Court Opinion

ID: 4079916
Source: CourtListenerOpinion
Date Created: 2016-10-05 19:00:34.446675+00
Date Added: 2024-06-11T07:45:21.860771
License: Public Domain

15-2606-cv
Visión En Análisis Y Estrategia, S.A., et al. v. Karl Anderson, 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.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 5th day of October, two thousand sixteen.

PRESENT:             JON O. NEWMAN,
                     JOSÉ A. CABRANES,
                                  Circuit Judges,
                     JANE A. RESTANI,
                                  Judge. *

Vision En Analisis Y Estrategia, S.A., a Mexican
Corporation, Capitaliza-T, Sociedad De Responsabilidad
Limitada De Dapital Variable, a Mexican Corporation,

                  Plaintiffs - Appellants,

v.                                                                       No. 15-2606

Karl Andersen, Kenneth A. Landgaard, Arthur L.
Bowen, William C. Coyle, Brock Bagley, David Mickelson
Insurance Services, Erwin Legal, P.C., Christopher R.
Erwin, PW Insurance Agency Corp., Leon Lowenthal,
Meyer Gertner, Randy W. Bagley,

                  Defendants - Appellees,

     *
      The Honorable Jane A. Restani, Judge for the United States Court of International Trade,
sitting by designation.

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Stavanger Holdings, Ltd., Hedmark Capital Ltd.,

             Defendants.

FOR PLANTIFFS-APPELLANTS:                                 Ruth F. Masters, MastersLaw, Oak Park,
                                                          IL; Maria C. Georgina Fabian and Cory
                                                          White, The International Business Law,
                                                          LLC, Chicago, IL.

FOR DEFENDANTS–APPELLEES                                   Ira S. Lipsius, Lipsius-Benhaim Law LLP,
KARL ANDERSEN, LEON                                        Kew Gardens, NY.
LOWENTHAL, MEYER GERTNER,
AND PW INSURANCE AGENCY CORP.:

FOR DEFENDANTS–APPELLEES                                   Jordan Danforth Wolff, Ellenoff
DAVID MICKELSON INSURANCE                                  Grossman & Schole LLP, New York,
SERVICES, ERWIN LEGAL, P.C.,                               NY.
AND CHRISTOPHER R. ERWIN:

FOR DEFENDANT–APPELLEE BROCK                               Brock Bagley, pro se, Cormal, IN.
BAGLEY:

FOR DEFENDANT–APPELLEE RANDY                               Randy W. Bagley, pro se, Tipton, IN.
W. BAGLEY:

     Appeal from a judgment of the United States District Court for the Southern District of
New York (Shira A. Scheindlin, Judge).

        UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the July 24, 2015 and October 7, 2015 judgments of the
District Court are AFFIRMED.

        Plaintiffs-appellants Visión en Análisis y Estrategia, S.A. and Capitaliza-T, Sociedad de
Responsabilidad Limitada de Capital Variable (“plantiffs”) brought a diversity action for breach of
contract, fraud and breach of fiduciary duties in connection with the sale and management of a life
insurance policy. The plaintiffs, proceeding pro se, appeal from the July 24, 2015 judgment of the
District Court dismissing the complaint for failure to join an indispensable party and the October 7,
2015 judgment of the District Court denying the motion for reconsideration.

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         On appeal, the plaintiffs assert that the District Court abused its discretion by concluding
that Tranen Capital Alternative Investment Fund, Ltd. and Tranen Capital, Ltd. (jointly, “Tranen”)
were “necessary parties.” See Fed. R. Civ. P. 19. Specifically, they argue that the District Court: (1)
improperly found that Tranen’s interests would be impeded by proceeding in their absence; (2)
failed to separately analyze each cause of action; and (3) incorrectly denied the motion for
reconsideration in light of the fact that Tranen is in liquidation proceedings. For the reasons set
forth below, we affirm the District Court’s judgement. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.

                                             DISCUSSION

         We review the District Court’s decisions to grant a motion to dismiss pursuant to Federal
Rule of Civil Procedure 19 and to deny a motion to reconsider for “abuse of discretion.” See Simon v.
City of New York, 727 F.3d 167, 171 (2d Cir. 2013); Viacom Int’l, Inc. v. Kearney, 212 F.3d 721, 725 (2d
Cir. 2000). A district court has abused its discretion if it based its ruling on an erroneous view of the
law or on a clearly erroneous assessment of the evidence, or rendered a decision that cannot be
located within the range of permissible decisions.” In re Sims, 534 F.3d 117, 132 (2d Cir. 2008)
(internal quotation marks, alteration, and citation omitted); see also In re City of New York, 607 F.3d
923, 943 n.21 (2d Cir. 2010) (explaining that “abuse of discretion” is a nonpejorative “term of art”).

