Infanti et al v. Scharpf et al, No. 1:2006cv06552 - Document 59 (E.D.N.Y. 2012)
Court Description: ORDER denying 43 First Motion for Partial Summary Judgment by Vittorio Infanti, granting 44 First Motion for Summary Judgment by George Scharpf Holdings LLC, and granting 45 Motion for Summary Judgment by Amboy National Bank, Stanley Koreyva, Jr, George Scharpf, and The Board of Directors of Amboy National Bank. Ordered by Senior Judge I. Leo Glasser on 2/14/2012. (Green, Dana)
Download PDF
<![CDATA[
Infanti et al v. Scharpf et al Doc. 59 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x VITTORIO INFANTI and INFANTI INTERNATIONAL, INC., Plaintiffs, Mem orandum and Order 0 6 Civ. 6552 - against GEORGE SCHARPF, et al., Defendants. ------------------------------------------------------x GLASSER, United States District J udge: On December 8, 20 0 6, the Plaintiffs com m enced an action against the Defendants by filing a 90 -page Com plaint containing 50 0 num bered paragraphs and 27 counts and references to 124 pages of exhibits. The Defendants, Am boy National Bank (“Am boy”) and George Scharpf (“Scharpf”) m oved this Court for an Order dism issing the Com plaint for failure to com ply with Rule 8 of the Federal Rules of Civil Procedure. In a Mem orandum and Order dated J une 10 , 20 0 8, this Court granted that m otion with leave to am end, coupled with the adm onition that scrupulous attention be paid to Rule 8 at the risk of dism issal if it is not. A 14-page Am ended Com plaint was thereafter filed on J une 27, 20 0 8 containing 93 num bered paragraphs with an attached RICO Case Statem ent of 26 pages. The Am ended Com plaint alleges eight causes of action. The first and second allege RICO violations on behalf of Infanti International, Inc. (the “Corporation”) and Vittorio Infanti (“Infanti” or “plaintiff”) individually, respectively; the third and fourth allege interference with contract on behalf of the Corporation and Infanti, respectively; 1 Dockets.Justia.com the fifth and sixth allege breach of fiduciary duty to the Corporation and Infanti, respectively; the seventh and eighth allege negligence by the Board of Directors of Am boy National Bank (the “Am boy Board”) on behalf of the Corporation and Infanti, respectively. On August 14, 20 0 9, the Corporation stipulated to the dism issal of all its claim s against all of the defendants. Stip. Of Dism issal (Dkt. No. 41). Surviving, therefore, are Infanti’s second, fourth, sixth, and eighth causes of action. The Am ended Com plaint, although considerably shorter than the original version, is still far from the “short and plain” statem ent Rule 8 requires. The pareddown version is unredeem ed by a m otion for partial sum m ary judgm ent filed by Infanti, individually, on his sixth cause of action, consisting of a 75-page Mem orandum of Points and Authorities and 78 pages of exhibits. Pl.’s Mot. for Partial Sum m . J . (Dkt. No. 43). The m otions pending before the Court are m otions for sum m ary judgm ent on behalf of all the defendants, except Elizabeth Kavlakian, and Infanti’s m otion for partial sum m ary judgm ent. D ISCU SSION The precursor of this case was com m enced m ore than 23 years ago by George Gasser and the Gasser Chair Com pany against Vittorio Infanti and the Infanti Chair Com pany. That action resulted in a judgm ent in excess of 15 m illion dollars against Infanti and his com pany for trade dress infringem ent. That judgm ent was sought to be assiduously underm ined and evaded by Infanti and the Com pany, who were joined in that tenacious endeavor by George Scharpf an d others, giving rise to litigation which spanned fifteen years. That case, Gasser v. Infanti, et. al, 0 3 Civ. 6413, is docum ented in a docket sheet of 486 entries and, even now, is pending before the Second Circuit Court 2 of Appeals. The backdrop for this action, pieces of which are referenced in the Am ended Com plaint, can