The opinion of the court was delivered by: Michael A. Telesca United States District Judge
Plaintiff Casimer J. Jaszewski, ("Jaszewski"), brings this action against defendants V-GPO, Inc., ("V-GPO"), John N. Blair, Esq., ("Blair") and the law firm of Blair and Roach, LLP., claiming that the defendants unlawfully converted plaintiff's property, and that defendant V-GPO breached a contract known as the Common Stock Escrow Agreement entered into on December 6, 2001. Jaszewski seeks damages for the alleged breach of contract and conversion of property, and recision of a modification made to the Common Stock Escrow Agreement.
Defendant V-GPO moves for summary judgment in its favor on grounds that this court lacks subject matter jurisdiction over the dispute because the amount in controversy is not in excess of $75,000.00. V-GPO further contends that plaintiff's cause of action for conversion is untimely, and that its breach of contract claim is defective. V-GPO also contends that there is no basis for rescinding the modification to the contract.
Defendants Blair and Blair and Roach move for summary judgment on grounds that because they did not exercise dominion or control over any of plaintiff's property, they may not be held liable for conversion.
For the reasons set forth below, I grant defendants' motions for summary judgment.
Plaintiff Casimer Jaszewski ("Jaszewski") was the owner of controlling interest in a company known as Epicure Investments ("Epicure"). Epicure was a publicly-traded shell corporation. In 2001, Jaszewski became interested in selling Epicure, and through the assistance of a third company, arranged for the purchase of Epicure by defendant V-GPO (a privately-held company). V-GPO was interested in purchasing a publicly-traded shell corporation for the purpose of transforming V-GPO into a publicly-traded company.
Jaszewski and V-GPO agreed to enter into a "reverse merger" transaction, whereby V-GPO would merge with Epicure, and in doing so, would become a publicly traded company. As part of the merger transaction, Jaszewski transferred 2,010,000 shares of stock to a company known as Belmont Securities, which company was to resell the shares and pay Jaszewski after certain amounts of the shares had been sold.
As an additional condition of the merger, V-GPO required that all outstanding $.001 par value Epicure stock (that was not sold as part of the merger transaction) be escrowed for a period of years following the merger. The parties agree that the remaining number of outstanding shares to be escrowed was 523,394, and that the holders of these shares were Jaszewski himself and members of his immediate family. To effectuate the escrowing of the remaining 523,394 shares, Epicure entered into an agreement with the holders of the outstanding shares pursuant to which the stock holders agreed to have their shares held in escrow. The escrow agreement, entitled the "Common Stock Escrow Agreement," ("the Escrow Agreement") was entered into by Epicure and the holders of the outstanding shares on December 6, 2001. Pursuant to the terms of the escrow agreement, the escrow period was to last for two years.
Plaintiff delivered the stock as required to defendant law firm Blair and Roach. Thereafter, in June, 2002, the plaintiff entered into another transaction with V-GPO pursuant to which plaintiff sold V-GPO 427,390 shares of stock being held in escrow in return for $25,000 and 450,000 shares of V-GPO stock.*fn1 This transaction was memorialized in a June 6, 2002 letter from V-GPO to Jaszewski indicating that Jaszewski would receive 450,000 shares of V-GPO stock, to be held in escrow pursuant to the December 6, 2001 Escrow Agreement. Although the parties acknowledge that the transfer of 450,000 V-GPO shares to the plaintiff, and payment of $25,000 to the plaintiff was in return for the transfer of plaintiff's 427,390 shares of stock to V-GPO, the agreement is silent as to plaintiff's obligation to sell 427,390 of his shares, and defendant's obligation to pay Jaszewski $25,000.
Plaintiff contends that in attempting to finalize the sale of his 427,390 shares for $25,000 and 450,000 V-GPO shares, defendant V-GPO demanded that plaintiff amend the Escrow Agreement to provide for a three-year escrow period, as opposed to the two-year period that had already been agreed to. Plaintiff contends that V-GPO threatened to not complete the transaction unless plaintiff would agree to such an amendment. As a result, plaintiff signed a second Escrow Agreement which provided for a three-year escrow period rather than a two-year period. The second Escrow Agreement does not state that it is an amendment or a modification of the original agreement, or even acknowledge that a first agreement existed. Indeed, with the exception of the longer escrow period, the second agreement is identical to the first agreement, including the portion that states the agreement was entered into on December 6, 2001. One other difference is that while the first Escrow Agreement was signed by all holders of outstanding shares, the second agreement was signed only by Jaszewski.
Upon completion of the two-year period contemplated in the original Escrow Agreement, plaintiff demanded the return of his stock from the defendant. The defendants refused to return plaintiff's stock on grounds that the plaintiff had modified the agreement and agreed to a three-year escrow period. After the three year period passed, plaintiff contends that the defendants returned only some of the shares, and that the shares that were returned were improperly restricted, thus making them effectively worthless. Defendants contend that the stock that was ...