2017 03:35 pm

4095370

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ALBANY --------------------------------------------------------------------X BELAIR CARE CENTER, INC., et al. Index No.: 901476/20141 Plaintiffs, REPLY AFFIRMATION OF -against- LEE E. BERGER IN FURTHER SUPPORT COOL INSURING AGENCY, Inc., et al. OF HUB’S MOTION TO

DISMISS THE AMENDED Defendants. COMPLAINT

--------------------------------------------------------------------X

LEE E. BERGER, an attorney duly admitted to practice law in the State of New York,

affirms the following under the penalties of perjury:

1. I am a member of the law firm of Kaufman Borgeest & Ryan LLP, attorneys for

Defendants HUB International Northeast Limited, HUB International Group Northeast Inc., and

HUB International Limited (collectively where applicable, “HUB”) and, as such, I am fully familiar

with the facts and circumstances of this matter based upon a review of the file maintained by

Your Affirmant’s office.

2. I submit this Reply Affirmation in further support of HUB’s Motion to Dismiss the

Amended Complaint pursuant to CPLR §§ 3211(a)(1), (a)(5), (a)(7), and (c)2 and in response to

Plaintiffs’ Affirmation in Opposition to the instant motion.

3. Specifically, this motion is made on the grounds that: (1) Plaintiffs’ claims in their

entirety are untimely as to HUB; (2) the “Relation Back” Doctrine is inapplicable and cannot

save Plaintiffs’ untimely claims; and (3) Plaintiff has failed to state a cause of action for

conversion, unjust enrichment, violation of General Business Law § 349, violations of the

1 The parties were given a new Index Number when this matter was converted to an E-filing case. This Motion

was initially filed under this matter’s original Index Number, 1476/2014. 2 Plaintiffs’ Opposition claims that they were not appropriately put on notice of the portion of HUB’s Motion

pursuant to CPLR § 3211(c). This contention is inaccurate as Plaintiffs were clearly made aware of HUB’s request via its Notice of Motion. HUB maintains that there are no issues of fact present in the instant matter and that the evidence before the Court is sufficient to allow this motion to be decided as a matter of law. In addition, the Court should be permitted to consider the affidavit attached in support of HUB’s motion, as Plaintiffs have been given a full and fair opportunity to submit affidavits of their own in opposition. Therefore, HUB submits that this relief can be appropriately sought and that it is in no way premature.

FILED: ALBANY COUNTY CLERK 02/17/2017 03:35 PM INDEX NO. 901476-14

NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 02/17/2017

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Racketeer Influenced and Corrupt Organizations Act (“RICO”), Common Law Indemnification,

and Negligence.

4. Defendants contend that “Law of the Case” Doctrine has a binding effect on

Plaintiffs’ claims against HUB. Specifically, this Court’s findings in its decision on Plaintiffs’

Motion to Amend directly addressed the timeliness of Plaintiffs’ claims as to the proposed new

parties; those findings are controlling here, and Plaintiffs time barred direct claims as to HUB

must be dismissed as a matter of law.

5. Furthermore, HUB will address the “Relation Back” Doctrine and its inapplicability

to the instant matter. Plaintiffs attempt to mislead the Court by refusing to recognize the

dispositive corporate separateness of Defendant Hirsch Wolf & Co., Inc. (hereinafter referred to

as “Hirsch Wolf, Inc.”) and non-party Hirsch Wolf & Co., LLC (hereinafter referred to as “Hirsch

Wolf, LLC”). Plaintiffs misrepresent the plain language contained in the documentary evidence

submitted by HUB, namely the Asset Purchase Agreement (hereinafter referred to as the

“Agreement”). When read accurately, the Agreement establishes as a matter of law that there

was no merger (de facto or otherwise) between Hirsch Wolf, Inc. and any of the HUB

defendants. As such, the “Relation Back” Doctrine is inapplicable to this matter and cannot save

Plaintiffs’ untimely claims.

6. HUB has also addressed Plaintiffs’ new arguments regarding the statute of

limitations for its claims. Although the Law of the Case Doctrine applies and bars each of

Plaintiffs’ newly found arguments, should the Court even entertain such contentions, HUB has

established that they are meritless as a matter of law.

7. Finally, should the Court find that any of Plaintiffs’ claims are timely, such claims

should still be dismissed as Plaintiffs cannot state a legally cognizable cause of action. As such,

these claims must be dismissed on their face.

8. It must be stated that Plaintiffs erroneously refer to HUB’s motion as a “second

bite of the apple.” This is plainly untrue as HUB was not a party in this matter until after service



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of the Amended Complaint in October 2016. Thus, this is the first time that HUB has had an

opportunity to litigate these issues. In contrast, Plaintiffs have had a full and fair opportunity to

litigate many of these issues, and should be bound by any and all adverse rulings.

ARGUMENT

POINT I

THE LAW OF THE CASE DOCTRINE MANDATES A FINDING THAT PLAINTIFFS’ CLAIMS AGAINST HUB ARE BARRED BY THE STATUTE OF LIMITATIONS

9. It is well-established that a party is bound by a prior ruling that it has already had

a full and fair opportunity to litigate before this Court. Here, much of Plaintiffs’ opposition is

devoted to raising new, as well as old, arguments regarding the timeliness of its claims against

HUB. In doing so, Plaintiffs are attempting to re-litigate issues of law that have been

conclusively decided by this Court in its September 23, 2016 Order.

10. Justice Platkin’s prior ruling on the timeliness of Plaintiffs’ claims is the law of this

case. (See HUB’s Memo of Law in Reply, p. 2). The doctrine of the ‘law of the case’ applies to

various stages of the same litigation. The doctrine is sometimes referred to as ‘a kind of intra-

action res judicata’; its purpose is to avoid the retrial of issues already determined in the same

case.” (See HUB’s Memo of Law in Reply, p. 3).

11. In the instant matter, Plaintiffs’ prior Motion to Amend the Complaint sought to

add new parties and assert new causes of action in this matter. One of those proposed new

parties was Hirsch Wolf, LLC. Like HUB, Hirsch Wolf, LLC had never been named as a

defendant in this action prior to the proposed Amended Complaint. In assessing Plaintiffs’

proposal to add Hirsch Wolf LLC as a new party, this Court held: “Plaintiffs’ claims against

Hirsch Wolf LLC plainly are time-barred unless they related back to the claims asserted

against [Hirsch Wolf, Inc.]” (See Exhibit D to HUB’s Affirmation in Support, p. 18)(emphasis

added). This same analysis must be equally applied to HUB, who stands in the exact position of

Hirsch Wolf, LLC with regard to the claims in the Amended Complaint.



