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Wilson v. Dantas

New York Court of Appeals

June 6, 2017

Robert E. Wilson, III, Respondent,
Daniel Valente Dantas, et al. Appellants, et al., Defendants.

          Philip C. Korologos, for appellants.

          Terrance Reed, for respondent.


         The order of the Appellate Division, insofar as appealed from, should be affirmed, with costs, and the certified question answered in the affirmative. Defendants have expressly abandoned their personal jurisdiction claims in their appeal to this Court. Their remaining claims, to the extent reviewable on this appeal, are without merit (see CPLR 3211 [a] [7]; Leon v Martinez, 84 N.Y.2d 83, 87-88 [1994]; Islamic Republic of Iran v Pahlavi, 62 N.Y.2d 474, 478-479 [1984], cert denied 469 U.S. 1108 [1985]).

          WILSON, J. (dissenting):

         We should dismiss this appeal for lack of appellate jurisdiction; the two issues as to which plaintiff sought leave to appeal have been rendered academic by plaintiff's subsequent amendment of his complaint. Defendants agree that those two issues are no longer present. However, because the majority has concluded otherwise, requiring us to reach the nonfinal arguments now raised by defendants, I address those arguments in detail. I disagree with the majority's conclusion as to the complaint's sufficiency, and would remand the forum non conveniens issue for redetermination.


         Our rules require parties requesting leave to appeal to include "[a] concise statement of the questions presented for review and why the questions presented merit review by this Court, such as that the issues are novel or of public importance, present a conflict with prior decisions of this Court, or involve a conflict among the departments of the Appellate Division. Movant shall identify the particular portions of the record where the questions sought to be reviewed are raised and preserved" (22 NYCRR 500.22). The First Department's rules similarly require that "[t]he moving papers shall include a copy of the order of this court from which leave to appeal is requested, and shall set forth the questions of law to be reviewed by the Court of Appeals" (NY Ct Rules § 600.14).

         Defendants petitioned the First Department for leave to appeal to this Court. They identified two legal questions, both concerning the sufficiency of the original complaint in pleading personal jurisdiction. [1] Within the thirty-four page memorandum urging review by this Court, there is a single boilerplate statement that "[d]efendants respectfully request leave to bring all cognizable issues before the Court of Appeals." Defendants did not mention the issues they now press on appeal.

         In opposition, plaintiff argued that the Appellate Division can grant leave from non-final orders generally only "where the questions present important issues of substantial public and pressing interest, " and that defendants "are limited to the questions that they have raised in their motion for leave to appeal." In reply, defendants mentioned only the two issues relating to personal jurisdiction, and did not dispute plaintiff's contention that their appeal was limited to the two personal jurisdiction issues.

         After the Appellate Division granted leave, plaintiff amended his complaint to eliminate the claimed defects in the allegations of personal jurisdiction. Defendants thereafter conceded the mootness of the issues they pressed on us, and instead ask us to review issues they have never claimed meet the standards for review by this Court of nonfinal orders.

         To justify this switcheroo, defendants cite the Appellate Division's certified question: "whether Supreme Court's order as modified by the Appellate Division was properly made." However, as we held in Quain, "if a party in its application for leave to appeal specifically limits the issues it seeks to have reviewed, it is bound by such limitation and may not raise additional issues on appeal" (Quain v Buzzetta Constr. Corp., 69 N.Y.2d 376, 379 [1987]). Although Quain involved a motion for leave granted by this Court and not the Appellate Division, the rule should be the same.

         The justification for binding a party to its express limitation implicates questions of notice and fairness. "To permit [the party to appeal other questions not raised] necessarily disadvantages the opposing parties, who might have joined issue or even cross-moved for leave to appeal as to additional issues had adequate notice been given" (id. at 380). Here, for example, plaintiff did not cross-move or seek leave to appeal from the Appellate Division's dismissal of his third, fifth and ninth causes of action, presumably on the understanding - as plaintiff asserted in his opposition to the leave to appeal - that the leave request was limited to the two personal jurisdiction questions presented by defendants as, in defendants' words, "deserving consideration by the Court of Appeals."

         Unlike the United States Supreme Court, we lack (but should possess) the ability to dismiss appeals based on an improvident grant of leave to appeal. It is therefore particularly important that we avoid cases where the issues specified by the appellant as the basis for review have evaporated.


         Given the Court's decision that we must decide the nonfinal issues newly raised by defendants, I conclude that, as a matter of law, only a portion of one cause of action in plaintiff's complaint [2] should survive defendants' motion.

         As alleged in the complaint, plaintiff Robert E. Wilson, III, who was employed by Citibank in the 1990s, devised an investment strategy related to Brazil, which he persuaded Citibank to pursue. In 1997, Citibank, Mr. Wilson and Mr. Dantas agreed to form a Cayman Islands entity, Opportunity Equity Partners, Ltd. (OEP), to be managed by Mr. Dantas in furtherance of that investment strategy. Citibank instructed Mr. Wilson to move to Brazil to assist with management of the investment fund; he was employed in Brazil by OEP, of which he was also a 1% shareholder. Mr. Wilson alleges that Mr. Dantas and two business enterprises formerly headed by Mr. Dantas, OEP and Opportunity Invest II, Inc. (OI), wrongfully injured him by promising and failing twice to pay him 5% of the carried interest in the private equity funds run by OEP.

         Mr. Wilson claims that before leaving Citibank to become a principal and shareholder of OEP Ltd., he sent Mr. Dantas a letter in July 1997 that specified the terms of Mr. Wilson's forthcoming employment, including that he was to receive 5% of the carried interest generated by the funds. Mr. Wilson signed the letter; no one else did.

         Six months later, in December of 1997, the seven shareholders of OEP, including Mr. Wilson, entered into a Shareholders' Agreement, to which OEP and OI were also parties. At the same time, OEP, as General Partner, Citibank, N.A., as Initial Limited Partner, and International Equity Investments, Inc., as Limited Partner, entered into the Amended and Restated Limited Partnership Agreement (LP Agreement). Also at the same time, OEP, OI, Citibank, N.A., Banco Opportunity S.A., CVC/Opportunity Equity Partners Administradora de Recursos, Ltda., and the seven Principals of OEP, including Mr. Wilson, entered into an Operating Agreement.

         The Shareholders' Agreement provided that, of OEP's 100 issued shares, OI would own 96 and Mr. Wilson and three other individuals would each own one. The Shareholders' Agreement specifically provided: "Nothing in this Agreement shall constitute or be deemed to constitute a partnership between any of the parties hereto." In 2005, various Citibank entities sued OEP and Mr. Dantas, who filed counterclaims. That litigation was resolved in 2008 through a confidential settlement. Mr. Wilson was not a party to that litigation. He claims that Mr. Dantas falsely promised him that he would be paid his share ...

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