United States District Court, S.D. New York
February 26, 2004.
KINGDOM 5-KR-41, LTD., Plaintiff, -v- STAR CRUISES PLC, et al., Defendants; MARKETING SYSTEMS INTERNATIONAL, LTD., BWI, Plaintiff, -v- STAR CRUISES, et al., Defendants
The opinion of the court was delivered by: DENISE COTE, District Judge
OPINION AND ORDER
Kingdom 5-KR-41, Ltd. ("Kingdom"), a Cayman Islands corporation,
commenced this action on April 6, 2001, against Star Cruises PLC, a
Bermuda corporation, and its wholly owned
subsidiary, Arrasas Ltd.*fn1 (collectively with Star, "Star"), as
well as the Bank of New York ("BNY"), a New York corporation, for damages
arising out of Star's acquisition of all of the outstanding shares of NCL
Holding ASA ("NCL"), a Norwegian corporation.*fn2 BNY now moves to
dismiss two of the three remaining state court claims against it. For the
following reasons, BNY's motion is granted.
In its original Complaint, Kingdom alleged violations of the federal
securities laws and unjust enrichment against Star, and breach of
contract against BNY.*fn3 BNY filed cross-claims against Star, and a
third-party complaint against NCL. In a March 20, 2002 Opinion, the
Honorable Alien Schwartz, to whom this case was then assigned, dismissed
all of Kingdom's claims
except for its unjust enrichment claim against Star, and the breach
of contract claim against BNY. Kingdom 5-KR-41, Ltd. v. Star Cruises
PLC, No. 01 Civ. 2940 (ACS), 2002 WL 432390 (S.D.N.Y. Mar. 2002)
(the "March Opinion"). The Court retained jurisdiction over the state law
claim against BNY based on the diversity of the parties, and exercised
supplemental jurisdiction over the remaining state law claim against
On August 5, 2003, after the conclusion of fact discovery, Kingdom
filed an Amended Complaint in which it added claims against BNY for
negligence and breach of fiduciary duty, as well as a demand for punitive
The following facts are as alleged by Kingdom, and as reflected in
documents integral to its Complaint. On July 9, 1999, NCL and BNY
executed a Deposit Agreement that created American Depositary Shares
("ADSs") of NCL.*fn4 The agreement reflected as its purpose NCL's desire
to provide for the deposit of its shares and the creation, based on that
deposit, of ADSs. Each ADS would represent four ordinary shares of NCL.
The Deposit Agreement described at length the rights and duties of
NCL and BNY. It also granted BNY the right to resign, and NCL the
right to remove BNY as the depositary and to appoint a successor. BNY and
NCL also indemnified each other from certain types of liability and
The Deposit Agreement included provisions addressing BNY's obligations
to the beneficial owners of NCL's ADSs. It also addressed the liability
of BNY to beneficial owners of ADSs. Section 5.03 of the Deposit
Agreement, entitled "Obligations of the Depositary, the Custodian and the
Issuer" provides in part that: "The Depositary assumes no obligation nor
shall it be subject to any liability under this Deposit Agreement to an
Owner or Beneficial Owners, except that it agrees to perform its
obligations specifically set forth in this Deposit Agreement without
negligence or bad faith."
On January 13, 2000, Star commenced a tender offer to purchase all of
the outstanding shares of NCL. In connection with the tender offer, Star
filed a Schedule 14D-1 with the Securities and Exchange Commission
("SEC"). In the Schedule 14D-1, Star offered to purchase all ADSs of NCL.
The offer was for 35 Norwegian Kroner ("NOK") per share and expired on
February 10, 2000.
The Schedule 14D-1 stated that Star's intent was to acquire all of the
outstanding shares of NCL.*fn5 The Schedule 14D-1 stated
that three Star affiliates intended to transfer their shares to
Star, and, provided Star held more than 90% of the outstanding shares
following the tender offer, it intended to effect a compulsory
acquisition pursuant to Norwegian law "as promptly as practicable" after
the tender offer period ended. The Schedule 14D-1 also indicated that
Star expected to offer the remaining shareholders a price "equal to" the
offer price, but cautioned in bold letters that such a price was not
guaranteed. Kingdom declined to tender its ADSs during the tender offer
Shortly after completion of the tender offers, Star confirmed in a
February 16, 2000 press release that it had successfully acquired over
90% of NCL and intended to commence the compulsory acquisition of the
remaining shares of NCL. On June 26, however, Star claimed in another
press release that it could not commence the acquisition because 10.9% of
NCL shares were still held by three affiliates. The press release stated
that Star was planning an initial public offering of its own stock in the
"later part" of 2000, after which Star intended to acquire the NCL shares
of its affiliates and complete the compulsory acquisition.
