United States District Court, S.D. New York
OPINION AND ORDER
VALERIE CAPRONI, UNITED STATES DISTRICT JUDGE
Navidea Biopharmaceuticals, Inc. (“Navidea”), a
pharmaceutical company, sued Michael Goldberg
(“Goldberg”) for breach of contract, breach of
the covenant of good faith and fair dealing, and breach of
fiduciary duty. See Am. Compl., Dkt. 15. Goldberg
answered the complaint and asserted counterclaims and
third-party claims against Navidea and Third-Party Defendant
Macrophage Therapeutics, Inc. (“Macrophage”), a
subsidiary of Navidea, for breach of contract, wrongful
discharge, injunctive relief, and quantum meruit.
Dkt. 31. Goldberg moved to dismiss Plaintiff's breach of
fiduciary duty claim on the grounds that it is time-barred
and fails to state a claim. Dkt. 32. Goldberg also seeks
advancement of attorneys' fees in connection with the
fiduciary duty claim and Rule 11 sanctions against Plaintiff.
Id. Navidea and Third-Party Defendant Macrophage
moved to dismiss or strike certain of Goldberg's
counterclaims and third-party claims pursuant to Federal
Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(f). Dkt.
40. Defendant Goldberg's motion is GRANTED in part and
DENIED in part. Plaintiff/Counterclaim Defendant Navidea and
Third-Party Defendant Macrophage's motion is GRANTED.
August 14, 2018, Navidea, Macrophage, and Goldberg, the
former CEO of Navidea and founder of Macrophage, entered into
an agreement (the “August Agreement”) with the
intent of entering into a further transaction (“the
Transaction”) to “provide for the separation of
Goldberg from Navidea and the establishment of the
parties' rights and obligations with respect to the
ownership, management and continued operations of
Macrophage.” Am. Compl., Dkt. 15 ¶ 12.
Specifically, and as relevant to the pending motions, the
August Agreement provided for: (1) Goldberg's resignation
from Navidea, (2) the sale of 23.5 million shares of Navidea
to Goldberg on the date of the consummation of the
Transaction; (3) a six-month line of credit from Navidea to
Macrophage of up to $750, 000, (4) an issuance to Goldberg of
Macrophage Super Voting Common Stock shares in a number equal
to 5% of the outstanding shares, and (5) Goldberg's
waiver of all rights to collect any debt owed by Navidea to
Goldberg. See August Agreement, Dkt. 31-1. Plaintiff
alleges that the future-contemplated agreements have not been
executed because Defendant “undertook certain actions
which Navidea considered breaches of the August
Agreement.” Am. Compl., Dkt. 15 ¶¶ 14, 44-67.
Notwithstanding the Plaintiff's argument, the August
Agreement expressly states that “any subsequent failure
to execute the Transaction documents shall not render”
the Agreement invalid. See August Agreement, Dkt.
Defendant's Opening of the “Secret
8, 2015, Navidea entered into a Term Loan Agreement with
Capital Royalty Partners II (“CRG”) for a loan of
up to $60, 000, 000. Am. Compl., Dkt. 15 ¶ 69. Pursuant
to the loan agreement, Navidea was required to provide CRG
with the control agreements for all depository accounts
controlled by either Navidea or Macrophage and to notify CRG
of any changes to the deposit accounts. Id. ¶
71. Failure to provide such notice or control agreements was
an event of default under the CRG Loan Agreement.
December 1, 2015, allegedly following a rift between Goldberg
and other members of Navidea management, Goldberg opened a
Wells Fargo account for Macrophage (the “Secret
Account”). Id. ¶¶ 72-74. Goldberg
failed to inform CRG of the existence of the account and
failed to provide CRG with a control agreement, thereby
breaching the CRG Loan Agreement. Id. ¶ 74. CRG
ultimately filed suit against Navidea in Texas state court,
alleging numerous events of default under the Loan Agreement,
including Goldberg's opening of the Secret Account.
Id. ¶ 85. The Texas court entered summary
judgment in favor of CRG, concluding that one or more events
of default had occurred. Id. ¶ 86. Navidea
alleges that, as a result of the summary judgment ruling, it
was forced to sell significant assets, resulting in losses
exceeding $50 million. Id. ¶¶ 86-91.
The Platinum Debt
to becoming CEO of Navidea, Goldberg had been affiliated with
Platinum-Montaur Life Sciences, LLC
(“Platinum-Montaur”), a collaboration among
Goldberg, Platinum Partners Value Arbitrage Fund LP, Platinum
Partners Liquid Opportunity Master Fund L.P., and Platinum
Opportunity (NY) LLC (collectively “Platinum
Funds”). Am. Compl., Dkt. 15 ¶ 33. On July 25,
2012, Navidea executed a loan agreement and promissory note
(the “Platinum Note”) payable to Platinum-Montaur
in an amount of up to $35 million. Navidea and Macrophage
Mem. of Law, Dkt. 41 at 4. On November 2, 2017,
Platinum-Montaur sued Navidea seeking to recover funds owed
by Navidea (the “Platinum Debt”), a part of which
Defendant Goldberg asserts he is entitled to. Am. Compl., Dkt.
