| Barneli & Cie SA v Dutch Book Fund SPC, Ltd |
| 2012 NY Slip Op 04099 [95 AD3d 736] |
| May 29, 2012 |
| Appellate Division, First Department |
| Barneli & Cie SA, Respondent, v Dutch Book Fund SPC,Ltd, et al., Appellants. |
—[*1] Hodgson Russ LLP, New York (Mark A. Harmon of counsel), for respondent.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 12, 2010,which, insofar as appealed from, denied defendants' motion to dismiss the fourth and fifth causesof action pursuant to CPLR 3211 (a) (1) and (7) and 3016 (b), unanimously reversed, on the law,with costs, and the motion granted. Appeal from order, same court and Justice, entered August25, 2011, which, inter alia, upon reargument, adhered to the determination on the originalmotion, unanimously dismissed, without costs, as academic. The Clerk is directed to enterjudgment in defendants' favor dismissing the complaint.
The fourth cause of action (for fraud) is not viable, given the representations and warrantiesthat plaintiff made in the Subscription Agreement that it signed and the fact that it failed toinvestigate before investing $50 million in defendant Dutch Book Fund SPC, Ltd (Fund) (see e.g. MBIA Ins. Corp. v MerrillLynch, 81 AD3d 419 [2011]; Graham Packaging Co., L.P. v Owens-Illinois, Inc., 67 AD3d 465[2009]; Permasteelisa, S.p.A. vLincolnshire Mgt., Inc., 16 AD3d 352 [2005]). If neither plaintiff nor its representativeshad expertise in algorithms or probability theory, then plaintiff should have "retain[ed] qualifiedoutside consultants" (HSH Nordbank AG v UBS AG, 95 AD3d 185 [2012]).
The fraud claim cannot be sustained as against defendants Dutch Book Partners, LLC(Partners) and Stanley R. Jonas for the additional reason that plaintiff relied solely on Funddocuments (see Valassis Communications v Weimer, 304 AD2d 448 [2003], appealdismissed 2 NY3d 794 [2004]), and did not allege any actionable statements made byPartners or Jonas (see e.g. Lai vGartlan, 28 AD3d 263 [2006]; Handel v Bruder, 209 AD2d 282 [1994]).
Because the fraud claim cannot stand as against Partners, there is no basis on which to holdJonas liable as the alter ego of Partners (the fifth cause of action). In addition, the [*2]conclusory allegations in the complaint are insufficient to state aveil-piercing claim (see e.g. AndejoCorp. v South St. Seaport Ltd. Partnership, 40 AD3d 407 [2007]; Albstein v Elany Contr. Corp., 30AD3d 210 [2006], lv denied 7 NY3d 712 [2006]). Concur—Friedman, J.P.,Sweeny, Renwick, Freedman and Abdus-Salaam, JJ. [Prior Case History: 28 Misc 3d1232(A), 2010 NY Slip Op 51571(U).]