2017 03:35 pm
Post on 16-Oct-2021
7 Views
Preview:
TRANSCRIPT
4095370
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ALBANY --------------------------------------------------------------------X BELAIR CARE CENTER, INC., et al. Index No.: 901476/20141 Plaintiffs, REPLY AFFIRMATION OF -against- LEE E. BERGER IN FURTHER SUPPORT COOL INSURING AGENCY, Inc., et al. OF HUB’S MOTION TO
DISMISS THE AMENDED Defendants. COMPLAINT
--------------------------------------------------------------------X
LEE E. BERGER, an attorney duly admitted to practice law in the State of New York,
affirms the following under the penalties of perjury:
1. I am a member of the law firm of Kaufman Borgeest & Ryan LLP, attorneys for
Defendants HUB International Northeast Limited, HUB International Group Northeast Inc., and
HUB International Limited (collectively where applicable, “HUB”) and, as such, I am fully familiar
with the facts and circumstances of this matter based upon a review of the file maintained by
Your Affirmant’s office.
2. I submit this Reply Affirmation in further support of HUB’s Motion to Dismiss the
Amended Complaint pursuant to CPLR §§ 3211(a)(1), (a)(5), (a)(7), and (c)2 and in response to
Plaintiffs’ Affirmation in Opposition to the instant motion.
3. Specifically, this motion is made on the grounds that: (1) Plaintiffs’ claims in their
entirety are untimely as to HUB; (2) the “Relation Back” Doctrine is inapplicable and cannot
save Plaintiffs’ untimely claims; and (3) Plaintiff has failed to state a cause of action for
conversion, unjust enrichment, violation of General Business Law § 349, violations of the
1 The parties were given a new Index Number when this matter was converted to an E-filing case. This Motion
was initially filed under this matter’s original Index Number, 1476/2014. 2 Plaintiffs’ Opposition claims that they were not appropriately put on notice of the portion of HUB’s Motion
pursuant to CPLR § 3211(c). This contention is inaccurate as Plaintiffs were clearly made aware of HUB’s request via its Notice of Motion. HUB maintains that there are no issues of fact present in the instant matter and that the evidence before the Court is sufficient to allow this motion to be decided as a matter of law. In addition, the Court should be permitted to consider the affidavit attached in support of HUB’s motion, as Plaintiffs have been given a full and fair opportunity to submit affidavits of their own in opposition. Therefore, HUB submits that this relief can be appropriately sought and that it is in no way premature.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
1 of 29
2 4095370
Racketeer Influenced and Corrupt Organizations Act (“RICO”), Common Law Indemnification,
and Negligence.
4. Defendants contend that “Law of the Case” Doctrine has a binding effect on
Plaintiffs’ claims against HUB. Specifically, this Court’s findings in its decision on Plaintiffs’
Motion to Amend directly addressed the timeliness of Plaintiffs’ claims as to the proposed new
parties; those findings are controlling here, and Plaintiffs time barred direct claims as to HUB
must be dismissed as a matter of law.
5. Furthermore, HUB will address the “Relation Back” Doctrine and its inapplicability
to the instant matter. Plaintiffs attempt to mislead the Court by refusing to recognize the
dispositive corporate separateness of Defendant Hirsch Wolf & Co., Inc. (hereinafter referred to
as “Hirsch Wolf, Inc.”) and non-party Hirsch Wolf & Co., LLC (hereinafter referred to as “Hirsch
Wolf, LLC”). Plaintiffs misrepresent the plain language contained in the documentary evidence
submitted by HUB, namely the Asset Purchase Agreement (hereinafter referred to as the
“Agreement”). When read accurately, the Agreement establishes as a matter of law that there
was no merger (de facto or otherwise) between Hirsch Wolf, Inc. and any of the HUB
defendants. As such, the “Relation Back” Doctrine is inapplicable to this matter and cannot save
Plaintiffs’ untimely claims.
6. HUB has also addressed Plaintiffs’ new arguments regarding the statute of
limitations for its claims. Although the Law of the Case Doctrine applies and bars each of
Plaintiffs’ newly found arguments, should the Court even entertain such contentions, HUB has
established that they are meritless as a matter of law.
7. Finally, should the Court find that any of Plaintiffs’ claims are timely, such claims
should still be dismissed as Plaintiffs cannot state a legally cognizable cause of action. As such,
these claims must be dismissed on their face.
8. It must be stated that Plaintiffs erroneously refer to HUB’s motion as a “second
bite of the apple.” This is plainly untrue as HUB was not a party in this matter until after service
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
2 of 29
3 4095370
of the Amended Complaint in October 2016. Thus, this is the first time that HUB has had an
opportunity to litigate these issues. In contrast, Plaintiffs have had a full and fair opportunity to
litigate many of these issues, and should be bound by any and all adverse rulings.
ARGUMENT
POINT I
THE LAW OF THE CASE DOCTRINE MANDATES A FINDING THAT PLAINTIFFS’ CLAIMS AGAINST HUB ARE BARRED BY THE STATUTE OF LIMITATIONS
9. It is well-established that a party is bound by a prior ruling that it has already had
a full and fair opportunity to litigate before this Court. Here, much of Plaintiffs’ opposition is
devoted to raising new, as well as old, arguments regarding the timeliness of its claims against
HUB. In doing so, Plaintiffs are attempting to re-litigate issues of law that have been
conclusively decided by this Court in its September 23, 2016 Order.
10. Justice Platkin’s prior ruling on the timeliness of Plaintiffs’ claims is the law of this
case. (See HUB’s Memo of Law in Reply, p. 2). The doctrine of the ‘law of the case’ applies to
various stages of the same litigation. The doctrine is sometimes referred to as ‘a kind of intra-
action res judicata’; its purpose is to avoid the retrial of issues already determined in the same
case.” (See HUB’s Memo of Law in Reply, p. 3).
11. In the instant matter, Plaintiffs’ prior Motion to Amend the Complaint sought to
add new parties and assert new causes of action in this matter. One of those proposed new
parties was Hirsch Wolf, LLC. Like HUB, Hirsch Wolf, LLC had never been named as a
defendant in this action prior to the proposed Amended Complaint. In assessing Plaintiffs’
proposal to add Hirsch Wolf LLC as a new party, this Court held: “Plaintiffs’ claims against
Hirsch Wolf LLC plainly are time-barred unless they related back to the claims asserted
against [Hirsch Wolf, Inc.]” (See Exhibit D to HUB’s Affirmation in Support, p. 18)(emphasis
added). This same analysis must be equally applied to HUB, who stands in the exact position of
Hirsch Wolf, LLC with regard to the claims in the Amended Complaint.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
3 of 29
4 4095370
12. Furthermore, the Court’s prior decision also sets forth the applicable accrual
dates for Plaintiffs’ claims of breach of contract, negligence, false advertising, aiding and
abetting breach of fiduciary duty, and aiding and abetting fraud. The Court determined found
that these claims as to the new parties were barred by the statute of limitations. (See Exhibit D
to HUB’s Affirmation in Support, p. 13). Specifically the Court held as follows:
- The alleged breaches of contract “necessarily occurred no later than December 31, 2007, when the WCB assumed administration of the Trust”;
- “The negligence and GBL § 350 causes of action accrued no later than July 10, 2009, by which time (1) the WCB had issued deficit assessments to each plaintiff-member, demanded payment, and threatened to initiate collection litigation if payments were not made, and (2) plaintiffs had commenced their own action against CRM, the Trustees, and the Trust’s professional advisors to recover the accumulated deficit for which they were being held responsible by the WCB”;
- “Any aiding and abetting of CRM’s fraud or breaches of duty necessarily
terminated when the WCB assumed administration of the Trust, and any resulting damages were sustained no later than July 10, 2009. Finally the two-year discovery rule was triggered no later than December 18, 2009, when the WCB’s forensic audit was completed and delivered.”