Kingdom was the beneficial owner of 1,810,810 ADSs representing 7,
243, 240 ordinary shares of NCL. On October 11, 2000, Kingdom brought a
valuation proceeding in Norway against Star and GT Lim. Kingdom claimed
that Star and its related entities had acquired more than 90 percent of
NCL's shares through the tender offer, and as a result were required to
buy Kingdom's shares at 35 NOK each. On November 29, Star acquired the
necessary NCL shares from its affiliates, and commenced the compulsory
acquisition the following day. The share price offered in the compulsory
acquisition was the then-market price of 13 NOK per share.
BNY, as the depositary for NCL's ADSs, received notice of the
compulsory acquisition and the right to contest the offer price on or
about November 30. Pursuant to the terms of the compulsory acquisition
offer, shareholders had until February 7, 2001 to contest the 13 NOK
compulsory offer price and initiate a valuation proceeding under
In its Amended Complaint, Kingdom alleges that, under the Deposit
Agreement, "BNY owed a fiduciary duty (as agent) to Kingdom, as ADS owner
(as principal), to act in Kingdom's interest when it received notice of
the Compulsory Acquisition offer. . . . BNY owed a fiduciary duty to
Kingdom to keep Kingdom informed and to seek Kingdom's instructions on
discretionary matters." According to Kingdom, the Deposit Agreement
provided that BNY would "perform certain acts on behalf of ADS owners,
such as Kingdom." Kingdom contends that BNY had a duty under
Sections 4.02 and 4.04 of the Deposit Agreement to distribute to
ADS holders of NCL all notices regarding "distributions or the offering
of any rights" with respect to their shares, including the compulsory
tender offer and right to reject the offer and demand valuation of the
shares by a Norwegian court. BNY did not notify the ADS holders of Star's
offer, however, and, on December 4, 2000, approximately four days after
the compulsory offer, accepted the 13 NOK per share price on behalf of
all of the ADSs in its possession.*fn6
Upon learning that BNY had accepted Star's 13 NOK per share price on
Kingdom's behalf, Kingdom immediately instructed BNY to rescind the
acceptance. BNY attempted to rescind, but Star refused to accept the
rescission and asserted that Kingdom had lost its right to contest the 13
NOK acquisition price. The Norwegian court dismissed Kingdom's valuation
proceeding against Star, finding that BNY's apparent authority to accept
Star's offer on Kingdom's behalf terminated Kingdom's right to pursue its
demand for at least 35 NOK per share in the Norwegian court. Kingdom
claims it suffered damages of over $17 million.
Kingdom asserts claims against BNY for breach of contract, negligence,
and breach of fiduciary duty. BNY now moves to dismiss Kingdom's
negligence and breach of fiduciary duty claims against it. New York law
governs claims arising out of the
Deposit Agreement*fn7, and neither Kingdom nor BNY has disputed
that Kingdom's negligence and breach of fiduciary duty claims fall under
New York law.
Rule 8(a) requires that a complaint contain "a short and plain
statement of the claim showing that the pleader is entitled to relief."
Rule 8(a)(2), Fed.R.Civ.P. Pleadings under the Federal Rules are to
give "fair notice of the claim asserted," so as to enable the opposing
party to answer and prepare for trial. Summons v. Abruzzo,
49 F.3d 83, 86 (2d Cir. 1995). A court may dismiss an action pursuant to
Rule 12(b)(6) only if "it appears beyond doubt, even when the complaint
is liberally construed, that the plaintiff can prove no set of facts
which would entitle him to relief." Jaqhory v. New York State Dep't
of Educ., 131 F.3d 326, 329 (2d Cir. 1997) (citation omitted). In
construing the complaint, the court must "accept all factual allegations
in the complaint as true and draw interferences from those allegations in
the light most favorable to the plaintiff." Id. "Given the
Federal Rules' simplified standard for pleading, a court may dismiss a
complaint only if it is clear that no relief could be granted under any
set of facts that could be proved consistent with the allegations."
