Schiff v. MAO, Inc.
| Docket Number: | 2009-CA-00798-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 03-30-2010 Opinion Author: Irving, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Fraud - Claim by individual shareholder - Party to contract Judge(s) Concurring: King, C.J., Lee and Myers, P.JJ., Griffis, Barnes, Ishee, Roberts and Maxwell, JJ. Non Participating Judge(s): Carlton, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - TORTS OTHER THAN PERSONAL INJURY & PROPERTY DAMAGE |
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| Trial Court: |
Date of Trial Judgment: 04-28-2009 Appealed from: Jackson County Circuit Court Judge: Kathy King Jackson Disposition: GRANTED DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Case Number: CI-2005-00,191(2) |
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| Note: | Due to a military leave of absence, Hon. Virginia C. Carlton did not participate in this hand down. | |
| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | PETER SCHIFF AND NEW WAVE LIMITED |
MICHAEL L. FONDREN |
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| Appellee: | MAO, INC. AND MARVIN A. ORNSTEIN | THOMAS L. MUSSELMAN | ||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Fraud - Claim by individual shareholder - Party to contract |
| Summary of the Facts: | In 1994, New Wave Limited, a corporation owned by Peter Schiff, invested three hundred thousand dollars, which allegedly came from Schiff, in a casino investment that had been proposed to Schiff by Marvin Ornstein, who owned MAO, Inc. According to Schiff, he created New Wave Limited, at Ornstein’s urging, to handle the three-hundred-thousand-dollar transaction. New Wave Limited was incorporated under the sovereignty of the Caribbean island nation of Nevis. Thereafter, New Wave Limited and MAO entered into a contract for the exchange of the three hundred thousand dollars. Apparently the casino investment did not come to fruition, and Schiff’s three hundred thousand dollars were never returned to him. New Wave Limited was dissolved by Nevis for nonpayment of fees. Apparently, no action was ever taken by Schiff to revive the corporation. Schiff and New Wave Limited filed a complaint against Ornstein and MAO, alleging that Ornstein and MAO had defrauded Schiff out of the three hundred thousand dollars. The circuit court granted MAO and Ornstein’s motion for summary judgment. Schiff appeals. |
| Summary of Opinion Analysis: | Schiff was never a party to the agreement that forms the basis of his fraud claim. An individual shareholder can bring suit only if there is a breach of a duty that is owed to the shareholder personally. Neither MAO nor Ornstein owed any such duty to Schiff personally. Therefore, the only party that could possibly sustain a cause of action against MAO or Ornstein is New Wave Limited. New Wave Limited was dissolved in December 1996 due to nonpayment of fees and had no ability to file suit as of December 2002. Schiff filed suit against MAO and Ornstein in 2005, nine years after New Wave Limited was dissolved. Accordingly, the circuit court was correct in finding that neither Schiff nor New Wave Limited was a proper party to the lawsuit against MAO and Ornstein. Schiff was not a party to the contract giving rise to the alleged fraud claim, and the time period had long since passed when a lawsuit could have been legitimately filed by New Wave Limited. |
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