(See Exhibit D to HUB’s Affirmation in Support, p. 13)(emphasis added).
13. Based upon these findings, this Court held that Plaintiffs’ claims were patently
untimely and could not be sustained as a matter of law. (See Exhibit D to HUB’s Affirmation in
Support, p. 14).
14. Plaintiffs had 30 days from the service of the Order with Notice of entry to
reargue this decision, yet they failed to do so. Plaintiffs cannot now ask the Court ask the Court
for reconsideration of decided issues. Further, Plaintiffs have not perfected an appeal of the
Court’s order. Therefore, the law of the case has been established and Plaintiffs’ attempts to
reargue such issues in opposition to the instant Motion to Dismiss must be rejected out of hand.
The Doctrine of Law of the Case controls and requires the Court to find that the claims against
HUB are barred by the statute of limitations.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
4 of 29
5 4095370
POINT II
PLAINTIFFS CANNOT RELATE THE CLAIMS AGAINST THE HUB DEFENDANTS BACK TO THE FIRST AMENDED COMPLAINT
15. The “Law of the Case” Doctrine requires that the Court find that Plaintiffs cannot
maintain any individual claims against HUB. Thus, Plaintiffs’ only means of keeping HUB in this
case are dependent upon the “Relation Back” Doctrine and a showing that HUB and Defendant
Hirsch Wolf, Inc. (not Hirsch Wolf, LLC) are “united in interest.” (See HUB’s Memo of Law in
Reply, p. 2).
16. Plaintiffs’ opposition has failed to rebut the dispositive documentary evidence
submitted by HUB and, as such, the Court must find that the “Relation Back” Doctrine is
inapplicable to Plaintiffs’ claims.
a. Plaintiffs Ambiguously Refer to Defendant Hirsch Wolf & Co., Inc. as “Hirsch” in an Attempt to Mislead the Court
17. Before we address the substance of Plaintiffs’ opposition and its utter lack of
merit, we must call attention to Plaintiffs’ attempt to mislead the Court as to the dispositive
relationships between HUB, Defendant Hirsch Wolf, Inc., and Non-Party Hirsch Wolf, LLC. On
the first page of Plaintiffs’ opposition, they clearly define Defendant Hirsch Wolf, Inc. as “Hirsch,”
then proceed to ignore the corporate separateness of Defendant Hirsch Wolf, Inc. and Non-
Party Hirsch Wolf, LLC, conflating the two entities, in what can only be described as an attempt
to deceive the Court and draw attention away from the legal insufficiencies of their arguments.
18. Hirsch Wolf, Inc. and Hirsch Wolf, LLC are two separate and distinct entities. This
is corroborated by the corporate filings for both entities, which reflect two active and separate
companies. (See the SOS Filings of Hirsch Wolf, Inc. and Hirsch Wolf, LLC, annexed to hereto
Exhibit “A”). Moreover, Plaintiffs have acknowledged that these are two separate entities: first
in their attempt to amend their complaint to name Hirsch Wolf, LLC as a defendant, where they
alleged that they were separate entities; and second when they commenced a second action
against Hirsch Wolf, LLC. (See Plaintiffs’ Complaint w/o Exhibits, annexed hereto as Exhibit
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
5 of 29
6 4095370
“B”). Finally, and most importantly, this Court has acknowledged a distinction between
these two entities when it denied Plaintiffs’ Motion to Amend the Complaint to name
Hirsch Wolf, LLC as a defendant.
19. The existence of this distinction is crucial to the instant motion practice as the
“Relation Back” Doctrine requires Plaintiffs to show that HUB is “united in interest” with an actual
party to this matter. Plaintiffs have utterly failed to put forth any of their own evidence or rebut
HUB’s documentary evidence, which has established that HUB is not united in interest with
Hirsch Wolf, Inc. Thus, Plaintiffs’ claims in their entirety are barred by statute of limitations and
must be dismissed as a matter of law.
b. There is no Evidence of a De Facto Merger between HUB and Defendant Hirsch Wolf, Inc.
20. Plaintiffs spend much of their Opposition analyzing the “hallmarks” of de facto
merger, addressing each of the factors and concluding that there was such a merger between
HUB and Defendant Hirsch Wolf, Inc. However, Plaintiffs conveniently gloss over the threshold
requirement of any de facto merger analysis - the presence of an actual transaction between
the purported predecessor and successor entities. When one actually addresses this issue,
it is clear that there simply cannot be any finding of a de facto merger in the instant matter.
21. In its moving papers, HUB has submitted documentary evidence in the form of
the Asset Purchase Agreement (hereinafter referred to as the “Agreement”) between HUB
International Northeast Limited (hereinafter referred to as “HubNE”) and non-party Hirsch Wolf,
LLC. This is the transaction on which Plaintiffs have based their entire theory of liability as to
HUB. Yet the plain language of the Agreement conclusively rebuts Plaintiffs’ allegations of a de
facto merger and forecloses their reliance upon the “Relation Back” Doctrine.
22. At the outset, the Court must turn its attention to the plainly stated fact that this
Agreement was between Hirsch Wolf, LLC and HubNE. The very first paragraph of the
Agreement provides:
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
6 of 29
7 4095370
ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of May 1, 2006, among Hub International Northeast Limited (“Buyer”), a Delaware Corporation, Hub International Limited (“Hub”), a corporation continued pursuant to the Canada Business Corporations Act, Hirsch Wolf & Co., LLC (“HWC”), a limited liability company formed under the laws of the State of New York, WZ Enterprises, LLC (“WZ”), a limited liability company formed under the laws of the State of New York, Hirsch Wolf (“Mr. Wolf”), Lon Grayson (“Mr. Grayson”), Raquel Wolf, Hirsch and Raquel Wolf Family Limited Partnership and H.R. Wolf Family Limited Partnership. Mr. Wolf and Mr. Grayson shall be referred to collectively as the “Members.” HWC and WZ shall be referred to singly and collectively as “Sellers.”
(Exhibit B to HUB’s Affirmation in Support, p. 1)(emphasis added).
23. This paragraph alone defines the “buyer” as HubNE and the “sellers” as Hirsch
Wolf, LLC and WZ Enterprises, LLC. Notably, Defendant Hirsch Wolf, Inc. is not listed as a
seller, nor is it even a party to the Agreement. In fact, a review of the Agreement’s signature
pages reveals that Hirsch Wolf, Inc. was not a signatory to the Agreement. (Exhibit B to HUB’s
Affirmation in Support, pp. 32-33).
24. The Agreement continues, setting forth in the “Recitals”:
WHEREAS Buyer desires to purchase and acquire from Sellers, and Sellers desire to sell to Buyer, certain assets and rights owned or held by Sellers and used in the conduct of the Business upon the terms and subject to the conditions set forth herein . . . .
(Exhibit B to HUB’s Affirmation in Support, p. 1).
25. Thus, the primary purpose of the Agreement is the sale of Hirsch Wolf, LLC’s
assets to HubNE. The Agreement is silent and mentions nothing related to the sale of anything
by Defendant Hirsch Wolf, Inc. Moreover, the Agreement specifically provides, and Hirsch Wolf,
LLC represented, that it held good and marketable title to all of the assets sold pursuant to the
Agreement. (Exhibit B to HUB’s Affirmation in Support, Pg. 10)(“Sellers have, and at the Closing
will deliver to Buyer, good and marketable title to all of the Purchased Assets . . .”).
