The opinion of the court was delivered by: Lewis A. Kaplan, District Judge.
This document relates to: 06 Civ. 0704 04
Bank of America Corporation and related entities (collectively, "BoA") move to dismiss on the grounds that (1) Parmalat Capital Finance Limited ("PCFL") lacks standing, (2) PCFL's claims are barred by in pari delicto, (3) each cause of action fails to state a claim upon which relief may be granted, and (4) Dr. Enrico Bondi, Food Holdings Limited, and Dairy Holdings Limited are indispensable parties.
1. The standing argument is based on the contention that the complaint fails to allege injury to PCFL, as distinguished from its creditors, and the proposition that PCFL cannot recover for injuries sustained by its creditors. I assume the latter proposition to be correct; indeed, PCFL so concedes. Pl. Mem. 8-9. But it is beside the point, as the complaint -- the allegations of which must be taken as true for purposes of this motion -- alleges injury to PCFL.*fn1
2. BoA here trots out much the same arguments in support of its in pari delicto defense that I previously rejected in Bondi v. Bank of America Corp., 412 F. Supp. 2d 392 (S.D.N.Y. 2006), Bondi v. Grant Thornton International, 421 F. Supp. 2d 703 (S.D.N.Y. 2006), and an order filed on February 21, 2007 in Parmalat Capital Finance Limited v. Grant Thornton International, No. 06 Civ. 2991. BoA's arguments are rejected for substantially the same reasons. See also infra ¶ 4c. BoA's reliance on Cenco, Inc. v. Seidman & Seidman, 686 F.2d 449 (7th Cir. 1982), is misplaced for the reasons set forth at pages 12-13 of plaintiff's memorandum and in Bondi v. Grant Thornton International, 421 F. Supp. 2d at 716.
3. The Rule 19 motion is denied to the extent and for the reasons set forth in the opinion of even date in this case and Food Holdings Limited v. Bank of America, No. 05 Civ. 9934.
4. BoA attacks the sufficiency of each of PCFL's claims for relief.
As an initial matter, the parties dispute whether FED. R. CIV. P. 9(b) applies to PCFL's claims. PCFL argues, correctly, that it makes no claim that it denominates "fraud," while BoA counters that fraud is nonetheless at the heart of the complaint.
PCFL's complaint seeks relief on two bases. The first is that BoA misrepresented the impact of the transactions to PCFL's board of directors to induce the board to approve the transactions and that the board relied on BoA's misrepresentations to PCFL's detriment. E.g., Cpt. ¶¶ 140-41. Regardless of how PCFL names its causes of action, this is an averment of fraud and must comply with Rule 9(b). See Rombach v. Chang, 355 F.3d 164, 170-71 (2d Cir. 2004). The complaint fails to allege facts about these alleged misrepresentations with any specificity, stating simply that they were made. These conclusory allegations fail to satisfy Rule 9(b).
A second basis for relief also is alleged. PCFL makes a garden variety breach of trust claim, alleging, for example, that BoA violated fiduciary duties by placing its own interests before those of PCFL. E.g., Cpt. ¶ 144. As this is not a claim for fraud, Rule 9(b) does not apply. See Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1104 (9th Cir. 2003) (where a plaintiff "allege[s] some fraudulent and some non-fraudulent conduct . . . only the allegations of fraud are subject to Rule 9(b)'s heightened pleading requirements").
Finally, although the complaint sets forth allegations about the greater Parmalat fraud on the public, PCFL seeks no relief on the basis of that fraud. No purpose would be served by requiring more precise pleading of these background allegations.
To the extent that PCFL's claims for relief are based on fraud, BoA's motion to dismiss is granted. The Court considers BoA's specific challenges to the remaining claims below.
a. Count 1 purports to assert a claim for breach of fiduciary duty. BoA argues that the complaint fails sufficiently to allege the existence of a fiduciary duty. The argument, however, is based on a parsing of the pleading that invites me to conclude that the allegations that favor the plaintiff are "belied by other, more specific allegations in the Complaint." Def. Mem. 10. As a complaint may not be dismissed unless it is plain that the plaintiff could prove no facts under its allegations that would entitle it to relief, e.g., Conley v. Gibson, 355 U.S. 41, 45-46 (1957), I cannot properly accept the invitation thus extended.
b. Count 2 claims that BoA aided and abetted breaches of fiduciary duty owed to PCFL by various Parmalat insiders who, according to the complaint, owed fiduciary duties as well to PCFL. BoA challenges this count on the grounds that the complaint fails to allege (1) a primary violation by the insiders, and (2) facts ...