just under 50% of outstanding TRT shares. An additional liquidating dividend of $9.50 was distributed to TRT shareholders on January 12, 1982. On January 28, 1982, the TRT shareholders approved the creation of TLT *fn9" and elected a slate of BCG nominees to serve as trustees of TLT. *fn10" The instant lawsuit ensued.

 Plaintiff's claims are essentially two-fold. First, plaintiff seeks to hold defendants civilly liable as aiders and abettors; specifically, plaintiff claims that the TRT trustees breached their fiduciary duties by selling and liquidating the trust property for allegedly self-interested reasons and at allegedly "fire sale" prices, and that SFREI knowingly and substantially assisted the trustees in this endeavor. Second, plaintiff seeks to hold defendants accountable as constructive trustees; specifically, plaintiff claims that the sale and liquidation, in addition to being tortious, were performed without obtaining the necessary approval allegedly required by the TRT Declaration of Trust, and that SFREI ahd "notice" of the TRT trustees' breaches of fiduciary duty and trust. As relief for the above claims, plaintiff seeks (1) an accounting from SFREI for losses suffered by TRT on the sale of TRT properties, damages, expenses and SFREI profits earned from the properties; and (2) a return to the "status quo ante." *fn11" on February 18, 1983, this Court denied defendants' motion to dismiss the complaint. On February 28, 1984, this Court denied defendants' motion for summary judgment without prejudice t renewal upon completion of further discovery. Discovery was thereafter conducted during which numerous depositions were taken and numerous documents were produced. The instant motions ensued.


 A. Applicable Law

 A federal Court exercising deversity jurisdiction must apply the substantive law of the forum in which it sits. Erie R.R. co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938). This includes the forum state's choice f law rules. Klaxon Co. v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941). Since the instant case invloves the activities of a Missouri real estate investment trust whose Declaration of Trust designated Missouri law as applicable, we conclude that Missouri law should be applied. See Skolnik v. Rose, 55 N.Y.2d 964, 434 N.E.2d 251, 449 N.Y.S.2d 182 (1982). To the extent that no directly applicable Missouri precedents exist, we shall refer to the law of other jurisdictions for guidance.

 B. Standard of Review

 Summary judgment may be granted only when it appears to the court that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A court "cannot try issues of fact but can only determine whether there are issues of fact to be tried." Katz v. The Goodyear Tire and Rubber Co., 737 F.2d 238 (2d Cir. 1984) (quoting Empire Electronics Co. v. United States, 311 F.2d 175, 179 (2d Cir. 1962) (emphasis in original)). In addition, the court must resolve all ambiguities and draw all reasonable inferences against the moving party. Id. Thus, where "the party against whom summary judgment is sought comes forth with affidavits or other material . . . that generates uncertainty as to the true state of any material fact, the procedural weapon of summary judgment is inappropriate." Id. (quoting Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980)).Summary judgment is to be granted only where the court "is convinced as a matter of law that the suit can have only one possible outcome." Reliance Insurance Co. v. Barron's, 442 F.Supp 1341, 1344 (S.D.N.Y. 1977).

 C. Theories of Liability

 1. Aider and Abettor ...

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