Case Information
*1 13-367-cv
Wilson v. Dantas
In the
United States Court of Appeals
For the Second Circuit
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A UGUST T ERM No.
R OBERT E. W ILSON , III,
Plaintiff Appellant, D ANIEL V ALENTE D ANTAS , O PPORTUNITY E QUITY P ARTNERS , L TD ., FORMERLY KNOWN AS CVC/O PPORTUNITY E QUITY P ARTNERS , L TD ., O PPORTUNITY I NVEST II, I NC ., C ITIBANK N.A., I NTERNATIONAL E QUITY I NVESTMENTS , I NC ., C ITIGROUP V ENTURE C APITAL I NTERNATIONAL B RASIL L.L.C., C ITIGROUP V ENTURE C APITAL I NTERNATIONAL B RASIL L.P., Defendants Appellees.
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Appeal United States Southern New York. CV ― George B. Daniels, Judge ________
A RGUED : D ECEMBER D ECIDED : M ARCH ________
Before: C ABRANES H ALL C HIN , Circuit Judges .
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Plaintiff appellant Robert E. Wilson, III appeals January judgment District for Southern District New York (George B. Daniels, Judge ) granting motion dismiss defendant appellee Citibank, N.A., all related entities for failure relief can granted. engaged tortious conduct breached obligations owed Wilson, resulting receive purportedly connection Brazil.
We hold had jurisdiction hear case U.S.C. because arose operation, properly Federal Rules Civil Procedure.
Accordingly, AFFIRM judgment Court.
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T ERRANCE G. R EED Lankford & Reed, PLLC, Alexandria, VA (Peter F. Langrock, Devin McLaughlin, Langrock, Sperry & Wool, LLP, Middlebury, VT; Martin F. Gusy, Gusy Van der Zandt LLP, New York, NY, brief ), Robert E. Wilson, III
Philip C. Korologos, Boies, Schiller & Flexner LLP, New York, NY, Daniel Valente Equity Partners, Ltd., Opportunity Invest II,
C ARMINE D. B OCCUZZI (Howard S. Zelbo, Anthony M. Shults, brief ), Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Citibank, N.A., International Equity Investments, Inc., Citigroup Venture Capital International Brasil, LLC, Citigroup Venture Capital International Brasil, LP
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J OSÉ A. C ABRANES Circuit Judge :
Plaintiff appellant Robert E. Wilson, III appeals January judgment District Southern District New York (George B. Daniels, Judge ) granting motion dismiss defendant appellee Citibank, N.A. all related entities (the “Citibank defendants”) failure relief can granted. engaged tortious conduct breached obligations owed Wilson, resulting receive purportedly connection Brazil.
We hold had jurisdiction hear case U.S.C. because arose operation, properly Federal Rules Civil Procedure. Accordingly, AFFIRM judgment Court.
BACKGROUND the following facts, which are
presumed true the purposes of appeal. While employed the 1990s, Wilson designed an investment program create large private equity fund targeting government ‐ owned Brazilian companies were being privatized. Beginning with the approval of upper management, Wilson created limited partnership, CVC/Opportunity Equity Partners, LP (the “Partnership”), an umbrella organization oversee the investment program. The Partnership was comprised the limited partner, through its subsidiary International Equity Investments, (“IEII”), the general partner, Opportunity Equity Partners, Ltd. (“OEP”), an entity Wilson created with the assistance Brazilian investment advisor Daniel Valente Dantas related entities (the “Opportunity defendants”).
Pursuant Limited Partnership Agreement, OEP was charged with managing administering underlying funds into which Partnership’s investors placed money investments. co investors were IEII, Brazilian pension funds, Under terms Operating Agreement, each investor would receive pro rata ownership interest stock Partnership’s portfolio companies. Wilson voluntarily resigned from Citibank,
relocated Brazil participate general management OEP. Prior joining OEP, personally negotiated employment agreement which entitled 5% “carried interest,” i.e. 5% total profits OEP general partner. entered into OEP’s Shareholder Agreement, provided OEP ‐ ‐ would have shares, which and three other founding principals each acquired one share. The remaining ninety six shares were owned Dantas controlled entity. Each the individual shareholders and Dantas were made Directors OEP, and devoted their full time managing the investments. From through 2008, the made ten large investments in Brazilian companies, resulting in substantial profits the Citibank defendants and the Opportunity defendants. 2005, Citibank, through its wholly owned subsidiary IEII,
allegedly terminated OEP’s status general partner, appointed CVC Brasil LLC, IEII subsidiary, the successor general partner. This led litigation among the Citibank defendants, OEP, culminating confidential settlement agreement April 2008, privy. The settlement resulted winding down distribution accompanying profits.
