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Lupis v. Bonino

March 31, 2010


The opinion of the court was delivered by: Reggie B. Walton United States District Judge

Memorandum Opinion

The plaintiff, Cascina Ca de Lupis, S.r.l. ("Cascina"), has filed this lawsuit accusing defendants Calita Corporation ("Calita"), and Roberto Donna ("Donna") of Fraud, Conversion, Conspiracy, and Unjust Enrichment.*fn1 The plaintiff seeks damages in an amount equal to the full value of the wines that it exported to former defendant Corrado Bonino ("Bonino"), and for which it did not receive payment. In addition, the plaintiff seeks punitive damages, pre-and post-judgment interest, costs, and attorney fees. Finally, the plaintiff seeks judicial intervention to compel the defendants to provide an accurate accounting of their records so that the plaintiff may review what wines the defendants obtained from the plaintiff, what wines were sold to third parties, and the funds acquired from those sales. Currently before the Court is defendant Donna's motion for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) and his accompanying Memorandum of Law In Support of Defendant Roberto Donna's Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6) (Def.'s Mem.).*fn2 The motion is opposed by the plaintiff. After carefully considering the parties' submissions, the Court concludes that it must deny in part and grant in part the defendant's motion to dismiss.

I. Background

The following facts are alleged in the plaintiff's Second Amended Complaint ("Am. Compl."). From September 2005 through June 2006, the plaintiff, an Italian company that exports high quality Italian wines to the District of Columbia, employed Corrado Bonino to assist the plaintiff in the importation and sale of its wines to restaurants in the District of Columbia and the surrounding area. Am. Compl. ¶¶ 1, 10, 12. During Bonino's employment, he contracted with Vini, Inc ("Vini"), a licensed wine importer, to enable the plaintiff's wines to be lawfully imported into the United States. Id. ¶ 14. The plaintiff exported wines valued at more than $600,000 to Bonino, and Bonino, through the Calita Corporation, a corporation organized and wholly owned by Bonino, then sold and distributed the wines to various purchasers in the United States. Id. ¶¶ 1, 5, 10, 12. Importantly, most of the wines were purportedly sold and delivered to the Galileo restaurant, a District of Columbia establishment owned and operated by defendant Donna. Id. ¶¶ 6, 19.

Sometime on or before December 31, 2005, without the plaintiff's knowledge or authorization, Bonino and Donna entered into an agreement which allowed Donna to pay Bonino less than the amount due for the purchase of the plaintiff's wines, in return for Bonino continuing to supply the plaintiff's wines to Donna. Id. ¶¶ 1, 22, 36. Donna would then sell these wines for a profit at both Galileo and a second restaurant he owned, Trattoria Beppo ("Trattoria"). Id. ¶¶ 22, 36. Furthermore, Bonino allegedly received an ownership interest in Trattoria. Id. ¶ 36. Between December 2005 and August 2006, Vini and Bonino provided in excess of $450,000 of the plaintiff's wines to Donna for his use at Galileo. Id. ¶ 19. Donna, aware that the proceeds from the sale of the wines would not be transmitted to the plaintiff, issued a series of checks payable to cash to Bonino and the Calita Corporation. Id. ¶¶ 5, 25, 27, 42, 43, 46. The checks issued by Donna to Bonino and Calita totaled $257,900, which was allegedly substantially less than the value of the wines supplied by the plaintiff to Bonino. Id. ¶¶ 26, 42, 46.

Additionally, the plaintiff alleges that between September 2005 and August 2006, Bonino directed Vini to pay him, through Calita, $57,000 from the sale of the wines , which the plaintiff should have received. Id. ¶ 28. Bonino represented to Vini that he was forwarding these payments to the plaintiff, when in fact the payments were retained by Bonino. Id. ¶¶ 29, 30. On September 27, 2006, upon learning of Bonino's actions, the plaintiff fired Bonino as its consultant and subsequently filed this lawsuit. Id. ¶ 32.

