Alliance Shippers Inc. v. Garcia ( 2016 )

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
3