26. The Agreement then sets forth the assets to be acquired by HubNE. Plaintiffs
misrepresent the plain language of this section of the Agreement, claiming that the assets
purchased were those of Defendant Hirsch Wolf, Inc. This is patently false and undermined by a
plain reading of the controlling contract. The language of this section provides:
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
7 of 29
8 4095370
1.1 Purchased Assets. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below in Section 2.4), each Seller shall sell, assign, transfer, convey, and deliver to Buyer, and Buyer shall purchase and acquire from such Seller, in each case free and clear of any and all liens, encumbrances, mortgages, pledges, claims or security interests of any kind (collectively, “Liens”), all of such Seller’s right, title and interest in, to and under the following assets, properties and right such Seller, wherever located (collectively, the “Purchased Assets”) . . . .
(Exhibit B to HUB’s Affirmation in Support, p. 2).
27. The Agreement proceeds to set forth all of the assets that were sold and
purchased pursuant to the contract. It is quite clear that all of the assets being acquired by
HubNE belong to the “sellers”, defined as Hirsch Wolf, LLC and WZ Enterprises, LLC. Neither of
these sellers is a party to the instant matter. Moreover, there is again no mention of Defendant
Hirsch Wolf, Inc. in these passages. The explanation for this absence is simple, Hirsch Wolf,
Inc. was not a party to the Agreement and none of its assets were sold or acquired by HUB.
28. Furthermore, the Agreement wholly refutes any contention that HUB assumed,
explicitly or implicitly, any of the liabilities of Hirsch Wolf, LLC, the actual party to the Agreement,
let alone Defendant Hirsch Wolf, Inc., who was not in any way involved in the asset acquisition.
The Agreement specifically provides:
1.3 No Assumption of Liabilities. Notwithstanding anything in this Agreement, Buyer shall not assume, or be liable to pay, perform, or otherwise discharge, any debts, obligations or liabilities of Sellers of any nature whatsoever (whether express or implied, absolute or contingent, liquidated or unliquidated, known or unknown, accrued or unaccrued, presently in existence or arising hereafter) including, but not limited to any premiums payable on policies with effective or renewal date prior to the Closing Date. All such debts, obligations and liabilities (collectively, the “Excluded Liabilities”) shall be retained by, and shall remain debts, obligations and liabilities of, Sellers.
(See Exhibit B to HUB’s Affirmation in Support, p. 3)
29. Thus any contention about the assumption of liabilities is easily debunked by a
simple reading of the Agreement.
30. Plaintiffs’ opposition touches upon the Agreement, but their contentions are
rather unremarkable. Plaintiffs simply attempt to create questions of fact about the document,
where there are none. They misquote the Agreement and, in an apparent intentional pattern
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
8 of 29
9 4095370
addressed above, ignore the unquestionable and dispositive distinction between Hirsch Wolf,
Inc. and Hirsch Wolf, LLC.
31. Plaintiffs’ first point of contention with regard to the Agreement pertains to the two
references to Hirsch Wolf, Inc. contained therein. The references appear on the title page and in
Article 5 of the Agreement. Defendants have explained that these references are purely
scrivener’s errors and that they have absolutely no impact on the sale of Hirsch Wolf, LLC’s
assets to HubNE. (See Exhibit A to HUB’s Affirmation in Support, ¶ 13). For the first reference,
we note that the cover page of this contract has no legal effect on the rights and obligations of
the Agreement itself. The cover page is simply that.
32. Furthermore, Plaintiffs’ arguments with regard to the second reference are belied
by their own documentation submitted in opposition. Specifically, the corporate filings for Hirsch
Wolf, LLC reflect that, after the date of the Agreement, Hirsch Wolf, LLC changed its name to
“B.R. Wolf & Co. LLC.” (See Exhibit J to Plaintiffs’ Affirmation in Opposition).3 Thus, Hirsch Wolf,
LLC changed its name in compliance with the terms of the Agreement. In contrast, the corporate
filings for Hirsch Wolf, Inc. reflect that, to this day, Hirsch Wolf, Inc. continues to operate under
the same exact name: “Hirsch Wolf & Co., Inc.” (See Exhibit “A”). Clearly, this entity was not
bound by the terms and conditions of the Agreement.
33. Thus, the scrivener’s errors within the Agreement are nothing more than
typographical mistakes during drafting. Plaintiffs harp on such errors to distract the Court from
the true substance of the Agreement and the undeniable fact that Defendant Hirsch Wolf, Inc.
was not a party to this transaction.
34. Next, Plaintiffs rely heavily upon the Press Release issued by HUB International
Limited on May 2, 2006 (hereinafter referred to as the “Press Release”), announcing HubNE’s
acquisitions of the assets of Hirsch Wolf, LLC. The very first sentence of this Press Release
3 Plaintiffs have even commenced a subsequent action against B.R. Wolf & Co., LLC. The action is entitled
Belair Care Center, et al. v. Hirsch Wolf & Company LLC d/b/a B.R. Wolf & Co., LLC, et al., Index No. 3175/2015. (See Exhibit “B”).
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
9 of 29
10 4095370
discounts Plaintiffs’ entire position. Consistent with Defendants’ arguments, the Press Release
states:
Hub International Limited . . . today announced the acquisition by its New York subsidiary, Hub International Northeast (HUB Northeast), of the assets of Hirsch Wolf & Co., LLC, a Brooklyn-based property and casualty insurance brokerage with special expertise in the healthcare industry. (See Exhibit H to Plaintiffs’ Affirmation in Opposition)(emphasis added).
35. At no point in any part of this release is Defendant Hirsch Wolf, Inc. mentioned.
Thus, Plaintiffs’ claim that this Press Release is evidence of a “continuity of management” or the
business of Hirsch Wolf, Inc. is unavailing, and just plainly false.
36. Plaintiffs’ opposition characterizes HUB’s documentary evidence as “sparse.”
HUB submits that this “sparse” evidence is more than sufficient to defeat all of Plaintiffs’
machinations about a de facto merger between HUB and Defendant Hirsch Wolf, Inc. The plain
language of the Agreement refutes all that is alleged in the Amended Complaint. Further,
despite, more than fifty pages of convoluted arguments and misstatements of fact and law,
Plaintiffs have utterly failed to overcome the controlling documentary evidence. There was no
merger (de facto or otherwise) between HUB and Hirsch Wolf, Inc. There is no unity of interest
between the two entities. Thus, the “Relation Back” Doctrine cannot be relied upon by Plaintiffs
to save their claims.
c. Plaintiffs’ Opposition has Failed to State a Basis for Alter Ego Liability
37. As HUB stated in its moving papers, the Amended Complaint’s allegations as to
alter-ego liability are woefully insufficient and wholly fail to provide a basis for finding that HUB
and Hirsch Wolf, Inc. are alter egos of one another. Plaintiffs’ allegations that Hirsch Wolf, Inc.
and HUB share a common ownership, management, employees, and work place, are
insufficient to maintain a claim for alter-ego liability. (See Exhibit D to HUB’s Affirmation in
Support, p. 24).
38. The arguments raised in Plaintiffs’ Opposition are patently insufficient, devoid of
support from credible evidence, and fail to raise any question as to the existence of this
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
10 of 29
11 4095370
purported alter-ego relationship. Plaintiffs’ contentions are those primarily addressed in the
preceding section regarding the alleged de facto merger. However, their inadequacies are worth
repeating.
39. Plaintiffs begin by misrepresenting the plain language of the Agreement,
asserting that HUB purchased “virtually all of the assets” of Hirsch Wolf, Inc. This is manifestly
untrue. As previously noted, the Agreement clearly provides that HubNE purchased some of the
assets of Hirsch Wolf, LLC. There is no mention of Hirsch Wolf, Inc.’s assets anywhere in the
Agreement and Plaintiffs’ statements to the contrary are patently false.
