| Goel v Ramachandran |
| 2013 NY Slip Op 07708 [111 AD3d 783] |
| November 20, 2013 |
| Appellate Division, Second Department |
| Vikas Goel et al., Respondents, v AnushRamachandran, Defendant, and Bunge Ltd. et al.,Appellants. |
—[*1] Nixon Peabody, LLP, New York, N.Y. (Robert C. Sentner, Nicole F. Mastropieri,and Cassandra R. Hamar of counsel), for respondents.
In an action, inter alia, to recover damages for unjust enrichment, aiding and abettinga fraud, and money had and received, the defendants Bunge Ltd. and Bunge S.A. appeal,as limited by their brief, from so much of an order of the Supreme Court, WestchesterCounty (Scheinkman, J.), dated April 4, 2012, as denied those branches of their motionpursuant to CPLR 3211 (a) which were to dismiss the first, second, and fifth causes ofaction insofar as asserted against them.
Ordered that the order is reversed insofar as appealed from, on the law, with costs,and those branches of the motion of the defendants Bunge Ltd. and Bunge S.A. pursuantto CPLR 3211 (a) which were to dismiss the first, second, and fifth causes of actioninsofar as asserted against them are granted.
The plaintiffs, Vikas Goel and Rainforest Trading, Ltd. (hereinafter Rainforest),commenced this action against the defendants, Anush Ramachandran, Bunge Ltd., andBunge S.A. The plaintiffs alleged that they lost approximately $100 million as a result ofa fraudulent scheme orchestrated by the defendants.
The amended complaint (hereinafter the complaint) alleged that Goel, a resident ofDubai, owned 99.99% of eSys Technologies Pte Ltd. (hereinafter eSys), a companyincorporated under the laws of Singapore. In 2006, Goel was contacted by arepresentative of Teledata Informatics (hereinafter Teledata), a company organized underthe laws of the British Virgin Islands. The representative informed Goel that Teledatawas interested in acquiring shares of eSys.
By agreement dated November 29, 2006 (hereinafter the Share SubscriptionAgreement), Teledata agreed to purchase 51% of the shares of eSys. The complaintalleged that the purchase price was originally $105 million, then subsequently increasedto $120 million. The transaction was to be accomplished through the creation ofRainforest, which was to serve as a holding company. Pursuant to the Share SubscriptionAgreement, Goel transferred all of his shares of eSys to Rainforest. The complaintalleged that in return, Rainforest issued 65 million shares to [*2]Goel and 55 million shares to Teledata. Goel thentransferred 6.5 million of his shares in Rainforest to Teledata, which, in turn, pledgedthose shares to the State Bank of India as collateral for an $80 million loan.
The complaint alleged that Teledata was to invest $25 million of its own funds alongwith the $80 million loan from the State Bank of India. A bank account was establishedfor Rainforest to enable Teledata to transfer the purchase funds pursuant to the ShareSubscription Agreement. The complaint alleged that, since Teledata obtained thecontrolling interest in Rainforest after the distribution of the Rainforest shares, it"assumed the managerial role[ ] of the majority shareholder" and had "control overdisbursements from [Rainforest's] bank account."
The complaint alleged that "Teledata did not intend to, and did not, invest the $25million into Rainforest that it had agreed to." The complaint alleged that Teledata"ultimately transferred only a small fraction of the money, a substantial part of which wasre-routed back to Teledata." The complaint specified that instead of transferring the $25million into Rainforest's account, Teledata transferred "much smaller sums" into theRainforest account, then caused those sums to be transferred out of Rainforest's accountto the defendant Bunge S.A. and to separate, unidentified entities that were allegedlycontrolled by Ramachandran. The complaint further alleged that Bunge S.A. claimed thatit was entitled to the money it received from the Rainforest account pursuant to contractsit had with Teledata, pursuant to which Teledata owed it money.
