Opinion ID: 765616
Heading Depth: 3
Heading Rank: 2

Heading: The Windsor Defendants' Misrepresentation

Text: 39 Next, the Windsor Defendants contend that, as mere customers of HED-France, they never engaged in actionable misrepresentation towards Cofacredit. They argue that the district court committed reversible error in finding otherwise. We disagree. 40
41 In finding the Windsor Defendants liable for fraud, the district court concluded that they were engaged with Brandli and HED-France in a conspiracy to defraud Cofacredit. As a result, the court imputed to the Windsor Defendants the misrepresentations made by Brandli and HED-France in furtherance of that conspiracy. The Windsor Defendants now argue that there was insufficient evidence of a conspiracy. 42 To prove a conspiracy, a plaintiff must show a corrupt agreement, an overt act in furtherance of that agreement, and membership in the conspiracy by each defendant. See Kashi v. Gratsos, 790 F.2d 1050, 1055 (2d Cir. 1986). As is true in criminal conspiracies, agreements in civil conspiracies will not easily be shown by direct evidence, but may be inferred from circumstantial evidence. In this case, there is ample evidence to support the conclusion that there was a conspiracy. 43 First, and most importantly, there is Brandli's March 1, 1988 fax to Lipszyc and Moshe Weiss. In this fax, Brandli suggests the need to make it appear as if the invoices have a firm payment date, when they in fact did not. When combined with the fact that each of the Windsor Defendants accepted product represented by stickered invoices, and later discussed the invoices with Cofacredit and Societe Generale as if they were actual sales, the reasonable inference is that there was an agreement to misrepresent the consignment transactions as true sales. 44 There is also evidence to support a finding that each defendant joined the conspiracy and committed an overt act in furtherance thereof. Sholam Weiss-the self-described president, director, and boss of Windsor Plumbing Supply, the chairman and sole owner of Windsor World, and an owner of HED-US-sent the March 8 fax to Societe Generale indicating that Windsor would pay the first Societe Generale-financed invoice. Moshe Weiss, an employee of Windsor Plumbing and president of Windsor World, participated in the August meeting in Paris at which the amended payment plan was discussed. Lipszyc, a vice president of Windsor World, participated in the July 26, 1988 meeting in Paris at which the amended payment plan was initially discussed, and sent the August 12, 1988 fax agreeing to the amended payment plan. Each of these acts furthered the scheme to defraud by representing to Societe Generale and Cofacredit that the invoices represented true sales. Accordingly, the district court did not commit reversible error in finding that the Windsor Defendants conspired to defraud Cofacredit. 45 Because the district court's finding of a conspiracy was not in error, the court properly imputed to the Windsor Defendants all of the misrepresentations Brandli and HED-France made withing the scope of the conspiracy. See Kashi, 790 F.2d at 1054-55 (stating that under New York law, proof of a civil conspiracy connects a defendant with the transaction, charges him with the acts of and declarations of his co-conspirators, and exposes that defendant to joint and several liability). The acts imputed to the Windsor Defendants include HED-France's tendering of invoices to Cofacredit for factoring. Given the terms of the Factoring Agreement, which required that all factored invoices represent firm sales having already been delivered subject to a maximum 180 day payment term, this tendering of invoices amounted to a representation by HED-France that the invoices evidenced firm sales to Windsor, when in fact they evidenced consignment shipments to HED-US. The district court properly charged the Windsor Defendants with their co-conspirators misrepresentations. 46
47 The evidence that demonstrates the Windsor Defendants' membership in the conspiracy also shows that the Windsor Defendants themselves misrepresented material facts concerning their transactions with HED-France. As demonstrated above, each of the Windsor Defendants represented to Cofacredit that Windsor owed a sum certain to HED-France, and therefore to Societe Generale and Cofacredit. Of course, this was not the case. Therefore, the district court did not err in finding that the Windsor Defendants themselves made material misrepresentations. And because we conclude that the district court's finding of misrepresentation was not in error, we need not reach the Windsor Defendant's contention that the district court also erred in finding that they concealed the terms of the Factoring Agreement in the face of a duty to disclose.