The memorandum discloses the information allegedly withheld. The Riccio complaint does not allege that the disclosed figures were inaccurate. No omission exists. Defendants in the Riccio complaint are entitled to summary judgment on the allegation that they failed to disclose the terms of the agreement between the seller and the D.B.G. affiliate.
The Roman complaint alleges (par. 23(1)), that the private placement memorandum in the Briargate Associates partnership represented that a corporate defendant, Warren Murray Property Management,
was to serve as supervisory agent in monitoring the overall partnership operations, in reviewing the income and expenses of the partnership and the terms of the contemplated conversion of the property to condominium status, and in assisting in the refinancing of the wraparound mortgage and liquidating of the partnership. (See pages 72-73 of the Memorandum).
The complaint alleges (par. 24(1)) that this was a misrepresentation because
Warren Murray was not to perform any services of any value for the partnership. Warren Murray was only to serve as a vehicle for depleting the partnership of its assets.
Again, the complaint has made only a bare, conclusory allegation. No fact has been pled which warrants trial on the issue of the services performed by Warren Murray.
State Law Claims
As defendants are entitled to summary judgment on all of the federal claims, the state law claims of common law fraud and breach of fiduciary duty are dismissed for lack of jurisdiction. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966).
The court is confronted with 27 equally frivolous complaints filed by the same law firm, Beigel & Sandler. Although alleging misrepresentations and material omissions from over 30 private placement memoranda, the complaints contain no more than one or two direct quotations from, or page citations to, these voluminous documents. it appears to the court as if the complaints were spun out of a word-processed original, with little attention to the details of each partnership and its private placement memorandum.
Each complaint is as groundless as the next. Each ignores the substantial disclosure in the private placement memoranda. Indeed, it seems impossible that the drafters of these complaints could have read the memoranda. If they had read the memoranda, they would have discovered that their allegations were entirely frivolous. No set of facts has been pleaded which gives rise to any inference that fraud has been committed.
The signature of an attorney upon a complaint constitutes a certificate that he or she has read the pleading and that "to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact." Fed. R. Civ. P. 11. Not one of these complaints appears to be grounded in fact as pled.
Although defendants have applied for sanctions, they have not accompanied this application with a request for a specific amount or with information about lawyers' time spent or other similar matters.
Under the circumstances, the court believes that an amount of sanctions should be awarded which will compensate defendants to some extent for their efforts in defending this action, and will also serve as a warning to Beigel & Sandler against further misconduct.
The court awards sanctions in the amount of $ 25,000. Payment is to be made to the law firm of Baer, Marks & Upham and the amount is to be distributed among defendants by agreement.
In conclusion, defendants' joint motion for summary judgment is granted. All of the D.B.G. complaints are dismissed. Sanctions are awarded in the amount of $ 25,000.
Dated: New York, New York
April 29, 1992
THOMAS P. GRIESA
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