40. Next Plaintiffs raise the fact that an employee of Hirsch Wolf, Inc. was hired by
HubNE as evidence of overlap in ownership, officers, directors, and personnel. However, this
very Court has already held in this case that “alter-ego liability will not attach merely because
two corporations perform similar functions, share common officers, directors or managers, or
share facilities or infrastructure.” (See Exhibit D to HUB’s Affirmation in Support, p. 24). Thus,
such evidence hardly meets the stringent standard for establishing an alter-ego relationship.
41. Moreover, Plaintiffs’ reliance upon the two mistaken references to Hirsch Wolf,
Inc. within the Agreement is insufficient to impose such liability. As discussed at length, these
were nothing more than scrivener’s errors, which have no legal impact on the Agreement itself.
This is corroborated by the fact that Hirsch Wolf, LLC now operates under a new name, while
Hirsch Wolf, Inc. has retained its moniker.
42. Thus, Plaintiffs’ opposition has failed to set forth any basis to support a claim for
alter-ego liability and, as such, this alleged relationship cannot be used to relate Plaintiffs’
claims against HUB back to the filing of the November 2, 2009 Complaint.
d. The Documentary Evidence Refutes Any and All Claims as to HUB International Group Northeast Inc. and HUB International Limited
43. Defendants have moved to dismiss Plaintiffs’ particular claims against HUB
International Group Northeast Inc. and HUB International Limited, as there is no basis for
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
11 of 29
12 4095370
Plaintiffs to maintain any of their claims against such entities.4 Plaintiffs’ sole opposition to this
portion of HUB’s motion is to claim that the arguments are ineffective due to the absence of the
entities’ Articles of Incorporations, as well as documents such as the Press Release, which
prevent HUB from meeting its burden. Like the rest of Plaintiffs’ opposition, these arguments are
meritless and fail to raise any legitimate opposition to HUB’s prayer for dismissal.
44. First, HUB International Group Northeast, Inc. is an independent entity, which
was not a party to the Agreement. The entire basis for Plaintiffs’ claims is premised upon a
purported de facto merger and acquisition of all of Hirsch Wolf, Inc.’s assets. Yet, a plain
reading of the Agreement reveals that HUB International Group Northeast, Inc. was not a party,
nor did it purchase any of Hirsch Wolf, LLC’s assets. Thus, there is simply no basis for Plaintiffs
to maintain any claims against this entity. Plaintiffs’ contention that HUB International Group
Northeast, Inc. must produce its Articles of Incorporation to support its position is unavailing.
However, to further buttress the merits of HUB’s argument, the Articles of Incorporation for each
HUB defendant are annexed hereto as Exhibits “C”, “D”, and “E”. Sufficient documentary
evidence is before the Court and it establishes as a matter of law that there was no merger (de
facto or otherwise) between HUB International Group Northeast, Inc. and Hirsch Wolf, Inc.
Moreover, HUB has produced an Affidavit of Ivy Fischer, an individual with knowledge of the
corporate structure of the relevant activities, to support these contentions. (See Exhibit A to
HUB’s Affirmation in Support). Notably, Plaintiffs’ Opposition wholly fails to refute any of the
substance of Ms. Fischer’s Affidavit.
45. Furthermore, although HUB International Limited is named as a party to the
Agreement, as per the plain terms of the contract, HUB International Limited did not acquire any
of the assets of Hirsch Wolf, LLC. The same is equally true for Hirsch Wolf, Inc., as it has been
established time after time that neither it, nor its assets, were involved in the Agreement. Thus,
4 For the sake of clarity, it is worth repeating the distinctions between each of the Hub Defendants. Hub
International Limited is a Delaware Holding Company and the parent company of Hub International Group Northeast, Inc. Further Hub International Northeast Limited (“HubNE”) is a subsidiary of Hub International Group Northeast, Inc. HubNE was the buyer under the terms of the Asset Purchase Agreement.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
12 of 29
13 4095370
HUB International Limited’s mere status as a party to the Agreement is insufficient to establish
any form of successor liability.
46. Finally, Plaintiffs’ reliance on the aforementioned Press Release is misguided
and has no impact on the merits of HUB’s motion. As noted above, HUB International Limited
issued the release which detailed HubNE’s purchase of the assets of Hirsch Wolf, LLC. Not
only does the Press Release confirm that HUB International Limited was not a buyer in the
Agreement, but it corroborates the fact that Hirsch Wolf, Inc. was not a party to the Agreement.
47. Therefore, Plaintiffs’ Opposition has failed to provide any basis for maintaining its
allegations of successor liability as to HUB International Group Northeast Inc. and HUB
International Limited. Thus, the “Relation Back” Doctrine is inapplicable as to the claims against
these entities.
POINT III
PLAINTIFFS’ NEW ARGUMENTS REGARDING THE TIMELINESS OF ITS CLAIMS ARE WHOLLY WITHOUT MERIT
48. As noted, Plaintiffs’ arguments regarding the timeliness of their claims are
meritless and subject to the Doctrine of “Law of the Case.” Furthermore, to the extent Plaintiffs
now make brand new arguments as to the statute of limitations, those are similarly without merit
as addressed herein.
a. Plaintiffs’ Reliance Upon CPLR § 214(2) is Misplaced and Meritless as a Matter of Law
49. In a first act to desperately maintain their claims, Plaintiffs erroneously cite CPLR
§ 214(2) and contend that all of their claims are timely based upon this statute. However, this is
a complete misinterpretation of the statute and it is clear that CPLR § 214(2) does not apply to
any claim against HUB. Thus, this argument must fail as a matter of law.
50. CPLR § 214(2) prescribes a three-year Statute of Limitations for “an action to
recover upon a liability, penalty, or forfeiture created or imposed by statute.” That is, it sets forth
a three year statute of limitations for claims created by statute, which did not exist at common
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
13 of 29
14 4095370
law. In fact, Courts have specifically held that CPLR § 214(2) does not apply to liabilities that did
exist at common law, but were also subsequently recognized or implemented by statute. (See
HUB’s Reply Memo of Law, p. 13). This section of the CPLR does not create a new cause of
action or usurp established legal principles that apply to common law claims. It is simply a gap
filler for claims created by the legislature, which did not otherwise have a limitations period.
51. Here, Plaintiffs have seized upon the language in the statute, namely the
reference to “liability” or “penalty”, and extended CPLR § 214(2)’s application to an untenable
level. As per Plaintiffs’ interpretation, the fact that Plaintiffs have allegedly been damaged by an
assessment imposed by a governmental entity, automatically means that Plaintiffs’ common law
claims fall within the ambit of CPLR § 214(2) thereby extending well beyond those prescribed by
statute and under the common law. Plaintiffs are simply incorrect in their reading of the statute
and the disconnect stems from a misinterpretation of CPLR § 214(2)’s reference to liabilities
imposed by statute.
52. By “liabilities imposed by statute,” this section of the CPLR does not refer to the
nature of Plaintiffs’ damages, but rather the basis for the cause of action and liability. For
example, the basis for a claim of negligence is a breach of a duty of care. Likewise, a contract
claim is based in breach of an obligation pursuant to an agreement. In contrast, a claim to
recover a lien created under the Insurance Law is a statutory creation, which would not exist at
common law. (See HUB’s Reply Memo of Law, pp. 13-14).
53. Here, Plaintiffs’ claims against HUB are not brought pursuant to a statute.
Plaintiffs may be held liable to the Workers’ Compensation Board in connection with their joint
and several liability for the Trust, but the claims as to the broker defendants are all based upon
the common law. Each of Plaintiffs’ claims exists independent of any statute and Plaintiffs have
not alleged such statutory violations in the Amended Complaint. As illustrated in the case law,
the applicability of CPLR § 214(2) does not turn on the nature of damages, but rather is wholly
dependent on the cause of action for liability itself. (See HUB’s Reply Memo of Law, p. 14-15).