On March 23, 2012, plaintiff commenced present suit New York court against On April 26, 2012, removed case pursuant U.S.C. stem defendants’ alleged honor commitments pay work at OEP. On January granted motion dismiss all asserted Federal Rules Civil Procedure, declined *6 6 13 367 exercise supplemental jurisdiction over remaining state law asserted This timely appeal followed.
DISCUSSION
We review de novo a district court’s order granting a motion dismiss under Rule 12(b)(6), “accepting true all allegations complaint drawing all reasonable inferences favor non ‐ moving party.” Gonzalez v. Hasty , 651 F.3d 318, 321 (2d Cir. 2011). To survive a motion dismiss, complaint must include “enough facts claim relief plausible its face.” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007); see Ashcroft v. Iqbal , U.S. 662, (2009). A will have “facial plausibility when plaintiff pleads factual content allows court draw reasonable inference defendant liable misconduct alleged.” Iqbal U.S. at Although all allegations contained are assumed be true, tenet “inapplicable legal conclusions.” Id.
A. Jurisdiction
Although not raised either party, must “take[] ourselves determine whether removal jurisdiction existed even where issue itself appealed.” re Methyl Tertiary Butyl Ether Prods. Liab. Litig. F.3d 112, (2d Cir. 2007). To be removable U.S.C. § action must: (1) civil suit, (2) have federally chartered corporation party, (3) arise “‘out transactions involving international or foreign banking, [including territorial banking], or international operations .’” Am. Int’l Grp., Bank Am. Corp. 780–81 (2d Cir. (emphasis supplied) (quoting U.S.C. 632). 367 Edge Act does define term “international or
foreign financial operations,” nor has been defined in our case law. Under plain meaning phrase, however, Edge Act jurisdiction extends those operations that consist “[t]he act or process raising or providing funds,” including “[t]he raising funds issuing capital securities (shares business).” See Black’s Law Dictionary (9th ed. 2009) (defining “financing” “equity financing”); see Stamm Barclays Bank N.Y. F. Supp. (S.D.N.Y. (defining “financial operations” “those operations that provide . . capital or loan money needed carry business” (internal quotation marks omitted)). In addition, “the suit must arise an offshore banking transaction that federally chartered corporation ” is party suit. Am. Int’l Grp. at (emphasis supplied). instant case, first two requirements are met because
this civil suit federally chartered U.S. bank. With regard third requirement, this case involves international investment program made numerous transactions involving Brazilian companies. Pursuant program, allegedly contributed $750 million return stock portfolio companies, they managed partnership funds onward. violated fiduciary duties obligations program. Accordingly, jurisdiction proper Act.
B. Dismissal Turning merits, address tort contract turn. 367 1. Tort Claims Count One
breach of fiduciary obligation allege the existence of a fiduciary duty between Wilson and Citibank defendants. Wilson argues that holding erroneous because Citibank a fiduciary duty OEP, which should extend Wilson because “the relation between OEP, Ltd. and Wilson was not that of a mere shareholder a corporation [as held], but rather a quasi partner a quasi partnership.” Appellant’s Br.
As Citibank rightly asserts, however, relationship between Wilson OEP does not create a fiduciary relationship between Wilson Citibank A fiduciary relationship between OEP’s shareholders Citibank cannot arise by virtue organizational structure outlined OEP’s Shareholder Agreement, Citibank was a party. Cf. United States v. Falcone (2d Cir. 2001) (noting “a fiduciary duty cannot imposed unilaterally entrusting person confidential information” (internal quotation marks omitted)). absence mutual intent part defendants create fiduciary relationship, any reliance or trust unilaterally placed insufficient create fiduciary relationship. Cf. Bianchi Midtown Reporting Serv., N.Y.S.2d (4th Dep’t (noting existence partnership depends upon, inter alia express implied intent parties). Count One
aided abetted defendants’ breach their fiduciary duty to him. Specifically, Wilson alleges that the Citibank defendants excluded Wilson from their litigation with Dantas OEP, then entered into a confidential settlement agreement precluding Wilson from obtaining the information necessary to enforce right to “carried interest.” Yet no authority exists the proposition a litigating party aids abets an injury to a third party by entering into a confidential settlement agreement normal course litigation.