The complaint alleged that "all of the funds that were transferred out of theRainforest Account were transferred either directly or indirectly throughRamachandran-controlled companies, into Bunge accounts" and that these funds were, inturn, "transferred to Teledata, or Teledata-controlled companies to be 're-invested' intoRainforest." The plaintiffs asserted that "[b]y doing this, Teledata, ultimately had recordsshowing that it had invested $25 million into Rainforest, while in truth, it had not doneso. Rather, it had wired much smaller amounts into Rainforest, but by the circular patterndescribed above, wired such amounts over and over again, so that it appeared it hadinvested much more."
The complaint asserted five causes of action against the defendants. As relevant here,four causes of action were asserted against Bunge Ltd. and Bunge S.A. (hereinaftertogether the Bunge defendants): the first cause of action was for money had and received,the second cause of action alleged unjust enrichment, the third cause of action allegedtortious interference with contract, and the fifth cause of action alleged aiding andabetting fraud. These four causes of action were asserted directly against Bunge S.A. forits allegedly tortious conduct. With respect to Bunge Ltd., the complaint alleged thatBunge S.A. was its alter ego, and the four causes of action described above were assertedagainst Bunge Ltd. under a theory of piercing the corporate veil.
The Bunge defendants thereafter moved to dismiss the complaint insofar as assertedagainst them pursuant to CPLR 3211 (a) (7) and insofar as asserted against Bunge S.A.pursuant to CPLR 3211 (a) (8). The Bunge defendants contended, inter alia, that theSupreme Court lacked personal jurisdiction over Bunge S.A., a corporation located andincorporated in Switzerland. The Bunge defendants further contended that the complaintfailed to state a cause of action for money had and received, unjust enrichment, or aidingand abetting fraud, and that the complaint was insufficient to state a cause of actionagainst Bunge Ltd. under a theory of piercing the corporate veil. The Bunge defendantsalso argued that the complaint failed to state a cause of action to recover damages fortortious interference with contract and that, in any event, any such cause of action wastime-barred.
The plaintiffs opposed the motion of the Bunge defendants. The plaintiffs contended,among other things, that the Supreme Court had personal jurisdiction over Bunge S.A.under the "mere department" and agency tests for personal jurisdiction by virtue of itsrelationship with Bunge Ltd., a corporation with its principal place of business in NewYork. The plaintiffs further contended that they had made a "sufficient start" indemonstrating that facts "may exist" which would establish personal jurisdiction overBunge S.A. such that they should be granted jurisdictional discovery pursuant to CPLR3211 (d). The plaintiffs also opposed those branches of the motion of the Bunge [*3]defendants which were pursuant to CPLR 3211 (a) (7).
The Supreme Court denied that branch of the motion of the Bunge defendants whichwas to dismiss the complaint insofar as asserted against Bunge S.A. pursuant to CPLR3211 (a) (8) for lack of personal jurisdiction. The Supreme Court concluded that theplaintiffs had made a sufficient start in demonstrating that facts may exist so as to supportthe exercise of jurisdiction pursuant to CPLR 301. In this regard, the court concludedthat, "because the evidence [was] sufficient to support the exercise of jurisdiction on themere department theory, the Court will deny the Bunge Defendants' motion to dismiss onjurisdictional grounds, without prejudice to the assertion of such a jurisdictional defenseat trial, should these Defendants be so advised."
The Supreme Court also denied those branches of the Bunge defendants' motionwhich were to dismiss the first, second, and fifth causes of action insofar as assertedagainst them pursuant to CPLR 3211 (a) (7). However, the court granted that branch oftheir motion which was to dismiss as time-barred the third cause of action, which allegedtortious interference with contract.
On appeal, the Bunge defendants contend that the Supreme Court erred in denyingthat branch of their motion which was to dismiss the complaint insofar as asserted againstBunge S.A. pursuant to CPLR 3211 (a) (8) for lack of personal jurisdiction. They furthercontend that the Supreme Court erred in denying those branches of their motion whichwere to dismiss the first, second, and fifth causes of action pursuant to CPLR 3211 (a)(7).
