The opinion of the court was delivered by: KNAPP
All defendants move to dismiss the second amended complaint in this action alleging violations of sections 10(b) and 17(a) of the securties laws and common law negligence, fraud, and breach of fiduciary duty. For reasons which follow, we dismiss the federal claims. There being no assertion of diversity jurisdiction, it follows that the pendent state claims must also fall.
We have once before considered motions to dismiss in this action. By memorandum endorsement dated February 7, 1986, we dismissed the amended complaint for failure to plead fraud with specificity and gave plaintiffs leave to replead, cautioning them at oral argument that if their new complaint did not address the concerns we there expressed, we would consider imposing sanctions. plaintiffs have dropped a number of parties and claims from the complaint but, as to the remaining defendants, the complaint is virtually identical to the one previously dismissed.
Both parties have submitted materials outside the pleadings on the motions. Finding it unnecessary to utilize them, we proceed on the basis of the complaint alone.
Plaintiffs are three couples who in 1980 purchased units of a tax shelter limited partnership which engaged in the business of buying and leasing computer equipment. The shelter apparently resulted in tax benefits until late 1984 when the internal Revenue Service disallowed deductions plaintiffs had been taking. plaintiffs then brought this action against the persons who sold them the shelter alleging that such sales were based on fraud.
They claim that they were misled into subscribing because defendants failed to give them information which was disclosed in a Partnership Offering memorandum sent to them only after they had subscribed. They took no action after receiving the Memorandum in late 1980 until about four years later when the IRS disallowed their deductions and when they realized that the defendants' actions had been "deceitful." Par. 17. The seek recission of their subscription agreements and reimbursement of tax penalties they have had to pay.
Defendants are Amtax Planning Corporation, which was to supply the computer equipment to the partnership; its president, Walter Levine; and michael Stoler, the personal accountant of plaintiffs Van and Geraldine Stevens.
The allegations with respect to plaintiffs Bernard and Sylvia Kaufman are contained in paragraph 14 of the complain as follows:
That upon information and belief of the Kaufman plaintiffs beginning on or about the period of time between the last half of May and june 21, 1980, Walter Levine commenced a series of telephone conversations with kaufman. On each such occasion levine described the benefits to be anticipated as a result of the purchase of the unit of the partnership. In response to questions by Sylvia kaufman posed during one of the first conversations. (Sic) Walter Levine specifically assured Mrs. kaufman that the internal Revenue Service had preapproved the anticipated tax benefits to be had, and had done so in writing. levine stated further that future changes in the tax law would not affect said benefits which would be "grandfathered in."
Plaintiffs Samuel and Muriel Kisseloff allege in paragraph 13 of the plaint that:
During the month of September 1980, Samuel kisseloff had telephone contact with Jerry Kramer, described as a member of the Amtax office. Telephone contact was also had with Levine during the month of September 1980. Kisseloff visited levine in the Amtax office in the late afternoon, on or about September 30, 1980, at which time Levine described that tax benefits to be had by purchasing a unit of ...