At the time of filing this complaint, the plaintiff alleged that it had been paid only $185,849 for the wines that were exported to the United States, leaving an outstanding balance of $415,666.80. Id. ¶ 11.

II. Standard of Review

A motion to dismiss under Federal Rule of Civil Procedure "12(b)(6) tests not whether the plaintiff will prevail on the merits, but instead whether the plaintiff has properly stated a claim" upon which relief may be granted. Woodruff v. DiMario, 197 F.R.D. 191, 193 (D.D.C. 2000). For a complaint to survive a Rule 12(b)(6) motion, it need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), which accomplishes the duel objectives of "giv[ing] the defendant fair notice of what the claim is and the grounds upon which it rests," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). "Although detailed factual allegations are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the grounds of entitlement to relief, [the] plaintiff must furnish more than labels and conclusions or a formulaic recitation of the elements of a cause of action." Hinson ex rel N.H. v. Merritt Educational Ctr., 521 F. Supp. 2d 22, 27 (D.D.C. 2007) (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 555). Or, as the Supreme Court more recently stated, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). And, a claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556). Moreover, under Rule 12(b)(6), the Court "must treat the complaint's factual allegations as true [and] must grant [the] plaintiff the benefit of all reasonable inferences [that can be derived] from the facts alleged." Trudeau v. FTC, 456 F.3d 178, 193 (D.C. Cir. 2006) (internal quotation marks and citation omitted). Finally, in resolving a Rule 12(b)(6) motion, the Court may consider only the factual allegations set forth in the complaint, any documents attached as exhibits with the complaint (or incorporated into the complaint), and matters subject to judicial notice. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997). The Court's focus is therefore restricted to the facts as alleged by the plaintiff[], which must be sufficient "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.

III. Analysis

As an initial matter, defendant Donna argues that because the plaintiff fails to allege that "Donna in his personal capacity, did, or could have, directly contracted with [the p]laintiff for the importation of the wine[s]," the plaintiff is unable to support any of his claims for relief against Donna, Def.'s Mem. at 6, and all claims against him must be dismissed, Id. at 5. Specifically, the defendant states that because he is not licensed to import wine as required by D.C. Code § 25-772(a) (2001), he "could not have lawfully purchased and resold the wine[s] in question[, and instead posits that t]he wine[s] could only have been lawfully purchased and resold by SER Corporation," which was doing business as Galileo, or the wine importer, Vini, Inc. Id. at 7. Consequently, because SER Corporation and Vini are not parties to this action and the defendant Donna "could not incur any legal obligation or duty to pay for the wine[s] [in his personal capacity]," defendant Donna argues that the plaintiff has failed to satisfy the requirements of Rule 12(b)(6). Id. at 7. The Court finds the defendant's arguments unpersuasive.

The District of Columbia Circuit held that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the "plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Accordingly, a court will construe a complaint "liberally in the plaintiff['s] favor, and . . . grant [the] plaintiff[] the benefit of all inferences that can be derived from the facts alleged". Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994) (internal citations omitted).

Here, the claims being asserted by the plaintiff do not question the propriety of the importation of the wines, but instead focus upon the circumstances under which the wines were sold after its importation. Am. Compl. ¶¶ 22, 36, 60, 66, 72. Therefore, defendant Donna's general challenge to the complaint is inapplicable to the present circumstances because his D.C. Code § 25-772(a) challenge has no bearing on whether he is liable based on the claims asserted by the plaintiff, and so long as the plaintiff's complaint alleges facts which would entitle him to relief, the defendant's motion to dismiss must be denied. Accordingly, the Court will proceed to examine whether the plaintiff has met its burden under each count asserted in its Second Amended Complaint.

