SUPREME COURT : COUNTY OF CHAUTAUQUA
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DANIEL C. WEINSTEIN,
Plaintiff,
-vs-
KEYWELL CORPORATION, A MICHIGAN
CORPORATION; JOEL D. TAUBER;
MORTON B. PLANT; ARNOLD I. PLANT;
RICHARD D. ODLE; JOHN MARK LOZIER;
KENNETH A. DISHELL; AND JEFFREY
O'HARA,
Defendants.
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KEYWELL CORPORATION,
Plaintiff,
-vs- Consolidated Index No.H-07185
DANIEL C. WEINSTEIN;
ANTHONY BOSCARINO; AND
VAC AIR ALLOYS CORP.,
Defendants.
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ANTHONY BOSCARINO,
Plaintiff,
-vs-
KEYWELL CORPORATION, A MICHIGAN
CORPORATION; JOEL D. TAUBER;
MORTON B. PLANT; ARNOLD I. PLANT;
RICHARD D. ODLE; JOHN MARK LOZIER;
KENNETH A. DISHELL; AND JEFFREY
O'HARA,
Defendants.
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DANIEL C. WEINSTEIN,
Plaintiff,
-vs-
KEYWELL CORPORATION; JOEL D. TAUBER;
MORTON D. PLANT; RICHARD D. ODLE;
AND JOHN MARK LOZIER,
Defendants & Third Party Plaintiffs,
-vs-
VAC AIR ALLOYS CORP.; AND
ANTHONY BOSCARINO,
Third Party Defendants.
THORP, REED & ARMSTRONG
(Thomas E. Lippard, Esq.
of Counsel) for Weinstein
PIPER & MARBURY
(Joseph G. Finnerty, Jr.,
Esq. of Counsel) Co-Counsel
for Keywell Corp.
CHARLES EDWARD FAGAN, ESQ.
Counsel for Keywell
PHILLIPS, LYTLE, HITCHCOCK,
BLAINE & HUBER
(Jeremiah J. McCarthy, Esq.
of Counsel) for Boscarino
and Co-Counsel for Weinstein
DECISION AND ORDER
GERACE, J.
Plaintiff Weinstein and third party defendant
Boscarino have moved for summary judgment dismissing
Keywell's claims for breach of fiduciary duty. Keywell has
moved for leave to reargue/renew motions which resulted in
this Court's July 24, 1995 Decision and Order.
THE WEINSTEIN, BOSCARINO MOTION
After the 1987 purchase of Vac Air by Keywell,
Weinstein and Boscarino were employed by Keywell as
corporate officers and employees. As such, they owed a
fiduciary duty to Keywell and its other shareholders.
That duty included revealing to Keywell any
significant problems they were aware of at Vac Air that
could drastically affect the viability of the corporations;
this included knowledge of any potential TCE problem.
"The directors and officers of a corporation
occupy a fiduciary, or more exactly a quasi-fiduciary,
relation to the corporation and its stockholders.
They are bound by all those rules of conscientious
fairness, morality, and honesty in purpose which the
law imposes as guides for those who are under the
fiduciary obligations and responsibilities, and they
are held, in official action, to the extreme measure
of candor, unselfishness, and good faith. An officer
or director must perform his duties in good faith and
with that degree of care which an ordinarily prudent
person in a like position would use under similar
circumstances. He must be scrupulous in such
performance, and he must act at all times in the
interests of the corporation and the stockholders... .
Indeed, the officers and directors of a corporation
are, in substance and in effect, trustees for the
corporation and for its stockholders; it has been
said that at least they occupy a position of partial
trust." (Case citations omitted.) 15 NY Jur 2d 993
247.
Weinstein and Boscarino contend that the claim for
breach of that duty must be dismissed because of a lack of
causal relationship between the breach and Keywell's
damages.
They argue that because all the cleanup costs relate
to the presence of TCE on the Vac Air premises before the
Keywell acquisition was effective, they had no fiduciary
relationship or duty at that time; that as soon as it
acquired Vac Air's assets, Keywell also incurred liability
for the TCE clean-up, regardless of any subsequent breach
of fiduciary duty.
Keywell counters that had Weinstein and Boscarino
informed Keywell of the extent and nature of the onsite
dumping and burial that Keywell could have decreased its
damages by initiating remediation.
As there is a question of fact whether Weinstein and
Boscarino breached that duty, and a question as to the
damages sustained as well as the causal relationship
between the tort and damages, the Court cannot grant their
motion for summary judgment on this cause of action.
KEYWELL'S MOTION
The doctrine of collateral estoppel does not bar this
Court from revisiting the decision of the Second Circuit
Court of Appeals which held that the question of reasonable
reliance in Keywell's fraud claim was a jury question.
The denial of a motion for summary judgment
establishes nothing except that summary judgment is not
warranted at the time of the motion. DAVID D. SIEGEL, NEW
YORK PRACTICE, section 287, citing PURO V. PURO, 79 AD2d
925, 434 NYS2d 424; SACKMAN-GILLILAND CORP v SENATOR
HOLDING CORP, 43 AD2d 948, 351 NYS2d 424.
It merely determines that a fact issue is involved and
does not even establish the law of the case. See 6 CARMODY-
WAIT 2d, Section 39:39 and HAMMOND v. INTERNATIONAL PAPER
CO., 178 AD2d 798, 577 NYS2d 526.
The nuisance claims were before this Court. As for the
question of misrepresentation and damages, this Court holds
to its prior July 1995 decision, but, even giving Keywell
the benefit of its argument, the findings would not have
been necessary for the Court's Decision.
The motion of Weinstein and Boscarino for summary
judgment dismissing Keywell's claims for breach of
fiduciary duty is denied.
Keywell's motion for leave to reargue/renew motions
which resulted in this Court's July 24, 1995 Decision and
Order is likewise denied.
THIS IS THE DECISION AND ORDER OF THIS COURT. NO
FURTHER ORDER SHALL BE NECESSARY, EXCEPT THAT DEFENDANT
KEYWELL MUST SUBMIT FOR THE APPROVAL AND FILING BY THIS
COURT OF A LIST OF THE PAPERS SUBMITTED BY BOTH PARTIES ON
THIS MOTION.
Dated: November , 1995
Mayville, New York
____________________________
JOSEPH GERACE
Supreme Court Justice
To all Counsel:
Please take notice that a DECISION and ORDER of
which the within is a copy, is duly granted in the above
entitled action on the day of , 1995, and
duly entered in the office of the Clerk of the County of
Chautauqua on the same date.