Opinion ID: 214922
Heading Depth: 2
Heading Rank: 2

Heading: Joint Venture Claims

Text: Appellants also seek to establish PNC’s liability on the theory that, in working together to acquire Griffith, Williamson, Argilus, and PNC entered into a joint venture, giving rise to mutual fiduciary duties and an obligation on PNC’s part to pay Argilus’s success fee. Even assuming that the parties agreed to form a joint venture, a claim that PNC contests, appellants’ arguments are unsupported by the evidence. 5 Under New York law, participants in a joint venture owe one another the same fiduciary duties that inhere between members of a partnership. Stem v. Warren, 174 N.Y.S. 30 (App. Div. 1919). Thus, a joint venturer must generally obtain permission from his associates before taking personal advantage of a business opportunity that he learns of through his participation in the venture. Meinhard v. Salmon, 164 N.E. 545 (N.Y. 1928). Appellants argue that PNC violated this rule by purchasing Griffith without their involvement. It is clear, however, that any fiduciary duties that PNC owed to the appellants were extinguished long before PNC and Saunders made their offer to purchase Griffith in July 2003. By appellants’ own account, their relationship with PNC came to an end in January 2003 when it became clear that the Williamson proposal would not be accepted. Appellants contend that PNC turned Griffith’s owners against the deal in some unspecified way, but they do not seriously dispute that the main sticking point was discomfort on the part of Griffith’s management with David Williamson’s planned role in the merged company, and they point to no evidence that PNC created or encouraged that discomfort. Accordingly, no reasonable fact-finder could conclude that PNC breached its fiduciary obligations to appellants. Nor would the existence of a joint venture obligate PNC to pay Argilus’s $1.2 million success fee. Williamson and Argilus negotiated the success fee well before they approached PNC with the opportunity to purchase Griffith. Their agreement obligated Williamson, not any prospective joint venture, to pay Argilus if Williamson succeeded in acquiring Griffith. There is no evidence that PNC expressly or impliedly assumed joint 6 liability with Williamson on that agreement.