Court Opinion

ID: 3601
Source: CourtListenerOpinion
Date Created: 2010-04-24 19:32:04+00
Date Added: 2024-06-11T16:42:23.332839
License: Public Domain

09-0117-cv (L)
In re Eugenia VI Venture Holdings, Ltd.

                               UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                    SUMMARY ORDER
RULINGS BY SUM M ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUM M ARY ORDER FILED AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1. WHEN CITING A SUM M ARY ORDER IN A DOCUM ENT
FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUM M ARY ORDER”). A PARTY CITING A
SUM M ARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
on the 23rd day of March, two thousand ten.

PRESENT:         BARRINGTON D. PARKER,
                 PETER W. HALL,
                 GERARD E. LYNCH,
                                 Circuit Judges.

_______________________________________________________

Eugenia VI Venture Holdings, Ltd.,
                                             Plaintiff-Appellant,

                          v.                                               No. 09-0117-cv(L),
                                                                           09-0123-cv (CON),
                                                                           09-0128-cv (CON),
                                                                           09-0129-cv (CON),
                                                                           09-0130-cv (CON),
                                                                           09-0132-cv (CON)

Robert V. Glaser, Burton C. Glosson, Glen Dell, Ron Augustin, Maplewood Partners, LP, AMC
Investors, LLC,
                                           Defendants-Appellees,

Narinder Chabra, Surinder S. Chabra, Parvinder Chabra,
                                          Defendants-Third Party-Plaintiffs-Counter-
                                          Claimant Appellees,

AMC Computer Corp.,
                                             Defendant-Cross-Defendant-Appellee,

AMC Investors II, LLC, Maplewood Holdings LLC, Maplewood Management, LP, Robert J.
Reale,
                                        Third Party-Defendants-Appellees.
________________________________________________________
For Appellant:                MITCHELL A. KARLAN , (Richie Falek, Megan Burns, Anne
                              Champion, Kristen Lisk, on the brief) Gibson, Dunn & Crutcher
                              LLP, New York, New York.

For Appellees:                TERENCE F. GILHEANY , (Brian T. McGovern, on the brief)
                              Cadwalader, Wickersham & Taft LLP, New York, New York;
                              Brian P. Miller, Samuel S. Heywood, Akerman Senterfitt, Miami,
                              Florida; Constantine D. Pourakis, Stevens & Lee, P.C., New York,
                              New York; Thomas A. Martin, Putney, Twombly, Hall & Hirson
                              LLP, New York, New York; Douglas E. Motzenbecker, Podvey
                              Meanor Catenacci, Hildner Cocoziello & Chattman, Newark, New
                              Jersey.

       Appeal from final judgment in six coordinated actions, entered on December 15, 2008, by

the United States District Court for the Southern District of New York (Batts, J.), granting

defendants-appellees’ joint motion for summary judgment on all claims as to all defendants-

appellees. UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

       We assume the parties’ familiarity with the underlying facts and the procedural history of

this case, as well as with the issues raised on appeal. Briefly, all claims arise from an Amended

and Restated Credit Agreement (the “Credit Agreement” or “Agreement”) between plaintiff-

appellant lender (“Eugenia”) and defendant-cross-defendant-appellee borrower AMC Computer

Corp. (“AMC”) dated January 30, 2003.

       We review de novo the district court’s decision to grant summary judgement and, in the

course of that review, we draw all permissible factual inferences in favor of the non-moving

party. See, e.g., Aulicino v. New York City Dep’t of Homeless Servs., 580 F.3d 73, 79-80 (2d Cir.

2009). We will affirm a summary judgment award only where such review reveals “no genuine

issue as to any material fact” and the movant is “entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(c).

                                                 2
       We agree with the district court’s conclusion that Eugenia’s derivative claims for breach

of fiduciary duty and aiding and abetting breach of fiduciary duty fail as a matter of law because

Eugenia failed to raise a genuine issue of material fact as to damages. To prove breach of

fiduciary duty under New York law, a plaintiff must demonstrate: “breach by a fiduciary of a

duty owed to plaintiff; defendant’s knowing participation in the breach; and damages.”1 SCS

Commc’ns, Inc., v. Herrick Co., 360 F.3d 329, 342 (2d Cir. 2004). For purposes of our analysis

here, defendants-appellees’ principal assertion below was that Eugenia could not prove causation

and damages.2 Eugenia failed to adduce sufficient evidence to raise a genuine issue of material

fact as to damages despite arguing that defendants-appellees caused the destruction of AMC and

“rendered the company incapable of paying its debts, and substantially increased those debts.”

That is, at the time the parties entered the Credit Agreement, AMC was already insolvent. As a

result, Eugenia cannot demonstrate that thereafter defendants-appellees’ mismanagement

rendered the corporation insolvent. Eugenia’s derivative fiduciary claims thus fail.

       We also agree with the district court that Eugenia’s claims for fraudulent inducement,

fraud, and aiding and abetting fraud fail as a matter of law because Eugenia suffered no out-of-

pocket loss. See Crigger v. Fahnestock & Co., 443 F.3d 230, 234 (2d Cir. 2006); Lama Holding

Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421 (1996).

       1
          The district court did not make a finding as to whether defendant-appellee Glaser owed
AMC a fiduciary duty. We need not reach this issue as we conclude that Eugenia has not shown
that it suffered damages as a result of defendant-appellees’ alleged breach of fiduciary duty.
       2
         Defendant-appellees also challenged Eugenia’s standing to bring derivative claims on
behalf of AMC. We concur with the district court’s conclusion that this claim is without merit.

                                                 3
      For the reasons stated above, the judgment of the district court dismissing Eugenia’s

claims is AFFIRMED.

                                                   FOR THE COURT:
                                                   Catherine O’Hagan Wolfe, Clerk

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