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SVENSKA FINANS INTERN. v. SCOLARO

March 3, 1999

SVENSKA FINANS INTERNATIONAL BV, AS SUCCESSOR IN INTEREST TO GEWICS HOLDING AG, PLAINTIFF,
v.
SCOLARO, SHULMAN, COHEN, LAWLER & BURSTEIN, P.C.; DAVID A. HOLSTEIN; AND WILLIAM J. LEBERMAN, DEFENDANTS.



The opinion of the court was delivered by: Scullin, District Judge.

MEMORANDUM-DECISION AND ORDER

Introduction

Plaintiff Svenska Finans International BV files this complaint as the successor in interest to Gewics Holding AG ("Gewics"). In October 1989, Defendant Scolaro, Shulman, Cohen, Lawler & Burstein, P.C. ("Scolaro, Shulman") filed a proof of claim on behalf of Gewics in a bankruptcy case involving ICS Cybernetics, Inc. ("ICS"). Scolaro, Shulman successfully recovered on that claim. This lawsuit arises out of a dispute as to whether Scolaro, Shulman — and in particular its two attorneys who handled the Gewics matter, Defendants David A. Holstein and William J. Leberman — properly disbursed the proceeds of the ICS claim.

Federal jurisdiction is based upon diversity of citizenship. Plaintiff's complaint alleges three state law causes of action: (1) breach of contract; (2) breach of fiduciary duty; and (3) conversion. Presently before the Court is a joint motion brought by all of the Defendants, pursuant to Fed. R.Civ.P. 12(b)(6), to dismiss Plaintiff's complaint on the grounds that each cause of action is time barred under the applicable statutes of limitations.

Discussion

I. Standard of Review

A moving party may succeed on a Rule 12(b)(6) motion only when it appears beyond doubt that the plaintiff could prove no set of facts in support of his claim that would entitle him to relief. See Irish Lesbian and Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir. 1998). All allegations in the complaint must be accepted as true, and reasonable inferences must be drawn in favor of the non-movant. See id.

II. Timeline of Events

The dates upon which the events at issue occurred are critical to determining whether the statutes of limitations have expired. For this reason, a short timeline of those events is provided, as they are represented in Plaintiff's complaint.

On February 8, 1989, Gewics commenced liquidation. At this time, because Gewics maintained its principal place of business in Switzerland, Swiss law mandated that Gewics' former officers ceased to have any authority to act on behalf of the company. Only the liquidator had such authority. On October 25, 1989, Defendants filed the proof of claim against ICS on behalf of Gewics. In an order dated August 20, 1992, the Bankruptcy Court for the Northern District of New York (Gerling, J.) allowed a portion of the claim, in the amount of $750,000.

By letter dated and telecopied December 30, 1992, Christian Monney of Progressia Management Ltd. informed Defendants that his company was acting as liquidator for Gewics and asked for information regarding the Gewics/ICS bankruptcy claim. Defendants responded on January 13, 1993 by forwarding a copy of the ICS disclosure statement and plan of reorganization. No specific mention was made of the Bankruptcy Court's approval of the $750,000 claim. On February 1, 1993, Defendant Leberman wrote to Gert Wihlborg, a former officer of Gewics, to inform him of the Bankruptcy Court's August 1992 order.

Mr. Monney sent another telecopy to Defendants dated February 8, 1993, in which he asked about a disputed claim of Gewics that was listed in the ICS claims register. Mr. Monney asked whether the claim was lost or could be recovered through legal action. Defendant Leberman inquired of Mr. Wihlborg in a February 12, 1993 letter as to how much detail should be provided. Plaintiff's complaint does not indicate whether Mr. Wihlborg answered this request or whether Defendants provided a response to Mr. Monney's letter.

On February 18, 1993, Defendant Leberman sent a fax to Mr. Wihlborg to inform him that ICS would waive an appeal of the Bankruptcy Court's decision and pay 43.19% of the claim within two months for a $5,000 concession. Around March 19, 1993, Defendants received a check from ICS for $340,975.00 as a partial distribution on the claim. Mr. Wihlborg instructed Defendants to wire the money (less attorneys' fees) to a Swiss bank account with the remark "G. Wihlborg." Defendants did so on March 29, 1993. When Defendants received a second partial payment of $111,900 on May 12, 1993, they again wired the money to the same Swiss bank account per Mr. Wihlborg's directions.

Mr. Monney on June 3, 1993 telecopied a letter to Defendants stating that Progressia had been informed of the allowance of Gewics' claim against ICS for $750,000, and that Progressia knew Defendants had received $340,975 of that amount and would receive another payment soon. Mr. Monney expressed surprise that Defendants had not provided this information, and reminded Defendants that only Progressia, as liquidators, had authority to act on Gewics' behalf.

On July 14, 1993, Seestatt telecopied letters to Defendants and ICS to inform them that Seestatt had been appointed as substitute liquidators of Gewics. Defendant Leberman acknowledged receipt of this letter on July 16, 1993. ICS's counsel wrote to Seestatt on July 19, 1993 to explain that further payments under the claim would still be forwarded to Defendants. ICS sent a copy of this letter to Defendant Leberman.

Gewics was placed under bankruptcy administration in Switzerland on February 2, 1995. On June 29, 1995, Defendants received the final payment of $78,572.25 on the ICS claim. Whereas the previous two checks were made out to the Scolaro, Shulman law firm, this last check was payable to Gewics. Defendant Holstein endorsed the check on Gewics' behalf. Defendant Holstein wrote Mr. Wihlborg on August 1 and September 7, 1995 for instructions on where to deposit the money. On September 14, 1995, Defendants received a letter from Guus Mineur on behalf of Victum Holdings BV. Mr. Mineur claimed that Victum Holdings BV was the assignee of the ICS claim from Gewics as of January 12, 1989, and ...


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