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Reclaimant Corp. v. Deutsch

Superior Court of Connecticut, Judicial District of Stamford, Stamford

June 19, 2017

RECLAIMANT CORP.
v.
WILLIAM J. DEUTSCH and LAURENCE B. SIMON

          MEMORANDUM OF DECISION RE:, Plaintiff's MOTION FOR SUMMARY JUDGMENT (#142) AND THE DEFENDANTS' MOTION FOR SUMMARY. JUDGMENT (#150)

          GENUARIO, J.

         I. INTRODUCTION

         The, Plaintiff brings this complaint in two counts both sounding in unjust enrichment. The first count of the complaint is directed against the, Defendant William J. Deutsch (Deutsch) and the second count of the complaint is directed against the, Defendant Laura B. Simon (Simon). The, Defendants were each former limited partners in a limited partnership organized and existing pursuant to the laws of the State of Delaware known as the SV Special Situation Funds LP (the limited partnership). The, Plaintiff is a corporation organized and existing under the laws of the State of Delaware who is the transferee and/or assignee of the limited partnership's right to recover the amount of the alleged unjust enrichment of Deutsch and Simon. Both Deutsch and Simon are Connecticut residents.

         The allegations of the complaint are relatively straight forward. The, Plaintiff claims that in January 2008 Deutsch redeemed a portion of his investment in the limited partnership by withdrawing $15, 000, 000.00 from his capital account and that in February 2008 Deutsch notified the limited partnership that he sought to redeem the remaining portion of his investment in the limited partnership. The, Plaintiff claims that in 2007 and 2008 the limited partnership had miscalculated the net asset value of the assets of the partnership and mistakenly believed that Deutsch's capital account had a value in excess of $22.98 million dollars as of December 31, 2007 and a value in excess of $8.1 millions dollars (after the initial $15 million dollar withdrawal) as of March 31, 2008. In May 2008 the limited partnership distributed three payments to Deutsch in the total amount of $7, 305, 473.93 based upon its erroneous belief as to the value of its assets. [1] The, Plaintiff alleges that Deutsch, in May 2008, received an overpayment of $7, 047, 974.03 that he was not entitled to receive. Similarly, the, Plaintiff alleges as a result of similar withdrawals and similar mistakes that Simon received an overpayment of $724, 557.80 when she withdrew her investment in May 2008. [1]

         While neither, Defendant concedes the underlying allegations that they were paid more than they were entitled to received, for purposes of these motions for summary judgment the court assumes that the, Defendants did receive more than they were entitled to receive, or more properly put, the court find that there is a genuine issue of material fact as to whether or not each, Defendant received more funds at the time of their withdrawal then they were entitled to receive. The, Defendants have filed twelve special defenses and now move for summary judgment based on five of them including their second special defense which states that the, Plaintiffs have failed to state a cause of action pursuant to the Delaware Revised Uniform Limited Partnership Act (DRULPA)

         1 The Chief Financial Officer of the limited partnership was subsequently convicted of criminal activity involving theft of the limited partnership assets. The, Plaintiff asserts that it was this criminal activity that resulted in the erroneous valuation of the limited partnership assets.

         Section 17-607(c).

         The, Plaintiff has moved for summary judgment on the second and fourth special defenses. As a practical matter, the, Plaintiffs are not seeking the entry of a final judgment against the, Defendants on this motion but are seeking a judgment of the court that the, Defendants' second and fourth special defenses are not applicable to the case at bar.

         Because the court holds that there is no genuine issue of material fact that: (1) the contract between the parties unambiguously chooses Delaware law as the applicable law, (2) Delaware law provides that the, Defendants " shall have no liability under [DRULPA] or other applicable law for the amount of the distribution after the expiration of three years from the date of the distribution" and (3) this action was not brought within three years from the date of the distributions that the, Plaintiff seeks to recover, the court denies the, Plaintiffs motion for summary judgment and grants the, Defendants motion for summary judgment based upon their second special defense.

         II. SUMMARY JUDGMENT STANDARDS

         The standards relating to the consideration by the court of a motion for summary judgment are well known. " Summary judgment is a method of resolving litigation when the pleadings, affidavits, and any other proofs submitted show that there is no genuine issue as to a material fact and that the moving party is entitled to judgment as of matter of law....The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v . NewHaven, 213 Conn. 277, 279 (1989)(citations omitted); However since litigants ordinarily have a constitutional right to have issues of fact decided by a jury... the moving party for summary judgment is held to a strict standard... of demonstrating his entitlement to summary judgment." Kakadelis v. DeFabritis, 191Conn. 276, 282 (1983) (Internal quotation marks omitted.).

         Summary judgment may be granted where the claim is barred by the statute of limitations. Doty v. Mucci, 238 Conn. 800, 806 (1996). " Summary judgment is proper where the affidavits do not set forth circumstances which would serve to avoid or impede the normal application of the particular limitations period." LaBow v. Rubin, 95 Conn.App. 454, 471 (2006). Summary judgment in favor of the, Defendant is properly granted if the, Defendant and its motion raises at least one legally sufficient defense that would bar the, Plaintiffs claim and involves no triable issues of fact." Serrano v. Burns, 248 Conn. 419, 424 (1999) (Internal quotation marks omitted).

         NO GENUTNE ISSUES OF MATERIAL FACT

         The court finds that there are no genuine issues concerning the following material facts. The, Defendants were signatories to the Limited Partnership Agreement (LPA) and the, Plaintiffs predecessor in interest was a signatory to the LPA. There is no genuine issue of material fact as to the contents of the LPA. The limited partnership was a Delaware limited partnership formed for the purpose of investing and trading securities and other investments. The limited Partnership's principal place of business was Greenwich, Connecticut. Both, Defendants were residents of the State of Connecticut. Both, Defendants acquired limited partnership interests and became limited partners in the limited partnership when it was formed in 2007. Both, Defendants redeemed their investments in early 2008 and withdrew from the partnership as of March 31, 2008. Demand has been made on both, Defendants for return of the alleged ...


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