be fully understood by readin g just two of the m any opinions written in that case, which can be found referenced in 20 0 8 WL 2323367 (E.D.N.Y. J une 2, 20 0 8) and 20 11 WL 2183549 (E.D.N.Y. J une 3, 20 11). Reduced to its essence, this Com plaint alleges a violation of 18 U.S.C. §§ 1962(a)(d) and 1964. The RICO claim is based upon alleged predicate acts of wire fraud and m ail fraud. As near as the Court can discern, the wire fraud predicate allegation is based upon a telephone call m ade in 1999 by Scharpf to Infanti, who was then in Argentina, inducing him to return to Staten Island by allegedly falsely representing that he, Scharpf, would return to Infanti the building and the chair m anufacturing business, the Infanti Chair Com pany, he conducted there. This, Infanti alleges, was in furtherance of Scharpf’s schem e to appropriate that business for him self. The m ail fraud predicate is allegedly based upon an application for a Certificate of Incorporation m ailed by Scharpf to the New J ersey Secretary of State in 20 0 1. The alleged “fraud” is Scharpf’s withholding from the Secretary of State that the corporation he form ed would be the indispensible piece of his plan to deceive Infanti. The interference with contract, the fourth cause of action – again, as near as the Court can discern – is alleged to be the prevention of the consum m ation of an oral agreem ent Infanti allegedly had with Gasser that would result in the satisfaction of the judgm ent against him held by Gasser. The sixth cause of action alleges a breach of fiduciary duty arising out of the “special relationship” between Infanti and Am boy National Bank and its officers. The eighth cause of action alleges the negligence of the Bank’s Board of Directors in failing to exercise their duty of reasonable care to prevent 3 Scharpf from causing the bank to aid and abet his fraudulent schem e. On August 18, 20 0 8, Defendant George Scharpf filed a Counterclaim against Infanti, seeking repaym ent of $ 1,355,0 0 0 of unpaid loans m ade to the Corporation and personally guaranteed by Infanti. Scharpf Def.’s Ans. and Countercl. (Dkt. No. 19). Neither party seeks sum m ary judgm ent as to the counterclaim . The irony of this lawsuit, as a reading of the two opinions of this Court in Gasser v. Infanti will reveal in detail, is that Infanti was a willing and knowing conspirator together with Scharpf in dism antling, rem oving, and concealing essential pieces of m achinery for the m anufacture of chairs from the prem ises of the Com pany, thus excluding them from and sabotaging the public auction sale ordered by the Court. That m achinery was subsequently restored to the prem ises, together with the entire inventory purchased at that sale by Scharpf, and the chair m anufacturing business was once again operational. It was Infanti’s candid and persuasively credible testim ony that revealed that brazen hijacking of the Corporation by him and Scharpf, in the additional litigation com pelled by that revelation. This lawsuit is the classic affirm ation of an adaptation of the proverb that there is no honor am ong m alefactors. I. Stan d ard o f Re vie w Sum m ary judgm ent is appropriate “if the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed R. Civ. P. 56(a); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87, 10 6 S. Ct. 1348, 1355-56, 89 L. Ed. 2d 538 (1986). As an initial m atter, the m oving party has the burden of dem onstrating that no genuine dispute of m aterial fact exists for trial. Matsushita, 475 U.S. at 586. “A party asserting that a fact cannot be or is 4 genuinely disputed m ust support the assertion by: (A) citing to particular parts of m aterials in the record . . .; or (B) showing that the m aterials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce adm issible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). The Court will also take judicial notice of judgm ents in the prior, related proceedings before this Court that involved the sam e parties. J oseph v. HDMJ Rest., Inc., 685 F. Supp. 2d 312, 315 (E.D.N.Y. 20 0 9) (“Even if not incorporated in a com plaint, the Court m ay take judicial notice of judgm ents entered in prior proceedings”). Once the m oving party has m et this burden, the opposing party “‘m ust do m ore than sim ply show that there is som e m etaphysical doubt as to the m aterial facts. . . . [T]he nonm oving party m ust com e forward with specific facts showing that there is a genuine issue for trial.’” Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 20 0 2) (quoting Matsushita, 475 U.S. at 586– 87 (em phasis in original)). “If a party fails to properly support an assertion of fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the court m ay . . . grant sum m ary judgm ent if the m otion and supporting m aterials—including the facts considered undisputed—show that the m ovant is entitled to it.” Fed. R. Civ. P. 56(e). The Court is com pelled to draw all reasonable inferences in favor of the nonm oving party, Matsushita, 475 U.S. at 586, and a genuine dispute exists if a reasonable jury could find in favor of the non-m oving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 10 6 S. Ct. 250 5, 2510 , 91 L. Ed. 2d 20 2 (1986). “A court faced with cross-m otions for sum m ary judgm ent need not ‘grant judgm ent as a m atter of law for one side or the other,’ but ‘m ust evaluate each party’s m otion on its own 5 m erits, taking care in each instance to draw all reasonable inferences against the party whose m otion is under consideration.’” U.S. Bank Nat’l Ass’n v. Ables & Hall Builders, 696 F. Supp. 2d 428, 438 (S.D.N.Y. 20 10 ) (quoting Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993)). II. Se co n d Cau s e o f Actio n : RICO Plaintiff alleges, without specificity, that all ten defendants violated all four provisions of the RICO statute, 18 U.S.C. § 1962.1 Defendants seek sum m ary judgm ent, arguing: (1) plaintiff lacks standing to bring these claim s; and (2) as a m atter of law, the facts alleged do not constitute the requisite two or m ore predicate acts of racketeering activity. 18 U.S.C. § 1961(5). A. Stan d in g Defendants argue that even if Infanti were to dem onstrate that defendants violated the RICO statute, as a m atter of law plaintiff does not have standing to bring a claim . To have standing to bring a civil RICO claim , a plaintiff m ust show: (1) a violation of substantive RICO, 18 U.S.C. § 1962; (2) injury to “business or property”; and (3) that the injury was caused by the violation. Gotlin v. Lederm an, No. 0 5 Civ. 1899 1 Section 1962 m akes it unlawful, inter alia, (1) to invest incom e derived from a pattern of racketeering activity in any enterprise that is engaged in interstate com m erce, § 1962(a); (2) to acquire or m aintain control of such an enterprise through a pattern of racketeering activity, § 1962(b); (3) to participate in the conduct of such an enterprise’s affairs through a pattern of racketeering activity, § 1962(c); or (4) to conspire to do any of the above, § 1962(d). Bankers Trust Co. v. Rhoades, 741 F.2d 511, 515 (2d Cir. 1984), vacated on other grounds, 473 U.S. 922, 10 5 S. Ct. 3550 , 87 L. Ed. 2d 673 (1985). 6 (ILG), 20 0 6 WL 1154817, at *5 (E.D.N.Y. Apr. 28, 20 0 6) (citing Gause v. Morris, No. 99 Civ. 6226 (J S), 20 0 0 WL 340 16343, at *3 (E.D.N.Y. Aug. 8, 20 0 0 )). “‘The requirem ent that the injury be to the plaintiff’s business or property m eans that the plaintiff m ust show a proprietary type of dam age.’” Gotlin v. Lederm an, 367 F. Supp. 2d 340 , 356 (E.D.N.Y. 20 0 5) (quoting Bankers Trust Co., 741 F.2d at 515). “For exam ple, a person physically injured in a fire whose origin was arson is not given a right to recover for his personal injuries; dam age to his business or his building is the type of injury for which § 1964(c) perm its