The opinion of the court was delivered by: DENISE COTE, District Judge
MEMORANDUM OPINION & ORDER
Eight employee benefits plans claim that six defendants
conspired to execute a fraudulent conveyance in an effort to
shield the assets of BMW Meats, LLC ("BMW Meats") from an
outstanding judgment. Defendant Martin Weiner has moved to dismiss the only claim brought against him. For the following
reasons the motion is denied.
In UFCW Local 174 Commercial Health Care Fund v. BMW Meats,
LLC, 05 Civ. 4030 (DLC), this Court confirmed three arbitration
awards against BMW Meats for failure to make contributions to the
UFCW Local 174 Commercial Health Care Fund, UFCW Local 174
Pension Fund, UFCW Local 174 Commercial Pension Fund, UFCW Local
174 Security Benefit Fund, UFCW Local 342 Annuity Fund, UFCW
Local 342 Health Care Fund, UFCW Local 342 Security Benefit Fund,
and UFCW Local 342 Legal Fund (the "Funds"). Judgment was entered
against BMW Meats on July 20, 2005.
On August 10, 2005, the Funds filed their complaint in the
instant action ("Complaint"). They bring this second action
against four corporations, Homestead Meadows Foods Corp.
("Homestead Foods"), Harry Capital, Inc. ("Harry Capital"), Ford
Meats, LLC, Heritage Food Group, Inc. (collectively "Corporate
Defendants"), and two individuals, Brian M. Weiner and Martin
Weiner. The plaintiffs allege that on or about the day that the
judgment issued against BMW Meats, all of that company's assets
were transferred to Homestead Foods. The plaintiffs claim the
transfer was the result of a conspiracy by the defendants to
protect BMW Meats' assets through a fraudulent conveyance.
Relying in large part upon facts pleaded "upon information and
belief," the Complaint alleges the following corporate structure in support of its claims. Brian Weiner is the sole
shareholder, President and CEO of BMW Meats. Brian Weiner is also
the President of Homestead Foods. All of the shares of Homestead
Foods are owned by Harry Capital. Martin Weiner, Brian Weiner's
father, is the majority shareholder of Harry Capital. The other
shareholders of Harry Capital are all members of the Weiner
family, including Brian Weiner. BMW Meats, Homestead Foods and
Harry Capital all have substantially the same employees,
management, directors and officers, and share the same office
space, business address and telephone number. The Complaint
alleges that both Brian and Martin Weiner used their complete
dominion over all the Corporate Defendants to transfer BMW Meats'
assets in an effort to avoid satisfaction of the judgment entered
against BMW Meats.
The plaintiffs plead counts of fraudulent conveyance,
conversion, unjust enrichment and violations of Article 6 of the
New York Commercial Code against Homestead Foods. They also claim
that Homestead Foods should be liable for the debts of BMW Meats
under theories of alter ego and successor liability. Finally, the
plaintiffs bring a claim of conspiracy to commit a fraudulent
transfer against all the defendants. For reasons explained
recently, subject matter jurisdiction exists over this action.
See UFCW Local 174 Commercial Health Care Fund v. Homestead
Meadows Foods Corp., 05 Civ. 7098 (DLC), 2005 WL 2429783
(S.D.N.Y. Oct. 4, 2005).
On September 22, Martin Weiner filed the instant motion to dismiss the sole claim against him pursuant to Rule 12 (b) (6) of
the Federal Rules of Civil Procedure. He argues that the
plaintiffs have failed to meet the pleading requirements for
conspiracy and that there is no independent cause of action for
civil conspiracy under New York law.
To dismiss an action pursuant to 12 (b) (6) a court must
determine that "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." Scutti Enters., LLC v.
Park Place Entm't Corp., 322 F.3d 211, 214 (2d Cir. 2003)
(citation omitted). In construing the complaint the court must
"accept as true the factual allegations in the complaint and
draw all inferences in the plaintiff's favor." 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) (citation omitted).
Rule 8(a) requires that the plaintiff provide a "short and
plain statement of the claim showing that the pleader is entitled
to relief." Fed.R.Civ.P. 8(a). Pleadings are to give "fair
notice" of a claim and "the grounds upon which it rests". Dura
Pharm., Inc. v. Broudo, 125 S.Ct. 1627, 1634 (2005) (citation
omitted). Rule 8 is "not meant to impose a great burden upon a plaintiff." Id. Indeed, because Rule 8 is fashioned in the
interest of fair and reasonable notice, not technicality,
"extensive pleading of the facts is not required." Wynder v.
McMahon, 360 F.3d 73, 77 (2d Cir. 2004) (citation omitted).
Pleadings averring conspiracy are properly measured under the
"liberal pleading requirements of Rule 8(a)." Hecht v. Commerce
Clearing House, Inc., 897 F.2d 21, 26 n. 4 (2d Cir. 1990).
The plaintiffs have satisfied the requirements of Rule 8. The
Complaint alleges sufficient facts to give fair notice to Martin
Weiner of the claim against him and the grounds upon which it
rests. It alleges his control of Harry Capital, which in turn
controls Homestead Foods, which was the vehicle used for the
alleged unlawful transfer of assets belonging to the judgment
debtor BMW Meats. The allegations that the defendants shared the
same office space and that they all had knowledge of the judgment
against BMW provide further details as to the place and the time
of the conspiracy.
Martin Weiner objects that many of the facts in the Complaint
are pleaded upon information and belief. This formulation is
entirely appropriate for facts that are customarily within the
possession of the defendants and subject to verification through
discovery. See 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1224 (3d ed. 2004).
Martin Weiner argues that New York law does not recognize an
independent cause of action for civil conspiracy, relying on Internet Law Library, Inc. v. Southridge Capital Mgmt., LLC,
223 F. Supp. 2d. 474, 490 (S.D.N.Y. 2002). A claim for conspiracy
to commit a tort is recognized in New York "to the extent that
the plaintiff well pleads the underlying tort." Fisher v. Big
Squeeze (N.Y.), Inc., 349 F. Supp. 2d. 483, 489 (E.D.N.Y. 2004);
see also Southridge, 223 F. Supp. 2d. at 490. The plaintiff
in this case has pled a conspiracy to commit fraudulent
conveyance, which is a species of tort, as well as the
substantive claim of fraudulent conveyance. Sunrise Indus. Joint
Venture v. Ditric Optics, Inc., 873 F. Supp. 765, 770 (E.D.N.Y.
1995); see also ...