We first address the Bunge defendants' contention regarding personal jurisdictionover Bunge S.A. However, we note that, in light of our determination granting thosebranches of the Bunge defendants' motion which were to dismiss the only remainingcauses of action asserted against these defendants for failure to state a cause of action, itwill not be necessary for the Supreme Court to resolve the issue of whether it haspersonal jurisdiction over Bunge S.A.
"A foreign corporation is amenable to suit in New York courts under CPLR 301 if ithas engaged in such a continuous and systematic course of 'doing business' here that afinding of its 'presence' in this jurisdiction is warranted" (Landoil Resources Corp. vAlexander & Alexander Servs., 77 NY2d 28, 33 [1990], quoting Laufer vOstrow, 55 NY2d 305, 309-310 [1982], and Frummer v Hilton Hotels Intl.,19 NY2d 533, 536 [1967], and Simonson v International Bank, 14 NY2d 281,285 [1964]). The test is whether "the aggregate of the corporation's activities in the State[are] such that it may be said to be 'present' in the State 'not occasionally or casually, butwith a fair measure of permanence and continuity' " (Laufer v Ostrow, 55 NY2dat 310, quoting Tauza v Susquehanna Coal Co., 220 NY 259, 267 [1917]). Anyexercise of jurisdiction over a foreign corporation on the basis of state law must comportwith the due process requirement that there be sufficient "minimum contacts" betweenthe foreign corporation and the forum State such that the forum State's assertion ofjurisdiction will not offend " 'traditional notions of fair play and substantial justice' "(International Shoe Co. v Washington, 326 US 310, 316 [1945], quotingMilliken v Meyer, 311 US 457, 463 [1940]).
Here, the Supreme Court concluded that the plaintiffs failed to sustain their burdenof demonstrating that Bunge S.A., a Swiss corporation, had directly engaged in activitiessufficient to establish its presence in New York within the meaning of CPLR 301.However, it determined that facts may exist which would permit it to impute the in-stateactivities of Bunge Ltd. to Bunge S.A., such that Bunge S.A. may be deemed to bevicariously present in New York pursuant to CPLR 301.
In its limited jurisprudence concerning the mere department doctrine, the primaryfocus of the Court of Appeals has been on the degree of control exercised by thedomestic corporation over the foreign corporation (see Delagi v VolkswagenwerkAG of Wolfsburg, Germany, 29 NY2d 426, 431-432 [1972]; Public Adm'r ofCounty of N.Y. v Royal Bank of Can., 19 NY2d 127, 131-132 [1967]). Such controlmay be manifested in numerous ways and, thus, the method by which such control maybe demonstrated will necessarily depend on the attendant facts (see Delagi vVolkswagenwerk AG of Wolfsburg, Germany, 29 NY2d at 431-432; PublicAdm'r of County of N.Y. v Royal Bank of Can., 19 NY2d at 131-132; compareMatter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141[1993]). Although the Court of Appeals has noted that it "has never [*4]held a foreign corporation present on the basis of control,unless there was in existence at least a parent-subsidiary relationship," it has neverthelessindicated that this factor is not dispositive (Delagi v Volkswagenwerk AG ofWolfsburg, Germany, 29 NY2d at 432). "The control over [a] subsidiary's activities. . . must be so complete that the subsidiary is, in fact, merely a departmentof the parent" (id.). It is only when the two corporations are "in fact, if not inname . . . one and the same corporation, [that] there is realistically no basisfor distinguishing between them" for jurisdictional purposes (Public Adm'r of Countyof N.Y. v Royal Bank of Can., 19 NY2d at 132).