Swierkiewicz v. Sorema, N.A.,
534 U.S. 506, 514 (2002).
In addition to the pleadings, the court may consider "any written
instrument attached to [the complaint] as an exhibit or any statements or
documents incorporated in it by reference, as well as public disclosure
documents required by law to be, and that have been filed with the SEC,
and documents that the plaintiffs either possessed or knew about and upon
which they relied in bringing suit." Rothman v. Gregor,
220 F.3d 81, 88 (2d Cir. 2000) (citation omitted). A court need not credit
general, conclusory allegations if they "are belied by more specific
allegations of the complaint." Hirsch v. Arthur Andersen &
Co., 72 F.3d 1085, 1092 (2d Cir. 1995).
The Negligence Claim
Kingdom contends that BNY had an independent duty, apart and distinct
from the Deposit Agreement, to exercise reasonable skill and care to ADS
holders in accordance with "custom and practice" in the industry, "even
where the Deposit Agreement did not cover a particular corporate action
or event." Specifically, Kingdom alleges that BNY negligently failed to
exercise its duty of reasonable care by failing to inform Kingdom of the
compulsory acquisition offer, to seek Kingdom's instructions with regard
to the offer, to consult with NCL regarding the terms of the offer, to
disclose applicable internal policies regarding compulsory acquisition
offers to Kingdom, and to maintain adequate internal policies for
responding to compulsory offers.
A claim for negligence requires proof of: (1) the existence of a duty
owed by the defendant to the plaintiff; (2) a breach of that duty; and
(3) injury to the plaintiff as a result of the breach. Alfaro v.
Wal-Mart Stores, Inc., 210 F.3d 111, 114 (2d Cir. 2000). Under New
York law, however, a cause of action in negligence "cannot be the basis
of liability where [the defendant's] sole legal duties to [the plaintiff]
arose entirely out of contract." International Ore & Fertilizer
Corp. v. SGS Control Services, Inc., 38 F.3d 1279, 1283 (2d Cir.
1994); City of New York v. 611 West I52nd Street, Inc.,
710 N.Y.S.2d 36, 38 (1st Dept. 2000). The negligent performance of a contract
is not considered a tort unless a legal duty "independent" of the
contract itself has been violated. Dorking Genetics v. United
States, 76 F.3d 1261, 1269 (2d Cir. 1996) (quoting
Clark-Fitzpatrick, Inc. v. Long Island Rail Road Co.,
521 N.Y.S.2d 653, 656-57 (N.Y. 1987)). This legal duty must "spring from
circumstances extraneous to, and not constituting elements of, the
contract, although it may be connected with and dependent upon the
contract." dark-Fitzpatrick, 521 N.Y.S.2d at 657. "Merely
alleging that the breach of contract duty arose from a lack of due care
will not transform a simple breach of contract into a tort." Sommer
v. Fed. Signal Corp., 583 N.Y.S.2d 957, 961 (N.Y. 1992) (citation
There are circumstances where a "legal duty independent of contractual
obligations may be imposed by law as an incident to the parties'
relationship." Id. For example, if a "defendant
goes beyond a mere breach of contract and acts in such a way that a
trier of fact could infer that it wilfully intended to harm the
plaintiff," then the defendant may have breached an independent duty to
the plaintiff. Carvel Corp. v. Noonan, 350 F.3d 6, 16 (2d Cir.
2003) (Wesley, J.) (interference with prospective business
relationships). Professionals and bailees "may be subject to tort
liability for failure to exercise reasonable care, irrespective of their
contractual duties." Sommer, 583 N.Y.S.2d at 961. Whether an
independent duty exists is a question of law to be decided by the court.
See McCarthy v. Olin Corp., 119 F.3d 148, 156 (2d Cir. 1997);
Church ex rel. Smith v. Callanan Industries, Inc., 752 N.Y.S.2d 254,
256 (N.Y. 2002). Where the damages sought are essentially the
enforcement of a bargain, however, the action must proceed solely on the
contract theory. Sommer, 583 N.Y.S.2d at 961.