         Upon such review, we find that the District Court acted within its discretion for the reasons
articulated in its July 24, 2015 and October 7, 2015 opinions. Rule 19 “sets forth a two-step test for
determining whether the court must dismiss an action for failure to join an indispensable party. First,
the court must determine whether an absent party belongs in the suit, i.e., whether the party qualifies
as a ‘necessary’ party under Rule 19(a).” Viacom, 212 F.3d at 724. Rule 19(a) provides, in relevant
part, that an absent party is a necessary party if it “claims an interest relating to the subject of the
action and is so situated that disposing of the action in the person’s absence may . . . as a practical
matter impair or impede the person’s ability to protect the interest.” Fed. R. Civ. P. 19(a)(1)(B)(i).
Second, if “the court makes a threshold determination that a party is necessary under Rule 19(a), and
[if, as here,] joinder of the absent party is not feasible for jurisdictional ... reasons, the court must ...
determine whether the party is ‘indispensable’” under Rule 19(b). Viacom, 212 F.3d at 725.

         The District Court clearly identified Tranen’s interests in the cause of action.1 Under Rule
19(a), the District Court specified that Tranen’s interests arose from the July 2011 Assignment and
August 2011 Contract between Tranen and the plaintiffs, as well as from the amended complaint’s

    1
     The amended complaint also contained alter-ego allegations against Tranen. See J.A. at 12-13.
The District Court did not base its necessary party finding on this rationale. Therefore, it is not
necessary to discuss that allegation further. See J.A. at 149 (7/24/15 Mem. & Order).

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direct allegations of fraud against Tranen. See J.A. at 149-150. “If the resolution of a plaintiff’s claim
would require the definition of a non-party’s rights under a contract, it is likely that the non-party is
necessary under Rule 19(a).” Jonesfilm v. Lion Gate Int’l, 299 F.3d 134, 141 (2d Cir. 2002); see also
Bankosky, 716 F.3d 45, 47 (2d Cir. 2013). The interests presented here are sufficient. Under Rule
19(b), the District Court then reasonably concluded that the absent parties’ interests would be
practically impeded in their absence. The District Court cited two factors: (1) resolution of the
plaintiffs’ claims would require determination of Tranen’s rights and obligations under the July 2011
Assignment and the August 2011 Contract; and (2) certain defendants, who are former directors and
officers of Tranen, could not adequately represent its current interests. See J.A. at 150-52. The
District Court acted well within its discretion to find that Tranen was a “necessary party.”

        We are also unpersuaded by the plaintiffs’ argument that the District Court should have
analyzed each cause of action separately. “Each claim in the Amended Complaint… relates to the
same sequence of transactions in which Tranen . . . [was] intimately involved.” J.A. at 161-62; see
Bankosky, 716 F.3d at 47. Insofar as Tranen directly participated in the alleged fraud and entered into
a contract with the plaintiffs to manage the life insurance policy, the District Court reasonably
concluded that “Tranen[’s] . . . actions are simply too interwoven throughout the Amended
Complaint to dismiss only those counts directly implicating the behavior of their officers and
directors.” J.A. at 161-62. Despite conceding that Tranen is a necessary party to the breach of
contract claim, the plaintiffs did not explain how the other claims of fraud and breach of fiduciary
duty could be resolved without determining Tranen’s rights and obligations under their contract.
Accordingly, the District Court was also well within its discretion in finding Tranen to be a necessary
party to the entire case.

        Finally, we reject the plaintiffs’ claim that the District Court improperly denied the motion
for reconsideration by failing to account for Tranen’s liquidation and lack of readily realizable assets.
The plaintiffs’ argue that Tranen’s interest in its “good name or good will” was diminished when the
company entered into liquidation. Thus, they imply that its interests could no longer be impaired by
their absence in this case. See Bankosky, 716 F.3d at 47. However, the District Court correctly
observed that its ruling was not predicated on Tranen’s “good name or good will.” Rather, Tranen
was deemed a necessary party because determining its participation in the alleged fraud and its rights
and obligations on its contract could not be avoided. Notably, there is ongoing litigation between
the plaintiffs and Tranen over who holds the beneficial interest in the life insurance policy in the
present case. In addition, the plaintiffs had an adequate alternative remedy in state court through
which to pursue their claims, even after the District Court denied their motion for reconsideration.
See Bankosky, 716 F.3d at 47. We conclude, therefore, that the plaintiffs’ claim regarding the District
Court’s denial of the motion for reconsideration is without merit.

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                                        CONCLUSION

       We have considered all of the plaintiffs’ remaining arguments and find them to be without
merit. Accordingly, we AFFIRM the judgment of the District Court.

                                                     FOR THE COURT:
                                                     Catherine O’Hagan Wolfe, Clerk

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