Here, the plaintiffs, as the parties seeking to assert personal jurisdiction, bear theultimate burden of proof as to whether Bunge S.A. is a mere department of Bunge Ltd.(see Daniel B. Katz & Assoc.Corp. v Midland Rushmore, LLC, 90 AD3d 977, 978 [2011]). In opposition tothe Bunge defendants' motion to dismiss the complaint insofar as asserted against BungeS.A. pursuant to CPLR 3211 (a) (8) on the ground of lack of personal jurisdiction, theplaintiffs "need only make a prima facie showing" that such jurisdiction exists (Cornely v Dynamic HVAC Supply,LLC, 44 AD3d 986, 986 [2007]).
However, where, as here, plaintiffs oppose a motion to dismiss the complaintpursuant to CPLR 3211 (a) (8) on the ground that discovery on the issue of personaljurisdiction is necessary, plaintiffs need not make a prima facie showing of jurisdiction,but instead "need only demonstrate that facts 'may exist' to exercise personal jurisdictionover the defendant" (Ying JunChen v Lei Shi, 19 AD3d 407, 407-408 [2005], quoting Peterson v SpartanIndus., 33 NY2d 463, 467 [1974]). If "it appear[s] from affidavits submitted inopposition to [the] motion . . . that facts essential to justify opposition mayexist but cannot then be stated," a court may, in the exercise of its discretion, postponeresolution of the issue of personal jurisdiction (CPLR 3211 [d]).
Here, it is undisputed that Bunge S.A. is a wholly-owned subsidiary of Bunge Ltd.The plaintiffs submitted evidence indicating a degree of financial interdependencybetween Bunge Ltd. and its various wholly-owned subsidiaries, although fundingappeared to be formalized as loan agreements. In addition, the plaintiffs adducedevidence indicating an overlap of executive personnel between Bunge Ltd. and aregional business grouping of Bunge subsidiaries identified as "Bunge Europe," and, inturn, an overlap of executive personnel between Bunge Europe and Bunge S.A. Theplaintiffs also submitted evidence indicating that Bunge Ltd. had represented Bunge S.A.as the "headquarters of Bunge's European activities and the main trading office Bungeworldwide."
Although there was evidence of a close parent-subsidiary connection between BungeLtd. and Bunge S.A., the Supreme Court correctly concluded that the plaintiffs'submissions failed to establish, prima facie, that the control exerted by Bunge Ltd. overBunge S.A. was "so complete that the subsidiary is, in fact, merely a department of theparent" (Delagi v Volkswagenwerk AG of Wolfsburg, Germany, 29 NY2d at432; see Public Adm'r of County of N.Y. v Royal Bank of Can., 19 NY2d at132). Nevertheless, the plaintiffs' submissions did indicate that Bunge Ltd. exerted somedegree of control over its subsidiaries through internal business groupings which werecomprised of employees of its various subsidiaries and organized to achieve commonpurposes under its direction. Since the plaintiffs demonstrated that facts "may exist"which would permit the exercise of personal jurisdiction over Bunge S.A., but that suchfacts remain in the exclusive control of the Bunge defendants, the Supreme Courtprovidently exercised its discretion in denying that branch of the Bunge defendants'motion which was to dismiss the complaint insofar as asserted against Bunge S.A.pursuant to CPLR 3211 (a) (8) for lack of personal jurisdiction (CPLR 3211 [d]; seePeterson v Spartan Indus., 33 NY2d at 467).
However, the Supreme Court improvidently exercised its discretion to the extent thatit denied that branch of the Bunge defendants' motion which was to dismiss thecomplaint insofar as asserted against Bunge S.A. pursuant to CPLR 3211 (a) (8) "withoutprejudice to the assertion of such a jurisdictional defense at trial." "Liability may beconsidered only after it is decided . . . that the defendant is subject to the inpersonam jurisdiction of our courts" (Kreutter v McFadden Oil Corp., 71 NY2d460, 470 [1988]). By permitting the case to move forward in such a manner, the SupremeCourt exposed Bunge S.A. to the full panoply of burdens inherent in defending this case,despite the fact that the court may not have jurisdiction over it. Under the circumstancesof this case, the [*5]Supreme Court should have deniedthat branch of the Bunge defendants' motion without prejudice to renewal upon thecompletion of limited discovery confined to the issue of whether Bunge S.A. was a meredepartment of Bunge Ltd. (seeExpert Sewer & Drain, LLC v New England Mun. Equip. Co., Inc., 106 AD3d775, 776 [2013]; MaristColl. v Brady, 84 AD3d 1322, 1322 [2011]).
