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Monteleone v. Leverage Group

February 5, 2009

FRANCES MONTELEONE, LINDA RODRIGUEZ, ELYSE SCILEPPI, FRANK J. MONTELEONE, AND WENDY MONTELEONE, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
MARGARET SCHAEFER BARGLOW, RAYMOND BARGLOW, PAMELA MONTANARO, SIRI SCULL, CHARLES SCULL, ROBERT WOLFSON, AND MAHALIA PUGATCH, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
GENE BIANCO AND ANITA BIANCO, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
PHILIP M. BRAY, IN-GRID V NOREIKO-BRAY, INDIVIDUALLY AND AS TRUSTEE FOR NORAY CHARITABLE REMAINDER UNITRUST, AND LABEL SERVICES, INC., PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
CARL GAMBELLO, CAROLE GAMBELLO, AND ADELE DISARMATO, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
MIRIAM B. GREENBERGER, PLAINTIFF,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
AMADEO DELMONACO, PIEDAD DELMONACO MICHELLE DELMONACO, BRANDON DELMONACO, NICOLE DELMONACO, ROSA ARMETTA, KARAMCHAD BALKARAN, GINO CITRO, STEVEN DOYLE, KEITH PENNINGTON, JOSEPH FONTANA, MARCO FONTANA, NUNZIO FONTANA, DAVID BREINER, MARC KOWALSKI, GEORGE TRIVINO, GERMAN VALDAVIA, AND MAZINE ALBERT, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
ANN MARIE DELIA, WILLIAM DELIA, ROBERT SWEENEY, VERONICA SWEENEY, TARA SROKA F/K/A/ TARA SWEENEY, AND LUDVIG HAUGEDAL, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.
BRIAN MARCHESE, RUTH MARCHESE, AND MICHAEL MARCHESE PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge

MEMORANDUM AND ORDER

Plaintiffs Frances Monteleone, Margaret Shaefer Barglow, Carl Gambello, Miriam Greenberger, Philip Bray, Amadeo del Monaco ("Del Monaco"), Gene Bianco, the Estate of William A. Delia ("Delia"), and Brian Marchese, among others*fn1 (collectively, "plaintiffs"), commenced actions against defendants the Leverage Group ("Leverage Group"), Leverage Option Management Co., Inc. ("Leverage Option Management"), Leverage Management, LLC -("Leverage Management"), North American Financial ("North American"), Philip Barry ("Barry"),*fn2 and Philip Barry, LLC ("Barry, LLC")*fn3 (collectively, "defendants"). These cases were consolidated for pretrial purposes on November 17, 2008. On December 24, 2008, all plaintiffs filed an Amended Consolidated Complaint, which included the following additional defendants: Saint Joseph's Development Corporation and HK Holdings, LLC.*fn4 The Amended Consolidated Complaint listed the following causes of action: (1) violation of federal securities law, 15 U.S.C. §§ 78c(a)(10), 78j(b) and S.E.C. Rule 10b-5; (2) violation of New Jersey securities law, N.J.S.A. 49:3-17; (3) violation of Federal RICO, 18 U.S.C. 1962(c); (4) Federal RICO conspiracy, 18 U.S.C. 1962(d); violation of New Jersey RICO, N.J.S.A. 2C:41-2(c); (6) New Jersey RICO Conspiracy, N.J.S.A. 2C:41-2(d); (7) fraud; (8) conversion; (9) negligent misrepresentation; (10) breach of fiduciary duty; (11) breach of contract; (12) breach of implied-covenants of good faith and fair dealing; and (13) unjust enrichment. Plaintiffs seek compensatory, consequential, and punitive damages, attorneys' fees, and costs. Now before the Court are the Del Monaco and Delia motions for partial summary judgment as to liability and damages. For the reasons set forth below, the motions are granted in part and denied in part.

Background

Familiarity with the procedural history, parties, investment scheme, prior summary judgment motions made in this case is assumed.*fn5

On January 29, 2009, I granted the Monteleone, Barglow, Gambello, Greenberger, Bianco, and Bray plaintiffs' motions for summary judgment. Pursuant to my consolidation order, these six motions for summary judgment were treated as having been filed on behalf of all plaintiffs. Each of the Del Monaco and Delia plaintiffs have submitted affidavits showing that their exposure to defendants' investment scheme mirrored that of the Monteleone, Barglow, Bianco, Gambello, Greenberger, and Bray plaintiffs.

Discussion

A. Liability

For the reasons stated in my January 29, 2009 opinion, I grant partial summary judgment to the Del Monaco and Delia plaintiffs on the issue of liability, limited to the claims stated in the previous ruling.

B. Damages

A plaintiff must substantiate a claim with evidence to prove the extent of damages. Although an evidentiary hearing may be held, "it is not necessary for the district court to hold a hearing, as long as... there was a basis for the damages specified." Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997); Tamarin v, Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993) (district judges are given much discretion to determine the necessity of an inquest).

The Del Monaco Plaintiffs

Each of the damages claims made by the fourteen Del Monaco plaintiff suffers from a lack of documentation substantiating the claims. The motion for summary judgment on damages is denied without prejudice to the Del Monaco plaintiffs filing additional papers.

The Delia Plaintiffs

Ann Marie Delia as administrator for her father's estate states that her father, for whose estate she is administrator, had two accounts with the Leverage Group. Affidavit of Ann Marie Delia at ¶ 3. The first account had a guaranteed interest rate of 6.01%, and the second had a guaranteed rate of 12.55%. Id. at ¶ 4. As of January 31, 2009, the first account balance was $298.968.88, and the second account balance was $202,236.01, for a total ...


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