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International Group, LLC v. Daniel Padilla

October 31, 2012


The opinion of the court was delivered by: Charles J. Siragusa United States District Judge


This is a diversity action alleging claims under New York State law for conversion and slander of title. Now before the Court is Plaintiff's motion for leave to file a second amended complaint (Docket No. [#9]) and Defendant's cross-motion to dismiss and/or for summary judgment [#14]. Plaintiff's motion is denied, and Defendants' motion to dismiss is granted.


The following facts are taken from the Amended Complaint and proposed Second Amended Complaint, including any documents which are attached thereto, incorporated by reference, or integral to the pleading,*fn2 and are viewed in the light most favorable to Plaintiff. International Group, LLC ("Plaintiff") is a company that provided charter flight service on a private Gulfstream jet aircraft. The jet was owned by a separate corporation, International Group, Inc., which is not a party to this action, but which has assigned all of its rights concerning the subject incident to Plaintiff. In or about September 2010, defendant Daniel Padilla ("Padilla") and defendant Richard Welkowitz ("Welkowitz") embarked on a business venture, that involved Padilla traveling to the African nations of Mali and Benin to obtain gold to bring back to the United States. Welkowitz allegedly funded the venture, by paying approximately $6 million to persons in the nation of Benin, including Desire Vodonou ("Vodonou"), a member of the Benin Parliament, to process the necessary customs paperwork. In connection with this venture, Welkowitz 's company, Blackford Commodities Company LLC ("Blackford Commodities"), contracted with Padilla's company, Greystone Aviation, LLC ("Greystone").

The contract between Blackford Commodities and Greystone provided that Greystone would be responsible for transporting the gold from Africa to the U.S. via an unnamed "private charter plane." Greystone subsequently chartered Plaintiff's jet for the round trip to and from Africa. Apart from providing such transportation, Plaintiff had no involvement in the arrangement between Blackstone Commodities and Greystone.

In Africa, the venture unraveled when Padilla was arrested and imprisoned, along with Plaintiff's flight crew, on suspicion of fraud involving the gold transaction. Specifically, this occurred on or about December 23, 2010, in Benin, in the capital city of Cotonou. On January 4, 2011, Benin authorities impounded the jet , purportedly because they believed that it was owned by Padilla. In that regard, Padilla allegedly represented "to his local contacts" that he was the jet's owner. Several days later, Benin authorities released Plaintiff's crew, but not the jet. On January 31, 2011, Benin authorities determined that the jet should remain impounded as evidence, since it was used in the commission of a crime.

Shortly after the jet was impounded, Plaintiff's insurance company began efforts to obtain the release of the jet. In connection with those efforts, Plaintiff learned of the agreement between Blackford Commodities and Greystone, and of Welkowitz's ownership of Blackford Commodities. On February 11, 2011, Plaintiff's insurer advised Welkowitz's representatives that the jet was owned by Plaintiff, not Padilla, and that Welkowitz should not interfere with efforts to obtain the release of the jet.

On February 21, 2011, Plaintiff wrote to Welkowitz, and indicated that it considered him to be the "Principal" of the failed gold venture, and that it was looking to him for payment of its costs associated with the seizure of the jet, which it estimated at approximately $3 million. Welkowitz did not respond.

On or about February 24, 2011, Welkowitz, along with one of his African advisors, Nelson Mandela's grandson, Amuah Kweku Mandela, wrote to the President of Benin, who is apparently also the "Chief Magistrate" of Benin, and threatened to take legal action against Benin in "the highest international legal institutions," due to the handling of the fraud case against Padilla and Vodonou. The letter indicated that Welkowitz and Mandela, along with more than one hundred other people, were the victims of "a scam" by Vodonou and Padilla, and expressed "suprise and amazement" that Vodonou was not being prosecuted. In pertinent part, the letter also urged the President not to release the jet:

The private jet was seized by the courts and is currently detained on the tarmac of the airport . . . in Cotonou. If the private jet used to carry out the plan which is tangible evidence in the record were to be released while the arrests and prosecutions are still ongoing and the accused are not yet judged, the case would lose its value to our prejudice as would the release of [the] accomplices of Desire Vodonou[, . . . ] Daniel Padilla and Benjamin Gandonou who have confessed and are already in prison asking to be released.

Docket No. [#3-1] at pp. 5-6. According to Plaintiff, this letter "knowingly and fraudulently lied about the ownership of the aircraft and the fact that the flight was not operated as a private flight but instead was operated as a non-scheduled commercial charter under plaintiff's US Air Carrier Certificate." Amended Complaint ¶ 30. The Court, though, sees no such representations in the letter.

On February 25, 2011, a Beninese court ordered that the jet be released. However, Welkowitz appealed that order, as a result of which, the jet remained impounded pending appeal. Amended Complaint ¶ 32.*fn3 The Amended Complaint contends that in the appeal, Welkowitz "again lied about the ownership of the aircraft and the nature of the charter, whether commercial or private," meaning that he lied both in the prior letter and in the appeal. Id. (emphasis added). The document which Plaintiff identifies as this "appeal" is contained in the record at Docket No. [#16-2] at pp. 3-6, Marchionda Aff., Ex. E. This exhibit is incorporated by reference into the Complaint, and the Court therefor may consider it in ruling on a 12(b)(6) motion. In that regard, the exhibit consists of three documents, in the following order: 1) a one-page notice, in French, dated February 28, 2011, by the Chief Clerk of the Court of Appeal of Cotonou; 2) an English translation of an Order, dated February 25, 2011, from a Magistrate of the Court of Appeal of Cotonou, releasing the jet to Plaintiff; and 3) an English translation of the first document, which merely indicates that an appeal has been filed. Notably, this "appeal" contains no statements about the ownership of the jet, nor does it indicate whether the jet flight was commercial or private. More importantly, none of the appeal documents was authored by Welkowitz.

In any event, due to the appeal, the jet remained impounded. Plaintiff's insurer then had negotiations with Welkowitz, in which Welkowitz indicated that he would withdraw his appeal if Plaintiff would withdraw the claim for charter costs and expenses that was set forth in Plaintiff's letter dated February 21, 2011. Regarding this offer by Welkowtiz, Plaintiff contends that , "[s]aid statements by defendant Welkowitz interfered with Plaintiff's possessory rights and falsely cast doubts on the validity of Plaintiff's possessory rights with respect to said aircraft." Proposed Second Amended Complaint ¶ 37. The Court, though, sees no factual basis for that conclusory statement. In any event, Plaintiff did not accept Welkowitz's offer. Nevertheless, on March 17, 2011, Welkowitz withdrew the appeal, and on March 23, 2011, Beninese authorities released the jet to Plaintiff. However, because of the length of time that the jet had been sitting without maintenance being performed, it was deemed un-flightworthy by U.S. federal aviation officials, which ultimately contributed to the demise of Plaintiff's business.

On December 21, 2011, Plaintiff commenced this action, asserting two causes of action under New York law: conversion and slander of title. On January 27, 2012, Plaintiff filed an Amended Complaint, asserting the same claims, and seeking approximately $5 million in damages. Plaintiff subsequently served all Defendants except Padilla. On March 29, 2012, Plaintiff filed the subject motion [#9] for leave to file a Second Amended Complaint. In that regard, Plaintiff states that "the proposed pleading omits a number of corporate defendants, expands certain factual allegations, and more specifically identifies Plaintiff's causes of action. It is respectfully submitted that the balance of the changes are stylistic." Witkowicz Aff. [#9] at ΒΆ 7. The proposed pleading still purports to state claims for conversion and slander of title. Specifically, Plaintiff alleged that Defendants "converted by wrongfully ...

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