The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:
USDC SDNY DOCUMENT ELECTRONICALLY FILED DOC #:
This family dispute has been litigated for nearly five years. At the core of this case is an alleged oral statement made 27 years ago, by and between Defendant George E. Robb, Jr. ("Robb, Jr.") and his father, George E. Robb, Sr. ("Robb, Sr.") that the family business which Robb, Jr. bought from Robb, Sr. in 1985 would be for the benefit of Plaintiffs and other family members. Based on Robb, Jr.'s alleged promise, which is supported only by hearsay, Plaintiffs claim that they are entitled to a meaningful share of profits from Robb Jr.'s sale of the business in March 2001. They assert claims for breach of contract, constructive trust, and unjust enrichment.
On February 29, 2008, the Court dismissed this matter on statute of limitations grounds. See Bice, et al. v. Robb, No. 07 Civ. 2214, 2008 WL 552566 (S.D.N.Y. Feb. 29, 2008). The Second Circuit vacated this Court's order of dismissal and remanded for further proceedings, but noted that its remand "does not preclude the district court from adjudicating the motion to dismiss on the ground that the alleged promise is too vague to be enforced." Bice, et al. v. Robb, 324 Fed. Appx. 79, 81 (2d Cir. 2009).*fn1 Plaintiffs subsequently filed their First Amended Complaint ("Amended Complaint") on May 22, 2009, and Robb, Jr. moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) on vagueness and other grounds. On January 15, 2010, the Court denied Robb, Jr.'s motion, holding that it was premature to dismiss Plaintiffs' breach of contract claim without discovery. Bice, et al. v. Robb, No. 07 Civ. 2214(PAC) (S.D.N.Y. Jan. 15, 2010) (Dkt. # 41) ("January 15, 2010 Order"). As the Court explained, "[d]iscovery might shed light on how Robb, Sr. ran the business for the benefit of his family and thus flesh out the terms of the promise." (Id. at 7-8.) Having conducted extensive discovery, Defendant now moves for summary judgment. For the reasons discussed below, the Court grants Defendant's motion. Plaintiffs' claims are therefore dismissed with prejudice.
The Court assumes the parties' familiarity with the background facts, procedural history, and allegations as stated in prior opinions, including the Second Circuit's opinion. Briefly, four siblings sued their brother, Robb, Jr., who bought the family business, RPM Securities, Inc.*fn2
("RPM"), from their father and his associates through a leveraged buy-out ("LBO") in 1985. Shortly before the LBO, according to the four siblings, Robb, Jr. told his father that he would "take care of family always." (Def's 56.1 ¶ 1; Pl's 56.1 ¶ 1(c).) After the LBO, the company continued to grow for more than a decade, and Robb, Jr. subsequently sold the business in 2001 to another NYSE specialist firm, LaBranche & Co., Inc. ("LaBranche"), at a large profit.
Plaintiffs assert that Robb Jr. received $180 million from LaBranche's acquisition of RPM, but that he did not "take care of the family" by giving them each a meaningful distribution of these proceeds.
1. Robb, Sr.'s Operation of RPM Plaintiffs contend that Robb, Sr. ran RPM as a family firm and that he wished to "keep it in the family." (Pl's 56.1 ¶¶16(b), 25.) Robb, Sr. was only one of RPM's principals, however. Throughout his time at RPM, Robb, Sr. employed many family members, even those who had no financial experience. (Id. ¶ 240.) In approximately 1978, Robb, Sr. gave RPM stock in equal amounts to each of his children. (Id. ¶ 242.) In subsequent years, Robb, Sr. increased his children's holdings in RPM and gave more shares to Robb, Jr. because he was the eldest. (Id. ¶ 245.) Plaintiffs argue that Robb, Sr.'s 1983 Will confirms that Robb, Sr. wanted to maintain RPM as a family business and provide for his children's financial security by giving them equal shares of RPM stock. (Id. ¶¶ 219, 279, 280.) Plaintiffs further contend that in 1984, after Robb, Sr. decided to leave RPM, he approached his brother John about running the company. (Id. ¶ 296.) John declined, and in 1985, Robb, Sr. discussed transferring his controlling interest in the company to Robb, Jr. (Id.¶¶ 297, 301.)
