Donovan v Ficus Invs., Inc.

[*1] Donovan v Ficus Invs., Inc. 2008 NY Slip Op 51797(U) [20 Misc 3d 1139(A)] Decided on August 1, 2008 Supreme Court, New York County Fried, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 1, 2008
Supreme Court, New York County

Thomas B. Donovan, individually and derivatively on behalf of PRIVATE CAPITAL MANAGEMENT, LLC and PRIVATE CAPITAL MANAGEMENT CORP., Plaintiffs,

against

Ficus Investments, Inc. a/k/a FICUS (USA), INC., JOSEPH C. LEWIS, JEFFERSON R. VOSS, TYLER V. PIERCY, THOMAS B. YOUTH, PRIVATE CAPITAL GROUP, LLC and LAWRENCE A. CLINE., Defendants, and PRIVATE CAPITAL MANAGEMENT, LLC and PRIVATE CAPITAL MANAGEMENT CORP., Nominal Defendants.



602715/2007



Attorneys for the Plaintiffs:

Attorneys for Defendants Ficus

Investments, Inc, Private Capital Group

LLC, Jefferson R. Voss, Tyler V. Piercy,

And Thomas B. Youth:

SCHLAM STONE & DOLAN LLP

26 Broadway

New York, NY 10004

By: Richard H. Dolan, Esq.

John M. Lundin, Esq.

Jeffrey M. Eilender, Esq.

ALSTON & BIRD LLP

90 Park Avenue

New York, NY 10016

By: John F. Cambria, Esq.

Michael DeSimone, Esq.

NITKEWICZ & MCMAHON LLP

356 Veterans Memrial Highway

Commack, NY 11735

By: Edward J. Nitkewicz, Esq.

For Defendant Lawrence A. Cline:

GREENBERG FREEMAN LLP

110 East 59TH Street

New York, NY 10022

By Sanford H. Greenberg, Esq.

Bernard J. Fried, J.

Defendants Ficus Investments, Inc. ("Ficus"), Private Capital Group, LLC ("PCG" or the "Company"), and Jefferson R. Voss, Tyler V. Piercy, and Thomas B. Youth (collectively the "Individual Defendants") have filed a motion (Motion Sequence No. 003) pursuant to CPLR § 3211(a)(4) and (7), 2201 and 602 to dismiss Thomas B. Donovan's ("Donovan") Complaint in its entirety, to stay the present action, or to consolidate it with another action pending before me, namely, Ficus Investments, Inc. et al v. Private Capital Management, LLC, et al, Index No. 600926-07 (the "Main Action").[FN1] Defendant Lawrence A. Cline ("Cline") filed a separate motion (Motion Sequence No. 002) seeking to dismiss Donovan's Complaint pursuant to CPLR § 3211(a)(1), (3), and (7). These two motions are consolidated for the purposes of this decision.

This action principally concerns Plaintiff's access to the books and records of PCG, of which Plaintiff Private Capital Management ("PCM") is the minority member and of which Ficus is the majority and managing member. Plaintiff alleges that Ficus and PCG violated Fla. Stat. § 608.4101(2), breached the PCG Operating Agreement, and breached their fiduciary duty to PCM when they refused to allow Donovan access to PCG's books and records. (Compl. ¶¶ 52-66.)[FN2] Plaintiff alleges that the Individual Defendants aided and abetted this breach of fiduciary duty by causing Ficus and PCG to deny Plaintiff access to the Company's books and records. (Compl. ¶¶ 67-74.) On all of these causes of action, Plaintiff seeks an award of money damages. (Id. ¶¶ 52-74.) Plaintiff also requests a declaratory judgment decreeing that "PCM has the right to [*2]inspect and copy PCG's books, records and documents without having to abide by conditions unilaterally imposed by Ficus," and that Ficus's refusal to allow such access constituted a material breach and repudiation of the Operating Agreement. (Id. ¶¶ 75-82.) Furthermore, Donovan seeks preliminary and permanent injunctions that would enjoin Ficus and PCG from denying him access to PCG's books, records, and documents (id. ¶¶ 83-90), and "an equitable decree directing Ficus and PCG to provide PCM with an accounting for the operations of PCG since on or about April 12, 2007." (Id. ¶¶ 91-95.) Finally, Plaintiff alleges that Cline breached his fiduciary duty to Donovan and to PCM by refusing to authorize the original proposed complaint against the Defendants. (Id. ¶¶ 96-101.)

For the reasons that follow, causes of action one through six, and nine, are dismissed pursuant to CPLR § 3211(a)(7); the seventh cause of action is to be consolidated with the Main Action pursuant to CPLR § 602; and the eighth cause of action is dismissed pursuant to CPLR § 3211(a)(4).

This action is one of six related disputes currently being litigated in this Court.[FN3] Familiarity with all decisions filed so far in this and the related actions is presumed, but I will provide such background and procedural information as is necessary for the purposes of this motion. Also, for purposes of this motion, it is presumed that the allegations in the Complaint are true and they will be afforded "every favorable inference," except insofar as they "fail to state a viable cause of action consist of bare legal conclusions, or are inherently incredible or unequivocally contradicted by documentary evidence." E.g., Leder v. Spiegel, 31 AD3d 266 (1st Dep't 2006).

Ficus is a Florida corporation of which Lewis is the beneficial owner, Voss is the President, Piercy is the Vice President, Director, and Treasurer, and to which Youth acted as counsel in addition to providing counsel to PCG. (Compl. ¶¶ 15-20.) Plaintiff Private Capital Management Corp., LLC, ("PCMC"), a New York limited liability company, is co-equally owned by Donovan and Cline. It holds 100% of the interest in and is the sole member of PCM, another New York limited liability company. (Id. ¶¶ 3-4, 8-10.)

In December of 2005, Cline and Donovan, through PCM, negotiated with Ficus for the creation of a new business entity, PCG, which was to continue their ongoing business of purchasing, managing, and reselling non-performing mortgages. (Id. ¶¶ 12, 23.) Under PCG's Operating Agreement, Ficus is the sole managing member with an 80% share in the Company, and PCM, which Donovan and Cline owned through PCMC, has a 20% share. (Id. ¶¶ 9-11, 16.) Until April of 2007, Cline was the President of PCG and Donovan was the CEO. (Operating [*3]Agreement[FN4] §§ 3.2.4 and 3.2.5; Compl. ¶¶ 26-27.) Under §§ 3.2.4 and 3.2.5 of the Operating Agreement, both were responsible for the "general supervision" of PCG while, under § 3.1.1, Ficus maintained the

sole, exclusive, full and complete authority, power and discretion: to manage and control the business and affairs and properties of the Company; to make all decisions regarding those matters; and to perform any and all other acts or activities customary or incident to the management of the Company's business, including, without limitation, the right and power to appoint individuals to serve, and remove such individuals, as officers of the Company and to delegate authority to such officers.