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12. Furthermore, the Court’s prior decision also sets forth the applicable accrual

dates for Plaintiffs’ claims of breach of contract, negligence, false advertising, aiding and

abetting breach of fiduciary duty, and aiding and abetting fraud. The Court determined found

that these claims as to the new parties were barred by the statute of limitations. (See Exhibit D

to HUB’s Affirmation in Support, p. 13). Specifically the Court held as follows:

- The alleged breaches of contract “necessarily occurred no later than December 31, 2007, when the WCB assumed administration of the Trust”;

- “The negligence and GBL § 350 causes of action accrued no later than July 10, 2009, by which time (1) the WCB had issued deficit assessments to each plaintiff-member, demanded payment, and threatened to initiate collection litigation if payments were not made, and (2) plaintiffs had commenced their own action against CRM, the Trustees, and the Trust’s professional advisors to recover the accumulated deficit for which they were being held responsible by the WCB”;

- “Any aiding and abetting of CRM’s fraud or breaches of duty necessarily

terminated when the WCB assumed administration of the Trust, and any resulting damages were sustained no later than July 10, 2009. Finally the two-year discovery rule was triggered no later than December 18, 2009, when the WCB’s forensic audit was completed and delivered.”

(See Exhibit D to HUB’s Affirmation in Support, p. 13)(emphasis added).

13. Based upon these findings, this Court held that Plaintiffs’ claims were patently

untimely and could not be sustained as a matter of law. (See Exhibit D to HUB’s Affirmation in

Support, p. 14).

14. Plaintiffs had 30 days from the service of the Order with Notice of entry to

reargue this decision, yet they failed to do so. Plaintiffs cannot now ask the Court ask the Court

for reconsideration of decided issues. Further, Plaintiffs have not perfected an appeal of the

Court’s order. Therefore, the law of the case has been established and Plaintiffs’ attempts to

reargue such issues in opposition to the instant Motion to Dismiss must be rejected out of hand.

The Doctrine of Law of the Case controls and requires the Court to find that the claims against

HUB are barred by the statute of limitations.



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POINT II

PLAINTIFFS CANNOT RELATE THE CLAIMS AGAINST THE HUB DEFENDANTS BACK TO THE FIRST AMENDED COMPLAINT

15. The “Law of the Case” Doctrine requires that the Court find that Plaintiffs cannot

maintain any individual claims against HUB. Thus, Plaintiffs’ only means of keeping HUB in this

case are dependent upon the “Relation Back” Doctrine and a showing that HUB and Defendant

Hirsch Wolf, Inc. (not Hirsch Wolf, LLC) are “united in interest.” (See HUB’s Memo of Law in

Reply, p. 2).

16. Plaintiffs’ opposition has failed to rebut the dispositive documentary evidence

submitted by HUB and, as such, the Court must find that the “Relation Back” Doctrine is

inapplicable to Plaintiffs’ claims.

a. Plaintiffs Ambiguously Refer to Defendant Hirsch Wolf & Co., Inc. as “Hirsch” in an Attempt to Mislead the Court

17. Before we address the substance of Plaintiffs’ opposition and its utter lack of

merit, we must call attention to Plaintiffs’ attempt to mislead the Court as to the dispositive

relationships between HUB, Defendant Hirsch Wolf, Inc., and Non-Party Hirsch Wolf, LLC. On

the first page of Plaintiffs’ opposition, they clearly define Defendant Hirsch Wolf, Inc. as “Hirsch,”

then proceed to ignore the corporate separateness of Defendant Hirsch Wolf, Inc. and Non-

Party Hirsch Wolf, LLC, conflating the two entities, in what can only be described as an attempt

to deceive the Court and draw attention away from the legal insufficiencies of their arguments.

18. Hirsch Wolf, Inc. and Hirsch Wolf, LLC are two separate and distinct entities. This

is corroborated by the corporate filings for both entities, which reflect two active and separate

companies. (See the SOS Filings of Hirsch Wolf, Inc. and Hirsch Wolf, LLC, annexed to hereto

Exhibit “A”). Moreover, Plaintiffs have acknowledged that these are two separate entities: first

in their attempt to amend their complaint to name Hirsch Wolf, LLC as a defendant, where they

alleged that they were separate entities; and second when they commenced a second action

against Hirsch Wolf, LLC. (See Plaintiffs’ Complaint w/o Exhibits, annexed hereto as Exhibit



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“B”). Finally, and most importantly, this Court has acknowledged a distinction between

these two entities when it denied Plaintiffs’ Motion to Amend the Complaint to name

Hirsch Wolf, LLC as a defendant.

19. The existence of this distinction is crucial to the instant motion practice as the

“Relation Back” Doctrine requires Plaintiffs to show that HUB is “united in interest” with an actual

party to this matter. Plaintiffs have utterly failed to put forth any of their own evidence or rebut

HUB’s documentary evidence, which has established that HUB is not united in interest with

Hirsch Wolf, Inc. Thus, Plaintiffs’ claims in their entirety are barred by statute of limitations and

must be dismissed as a matter of law.

b. There is no Evidence of a De Facto Merger between HUB and Defendant Hirsch Wolf, Inc.

20. Plaintiffs spend much of their Opposition analyzing the “hallmarks” of de facto

merger, addressing each of the factors and concluding that there was such a merger between

HUB and Defendant Hirsch Wolf, Inc. However, Plaintiffs conveniently gloss over the threshold

requirement of any de facto merger analysis - the presence of an actual transaction between

the purported predecessor and successor entities. When one actually addresses this issue,

it is clear that there simply cannot be any finding of a de facto merger in the instant matter.

21. In its moving papers, HUB has submitted documentary evidence in the form of

the Asset Purchase Agreement (hereinafter referred to as the “Agreement”) between HUB

International Northeast Limited (hereinafter referred to as “HubNE”) and non-party Hirsch Wolf,

LLC. This is the transaction on which Plaintiffs have based their entire theory of liability as to

HUB. Yet the plain language of the Agreement conclusively rebuts Plaintiffs’ allegations of a de

facto merger and forecloses their reliance upon the “Relation Back” Doctrine.

22. At the outset, the Court must turn its attention to the plainly stated fact that this

Agreement was between Hirsch Wolf, LLC and HubNE. The very first paragraph of the

Agreement provides:



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ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of May 1, 2006, among Hub International Northeast Limited (“Buyer”), a Delaware Corporation, Hub International Limited (“Hub”), a corporation continued pursuant to the Canada Business Corporations Act, Hirsch Wolf & Co., LLC (“HWC”), a limited liability company formed under the laws of the State of New York, WZ Enterprises, LLC (“WZ”), a limited liability company formed under the laws of the State of New York, Hirsch Wolf (“Mr. Wolf”), Lon Grayson (“Mr. Grayson”), Raquel Wolf, Hirsch and Raquel Wolf Family Limited Partnership and H.R. Wolf Family Limited Partnership. Mr. Wolf and Mr. Grayson shall be referred to collectively as the “Members.” HWC and WZ shall be referred to singly and collectively as “Sellers.”

(Exhibit B to HUB’s Affirmation in Support, p. 1)(emphasis added).

23. This paragraph alone defines the “buyer” as HubNE and the “sellers” as Hirsch

Wolf, LLC and WZ Enterprises, LLC. Notably, Defendant Hirsch Wolf, Inc. is not listed as a

seller, nor is it even a party to the Agreement. In fact, a review of the Agreement’s signature

pages reveals that Hirsch Wolf, Inc. was not a signatory to the Agreement. (Exhibit B to HUB’s

Affirmation in Support, pp. 32-33).

