STATE OF NEW YORK

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.