Diamond v. SLD 500 LLC
- P. Castel
- 1:21-cv-02604
- U.S. District Court · Southern District of New York
- 3
In Diamond v. SLD 500 LLC, Judge Castel granted Scott Diamond and SLD 500 LLC judgment on the pleadings, ending plaintiffs’ two contract claims.
Warren Diamond and Faith Diamond’s two contract-based claims were foreclosed; Scott Diamond and SLD 500, LLC received judgment, and the case was closed.
What happened
In Diamond v. SLD 500 LLC, Warren Diamond and Faith Diamond, as trustee of the Diamond Trust, brought two contract-based claims against Scott Diamond and SLD 500, LLC. The claims alleged that Scott Diamond and SLD 500 were responsible for a breach involving monthly distributions under Paragraph 3(d) of an agreement.
The defendants argued that Paragraph 3(d) required 500 Lincoln, LLC—not Scott Diamond or SLD 500—to make the distributions. They also argued that Scott’s obligations ended when he was removed as trustee and that the plaintiffs had not alleged facts supporting liability by disregarding the companies’ separate legal status. The plaintiffs did not file an opposition to the motion.
The court granted the defendants’ motion for judgment on the pleadings, concluding that the agreement foreclosed the plaintiffs’ claims. Judge Castel directed the Clerk to enter judgment for the defendants and close the case. The court did not address the defendants’ arguments about the liquidated-damages provision.
The detailed version
- Diamond v. SLD 500 LLC · No. 1:21-cv-02604
- P. Castel
- May 30, 2024
Background
The plaintiffs asserted two contract-based claims against Scott Diamond and SLD 500, LLC. The claims sought to impose liability on those defendants for an alleged breach of Paragraph 3(d) of an agreement. In an earlier opinion and order in this case, the court interpreted the agreement and concluded that the plaintiffs’ claims were foreclosed. The court then directed the defendants to file a formal motion for judgment on the pleadings.
The defendants filed that motion under Rule 12(c) of the Federal Rules of Civil Procedure. The plaintiffs requested, and received, additional time to respond, but filed no opposition by the extended deadline.
Arguments and analysis
The defendants argued that Paragraph 3(d) required 500 Lincoln, LLC to make monthly automatic distributions from the Lincoln Citi Account, and did not impose that obligation on Scott Diamond or SLD 500. They also argued that Scott Diamond had authority to direct payments to the Diamond Trust while he remained a trustee, but had no continuing obligation under Paragraph 3(d) after his removal as trustee. Finally, they argued that the plaintiffs could not hold Scott or SLD 500 liable for allegedly causing 500 Lincoln to breach the agreement because the plaintiffs had not alleged facts supporting disregard of the companies’ separate legal status, commonly called piercing the corporate veil.
The court explained that the standard for a Rule 12(c) motion is the same as the standard for a motion to dismiss for failure to state a claim under Rule 12(b)(6). Under that standard, a complaint must contain enough factual matter to state a claim that is plausible on its face. The court agreed with the defendants’ arguments and relied on its prior, “definitive and final interpretation” of the agreement. It concluded that neither Scott Diamond nor SLD 500 could be held liable for a breach of the agreement.
Disposition
The court GRANTS the defendants’ motion for judgment on the pleadings. It directed the Clerk to terminate the motion, grant judgment for the defendants, and close the case. Because the court concluded that the plaintiffs’ contract claims were foreclosed, it did not address the defendants’ arguments concerning the enforceability of the liquidated-damages clause. Judge Castel signed the order on May 30, 2024.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.