suit.” Bankers Trust Co., 741 F.2d at 515. “Proprietary” dam age does not include “physical, em otional or reputational harm .” State Farm Mut. Auto Ins. Co. v. CPT Med. Servs., P.C., 375 F. Supp. 2d 141, 152 (E.D.N.Y. 20 0 5) (citations om itted). Plaintiff alleges that, through racketeering activities, defendants controlled the Corporation, took incom e from the Corporation, and invested the incom e in EKI, LLC (“EKI”), all with the objective “that EKI would flourish and the plaintiffs’ respective businesses would be destroyed.” Am . Com pl. ¶¶ 34, 36-37. Although plaintiff states in his com plaint that he has been injured in the am ount of $ 10 0 ,0 0 0 ,0 0 0 , plaintiff’s accountant assessed plaintiff’s losses to be $ 395, 565 in “lost profits” of the Corporation and $ 1,510 ,317 in “lost owner com pensation.” See Pl.’s Statem ent of Undisputed Material Facts ¶ 14 (Dkt. No. 49-4); Declaration of Avrin Slatkin dated October 29, 20 0 9 (“Slatkin Decl.”) Ex F (Dkt. No. 44-9). While these are indeed injuries to “business or property,” they are injuries to the Corporation, not Infanti. In his efforts to evade the Gasser J udgm ent, Infanti was never 7 a director or shareholder of the Corporation. Pl.’s Statem ent of Undisputed Material Facts at 5-6 (Dkt. No. 49); Slatkin Decl. Ex. B at 92; Ex. I, at ¶ 3. For the first four years of the Corporation’s existence, Infanti had no form al relationship with the com pany: it was not until Septem ber 6, 20 0 2 that he was elected President and CEO and entered into an em ploym ent agreem ent, with an annual salary of $ 48,0 0 0 a year. Slatkin Decl. Ex. B, at 97, 20 6; Ex I, at ¶ 8. Prior to this, he received no salary but all his living expenses, including such things as his rent, utilities, cable service, and food were paid for by the Corporation in consideration for the services he rendered to the corporation. See Gasser v. Infanti Int’l, Inc., 353 F. Supp. 2d 342, 347 (E.D.N.Y. 20 0 5). It is well-settled law that shareholders, officers, and em ployees lack standing to bring a civil RICO claim , in their individual capacities, for injuries to the corporation. See Bingham v. Zolt, 66 F.3d 553, 561– 62 (2d Cir. 1995) (“The shareholder in such a case is injured only as a result of the injury to another, i.e., the corporation, and therefore generally lacks standing.”); Manson v. Stacescu, 11 F.3d 1127, 1130 – 33 (2d Cir. 1993), cert. denied, 513 U.S. 915, 115 S. Ct. 292, 130 L. Ed. 2d 20 6 (1994) (shareholders and em ployees do not have standing because their injury is derivative of that of the corporation and does not satisfy RICO’s proxim ate cause requirem ent); At The Airport v. ISATA, LLC, 438 F. Supp. 2d 55, 62 (E.D.N.Y. 20 0 6) (individuals cannot assert a RICO claim in an individual capacity based on claim s of injury suffered by a third-party in which they have a financial interest); Leung v. Law, 387 F. Supp. 10 5, 122-123 (E.D.N.Y. 20 0 5) (plaintiff shareholder lacked standing to assert claim for injuries caused by the RICO predicates to the corporation). 8 Nor does Infanti’s personal guarantee of the Am boy loans create standing to bring a civil RICO claim for losses to the corporation. In Manson, the Second Circuit confronted precisely this issue. Plaintiffs, who were shareholders and em ployees of the com pany, personally guaranteed $ 450 ,0 0 0 in bank loans to the com pany. As a result of racketeering activities by persons both inside and outside the com pany, the com pany was unable to repay the loans and plaintiffs becam e obligated for the debt. The court found the plaintiffs lacked standing because “[t]he alleged looting of the Com pany only harm ed the [plaintiffs] indirectly.” Manson, 11 F.3d at 1130 (noting creditors of a corporation generally do not have standing under RICO). Thus, as a m atter of law, Infanti does not have standing to assert RICO claim s, in his individual capacity, for the alleged