The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge
Walter Rusyniak and Anthony Rusyniak ("Plaintiffs") commenced this action against Ena Paola Gensini, Gunila De Montaigu, and Concha Futura, S.A. ("Defendants"), asserting claims of (1) fraud, (2) breach of fiduciary duty, (3) civil conspiracy, (4) breach of contract, and (5) violation of Panamanian corporate law. (Dkt. No. 16, at 9-17 [Plf.'s Am. Compl.].)
Currently before the Court are Defendants' motion to dismiss Plaintiffs' Amended Complaint, and Plaintiffs' cross-motion to amend their Amended Complaint. (Dkt. Nos. 24, 41.) Plaintiffs seek to amend their Amended Complaint to (1) allege newly discovered facts regarding the various causes of action asserted in their Amended Complaint, and (2) add, as a party Defendant, Ena Paola Gensini's daughter and attorney in fact, Gioia Gensini. (Dkt. No. 41, Part 1, at 1.) For the reasons set out below, Defendants' motion to dismiss is granted in part and denied in part, and Plaintiffs' cross-motion to amend is granted in part and denied in part.
A. Relevant Procedural History
Plaintiffs commenced this action on March 16, 2007. (Dkt. No. 1.) On July 12, 2007, Plaintiffs filed an Amended Complaint. (Dkt. No. 16.) On August 3, 2007, Defendants jointly filed a motion to dismiss Plaintiff's Amended Complaint based upon Fed. R. Civ. P. 12(b)(2) and 12(b)(6). (Dkt. No. 24.) Both before and after the filing of Defendants' motion to dismiss, Plaintiffs sought initial disclosure pursuant to Fed. R. Civ. P. 26. (Dkt. No. 41, Part 2, at 1.) As a result, in September 2007, Defendants produced initial disclosure documents Fed. R. Civ. P. 26. (Dkt. No. 41, Part 2, at 2.) Subsequently, Plaintiffs sought, and were granted, a thirty (30) day adjournment of the deadline by which they had to respond to Defendants' motion to dismiss. (Dkt. No. 40 and Text Order of Sept. 19, 2007.) Plaintiffs now assert that these disclosures form the basis of their cross-motion to amend their Amended Complaint. (Dkt. No. 41, Part 2, at 2.)
B. Factual Allegations of the Proposed Second Amended Complaint
Because Plaintiffs' proposed Second Amended Complaint may cure certain deficiencies asserted by Defendants (in their motion to dismiss) with regard to Plaintiffs' Amended Complaint, and because an amended pleading supersedes a prior pleading in all respects (see N.D.N.Y. L.R. 7.1[a]), the Court will review the allegations of Plaintiffs' proposed Second Amended Complaint, rather than the allegations of their Amended Complaint. Liberally construed pursuant to Fed. R. Civ. P. 8(e), Plaintiffs' proposed Second Amended Complaint (Dkt. No. 41, Part 9) alleges as follows.
On or about May 27, 1980, Plaintiff Walter Rusyniak, in a partnership with Geoffredo Gensini, established a corporation in the Republic of Panama under the name of Concha Futura, S.A. On or about August 6, 1980, Geoffredo Gensini sold two parcels of land located in the Republic of Panama to Concha Futura, S.A., for thirty-seven thousand dollars ($37,000) in exchange for a twenty-five (25) percent ownership interest in Concha Futura, S.A. On or about August 6, 1980, Plaintiff Walter Rusyniak purchased a twenty-five (25) percent ownership interest in Concha Futura, S.A.*fn1 The investments of Geoffredo Gensini and Walter Rusyniak provided the initial capitalization for Concha Futura, S.A.*fn2 Two other shareholders, Roland De Montaigu and Guido Bezzera, were to invest in Concha Futura, S.A., within close proximity to the initial capitalization.*fn3
On or about January 10, 1981, the four shareholders of Concha Futura, S.A., held a meeting in which they amended the Articles of Incorporation.*fn4 At the meeting on January 10, 1981, the Board accepted the resignation of Guido Bezzera and accepted the nomination of Theodore Venners as his replacement. In the Articles of Incorporation, the shareholders set forth numerous provisions, most notably (1) a provision that the President of the Board (and, in his absence or defection, the Vice-President of the Board) will be the legal spokesperson of the company, and (2) a provision that only the existing officers actually in office could elect new officers to fill vacancies. The shareholders also established that Geoffredo Gensini would serve as President, Walter Rusyniak as Vice-President, Ronald De Montaigu as Secretary/Treasurer, and Theodore Venners as a member at large. In the event that Geoffredo Gensini passed away, Walter Rusyniak would take on Geoffredo Gensini's role as the legal spokesperson for the company.