Since April 12, 2007, by Order of this Court, Ficus has had total control over the books, records, documents, and operations of PCG. (Compl. ¶ 26.) However, Donovan claims he is concerned that Ficus is managing PCG in a manner that is detrimental to PCM's interests as a minority member—specifically, that it is operating PCG in a manner that will allow it to recover the principal of and interest on its loans to PCG, without regard to whether profits will be created (which it would have to split with PCM). (Id. ¶¶ 30, 48.) Indeed, according to the Complaint, the value of PCG under Ficus's management has already declined "significantly." (Id. ¶ 50.)

As a result, PCM (through Donovan) has sought access to the Company's books, records and documents in order to enforce its interests. But, according to Donovan, Ficus has repeatedly refused to provide PCM such access in violation of what he insists is PCM's right under Fla. Stat. § 608.4101(2) and the Operating Agreement. (Id. ¶¶ 22-23, 28-29, 31-35, 43-46, 53-54, 58.) PCM's initial demands for access and Ficus's refusal of those demands, which led to the commencement of this action, took place via correspondence in July of 2007. (Id. ¶ 31-34.) By letter dated July 17, 2007, PCM demanded access to PCG's books and records. (Compl. Ex. A.) By letter dated July 19, 2007, Ficus refused to grant PCM access unless it agreed to abide by several conditions not found in the Operating Agreement, namely: (1) that PCM return to Ficus all missing Company documents in its possession; (2) that PCM's members "make themselves available for a full de-briefing regarding, among other things, the transfers of Company monies and assets and the other matters set forth in Ficus's Amended Complaint;" and (3) that PCM place into escrow $12.382 million in "loan proceeds" for the duration of the litigation of the Main Action. (Id. Ex. B.) By letter dated July 20, 2007, PCM insisted that such demands were unreasonable and not permissible under the Operating Agreement. (Id. Ex C.) By letter dated July 23, 2007, Ficus continued to demand accession to its conditions if PCM wanted to access PCG's books and records. (Id. Ex. D.) Having failed to secure access to the books and records of PCG, which he believed to be his statutory and contractual right, Donovan commenced this action.

In regards to Cline, Donovan claims that PCMC is the sole owner of PCM and that he and Cline are co-equal owners of PCMC. (Id. ¶¶ 9-11.) While Donovan authorized a proposed lawsuit against Ficus, PCG, and the Individual Defendants on behalf of PCM, Cline refused to do so. [*4](Id. ¶ 40.) Donovan claims that Cline had no bona fide reasons for not authorizing it and that, instead, Cline's decision was "based upon his personal interests." (Id. ¶¶ 38-41.) Both Cline and Donovan agree on the following: (1) that counsel for PCM, Edward J. Nitkewicz, Esq., presented Cline with the proposed complaint on July 30, 2007; (2) that he demanded that Cline approve the lawsuit by the following day; and (3) that Cline refused to do so on August 1, 2007. (Id. ¶ 39, Ex. E; Greenberg Supp. Affirm.[FN5] ¶ 7.) Notwithstanding Cline's refusal to approve the lawsuit, the Complaint was filed on August 9, 2007. Donovan claims that Cline's actions amounted to a breach of his fiduciary duties to PCM, PCMC and Donovan.

Subsequent to the filing of this motion, I issued an Order dated March 11, 2008 (the "March 11 Order"), setting forth a protocol governing Donovan's access to PCG's books and records. The order was intended "to provide [Donovan] with his rightful, contractually and statutorily mandated access, but to do so subject to a protocol that would not only prevent the disgruntled LLC member from disrupting or interfering with PCG's business, but that would also protect the integrity/confidentiality of any inspected books, records or documents." (March 11 Order at 6.) The March 11 Order established what documents Donovan is entitled to, namely, "all books, records and documents that are reasonably related to Donovan's membership interest, i.e. those pertaining to the profits, losses, distributions, assets, including mortgage portfolios, liabilities, and tax obligations of the Company (the Related Documents')." (Id. at 7.) It also clarifies which books and records Donovan's representatives will not have access to, namely, "personnel records, administrative records, client files, and any privileged communications or documents subject to work product protection" (id.), and provides that "Donovan's representatives shall not have access to PCG's computer system. To the extent that any Related Documents are kept, in the ordinary course of business, in electronic form, Ficus shall provide hard copies of same to Donovan's representatives." (Id. at 7-8.) Finally, the Order gives extensive details for how the parties should deal with confidential or privileged documents.[FN6] (Id. at 8-11.) It is on the basis of this Order that Defendants advance their primary argument—that the claims in the Complaint are now moot because the issue of Donovan's access to books and records has been determined. (Ficus Defs.' Reply Mem.[FN7] at 3-4.)

This argument is not sufficient to warrant dismissal of the claims in this action. There is no provision in CPLR § 3211(a) which allows for dismissal on the grounds that a preliminary [*5]injunction has provided temporary closure to a dispute. Walker Memorial Baptist Church v. Saunders, 285 NY 462, 474 (1941) ("The granting or refusal of a temporary injunction does not constitute the law of the case or an adjudication on the merits, and the issues must be tried to the same extent as though no temporary injunction had been applied for"). Moreover, the issue is not moot in the more general sense of the word because the Order does not permanently settle the issue of what access Donovan will have to PCG's books and records in the long-term. The Defendants are also incorrect in their assertion that the claim for books and records is moot because Plaintiff will be able to access all the records he needs through discovery in the Main Action. While discovery in that action may produce all that he is entitled to at the present time, at some point the period for discovery will end. However, if PCG is still in existence at that time, Donovan will have a continuing right to inspect the Company's books and records, which will not be enforceable through discovery. Therefore, neither the Order nor the opportunity for discovery in the Main Action make the issues in this case moot.

