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BATTLE FOWLER v. BRIGNOLI

June 18, 1991

BATTLE FOWLER, AS RECEIVER AND LIQUIDATING TRUSTEE OF BRIGNOLI, CURLEY & ROBERTS ASSOCIATES, PLAINTIFF,
v.
RICHARD J. BRIGNOLI, ARIE E. DAVID AND BRIGNOLI MODELS, INC., DEFENDANTS.



The opinion of the court was delivered by: Milton Pollack, Senior District Judge.

OPINION AND DECISION

Plaintiff Battle Fowler, as Receiver and Liquidating Trustee of Brignoli, Curley & Roberts Associates ("BCR"), has filed suit to recover certain sums paid by BCR to defendants. The Receiver moved for an order pursuant to Rule 56 Fed.R.Civ.P. granting plaintiff summary judgment on three of the four Claims for Relief. For the reasons appearing hereinafter and pursuant to Rule 54(b) Fed.R.Civ.P., summary judgment is granted on the First and Second Claims for Relief and is denied on the Fourth Claim for Relief.

Background

A derivative action entitled Curley v. Brignoli Curley & Roberts Assoc., 88 Civ. 5307(MP) (the "Curley Action") was brought by certain limited partners of BCR against Richard Brignoli; Brignoli & Curley Inc. ("BCI"); and BCR as a necessary party. BCI was BCR's corporate General Partner. Richard Brignoli was majority shareholder, Chief Executive Officer, President and Chairman of the Board of BCI. Curley v. Brignoli, Curley & Roberts Assoc., 746 F. Supp. 1208, 1210-11 (S.D.N.Y. 1989), aff'd, 915 F.2d 81 (2d Cir. 1990).

This Court in its post-trial Opinion of August 4, 1989 removed BCI as General Partner of BCR after finding "Richard Brignoli . . . has been guilty of and has caused BCI to be guilty of such crass and autocratic conduct in the service of his selfish interest and in derogation of the interests of the limited partnership so as to affect prejudicially the carrying on of the business as a partnership. . . . The evidence adduced at trial amply established glaring misconduct by Brignoli and BCI." Id. Furthermore, this Court found BCR suffered substantial damage as a result of Brignoli's disloyalty including a forfeiture of a $175,000 certificate of deposit and excessive or unwarranted payments to Brignoli and Brignoli Models, Inc. ("BMI"), and that from the time Brignoli fired Curley as BCI's chief officer in December 1987, Brignoli operated BCR to serve only his self-interest until BCI's removal as General Partner in August 1989. Curley, 746 F. Supp. at 1215-19.

After a vote in favor of dissolution, the Court entered judgment dated August 28, 1989 ordering dissolution of BCR and appointed Battle Fowler as Receiver.

The Court of Appeals dropped BCR as a party, recharacterized the action as a class action, and affirmed the District Court's decision on the merits. Curley v. Brignoli, Curley & Roberts Assoc., 915 F.2d 81 (2d Cir. 1990).

The Receiver filed the complaint in this action on December 8, 1989 seeking the following relief:

1) First Claim for Relief — against Brignoli for all salary paid Brignoli by BCR while he was in breach of his fiduciary duties, in the amount of $369,229;

2) Second Claim for Relief — against Brignoli for reimbursement of legal costs paid by BCR for the benefit of Brignoli in connection with the Curley v. Brignoli, 88 Civ. 5307(MP), action, in the amount of $367,337.03;

3) Third Claim for Relief — against Arie David for reimbursement of payments made by BCR for legal services that were allegedly not performed, in the amount of $132,500.

4) Fourth Claim for Relief — against Brignoli and BMI, reimbursement in the amount of $159,342.66 for excessive payments made to BMI for "Stock Sleuth", a trading analysis computer program, by reason of Brignoli's self-dealing in engaging BMI.

The Receiver moves for summary judgment on the First, Second, and ...


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