After Only Three Weeks, Plaintiff Agrees to Withdrawal of Complaint Against Broker
June 17, 2009
London Fischer LLP, through the efforts of partners Perry Kreidman and Gregg Minkin and associates Miriam Schneider and Josh Abrams, was recently successful in having a federal court action against a defendant withdrawn by the plaintiff within three weeks of the commencement of the action.
The case involved a transaction in which a substantial life insurance policy held in a trust was bought and transferred to a purchaser who specialized in investments into such assets. After the purchaser remitted the funds for the transfer of the policy, it was informed that the policy had lapsed due to unpayment of premiums. The purchaser thereafter brought suit against some of the parties involved in the action for breach of contract, fraud, and conversion of the contract proceeds. London Fischer’s client was the broker for the trust that had originally held the policy. However, the broker was not a party to the contract of sale, nor involved in any way in the receipt or disbursal of the funds for the transfer of the policy from the trust to the purchaser.
Upon receipt of the complaint filed by the purchaser for fraud, breach of contract, and conversion, London Fischer formulated an aggressive litigation approach intended to culminate in a motion to dismiss the complaint for a failure to state a claim. However, since the action was filed in the United States District Court for the Eastern District of New York, in order to comply with the judge’s rules regarding the making of a motion to dismiss the claim, we first had to present a three page letter to the court requesting permission for such a motion. Crafting the letter with appropriate case law and authority as a proposed motion to dismiss, we asked the court for the right to seek a dismissal of the action against our client.
We argued, in essence, that the breach of contract claim was invalid because the broker was not a party to the contract. We asserted that the fraud claim lacked the requisite specifics of any misconduct or misrepresentations by our client. Finally, on the conversion claim we argued that there were no allegations that the broker had received, disbursed, or converted the proceeds for the purchase and transfer of the policy.
Of note, not only did the plaintiff choose not to oppose our request to file the motion or challenge the substantive arguments raised in our letter, it immediately advised the court that it would withdraw the complaint against our client and file an amended complaint without including it as a party.
Based on our letter seeking permission to file the motion and the plaintiff’s representation that it would withdraw the action against our client and file an amended complaint without naming the broker as a defendant, the court permitted the amended complaint to be filed and issued an order confirming the removal of our client as a defendant.
What was interesting is that only three weeks elapsed between the commencement of the action against our client and our successful efforts to have the plaintiff withdraw the complaint with the approval of the federal court.