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Hughes v. BCI International Holdings

March 27, 2007

PATRICIA G. HUGHES, ET AL., PLAINTIFFS,
v.
BCI INTERNATIONAL HOLDINGS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION AND ORDER

Plaintiff Patricia Hughes ("Hughes"), on behalf of herself and her three minor children, brought this action for, inter alia, fraud in connection with her investment in a privately held start-up company. Defendants are, primarily, the founders, officers, and directors of that venture.

Since this Court's opinion regarding Defendants' motion to dismiss, see Hughes v. BCI, 452 F. Supp. 2d 290 (S.D.N.Y. Sept. 14, 2006), Defendants and several other parties have interposed cross-claims. Multiple summary judgment motions are now before this court on Plaintiffs' original claims and various cross-claims by various parties. I will address these motions seriatim, proving background only where necessary to reach a decision.*fn1

I. STANDARD OF REVIEW

A court will not grant a motion for summary judgment unless it determines that there is no genuine issue of material fact and the undisputed facts are sufficient to warrant judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986); Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986). The moving party bears the burden of demonstrating the absence of a material factual question. Anderson v. Liberty Lobby, 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed. 2d 202. In determining whether there is a genuine issue of material fact, the Court must resolve all ambiguities, and draw all inferences, against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed. 2d 176 (1962) (per curiam); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). However, a disputed issue of material fact alone is insufficient to deny a motion for summary judgment; the disputed issue must be "material to the outcome of the litigation," Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), and must be backed by evidence that would allow "a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed. 2d 538 (1986); see also Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir. 1992).

II. DISCUSSION

A. Plaintiffs' Motions v. Cunningham Defendants and Cunningham Defendants' Cross-Motions

Plaintiff Hughes and her three minor children moved for summary judgment against Michael Cunningham ("M. Cunningham"), the Coach House Group (UK) Ltd. ("CHG"), The Sustainable Project Development Group, Ltd. ("Sustainable Projects"), SPDG Fibre International ("SPDG Fibre"), and SPDG Technologies, PLC ("SPDG Tech") (collectively, the "Cunningham Defendants") on the following claims: unjust enrichment (Plaintiffs' Sixth Claim), successor liability (Plaintiffs' First and Tenth Claims), promissory and equitable estoppel (Plaintiffs' Eleventh and Twelfth Claims), breach of fiduciary duty and trust (Plaintiffs' Seventeenth Claim, v. M. Cunningham only), avoidance of fraudulent transfer or conveyance (in the alternative) (Thirteenth and Fourteenth Claims), and various remedies, if summary judgment is granted on any of the above claims (Sixteenth Claim).

The Cunningham Defendants have cross-moved for summary judgment on the above claims, and additionally, moved for summary judgment to dismiss Plaintiffs' claims for fraud (Plaintiffs' Second Claim), negligence (Plaintiffs' Third Claims), negligent misrepresentation (Plaintiffs' Fourth Claim), intentional concealment or negligent nondisclosure (Plaintiffs' Fifth Claim), respondeat superior (Plaintiffs' Eighth Claim), and "veil piercing" (Plaintiffs' Fifteenth Claim), and to dismiss Plaintiffs' claims for consequential or punitive damages.

Because genuine issues of material fact exist as to all the above claims, summary judgment is denied to both parties on all these claims.

B. Cunningham Defendants' Motions v. BCI and Bio-Comp

Defendants BCI International Holdings, Inc. ("BCI") and Bio-Composites International, Inc. ("Bio-Comp") interposed several cross-claims against the abovementioned Cunningham Defendants, as well as third-party defendants David Higson ("Higson") and John Cunningham ("J. Cunningham").

The Cunningham Defendants, as well as Higson and John Cunningham, subsequently moved for summary judgment to dismiss BCI's and Bio-Comp's cross-claims for breach of fiduciary duty (against Michael and John Cunningham) and aiding and abetting breach of fiduciary duty (against Higson and the remaining "Cunningham Defendants"), theft and diversion of corporate assets (against the Cunningham Defendants), conversion (against the Cunningham Defendants), unjust enrichment (against the Cunningham Defendants), and prima facie tort (against the Cunningham Defendants).

Because genuine issues of fact exist as to all the above claims, the Cunningham Defendants and Higson and John Cunningham's motion for summary ...


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