In alternative, Wilson Citibank defendants instructed Dantas to pay Wilson “carried interest” had been promised him. Such an allegation implausible, however, Citibank had no incentive reason prevent Opportunity paying their employees profits earned by OEP, nor does suggest one. As rightly found, defendants’ strategic decisions their litigation against Dantas OEP were motivated by nothing more than appropriate economic self interest. Count Two, asserts fraudulent concealment claim defendants, premised on
negotiation confidential settlement agreement The for, inter alia allege an intent defraud. See TVT Records Island Def Jam Music Grp. 90–91 (2d Cir. (fraudulent concealment requires plaintiff allege, inter alia intent defraud). argues appeal such intent exists because, keeping settlement confidential, sought eliminate ability obtain purportedly Limited Agreement. Again, such motive neither alleged Complaint, nor plausible. far more plausible inference is motive was end nearly four years contentious litigation with and, as discussed next, Wilson’s right seek stemmed not Limited Partnership Agreement, but solely from OEP’s Shareholder Agreement Wilson’s agreement Dantas. Contract Claims contract similarly lack merit. asserts breach contract Count Seven CVC Brasil—the subsidiary took over as General Partner 2005—on theory that, Limited Partnership Agreement, CVC Brasil assumed obligation compensate when replaced OEP as General Partner. reliance Limited Partnership Agreement
misplaced inasmuch agreement, not party, expressly disclaims existence any third party beneficiaries. See Limited Partnership Agreement 13.15 (“This Agreement . . . entered into sole exclusive benefit General Partner Limited Partners . . . no other Person will have any rights hereunder . . .”). Moreover, there no evidence any provisions Limited Agreement grant enforceable rights any entity other than General Limited Partner.
Indeed, courts within Circuit have consistently held “even where contract expressly sets forth obligations specific individuals categories individuals, those individuals do have standing enforce those obligations suing third party beneficiaries when contract contains negating clause.” re *11 11 13 367 ‐ Lehman Bros. Holdings Inc. , B.R. 268, 275–76 (S.D.N.Y. 2012). For instance, in India.Com, v. Dalal (2d Cir. 2005), held “the mention [a third party] in contract a broker entitled to a commission insufficient to confer third party status where parties themselves are explicit they did not intend create third party beneficiaries.” Id. at ; cf. D iamond Castle Partners IV PRC, L.P. v. IAC/InterActiveCorp N.Y.S.2d (1st Dep’t (construing negating clause exclude plaintiffs “in light numerous contract provisions granting plaintiffs enforceable rights”). Accordingly, in light negating clause, and lack any other clause affirmatively granting him rights, Wilson may not rely upon Limited Agreement enforce rights owed and purportedly assumed by CVC Brasil. several quasi contract Counts Four Eight, including promissory estoppel unjust enrichment. “To establish viable cause action sounding promissory estoppel, plaintiff must allege,” among other elements, “a clear unambiguous promise.” Rogers Town Islip N.Y.S.2d (2d Dep’t 1996). sole allegation “promise” that, “[i]n reliance judgment assurances Plaintiff would receive promised writing by Dantas, Plaintiff relocated . . Brazil.” Joint App’x Whether “assurance” amounted promise indemnify event Dantas breached contract neither clear nor unambiguous. With regard unjust enrichment claim, not defendants, who allegedly “carried interest.” Since were never contractually obligated pay Wilson, they were enriched at expense.
CONCLUSION
To summarize, we hold that: (A1) Under Edge term “international or foreign operations” encompasses those operations consist act process raising or providing funds,
including raising funds issuing capital securities. (A2) Jurisdiction Act proper here. This civil
suit, federally chartered U.S. bank, arise numerous transactions involving Brazilian companies. (B) properly tort
contract relief can granted. For reasons stated above, AFFIRM judgment Court, entered January
[1] The relevant portion of 12 U.S.C. § 632 states that all suits of a civil nature at common law or in equity to which any corporation organized under the laws of the United States shall be a party, arising out of transactions involving international or foreign banking . . . or out of other international or foreign financial operations . . . shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits.
[2] Because Wilson was not in a fiduciary relationship with Citibank, his constructive fraud claim also fails. See Klembczyk v. Di Nardo , 705 N.Y.S.2d 743, 744 (4th Dep’t 1999) (“The elements of constructive fraud are the same as those for actual fraud, except that the element of scienter is replaced by a fiduciary or confidential relationship between the parties.”).
[3] For similar reasons, Wilson’s tortious interference claims in Count Three, which are premised upon allegations of misconduct during the course of litigation, also fail.
[4] As Wilson has not alleged any actionable torts, his claim for civil conspiracy in Count Five also fails. See Anesthesia Assocs. of Mount Kisco, LLP v. N. Westchester Hosp. Ctr. , 873 N.Y.S.2d 679, 685 (2d Dep’t 2009) (requiring allegations of an “actionable, underlying tort” to plead civil conspiracy).