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
14 of 29
15 4095370
54. Therefore, Plaintiffs have clearly misinterpreted the applicability of CPLR §
214(2) and the Court should rightly dismiss their flawed contentions. Their causes of action exist
at common law and are not based upon any statutory liability whatsoever. As such, CPLR §
214(2) cannot possibly apply to save Plaintiffs’ otherwise untimely claims.
b. Plaintiffs’ Claims Regarding the Timeliness of the Unjust Enrichment Claim are Meritless as a Matter of Law
55. Plaintiffs next attempt to extend the statute of limitations for their unjust
enrichment claim arguing that HUB has an ongoing fiduciary duty to Plaintiffs, which has tolls
the statute of limitations for this claim in perpetuity. In making this argument, Plaintiffs first claim
that they were in a fiduciary relationship with HUB, an allegation that HUB wholly disputes. HUB
maintains that it was involved in nothing more than a broker-client relationship with Plaintiffs,
which does not give rise to a fiduciary duty. (See HUB’s Reply Memo of Law, p. 15).
56. However, even if a fiduciary relationship did exist, Plaintiffs’ claim that such
relationship continues to this day is wholly without merit.
57. In pursuing this argument, Plaintiffs cite a unique tolling provision, which provides
that claims arising out of a fiduciary relationship do not accrue “until the fiduciary has openly
repudiated his or her obligation or the relationship has been otherwise terminated.” (See HUB’s
Reply Memo of Law, p. 16). Here, the entire crux of Plaintiffs’ fiduciary duty claims revolve
around their placement in the HITNY Trust, and the broker defendants’ related advice and
communications regarding the Trust. Obviously, the relationships, and all associated duties in
connection with the Trust came to an end when the Workers’ Compensation Board seized
control of it on December 31, 2007. Notably, Plaintiffs do not allege anywhere in the Amended
Complaint, or in their opposition, that the relationships between the Plaintiffs and Broker
Defendants continued beyond the Trust’s termination. As such any and all fiduciary duties
expired with the Trust’s termination.
58. Thus, any toll of the statute of limitations was lifted on December 31, 2007 and
the statute of limitations began to run on the unjust enrichment claim from that date. Pursuant to
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
15 of 29
16 4095370
CPLR §213, the time ran on Plaintiffs’ Unjust Enrichment claim in December 2013, well before
any claims were asserted against HUB. Therefore, the Court must find that Plaintiffs’ opposition
is without merit and dismiss the unjust enrichment claim as to HUB.
c. Plaintiffs’ Claims Pursuant to General Business Law § 349 are Time Barred
59. Next, Plaintiffs misinterpret the Court of Appeals’ decision in Gaidon v. Guardian
Life Ins. Co. Of Am., 96 N.Y.2d 201, 727 N.Y.S.2d 30 (2001), in yet another attempt to extend
the life of a time barred claim. Specifically, Plaintiffs argue that their General Business Law §
349 claim did not accrue until they entered into settlement agreements with Workers’
Compensation Board in 2013. However, an accurate reading of Gaidon reveals that this
contention is plainly in error.
60. In Gaidon, the Court of Appeals held that a claim pursuant to General Business
Law (“GBL”) § 349 accrues when plaintiff has been injured by a deceptive act or practice
violating Section 349. Id. That case dealt with alleged misrepresentations made by Defendant
Guardian Life about “vanishing premiums,” which led plaintiffs to believe that their premium
payments would in fact “vanish.” (See HUB’s Reply Memo of Law, p. 17). In determining when
plaintiffs were injured by the subject deceptive acts, the Court found that the injuries occurred
when they were “first called upon to pay additional premiums beyond the date by which they
were led to believe that policy dividends would be sufficient to cover all premium costs.” (See
HUB’s Reply Memo of Law, p. 17).
61. In the instant matter, Plaintiffs were allegedly injured when their expectations for
Workers’ Compensation coverage were not met and the Workers’ Compensation Board issued
deficit assessments to each plaintiff-member, demanded payment, and threatened to initiate
collection litigation if payments were not made. This Court has already determined that this date
was July 10, 2009. Plaintiffs attempt to extend the accrual of their claims until their settlement
agreements in 2013 is contrary to the governing case law from the Court of Appeals and this
Court’s own conclusive determination.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
16 of 29
17 4095370
62. Furthermore, like GBL § 349, claims pursuant to GBL § 350 have been deemed
to accrue at the time of Plaintiffs’ injury. (See Exhibit D to HUB’s Affirmation in Support, p. 9-10);
(see also HUB’s Reply Memo of Law, p. 17). In the instant matter, this Court has held that
Plaintiffs’ proposed GBL § 350 claim, which was based upon the very same allegations as the
GBL § 349 claim, accrued on July 10, 2009 and consequently ran on July 10, 2012. (See Exhibit
D to HUB’s Affirmation in Support, p. 13). Thus, the Court’s prior holdings with regard to GBL §
350, must be equally applied to the GBL § 349 claim.
d. Plaintiffs’ RICO Claim is Barred by the Statute of Limitations
63. The statute of limitations for a civil RICO claim is four years and the claim is
deemed to accrue when the plaintiff knew or should have known of the purported injury. See
Dempster v. Liotti, 86 A.D.3d 169, 924 N.Y.S.2d 484 (2d Dept. 2011). HUB maintains that
Plaintiffs’ RICO claim accrued on either July 10, 2009 or December 18, 2009, by which point the
Worker’s Compensation Board had issued their assessment to all plaintiffs and completed their
audit of the HITNY Trust.
64. Plaintiffs claim that their damages did not become clear and definite until they
entered into settlement agreements with the Workers’ Compensation Board in 2013. This
argument is flawed and Plaintiffs’ reliance upon Harbinger Capital Partners Master Fund I, Ltd.
v. Wachovia Capital Mkts., LLC, 347 Fed. Appx. 711 (2d Cir. 2009) is misplaced. (See HUB’s
Reply Memo of Law, pp. 18).
65. Here, Plaintiffs’ damages are not tenuous. The damages and plaintiffs’ injuries
were definite from the moment the assessment was issued by the Board on July 10, 2009. Any
subsequent adjustment to the assessment or plaintiffs’ settlements is solely related to the
Board’s assessment. Despite plaintiffs’ contention to the contrary, these settlements do not
constitute injuries which are new or independent of the Board’s assessment. (See HUB’s Reply
Memo of Law, p. 19).
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
17 of 29
18 4095370
66. Thus, Plaintiffs’ contentions should be rejected and the RICO claim should be
dismissed as a matter of law.
e. Plaintiffs’ Breach of Contract Claim is Barred by the Statute of Limitations
67. Plaintiffs next contend that their breach of contract claim as to HUB directly is not
barred by the statute of limitations. This section of their Opposition starts with a
mischaracterization of this Court’s prior holding in this matter. Namely, Plaintiffs contend that, in
its prior decision, this Court rejected HUB’s very arguments about the timeliness of their contract
claims. This is plainly inaccurate.
68. The Court’s decision clearly distinguished its analysis of the breach of contract
claims as to Hirsch Wolf, Inc. and proposed party, Hirsch Wolf, LLC. As noted in the prior
sections regarding the Doctrine of Law of the Case, the Court clearly held that the proposed
breach of contract claim as to Hirsch Wolf, LLC was “untimely” as a matter of law. (See Exhibit
D to HUB’s Affirmation in Support, p. 14). The same finding should clearly apply to the direct
breach of contract claim against HUB and the Court should disregard this meritless portion of
Plaintiffs’ Opposition.
