The opinion of the court was delivered by: Scheindlin, District Judge.
This case involves a complex dispute between Plaintiff Rohit
Phansalkar and Defendants Andersen Weinroth & Co., L.P., AW &
Co., Inc., G. Chris Andersen and Stephen D. Weinroth
(collectively "AW"). The parties have alleged several claims
against each other based on transactions that took place during
Phansalkar's employment at AW. This motion involves just one of
Phansalkar's many claims against AW. In Count Fifteen of his
Amended Complaint, Phansalkar alleges that AW illegally
converted his shares in a company called Millenium Cell Inc.
("MCEL"). AW moves pursuant to Rule 56(c) of the Federal Rules
of Civil Procedure for partial summary judgment dismissing this
count. For the reasons stated below, AW's motion is denied.
I. SUMMARY JUDGMENT STANDARD
Rule 56 provides for summary judgment "if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
"An issue of fact is `material' for these purposes if it `might
affect the outcome of the suit under the governing law[,]'
[while] [a]n issue of fact is `genuine' if `the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party.'" Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92,
97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
In assessing the record to determine whether genuine issues of
material fact are in dispute, a court must resolve all
ambiguities and draw all reasonable factual inferences in favor
of the non-moving party. See Parkinson v. Cozzolino,
238 F.3d 145, 150 (2d Cir. 2001). "Although the moving party bears the
initial burden of establishing that there are no genuine issues
of material fact, once such a showing is made, the non-movant
must `set forth specific facts showing that there is a genuine
issue for trial.'" Weinstock v. Columbia Univ., 224 F.3d 33,
41 (2d Cir. 2000) (quoting Anderson, 477 U.S. at 256, 106
S.Ct. 2505). However, the non-moving party may not "rest upon
. . . mere allegations or denials." St. Pierre v. Dyer,
208 F.3d 394, 404 (2d Cir. 2000). "Statements that are devoid of any
specifics, but replete with conclusions, are insufficient to
defeat a properly supported motion for summary judgment."
Bickerstaff v. Vassar Coll., 196 F.3d 435, 452 (2d Cir. 1999),
cert. denied, 530 U.S. 1242, 120 S.Ct. 2688, 147 L.Ed.2d 960
(2000); see also Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir.
1998) ("If the evidence presented by the non-moving party is
merely colorable, or is not significantly probative, summary
judgment may be granted.") (quotation marks, citations, and
Anderson Weinroth & Co., L.P., is an investment banking firm.
G. Chris Anderson and Stephen D. Weinroth are partners at this
firm. Rohit Phansalkar was an investment banker at the firm from
February 1998 until July 2000.*fn1
Phansalkar alleges that AW wrongfully withheld compensation,
certain securities and certain investment opportunities that
were promised to him in exchange for the services he provided
during his tenure with AW. Phansalkar also alleges that Anderson
and Weinroth breached their agreement to sell him certain shares
of stock in MCEL which are now worth several million dollars.
Phansalkar's complaint includes claims for breach of contract,
conversion, breach of fiduciary duty, quantum meruit, unjust
enrichment and an accounting. See Phansalkar's Amended
Complaint ¶¶ 54-137.
AW alleges that, during his tenure at AW, Phansalkar
intentionally concealed from his partners at AW that he had
appropriated for himself property and opportunities that
rightfully belonged to the partnership. According to AW, these
actions violated the utmost duties of care, loyalty, and good
faith owed by one partner to his other partners and constituted
the unauthorized assumption and exercise of ownership over
assets that belonged to AW. AW's complaint includes claims for
breach of fiduciary duties, conversion and
breach of contract. See AW's Second Amended Complaint ¶¶ 28-74.
Assuming plaintiffs allegations to be true, the facts relevant
to this motion are as follows. In December, 1998, AW and certain
other investors formed a limited liability company called
Millenium Cell LLC ("MCEL LLC"). See 8/1/01 Affidavit of
Russell J. Steward, AW employee ("Steward Aff.") ¶ 2. No
certificates evidencing the interests of investors in MCEL LLC
were ever issued. See id. In or around February 2000, Anderson
and Weinroth offered to sell Phansalkar up to $100,000 worth of
their interests in MCEL LLC, representing a percentage ownership
of the company. See Defendants' Statement of Material Facts
Pursuant to Local Civil Rule 56.1(a) ("Def.56.1") ¶ 3 (citing
3/27/01 Deposition of Stephen D. Weinroth ("Weinroth Dep."), Ex.
B to 8/1/01 Affidavit of Defendants' Attorney Jaculin Aaron
("Aaron Aff."), 46-47). In or around February 2000, Phansalkar
purchased 637,902 shares of MCEL LLC from Anderson and Weinroth
for $60,000 (the "MCEL Shares"). See Plaintiffs Statement of
Material Facts Pursuant to Local Civil Rule 56.1(a) ("Pl.56.1")
¶ 1. Phansalkar delivered to both Anderson and Weinroth a check
for $30,000 as payment for those shares, which each deposited in
his respective personal bank account. See Phansalkar checks,
Ex. B to 8/13/01 Affidavit of Plaintiffs Attorney Sapna
Mirchandani ("Mirchandani Aff.").
In April 2000, MCEL was converted into a corporation which was
called Millenium Cell Inc. ("MCEL"). See Steward Aff. ¶ 4. No
common stock certificates for MCEL were issued at this time.
See id. ¶ 5.
In or about May 2000, AW prepared and maintained ownership
schedules reflecting the names, shares and percentage ownership
of MCEL investors, including Phansalkar (the "MCEL Ownership
Schedules"). See P1. 56.1 ¶ 2. The schedules identified
Phansalkar as the owner of 637,902 shares of MCEL. See id.;
MCEL Ownership Schedules, Ex. C to Mirchandani Aff. In or about
May 2000, at the instruction of Weinroth, AW employee Russell J.
Steward requested that Phansalkar identify any designees to whom
he wished to grant his shares of MCEL stock. See P1. 56.1 ¶ 4.
Phansalkar complied with this request and designated certain of
his shares to various individuals. See id. These designations
were reflected on the MCEL Ownership Schedules. See MCEL
On May 25, 2000, MCEL submitted an S-1 filing with the
Securities Exchange Commission. See P1. 56.1 15. The S-1
Filing listed the amount of shares held by each of Andersen and
Weinroth as well as other principal shareholders, but did not
include the 637,902 MCEL Shares owned by Phansalkar. See id.
One of the items submitted to the underwriters, accountants and
attorneys involved in the proposed public offering was the MCEL