losses the Corporation suffered. The Corporation, the appropriate plaintiff to bring these claim s, stipulated to the dism issal of all its claim s against all of the defendants. See Stip. Of Dism issal. For the foregoing reasons, plaintiff does not have standing to bring this claim and, accordingly, defendants’ m otion for sum m ary judgm ent as to plaintiff’s Second Cause of Action is granted. Because the Court finds that the plaintiff lacks standing, it is unnecessary to address defendants’ argum ents regarding the inadequacy of the alleged predicate acts. III. Fo u rth Cau s e o f Actio n : In te rfe re n ce w ith Co n tract Defendants also seek sum m ary judgm ent on plaintiff’s Fourth Cause of Action, interference with contract. Plaintiff alleges that he negotiated with Gasser to discharge the $ 15 m illion outstanding judgm ent for a reduced $ 1 m illion paym ent. Am . Com pl. ¶¶ 21, 28; Decl. of Vittorio Infanti dated Novem ber 11, 20 0 9 (“Infanti Decl.”), ¶¶ 3-4 (Dkt. 9 No. 49-4). Plaintiff alleges that to prevent this satisfaction of judgm ent, defendants unlawfully interfered with a contract Infanti m ade with an investor, Ekm el Anda (“Anda”), who agreed to loan Infanti $ 2 m illion in exchange for a share in the Com pany. See Am . Com pl. ¶¶ 21-22, 48, 52 (“the defendant group, knowingly, with actual m alice and without excuse intentionally interfered with the J udgm ent payoff agreement. . . .” (em phasis in original)); Pl.’s Mem . of Law in Opp. to Scharpf Mot. for Sum m . J . at 9 (Dkt. No. 49). An unlawful interference with contract is defined as follows: “[o]ne who intentionally and im properly interferes with the perform ance of a contract . . . between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.” Restatem ent (Second) of Torts § 766 (20 11). “In order to state a claim for tortious interference with contract under New York law, plaintiffs m ust dem onstrate ‘the existence of a valid contract between the plaintiff[s] and a third party, defendant’s knowledge of that contract, defendant’s intentional procurem ent of the third-party’s breach of the contract without justification, actual breach of the contract, and dam ages resulting therefrom .’” Discover Grp., Inc. v. Lexm ark Int’l., Inc., 333 F. Supp. 2d 78, 83-84 (E.D.N.Y. 20 0 4) (citing Lama Holding Co. v. Sm ith Barney Inc., 88 N.Y.2d 413, 424, 646 N.Y.S.2d 76, 668 N.E.2d 1370 (1996)). In this case, plaintiff alleges no m ore than verbal discussions with Gasser, negotiating the term s of a Stipulation of Settlem ent. The agreem ent with Anda consisted, by Plaintiff’s own description, of “a rudim entary typed four page agreem ent,” 10 Pl.’s Am boy Reply Mem . at 9 & 13 (Dkt. No. 49), and was never finalized. Affidavit of Dennis T. Kearney dated October 30 , 20 0 9 (“Kearney Aff.”) Ex. F, at 29-32 (Dkt. No. 452). It is undisputed that neither agreem ent was ever signed. As a m atter of law, these agreem ents cannot be considered enforceable contracts, an essential elem ent of the tort, and were m erely prospective contractual relationships. “[A] claim for interference with a prospective contractual relationship requires the injured party to prove that the interfering party’s conduct was culpable. Gortat v. Capala Bros., Inc., 585 F. Supp. 2d 372, 376 (E.D.N.Y. 20 0 8) (citing Carvel Corp. v. Noonan, 3 N.Y.3d 182, 785 N.Y.S.2d 359, 818 N.E.2d 110 0 , 110 3 (20 0 4)). Culpable conduct includes “‘physical violence, fraud or m isrepresentation, civil suits or crim inal prosecutions, and som e degrees of econom ic pressure,’ but it does not include m ere persuasion.” Id. (citing Carvel, 785 N.Y.S. 2d at 191). At deposition, Anda stated that the reason he did not sign the contract with Infanti was that he personally disliked the plaintiff’s wife, Kavlakian, and “didn’t feel like being in business with som ebody I am not going to get along with.” Kearney Aff., Ex F., at 30 . Plaintiff argues