552 F. App'x 13
2d Cir.2014Background
- Fillmore appeals a district court judgment dismissing eight claims against Capmark Bank in a diversity case involving a loan to Downtown Miami Mall LLC and Downtown Miami Hotel LLC.
- Capmark Bank allegedly breached the May 2007 Co-Lending and Servicing Agreement via its affiliate Capmark Finance, Inc. (CFI), under an alter ego theory.
- California law governs veil-piercing due to corporate form and the California incorporation of CFI; New York law governs pleadings in the implied covenant and tort claims.
- District court dismissed the first six claims for failure to state a claim and dismissed the remaining two by consent; on appeal, the court reviews for plausibility under Twombly and Iqbal.
- Fillmore contends Capmark improperly controlled or used CFI to breach contracts and sought to extend or foreclose rights under the Loan and Servicing Agreements.
- The court ultimately affirms dismissal of all claims against Capmark, holding pleadings insufficient to establish alter ego, independent fiduciary duties, or tortious interference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Alter ego/veil piercing sufficiency | Fillmore alleges unity of interest between Capmark and CFI to disregard the corporate form. | Capmark argues pleaded facts are conclusory and insufficient to pierce the corporate veil under California law. | Alter ego claim properly dismissed; insufficient non-conclusory facts. |
| Implied covenant breach viability | Capmark’s conduct breached the implied covenant beyond the express terms of the contracts. | Implied covenant cannot override express terms or create independent rights; duplicative of contract claim. | Dismissed; implied covenant not plausibly alleged beyond contract. |
| Aiding and abetting fiduciary breach | Capmark aided CFI’s breach of fiduciary duties to Fillmore. | No independent fiduciary duty by CFI; no underlying breach to aid. | Dismissed; no actionable aiding and abetting without primary fiduciary breach. |
| Tortious interference with contract against a party to the contract | Capmark’s rights and duties as a party to the Loan Agreement allowed interference with Borrowers’ performance. | Only a stranger to a contract may be liable, or at least the pleading fails to plausibly allege intentional procurement. | Dismissed; lack of plausible factual basis for intentional inducement to breach. |
| Gross negligence and willful misconduct in contract context | Capmark’s conduct was grossly negligent and willful in inducing default. | Claims sound in contract; no independent duty supporting tort claims against Capmark. | Dismissed; no independent duty or tort apart from contract. |
Key Cases Cited
- American Fuel Corp. v. Utah Energy Dev. Co., 122 F.3d 130 (2d Cir. 1997) (veil-piercing choice-of-law framework in diversity cases)
- Fletcher v. Atex, Inc., 68 F.3d 1451 (2d Cir. 1995) (corporate veil matters governed by state-of-incorporation rules)
- Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requires plausible grounds for relief)
- Gaia House Mezz LLC v. State Street Bank & Trust Co., 720 F.3d 84 (2d Cir. 2013) (implied covenant limits and business-efficacy context)
- M/A-COM Sec. Corp. v. Galesi, 904 F.2d 134 (2d Cir. 1990) (implied covenant and business-efficacy limits)
- Van Valkenburgh, Nooger & Neville, Inc. v. Hayden Publ’g Co., 281 N.E.2d 142 (N.Y. 1972) (New York law on implied duties and business relation expectations)