The opinion of the court was delivered by: Dearie, District Judge.
Defendant Federal Deposit Insurance Corporation moves to
dismiss the complaint pursuant to Rule 56 of the Federal Rules of
Civil Procedure. Plaintiff Stephen Beninati cross moves to amend
his complaint to add the United States as a defendant.
Defendant's motion to dismiss is granted. Plaintiff's motion to
amend the complaint is denied.
Plaintiff brings this action pursuant to 12 U.S.C. § 1821(d)(5)
seeking damages in the amount of $5,000,000. The complaint
alleges that the FDIC breached its "fiduciary duty and its duty
to act in good faith" and that it tortiously interfered with
plaintiff's rights under a shareholders' agreement.
In 1976, plaintiff Stephen Beninati ("Beninati") and Richard
Nicotra ("Nicotra") co-founded Everything Yogurt, Inc. ("EYI").
Beninati and Nicotra each owned 47.5% of the outstanding common
shares of EYI, and Kenneth Kaplan ("Kaplan") owned the remaining
5%. Stat. of Undisputed Facts ¶¶ 1-2. On October 3, 1991, EYI
entered into a Loan Consolidation and Modification Agreement (the
"Loan Agreement") with Community National Bank and Trust Co. of
New York ("CNB"). Id. at ¶ 3; Def.'s Aff. in Supp. of
Summ.J.Ex. 3. The face amount of the loan was $1,000,000. When
CNB initially loaned the funds to EYI, Beninati and Nicotra
pledged their shares in EYI pursuant to a Stock Pledge and
Security Agreement (the "Pledge Agreement").*fn1 Stat. of
Undisputed Facts ¶ 4; Stock Pledge and Security Agreement at
Def.'s Aff. in Supp. of Summ.J.Ex. 4.
Under the Pledge Agreement, upon a default, CNB had the right
to "sell, assign, give an option or options to purchase, contract
to sell or otherwise dispose of and deliver . . . [the] pledged
stock." Pledge Agreement ¶ 2(e). CNB was obligated to send each
of the stockholders notice ten days prior to the time of any sale
or disposition of the pledged stock. Id. ¶ 2(f). The
stockholders retained the right to vote the pledged stock until
the occurrence of a default. Id. at ¶ 2(c). Upon a default, CNB
had the right to exercise voting and all other corporate rights.
Id. In the event that CNB could not dispose of the pledged
stock in a public sale, the Agreement expressly permitted CNB to
dispose of the shares through private sales. Id. at ¶ 5. The
Agreement also explains that "[t]he Stockholders acknowledge that
any such private sales may be at places and on terms less
favorable to CNB than if sold in public sales and agree that such
private sales shall be deemed to have been made in a commercially
reasonable manner." Id. Finally, the parties agreed that CNB's
rights under the Pledge Agreement were "superior to any rights
that any signatory [to the pledge agreement] may have under"
agreements between or among EYI and its stockholders and the
stockholders themselves. Id.
According to plaintiff, in August of 1992, Nicotra and Kaplan,
the 5% shareholder, held a Special Meeting of the EYI Board of
Directors and terminated plaintiff as President. Pl.'s Aff. in
Opp'n to Summ.J. ¶ 2. Shortly thereafter, they terminated him as
Director, thereby precluding his involvement with EYI's affairs.
Id. Beninati filed a summons and complaint in New York Supreme
Court, Richmond County, based upon Nicotra's and Kaplan's
actions. Beninati's Aff. in Opp'n to Summ.J. ¶ 2. Beninati
alleged that their actions were contrary to a Shareholders
Agreement that guaranteed Beninati employment and barred any
significant decisions affecting EYI without consent of both
Beninati and Nicotra. Id.; see also EYI Shareholders' Buy Sell
Agreement, Def.'s Aff. in Supp. of Summ.J.Ex. 9.
