Court Opinion

ID: 4036590
Source: CourtListenerOpinion
Date Created: 2016-09-23 15:00:49.638885+00
Date Added: 2024-06-11T14:49:53.724297
License: Public Domain

15-1895
     Alliance Shippers Inc. v. Garcia, et al.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 23rd day of September, two thousand sixteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                DEBRA ANN LIVINGSTON,
 8                              Circuit Judges,
 9                JED S. RAKOFF,*
10                              District Judge.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       ALLIANCE SHIPPERS INC.,
14                Plaintiff-Appellant,
15
16                    -v.-                                               15-1895
17
18       JOHN J. GARCIA, individually and as
19       agent of KRISP-PAK SALES CORP., and
20       CARLOS O. GARCIA, individually and as
21       agent of KRISP-PAK SALES CORP.,
22                Defendants-Appellees.
23       - - - - - - - - - - - - - - - - - - - -X

                *
                  The Honorable Jed S. Rakoff, United States
         District Court for the Southern District of New York,
         sitting by designation.
                                                  1
 1   FOR APPELLANT:             RONALD HOROWITZ, Law Offices of
 2                              Ronald Horowitz, Flagler Beach,
 3                              Florida.
 4
 5   FOR APPELLEES:             LEONARD KREINCES, Howard
 6                              Rosenberg, Kreinces & Rosenberg,
 7                              P.C., Westbury, New York.
 8
 9        Appeal from a judgment of the United States District
10   Court for the Southern District of New York (Forrest, J.).
11
12        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13   AND DECREED that the judgment of the district court be
14   AFFIRMED.
15
16        Plaintiff Alliance Shippers, Inc. (“Alliance”) appeals
17   from the judgment of the United States District Court for
18   the Southern District of New York (Forrest, J.), dismissing
19   the complaint on motion. Alliance alleges that it provided
20   freight transportation services to Krisp-Pak Sales Corp.
21   (“Krisp-Pak”), a produce seller, and has never received
22   payment.1 Alliance alleges that defendants John Garcia and
23   Carlos Garcia, who were officers of Krisp-Pak, fraudulently
24   transferred money from Krisp-Pak to themselves. We assume
25   the parties’ familiarity with the underlying facts, the
26   procedural history, and the issues presented for review.
27
28        1. The district court dismissed the fraudulent
29   transfer cause of action for failure to state a claim.
30   Under Federal Rule of Civil Procedure 9(b), all claims of
31   fraud are subject to a heightened pleading standard and must
32   be pleaded with particularity; plaintiffs are required to
33   detail the statements or omissions that the plaintiff
34   contends are fraudulent, identify the speaker, state where
35   and when the statements were made, and explain why the
36   statements are fraudulent. See Fin. Guar. Ins. Co. v.
37   Putnam Advisory Co., 783 F.3d 395, 402-03 (2d Cir. 2015).
38

         1
              Alliance previously obtained a $371,007.68
     judgment in New Jersey Superior Court in its favor against
     Krisp-Pak, which is not a party to this suit. According to
     the amended complaint, Krisp-Pak “began the process of
     informal liquidation in or around 2012.” Am. Compl. ¶ 33.
     According to the defendants, Krisp-Pak was never actually
     dissolved.
                                  2
 1        As the district court ruled, the plaintiff has not
 2   identified a single factual allegation in its amended
 3   complaint that would support an inference of fraudulent
 4   intent by the defendants. While, under Rule 9(b), intent
 5   need not “be alleged with great specificity,” Chill v. Gen.
 6   Elec. Co., 101 F.3d 263, 267 (2d Cir. 1996), the plaintiff
 7   has made no allegations of fact to support his
 8   characterization of the loans the defendants made as
 9   “capital contributions,” nor are there any other allegations
10   in the complaint that suggest fraudulent intent.
11
12        2. The district court dismissed the plaintiff’s
13   recharacterization and equitable subordination claims as
14   bankruptcy claims that are not properly before a district
15   court. The district court did not err. See, e.g., HBE
16   Leasing Corp. v. Frank, 48 F.3d 623, 634 (2d Cir. 1995)
17   (“Equitable subordination is distinctly a power of federal
18   bankruptcy courts, as courts of equity, to subordinate the
19   claims of one creditor to those of others.”).
20
21        3. The plaintiff argues that the defendants, as
22   shareholders and officers, owed fiduciary duties to Krisp-
23   Pak’s creditors and that those duties were breached. The
24   plaintiff has not alleged facts that would support this
25   claim. Instead, its brief makes arguments for piercing the
26   corporate veil that have no apparent connection or relevance
27   to the breach of fiduciary duty allegations. Accordingly,
28   this claim is also dismissed.
29
30        4. The district court denied the plaintiff’s motion to
31   amend its complaint. However, the plaintiff has already
32   amended its complaint once, and we have held that, in such
33   circumstances, a district court does not abuse its
34   discretion when it denies further leave to amend. ATSI
35   Commc’ns v. Shaar Fund, Ltd., 493 F.3d 87, 108 (2d Cir.
36   2007); McLaughlin v. Anderson, 962 F.2d 187, 195 (2d Cir.
37   1992). Accordingly, the district court did not abuse its
38   discretion in denying the plaintiff’s request to amend.
39
40        For the foregoing reasons, and finding no merit in the
41   plaintiff’s other arguments, we hereby AFFIRM the judgment
42   of the district court.
43                               FOR THE COURT:
44                               CATHERINE O’HAGAN WOLFE, CLERK
45

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