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Colwell and Salmon v. Arbormed Corporation

June 23, 2011

COLWELL AND SALMON COMMUNICATIONS, INC., PLAINTIFF,
v.
ARBORMED CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Thomas J. McAVOY Senior United States District Judge

DECISION and ORDER

Defendant filed a motion to dismiss Plaintiff's claim of constructive trust pursuant to Fed. R. Civ. P. 12 . Plaintiff filed a cross-motion for leave to amend the Complaint pursuant to Fed. R. Civ. P. 15. For the following reasons, the Court denies Defendant's motion to dismiss and grants Plaintiff's motion for leave to amend the Complaint.

I. FACTS

The following facts are from the Plaintiff's Proposed First Amended Complaint and are deemed to be true for the purposes of this motion.

Plaintiff, Colwell & Salmon Communications, Inc. (hereinafter "Colwell"), is a domestic corporation organized and existing under the laws of the State of New York, with a principle place of business in Albany, New York. Defendant Bridge Healthcare Finance, LLC (hereinafter "Bridge") is a Delaware limited liability company with a principle place of business in Chicago, Illinois. Defendant ArborMed, Inc. (hereinafter "ArborMed") is a California corporation with a principle place of business in Orange, California.

On February 8, 2008, prior to certain loans made to ArborMed, Plaintiff entered into an Intercreditor Agreement with Defendant Bridge, which was intended to prioritize the respective security interests of Bridge and Colwell with regard to the subsequent loans made to ArborMed. Defendant ArborMed then executed promissory notes in favor of Plaintiff and pledged certain of its assets and personal property as security for its performance of its obligations under the Notes, totaling $122,500.

In an April 7, 2009 letter to ArborMed, Plaintiff demanded payment in full of all amounts due and owing under the Notes in addition to payment in the amount of $55,944.00 for services rendered pursuant to an agreement between Colwell and ArborMed. ArborMed, in a letter dated April 23, 2009, repudiated its obligation to pay any of the amounts due. In October 2009, Fi-Med Management, Inc. (hereinafter "Fi-Med") acquired the assets of ArborMed at a public sale. Defendant Bridge received approximately $350,000 of the proceeds from the sale of ArborMed's assets to Fi-Med.

Plaintiff alleges that pursuant to the Intercreditor Agreement existing between Bridge and Colwell, Bridge was only entitled to priority with regard to Colwell as to the first $50,000.00 of its secured interest in the assets of ArborMed. Furthermore, the Intercreditor Agreement provided, in part, that: [i]n the event that any collateral, or any proceeds thereof shall be received . . . by Bridge . . . in violation of the terms of this Agreement while . . . the [Colwell] Short-Term Loan . . . is outstanding, such subject collateral or proceeds shall be held in trust for the benefit of and shall be immediately paid over or delivered to Colwell.

Pl.'s Prop. First Am. Compl. Para. 18.

Plaintiff filed suit on August 18, 2010 in the Supreme Court for the State of New York, County of Albany. Defendants filed a Notice of Removal which removed this action to federal court on September 21, 2010. On October 27, 2010, Bridge filed a motion to dismiss Plaintiff's cause of action for constructive trust. Plaintiff filed a motion for leave to amend the Complaint on December 23, 2010. Plaintiff's original Complaint contained a claim of constructive trust against Defendant Bridge. Plaintiff's Proposed First Amended Complaint contains claims against Defendant Bridge for breach of contract and breach of express trust, in addition to the existing constructive trust claim.

II. DISCUSSION

a. Cross-Motion for Leave to Amend Complaint

Defendant argues that Plaintiff's cross-motion to amend the Complaint should be denied because of Plaintiff's undue delay.

A party may amend its pleading within "21 days after serving it, or . . . 21 days after service of a motion under Rule 12 (b). . . . In all other cases, a party may amend its pleading with . . . the court's leave. The court should freely give leave when justice so requires." Fed. R. Civ. P. 15 (a). "[A] rule 15 (a) motion should be denied only for such reasons as undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party." Aetna ...


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