However, there are sufficient reasons to dismiss each of the claims in this action on other grounds. The first, second, third, fourth, fifth, sixth, and ninth causes of action are dismissed pursuant to CPLR § 3211(a)(7) because they fail to state claims upon which relief can be granted. The seventh claim is to be consolidated with the Main Action pursuant to CPLR § 602. Finally, the eighth cause of action is dismissed pursuant to CPLR § 3211(a)(4) because it states a claim identical to a counterclaim in a pending action. I shall now discuss each claim in order and explain my specific reasons for dismissing them.

The first cause of action alleges that Ficus and PCG violated Florida Statute § 608.4101(2) (hereinafter the "Statute") by failing to provide Donovan with access to PCG's books and records.[FN8] (Compl. ¶¶ 52-56.) This allegation against Ficus is baseless, as by the express language of the Statute, the duty to provide access to books and records only applies to the LLC in question, not to its managers. Multiple Florida courts of appeal have endorsed this interpretation, holding that the LLC is the only entity that can be held liable for the denial of access to the LLC's books and records. Merovich v. Huzenman, 911 So. 2d 125, 128 (Fla. App. 3d 2005); Florida Estate Developers v. Ben Tobin Cos., 964 So. 2d 238, n.1 (Fla. App. 4th 2007) (citing Merovich). Therefore, Ficus cannot have violated this statutory provision as it is not the LLC at issue.

The claim against PCG is also untenable. The Statute does not entitle members of LLCs to the "unfettered access" to books and records which Plaintiff demands. (Hr'g Tr. 15, April 8, 2007.) Although Donovan's Complaint alleges only the violation of subsection (2) of Fla. Stat. § 608.4101, this provision cannot be read in isolation from the subsections that immediately follow. Subsection 3 of the Statute states that the LLC shall provide to members: (a) Without demand, information concerning the limited liability company's business or [*6]affairs reasonably required for the proper exercise of the member's rights and performance of the member's duties under the operating agreement or this chapter; and (b) On demand, other information concerning the limited liability company's business or affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

Fla. Sta. § 608.4101(3) (emphasis added).

Furthermore, subsection 4 states that:

[t]he manager of a limited liability company shall have the right to keep confidential from the members, for such period of time as the manager deems reasonable, any information which the manager reasonably believes to be in the nature of trade secrets or other information the disclosure of which the manager in good faith believes is not in the best interest of the limited liability company or could damage the limited liability company or its business or which the limited liability company is required by law or by agreement with a third party to keep confidential.

Fla. Stat. § 608.4101(4) (2003) (emphasis added).

These provisions make clear that the Statute does not entitle Plaintiff to unfettered access, but rather, only access to materials "reasonably required for the proper exercise of [its] rights and duties" and which the manager does not believe will be harmful to the LLC.

From the beginning of this dispute, Ficus has claimed that Donovan is only seeking these records in order to harm the company. (Compl. Ex. B.) And, the March 11 Order acknowledged that Ficus had a legitimate concern regarding the consequences of Donovan having access to PCG's books and records. (March 11 Order at 6-7.) Ficus thus maintains that it had a good faith basis for denying Donovan unfettered access to PCG's books and records and that doing so was not a violation of the Statute. Moreover, while Ficus may have been excessive in denying Donovan all access to the books and records, the extent of the access to which he is entitled was determined by the March 11 Order and further clarified by the July 9 Order, and going forward he will be entitled to the access required for the proper exercise of his rights under the Operating Agreement.

Finally, there is the issue of whether or not money damages can even be a remedy for a violation of the Statute. The Statute does not explicitly provide for such a remedy, and Plaintiff has cited no case law, nor has my research found any, which supports the proposition that damages are a remedy for its violation. As such, even if Ficus had acted improperly, it seems that there still would be no legal basis for Plaintiff's claim for damages.

Therefore, the first cause of action is dismissed as to both Ficus and PCG pursuant to CPLR § 3211(a)(7).

The second cause of action alleges that Ficus and PCG "breached and repudiated their obligations under the Operating Agreement by denying PCM its right to inspect and copy PCG's books, records and documents for purposes reasonably related to PCM's membership interest." (Compl. ¶ 58.)

In order to plead a cause of action for breach of contract, the complaint "must allege the provisions of the contract upon which the claim is based. The pleadings must be sufficiently [*7]particular to give the court and [the] parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved' as well as the material elements of each cause of action or defense.'" Atkinson v. Mobil Oil Corp., 205 AD2d 719, 720 (2d Dep't 1994) (quoting DiMauro v. Metropolitan Suburban Bus Auth., 105 AD2d 236, 239) (2d Dep't 1984). Vague and conclusory allegations are insufficient. Gordon v. Dino De Laurentiis Corp., 141 AD2d 435, 436 (1st Dep't 1988). Furthermore, the complaint must allege the essential terms of the contract, including the specific provisions upon which liability is predicated. Sud v. Sud, 211 AD2d 423, 424 (1st Dep't 1995).

While Plaintiff is correct in mentioning the caveat that the right of access is limited to purposes reasonably related to PCM's membership interest, it ignores another crucial limit to the right. The Operating Agreement clearly states that, in accordance with the Statute, the LLC manager has the right to impose "reasonable standards" upon what information is made available to an LLC member.[FN9] However, Plaintiff has repeatedly claimed that PCM is entitled to more expansive rights. Donovan, through counsel, in his letter of July 20, 2007, and subsequently at oral argument, argued that the words "reasonable standards" only refer to the "time," "location," and "expense" of providing such records, not to the types of documents Plaintiff may view. (Compl. Ex. C; Hr'g Tr. 15, April 8, 2008.) Indeed, at oral argument, Plaintiff's counsel went on to claim that the "agreement says we are supposed to get unfettered access." (Hr'g Tr. 15, April 8, 2008.)

Thus, Plaintiff bases his allegation of a breach of contract on the assertion that the contract guarantees him a right which it clearly does not—the right to access to all of PCG's books and records. Therefore, the second claim must be dismissed for failure to state a cause of action upon which relief can be granted pursuant to CPLR § 3211(a)(7).

Plaintiff's third cause of action states that "Ficus and PCG owed, and continued to owe, fiduciary duties to PCM [and that they] breached their fiduciary duties to PCM by denying PCM its right to inspect and copy PCG's books, records and documents." (Compl. ¶¶ 62-63.)

