In an August 8, 2011 decision by Justice Whelan, the court dismissed the majority of the plaintiff’s claims against corporate and individual parties, which arose out of two agreements in which the plaintiff purchased certain assets and liabilities of a bus transportation business and formed a separate joint venture limited liability company for the purpose of providing advertising rights. The court granted the defendants’ the motion to dismiss three separate causes of action sounding in contract against defendant JD Transportation on the grounds that the plaintiff expressly agreed in the asset purchase agreement that any damages for breach of contract would be limited to indemnity and the court found that there was no special relationship between the parties nor any public policy which imposed liability upon the company. The court further determined that the allegation that JD Transportation’s breach was willful was insufficient to set aside the unambiguous limitation of liability provision. The court also dismissed the claim for indemnity only against individual defendant Douglas Slayton on the grounds that he was not a signatory to the asset purchase agreement and there were no allegations that he acted personally or in his individual capacity. The court denied, however, the motion to dismiss the indemnity claim against JD Transportation. The court dismissed the fraud claim on the grounds that the plaintiff suffered no actionable harm from the purported false statements and because the plaintiff expressly and unconditionally waived non-compliance with those obligations forming the basis of the fraud claim. Dismissing the fraudulent inducement claim, the court found the complaint merely alleged an intent not to disclose, rather than a material misrepresentation of a known fact that is meritorious, which is necessary to state a claim for fraud in the inducement. Those same allegations, the court ruled, were equally insufficient to state a claim for fraudulent concealment because there was no allegation that the defendants had a duty to disclose. The court dismissed the cause of action for breach of fiduciary duty because it found that the transaction at issue was nothing more than an arm’s length business arrangement between sophisticated parties which does not create a fiduciary relationship or give rise to any fiduciary duties. The court also dismissed the claims seeking recision of the joint venture agreement because they were barred by res judicata. The court found the plaintiff could have raised those claims during its arbitration proceeding initiated by one of the defendants pursuant to the joint venture agreement. Finally, the court dismissed the unjust enrichment claim because it could not stand in light of the asset purchase agreement which covered the same subject matter.
Hampton Transp. Ventures, Inc. v JD Transp., LLC, Sup Ct, Suffolk County, August 8, 2011, Whelan, J, Index No. 35625-10