United States District Court, S.D. New York
ALLAN J. SULLIVAN, Plaintiff,
HAROLD RUVOLDT, an individual, CATHY FLEMING, an individual, and FLEMING RUVOLDT, PLLC a New York Professional Limited Liability Company, Defendants.
OPINION AND ORDER
Edgardo Ramos, U.S.D.J.
J. Sullivan (“Sullivan” or “Plaintiff)
brings this action against Harold Ruvoldt
(“Ruvoldt”), Cathy Fleming
(“Fleming”) and Fleming Ruvoldt, PLLC (together,
“Defendants”). Before the Court is
Defendants' motion to dismiss on the grounds that (1)
Sullivan is not a real party in interest and does not have
standing to bring this action; (2) complete diversity of the
parties does not exist; and (3) the Complaint fails to state
following reasons, Defendants' motion is GRANTED.
December 2013, Sullivan and Ruvoldt formed the law firm
Sullivan Ruvoldt PLLC as a New York professional limited
liability corporation. First Am. Compl. (“FAC”)
at 10. (Doc. 19). Sullivan and Ruvoldt operated the firm
pursuant to certain written and oral understandings.
Id. at 11. From December 3, 2013 to March 31, 2015,
Sullivan and Ruvoldt each shared decision-making
responsibility for the operations of the firm as equal
partners, each owned 50% interest in the firm, each had an
absolute and unreviewable right to veto any transaction, and
each had a right to 50% of the profits. Id. at
¶ 11. Sullivan Ruvoldt PLLC maintained a TD Bank account
(the “Sullivan Ruvoldt Account”). Id. at
¶ 21. As of March 31, 2015, Sullivan Ruvoldt PLLC's
net assets had an estimated value of over $400, 000.
Id. at ¶ 19.
March 2015, Sullivan informed Rudvoldt that he had accepted
an executive-level legal position with the State of Vermont
effective April 1, 2015. Id. at ¶ 16. On March
26, 2015 the two partners exchanged a total of seven emails
regarding Sullivan's departure:
1. At 9:58 a.m., Rudvoldt emailed Sullivan that: (1) Sullivan
would need to “formally withdraw, ” (2)
Sullivan's interest “will be set as assets minus
liabilities at Midnight 3/31, ” (3) Ruvoldt will let
Sullivan know “when receivables are collected and
[Sullivan and Ruvoldt will] share all assets and liabilities,
including receivables, ” (4) there are some liabilities
that will not be known as of March 31, 2015, but will be
shared if incurred before that date, and (5) Ruvoldt will
“manage the wind down.” FAC Exhibit A; Second
Supp. Sullivan Decl., Ex. 5 at 2. At the end of the email,
Ruvoldt stated that he “deeply personally regret[s] the
loss of [Sullivan] as a partner” and requested that
Sullivan “email back that this is agreeable.”
2. Sullivan responded at 10:51 a.m., “[I] will need to
have continued access to books and records as the accounts as
of now are incomplete and I believe not 100% accurate. [I] am
assuming if [I] withdraw my name comes off?” Second
Supp. Sullivan Decl., Ex. 5 at 2.
3. Ruvoldt wrote at 10:55 a.m., “Signatures come off
but you will still have access. New accounts will be opened
for new partnership[.] What kind of errors[?]”
Id. at 1-2.
4. Sullivan replied at 11:02 a.m., “[F]or example it
said I had $40, 000 in distributions. I think the number is
for less, however that might account for someone's going
into deposits. [I]t all needs to be looked at. [ ] I have no
interest in delaying anything. I just want to make sure
everything is accurate. [W]e are hindered by not having a
complete set of books and records. . . . [T]he records right
now are incomplete.” Id. at 1.
5. Ruvoldt stated at 11:09 a.m. that both Sullivan and
Ruvoldt need to “update expenses etc., ” and
reminded Sullivan that “there [a]re many more expenses
than submitted by either of us that should be accounted for
going forward.” Id.
6. At 11:36 a.m., Sullivan emailed on the same chain,
“[I] was asking about use of my name for a spell. [I]
take it you are not interested in that now? [I]f so,
[I']ll need some hold harmless for that period,
7. Ruvoldt responded at 11:40 a.m., “We may need to use
the name a few days. I am working to try to minimize, to
avoid any overlap. But I may not be able to. Yes for any
period your name after withdrawing is used you will be held
harmless for any action taken or any liability thereafter
about April 1, 2015, Fleming Ruvoldt PLLC's website
announced that the operation of Fleming Ruvoldt PLLC had
commenced and that Sullivan had departed. FAC at ¶ 20.
Fleming Ruvoldt PLLC opened separate ...