15 ¶¶ 37-38. Goldberg alleges that Platinum
assigned him $1.3 million of the Platinum Debt, and that, as
of the August Agreement, Navidea owed him $2.5 million
(including accrued interest), Counterclaims and Third-Party
Claims (CC/TPC), Dkt. 31 ¶¶ 37-38. The August
Agreement provided for the issuance of Navidea shares as
compensation for Goldberg's agreement to release his
portion of the Platinum Debt. Am. Compl., Dkt. 15 ¶ 39;
CC/TPC, Dkt. 31 ¶ 130.
Defendant Goldberg's Motion to Dismiss
moves to dismiss Plaintiff's fourth cause of action on
the grounds that it is time-barred and fails to state a claim
for which relief can be granted. Defendant also seeks
attorneys' fees and Rule 11 sanctions.
Plaintiff's Fourth Cause of Action is Dismissed as
fourth cause of action alleges that Goldberg breached his
fiduciary duty of loyalty by “failing to advise
Navidea's board members and management of his decision to
open a secret Macrophage bank account in violation of the CRG
Loan Agreement and without bothering to consult with Navidea
legal counsel.” Am. Compl., Dkt. 15 ¶¶
120-122. As noted, supra, Navidea and CRG entered
into a Loan Agreement pursuant to which Navidea was required
to provide CRG with the control agreements for all depository
accounts controlled by Navidea or Macrophage. Id.
¶ 71. Plaintiff alleges that Goldberg's opening of
the Secret Account, without providing the control agreements,
caused Plaintiff to be in default under the CRG Loan
Agreement and ultimately resulted in CRG obtaining summary
judgment against Navidea. Id. ¶¶ 74, 82,
York choice of law rules dictate that the law of the state of
incorporation governs claims for breach of fiduciary duty.
Walton v. Morgan Stanley & Co. Inc., 623 F.2d
796, 798 n.3 (2d Cir. 1980). Thus, because Navidea is a
Delaware corporation, Delaware law applies. Under Delaware
law, claims for breach of fiduciary duty are governed by a
three-year statute of limitations. Del. Code. Ann. Tit. 10,
§ 8106(a); In re AMC Inv'rs, LLC, 551 B.R.
148, 152 (D. Del. 2016) (“Delaware's three-year
statute of limitations for breach of fiduciary duty claims
applies, and  the limitations period begins to run from the
occurrence of the alleged wrong.”).
The Fourth Cause of Action is Time-Barred
fourth cause of action is time-barred because more than three
years have passed since Goldberg's alleged breach of his
fiduciary duty; Goldberg opened the “secret
account” on December 1, 2015 and this action was filed
on April 26, 2019. Am. Compl., Dkt. 15 ¶ 74. Navidea
argues that Goldberg's opening of the bank account was
part of an extended period of misconduct, or continuing
wrong, which extended until April 27, 2016, at the earliest.
Navidea Mem. of Law, Dkt. 45 at 9-10. Accordingly, Plaintiff
argues that the appropriate triggering date for the statute
of limitations is April 27, 2016. Id. at 10-12. The
Court disagrees; the statute of limitations “begins to
run at the time that the cause of action accrues, which is
generally when there has been a harmful act by a
defendant.” Barbara v. MarineMax, Inc., No.
12-CV-0368, 2012 WL 6025604, at *9 (E.D.N.Y. Dec. 4, 2012).
Because Goldberg's alleged harmful act occurred when he
opened the bank account on December 1, 2015, the statute of
limitations began to run on that date. Even if Navidea
did not learn of the alleged breach on December 1, 2015, CRG
filed suit against Navidea for breach of the Loan Agreement
on April 7, 2016. See Navidea Mem. of Law, Dkt. 45
at 7. Thus, by at least April 7, 2016, and likely earlier,
Plaintiff knew that Goldberg had opened the Secret Account.
Accordingly, even if the Court views April 7, 2016, as the
triggering date for the statute of limitations, the fourth
cause of action remains time-barred.
Plaintiff's fourth cause of action is barred by the
statute of limitations, Defendant's motion to dismiss
this claim is granted. Accordingly, the Court will not address
Defendant's arguments that the claim should also be
dismissed for failure to state a claim.
requests an advancement of attorneys' fees with respect
to Plaintiff's now-dismissed breach of fiduciary duty
claim. Goldberg Mem. of Law, Dkt. 33 at 7-9. Article V of
Navidea's bylaws dictate the circumstances and conditions
governing indemnification and the payment of attorneys'
fees. Specifically, Section 3 of Article V, entitled
“Payment of Expenses” states:
Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil . . . action . . .
shall be paid by the corporation in advance of the final
disposition of such action . . . upon receipt of an
undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that