In regards to Ficus, this claim is clearly invalid under Florida law, which governs the LLC as agreed by the parties in § 1.1.1 of the Operating Agreement.

Limited liability companies are creatures of statute, Alexander v. Minton, 855 So. 2d 94, 96 (Fla. App. 2d 2003), and so the Florida Limited Liability Company Act (Fla. Stat. § 608 [2003]) alone determines the fiduciary duties owed by managers and members of the LLC. See e.g. Merovich v. Huzenman, 911 So. 2d 125 (Fla. App. 3d 2005) (interpreting the fiduciary duties imposed upon an LLC in connection with the Florida LLC Act).

While § 608.4225 of the Act does impose duties on the managers of LLCs, these fiduciary duties do not include the duty to provide access to books and records. Merovich v. Huzenman, 911 So.2d at 127-28; Florida Estate Developers, LLC v. Ben Tobin Companies, Ltd., [*8]964 So. 2d 238, n.1 (Fla. App. 4th 2007) (citing Merovich). Instead, the provision only refers to the traditional fiduciary duties:

[to] (1) account for and hold as trustee "any property, profit, or benefit derived in the conduct or winding up of the limited liability company or derived from a use of limited liability company property"; (2) refrain from dealing with the company "on behalf of a party having an interest adverse" to the company; and, (3) refrain from competing with the company in the conduct of company business "before the dissolution" of the company."

Merovich, 911 So. 2d at 127 (quoting Fla. Stat. § 608.4225(1) [2003].)[FN10]Accordingly, in each of those cases the court held that the action to enforce the LLC members' right to access the LLC's books and records should not have been brought against the managers under a breach of fiduciary duty claim, but instead against the LLCs for violation of § 608.4101. Merovich, 911 So.2d at 127-128; Florida Estate Developers, 964 So2d at 240 n.1.

Plaintiff misses the fundamental point of these decisions. Plaintiff claims that Merovich "expressly holds that a member of [sic] Florida LLC may bring a breach of fiduciary duty claim against the LLC manager or another LLC member" and cites Foster-Thompson, LLC v. Thompson, 2007 WL 1725198, at *7 (M.D. Fla. June 14, 2007), for the proposition that "managers and managing members of Florida LLCs [owe] fiduciary duties to members." (Pl.'s Opp. Mem.[FN11] at 2.) While this is true, the courts in Merovich and Florida Estate Developers explicitly held that the fiduciary duties owed by LLC managers to LLCs and their members do not include the duty to provide access to an LLC's books and records. Merovich, 911 So.2d at 127-28; Florida Estate Developer, 964 So. 2d at 240 n.1.

Plaintiff's claim against PCG also fails. Ficus asserts, and Plaintiff is unable to offer contravening authority, that "no Florida court has ever held that a limited liability company owes a fiduciary duty to its members." (Ficus Defs.' Supp. Mem.[FN12] at 3.) This dearth is unsurprising as the Statute makes no mention of any fiduciary, or fiduciary-like duties owed by LLCs to their members. The only such duties that are mentioned are limited to those owed by managers to their LLCs, and these do not cover access to books and records. (Fla. Stat. § 608.4225.) And, while § 608.4101 does obligate LLCs to provide some access to books and records to their members, under the authority cited above, this is not a fiduciary duty.

Thus, PCG owed no fiduciary duty to PCM and, while Ficus did owe PCM a fiduciary duty, such duty did not cover access to books and records. Therefore, because neither PCG nor [*9]Ficus owed the fiduciary duty alleged in the Complaint, the third claim is dismissed as to both Ficus and PCG pursuant to CPLR § 3211(a)(7).

Plaintiff's fourth cause of action alleges that the Individual Defendants aided and abetted a breach of fiduciary duty in that they "knowingly induced, solicited, participated in, and lent substantial assistance to Ficus's and PCG's breaches of their fiduciary duties to PCM by causing Ficus and PCG to refuse to allow PCM to inspect and copy PCG's books, records and documents." (Compl. ¶ 71.)

The case law is clear, and supported by common sense, that if there is no cognizable breach of fiduciary duty, there can be no claim of aiding and abetting the breach of fiduciary duty. See Bruhl v. Conroy, 2007 WL 983228, at *10 (S.D. Fla. March 27, 2007) ("[A] claim for aiding and abetting a breach of fiduciary duty requires: (1) a fiduciary duty on the part of the primary wrongdoer; (2) a breach of this fiduciary duty; (3) knowledge of the breach by the alleged aider and abettor; and (4) the aider and abettor's substantial assistance or encouragement of the wrongdoing"); see also, In re Caribbean K Line, Ltd., 288 B.R. 908, 919 (S.D. Fla. 2002) (stating the same elements for a claim of aiding and abetting a breach of fiduciary duty). Since neither PCG nor Ficus had a fiduciary duty to provide PCM with books and records, and therefore there was no breach of fiduciary duty, there can be no claim that the Individual Defendants aided and abetted a breach of fiduciary duty. The fourth claim is thus dismissed pursuant to CPLR § 3211(a)(7).

Before going on to the fifth cause of action, I note that there is an alternative ground for dismissal of the first four claims based on CPLR § 3211(a)(4)—they are all essentially duplicative of the seventh counterclaim, for breach of fiduciary duty, in the Main Action. (Cambria Affirm. Ex. D at ¶¶ 138-140.)

Plaintiff's theory of damages in the first four causes of action is premised on its assertion that "Ficus's primary present motivation is to manage PCG in a way that allows Ficus to recover its principal and 11.5% interest, without regard to whether profits will be generated, to the detriment of PCM, the minority member, and PCMC." (Compl. ¶ 48.) Having requested and been refused the books and records he believes he needs to prove such mismanagement, Plaintiff brings claims one, two, three and four seeking damages based on the theory that the delay in gaining access to PCG's books and records has prevented him from knowing the full nature of, and thereby opposing, Ficus's alleged mismanagement. (Hr'g Tr. 15, April 8, 2008).

Ficus and PCG argue that this theory of damages is redundant, as any damages "would necessarily be based on a decline in the Company's value and/or profits since Ficus took over management, which will also be determined in [the Main Action.]" (Ficus Defs' Supp. Mem. at 10.) Plaintiff responds by arguing that, in order for a claim to be dismissed, CPLR § 3211(a)(4) "requires that the prior cause of action be the same,'" and, therefore, that the claim cannot be dismissed because it concerns books and records, whereas the claims in the Main Action do not. (Pl.'s Opp. Mem. at 4-5).