24. The Agreement continues, setting forth in the “Recitals”:

WHEREAS Buyer desires to purchase and acquire from Sellers, and Sellers desire to sell to Buyer, certain assets and rights owned or held by Sellers and used in the conduct of the Business upon the terms and subject to the conditions set forth herein . . . .

(Exhibit B to HUB’s Affirmation in Support, p. 1).

25. Thus, the primary purpose of the Agreement is the sale of Hirsch Wolf, LLC’s

assets to HubNE. The Agreement is silent and mentions nothing related to the sale of anything

by Defendant Hirsch Wolf, Inc. Moreover, the Agreement specifically provides, and Hirsch Wolf,

LLC represented, that it held good and marketable title to all of the assets sold pursuant to the

Agreement. (Exhibit B to HUB’s Affirmation in Support, Pg. 10)(“Sellers have, and at the Closing

will deliver to Buyer, good and marketable title to all of the Purchased Assets . . .”).

26. The Agreement then sets forth the assets to be acquired by HubNE. Plaintiffs

misrepresent the plain language of this section of the Agreement, claiming that the assets

purchased were those of Defendant Hirsch Wolf, Inc. This is patently false and undermined by a

plain reading of the controlling contract. The language of this section provides:



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1.1 Purchased Assets. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below in Section 2.4), each Seller shall sell, assign, transfer, convey, and deliver to Buyer, and Buyer shall purchase and acquire from such Seller, in each case free and clear of any and all liens, encumbrances, mortgages, pledges, claims or security interests of any kind (collectively, “Liens”), all of such Seller’s right, title and interest in, to and under the following assets, properties and right such Seller, wherever located (collectively, the “Purchased Assets”) . . . .

(Exhibit B to HUB’s Affirmation in Support, p. 2).

27. The Agreement proceeds to set forth all of the assets that were sold and

purchased pursuant to the contract. It is quite clear that all of the assets being acquired by

HubNE belong to the “sellers”, defined as Hirsch Wolf, LLC and WZ Enterprises, LLC. Neither of

these sellers is a party to the instant matter. Moreover, there is again no mention of Defendant

Hirsch Wolf, Inc. in these passages. The explanation for this absence is simple, Hirsch Wolf,

Inc. was not a party to the Agreement and none of its assets were sold or acquired by HUB.

28. Furthermore, the Agreement wholly refutes any contention that HUB assumed,

explicitly or implicitly, any of the liabilities of Hirsch Wolf, LLC, the actual party to the Agreement,

let alone Defendant Hirsch Wolf, Inc., who was not in any way involved in the asset acquisition.

The Agreement specifically provides:

1.3 No Assumption of Liabilities. Notwithstanding anything in this Agreement, Buyer shall not assume, or be liable to pay, perform, or otherwise discharge, any debts, obligations or liabilities of Sellers of any nature whatsoever (whether express or implied, absolute or contingent, liquidated or unliquidated, known or unknown, accrued or unaccrued, presently in existence or arising hereafter) including, but not limited to any premiums payable on policies with effective or renewal date prior to the Closing Date. All such debts, obligations and liabilities (collectively, the “Excluded Liabilities”) shall be retained by, and shall remain debts, obligations and liabilities of, Sellers.

(See Exhibit B to HUB’s Affirmation in Support, p. 3)

29. Thus any contention about the assumption of liabilities is easily debunked by a

simple reading of the Agreement.

30. Plaintiffs’ opposition touches upon the Agreement, but their contentions are

rather unremarkable. Plaintiffs simply attempt to create questions of fact about the document,

where there are none. They misquote the Agreement and, in an apparent intentional pattern



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addressed above, ignore the unquestionable and dispositive distinction between Hirsch Wolf,

Inc. and Hirsch Wolf, LLC.

31. Plaintiffs’ first point of contention with regard to the Agreement pertains to the two

references to Hirsch Wolf, Inc. contained therein. The references appear on the title page and in

Article 5 of the Agreement. Defendants have explained that these references are purely

scrivener’s errors and that they have absolutely no impact on the sale of Hirsch Wolf, LLC’s

assets to HubNE. (See Exhibit A to HUB’s Affirmation in Support, ¶ 13). For the first reference,

we note that the cover page of this contract has no legal effect on the rights and obligations of

the Agreement itself. The cover page is simply that.

32. Furthermore, Plaintiffs’ arguments with regard to the second reference are belied

by their own documentation submitted in opposition. Specifically, the corporate filings for Hirsch

Wolf, LLC reflect that, after the date of the Agreement, Hirsch Wolf, LLC changed its name to

“B.R. Wolf & Co. LLC.” (See Exhibit J to Plaintiffs’ Affirmation in Opposition).3 Thus, Hirsch Wolf,

LLC changed its name in compliance with the terms of the Agreement. In contrast, the corporate

filings for Hirsch Wolf, Inc. reflect that, to this day, Hirsch Wolf, Inc. continues to operate under

the same exact name: “Hirsch Wolf & Co., Inc.” (See Exhibit “A”). Clearly, this entity was not

bound by the terms and conditions of the Agreement.

33. Thus, the scrivener’s errors within the Agreement are nothing more than

typographical mistakes during drafting. Plaintiffs harp on such errors to distract the Court from

the true substance of the Agreement and the undeniable fact that Defendant Hirsch Wolf, Inc.

was not a party to this transaction.

34. Next, Plaintiffs rely heavily upon the Press Release issued by HUB International

Limited on May 2, 2006 (hereinafter referred to as the “Press Release”), announcing HubNE’s

acquisitions of the assets of Hirsch Wolf, LLC. The very first sentence of this Press Release

3 Plaintiffs have even commenced a subsequent action against B.R. Wolf & Co., LLC. The action is entitled

Belair Care Center, et al. v. Hirsch Wolf & Company LLC d/b/a B.R. Wolf & Co., LLC, et al., Index No. 3175/2015. (See Exhibit “B”).



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discounts Plaintiffs’ entire position. Consistent with Defendants’ arguments, the Press Release

states:

Hub International Limited . . . today announced the acquisition by its New York subsidiary, Hub International Northeast (HUB Northeast), of the assets of Hirsch Wolf & Co., LLC, a Brooklyn-based property and casualty insurance brokerage with special expertise in the healthcare industry. (See Exhibit H to Plaintiffs’ Affirmation in Opposition)(emphasis added).

35. At no point in any part of this release is Defendant Hirsch Wolf, Inc. mentioned.

Thus, Plaintiffs’ claim that this Press Release is evidence of a “continuity of management” or the

business of Hirsch Wolf, Inc. is unavailing, and just plainly false.