We now turn to the merits of that branch of the motion of the Bunge defendantswhich was to dismiss the first, second, and fifth causes of action insofar as assertedagainst them pursuant to CPLR 3211 (a) (7) for failure to state a cause of action. "On amotion to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state acause of action, the court must afford the pleading a liberal construction, accept all factsas alleged in the pleading to be true, accord the plaintiff the benefit of every possibleinference, and determine only whether the facts as alleged fit within any cognizable legaltheory" (Breytman v OlinvilleRealty, LLC, 54 AD3d 703, 703-704 [2008]; see Leon v Martinez, 84NY2d 83, 87-88 [1994]).
The first cause of action asserted against the Bunge defendants was for money hadand received. "A cause of action for money had and received is one of quasi-contract orof contract implied-in-law" (Board of Educ. of Cold Spring Harbor Cent. SchoolDist. v Rettaliata, 78 NY2d 128, 138 [1991]; see Parsa v State of New York,64 NY2d 143, 148 [1984]). "Having money that rightfully belongs to another, creates adebt; and wherever a debt exists without an express promise to pay, the law implies apromise" (Byxbie v Wood, 24 NY 607, 610 [1862]).
The essential elements of a cause of action for money had and received are (1) thedefendant received money belonging to the plaintiff, (2) the defendant benefitted fromreceipt of the money, and (3) under principles of equity and good conscience, thedefendant should not be permitted to keep the money (see Matter of Witbeck,245 AD2d 848, 850 [1997]; see also Rocks & Jeans v Lakeview Auto Sales &Serv., 184 AD2d 502, 502 [1992]; see generally 22A NY Jur 2d Contracts§ 533 [2013]). "The action depends upon equitable principles in the sense thatbroad considerations of right, justice and morality apply to it" (Parsa v State of NewYork, 64 NY2d at 148; see People ex rel. Dusenbury v Speir, 77 NY 144,150 [1879]).
Here, the complaint alleged that, after the distribution of the Rainforest shares,Teledata obtained the controlling interest in Rainforest, it assumed the managerial role ofthe majority shareholder, and it was in a position of control over disbursements fromRainforest's bank account. The complaint alleged that Teledata, in its role as majorityshareholder of Rainforest, transferred certain funds "out of the Rainforest Account. . . either directly or indirectly through Ramachandran-controlledcompanies, into Bunge accounts" and that these funds were, in turn, "transferred toTeledata, or Teledata-controlled companies to be 're-invested' into Rainforest."
The complaint does not allege that the transfers were made to Bunge S.A. for nolegitimate purpose. In addition, the complaint does not allege that the transfers were theresult of a mistake, or were unlawful or unauthorized. Indeed, the complaint itself allegesthat the transfers were precipitated by Teledata, which, as alleged, was the majorityshareholder of Rainforest with the legal authority to control Rainforest's bank accountsand transfer money therefrom. The only theory articulated in the complaint as to why themoney transferred rightfully belongs to Rainforest is that the transfer constituted a breachof the Share Subscription Agreement by Teledata. This allegation, that Teledata breachedthe Share Subscription Agreement by failing to adequately capitalize Rainforest, does notrender the money transferred to Bunge S.A. the rightful property of Rainforest.Accordingly, the factual allegations are insufficient to state a cause of action for moneyhad and received, since the complaint failed to adequately allege that Bunge S.A.received money that "rightfully belongs" to Rainforest (Byxbie v Wood, 24 NYat 610; see McCulloch v Townof Milan, 74 AD3d 1034, 1036 [2010]; Amanat v Bank Leumi Trust Co. ofN.Y., 243 AD2d 257, 257 [1997]; Stephans v Apostol, 17 AD2d 982, 983[1962]).