Kavlakian intentionally upset Anda, “causing him to dislike her, thereby blocking the judgm ent payoff.” Pl.’s Am boy Reply Mem ., Separate Statem ent of Undisputed Facts at 8 (Dkt. No. 49); see also Pl.’s Statem ent of Undisputed Material Facts in Supp. of Mot. for Partial Sum m . J . at 18 (Dkt. No. 53-3) (sum m arizing Kavlakian’s com m ents to Anda). Plaintiff has not alleged any conduct by the defendants that even rem otely satisfies the pre-requisites for asserting a valid claim for tortious interference with contract. For the above reasons, Defendants’ m otion for sum m ary judgm ent is granted as to plaintiff’s fourth cause of action. 11 IV. Sixth Cau s e o f Actio n : Bre ach o f Fid u ciary D u ty Plaintiff alleges that the defendants were in a “special relationship” with him and breached their fiduciary duty by, am ong other things: being in “alm ost 10 0 % secret control of the plaintiffs and their business;” “favoring one depositor EKI over the plaintiff Vittorio Infanti, also a depositor;” passing business inform ation to EKI; and hiding “their self interest in all transactions, all to [Infanti’s] dam age.” Am . Com pl. ¶¶ 61-64. Although plaintiff does not specify in the com plaint which defendants breached their fiduciary duty, as near as the Court can discern the plaintiff alleges this breach against Am boy, the Am boy Board, Scharpf, in his individual capacity, and Kavlakian. See Pl.’s Mem . of P. & A. at 2 (Dkt. No. 43). 2 Plaintiff seeks sum m ary judgm ent on this claim , alone. Defendants also seek sum m ary judgm ent. Under New York law, the elem ents of a breach of fiduciary duty claim are: (1) the existence of a fiduciary duty; and (2) the breach of that fiduciary duty.3 Shpak v. Curtis, No. 10 Civ. 1818 (RRM) (J O), 20 11 WL 4460 60 5, at *15 (E.D.N.Y. Sept. 26, 20 11) (citing Russo v. Banc of Am . Sec., LLC, No. 0 5 Civ. 2922 (DAB), 20 0 7 WL 1946541, at *8 (S.D.N.Y. J une 28, 20 0 7). “A fiduciary relation exists between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon m atters within the scope of the relation.” Restatem ent (Second) of Torts § 874 (20 11). A. Am bo y an d th e Am bo y Bo ard 2 It appears this is also the defendants’ understanding, as reflected in their m em oranda of law in opposition to plaintiff’s m otion for partial sum m ary judgm ent. 3 The parties (if they cite to any law at all) cite without distinction to both New J ersey and New York law. In any event, the outcom e under either state’s law would be the sam e. See McKelvey v. Pierce, 173 N.J . 26, 57, 80 0 A.2d 8 40 , 859-60 (20 0 2) (sum m arizing the elem ents of a breach of fiduciary duty under New J ersey law). 12 The relationship between Infanti, Am boy, and the Am boy Board was that of a creditor and debtor, created by Infanti’s deposits with the bank and a series of loans m ade by the bank to the Corporation, which Infanti guaranteed. It is well-established under both New J ersey and New York law that a creditor-debtor relationship is not a fiduciary one. BHC Interim Funding, L.P. v. Finantra Capital, Inc., 283 F. Supp. 2d 968, 989-90 (S.D.N.Y. 20 0 3) (“[T]he relationship between a lender and borrower is not fiduciary in nature.”); Tevdorachvili v. Chase Manhattan Bank, 10 3 F. Supp. 2d 632, 640 (E.D.N.Y. 20 0 0 ) (“[T]he bank-depositor agreem ent standing alone creates no fiduciary relationship between the parties.”); Bennice v. Lakeshore Sav. & Loan Ass’n, 254 A.D.2d 731, 732, 677 N.Y.S.2d 842, 842 (4th Dep’t 1998) (the relationship between a bank and its depositor is that of debtor and creditor, which, without m ore, is not a fiduciary relationship); N.J . Econ. Dev. Auth. v. Pavonia Rest., Inc., 319 N.J . Super. 435, 725 A.2d 1133 (1998) (“[A]s a general proposition, creditor-debtor relationships rarely give rise to a fiduciary duty ‘inasm uch as their respective positions are essentially adversarial.’” (citing Globe Motor Car v. First Fid. Bank, 273 N.J . Super. 