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NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
M2 WORLDWIDE, LLC et al.,
Civil Action No. 12-1059 (SRC)
OPINION & ORDER
CHESLER, District Judge
This motion comes before the Court on the motion to dismiss the First Amended
Complaint (“FAC”) by Defendants Michael Kalfus and Robin Kalfus (collectively,
“Defendants”). For the reasons stated below, the motion will be granted in part and denied in
In brief, this case arises from a dispute over alleged misappropriation of three market
analysis methods created by Plaintiff Albert Kenney (“Plaintiff”). This matter was removed to
this Court from the Superior Court of New Jersey on February 22, 2012. Plaintiff subsequently
sought leave to file an amended complaint, which was granted. The FAC asserts seven claims:
1) tortious interference with prospective economic advantage; 2) misappropriation of trade
secrets, pursuant to N.J.S.A. § 56:15-1; 3) breach of contract; 4) fraud in the inducement; 5)
fraud; 6) declaratory judgment; and 7) conversion. Defendants now move to dismiss this
pleading. The FAC alleges that Michael Kalfus and Robin Kalfus are the sole members of
Defendant M2 Worldwide, LLC, a limited liability corporation organized under the laws of the
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State of New Jersey.
Defendants first move to dismiss the FAC on the ground that New Jersey law shields the
owners of a LLC from personal liability for acts performed in their roles as members of a LLC.
As Plaintiff contends, this is incorrect. In Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 303
(2002), the New Jersey Supreme Court held: “the essence of the participation theory is that a
corporate officer can be held personally liable for a tort committed by the corporation when he or
she is sufficiently involved in the commission of the tort.” The FAC alleges that Defendants
were both personally involved in the commission of various torts against Plaintiff. Plaintiff has
pled sufficient facts to support viable claims against Defendants for personal liability for acts
performed in their roles as corporate officers, pursuant to Saltiel.
In reply, Defendants argue that the FAC asserts no tort claims, but only contract claims.
This does not fit the FAC, which does not allege a written contract and plainly asserts most
claims under tort theories. Indeed, only one count asserts a breach of contract claim against the
LLC. The remaining counts assert claims based on fraud, misappropriation of trade secrets,
tortious interference, and conversion. At this stage, this Court cannot conclude that “[t]he
dispute clearly arises out of and relates to the contract and its breach.” Wasserstein v. Kovatch,
261 N.J. Super. 277, 286 (N.J. Super. Ct. App. Div. 1993).
Defendants next argue that the fraud claims must be dismissed for failure to meet the
particularity requirement of Federal Rule of Civil Procedure 9(b). Defendants are correct that the
FAC fails to make any factual allegations to support any fraud claims against Robin Kalfus.
Defendants’ reply brief argues only that the the FAC fails to state sufficient facts to support fraud
It is not clear on what theory Count Six, the declaratory judgment claim, is predicated.
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claims against Robin Kalfus, and it does not continue to support the argument that the fraud
claims against Michael Kalfus are insufficient under Rule 9(b). The FAC pleads facts with
sufficient particularity to support fraud claims against Michael Kalfus, but not Robin Kalfus. As
to the fraud claims against Robin Kalfus, the motion to dismiss will be granted in part, and Count
Five will be dismissed without prejudice. The motion to dismiss the FAC will otherwise be
For these reasons,
IT IS on this 11th day of July, 2013, hereby
ORDERED that Defendants’ motion to dismiss the First Amended Complaint (Docket
Entry No. 48) is GRANTED in part and DENIED in part; and it is further
ORDERED that, as to Count Five against Robin Kalfus only, the motion to dismiss is
GRANTED, and Count Five against Robin Kalfus is hereby DISMISSED without prejudice;
and it is further
ORDERED that, as to all other counts in the First Amended Complaint, the motion to
dismiss is DENIED.
s/ Stanley R. Chesler
Stanley R. Chesler, U.S.D.J