Unfortunately for Plaintiff, New York courts have not read the provision so literally. The key criteria are: (1) whether or not the different suits "arise out of the same actionable wrong or series of wrongs;" (2) whether or not the relief sought in the different suits is "the same or substantially the same;" and (3) whether or not it makes sense as a practical matter to try the two issues separately. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, [*10]CPLR 3211.15, pp. 29-30 ("Given the fluidity of the concept of cause of action', the courts have wisely refrained from insisting that the two actions be identical. [Courts instead should apply] a two-pronged inquiry: (1) do both suits arise out of the same actionable wrong or series of wrongs? and (2) as a practical matter, is there any good reason for two actions rather than one being brought in seeking the remedy? If the first question is answered yes and the second one no, the court should apply paragraph 4 and dismiss the action"); Bradford v. Brooklyn Trust Co., 269 A.D. 549, 550 (1st Dep't 1945) (citing Cipolla v. Cipolla, 255 A.D. 789 [2nd Dep't 1938], which held that "the prohibition against the maintenance of two separate actions, pending between the same parties for the same cause contemplates two such actions in which the same relief is sought upon the same general theory, irrespective of whether or not each of such actions sets forth an independent cause of action"); White Light Productions, 231 AD2d 90, 94 (1st Dep't 1997) (holding that dismissal requires that the relief sought in both actions be "the same or substantially the same"); GSL Enterprises, Inc. v. Citibank, N.A., 155 AD2d 247, 247 (1st Dep't 1989) (upholding dismissal of a complaint "because a pending action existed between the same parties for essentially the same relief and involving the same actionable wrong").

Based on these criteria, dismissal is appropriate. The first four claims here and the counterclaims in the Main Action all "arise out of the same actionable wrong or series of wrongs"—Ficus's takeover and management of PCG. They both seek "the same or substantially the same relief"—the damages to Plaintiff caused by Ficus's alleged mismanagement. Finally, as a practical matter, there is no reason to try the issues separately; indeed, there is no reason to try the present issue at all. In order to prove that PCM was unable to prevent mismanagement by Ficus due to lack of access to PCG's books and records, Plaintiff would have to prove that there was mismanagement in the first place and that it led to financial losses for PCM. But if he were to prove that, the books and records action would be superfluous as there would be no basis for further damages—those losses PCM was unable to prevent due to its lack of access to PCG's books and records are, after all, a subset of the damages sought due to the alleged mismanagement. As such, at least under the theories offered by Plaintiff so far, there is no reason for a separate action to determine whether or not PCM suffered damages resulting from a lack of access to PCG's books and records, and CPLR § 3211(a)(4) thus offers an alternative ground for dismissal of the first four causes of action.

In his fifth cause of action, Plaintiff seeks a declaratory judgment "decreeing that PCM has the right to inspect and copy PCG's books, records and documents without having to abide by conditions unilaterally imposed by Ficus." (Compl. ¶ 78.) It is presumed, given Plaintiff's counsel's statements in oral arguments, that it is requesting the right to "unfettered access" to these books and records. (Hr'g Tr. 15, April 8, 2008.) Because, as discussed above, Plaintiff is not entitled to such a right under either the Operating Agreement or the Statute, this claim is dismissed pursuant to CPLR § 3211(a)(7).

In his sixth cause of action, Plaintiff seeks a declaratory judgment "decreeing that Ficus's refusal to allow PCM to inspect and copy PCG's books, records and documents without having to abide by conditions unilaterally imposed by Ficus constitutes a material breach and repudiation by Ficus of the Operating Agreement, and that PCM may, at its option, elect to terminate the Operating Agreement and dissolve PCG." (Compl. ¶ 82.)

As previously discussed, I do not believe that Ficus breached the Operating Agreement [*11]when it refused PCM access to PCG's books and records. However, even accepting Plaintiff's argument that Ficus's initial refusal of access was a breach, it must have been a material breach in order to constitute a repudiation of the Operating Agreement and, therefore, to entitle Plaintiff to have it rescinded. Bear, Stearns Funding, Inc. v. Interface Group-Nevada, Inc., 361 F. Supp. 2d 283, 290-91 (S.D.NY 2005); see also In re Lavigne, 114 F.3d 379, 387 (2d Cir. 1997) ("under New York law, only a breach in a contract which substantially defeats the purpose of that contract can be grounds for rescission Put another way, a party is relieved of continued performance under a contract only when the other party's breach is material'") (citations and quotation omitted).

The standard for a material breach is not insubstantial. First, "[u]nder New York law, for a breach of a contract to be material, it must go to the root of the agreement between the parties." Frank Felix Associates, Ltd. v. Austin Drugs, Inc., 111 F.3d 284, 289 (2d. Cir. 1997); see also In re Lavigne, 114 F.3d at 387. According to § 1.3 of the Operating Agreement, the primary purpose of PCG was to "(a) purchase, manage and sell real estate mortgages in the ordinary course of business, and conduct other business as may be approved by the Members," with Ficus providing the financial resources necessary to that objective and with Donovan and Cline engaging in the actual financial transactions. While the breach of contract claims and counterclaims in the Main Action, which deal with PCM's alleged misappropriation of Ficus's investments and Ficus's alleged wrongful termination of Donovan and Cline, meet this standard, there is nothing in the Operating Agreement or the parties' briefs tending to prove the right to access PCG's books and records was the "root of the agreement."

Second, even if the breach goes to the "root of the agreement," there are other factors that must be considered. The Court in Bear applied the standard for materiality of the Restatement (Second) of Contracts, § 241 which looks to:

(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; © the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

361 F.Supp.2d, at 296-97.

Viewing Ficus's actions in light of these factors, especially the last two—the likelihood of curability and the presence of good faith—militates against finding that a material breach occurred. In regards to the former, the March 11 Order set forth what access to PCG's books and records Ficus must provide to PCM. As such, assuming that it will not seek to violate an order by this Court, Ficus will cure any breach that might have occurred due to its prior refusal to grant PCM access to PCG's books and records. Having cured the breach, Ficus will have satisfied the other three factors: (a) Donovan will not be deprived of a reasonably expected benefit; (b) the lack of deprivation will negate any need for compensation; and © Ficus will not suffer any forfeiture as compliance with the March 11 Order will not necessitate a substantial expenditure of its resources. In regards to the latter, I have said before that Ficus was justified in viewing [*12]Donovan's requests for unrestricted access to PCG's books and records with caution, and that, therefore, it had a good faith basis for denying Donovan access to at least some of the Company's documents.[FN13] While its total denial of access may have been excessive, it is not clearly inconsistent with the standards of good faith and fair dealing. Thus, having failed to plead sufficient facts to show a material breach occurred, the above discussion provides yet another basis for the dismissal of this cause of action pursuant to CPLR § 3211(a)(7).