Kingdom alleges in its Amended Complaint that not only the Deposit
Agreement but also the "custom and practice of the industry" imposed a
duty on BNY to seek Kingdom's instructions regarding the compulsory
acquisition offer. Kingdom presents no case law supporting the
proposition that industry custom and practice can create an independent
legal duty outside of the contractual relationship. Although custom and
practice can help define a standard of care a party must exercise after
it has undertaken a duty, see, e.g., Lee v. Pennsylvania R.
Co., 192 F.2d 226, 229 (2d Cir. 1951), custom and practice do not
give rise to an independent legal duty. See Mallor v. Wolk
Properties, Inc., 311 N.Y.S.2d 141, 148 (N.Y. Sup. 1970)
(collecting cases). In construing the common law of negligence in their
jurisdictions, other courts have explicitly found that custom and usage
do not give rise to an independent legal duty. See, e.g., Canal
Barge Co., Inc. v. Torco Oil Co., 220 F.3d 370, 377 (5th Cir. 2000);
Florida Fuels, Inc. v. Citcro Petroleum Corp., 6 F.3d 330, 334
(5th Cir. 1993); Van Duyn v. Cook-Teacrue Partnership,
694 N.E.2d 779, 782 (Ind. Ct. App. 1998); Servicemaster of St. Cloud v.
Gab Business Services, Inc., 544 N.W.2d 302, 307 (Minn. 1996);
First Nat'l Bank of Ft. Smith v. Kansas City Southern Rwv. Co.,
865 S.W.2d 719, 729 (Mo. Ct. App. 1993).
Kingdom next contends that it enjoyed a special relationship of trust
and confidence with BNY as the depositary of Kingdom's ADSs. Kingdom
asserts that by "entrusting its substantial investment in the care of
BNY, Kingdom put its trust and confidence in BNY." This assertion also
fails. Kingdom does not plead the existence of such a relationship with
BNY in its Amended Complaint, raising it for the first time in its brief
in opposition to this motion. Even if Kingdom had pleaded the existence
of a special relationship between it and BNY, its conclusory assertion
would be directly contradicted by the explicit terms of the Deposit
Agreement, a document that is integral to the Complaint. As the Deposit
Agreement makes clear, it is NCL that chose BNY to serve as the
depositary for ADSs, and any special relationship that existed was
between NCL and BNY.
Kingdom provides no authority for the proposition that a depositary
bank has a special relationship of trust and confidence with the owners
of ADSs such that the depositary bank owes them a duty of care extraneous
to the contract governing the deposit. The cases that Kingdom does cite
in connection with this claim are inapposite. See, e.g., Apple
Records, Inc. v. Capitol Records, Inc., 529 N.Y.S.2d 279, 283 (1st
Dep't 1988) (parties' intertwined 20-year business relationship created
an independent duty outside of the contract).
Kingdom argues that BNY's promotion of itself as "the leading
depositary of ADSs" created an independent duty. To the extent that
advertising of expertise can create a duty, the duty would have run
between BNY and NCL. Again, Kingdom has cited no authority for the
existence of a duty to it under this alternative theory.
Finally, Kingdom argues that the law of bailment created an independent
legal duty to Kingdom when BNY took custody of Kingdom's property.
Kingdom's attempt to cast its relationship with BNY as one of
bailor-bailee again is raised for the first time in its brief in
opposition to this motion. Kingdom presents no case law supporting the
proposition that the relationship between a depositary bank and an ADS
holder is one of a bailor-bailee. Under New York law, "a bailment is the
delivery of personalty for some particular purpose, or on mere deposit,
upon a contract, express or implied, that after the purpose has been
fulfilled it shall be redelivered to the person who delivered it,
or otherwise dealt with according to his directions, or kept until he
reclaims it, as the case may be." Pagliai v. Del Re, No. 99
Civ. 9030 (DLC), 2001 WL 220013, at *5 (S.D.N.Y. Mar. 7, 2001) (citation
omitted) (emphasis supplied). The elements of a bailment are "intent to
create the bailment, delivery of possession of the bailed items, and
acceptance of the items by the bailee." Id. (citation omitted).
Kingdom does not allege facts sufficient to establish the existence of
a bailor-bailee relationship between itself and BNY.*fn8 Kingdom has not
identified what it delivered to BNY for its safekeeping; rather, it was
NCL who chose BNY as the depositary of its shares and who delivered them
into the possession of BNY. In addition, nothing in the Deposit Agreement
itself nor in Kingdom's pleadings reflects an intent by Kingdom to create
a bailor-bailee relationship with respect to the NCL ADSs beneficially
owned by Kingdom.