The second cause of action asserted against the Bunge defendants was to recoverdamages for unjust enrichment. "To prevail on a claim of unjust enrichment, a party mustshow that (1) the other party was enriched, (2) at that party's expense, and (3) that it isagainst equity and good conscience to permit [the other party] to retain what is sought tobe recovered" (Citibank, N.A. v[*6]Walker, 12 AD3d 480, 481 [2004] [internalquotation marks omitted]; seeRobertson v Wells, 95 AD3d 862, 864 [2012]; Levin v Kitsis, 82 AD3d1051, 1053 [2011]; Anesthesia Assoc. of Mount Kisco, LLP v Northern WestchesterHosp. Ctr., 59 AD3d 473, 481 [2009]).
"The essential inquiry in any action for unjust enrichment or restitution is whether itis against equity and good conscience to permit the defendant to retain what is sought tobe recovered" (Paramount Film Distrib. Corp. v State of New York, 30 NY2d415, 421 [1972]). "Such a claim is undoubtedly equitable and depends upon broadconsiderations of equity and justice" (id.). "Generally, courts will look to see if abenefit has been conferred on the defendant under mistake of fact or law, if the benefitstill remains with the defendant, if there has been otherwise a change of position by thedefendant, and whether the defendant's conduct was tortious or fraudulent" (id.).
"[A] plaintiff's allegation that the [defendant] received benefits, standing alone, isinsufficient to establish a cause of action to recover damages for unjust enrichment" (Old Republic Natl. Tit. Ins. Co. vCardinal Abstract Corp., 14 AD3d 678, 680 [2005]; see McGrath vHilding, 41 NY2d 625, 629 [1977]; Erlitz v Segal, Liling & Erlitz, 142AD2d 710, 712 [1988]). "Critical is that under the circumstances and as between the twoparties to the transaction the enrichment be unjust" (McGrath v Hilding, 41NY2d at 629, citing Restatement of Restitution § 1, Comment a).
Here, the amended complaint merely asserted, in a conclusory fashion, that BungeS.A. received funds from which it benefitted and that "[e]quity and good consciencerequire restitution." However, on a motion to dismiss pursuant to CPLR 3211 (a) (7),"bare legal conclusions are not presumed to be true" (Khan v MMCA Lease, Ltd., 100 AD3d 833, 833 [2012];see Felix v Thomas R.Stachecki Gen. Contr., LLC, 107 AD3d 664, 667 [2013]). Accordingly, the barelegal conclusion that it is against equity and good conscience to permit Bunge S.A. toretain this unidentified benefit is insufficient to adequately allege that the assertedenrichment was unjust (see Felix v Thomas R. Stachecki Gen. Contr., LLC, 107AD3d at 667; Khan v MMCA Lease, Ltd., 100 AD3d at 833).
In addition, the general factual assertions contained in the complaint do not satisfythe pleading requirements of unjust enrichment. As previously noted, the complaint didnot allege that Bunge S.A. received the transfers through some mistake or deceptionpracticed upon Rainforest by Bunge S.A. The complaint alleged that the transfers wereduly authorized by Teledata, which was in control of Rainforest's bank account throughits role as the majority shareholder. The fact that Teledata may have breached the ShareSubscription Agreement or some other legal duty owed to the plaintiffs when it made thetransfers does not render the transfers "unjust" with respect to Bunge S.A. (McGrathv Hilding, 41 NY2d 625, 629 [1977]; see Citibank, N.A. v Walker, 12 AD3dat 481). Accepting the facts alleged in the complaint as true, and according the plaintiffthe benefit of every favorable inference (see Leon v Martinez, 84 NY2d at87-88), the complaint fails to state a cause of action to recover damages for unjustenrichment (see Robertson v Wells, 95 AD3d at 864; Levin v Kitsis, 82AD3d at 1053; Spector vWendy, 63 AD3d 820, 822 [2009]).