388, 393 (1993), aff’d 291 N.J . Super. 428 (app. Div.), certif. denied 147 N.J . 263 (1996))). Infanti has not alleged any facts that would establish a “special relationship” im posing a fiduciary duty on Am boy or the Am boy Board. Am boy and the Am boy Board also m ay have stood in a landlord-tenant relationship with Infanti, to whom they leased the Richm ond Terrace prem ises. See Def. Am boy’s Mot. for Sum m . J ., Ex. B (Dkt. No. 45). This relationship was also not a fiduciary one. See Dem bick v. 220 Central Park S., LLC, 33 A.D.3d 491 (1st Dep’t 20 0 6) (landlord and tenant relationship does not norm ally create a fiduciary relationship). 13 Sum m ary judgm ent is therefore granted to the defendants, dism issing the Sixth Cause of Action against Am boy, the Am boy Board, Peter W. Davis, Scharpf, as Chairm an of the Board, President, and Chief Executive Officer of Am boy, and Stanley Koreyva, J r., as Chief Financial Officer of Am boy. B. Ge o rge Sch arp f In addition to acting in his capacity as an officer of Am boy, Scharpf individually loaned m oney to the Corporation, loans personally guaranteed by Infanti. Scharpf argues he is sim ply a creditor of the Com pan y and, by extension, a creditor of Infanti should the Com pany fail to repay the loan. Decl. of George Scharpf in Supp. of Mot. for Sum m . J . dated October 23, 20 0 9 (Dkt. No. 44-12). For the reasons previously discussed, a creditor-debtor relationship is not a fiduciary one. To establish a fiduciary duty under these circum stances, plaintiff would need to dem onstrate m ore than an ordinary business relationship with Scharpf and show “‘a confidence reposed which invests the person trusted with an advantage in treating with the person so confiding, or an assum ption of control and responsibility.’” U.S. Bank Nat. Ass’n v. Ables & Hall Bldrs., 696 F. Supp. 2d 428, 442 (S.D.N.Y. 20 10 ) (quoting Mfrs. Hanover Trust Co. v. Yanakas, 7 F.3d 310 , 318 (2d Cir. 1993)). Aside from a conclusory statem ent the defendants had “10 0 % secret control of the plaintiffs and their business,” plaintiff fails to allege any facts that would support finding a fiduciary relationship between Scharpf and Infanti. In fact, Infanti testified at deposition that Scharpf did not participate in the business of the Corporation in any way. See Def. Scharpf’s Mot. for Sum m . J ., Ex. B (Deposition of Vittorio Infanti) at 20 6-20 9 (Dkt. No. 44-5). Sum m ary judgm ent is 14 therefore granted to the defendants, dism issing the Sixth Cause of Action against Scharpf, individually. C. Elizabe th Kavlakia n As far as the Court can discern, Plaintiff also seeks sum m ary judgm ent against his form er wife, Elizabeth Kavlakian, for breach of fiduciary duty. See Am . Com pl. ¶ 20 ; Aff. of Vittorio Infanti in Supp. of Mot. for Sum m . J . ¶¶ 11-12 (Dkt. No. 43); Pl.’s Am boy Reply Mem . at 6-8 (Dkt. No. 49). Kavlakian, acting pro se, opposes the m otion. See Letter from Elizabeth Kavlakian dated Novem ber 16, 20 0 9 (Dkt. No. 50 ). Since Kavlakian is proceeding pro se, her pleadings “‘m ust be held to less stringent standards than form al pleadings drafted by lawyers.’” Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 191 (2d Cir.20 0 8) (quoting Erickson v. Pardus, 551 U.S. 89, 94, 127 S. Ct. 2197, 167 L. Ed. 2d 10 81 (20 0 7)). Essentially, plaintiff alleges that Kavlakian used her relationship as his wife to obtain confidential business inform ation from him which she then secretly exploited, in collaboration with the other defendants, to establish a com petitor business, EKI. See RICO Statem ent at 8-9 (Dkt. No. 13-3). Currently, Kavlakian is President of EKI and that com pany owns the assets that were once the Corporation’s, including the INFANTI tradem ark, and sells chairs bearing the m ark. Decl. of Elizabeth Kavlakian dated October 23, 20 0 6, ¶¶ 1, 3, & 5 (Dkt. No. 47). Kavlakian’s m arriage to