SARA LIOI, District Judge.
Before the Court are the following motions to dismiss the third-party complaint filed by Ciuni & Panichi, Inc. ("C&P"), Lynn A. Basconi, Robert J. Smolko, and Charles M. Ciuni (collectively, the "Ciuni defendants"):
The Ciuni Defendants filed an omnibus opposition to all of these motions (Doc. No. 220 ["Opp'n"]) and most movants filed a reply, as indicated in the listing of motions above.
For the reasons and to the extent set forth herein, the motions to dismiss the third-party complaint are all granted.
On February 26, 2016, acting in its capacity as Liquidating Agent for G.I.C. Federal Credit Union ("GIC"), the NCUA Board filed a complaint against the Ciuni defendants, seeking to recover damages relating to a massive, multi-year fraud committed by William Memmer ("Memmer")
The Ciuni defendants filed a counterclaim, as amended, seeking a declaratory judgment "as to the rights of C&P and the responsibilities of [GIC], its employees, officers, committees, directors, and members under [] letters of engagement [between C&P and GIC]." (Doc. No. 10, Counterclaim ¶ 12.) The counterclaim also sought to hold the NCUA Board liable for GIC's breach of contract. On the NCUA Board's motion, by order dated March 30, 2017, this Court dismissed the counterclaims, determining that there was no subject matter jurisdiction because the counterclaims had not been first presented as administrative claims under the relevant statute. (See Doc. No. 109.)
The Ciuni defendants also filed the third-party complaint that is now the subject of motions to dismiss.
All the movants
The Ciuni defendants are claiming that the third-party defendants "recklessly and intentionally induced C&P to enter into the engagement [with GIC] knowing C&P would rely upon the representations and omissions of the Third-Party Defendants." (Doc. No. 11, Third-Party Complaint ["TP. Compl."] ¶ 12.) The implication is that, had the third-party defendants not wrongfully induced C&P to enter into a contract with GIC, the Ciuni defendants would never have been in the predicament of having been sued by the NCUA Board. Therefore, if the Ciuni defendants are found liable to the NCUA Board on its complaint, the Ciuni defendants are looking to hold someone else responsible.
Although the third-party complaint sets forth several separate contract and tort counts,
"As a general rule, . . . directors and officers of a corporation cannot be held personally liable for the corporation's acts . . ., unless unusual circumstances justify disregarding the corporate entity." Olympic Forest Prods., Ltd. v. Cooper, 148 F. App'x 260, 263 (6th Cir. 2005). Under Ohio law, "[t]he corporate form may be disregarded and individual [directors or officers] held liable for wrongs committed by the corporation when (1) control over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal act against the person seeking to disregard the corporate entity, and (3) injury or unjust loss resulted to the plaintiff from such control and wrong." Belvedere Condo. Unit Owners' Ass'n v. R.E. Roark Cos., Inc., 617 N.E.2d 1075 (Ohio 1993), syllabus ¶ 3.
The Ciuni defendants have alleged no facts that would support piercing the corporate veil.
Federal law expressly eliminates the jurisdiction of any court to consider "any claim relating to any act or omission" of a credit union being liquidated by the NCUA Board. 12 U.S.C. § 1787(b)(13)(D)(ii). To the extent the third-party claims are actually claims against GIC, they have been waived because there is nothing in the third-party complaint to suggest that the Ciuni defendants properly brought them as administrative claims.
Therefore, to the extent the third-party claims could be construed as brought against GIC or the NCUA Board, they are barred due to failure to exhaust administrative remedies, a failure that now renders any such claims waived.
To the extent the Ciuni defendants are attempting to seek relief from the individual third-party defendants for any alleged breach of contract, promissory estoppel, tortious interference with contract, negligence, and gross negligence, they also lack standing.
The movants correctly argue that, once a federally-insured credit union is liquidated and put under the control of the liquidating agent, only that agent has standing to pursue claims against former officers and directors for alleged breaches of their duties. Under 12 U.S.C. § 1787(b)(2), the liquidating agent succeeds to "all rights, titles, powers, and privileges of the credit union, and of any member, accountholder, officer, or director of such credit union with respect to the credit union and the assets of the credit union."
Thus, to the extent the third-party claims could be construed as claims against GIC, acting through its officers and directors, the Ciuni defendants lack standing to pursue such claims.
Accordingly, Counts III through VII of the third-party complaint must be dismissed.
In the context of their argument on standing, the Ciuni defendants assert that they are seeking damages against the third-party defendants, not for injury to GIC, but for their own losses. (Opp'n at 6902.) They argue that "[t]o suggest that an aggrieved party has no remedy for its own loss as against [] malfeasors would mean that no one ever would[.]" (Opp'n at 6902.)
In its complaint, the NCUA Board is attempting to hold the Ciuni defendants liable for having allegedly breached their professional duties, resulting in significant injury and loss to the now-defunct GIC and its insurer. The Ciuni defendants claim that, if they are found liable to the NCUA Board, they are entitled in indemnification and contribution from the third-party defendants, whose alleged breaches of duty would have caused the Ciuni defendants' liability.
These claims are premature. Under Ohio law, "a cause of action for contribution does not accrue until the joint tortfeasor has paid more than [its] proportionate share of liability." McPherson v. Cleveland Punch & Shear Co., 816 F.2d 249, 250-51 (6th Cir. 2987) (citing Nat'l Mut. Ins. Co. v. Whitmer, 435 N.E.2d 1121, 1123-24 (Ohio 1982)). The same is true for indemnity. Midwest Specialties, Inc. v. Crown Indus. Prods. Co., 940 F.Supp. 1160, 1168 (N.D. Ohio 1996) ("Under Ohio law, a party seeking indemnity and/or contribution may recover only the amount it has paid in excess of its proportional share of the obligation. The right to indemnity and/or contribution becomes complete and enforceable only upon a payment by the claimant satisfying the whole of the obligation." (citing Whitmer, 435 N.E.2d at 1123-24)). Since the Ciuni defendants have not yet been found liable to the NCUA Board, the claims, if viable, have not yet accrued. Additionally, since they are state common law claims, and since they have been stayed for the better part of two years
For the reasons set forth herein, the motions to dismiss the third-party complaint are granted as follows: Counts III through VII of the third-party complaint are dismissed with prejudice as barred by both lack of standing and failure to exhaust administrative remedies; Counts I and II are dismissed without prejudice as not ripe.