The fifth cause of action asserted in the complaint alleged aiding and abetting fraud."A plaintiff alleging an aiding-and-abetting fraud claim must allege the existence of theunderlying fraud, actual knowledge, and substantial assistance" (Oster v Kirschner, 77 AD3d51, 55 [2010]; see HighTides, LLC v DeMichele, 88 AD3d 954, 960 [2011]). Aiding and abetting fraud"is not made out simply by allegations which would be sufficient to state a claim againstthe principal participants in the fraud" combined with conclusory allegations that theaider and abettor had actual knowledge of such fraud (National Westminster Bank vWeksel, 124 AD2d 144, 149 [1987]; see CDR Creances S.A.S. v First Hotels & Resorts Invs., Inc.,101 AD3d 485, 486-487 [2012]). "Aiding and abetting fraud must be pleaded withthe specificity sufficient to satisfy CPLR 3016 (b)" (High Tides, LLC vDeMichele, 88 AD3d at 960; see Jones v OTN Enter., Inc., 84 AD3d 1027, 1028 [2011];Rizel v Bodner, 225 AD2d 410 [1996]; Shearson Lehman Bros. vBagley, 205 AD2d 467 [1994]; National Westminster Bank v Weksel, 124AD2d at 149). The heightened pleading requirements of CPLR 3016 (b) may be metwhen the material facts alleged in the complaint, in light of the surroundingcircumstances, "are sufficient to permit a reasonable inference of the alleged conduct"including the adverse party's knowledge of, or participation in, the fraudulent scheme (Pludeman v Northern Leasing Sys.,Inc., 10 NY3d 486, 492 [2008]; see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d553, 559 [2009]; Polonetsky v Better Homes Depot, 97 [*7]NY2d 46, 55 [2001]; High Tides, LLC vDeMichele, 88 AD3d at 960).
Here, the complaint consists of conclusory allegations regarding the Bungedefendants' knowledge that Teledata entered into the Share Subscription Agreement withthe intent to defraud Goel. Furthermore, the facts alleged in the complaint are insufficientto permit a reasonable inference as to the Bunge defendants' knowledge of this fraud andtheir substantial assistance in the achievement of the fraud (see CDR Creances S.A.S. v FirstHotels & Resorts Invs., Inc., 101 AD3d 485, 486-487 [2012]; High Tides,LLC v DeMichele, 88 AD3d at 960; National Westminster Bank v Weksel,124 AD2d at 149). Accordingly, the complaint fails to state a cause of action allegingaiding and abetting fraud.
The complaint also alleged that Bunge Ltd. is liable under a theory of piercing thecorporate veil with respect to the first, second, and fifth causes of action. Since thecomplaint fails to adequately set forth these underlying causes of action against BungeS.A., those causes of action must be dismissed as against Bunge Ltd., since "an attemptof a third party to pierce the corporate veil does not constitute a cause of actionindependent of that against the corporation; rather it is an assertion of facts andcircumstances which will persuade the court to impose the corporate obligation on its[parent]" (Matter of Morris v New York State Dept. of Taxation & Fin., 82NY2d 135, 141 [1993]).
The Bunge defendants' contention that the mere department test is unconstitutional(see Goodyear Dunlop Tires Operations, S.A. v Brown, 564 US —, 131 SCt 2846 [2011]; see also Lea Brilmayer and Kathleen Paisley, PersonalJurisdiction and Substantive Legal Relations: Corporations, Conspiracies, and Agency,74 Cal L Rev 1, 27 [1986]), is raised for the first time on appeal and, thus, is notproperly before this Court.
In light of the foregoing, we need not address the parties' remaining contentions.
Accordingly, we reverse the order insofar as appealed from, and grant those branchesof the Bunge defendants' motion pursuant to CPLR 3211 (a) which were to dismiss thefirst, second, and fifth causes of action insofar as asserted against them. Skelos, J.P.,Balkin, Cohen and Miller, JJ., concur.