United States District Court, S.D. New York
OPINION & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge.
Canon U.S.A., Inc. ("Canon USA") and Canon
Financial Services, Inc. allege that Jay J. Freireich, and
his law firm, Brach Eichler LLC ("Brach Eichler, "
and together with Freireich, the "Attorney
Defendants"), aided and abetted a fraud perpetrated by
their former clients. Plaintiffs now move for leave to amend
their complaint to add a claim against the Attorney
Defendants for violation of New York Judiciary Law §
487. The Court grants the motion.
Court summarizes here the relevant factual allegations from
Plaintiffs' Proposed Amended Complaint, which the Court
accepts as true for purposes of this motion for leave to
amend. See Henneberry v. Sumitomo Corp. of America,
415 F.Supp.2d 423, 432-33 (S.D.N.Y. 2006). Defendants
Divinium Technologies (formerly known as EZ Docs, Inc.
("EZ Docs")), Anthony Grimaldi, Steven Hernandez,
Catherine Mattiucci, and Leonard Harac (together, the
"EZ Docs Defendants") defrauded Canon USA to obtain
an authorized Canon business equipment dealership. Proposed
Am. Compl. (Dkt. 89-1) ¶¶ 1-2. The scheme arose in
2008, after Canon USA refused authorization for Empire
Technology ("Empire") to acquire an authorized
Canon retail dealership. Id. ¶¶ 45-47.
Grimaldi and Hernandez were Empire's principals, and
Canon USA rejected Empire's attempted acquisition due, in
part, to Grimaldi and Hernandez's prior arrests in
connection with a fraud scheme involving business equipment
leases. Id. ¶ 46.
Hernandez, and Harac realized that to obtain a dealership,
they had to conceal Grimaldi and Hernandez's involvement.
Id. ¶ 48. They agreed with Grimaldi's
sister, Mattiucci, to create a new corporation, EZ Docs, to
pursue acquisition of the dealership. See Id. ¶
49. EZ Docs was set up to have Mattiucci as President and
nominal shareholder. Id. But in reality, Grimaldi
and Hernandez were to split ownership and primarily perform
the actual management of EZ Docs, with Harac's and
Mattiucci's assistance and participation. See
Id. Grimaldi, Hernandez, and Mattiucci then retained
Freireich to help provide legal services with respect to EZ
Docs. Id. ¶ 53. At the time, Freireich worked
for non-party Poe & Freireich, but moved to Brach Eichler
in March 2010. Id. ¶¶ 53, 63. Canon USA
approved EZ Docs' acquisition of the dealership in
November 2008, as well as another dealership in February
2010. Id. ¶¶ 52, 63.
acquiring the dealerships, the EZ Docs Defendants engaged in
a series of improper and illegal activity. See generally
Id. § IV.F. Because of her status as owner and
principal of EZ Docs, Mattiucci grew concerned about her
potential personal liability in connection with this
activity. See Id. ¶ 161. Consequently,
Mattiucci, Grimaldi, and Hernandez asked Freireich to draft a
"Nominee Declaration." Id. Freireich
addressed this request in a June 2011 letter to Mattiucci,
Grimaldi, and Hernandez, wherein Freireich described Grimaldi
and Hernandez as the "de facto shareholders, officers
and directors" of EZ Docs. Id. Thereafter,
Freireich prepared the Nominee Declaration, dated October 5,
2011 and executed by Mattiucci, Grimaldi, and Hernandez.
Id. The Nominee Declaration provided, among other
things, that at the time EZ Docs was formed, it was intended
that Grimaldi and Hernandez would hold 100% of EZ Docs'
stock, and that Mattiucci was holding the shares of EZ Docs
"for the benefit of and as nominee for" Grimaldi
and Hernandez. Id. It also provided that Mattiucci,
Grimaldi, and Hernandez understood "that Canon was and
is unwilling to permit [Grimaldi and Hernandez] to have an
ownership interest in a Canon licensed dealership."
fall of 2011, Canon USA began considering terminating EZ
Docs' dealership due, among other things, to learning of
Grimaldi and Hernandez's involvement with EZ Docs.
See Id. ¶ 160. On October 25, 2011, Canon USA
notified EZ Docs that EZ Docs' authorized Canon retail
dealer agreement was terminated, effective immediately.
Id. ¶ 162.
November 1, 2011, EZ Docs, represented by Freireich and Brach
Eichler, sued Canon USA in New York State Supreme Court to
seek reinstatement of the dealership (the "Termination
Lawsuit"). Id. ¶ 163. Freireich and Brach
Eichler also filed an application for a temporary restraining
order ("TRO"), together with an affidavit from
Mattiucci that contained such statements as "[n]o other
person has ever held any equity interest in [EZ Docs]."
Id. ¶¶ 164-165. On November 4, 2011,
Justice Melvin L. Schweitzer of the Supreme Court of the
State New York denied the TRO application. Id.
original complaint, Plaintiffs sued the Attorney Defendants
for aiding and abetting the EZ Docs Defendants' fraud.
Compl. (Dkt. 1) Counts VII, IX. They now seek to add a claim
against the Attorney Defendants for violation of New York
Judiciary Law § 487 in connection with allegedly false
statements made in submissions to the New York Supreme Court
in the Termination Lawsuit. Proposed Am. Compl. Count XVI.
may amend its pleadings at any time with the court's
leave, which the court should freely give when justice so
requires. See Fed. R. Civ. P. 15(a)(2). Generally,
"[a] district court has discretion to deny leave for
good reason, including futility, bad faith, undue delay, or
undue prejudice to the opposing party." McCarthy v.
Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.
2007). "An amendment to a pleading is futile if the
proposed claim could not withstand a motion to dismiss
pursuant to Fed.R.Civ.P. 12(b)(6)." Lucente v.
Int'l Bus. Machs. Corp., 310 F.3d 243, 258 (2d Cir.
Attorney Defendants contend that Plaintiffs' proposed
amendment would be futile. However, they concede-and the
Court agrees-that there is no bad faith or undue delay on the
part of Plaintiffs, or undue ...