36. Plaintiffs’ opposition characterizes HUB’s documentary evidence as “sparse.”

HUB submits that this “sparse” evidence is more than sufficient to defeat all of Plaintiffs’

machinations about a de facto merger between HUB and Defendant Hirsch Wolf, Inc. The plain

language of the Agreement refutes all that is alleged in the Amended Complaint. Further,

despite, more than fifty pages of convoluted arguments and misstatements of fact and law,

Plaintiffs have utterly failed to overcome the controlling documentary evidence. There was no

merger (de facto or otherwise) between HUB and Hirsch Wolf, Inc. There is no unity of interest

between the two entities. Thus, the “Relation Back” Doctrine cannot be relied upon by Plaintiffs

to save their claims.

c. Plaintiffs’ Opposition has Failed to State a Basis for Alter Ego Liability

37. As HUB stated in its moving papers, the Amended Complaint’s allegations as to

alter-ego liability are woefully insufficient and wholly fail to provide a basis for finding that HUB

and Hirsch Wolf, Inc. are alter egos of one another. Plaintiffs’ allegations that Hirsch Wolf, Inc.

and HUB share a common ownership, management, employees, and work place, are

insufficient to maintain a claim for alter-ego liability. (See Exhibit D to HUB’s Affirmation in

Support, p. 24).

38. The arguments raised in Plaintiffs’ Opposition are patently insufficient, devoid of

support from credible evidence, and fail to raise any question as to the existence of this



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purported alter-ego relationship. Plaintiffs’ contentions are those primarily addressed in the

preceding section regarding the alleged de facto merger. However, their inadequacies are worth

repeating.

39. Plaintiffs begin by misrepresenting the plain language of the Agreement,

asserting that HUB purchased “virtually all of the assets” of Hirsch Wolf, Inc. This is manifestly

untrue. As previously noted, the Agreement clearly provides that HubNE purchased some of the

assets of Hirsch Wolf, LLC. There is no mention of Hirsch Wolf, Inc.’s assets anywhere in the

Agreement and Plaintiffs’ statements to the contrary are patently false.

40. Next Plaintiffs raise the fact that an employee of Hirsch Wolf, Inc. was hired by

HubNE as evidence of overlap in ownership, officers, directors, and personnel. However, this

very Court has already held in this case that “alter-ego liability will not attach merely because

two corporations perform similar functions, share common officers, directors or managers, or

share facilities or infrastructure.” (See Exhibit D to HUB’s Affirmation in Support, p. 24). Thus,

such evidence hardly meets the stringent standard for establishing an alter-ego relationship.

41. Moreover, Plaintiffs’ reliance upon the two mistaken references to Hirsch Wolf,

Inc. within the Agreement is insufficient to impose such liability. As discussed at length, these

were nothing more than scrivener’s errors, which have no legal impact on the Agreement itself.

This is corroborated by the fact that Hirsch Wolf, LLC now operates under a new name, while

Hirsch Wolf, Inc. has retained its moniker.

42. Thus, Plaintiffs’ opposition has failed to set forth any basis to support a claim for

alter-ego liability and, as such, this alleged relationship cannot be used to relate Plaintiffs’

claims against HUB back to the filing of the November 2, 2009 Complaint.

d. The Documentary Evidence Refutes Any and All Claims as to HUB International Group Northeast Inc. and HUB International Limited

43. Defendants have moved to dismiss Plaintiffs’ particular claims against HUB

International Group Northeast Inc. and HUB International Limited, as there is no basis for



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Plaintiffs to maintain any of their claims against such entities.4 Plaintiffs’ sole opposition to this

portion of HUB’s motion is to claim that the arguments are ineffective due to the absence of the

entities’ Articles of Incorporations, as well as documents such as the Press Release, which

prevent HUB from meeting its burden. Like the rest of Plaintiffs’ opposition, these arguments are

meritless and fail to raise any legitimate opposition to HUB’s prayer for dismissal.

44. First, HUB International Group Northeast, Inc. is an independent entity, which

was not a party to the Agreement. The entire basis for Plaintiffs’ claims is premised upon a

purported de facto merger and acquisition of all of Hirsch Wolf, Inc.’s assets. Yet, a plain

reading of the Agreement reveals that HUB International Group Northeast, Inc. was not a party,

nor did it purchase any of Hirsch Wolf, LLC’s assets. Thus, there is simply no basis for Plaintiffs

to maintain any claims against this entity. Plaintiffs’ contention that HUB International Group

Northeast, Inc. must produce its Articles of Incorporation to support its position is unavailing.

However, to further buttress the merits of HUB’s argument, the Articles of Incorporation for each

HUB defendant are annexed hereto as Exhibits “C”, “D”, and “E”. Sufficient documentary

evidence is before the Court and it establishes as a matter of law that there was no merger (de

facto or otherwise) between HUB International Group Northeast, Inc. and Hirsch Wolf, Inc.

Moreover, HUB has produced an Affidavit of Ivy Fischer, an individual with knowledge of the

corporate structure of the relevant activities, to support these contentions. (See Exhibit A to

HUB’s Affirmation in Support). Notably, Plaintiffs’ Opposition wholly fails to refute any of the

substance of Ms. Fischer’s Affidavit.

45. Furthermore, although HUB International Limited is named as a party to the

Agreement, as per the plain terms of the contract, HUB International Limited did not acquire any

of the assets of Hirsch Wolf, LLC. The same is equally true for Hirsch Wolf, Inc., as it has been

established time after time that neither it, nor its assets, were involved in the Agreement. Thus,

4 For the sake of clarity, it is worth repeating the distinctions between each of the Hub Defendants. Hub

International Limited is a Delaware Holding Company and the parent company of Hub International Group Northeast, Inc. Further Hub International Northeast Limited (“HubNE”) is a subsidiary of Hub International Group Northeast, Inc. HubNE was the buyer under the terms of the Asset Purchase Agreement.



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HUB International Limited’s mere status as a party to the Agreement is insufficient to establish

any form of successor liability.

46. Finally, Plaintiffs’ reliance on the aforementioned Press Release is misguided

and has no impact on the merits of HUB’s motion. As noted above, HUB International Limited

issued the release which detailed HubNE’s purchase of the assets of Hirsch Wolf, LLC. Not

only does the Press Release confirm that HUB International Limited was not a buyer in the

Agreement, but it corroborates the fact that Hirsch Wolf, Inc. was not a party to the Agreement.

47. Therefore, Plaintiffs’ Opposition has failed to provide any basis for maintaining its

allegations of successor liability as to HUB International Group Northeast Inc. and HUB

International Limited. Thus, the “Relation Back” Doctrine is inapplicable as to the claims against

these entities.

POINT III

PLAINTIFFS’ NEW ARGUMENTS REGARDING THE TIMELINESS OF ITS CLAIMS ARE WHOLLY WITHOUT MERIT

48. As noted, Plaintiffs’ arguments regarding the timeliness of their claims are

meritless and subject to the Doctrine of “Law of the Case.” Furthermore, to the extent Plaintiffs

now make brand new arguments as to the statute of limitations, those are similarly without merit

as addressed herein.

a. Plaintiffs’ Reliance Upon CPLR § 214(2) is Misplaced and Meritless as a Matter of Law

49. In a first act to desperately maintain their claims, Plaintiffs erroneously cite CPLR

§ 214(2) and contend that all of their claims are timely based upon this statute. However, this is

a complete misinterpretation of the statute and it is clear that CPLR § 214(2) does not apply to

any claim against HUB. Thus, this argument must fail as a matter of law.

