Northern Shipping Funds I, LLC v. Icon Capital Corp.
921 F. Supp. 2d 94
S.D.N.Y.2013Background
- Northern sues Icon and Boa over proceeds and settlement related to Icon Capital Corp. v. Boa Sub AS (Prior Action).
- Commitment Letter (Sept. 17, 2010) set up a $70M loan arrangement with upfront fees of $2.45M and an earnest deposit of about $300k.
- Boa withdrew from the deal in December 2010; Northern and Icon demanded fees and expenses per the Commitment Letter.
- In Jan. 2012, the Prior Action settled for about $750k to Icon; Northern alleges it was not allowed to participate or share in the settlement and that Icon misrepresented Northern’s rights.
- Northern asserts breach of contract, unjust enrichment, money had and received, constructive trust, and breach of fiduciary duty; Icon moves to dismiss fiduciary duty and constructive trust claims.
- The court declines to convert the motion to one for summary judgment and grants Icon’s Rule 12(b)(6) motion to dismiss the fiduciary duty and constructive trust claims as pleaded.
- The court incorporates the Commitment Letter and Prior Action complaint by reference and excludes outside materials accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a fiduciary relationship between Icon and Northern | Northern contends joint venture/agency roles created trust. | Icon argues no fiduciary relationship; arm's-length commercial transaction. | No fiduciary relationship established; dismissal warranted. |
| If joint venture existed, whether it satisfies joint venture elements | Complaint and Commitment Letter imply joint venture. | Lack of explicit losses sharing defeats joint venture. | No valid joint venture formed. |
| Existence of an agency relationship between Icon and Northern | Agreement and conduct show agency duties beyond contract. | Commitment Letter lacks control-language; no agency. | No agency relationship proven; fiduciary claim fails. |
| Duplicative nature of breach of fiduciary duty and breach of contract | Fiduciary duty provides independent remedy. | Claims based on same contract; duplicative. | Fiduciary claim dismissed as duplicative of contract claim. |
| Constructive trust viability given contract Controls | Constructive trust appropriate to prevent unjust enrichment. | Equitable remedy not warranted where contract governs. | Constructive trust claim dismissed; adequate legal remedy exists through contract. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard—claims must be plausible on their face)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (requirement of non-conclusory factual allegations)
- Steinbeck v. Steinbeck Heritage Foundation, 400 F. App’x 572 (2d Cir. 2010) (agency/relationship analysis; control essential for agency)
- Pension Committee of University of Montreal Pension Plan v. Banc of America Securities, LLC, 592 F. Supp. 2d 608 (S.D.N.Y. 2009) (arm’s-length transactions generally lack fiduciary duties absent exceptional circumstances)
- In re Parmalat Securities Litigation, 375 F. Supp. 2d 278 (S.D.N.Y. 2005) (agency/control as indicators of principal-agent relationship)