Clare Robb, Robb, Sr.'s wife, testified in her deposition that at some point prior to the LBO, she heard her husband speaking to Robb, Jr. on the telephone. (Declaration of Laura Flahive Wu ("Wu Decl."), Ex. 5, at 24:5-19.) She testified that during this conversation, Robb, Sr. told Robb, Jr. "to keep it in -- just keep it in the family."*fn3 (Id. at 25:4-5.) What Robb, Jr. said is not known; Clare Robb could not hear Robb, Jr.'s response. She testified that she understood Robb, Sr. to be referring to RPM and thought that Robb, Jr. agreed to her husband's request. (Id. at 26:2-8; 27:9-12.) Clare Robb further testified that after the LBO, Robb, Sr. told her that he chose to sell RPM to Robb, Jr. rather than other bidders "[b]ecause he wanted to keep it in the family." (Id. at 41:17-21.)
According to Plaintiffs, Robb, Jr. acknowledged this oral agreement during multiple conversations with family members, specifically: a January 4, 2007 conversation with his sister, Plaintiff Barbara Robb, (Def's 56.1 ¶ 217; Pl's 56.1 ¶ 217); a January 11, 2007 conversation with his sister, Plaintiff Clare Robb Wenk, (Wu Decl., Ex. 3, at 87:2-15); and during various conversations with Robb, Sr.'s brother, James Robb. (Pl's 56.1 ¶ 50.) The record further shows that after the 2001 sale of RPM to LaBranche, Robb, Jr. created and funded GR Family LLC using part of his proceeds from the transaction in order to benefit his siblings. (Def's 56.1 ¶ 157.) Plaintiffs argue that these measures show that Robb, Jr. acknowledged his oral agreement with Robb, Sr. Defendant maintains that he did not create GR Family LLC to fulfill any obligation to Robb, Sr., but rather "[t]o try to create a nest egg for some of my siblings and children." (Id.) Elizabeth Robb Bice expressed a similar understanding in an email to Barbara Robb dated November 30, 2006. (Wu Decl., Ex. 40 ("I did believe he was going to give it to us as a 'nest egg' for each of our retirements.").)
Plaintiffs also argue that a September 4, 1985 memorandum from Robb, Sr. regarding the LBO suggests that Robb, Sr. rejected other offers for RPM in favor of Robb, Jr.'s bid. The memorandum states that Robb, Sr. received a separate all-cash offer of "at least equal to $35,000,000," but that RPM terminated those negotiations. (Wu Decl., Ex. 19.) The memorandum also states that RPM held "serious negotiations" with another group for the sale of RPM "at a purchase price of at least $35,000,000," but that "the leveraged buy-out proposed by George E. Robb, Jr. and certain other minority shareholders appeared more beneficial to RPM." (Id.) Plaintiffs contend that Robb, Sr. accepted Robb, Jr.'s bid for the company in reliance on Robb, Jr.'s alleged promise "to fulfill his father's wishes to keep RPM in the family and use it to provide financial security to his children, by, among other things, distributing proceeds of a future sale equally to his children." (Pl's Mem. at 9.) Neither Robb, Sr. nor Robb, Jr. ever uttered any words concerning "future sale" or "distributing proceeds of a future sale," however. Those words are strictly Plaintiffs' claims.
Defendant asserts that the record fails to show any evidence of an oral agreement with Robb, Sr., or that Robb, Sr. intended to preserve an interest in RPM for his family at the time of the LBO. Rather, Defendant maintains that Robb, Sr. began to seek bids for RPM from competing Wall Street firms 18 months before the LBO. RPM engaged Bear Sterns as its investment advisor to assist in negotiations with a retail brokerage firm. (Def's 56.1 ¶¶ 30-31.) Robb, Jr. ultimately developed an LBO proposal with the assistance ...