50. CPLR § 214(2) prescribes a three-year Statute of Limitations for “an action to

recover upon a liability, penalty, or forfeiture created or imposed by statute.” That is, it sets forth

a three year statute of limitations for claims created by statute, which did not exist at common



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law. In fact, Courts have specifically held that CPLR § 214(2) does not apply to liabilities that did

exist at common law, but were also subsequently recognized or implemented by statute. (See

HUB’s Reply Memo of Law, p. 13). This section of the CPLR does not create a new cause of

action or usurp established legal principles that apply to common law claims. It is simply a gap

filler for claims created by the legislature, which did not otherwise have a limitations period.

51. Here, Plaintiffs have seized upon the language in the statute, namely the

reference to “liability” or “penalty”, and extended CPLR § 214(2)’s application to an untenable

level. As per Plaintiffs’ interpretation, the fact that Plaintiffs have allegedly been damaged by an

assessment imposed by a governmental entity, automatically means that Plaintiffs’ common law

claims fall within the ambit of CPLR § 214(2) thereby extending well beyond those prescribed by

statute and under the common law. Plaintiffs are simply incorrect in their reading of the statute

and the disconnect stems from a misinterpretation of CPLR § 214(2)’s reference to liabilities

imposed by statute.

52. By “liabilities imposed by statute,” this section of the CPLR does not refer to the

nature of Plaintiffs’ damages, but rather the basis for the cause of action and liability. For

example, the basis for a claim of negligence is a breach of a duty of care. Likewise, a contract

claim is based in breach of an obligation pursuant to an agreement. In contrast, a claim to

recover a lien created under the Insurance Law is a statutory creation, which would not exist at

common law. (See HUB’s Reply Memo of Law, pp. 13-14).

53. Here, Plaintiffs’ claims against HUB are not brought pursuant to a statute.

Plaintiffs may be held liable to the Workers’ Compensation Board in connection with their joint

and several liability for the Trust, but the claims as to the broker defendants are all based upon

the common law. Each of Plaintiffs’ claims exists independent of any statute and Plaintiffs have

not alleged such statutory violations in the Amended Complaint. As illustrated in the case law,

the applicability of CPLR § 214(2) does not turn on the nature of damages, but rather is wholly

dependent on the cause of action for liability itself. (See HUB’s Reply Memo of Law, p. 14-15).



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54. Therefore, Plaintiffs have clearly misinterpreted the applicability of CPLR §

214(2) and the Court should rightly dismiss their flawed contentions. Their causes of action exist

at common law and are not based upon any statutory liability whatsoever. As such, CPLR §

214(2) cannot possibly apply to save Plaintiffs’ otherwise untimely claims.

b. Plaintiffs’ Claims Regarding the Timeliness of the Unjust Enrichment Claim are Meritless as a Matter of Law

55. Plaintiffs next attempt to extend the statute of limitations for their unjust

enrichment claim arguing that HUB has an ongoing fiduciary duty to Plaintiffs, which has tolls

the statute of limitations for this claim in perpetuity. In making this argument, Plaintiffs first claim

that they were in a fiduciary relationship with HUB, an allegation that HUB wholly disputes. HUB

maintains that it was involved in nothing more than a broker-client relationship with Plaintiffs,

which does not give rise to a fiduciary duty. (See HUB’s Reply Memo of Law, p. 15).

56. However, even if a fiduciary relationship did exist, Plaintiffs’ claim that such

relationship continues to this day is wholly without merit.

57. In pursuing this argument, Plaintiffs cite a unique tolling provision, which provides

that claims arising out of a fiduciary relationship do not accrue “until the fiduciary has openly

repudiated his or her obligation or the relationship has been otherwise terminated.” (See HUB’s

Reply Memo of Law, p. 16). Here, the entire crux of Plaintiffs’ fiduciary duty claims revolve

around their placement in the HITNY Trust, and the broker defendants’ related advice and

communications regarding the Trust. Obviously, the relationships, and all associated duties in

connection with the Trust came to an end when the Workers’ Compensation Board seized

control of it on December 31, 2007. Notably, Plaintiffs do not allege anywhere in the Amended

Complaint, or in their opposition, that the relationships between the Plaintiffs and Broker

Defendants continued beyond the Trust’s termination. As such any and all fiduciary duties

expired with the Trust’s termination.

58. Thus, any toll of the statute of limitations was lifted on December 31, 2007 and

the statute of limitations began to run on the unjust enrichment claim from that date. Pursuant to



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CPLR §213, the time ran on Plaintiffs’ Unjust Enrichment claim in December 2013, well before

any claims were asserted against HUB. Therefore, the Court must find that Plaintiffs’ opposition

is without merit and dismiss the unjust enrichment claim as to HUB.

c. Plaintiffs’ Claims Pursuant to General Business Law § 349 are Time Barred

59. Next, Plaintiffs misinterpret the Court of Appeals’ decision in Gaidon v. Guardian

Life Ins. Co. Of Am., 96 N.Y.2d 201, 727 N.Y.S.2d 30 (2001), in yet another attempt to extend

the life of a time barred claim. Specifically, Plaintiffs argue that their General Business Law §

349 claim did not accrue until they entered into settlement agreements with Workers’

Compensation Board in 2013. However, an accurate reading of Gaidon reveals that this

contention is plainly in error.

60. In Gaidon, the Court of Appeals held that a claim pursuant to General Business

Law (“GBL”) § 349 accrues when plaintiff has been injured by a deceptive act or practice

violating Section 349. Id. That case dealt with alleged misrepresentations made by Defendant

Guardian Life about “vanishing premiums,” which led plaintiffs to believe that their premium

payments would in fact “vanish.” (See HUB’s Reply Memo of Law, p. 17). In determining when

plaintiffs were injured by the subject deceptive acts, the Court found that the injuries occurred

when they were “first called upon to pay additional premiums beyond the date by which they

were led to believe that policy dividends would be sufficient to cover all premium costs.” (See

HUB’s Reply Memo of Law, p. 17).

61. In the instant matter, Plaintiffs were allegedly injured when their expectations for

Workers’ Compensation coverage were not met and the Workers’ Compensation Board issued

deficit assessments to each plaintiff-member, demanded payment, and threatened to initiate

collection litigation if payments were not made. This Court has already determined that this date

was July 10, 2009. Plaintiffs attempt to extend the accrual of their claims until their settlement

agreements in 2013 is contrary to the governing case law from the Court of Appeals and this

Court’s own conclusive determination.