69. Plaintiffs proceed contending that, in the context of Group Self-Insured Trust
(“GSIT”) cases, this Court held that the statutes of limitations for Plaintiffs’ claims are triggered
when the Workers’ Compensation Board levies the “latest assessment.” In purported support of
this contention, Plaintiffs primarily rely upon New York State Workers’ Compensation v. 1 & 3
On Fifth Corp., Decision/Order, Index No. 2900-13 (Albany Cty. March 30, 2015) and Inter-
Community Mem. Hosp. of Newfane v. Hamilton Wharton Group, Inc., 93 A.D.3d 1176, 941
N.Y.S.2d 360 (4th Dept. 2012). Despite Plaintiffs’ arguments, an accurate reading of both cases
reveals that both decisions are easily distinguishable from the matter at hand. (See HUB’s
Reply Memo of Law, pp. 19-22).
70. Here, the claimed breaches do not arise out of a trust member’s continuing
obligation to pay assessments. To the contrary, the contract claims are based upon the broker
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
18 of 29
19 4095370
defendants’ alleged failure to perform its insurance counseling and brokerage services which
were bargained for in the contracts. Based upon the relevant contracts, and the nature of their
alleged breaches, Plaintiffs’ damages are unrelated to accrual of the claim. Each assessment,
of which there has only been one, cannot constitute a subsequent breach by the broker
defendants and the accrual of a new claim. Moreover, in New York State Workers’
Compensation Bd. v. SGRisk, LLC, 967 N.Y.S.2d 868, 2013 N.Y. Misc. LEXIS 915 (Albany Cty.,
March 1, 2013), this Court expressly rejected Plaintiffs’ interpretation of Inter-Community. (See
HUB Reply Memo of Law pp. 22).
71. Thus, Defendants urge the Court to follow well-established New York contract
law and hold that Plaintiffs’ contract claims accrued no later than December 31, 2007 and are
thus untimely as a matter of law.
f. Plaintiffs’ Negligence Claim is Untimely
72. Plaintiffs’ ignorance of this Court’s prior ruling extends next to their arguments
regarding the accrual and running of the statute of limitations for their negligence claim. As
previously noted, this Court held that Plaintiffs’ negligence claim accrued no later than July 10,
2009, at which point (1) the WCB had issued deficit assessments to each plaintiff-member,
demanded payment, and threatened to initiate collection litigation if payments were not made,
and (2) plaintiffs had commenced their own action against CRM, the Trustees, and the Trust’s
professional advisors to recover the accumulated deficit for which they were being held
responsible by the WCB. (See Exhibit D to HUB’s Affirmation in Support, p. 13). This is the law
of the case and Plaintiffs’ arguments to the contrary should be dismissed accordingly.
73. Moreover, Plaintiffs’ reliance upon Bond v. Progressive Ins. Co., 82 A.D.3d 1318,
917 N.Y.S.2d 756 (3d Dept. 2011), Rockaway Beach Blvd. Constr. Co., LLC v. Treiber Group,
LLC, Index No. 601106/14 (Nassau Cty. Jan. 21, 2015), and Zoller v. Niagra Mohawk Power
Corp., 137 A.D.2d 947, 525 N.Y.S.2d 364 (3d Dept. 1988) is wholly misplaced. (See HUB’s
Reply Memo of Law pp. 23-25).
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
19 of 29
20 4095370
74. In the instant matter, there can be no finding that the broker defendants
committed ongoing acts of negligence that went up to the commencement of this lawsuit. To the
contrary, the broker defendants’ purported negligence arises of out of their acts and omissions
in relation to the HITNY Trust. Consequently, any alleged negligent acts on the part of the
broker defendants could not extend beyond the Workers’ Compensation Board’s seizure of the
Trust in December 2007. Moreover, Plaintiffs earliest date of actual harm, July 10, 2009,
occurred after the seizure of the Trust when the Board issued its assessments. Thus, the
circumstances of this case are wholly distinguishable from the case law cited in Plaintiffs’
Opposition and Plaintiffs’ comparisons to this case are misplaced.
g. Plaintiffs’ Claims for Fraud and Aiding and Abetting Fraud are Untimely
75. As previously discussed at length, this Court has held that the last purported
fraudulent act could not have occurred after 2007, when the Workers’ Compensation Board
seized the Trust. Furthermore, this Court held that the latest date for Plaintiffs’ discovery of any
alleged fraud is December 18, 2009, when the Workers’ Compensation Board completed its
forensic audit. Thus, it is clear that Plaintiffs fraud claims as to HUB are untimely as a matter of
law.
76. In opposition, Plaintiffs cite to the now well-worn Inter-Community decision, which
has been discussed at length in this Reply. Nothing in the Fourth Department’s decision allows
Plaintiffs to contravene well-established legal principles and restart the statute of limitations for
each of their claims after each assessment, of which there was only one here anyway. This
argument should be disregarded for the reasons already set forth in detail in these papers.
POINT IV
PLAINTIFFS HAVE FAILED TO STATE A CAUSE OF ACTION AGAINST HUB
77. HUB maintains that it has demonstrated that all of Plaintiffs’ direct claims against
it are barred by the applicable statute of limitations. Further, HUB contends that Plaintiffs have
failed to overcome the documentary evidence which conclusively establishes that there was no
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
20 of 29
21 4095370
de facto merger between HUB and Defendant Hirsch Wolf, Inc. Thus, the “Relation Back”
Doctrine cannot be relied upon to save Plaintiffs’ untimely claims. Thus, this matter should be
decided on the statute of limitations.
78. However, to the extent the Court finds that Plaintiffs can maintain their claims
against HUB based upon the allegations of successor liability, Plaintiffs’ claims should still be
dismissed pursuant to CPLR § 3211(a)(7).
a. Should the Court Dismiss any Claims as to Hirsch Wolf, Inc., the same Findings Must be Made as to HUB
79. Should the Court permit Plaintiffs’ claims based upon the alleged successor
liability, which HUB vehemently disputes, such claims can only be maintained to the extent that
they are adequately pled against Defendant Hirsch Wolf, Inc., HUB’s wrongfully alleged
predecessor in interest. If the Court grants any portion of Hirsch Wolf, Inc.’s motion, the same
finding must be made as to the equivalent claims against HUB.
b. Conversion
80. In an action for conversion of money, plaintiff must identify a specific, identifiable
fund, over which plaintiff exercised control and possession at the time of the conversion. (See
HUB’s Reply Memo of Law, p. 26). Plaintiffs cannot meet this standard in the instant matter
because said “specific and identifiable funds” are only the premiums paid to the HITNY Trust,
which Plaintiffs no longer possessed when the Trust paid commissions to the broker
defendants.
81. Plaintiffs’ position is flawed for many reasons. First, there is nothing specific
about the plaintiffs’ “funds” that were allegedly converted. This is evident in that Plaintiffs point
generally to everything that the Broker Defendants received in connection with the Trust, as
evidence of a conversion of their funds. Plaintiffs state that each benefit received by the brokers
for any purpose, legitimate or otherwise, is a conversion of Plaintiffs’ property and that “each sip
of champagne was a conversion of Plaintiffs’ premium dollars.” However, there is nothing
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
21 of 29
22 4095370
specific about these allegations and Plaintiffs cannot adequately plead the elements by relying
on such broad and general allegations and rhetoric.
