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Beach v. Touradji Capital Mgt., LP
Citations: 142 A.D.3d 442; 36 N.Y.S.3d 637Docket: 603611/08 1210 1209
Court: Appellate Division of the Supreme Court of the State of New York; August 11, 2016; New York; State Appellate Court
Original Court Document: View Document
In the case of Beach v. Touradji Capital Management, LP, the New York Appellate Division modified a Supreme Court order regarding counterclaims made by Touradji Capital Management against Gentry T. Beach and others. The court partially denied Touradji's motion to amend its counterclaims, specifically rejecting the addition of allegations concerning Robert Vollero's conversation with Beach’s lawyer, claims of document destruction, and a new counterclaim for tortious interference related to a contract between Touradji and nonparty Benjamin Bram. The court affirmed that the new tortious interference counterclaim related back to the original counterclaims, which had sufficiently notified the plaintiffs of the allegations regarding false statements about Touradji’s dealings with Amaranth. However, the court found the amended counterclaims insufficient in alleging that Vollero induced Bram to breach his contract or conspired with Beach. Additionally, the breach of fiduciary duty counterclaim linked to violations of Regulation M has a three-year statute of limitations, contrary to the counterclaim plaintiffs’ assertion of a six-year limit. The court allowed this statute of limitations argument to be raised on appeal but dismissed the claim that the counterclaim accrued only upon settling with the SEC, as it relied on external facts not present in the record. Counterclaim plaintiffs' argument for tolling the statute of limitations from June 21, 2010, to September 26, 2013, was rejected, as the Rule 105 allegation did not relate back to the original counterclaims, which failed to inform plaintiffs of the relevant transaction. The allegation, however, does relate back to plaintiffs' own complaint concerning the Haynesville Shale investment. Plaintiffs' securities regulation violation, which led to penalties against their employer, was determined to be against the employer's interests. Allegations regarding Vollero's destruction of handwritten notes in favor of plaintiffs were deemed sufficient to support a breach of fiduciary duty, but Touradji Capital could not assert this against Beach due to attorney-client privilege related to Vollero's representation. The court's view that Vollero's conversation with Gentry's lawyer was privileged and did not breach fiduciary duty was upheld. The court was correct in treating the spoliation counterclaim as a motion for sanctions, as prior motions left the door open for lesser sanctions. The amendment of the defamation counterclaim was denied due to insufficient details on the statements' location, but plaintiffs were not prejudiced by changes to the counterclaims. The motion court acted within its discretion by not imposing additional discovery costs on the counterclaim plaintiffs. This ruling was officially recorded on August 11, 2016, by the Supreme Court, Appellate Division, First Department.