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62. Furthermore, like GBL § 349, claims pursuant to GBL § 350 have been deemed

to accrue at the time of Plaintiffs’ injury. (See Exhibit D to HUB’s Affirmation in Support, p. 9-10);

(see also HUB’s Reply Memo of Law, p. 17). In the instant matter, this Court has held that

Plaintiffs’ proposed GBL § 350 claim, which was based upon the very same allegations as the

GBL § 349 claim, accrued on July 10, 2009 and consequently ran on July 10, 2012. (See Exhibit

D to HUB’s Affirmation in Support, p. 13). Thus, the Court’s prior holdings with regard to GBL §

350, must be equally applied to the GBL § 349 claim.

d. Plaintiffs’ RICO Claim is Barred by the Statute of Limitations

63. The statute of limitations for a civil RICO claim is four years and the claim is

deemed to accrue when the plaintiff knew or should have known of the purported injury. See

Dempster v. Liotti, 86 A.D.3d 169, 924 N.Y.S.2d 484 (2d Dept. 2011). HUB maintains that

Plaintiffs’ RICO claim accrued on either July 10, 2009 or December 18, 2009, by which point the

Worker’s Compensation Board had issued their assessment to all plaintiffs and completed their

audit of the HITNY Trust.

64. Plaintiffs claim that their damages did not become clear and definite until they

entered into settlement agreements with the Workers’ Compensation Board in 2013. This

argument is flawed and Plaintiffs’ reliance upon Harbinger Capital Partners Master Fund I, Ltd.

v. Wachovia Capital Mkts., LLC, 347 Fed. Appx. 711 (2d Cir. 2009) is misplaced. (See HUB’s

Reply Memo of Law, pp. 18).

65. Here, Plaintiffs’ damages are not tenuous. The damages and plaintiffs’ injuries

were definite from the moment the assessment was issued by the Board on July 10, 2009. Any

subsequent adjustment to the assessment or plaintiffs’ settlements is solely related to the

Board’s assessment. Despite plaintiffs’ contention to the contrary, these settlements do not

constitute injuries which are new or independent of the Board’s assessment. (See HUB’s Reply

Memo of Law, p. 19).



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66. Thus, Plaintiffs’ contentions should be rejected and the RICO claim should be

dismissed as a matter of law.

e. Plaintiffs’ Breach of Contract Claim is Barred by the Statute of Limitations

67. Plaintiffs next contend that their breach of contract claim as to HUB directly is not

barred by the statute of limitations. This section of their Opposition starts with a

mischaracterization of this Court’s prior holding in this matter. Namely, Plaintiffs contend that, in

its prior decision, this Court rejected HUB’s very arguments about the timeliness of their contract

claims. This is plainly inaccurate.

68. The Court’s decision clearly distinguished its analysis of the breach of contract

claims as to Hirsch Wolf, Inc. and proposed party, Hirsch Wolf, LLC. As noted in the prior

sections regarding the Doctrine of Law of the Case, the Court clearly held that the proposed

breach of contract claim as to Hirsch Wolf, LLC was “untimely” as a matter of law. (See Exhibit

D to HUB’s Affirmation in Support, p. 14). The same finding should clearly apply to the direct

breach of contract claim against HUB and the Court should disregard this meritless portion of

Plaintiffs’ Opposition.

69. Plaintiffs proceed contending that, in the context of Group Self-Insured Trust

(“GSIT”) cases, this Court held that the statutes of limitations for Plaintiffs’ claims are triggered

when the Workers’ Compensation Board levies the “latest assessment.” In purported support of

this contention, Plaintiffs primarily rely upon New York State Workers’ Compensation v. 1 & 3

On Fifth Corp., Decision/Order, Index No. 2900-13 (Albany Cty. March 30, 2015) and Inter-

Community Mem. Hosp. of Newfane v. Hamilton Wharton Group, Inc., 93 A.D.3d 1176, 941

N.Y.S.2d 360 (4th Dept. 2012). Despite Plaintiffs’ arguments, an accurate reading of both cases

reveals that both decisions are easily distinguishable from the matter at hand. (See HUB’s

Reply Memo of Law, pp. 19-22).

70. Here, the claimed breaches do not arise out of a trust member’s continuing

obligation to pay assessments. To the contrary, the contract claims are based upon the broker



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defendants’ alleged failure to perform its insurance counseling and brokerage services which

were bargained for in the contracts. Based upon the relevant contracts, and the nature of their

alleged breaches, Plaintiffs’ damages are unrelated to accrual of the claim. Each assessment,

of which there has only been one, cannot constitute a subsequent breach by the broker

defendants and the accrual of a new claim. Moreover, in New York State Workers’

Compensation Bd. v. SGRisk, LLC, 967 N.Y.S.2d 868, 2013 N.Y. Misc. LEXIS 915 (Albany Cty.,

March 1, 2013), this Court expressly rejected Plaintiffs’ interpretation of Inter-Community. (See

HUB Reply Memo of Law pp. 22).

71. Thus, Defendants urge the Court to follow well-established New York contract

law and hold that Plaintiffs’ contract claims accrued no later than December 31, 2007 and are

thus untimely as a matter of law.

f. Plaintiffs’ Negligence Claim is Untimely

72. Plaintiffs’ ignorance of this Court’s prior ruling extends next to their arguments

regarding the accrual and running of the statute of limitations for their negligence claim. As

previously noted, this Court held that Plaintiffs’ negligence claim accrued no later than July 10,

2009, at which point (1) the WCB had issued deficit assessments to each plaintiff-member,

demanded payment, and threatened to initiate collection litigation if payments were not made,

and (2) plaintiffs had commenced their own action against CRM, the Trustees, and the Trust’s

professional advisors to recover the accumulated deficit for which they were being held

responsible by the WCB. (See Exhibit D to HUB’s Affirmation in Support, p. 13). This is the law

of the case and Plaintiffs’ arguments to the contrary should be dismissed accordingly.

73. Moreover, Plaintiffs’ reliance upon Bond v. Progressive Ins. Co., 82 A.D.3d 1318,

917 N.Y.S.2d 756 (3d Dept. 2011), Rockaway Beach Blvd. Constr. Co., LLC v. Treiber Group,

LLC, Index No. 601106/14 (Nassau Cty. Jan. 21, 2015), and Zoller v. Niagra Mohawk Power

Corp., 137 A.D.2d 947, 525 N.Y.S.2d 364 (3d Dept. 1988) is wholly misplaced. (See HUB’s

Reply Memo of Law pp. 23-25).



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74. In the instant matter, there can be no finding that the broker defendants

committed ongoing acts of negligence that went up to the commencement of this lawsuit. To the

contrary, the broker defendants’ purported negligence arises of out of their acts and omissions

in relation to the HITNY Trust. Consequently, any alleged negligent acts on the part of the

broker defendants could not extend beyond the Workers’ Compensation Board’s seizure of the

Trust in December 2007. Moreover, Plaintiffs earliest date of actual harm, July 10, 2009,

occurred after the seizure of the Trust when the Board issued its assessments. Thus, the

circumstances of this case are wholly distinguishable from the case law cited in Plaintiffs’

Opposition and Plaintiffs’ comparisons to this case are misplaced.

g. Plaintiffs’ Claims for Fraud and Aiding and Abetting Fraud are Untimely

75. As previously discussed at length, this Court has held that the last purported

fraudulent act could not have occurred after 2007, when the Workers’ Compensation Board

seized the Trust. Furthermore, this Court held that the latest date for Plaintiffs’ discovery of any

alleged fraud is December 18, 2009, when the Workers’ Compensation Board completed its

forensic audit. Thus, it is clear that Plaintiffs fraud claims as to HUB are untimely as a matter of

law.