82. Moreover, Plaintiffs’ arguments also fail to establish that they had any ownership
or possession over the funds at the time that they were allegedly converted. In the process
described in Plaintiffs’ allegations, they paid premiums to the Trust, and subsequently the
Broker received commissions. Yet, those commissions were not paid directly to the defendants
by the Plaintiffs. The Defendant brokers received compensation from the Trust, not from the
Plaintiffs. Thus, Plaintiffs’ property was not passed directly from plaintiff to the broker. Nothing in
Plaintiffs’ Amended Complaint or Opposition would allow the Court to find that the direct funds
paid to the Trust were passed along to the brokers. Thus, Plaintiffs cannot make out a claim for
conversion.
c. Unjust Enrichment
83. The basis of a claim for unjust enrichment is that the defendant has obtained a
benefit which in equity and good conscience should be paid to the plaintiff. “Unjust enrichment is
not a catchall cause of action to be used when others fail. It is available only in unusual
situations when, though defendant has not breached a contract, nor committed a recognized
tort, circumstances create an equitable obligation running from the defendant to the plaintiff.
Typical cases are those in which the defendant though guilty of no wrongdoing, has received
money to which he or she is not entitled . . . An unjust enrichment claim is not available where it
simply duplicates, or replaces, a conventional contract or tort claim” (See HUB’s Reply Memo of
Law, p. 28).
84. In the instant matter, Plaintiffs’ Amended Complaint alleges unjust enrichment
based purely on the purported wrongdoings of the broker defendants. Moreover, these alleged
wrongdoings are the same exact facts upon which Plaintiffs rely for their other contract and tort
claims. Thus, even if Plaintiffs’ contract claim was not present, this unjust enrichment cause of
action would still be duplicative of Plaintiffs’ claim of negligence, fraud, and/or negligent
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
22 of 29
23 4095370
misrepresentation. Based upon the Court of Appeals decision in Corsello v. Verizon N.Y., Inc.,
18 N.Y.3d 777 (2012), “a claim for unjust enrichment cannot lie where the complaint also
alleges either fraud or breach of contract based on the same underlying facts.” (See HUB’s
Reply Memo of Law, p. 28).
85. Finally, we would be remiss not to point out Plaintiffs’ patent misrepresentation to
the Court contained within this section. Plaintiffs have the audacity to state that HUB does not
dispute that it acquired the assets of “Hirsch.” Let it be clear that HUB vehemently disputes that
it acquired the assets of Defendant Hirsch Wolf, Inc. Plaintiffs’ statements to the contrary are
nothing more than fabrications. Further, Plaintiffs’ presentation of such untruths is done with the
sole objective of confusing this Court with its ambiguous references to Hirsch Wolf, Inc. and
Hirsch Wolf, LLC. The Court should not be fooled by such fiction.
d. General Business Law § 349
86. Defendants maintain that Plaintiffs have failed to adequately plead the elements
of a cognizable claim pursuant to GBL 349. Furthermore, the case law relied on in opposition to
HUB’s motion is distinguishable and cannot control for purposes of the instant motion practice.
87. The elements of a cause of action under GBL 349 are “first, that the challenged
act of practice was consumer-oriented; second, that it was misleading in a material way; and
third, that the plaintiff suffered injury as a result of the deceptive act.” (See HUB’s Reply Memo
of Law, p. 29). “Section 349 does not grant a private remedy for every improper or illegal
business practice, but only for conduct that tends to deceive consumers.” (See HUB’s Reply
Memo of Law, p. 29).
88. In its prior decision, this Court noted that the elements of a claim pursuant to
GBL 349 and 350 are identical to one another and that Plaintiffs could not meet the requisite
elements to state a GBL 350 claim. (See Exhibit D to HUB’s Affirmation in Support, p. 22)
Specifically, the Court found that the activities alleged in the proposed Amended Complaint
were not directed at and did not impact the consuming public at large. The same finding must
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
23 of 29
24 4095370
be made as to Plaintiffs’ GBL 349 claim. The transactions detailed throughout the Amended
Complaint involve private interactions between the brokers and the individual plaintiffs. It does
not involve the public at large. Thus, GBL 349 is inapplicable to the underlying dispute.
89. Moreover, the case law cited in Plaintiffs’ opposition does not require that the
Court depart from its prior and controlling findings. (See HUB’s Reply Memo of Law, pp. 30-31).
90. It is clear that what is actually alleged in the Amended Complaint and affixed to
Plaintiffs’ Opposition papers does not support a finding that the defendant brokers were
marketing the Trust to the general public or individual consumers. Plaintiffs quote emails and
letters sent by the broker defendants to individual Plaintiffs. However, these were not mass
marketing emails targeting multiple employers. To the contrary, these were communications
between a broker and a client, where the broker expressed nothing more than opinions or
hopes about the Trust. The Court made this very observation of the Amended Complaint, noting
that “it is apparent from the proposed complaint that many of the interactions between plaintiffs
and their insurance brokers were based upon individualized written and oral statements.” (See
Exhibit D to HUB’s Affirmation in Support, p. 23).
91. Plaintiffs also cite many “advertising materials” which they allege were distributed
to the public. However, these documents bear the insignia of CRM, the Trust’s administrator.
The same is true for the “broker bash” PowerPoint, which stemmed from an event put on by
CRM. These are not broker materials. They may be evidence to support a claim that can be
maintained against CRM, but nothing in the Accredited Aides Plus, Inc. v. Program Risk Mgt.,
Inc., 2017 N.Y. App. Div. LEXIS 65, (3d Dept. Jan. 5, 2017) decision justifies using CRM’s
materials to sustain a GBL claim against the brokers. (See HUB’s Reply Memo of Law, p. 30-
31).
92. Furthermore, the Third Department’s decision in State of New York Workers’
Compensation Bd. V. 26-28 Maple Ave., Inc., 80 A.D.3d 1135 (3d Dept. 2011) is still controlling
on this issue. In that case, the Third Department found that a broker’s marketing of a GSIT did
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
24 of 29
25 4095370
not provide grounds to state a claim under GBL 349. Nothing in Accredited Aides disrupted this
holding and thus, it should be applied in the instant matter to dismiss Plaintiffs’ GBL 349 claims.
(See HUB’s Reply Memo of Law, p. 31).
e. RICO
93. It is unquestionable that civil RICO violations are subject to a heightened
pleading requirement because such claims have been found to be an unusually potent weapon
and the litigation equivalent of a thermonuclear device. (See HUB’s Reply Memo of Law, p. 31).
In the instant matter that heightened standard applies specifically to the brokers’ alleged
mailings, which Plaintiffs claim were part of a purported RICO scheme.
94. Plaintiffs’ Amended Complaint and their opposition wholly fail to meet this
standard and plead with particularity as to the alleged mailings. Plaintiffs’ claim that Krog Corp.
v. Vanner Group, Inc., 2016 N.Y. Misc. LEXIS 3251, 2016 N.Y. Slip Op 51288(U) (Albany Cty.
Aug. 22, 2016) is distinguishable from the instant matter, but they are sorely mistaken. The
alleged fraud in Krog is exactly the same as the one alleged in Plaintiffs’ Amended Complaint.
Thus, Plaintiffs are obligated, as set forth in Krog, to plead with particularity as to the specific
mailings sent by the broker defendants. Plaintiffs have not met this standard as they fail to set
forth which Plaintiffs actually received mailings and how they were misled.
95. Furthermore, Plaintiffs attempt to skirt the heightened requirements by relying on
the marketing materials and letters sent to only some of the Plaintiffs, constitutes the type of
non-actionable puffery that fails to sustain a RICO claim. (See HUB’s Reply Memo of Law, p.
32).