Infanti, alone, does not create a fiduciary relationship. United States v. Chestm an, 947 F.2d 551, 568 (2d Cir. 1991) (“Although spouses certainly m ay by their conduct becom e fiduciaries . . . m ore than the gratuitous reposal 15 of a secret to another who happens to be a fam ily m em ber is required to establish a fiduciary or sim ilar relationship of trust and confidence.”). A fiduciary relationship exists where there is “reliance, and de facto control and dom inance,” United States v. Margiotta, 688 F.2d 10 8, 125 (2d Cir. 1982), or where there is “repeated disclosure of business secrets” between the spouses. United States v. Corbin , 729 F. Supp. 2d 60 7, 617 (discussing Chestm an, 947 F. 2d at 569). It is apparent that Kavlakian was involved in Infanti’s business dealings to som e extent. See, e.g., Kearny Aff. Ex. F, at 30 -32 (Dkt. No. 45-1); Infanti Decl. ¶ 2 (“I also invested a lot of tim e and effort in training m y wife Elizabeth Kavlakian regarding how to run the factory”). However, these general, undifferentiated allegations do not establish a fiduciary relationship. Plaintiff’s m otion for sum m ary judgm ent against Kavlakian on the sixth cause of action is therefore denied. D . Eigh th Cau s e o f Actio n : N e glige n ce by Am bo y Bo ard Defendant Am boy Board seeks sum m ary judgm ent on plaintiff’s eighth cause of action, a claim of negligence. Among other things, plaintiff alleges that the Am boy Board had a duty to oversee the actions of Scharpf and failed to prevent Scharpf from “for m any years . . . system atically defrauding both the bank and its custom ers by unfair com petition and by failing to disclose [his] crim inal conduct . . . .” Am . Com pl. ¶ 82. Plaintiff alleges that the Am boy Board was “looking the other way, or they accepted a sm all yearly paym ent to sit on the board, and essentially agreed with whatever Scharpf did.” Am . Com pl. ¶ 89. As a result, Am boy was defrauded, the bank lost considerable sum s in unpaid loans to the Corporation, and the bank sold real estate it owned at Richm ond Terrace to Scharpf for a fraction of its actual value. Am . Com pl. ¶ 87. 16 Three basic elem ents are essential for the existence of a cause of action in negligence: (1) a duty of care owed by defendant to plaintiff; (2) a breach of that duty by defendant; and (3) an injury to plaintiff proxim ately caused by defendant’s breach. Harper v. United States, 949 F. Supp. 130 , 132 (E.D.N.Y. 1996). Defendants m ove for sum m ary judgm ent on the ground that plaintiff lacks standing to bring this claim , essentially arguing that he has failed to show he suffered any cognizable harm . See Lujan v. Defenders of Wildlfe, 50 4 U.S. 555, 560 -61, 112 S. Ct. 2130 , 119 L. Ed. 2d 351 (1992) (standing requires, am ong other things, plaintiff to have suffered an injury fairly traceable to the defendant). Defendant Am boy also argues, for the reasons previously discussed, that Am boy owed no duty of care to Infanti. Whether characterized as a lack of standing or as a failure to state a claim for negligence, it is apparent the alleged injuries are to Am boy, not to plaintiff, and sum m ary judgm ent m ust be granted to the defendants. 17 CON CLU SION For the foregoing reasons, defendants’ m otion for sum m ary judgm ent on the Second, Fourth, and Eighth Causes of Action is GRANTED. Those causes of action are dism issed as to all defendants. As to the Sixth Cause of Action for breach of fiduciary duty, defendants Am boy and Scharpf’s m otions for sum m ary judgm ent are GRANTED and plaintiff’s m otion for sum m ary judgm ent is DENIED. A status conference will be scheduled to resolve Infanti’s rem aining claim against Kavlakian and Scharpf’s counterclaim . SO ORD ERED . Dated: Brooklyn, New York February 14, 20 12 _ _ / s/ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I. Leo Glasser, U.S.D.J . 18
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