76. In opposition, Plaintiffs cite to the now well-worn Inter-Community decision, which

has been discussed at length in this Reply. Nothing in the Fourth Department’s decision allows

Plaintiffs to contravene well-established legal principles and restart the statute of limitations for

each of their claims after each assessment, of which there was only one here anyway. This

argument should be disregarded for the reasons already set forth in detail in these papers.

POINT IV

PLAINTIFFS HAVE FAILED TO STATE A CAUSE OF ACTION AGAINST HUB

77. HUB maintains that it has demonstrated that all of Plaintiffs’ direct claims against

it are barred by the applicable statute of limitations. Further, HUB contends that Plaintiffs have

failed to overcome the documentary evidence which conclusively establishes that there was no



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de facto merger between HUB and Defendant Hirsch Wolf, Inc. Thus, the “Relation Back”

Doctrine cannot be relied upon to save Plaintiffs’ untimely claims. Thus, this matter should be

decided on the statute of limitations.

78. However, to the extent the Court finds that Plaintiffs can maintain their claims

against HUB based upon the allegations of successor liability, Plaintiffs’ claims should still be

dismissed pursuant to CPLR § 3211(a)(7).

a. Should the Court Dismiss any Claims as to Hirsch Wolf, Inc., the same Findings Must be Made as to HUB

79. Should the Court permit Plaintiffs’ claims based upon the alleged successor

liability, which HUB vehemently disputes, such claims can only be maintained to the extent that

they are adequately pled against Defendant Hirsch Wolf, Inc., HUB’s wrongfully alleged

predecessor in interest. If the Court grants any portion of Hirsch Wolf, Inc.’s motion, the same

finding must be made as to the equivalent claims against HUB.

b. Conversion

80. In an action for conversion of money, plaintiff must identify a specific, identifiable

fund, over which plaintiff exercised control and possession at the time of the conversion. (See

HUB’s Reply Memo of Law, p. 26). Plaintiffs cannot meet this standard in the instant matter

because said “specific and identifiable funds” are only the premiums paid to the HITNY Trust,

which Plaintiffs no longer possessed when the Trust paid commissions to the broker

defendants.

81. Plaintiffs’ position is flawed for many reasons. First, there is nothing specific

about the plaintiffs’ “funds” that were allegedly converted. This is evident in that Plaintiffs point

generally to everything that the Broker Defendants received in connection with the Trust, as

evidence of a conversion of their funds. Plaintiffs state that each benefit received by the brokers

for any purpose, legitimate or otherwise, is a conversion of Plaintiffs’ property and that “each sip

of champagne was a conversion of Plaintiffs’ premium dollars.” However, there is nothing



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specific about these allegations and Plaintiffs cannot adequately plead the elements by relying

on such broad and general allegations and rhetoric.

82. Moreover, Plaintiffs’ arguments also fail to establish that they had any ownership

or possession over the funds at the time that they were allegedly converted. In the process

described in Plaintiffs’ allegations, they paid premiums to the Trust, and subsequently the

Broker received commissions. Yet, those commissions were not paid directly to the defendants

by the Plaintiffs. The Defendant brokers received compensation from the Trust, not from the

Plaintiffs. Thus, Plaintiffs’ property was not passed directly from plaintiff to the broker. Nothing in

Plaintiffs’ Amended Complaint or Opposition would allow the Court to find that the direct funds

paid to the Trust were passed along to the brokers. Thus, Plaintiffs cannot make out a claim for

conversion.

c. Unjust Enrichment

83. The basis of a claim for unjust enrichment is that the defendant has obtained a

benefit which in equity and good conscience should be paid to the plaintiff. “Unjust enrichment is

not a catchall cause of action to be used when others fail. It is available only in unusual

situations when, though defendant has not breached a contract, nor committed a recognized

tort, circumstances create an equitable obligation running from the defendant to the plaintiff.

Typical cases are those in which the defendant though guilty of no wrongdoing, has received

money to which he or she is not entitled . . . An unjust enrichment claim is not available where it

simply duplicates, or replaces, a conventional contract or tort claim” (See HUB’s Reply Memo of

Law, p. 28).

84. In the instant matter, Plaintiffs’ Amended Complaint alleges unjust enrichment

based purely on the purported wrongdoings of the broker defendants. Moreover, these alleged

wrongdoings are the same exact facts upon which Plaintiffs rely for their other contract and tort

claims. Thus, even if Plaintiffs’ contract claim was not present, this unjust enrichment cause of

action would still be duplicative of Plaintiffs’ claim of negligence, fraud, and/or negligent



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misrepresentation. Based upon the Court of Appeals decision in Corsello v. Verizon N.Y., Inc.,

18 N.Y.3d 777 (2012), “a claim for unjust enrichment cannot lie where the complaint also

alleges either fraud or breach of contract based on the same underlying facts.” (See HUB’s

Reply Memo of Law, p. 28).

85. Finally, we would be remiss not to point out Plaintiffs’ patent misrepresentation to

the Court contained within this section. Plaintiffs have the audacity to state that HUB does not

dispute that it acquired the assets of “Hirsch.” Let it be clear that HUB vehemently disputes that

it acquired the assets of Defendant Hirsch Wolf, Inc. Plaintiffs’ statements to the contrary are

nothing more than fabrications. Further, Plaintiffs’ presentation of such untruths is done with the

sole objective of confusing this Court with its ambiguous references to Hirsch Wolf, Inc. and

Hirsch Wolf, LLC. The Court should not be fooled by such fiction.

d. General Business Law § 349

86. Defendants maintain that Plaintiffs have failed to adequately plead the elements

of a cognizable claim pursuant to GBL 349. Furthermore, the case law relied on in opposition to

HUB’s motion is distinguishable and cannot control for purposes of the instant motion practice.

87. The elements of a cause of action under GBL 349 are “first, that the challenged

act of practice was consumer-oriented; second, that it was misleading in a material way; and

third, that the plaintiff suffered injury as a result of the deceptive act.” (See HUB’s Reply Memo

of Law, p. 29). “Section 349 does not grant a private remedy for every improper or illegal

business practice, but only for conduct that tends to deceive consumers.” (See HUB’s Reply

Memo of Law, p. 29).

88. In its prior decision, this Court noted that the elements of a claim pursuant to

GBL 349 and 350 are identical to one another and that Plaintiffs could not meet the requisite

elements to state a GBL 350 claim. (See Exhibit D to HUB’s Affirmation in Support, p. 22)

Specifically, the Court found that the activities alleged in the proposed Amended Complaint

were not directed at and did not impact the consuming public at large. The same finding must



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be made as to Plaintiffs’ GBL 349 claim. The transactions detailed throughout the Amended

Complaint involve private interactions between the brokers and the individual plaintiffs. It does

not involve the public at large. Thus, GBL 349 is inapplicable to the underlying dispute.

89. Moreover, the case law cited in Plaintiffs’ opposition does not require that the

Court depart from its prior and controlling findings. (See HUB’s Reply Memo of Law, pp. 30-31).

