The opinion of the court was delivered by: SCHEINDLIN
Shira A. Scheindlin, U.S.D.J.:
Defendants move pursuant to Rule 12(b)(6) to dismiss plaintiff's claims for failure to state a claim upon which relief may be granted.
For the reasons that follow, defendants' motions are denied.
I. Applicable Legal Standard
In deciding a Rule 12(b)(6) motion, the court must accept as true material facts alleged in the complaint and draw all reasonable inferences in the nonmovant's favor. See Kaluczky v. City of White Plains, 57 F.3d 202, 206 (2d Cir. 1995). Such a motion cannot be granted simply because recovery appears remote or unlikely on the face of a complaint, as "the issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996) (quoting Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974)), cert. denied, 136 L. Ed. 2d 14, 117 S. Ct. 50 (Oct. 7, 1996)) (internal quotation marks omitted). Rather, dismissal can only be granted if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Scheuer, 416 U.S. at 236.
II. Procedural and Factual Background
Plaintiff's original Complaint was filed on May 16, 1996. Defendants moved to dismiss this Complaint pursuant to Rule 12(b)(6) on September 6, 1996. After a telephone conference with the Court, defendants agreed to withdraw their motions to dismiss in order to allow plaintiff an opportunity amend his complaint by including certain factual allegations that had been set forth in affidavits but not the original Complaint. At the time, I suggested to defendants that allowing plaintiff to amend his original Complaint in that manner might obviate the need to re-submit motions to dismiss. Nevertheless, after plaintiff filed a First Amended Complaint on September 31, 1996, defendants moved once again to dismiss pursuant to Rule 12(b)(6).
Applying the above legal principles, the facts set forth in the First Amended Complaint are presumed true for the purposes of deciding defendants' motions to dismiss. I begin with a brief description of the defendants to this action. Barcol Group, Ltd. ("Barcol") is a New York corporation owned and directed by Walter J. Baronowski ("Baronowski") and John Coleman, Jr. ("Coleman"). BDS Securities Corporation ("BDS") is also a New York corporation, and Kevin J. McCabe ("McCabe") was president of BDS during all times relevant to this action. Capital Management of Bermuda (Holdings) Ltd. ("CMH") and Capital Management of Bermuda, Ltd. ("CM") are Bermuda corporations whose principal places of business are in New York. Baronowski is President of CMH and CM, and Coleman and Thomas E. Keating ("Keating") are officers of CMH and CM. RavensRock Capital ("RavensRock") and The High View Fund, L.P. ("High View") are equity investors in the acquisition of The Travelers Corporation of Bermuda, Ltd. ("TCB") whose principal places of business are located in New York. See First Amended Complaint, at PP 2-11.
CMH was formed as a vehicle for the acquisition of TCB. CM was the company that was acquired, being previously known as TCB. When CMH acquired TCB it did so with capital raised by BDS in New York. RavensRock and High View contributed capital to further the acquisition of TCB. CM and CMH have subsequently taken over business previously conducted by Barcol. See id. PP 9, 10, 22-24.
In October of 1994, plaintiff entered into an oral joint venture agreement with defendants Baronowski, Coleman and Keating to acquire an off-shore insurance company then known as TCB.
It was agreed that plaintiff would have the same equity interest in the venture as Coleman and Keating (9% of the acquired company's stock) and the same salary as Coleman ($ 180,000)
See id., at PP 12-13, 47-48.
In connection with the joint venture agreement, plaintiff loaned Baronowski, Coleman and Keating more than $ 120,000 for use in the TCB acquisition. Id. at P 63. Plaintiff also hired an actuarial firm to perform a due diligence examination of TCB at a cost of $ 46,200, and provided a variety of services to the joint venture, such as structuring the terms of the proposed transaction and traveling to Bermuda and Hartford on behalf of the joint venture.
Unbeknownst to plaintiff, defendants Baronowski, Coleman and Keating began negotiations with defendant BDS and defendant McCabe during the final stages of the TCB acquisition. At all relevant times, BDS, McCabe, RavensRock, High View, Barcol, CMH and CM were aware of the existence of the joint venture agreement among plaintiff and Baronowski, Coleman and Keating to acquire TCB. See id. at P 94. On December 7, 1995, plaintiff wrote to BDS and McCabe to warn them against tortiously interfering with plaintiff's contractual rights. Despite this warning, Baronowski, Coleman, Keating, Barcol, CM and CMH, acting with BDS and McCabe as well as RavensRock and High View acquired TCB without plaintiff. See id. at PP 57-59. Plaintiff did not receive a 9% equity stake or a salary of $ 180,000 after the acquisition of TCB. Instead, he alleges, defendants kept the promised equity stake, salary and loans totaling $ 166,200 for themselves.
The First Amended Complaint sets forth eleven claims
, which are discussed below with respect to each defendant.
A. First Claim: Breach of Joint Venture Agreement (against Defendants Baronowski, Coleman and Keating)
Defendants Keating and Coleman move to dismiss the First claim on the ground that they are not alleged to have been present when plaintiff and Baronowski formed the joint venture agreement, and thus cannot be parties to that contract as a matter of law. Plaintiff alleges that Keating and Coleman were parties to the joint venture agreement by virtue of Baronowski's representation at the time of formation, see First Amended Complaint at P 30 (alleging that Baronowski stated that Coleman and Keating were parties to the joint venture agreement), and by virtue of their subsequent conduct which ...