In sum, the obligations owed by BNY with respect to the ADSs were
defined in the Deposit Agreement. Kingdom has not identified a separate
duty extraneous to the contract. Equally important, the damages Kingdom
seeks are in the nature of a claim for the benefit of the bargain, and
not tort damages. For each of these reasons, Kingdom's claim for
negligence must be
Contrary to Kingdom's assertion, neither the law of the case nor
judicial estoppel compels a different result. The law of the case
doctrine, which is discretionary, dictates that "a decision on an issue
of law made at one stage of a case becomes binding precedent to be
followed in subsequent stages of the same litigation." Westerbeke
Corp. v. Daihatsu Motor Co., Ltd., 304 F.3d 200, 218 (2d Cir. 2002).
In the March Opinion, the Court addressed BNY's claim against Star and
NCL for contribution under the common law by observing, inter
alia, that "Kingdom's claim against BNY sounds both in contract and
in tort." The Court stated that the duty to Kingdom was "extraneous to
the contract itself since it was not created solely by agreement." The
allegations of an independent duty to which the Court referred were the
allegations that BNY had violated the "custom and practice in the
industry" by not notifying Kingdom of the compulsory offer.
The March Opinion was not required to confront the legal sufficiency of
Kingdom's negligence claim. Indeed, the negligence claim was first
pleaded the following year, in an Amended Complaint of August 5, 2003.
The law of the case doctrine should not be invoked unless the parties had
a "full and fair" opportunity to litigate the initial determination.
Westerbeke, 304 F.3d at 219 (citation omitted). Having now had
that opportunity, and for the reasons described above, it is well
settled that industry custom cannot create a legal duty.
Judicial estoppel also does not apply. Judicial estoppel applies to
inconsistent factual positions asserted in a prior proceeding that were
adopted by the court. Wight v. Bankamerica Corp., 219 F.3d 79,
90 (2d Cir. 2000). "If the statements can be reconciled there is no
occasion to apply an estoppel." Id. (citation omitted).
In opposing Star's motion to dismiss BNY's claim for contribution, BNY
[Star] attack[s] BNY's entitlement to common-law
contribution on the ground that contribution is
not available to a defendant whose potential
liability to a plaintiff is for economic loss
resulting from an alleged breach of
contract. . . . The Court should treat Kingdom's
claim for the moment as one sounding
both in contract and in negligence.
(Emphasis supplied.) BNY has not advanced any factual positions that
contradict those it presented at earlier stages of this litigation.
Kingdom has not identified even a clear contradiction of a legal
position. BNY's argument can be read as stating only that, until the
court resolved the adequacy of Kingdom's pleadings, they should be
treated as alleging both claims in contract and for negligence.
Breach of Fiduciary Duty
Kingdom next asserts that the Deposit Agreement made BNY the agent of
Kingdom, an ADS owner. Kingdom claims that this
principal-agent relationship placed a fiduciary duty on BNY to act
in Kingdom's interest when it received notice of the compulsory
acquisition offer, and required it to keep Kingdom informed and seek
Kingdom's instructions on discretionary matters pertaining to the offer.
Kingdom alleges that BNY breached its fiduciary duty to Kingdom by
accepting Star's compulsory acquisition offer.
A claim of breach of fiduciary duty under New York law requires the
plaintiff to plead: (1) a fiduciary duty between the parties; (2)
defendant's breach of that duty; and (3) damages suffered by the
plaintiff which were proximately caused by the breach. See Whitney
v. Citibank, N.A., 782 F.2d 1106, 1115 (2d Cir. 1986). Under New
York law, a fiduciary relationship exists "when one person is under a
duty to act for or to give advice for the benefit of another within the
scope of the relation." Levitin v. PaineWebber, Inc.,
159 F.3d 698, 707 (2d Cir. 1998) (citation omitted) (a broker with no
discretionary authority is not a fiduciary). Where the parties deal in an
arms-length commercial transaction, however, "no relation of confidence
or trust sufficient to find the existence of a fiduciary relationship
will arise absent extraordinary circumstances." In re Mid-Island
Hosp., Inc., 276 F.3d 123, 130 (2d Cir. 2002) (citation omitted).