Following the meeting on January 10, 1981, an extended period of time passed with no communication between the shareholders.*fn5 On October 15, 1986, Geoffredo Gensini passed away, which, according to Plaintiffs, resulted in Walter Rusyniak becoming the President of Concha Futura, S.A., under the Corporate Bylaws.*fn6 In 1995, Plaintiffs traveled to Panama to determine the status of the corporation and its members. Plaintiffs confirmed that there had been no activity in the corporation, that the corporation remained in good standing despite its inactivity, that the land held by Concha Futura, S.A., remained in good standing despite its inactivity, and that the land held by Concha Futura, S.A., remained in the name of the corporation. It was also clear to Plaintiffs, from a review of the records of Concha Futura, S.A., that no ongoing annual meetings or duties were being undertaken by the corporation.
In early 1996, a meeting was conducted in New York City by the spouse of the late Geoffredo Gensini, Defendant Ena Paola Gensini, who claimed to be acting as President "ad hoc" in her husband's place.*fn7 Defendant Gensini was accompanied by the wife of the deceased Roland De Montaigu, Defendant Gunila De Montaigu, who claimed to be acting as Vice-President "ad hoc." Also present were Alberto A. Tile, acting as Secretary/Director, and Laurent De Montaigu, acting as Treasurer/Director. These new directors and officers were elected to the Board by Defendants Gensini and De Montaigu.*fn8 No notice was given to Plaintiffs regarding this meeting, by publication or otherwise.*fn9 Defendants used this meeting to usurp Plaintiff Walter Rusyniak's authority and to take over the corporation and its assets.*fn10
In January 1997, another meeting was held during which "ad hoc" directors made numerous changes to the Corporate Bylaws and Agreements without any notice to Plaintiff Walter Rusyniak.*fn11 One of the changes made at this meeting was to reduce the majority vote required to sell, lease, exchange or dispose of property or assets from seventy percent (70%) to sixty percent (60%).*fn12 Another decision made at this meeting was that Plaintiff Walter Rusyniak had forfeited his shares because several letters of collection were sent to him, with no payment having been credited, and the Board therefore annulled his Certificate of Shares.*fn13
After this meeting, Defendants conducted the business of Concha Futura, S.A., as if they were the legitimate officers.*fn14 Up until January 2006, Defendant Ena Gensini lived in Manlius, New York, Defendant De Montaigu held property in Paris, France, and Alberto Tile, as well as Concha Futura, S.A., were based in Panama.*fn15 As a result, the parties coordinated meetings and conducted their affairs through written correspondence and telephone conversations between New York, Panama and/or France.*fn16 Part of this correspondence included discussions of selling Concha Futura assets. Plaintiff Walter Rusyniak was never included in any of the aforementioned communications.
On or about June 14, 2002, Defendant Ena Gensini granted her daughter, Gioia Gensini, a Power of Attorney over her banking.*fn17 This Power of Attorney also conferred on Gioia Gensini the authority to represent Ena Paola Gensini's interest in Concha Futura, S.A.*fn18
In June 2005, the "ad hoc" Board met in Syracuse, New York.*fn19 At that meeting, the "ad hoc" group voted to enter into a promise to sell the two parcels of land owned by Concha Futura, S.A., through Alberto Tile. No notice of this meeting was provided to Plaintiff Walter Rusyniak, despite the fact that he resided in close proximity to the meeting location. On or about July 11, 2005, in the Republic of Panama, Alberto Tile, as representative of the "ad hoc" officers of Concha Futura, S.A., entered into a promise to sell the parcels of land owned by the corporation to Atahualpa Panama Incorporated.*fn20
In May 2006, Plaintiff Anthony Rusyniak flew back to Panama to again confirm the status of the corporation's assets,*fn21 assuming that they were in the same state they had been in from 1981 to 1995, when he and his father duly confirmed the corporation was in good standing.*fn22 During his investigation, Plaintiff Anthony Rusyniak discovered that there were investors poised to purchase the land originally sold to Concha Futura, S.A., by Geofreddo Gensini in his efforts to capitalize the corporation some twenty-five (25) years earlier.*fn23
Defendants were aware that Plaintiff Anthony Rusyiak was investigating the status of the corporation and had heard about a potential sale of the land.*fn24
After an extended effort, Plaintiffs obtained, from Panamanian officials, information relating to Concha Futura, S.A. This information consisted of minutes of alleged "shareholder meetings" held by Defendants. Plaintiff Walter Rusyniak had no knowledge or prior notice of any shareholder meetings, despite the provisions requiring due notice in the Articles of Incorporation and Bylaws.*fn25 In addition, none of the legitimately elected corporate officers or members of the Board were present at any of the aforementioned meetings.*fn26
On May 8, 2006, Gioia Gensini sent an email message to Attorneys Alberto Tile and Laurence Bousquet, responding to Attorney Tile's email message of earlier that day, and authorizing Attorney Tile to sell the assets of Concha Futura, S.A., within forty-eight (48) hours, as he recommended.*fn27
As a result, in or about May of 2006, two Concha Futura, S.A., land parcels were sold.*fn28
Plaintiffs did not receive any of the profits from these sales.*fn29
II. RELEVANT LEGAL STANDARDS
Plaintiffs' motion to amend is made pursuant to Fed. R. Civ. P. 15(a), which explicitly provides that "leave [to amend] shall be freely given when justice so requires." Fed. R. Civ. Proc. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962); Manson v. Stacescu, 11 F.3d 1127, 1133 (2d Cir. 1993). Elaborating on this standard, the Supreme Court has explained that leave to amend should be freely given [i]n the absence of any apparent or declared reason--such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment . . . .
Foman, 371 U.S. at 182, accord, Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir. 2001).
With regard to the futility exception, courts measure futility under the same standard as they do a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Nettis v. Levitt, 241 F.3d 186, 194 n.4 (2d Cir 2001), overruled on other grounds by Slayton Am. Exp. Co., 460 F.3d 215 (2d Cir. 2006); Ricciuti v. New York City Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991).
B. Motion to Dismiss for Failure to State a Claim
Under Fed. R. Civ. P. 12(b)(6), a defendant may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). It has long been understood that a defendant may base such a motion on either or both of two grounds: (1) a challenge to the "sufficiency of the pleading" under Fed. R. Civ. P. 8(a)(2) and, in cases alleging fraud, Fed. R. Civ. P. 9(b);*fn30 or (2) a challenge to the legal cognizability of the claim.*fn31
With regard to the first ground, Fed. R. Civ. P. 8(a)(2) requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2) [emphasis added]. By requiring this "showing," Fed. R. Civ. P. 8(a)(2) requires that the pleading contain a short and plain statement that "give[s] the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Jackson v. Onondaga County, 549 F. Supp.2d 204, 212, n. 17 (N.D.N.Y.2008) (McAvoy, J., adopting Report-Recommendation on de novo review) (citations omitted). The main purpose of this rule is to "facilitate a proper decision on the merits." Jackson. 549 F. Supp. at 212, n.18 (citations omitted).*fn32
The Supreme Court has long characterized this pleading requirement under Fed. R. Civ. P. 8(a)(2) as "simplified" and "liberal," and has repeatedly rejected judicially established pleading requirements that exceed this liberal requirement. Id. at 212, n.20 (citations omitted). However, even this liberal notice pleading standard "has its limits." Id. at 212, n.21 (citations omitted). As a result, numerous Supreme Court and Second Circuit decisions exist holding that a pleading has failed to meet this liberal notice pleading standard. Id. at 213, n.22 (citations omitted).
Most notably, in Bell Atlantic Corporation v. Twombly, the Supreme Court reversed an appellate decision holding that a complaint had stated an actionable antitrust claim under 15 U.S.C. § 1. Bell Atlantic Corporation v. Twombly, 127 S.Ct. 1955 (2007). In doing so, the Court "retire[d]" the famous statement by the Court in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Twombly, 127 S.Ct. at 1968-69. Rather than turning on the conceivability of an actionable claim, the Court clarified, the "fair notice" standard turns on the plausibility of an actionable claim. Id. at 1965-74. The Court explained that, while this does not mean that a pleading need "set out in detail the facts upon which [the claim is based]," it does mean that the pleading must contain at least "some factual allegation[s]." Id. at 1965 (citations omitted). More specifically, the "[f]actual allegations must be enough to raise a right to relief above the speculative level [to a plausible level]," assuming (of course) that all the allegations in the complaint are true. Id. (citations omitted).*fn33
As have other Circuits, the Second Circuit has recognized that the clarified plausibility standard that was articulated by the Supreme Court in Twombly governs all claims, including claims brought by pro se litigants (although the plausibility ofthose claims is to be assessed generously, in light of the special solicitude normally afforded pro se litigants).*fn34 It should be emphasized that Fed. R. Civ. P. 8's plausibility standard, explained in Twombly, was in no way retracted or diminished by the Supreme Court's decision (two weeks later) in Erickson v. Pardus, in which (when reviewing a pro se pleading) the Court stated, "Specific facts are not necessary" to successfully state a claim under Fed. R. Civ. P. 8(a)(2). Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) [citation omitted; emphasis added]. That statement was merely an abbreviation of the often-repeated point of law--first offered in Conley and repeated in Twombly--that a pleading need not "set out in detail the facts upon which [the claim is based]" in order to successfully state a claim. Twombly, 127 S.Ct. 1965, n.3 (citing Conley, 355 U.S. at 47) [emphasis added]. That statement did not mean that all pleadings may achieve the requirement of "fair notice" without ever alleging any facts whatsoever. Clearly, there must still be enough fact set out (however set out, whether in detail or in a generalized fashion) to raise a right to relief above the speculative level to a plausible level.*fn35
Finally, in reviewing a complaint for dismissal under Fed. R. Civ. P. 12(b)(6), the court must accept the material facts alleged in the complaint as true and construe all reasonable inferences in the plaintiff's favor. Board of Educ. of Pawling Cent. Sch. Dist. v. Schultz, 290 F.3d 476, 479 (2d Cir. 2002).