In his seventh cause of action, Plaintiff seeks "a preliminary and permanent injunction, enjoining Ficus and PCG from violating Fla. Stat. § 608.4101(2), from breaching and repudiating Section 1.5.1 of the Operating Agreement, and from refusing PCM access to the books, records and documents of PCG." (Compl. ¶ 90.) In light of my finding that there was no violation of the Statute or the Operating Agreement and my issuance of several Orders defining the level of access to PCG's books and records to which Donovan is entitled and ordering Ficus to grant him such access, these injunctions which Donovan seeks may seem superfluous. However, Donovan's right to access the books and records of PCG may continue to exist even after this action and the Main Action have concluded, and so there is some merit to this request.

"When actions involving a common question of law or fact are pending before a court, the court, upon motion, may order a joint trial of any or all of the matters in issue, may order the actions consolidated, and may make such other orders concerning proceedings therein as may tend to avoid unnecessary costs or delay." CPLR § 602.

In the present case, if the parties continue to be members of PCG after the resolution of the Main Action, there will be a need for me to provide a long-term remedy for Plaintiff's legitimate claim to some level of access to the Company's books and records. Yet, because the general issue of Donovan's rights under the Statute and the Operating Agreement is fundamental to the Main Action, there is no reason for the more specific issue of his right to access books and records to be tried in this separate action. As such, the seventh claim will be consolidated with the Main Action, pursuant to CPLR § 602.

Plaintiff's eighth cause of action seeks "an equitable decree directing Ficus and PCG to provide PCM with an accounting for the operations of PCG since on or about April 12, 2007." (Compl. ¶ 95.)

According to CPLR § 3211(a)(4), a claim may be dismissed if "there is another action pending between the same parties for the same cause of action in a court of any state or the United States; the court need not dismiss upon this ground but may make such order as justice [*13]requires."[FN14] When a claim made in a complaint is identical to a previously-filed counterclaim made by that party in another action, it is generally dismissed. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3211.15, pp. 28; Pompea v. Essayan, 36 AD2d 745 (2d Dep't 1971) (dismissing claims made in a complaint which were identical to counterclaims previously brought in a pending action between the parties); Looney v. Smith, 198 Misc. 99 (NY Sup. Ct. 1950) (holding that a motion to dismiss pursuant to CPLR § 3211(a)(4) may be appropriate when claims brought by the plaintiff are identical to counterclaims made by that party in a pending action).

In this case, the eighth cause of action is identical to, and therefore wholly duplicative of, the fifth counterclaim in Donovan's answer to the first amended complaint in the Main Action.[FN15] (Cambria Affirm. Ex. D at ¶¶ 134-135). Accordingly, it is dismissed pursuant to CPLR § 3211(a)(4).

Plaintiff's ninth and final cause of action alleges that Defendant Cline "breached his fiduciary duties to PCM, PCMC and Donovan by refusing to authorize a direct action by PCM against PCG, Lewis, Voss, Piercy and Youth based upon their refusal to allow access to PCG's books and records [and that as] a direct and proximate result of Cline's breach of his fiduciary duties, PCM, PCMC and Donovan have sustained damages and will likely sustain further damages." (Compl. ¶¶ 98-99.) In his motion to dismiss the claim, Cline does not seem to contest that he owed a fiduciary duty at least to PCM, if not to Donovan and PCMC. Instead, he opposes the claim on two grounds: (1) that the Complaint fails to state a cause of action because Plaintiff fails to allege damages proximately caused by Defendant's actions; and (2) that Plaintiff lacks standing to sue individually or derivatively on behalf of PCMC. Without reaching the issue of standing, the claim should be dismissed for the first reason—that Plaintiff fails to allege sufficient facts to show damages proximately caused by Defendant's alleged breach of his [*14]fiduciary duty to PCM, Donovan, or PCMC.[FN16]

Damages are an essential element of a cause of action for breach of fiduciary duty. People of the State of New York v. H & R Block, Inc., 2007 WL 2330924, at *7 (NY Sup. Ct. July 9, 2007) ("[t]o state a claim for breach of fiduciary duty, plaintiff must plead: (1) the existence of a fiduciary duty between the parties; (2) breach of that duty; and (3) damages suffered as a result of the breach"); Kurtzman v. Bergstol, 40 AD3d 588, 590 (2d Dep't 2007) ("In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct"); R.M. Newell Co., Inc. v. Rice, 236 AD2d 843, 844 (4th Dep't 1997) (stating that damages are "an essential element" of a cause of action for breach of fiduciary duty).

In addition, in an action for breach of fiduciary duty, damages must have been proximately caused by the defendant's breach. Laub v. Faessel, 297 AD2d 28, 30 (1 st Dep't 2002) (stating that to maintain a cause of action for breach of fiduciary duty plaintiff must show that the "misconduct [was] the direct and proximate cause of the losses suffered").

Despite the liberal pleading standards of the CPLR, Plaintiff must go beyond merely alleging that these essential elements are present if its claim is to survive a motion to dismiss pursuant to CPLR § 3211(a)(7). Gall v. Summit, Rovins and Feldesman, 222 AD2d 225, 226 (1st Dep't 1995) (dismissing a claim for breach of fiduciary duty where the "verified complaint is devoid of factual allegations which sufficiently demonstrate a causal relationship between purported conduct on the part of defendants and damages suffered by plaintiff"); Caniglia v. Chicago Tribune - New York News Syndicate, Inc., 204 AD2d 233, 233-234 (1st Dep't 1994) [*15]("bare legal conclusions, as well as factual claims inherently incredible or flatly contradicted by documentary evidence" are not presumed to be true and are not accorded every favorable inference).

Plaintiff offers two theories of damages in order to meet the requirements discussed above. However, neither is sufficient to satisfy them and, therefore, to support a cause of action for breach of fiduciary duty.