A. The Plaintiff's Fraud Claim

The defendant argues that the plaintiff "fails to plead with sufficient particularity all the required elements for a claim for fraud." Def.'s Mem. at 8. In support of this position, the defendant posits that "the Second Amended Complaint fails to sufficiently allege that [the defendant's] allegedly false representation [to the plaintiff that all of the wines were exclusively being used by him at Galileo] was given with an intent to deceive, concerned a material fact, and that [the plaintiff] took action in reliance thereupon." Id. Notably, the defendant fails to address, in both his motion to dismiss and his reply to the plaintiff's opposition, the plaintiff's claim regarding Bonino's false representations to the plaintiff that "all monies obtained for the sale of Cascina wine[s] in the United States would be and were being forwarded to Cascina," Am. Compl. ¶ 20, a statement Donna allegedly knew was false. Id. ¶ 42.

The plaintiff counters that it has satisfied the pleading requirements by adequately identifying the alleged perpetrator of the fraud, when the fraudulent statements were made, the nature of the statements, and what injury the plaintiff sustained as a result of the statements. Plaintiff's Response to Defendant Roberto Donna's Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)6 ("Pl.'s Opp'n") at 3.*fn3 The plaintiff asserts that the fraud claim against Donna stems from his role in the conspiracy with Bonino to defraud the plaintiff, thus, rendering Donna liable for Bonino's fraudulent statements and actions. Id. As additional support for its fraud claim, the plaintiff alleges that Bonino is a long time friend and confidant of Donna, Am. Compl. ¶ 7, Bonino and Donna allegedly have a longstanding business relationship with each other "in conjunction" with both Galileo and Trattoria, and "Calita's principal place of business is listed as Galileo Restaurant." Id. Therefore, the plaintiff argues that "liability for fraudulent statements made by Bonino can be imposed on [the defendant]." Pl.'s Opp'n at 4.

The defendant responds that the plaintiff is seeking to solve the defects in his fraud claim by improperly interweaving it with its conspiracy claim. Reply Memorandum to "Plaintiff's Response to defendant Roberto Donna's Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)[(6)]" (Def.'s Reply) at 2-3. The defendant also asserts that the plaintiff's arguments are insufficiently supported and inaccurate, which he contends further "highlights the deficiencies in [the plaintiff's] Second Amended Complaint." Id. For the following reasons, the Court disagrees with the defendant.

To prevail on a claim of fraud, the plaintiff must establish that there was "(1) a false representation (2) made in reference to a material fact, (3) with knowledge of its falsity, (4) with the intent to deceive, and (5) an action that is taken in reliance upon the representation." Pearson v. Chung, 961 A.2d 1067, 1074 (D.C. 2008) (internal quotation marks and citation omitted). Additionally, "the plaintiff must also have suffered some injury as a consequence of his reliance on the misrepresentation." Chedick v. Nash, 151 F.3d 1077, 1081 (D.C. Cir. 1998) (internal citation omitted). "A false representation is 'an assertion not in accord with the facts[,' including t]he concealment of a fact that should have been disclosed." Sage v. Broad. Publ'ns, Inc., 997 F. Supp. 49, 52 (D.D.C. 1998) (internal citation omitted). "[The] materiality requirement is met if the matter at issue is 'of importance to a reasonable person in making a decision about a particular matter or transaction.'" U.S. v. Philip Morris USA Inc., 566 F.3d 1095, 1122 (D.C. Cir. 1996) (internal citation omitted).

Furthermore, a person who "is not a party to the transaction into which the complainant is induced" may also be charged with fraud, "particularly where such third person profits from the fraud and retains the benefits thereof." 37 Am. Jur. 2d Fraud and Deceit ยง 304 (2010). In other words, "[a] transaction is not purged of fraud by showing that it was brought about by a third person." Id.; accord Abrams v. Roseth Corp., 292 N.Y.S. 445, 446 (N.Y. App. Div. 1937) (holding that when third-party defendants "joined with the defendants . . . in said fraud and deprived the plaintiff of his commissions [and] kept and received ...

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