Around the time that Beninati commenced the state action
against Nicotra and Kaplan, the FDIC declared EYI's note to be in
default and notified Beninati and Nicotra accordingly. Stat. Of
Undisputed Facts ¶¶ 8, 9. The FDIC proceeded to engage in
negotiations with Nicotra and other unnamed representatives of
EYI regarding the liquidation of the loan obligation. Beninati
Aff. in Opp'n to Summ. J.Ex. A. Plaintiff alleges that he tried
to participate in these negotiations, but that the FDIC did not
allow him to do so. Id. at ¶ 4.
Instead, Beninati alleges, the FDIC conducted separate
negotiations with him. In a letter dated June 28, 1993, the FDIC
notified Beninati's attorney that it would be "accepting bids
from parties interested in purchasing the Everything Yogurt stock
pledged by . . . Beninati." Def.'s Aff. in Opp'n to Summ.J.Ex.
12. Beninati alleges that in subsequent negotiations with the
FDIC, the FDIC misled him by suggesting that it would only
consider offers sufficient to liquidate the entire EYI
obligation, not portions of it. Pl.'s Aff. in Opp'n to Summ.J. ¶
3. Plaintiff also alleges that the FDIC never indicated that it
would consider offers for his shares alone. Id. Plaintiff
concedes he was financially unable to purchase either the entire
note or his shares. Id. Beninati alleges, however, "with the
assistance of others" he would have be able to make an offer for
his shares "in excess of that which was accepted by the FDIC from
. . . Nicotra." Id. at ¶ 5. Beninati contends that he did not
make such an offer because he relied on the FDIC's representation
that it would only consider offers for the full amount of the
On August 23, 1993, the FDIC sold Beninati's shares in EYI to
Nicotra for $210,000.00, on a deferred payment basis. Stat. of
Undisputed Facts ¶¶ 10-11; Beninati Aff. in Opp'n to Summ.J ¶ 3.
At the same time, the FDIC sold the EYI note and remaining
collateral*fn2 to Colombo, Inc. ("Colombo") for $735,000.
On November 25, 1994, Beninati commenced an action in the New
York Supreme Court, Richmond County, against Nicotra, Colombo,
and the FDIC, claiming that the transfer of stock to Nicotra and
the sale of the EYI note to Colombo was fraudulent and,
therefore, should be voided. The FDIC was dismissed from the
action due to Beninati's failure to exhaust his administrative
remedies as mandated by 12 U.S.C. § 1821(d). Stat. of Undisputed
Facts ¶ 14. On September 8, 1995, after the FDIC was dismissed
from the state court action, Beninati filed a claim with the
FDIC. Id. at ¶ 15. However, the claim did not specify an
amount. A supplemental claim was filed on November 29, 1995.
After receiving a final notice of denial, Beninati commenced the
instant action against the FDIC in this Court. In
its answer, the FDIC admits that plaintiff served the Notice of
Claim in a timely manner. Answer ¶ 3.
In sum, the complaint sets forth two claims. The first claim
alleges that the FDIC tortiously interfered with plaintiff's
right under the Shareholder's Agreement entered into by
plaintiff, Nicotra, and Kaplan. The second claim alleges that the
FDIC, by its actions of selling plaintiff's stock to Nicotra and
the EYI note to Colombo, breached its "fiduciary" duty to act in
good faith and its duty to dispose of plaintiff's collateral in a
commercially reasonable manner.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure
summary judgment is appropriate when "there is no genuine issue
as to any material fact." Fed.R.Civ.P. 56(c); Knight v. U.S.
Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986). The burden is
especially heavy as "the inferences to be drawn from the
underlying facts . . . must be viewed in the light most favorable
to the party opposing the motion." Matsushita Elec. Indus. Co.
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348,
89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc.,
369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)). For the
reasons stated below, the Court concludes that plaintiff's claims
are contract claims and, therefore, the FDIC is a proper
defendant and subject to suit in this Court. However, this Court
also concludes ...