Thus, a conventional business relationship "without more" does not create
a fiduciary relationship in New York. Pursier v. Women's Interart
Center, Inc., 566 N.Y.S.2d 295, 297 (1st Dep't 1991). The fact that
parties have executed a
contract is insufficient to create a fiduciary relationship.
Northeast General Corp. v. Wellington Advertising, Inc.,
82 N.Y.2d 158, 164-65 (N.Y. 1993).
"Generally, banking relationships are not viewed as special
relationships giving rise to a heightened duty of care." Banque
Arabe et Internationale D'Investissement v. Maryland Nat. Bank,
57 F.3d 146, 158 (2d Cir. 1995); Aaron Ferer & Sons, Ltd. v. Chase
Manhattan Bank, 731 F.2d 112, 122 (2d Cir. 1984). Such a duty may be
found, however, where the bank and its customer are engaged in a
principal-agent relationship. To establish the existence of such a
relationship requires the pleading of facts sufficient to show: "(1) the
principal's manifestation of intent to grant authority to the agent, and
(2) agreement by the agent, [and (3)] control over key aspects of the
undertaking." Commercial Union Ins. Co. v. Alitalia Airlines,
S.p.A., 347 F.3d 448, 462 (2d Cir. 2003) (citation omitted).
Kingdom asserts that a fiduciary relationship existed because BNY was
its agent and because it was entrusted with Kingdom's property. It
asserts that it has adequately pleaded the existence of such a
relationship, and any factual dispute must await summary judgment or
Kingdom does not sufficiently plead the existence of a fiduciary
relationship between itself and BNY. Kingdom's Amended Complaint does not
allege circumstances that would give rise to a fiduciary relationship
between the parties. In fact, the Deposit
Agreement specifically disavows any responsibility to, or control
by, beneficial owners such as Kingdom. For example, Section 5.04 provides
for two instances in which BNY may be removed as the depositary of NCL's
ADSs. BNY may resign at any time, and must give notice of its resignation
only to NCL, or, alternatively, NCL itself may remove BNY as the
depositary of its shares. Upon NCL's designation of the successor
depositary, such successor depositary "without any further act or deed"
becomes "fully vested" with all the rights, duties, and obligations of
BNY. There is no mention of the owners or beneficial owners. Beneficial
owners such as Kingdom do not have the power to remove BNY as the
depositary, and their consent is not required to confirm any successor
depositary should NCL remove BNY and designate a new depositary. A
conclusory pleading of a fiduciary duty is insufficient to plead a cause
of action in the face of the contrary terms in the contract which
governed the parties' relationship.
As with the negligence claim, Kingdom asserts that the law of the case
prevents BNY from prevailing on its motion to dismiss the breach of
fiduciary duty claim. According to Kingdom, the March Opinion recognized
the existence of an agency relationship between BNY and Kingdom.
Although the March Opinion does state, in the context of dismissing
BNY's third-party claim against NCL for breach of the duty of good faith
as owed by an agent, that "BNY acts as
Kingdom's agent under certain circumstances," such language does
not broadly proclaim the existence of a principal-agent relationship
between Kingdom and BNY. As with Kingdom's negligence claim, the March
Opinion could not directly confront the legal sufficiency of Kingdom's
fiduciary duty claim since it had not yet been pleaded. See
Westerbeke, 304 F.3d at 219. In addition, Kingdom does not plead (or
identify in its papers on this motion) that the "certain circumstances"
to which the March Opinion refers are applicable here.*fn9 Thus, the law
of the case does not compel a finding that Kingdom adequately pleads the
existence of a fiduciary relationship with BNY.
Kingdom also argues that the doctrine of judicial estoppel prevents BNY
from denying a fiduciary relationship with Kingdom because it had argued
to the Court that there was a fiduciary relationship between BNY and NCL.
The fact that BNY argued that it enjoyed a fiduciary relationship with
NCL does not preclude BNY from taking a contrary position with respect to
its relationship with Kingdom. NCL, the issuer of the ADSs, and Kingdom,
one of the beneficial owners of NCL's ADSs, stand in different positions
with respect to BNY, a fact evident throughout the Deposit Agreement.
For the reasons stated above, the Bank of New York's motion to dismiss
the claims for negligence and breach of fiduciary duty asserted by
Kingdom 5-KR-41, Ltd. in its Amended Complaint is granted.