Plaintiff's first theory of damages is that he incurred increased attorneys' fees "because [he] had to bring a different action and because [he] had to bring a different procedure." (Hr'g Tr. 12, April 8, 2008.) Specifically, Plaintiff claims that "[a] derivative action is more complicated than a direct one, involving more layers of litigation and discovery [and a] simple direct action by PCM LLC, at the very least, would have been cheaper to litigate." (Pl.'s Opp. Mem. at 4.) However, under New York law a plaintiff cannot claim attorneys' fees as damages unless there is an express provision providing for such a remedy in the contract or statute at issue. Hooper Associates, Ltd. v. AGS Compusters, Inc., 74 NY2d 487, 491 (1989). So, even if Plaintiff's counsel is correct that Plaintiff "shouldn't have had to litigate [this issue]," Plaintiff is not entitled to recovery of attorneys' fees here. [FN17]

Plaintiff's second theory of damages is that the delay in obtaining access to PCG's books and records is preventing Donovan and PCM from knowing the true extent of Ficus's alleged mismanagement of the company, and thereby preventing them from protecting their interests. (Hr'g Tr. 15, April 8, 2008.) Notwithstanding the previous discussion of why any claim for damages in this action is wholly duplicative of the claim for damages in the Main Action, this allegation seems independently untenable as a matter of common sense.[FN18] PCM's attorney [*16]("Nitkewicz") requested Cline's approval of the proposed lawsuit at 10:57 PM on July 30, 2007, and stated that he planned to file the suit in the following day or two. (Compl. Ex. E.) Regardless of whatever state of consternation into which Nitkewicz may have been thrown by Cline's refusal, he still managed to file the suit on August 9, 2007, a grand total of no more than nine days after the earliest it could have been filed had Cline approved it. It seems "inherently incredible" that this nine day delay in filing this action, which has now been ongoing for over a year, could lead to any increase in damages to him or to PCM. It therefore need not be presumed to be true. Yet, even if the claim is not "inherently incredible," Donovan offers no factual allegations to show how Cline's failure to authorize the suit proximately caused any damages suffered by Donovan or PCM during this period. As such, the claim still need not be presumed to be true. Gall, 222 AD2d at 226. Therefore, absent any other basis for damages caused by Cline's action, Plaintiff has failed to state a claim upon which relief can be granted, and so this claim is dismissed pursuant to CPLR § 3211(a)(7).

Accordingly, it is

ORDERED, that the Ficus Defendants' motion to dismiss, to stay or consolidate (Mot. Seq. No. 003) is granted; and it is further

ORDERED that Cline's motion to dismiss (Mot. Seq. No. 002) is granted; and it is further

ORDERED, that the first, second, third, fourth, fifth, sixth, eighth and ninth causes of action are hereby dismissed; and it is further

ORDERED, that the seventh cause of action is hereby severed, and the pleading in connection therewith shall be consolidated with pleadings in the Main Action (Index No. 600926/2007); and it is further

ORDERED that upon service on the Clerk of the Court of a copy of this Order with notice of entry, the Clerk shall consolidate the papers in this and the Main Action, and shall mark his records to reflect the consolidation; and it is further

ORDERED that a copy of this Order with notice of entry shall also be served upon the Clerk of the Trial Support Office (Room 158), who is hereby directed to mark the court's records to reflect the consolidation.

Dated August __, 2008. Footnotes

Footnote 1:

Joseph C. Lewis ("Lewis"), originally named as one of the Individual Defendants, was dismissed from this lawsuit on April 8, 2008, due to Plaintiffs' failure to prove service. (Hr'g Tr. 11, April 8, 2008)

Footnote 2:

Complaint, August 9, 2007. A copy of the Complaint is attached to the Affirmation of John F. Cambria in Support of Defendants' Motion to Dismiss, Oct. 11, 2007 (hereafter "Cambria Affirm."), at Ex. E. As clarification, citations which mention exhibits following the word "Compl." refer to the exhibits to attached to Plaintiff's complaint.

Footnote 3:

In addition to the Main Action, the other actions currently pending before me are: Private Capital Group, LLC v. Donovan, Index No. 650338/2007; New York Holding v. PCG REA LLC, Lawrence A. Cline and Ryan Bloomfield, Index No. 602795/2007; 422 East 84th Street Holding Corp. v. PCG REA LLC, Lawrence A. Cline, Susan Cline and Ryan Bloomfield, Index No. 602839/2007; and Banque Portfolio Corp. and Private Capital Group, LLC v. Daniel S. Torchio, et al., Index No. 650339/2007.

Footnote 4:

A copy of the Operating Agreement is attached to the Cambria Affirmation, Oct. 11, 2007, at Ex. A.

Footnote 5: Affirmation of Sanford H. Greenberg in Support of Defendant Lawrence A. Cline's Motion to Dismiss the Complaint, October 3, 2007.

Footnote 6:

Donovan subsequently moved to compel Ficus's compliance with the March 11 Order (Motion Sequence No. 007), asserting that Ficus and PCG had not provided access to all of the books, records and documents to which he was entitled. On July 9, 2008, I issued an Order that served to further clarify what types of books, records and documents Donovan is entitled to access. (See Order, July 9, 2008, hereafter the "July 9 Order.")

Footnote 7: Reply Memorandum of Law in Support of Defendants' Motion to Dismiss or for Order Staying Action, March 25, 2007.

Footnote 8:

"A limited liability company shall provide members and their agents and attorneys access to its records at the limited liability company's principal office or other reasonable locations specified in the operating agreement. The limited liability company shall provide former members and their agents and attorneys access for the proper purposes to records pertaining to the period during which they were members. The right of access provides the opportunity to inspect and copy records during ordinary business hours. The limited liability company may impose a reasonable charge, limited to the costs of labor and material, for copies of records furnished." Fla. Stat. § 608.4101(2) (2000).

Footnote 9:

"Any Member or such Member's duly authorized representative, subject to reasonable standards established by the Manager governing what information and documents are to be furnished at what time and location and at whose expense, has the right at any time, for any purpose reasonably related to such Member's Membership Interest, to inspect and copy from such books and documents during normal business hours." Operating Agreement § 1.5.1 (emphasis added).