C. Motion to Dismiss for Lack of Jurisdiction
"When a defendant moves to dismiss a complaint under Rule 12(b)(2) for want of personal jurisdiction, courts must perform a two-part analysis." Harris v. Ware, 04-CV-1120, 2005 WL 503935, at *1 (E.D.N.Y. Mar. 4, 2005) "First, personal jurisdiction over a defendant must be established under the law of the state where the federal court sits." Harris, 2005 WL 503935, at *1 (citing Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 [2d Cir. 1999]). "Under Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure, the service of a summons establishes personal jurisdiction over a defendant 'who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located.'"
Id. (citation omitted). "Second, if jurisdiction is established under the governing statute, courts must determine whether the exercise of jurisdiction under the relevant state law would violate the defendant's due process rights." Id. (citation omitted)
The plaintiff "bears the burden of establishing that the court has jurisdiction over the defendant, since Defendant has served the Rule 12(b)(2) motion." Aldinger v. Segler, 04-CV-4405(RJH), 2005 WL 2591958, at *2 (S.D.N.Y. Oct.13, 2005) (internal quotation marks and citation omitted). Unless a court conducts "a full-blown evidentiary hearing," the plaintiff only needs to make "a prima facie showing of jurisdiction through its own affidavits and supporting materials to survive a motion to dismiss under Rule 12(b)(2)." Harris, 2005 WL 503935, at *1 (internal quotation marks and citations omitted). "In other words, prior to discovery, a plaintiff may defeat a jurisdiction-testing motion by pleading in good faith, . . . legally sufficient allegations of jurisdiction." Harris, 2005 WL 503935, at *1 (internal quotation marks and citations omitted). However, "[o]nce discovery regarding a defendant's contacts with the forum is conducted," the plaintiff's burden is heightened, with the requirement that the "prima facie showing . . . include an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant." Id. (internal quotation marks and citations omitted).
"If the plaintiff fails to make the requisite showing, [the Court] may dismiss the complaint pursuant to Rule 12(b)(2)." Id. In the alternative, the Court may "transfer venue[,] even it if lacks personal jurisdiction over defendants, if the requirements of the governing statute, 28 U.S.C. § 1404(a), are met." Id. (internal quotation marks and citations omitted). "When evaluating the parties' submissions, the Court will read the Complaint and submissions in the light most favorable to Plaintiff." Daou v. Early Advantage, LLC, 410 F. Supp.2d 82, 88-89 (N.D.N.Y. 2006) (Scullin, J.) (citations omitted).
Because an analysis of Defendants' motion to dismiss is intertwined with an analysis of Plaintiffs' motion to amend, the Court will frame its analysis around Plaintiffs' motion to amend, and address the legal arguments asserted in Defendants' motion to dismiss below in Part III.D. of this Decision and Order.
"In Foman v. Davis, the Supreme Court held that, despite the liberal pleading standards set forth in Fed. R. Civ. P. 15, a party's motion for leave to amend a pleading may be denied if that party has shown 'undue delay' in seeking the amendment." Am. Med. Ass'n v. United Healthcare Corp., 00-CV-2800, 2006 WL 3833440, at *3 (S.D.N.Y. Dec. 29, 2006) (citing Foman v. Davis, 371 U.S. 178, 182 ). "As the Court of Appeals has explained, a district court 'plainly has discretion . . . to deny leave to amend where the motion is made after an inordinate delay, no satisfactory explanation is offered for the delay, and the amendment would prejudice the defendant.'" Am. Med. Ass'n, 2006 WL 3833440, at *3 (citing Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 [2d Cir. 1990]). "When a considerable period of time has passed between the filing of the complaint and the motion to amend, courts have placed the burden upon the movant to show some valid reason for his neglect and delay." Id. (citations omitted).
Here, Defendants do not attack Plaintiffs' motion to amend on the ground of undue delay. After carefully considering the matter, the Court finds that, because the motion to amend has been made relatively early in the proceedings, and was made shortly after Plaintiffs received certain ...