96. Moreover, the Plaintiffs who have failed to proffer any evidence of these
“mailings” cannot adequately state a civil RICO claim. This is not a class action, thus each and
every plaintiff must meet the stringent pleading requirement. Here, only some of the Plaintiffs
have alleged that they have received communications from the broker defendants. The ones
that fail to make such allegations have no excuse, as it is alleged that the mailings were directed
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
25 of 29
26 4095370
to each and every one of them. This is not a situation where the purported information
supporting the RICO claim is in exclusive possession of those participating in the scheme. (See
HUB’s Reply Memo of Law, p. 32).
97. Therefore, Plaintiffs have failed to meet the stringent requirements of the civil
RICO claim and the cause of action must be dismissed accordingly.
f. Common-Law Indemnification
98. In order for a Plaintiff state a claim for implied indemnity against a defendant
broker, the cause of action must include allegations that Plaintiff and the broker “owed a
common duty to some other party, that ought to be discharged by [the broker] rather than
[Plaintiff].” (See HUB’s Reply Memo of Law, p. 33). Despite the contentions in Plaintiffs’
Opposition, Plaintiffs cannot state a cause of action as to Common-Law or Implied
Indemnification.
99. Plaintiffs misrepresent what is stated in their own Amended Complaint in order to
save this meritless claim. In their Amended Complaint, Plaintiffs fail to allege that they delegated
their duty to obtain Workers’ Compensation insurance to the defendant brokers. Rather,
Plaintiffs’ Amended Complaint, as cited in their opposition, provides in relevant part:
- Each of these Plaintiffs, which are businesses lacking an in-house expertise on complex insurance matters, had a special relationship of personal trust and confidence with the Brokers wherein the Plaintiffs continuously and reasonably relied upon the expertise and advice of the Brokers with regard to inquiries on securing suitable workers compensation insurance coverage for their employees;
- That special relationship of personal trust and confidence existed for a period of years and in some cases predated their joining of the Trust. (See Plaintiffs’ Amended Complaint, ¶¶ 125, 127).
100. These allegations provide no basis for the Court to find that the Defendants owed
a shared or common duty with Plaintiffs to provide Workers’ Compensation coverage to
Plaintiffs’ employees or maintain the solvency of the Trust, which would be necessary to support
a common law indemnification claim. Plaintiffs improperly attempt to recast its direct claims
sounding in breach of contract and tort against HUB, into a common law indemnification claim.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
26 of 29
27 4095370
This flawed argument has been rejected in several decisions and this time should be no
different. (See HUB’s Reply Memo of Law, p. 33-34).
101. Finally, Plaintiffs’ reliance upon 12 NYCRR 317.17 as evidence of the brokers’
actionable duty is mistaken. These regulations do not provide any basis to find that the brokers
had a duty to maintain the solvency of the Trust. Rather, these regulations solely go to the
brokers’ duties to prospective members in marketing the Trust. These same duties are cited in
support of Plaintiffs’ contract and tort claims, but they do not provide grounds for finding that the
brokers shared a common duty with plaintiffs or the Trust. Thus, the common law
indemnification claim should be dismissed accordingly.
g. Negligence
102. In their moving papers, Defendants established that Plaintiffs’ negligence claim is
duplicative of their breach of contract claim. In opposition, Plaintiffs unsuccessfully attempt to
enlarge the scope of their negligence claim asserting, for the first time, that the broker
defendants had expansive involvement in the actual administration of the HITNY Trust.
103. Specifically, Plaintiffs contend that their negligence cause of action is based on
more than what is just alleged in the Amended Complaint, namely a failure to adequately advise
Plaintiffs on the risks associated with self-insured trusts. Now Plaintiffs claim that the brokers
played a role in the administration of the Trust and acted as an agent of CRM, which are
patently false.
104. Taking these contentions in turn, Plaintiffs’ claim that the brokers participated in
the administration of the Trust is undermined by the very Forensic Audit Report relied upon as
an exhibit to the Amended Complaint. The Forensic Audit Report reviewed the inner workings of
the HITNY Trust and CRM’s acts and omissions in painstaking detail. Plaintiffs cite to this report
as a basis for their claims and damages in this lawsuit. However, it is telling that in the 92 pages
that make up this report, there is not a single assertion, allusion, or comment that would allow
anyone to find that the broker defendants were involved in the actual administration and inner
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
27 of 29
28 4095370
workings of the Trust. This contention is pure conjecture, which Plaintiffs pluck out of the air at
the eleventh hour in yet another desperate grasp to save their poorly pleaded complaint. The
contention is without merit and should be disregarded.
105. Further, Plaintiffs contend that the Defendants acted negligently in their role of
marketing the Trust. Specifically, Plaintiffs state that Defendants still attempted to increase the
Trust’s membership, despite the mounting deficit. However, when these allegations are boiled
down, they still resemble nothing more than the same basis for Plaintiffs’ breach of contract
claim. Specifically, Plaintiffs allege that Defendants are in breach of their agreements, due to
“improperly placing and continuing to place Plaintiffs in the Trust with knowledge of the
Trust’s deficit.” (Amended Complaint ¶ 220).
106. Suffice it to say, there is no distinction in the allegations between the two causes
of action. As such, Plaintiffs’ negligence claim must be dismissed as a matter of law.
CONCLUSION
107. The present record before the Court establishes, as a matter of law, that
Plaintiffs’ Amended Complaint as to the HUB defendants must be dismissed in its entirety.
108. HUB has appropriately cited to the “Law of the Case” Doctrine, establishing that
this Court’s prior decision on Plaintiffs’ Motion to Amend is dispositive for purposes of the
timeliness of Plaintiffs’ direct claims against HUB. Moreover, Plaintiffs’ new arguments regarding
the statute of limitations are devoid of merit and can be easily disregarded by the Court. Simply
stated, these direct claims as to HUB are wholly barred by the statute of limitations.
109. Furthermore, HUB has definitively established that Plaintiffs cannot rely upon the
“Relation Back” doctrine to save their claims. HUB did not enter into a merger (de facto or
otherwise) with Defendant Hirsch Wolf, Inc. The Asset Purchase Agreement provides
unquestionable evidence of this fact. HUB has not entered into any transaction with Hirsch Wolf,
Inc. or acquired any of that entity’s assets.
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
28 of 29
29 4095370
110. Rather, the Agreement clearly reflects a transaction between HUB and non-party
Hirsch Wolf, LLC. This undisputable fact is fatal to any and all of Plaintiffs’ claims regarding a
purported de facto merger. Moreover, it precludes Plaintiffs from establishing that HUB and
Defendant Hirsch Wolf, Inc are “united in interest” and forecloses any application of the
“Relation Back” Doctrine. Plaintiffs’ opposition wholly fails to present any evidence to the
contrary. There is simply no basis for Plaintiffs’ claims of successor liability.
111. Moreover, HUB has established that, even if the statute of limitations did not bar
its claims, the vast majority of its causes of action are deficient as a matter of law. Plaintiffs have
failed a state a cognizable cause of action, warranting the dismissal of such toothless
allegations.
112. Finally, HUB has presented uncontroverted evidence to the Court, which
warrants a ruling on the pleadings. This Motion is in no way premature and Plaintiffs have failed
to present a legitimate basis for allowing their meritless claims to proceed into discovery.
113. Therefore, for the foregoing reasons, the Court should issue an order granting
HUB’s Motion to Dismiss the Amended Complaint in its entirety, together with such other and
further relief as this Court deems just and proper.
Dated: February 17, 2017 Valhalla, New York
Yours, etc. KAUFMAN BORGEEST & RYAN LLP By: Lee E. Berger, Esq. Attorneys for Defendants
HUB International Northeast Limited; HUB International Group Northeast Inc. HUB International Limited 200 Summit Lake Drive, First Floor
Valhalla, New York 10595 (914) 449-1000 Our File No.: 173.001
FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017
29 of 29
top related