Footnote 10:

Merovich and Florida Estate Developers are consistent with the definition of the term "breach of fiduciary duty" under New York law, in that it is generally interpreted to refer to a situation where a manager wrongfully enriches himself at the expense of the entity to which he owes the duty. See e.g. Reid v. Bickel & Brewer, 1990 WL 129199, at *8 (S.D.NY Sept. 4, 1990) withdrawn in part, 1190 WL 200540 (S.D.NY Dec. 6, 1990) (stating that "the essence of a breach of fiduciary duty between partners is that one partner has advantaged himself at the expense of the firm," and reiterating that the three prongs of a fiduciary duty are: (1) to account for profits and revenues; (2) to avoid conflicts of interest and (3) to not compete with the entity).

Footnote 11: Plaintiff's Memorandum of Law in Opposition to Defendants' Motion to Dismiss, March 7, 2008.

Footnote 12: Memorandum of Law in Support of Defendants' Motion to Dismiss or for Order Staying Action, Oct. 11, 2007.

Footnote 13:

In both the March 11 Order and the Order dated Oct. 5, 2007, I recognized that Ficus has a legitimate interest in ensuring that Donovan and his representatives are not able to " rifle through Company books and records' and disrupt ongoing business." (March 11 Order at 5.) It is for this reason that I stated that my goal in issuing the March 11 Order was "to provide this LLC member with his rightful, contractually and statutorily mandated access, but to do so subject to a protocol that would not only prevent the disgruntled LLC member from disrupting or interfering with PCG's business, but that would also protect the integrity/confidentiality of any inspected books, records or documents." (March 11 Order at 6.)

Footnote 14:

There seems to have been some confusion among the parties as to the wording of this provision and the case law that has interpreted it. This provision contains the words "between the same parties for the same cause of action" which appear after the word "pending." Also, the presence of the qualifying second clause, which states that "the court need not dismiss upon this ground but may make such order as justice requires," should not be overlooked. Finally, it should be noted that the case law interpreting this provision has repeatedly emphasized the broad discretion granted to courts when determining whether or not to dismiss an action under this provision. See, e.g, Whitney v. Whitney, 57 NY2d 731 (1982) (holding that CPLR § 3211(a)(4) "vests a court with broad discretion in considering whether to dismiss an action on the ground that another action is pending between the same parties on the same cause of action," and holding that the Appellate Term had erred in dismissing, on the law, the Special Term's exercise of discretion in denying such a motion).

Footnote 15:

Notwithstanding Ficus's reference to Donovan's Answer to the First Amended Complaint, the parties are currently on their Fourth Amended Complaint in the Main Action. No Fourth Answer has yet been filed. The fifth counterclaim asserted in Donovan's Answer to the Third Amended Complaint seeks delivery of profit and loss reports, as well as other financial information, pursuant to the terms of the Operating Agreement. This claim thus seeks essentially the same relief as is sought by the eight cause of action here, and it is therefore dismissed.

Footnote 16:

Cline also claims, at various points in his papers, that Defendant's actions cannot, as a matter of law, constitute a breach of fiduciary duty. Defendant states that because he was provided "less than twenty four hours to consider the merits of the Proposed PCM LLC Complaint Cline was not provided a reasonable opportunity to investigate (a) the merits of the claims asserted in the Proposed PCM LLC Complaint, (b) the benefit to PCM LLC in pursuing the Proposed PCM LLC Complaint, if any, and (c) alternatives to litigation." This argument seems entirely justified. Bringing a suit of this kind is a serious affair, and Plaintiff offers no evidence there was any exigency necessitating filing it within a day of seeking Cline's approval. However, because the issue of damages is sufficient to dismiss the claim, I make no determination, as to whether or not Defendant's actions constituted a breach of fiduciary duty.

Defendant also argues that there was no breach of fiduciary duty because Donovan was never entitled to the relief sought in either the proposed Complaint or the one that was actually filed (Reply Memorandum of Law in Further Support of Defendant Lawrence A. Cline's Motion to Dismiss the Complaint, March 28, 2008 at 2-3.) While it is obvious that the Court largely agrees with Defendant, as evidenced (as noted by Defendant) by the Court's March 11 Order and this ruling, that Donovan did not have the right to the unfettered access which he seeks, given that it is unclear what, if anything, Cline knew about the statutory and contractual issues in this dispute, the Court will not reach a finding on this argument. Plaintiff's failure to allege damages proximately caused by Defendant's alleged actions is sufficient grounds for dismissal of his claim.

Footnote 17:

Even if attorneys' fees were recoverable as damages, it is contestable whether this claim would survive this motion. Plaintiff offers no facts to support his assertion that this derivative action has cost more to litigate than the proposed action would have, and Defendant Cline asserts that it has not. Indeed, as Cline notes, the parties are exactly the same, and Plaintiff's counsel has only one client contact either way. (Cline Def.'s Reply Mem. at 2.) Moreover, as Cline notes, the Complaint as filed was virtually identical to the one that was proposed, and, therefore, Donovan did not lose the ability to bring any cause of action or theory by virtue of Cline's refusal to authorize the suit.

Footnote 18:

Here, any claim for damages against Cline is doubly duplicative.

As explained above, any damages suffered by PCM due to Ficus's alleged mismanagement of PCG will be proved in the Main Action. If Plaintiff can prove such damages, then there will be no basis for damages in this action because the damages sought here are merely a subset of the damages sought in Plaintiff's counterclaims in the Main Action. That is, Plaintiff is seeking those losses due to Ficus's alleged mismanagement which Plaintiff was unable to prevent due to its lack of access to PCG's books and records—which clearly is included in the total amount of damages sought due to Ficus's alleged mismanagement of PCG.

This action goes even further in that it is seeking a subset of a subset of damages already sought in the Main Action. That is, Plaintiff is seeking the subset of those losses due to Ficus's alleged mismanagement which Plaintiff was unable to prevent due to its lack of access to PCG's books and records which it would not have incurred had Cline allowed Plaintiff to file the suit approximately a week earlier.

Thus, even if Plaintiff could somehow prove that the 1-8 day delay in filing this suit did actually lead to Plaintiff incurring greater losses due to Ficus's alleged mismanagement, then those losses are still the same losses as alleged in the Main Action. In the end, all losses due to Ficus's alleged management will be determined in the Main Action. If Plaintiff manages to prove such damages, the claims in this action will become moot because whatever award Plaintiff receives will include the damages alleged here, which are, again, merely a subset of the damages sought in the Main Action.