90. It is clear that what is actually alleged in the Amended Complaint and affixed to

Plaintiffs’ Opposition papers does not support a finding that the defendant brokers were

marketing the Trust to the general public or individual consumers. Plaintiffs quote emails and

letters sent by the broker defendants to individual Plaintiffs. However, these were not mass

marketing emails targeting multiple employers. To the contrary, these were communications

between a broker and a client, where the broker expressed nothing more than opinions or

hopes about the Trust. The Court made this very observation of the Amended Complaint, noting

that “it is apparent from the proposed complaint that many of the interactions between plaintiffs

and their insurance brokers were based upon individualized written and oral statements.” (See

Exhibit D to HUB’s Affirmation in Support, p. 23).

91. Plaintiffs also cite many “advertising materials” which they allege were distributed

to the public. However, these documents bear the insignia of CRM, the Trust’s administrator.

The same is true for the “broker bash” PowerPoint, which stemmed from an event put on by

CRM. These are not broker materials. They may be evidence to support a claim that can be

maintained against CRM, but nothing in the Accredited Aides Plus, Inc. v. Program Risk Mgt.,

Inc., 2017 N.Y. App. Div. LEXIS 65, (3d Dept. Jan. 5, 2017) decision justifies using CRM’s

materials to sustain a GBL claim against the brokers. (See HUB’s Reply Memo of Law, p. 30-

31).

92. Furthermore, the Third Department’s decision in State of New York Workers’

Compensation Bd. V. 26-28 Maple Ave., Inc., 80 A.D.3d 1135 (3d Dept. 2011) is still controlling

on this issue. In that case, the Third Department found that a broker’s marketing of a GSIT did



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not provide grounds to state a claim under GBL 349. Nothing in Accredited Aides disrupted this

holding and thus, it should be applied in the instant matter to dismiss Plaintiffs’ GBL 349 claims.

(See HUB’s Reply Memo of Law, p. 31).

e. RICO

93. It is unquestionable that civil RICO violations are subject to a heightened

pleading requirement because such claims have been found to be an unusually potent weapon

and the litigation equivalent of a thermonuclear device. (See HUB’s Reply Memo of Law, p. 31).

In the instant matter that heightened standard applies specifically to the brokers’ alleged

mailings, which Plaintiffs claim were part of a purported RICO scheme.

94. Plaintiffs’ Amended Complaint and their opposition wholly fail to meet this

standard and plead with particularity as to the alleged mailings. Plaintiffs’ claim that Krog Corp.

v. Vanner Group, Inc., 2016 N.Y. Misc. LEXIS 3251, 2016 N.Y. Slip Op 51288(U) (Albany Cty.

Aug. 22, 2016) is distinguishable from the instant matter, but they are sorely mistaken. The

alleged fraud in Krog is exactly the same as the one alleged in Plaintiffs’ Amended Complaint.

Thus, Plaintiffs are obligated, as set forth in Krog, to plead with particularity as to the specific

mailings sent by the broker defendants. Plaintiffs have not met this standard as they fail to set

forth which Plaintiffs actually received mailings and how they were misled.

95. Furthermore, Plaintiffs attempt to skirt the heightened requirements by relying on

the marketing materials and letters sent to only some of the Plaintiffs, constitutes the type of

non-actionable puffery that fails to sustain a RICO claim. (See HUB’s Reply Memo of Law, p.

32).

96. Moreover, the Plaintiffs who have failed to proffer any evidence of these

“mailings” cannot adequately state a civil RICO claim. This is not a class action, thus each and

every plaintiff must meet the stringent pleading requirement. Here, only some of the Plaintiffs

have alleged that they have received communications from the broker defendants. The ones

that fail to make such allegations have no excuse, as it is alleged that the mailings were directed



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to each and every one of them. This is not a situation where the purported information

supporting the RICO claim is in exclusive possession of those participating in the scheme. (See

HUB’s Reply Memo of Law, p. 32).

97. Therefore, Plaintiffs have failed to meet the stringent requirements of the civil

RICO claim and the cause of action must be dismissed accordingly.

f. Common-Law Indemnification

98. In order for a Plaintiff state a claim for implied indemnity against a defendant

broker, the cause of action must include allegations that Plaintiff and the broker “owed a

common duty to some other party, that ought to be discharged by [the broker] rather than

[Plaintiff].” (See HUB’s Reply Memo of Law, p. 33). Despite the contentions in Plaintiffs’

Opposition, Plaintiffs cannot state a cause of action as to Common-Law or Implied

Indemnification.

99. Plaintiffs misrepresent what is stated in their own Amended Complaint in order to

save this meritless claim. In their Amended Complaint, Plaintiffs fail to allege that they delegated

their duty to obtain Workers’ Compensation insurance to the defendant brokers. Rather,

Plaintiffs’ Amended Complaint, as cited in their opposition, provides in relevant part:

- Each of these Plaintiffs, which are businesses lacking an in-house expertise on complex insurance matters, had a special relationship of personal trust and confidence with the Brokers wherein the Plaintiffs continuously and reasonably relied upon the expertise and advice of the Brokers with regard to inquiries on securing suitable workers compensation insurance coverage for their employees;

- That special relationship of personal trust and confidence existed for a period of years and in some cases predated their joining of the Trust. (See Plaintiffs’ Amended Complaint, ¶¶ 125, 127).

100. These allegations provide no basis for the Court to find that the Defendants owed

a shared or common duty with Plaintiffs to provide Workers’ Compensation coverage to

Plaintiffs’ employees or maintain the solvency of the Trust, which would be necessary to support

a common law indemnification claim. Plaintiffs improperly attempt to recast its direct claims

sounding in breach of contract and tort against HUB, into a common law indemnification claim.



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This flawed argument has been rejected in several decisions and this time should be no

different. (See HUB’s Reply Memo of Law, p. 33-34).

101. Finally, Plaintiffs’ reliance upon 12 NYCRR 317.17 as evidence of the brokers’

actionable duty is mistaken. These regulations do not provide any basis to find that the brokers

had a duty to maintain the solvency of the Trust. Rather, these regulations solely go to the

brokers’ duties to prospective members in marketing the Trust. These same duties are cited in

support of Plaintiffs’ contract and tort claims, but they do not provide grounds for finding that the

brokers shared a common duty with plaintiffs or the Trust. Thus, the common law

indemnification claim should be dismissed accordingly.

g. Negligence

102. In their moving papers, Defendants established that Plaintiffs’ negligence claim is

duplicative of their breach of contract claim. In opposition, Plaintiffs unsuccessfully attempt to

enlarge the scope of their negligence claim asserting, for the first time, that the broker

defendants had expansive involvement in the actual administration of the HITNY Trust.

103. Specifically, Plaintiffs contend that their negligence cause of action is based on

more than what is just alleged in the Amended Complaint, namely a failure to adequately advise

Plaintiffs on the risks associated with self-insured trusts. Now Plaintiffs claim that the brokers

played a role in the administration of the Trust and acted as an agent of CRM, which are

patently false.

104. Taking these contentions in turn, Plaintiffs’ claim that the brokers participated in

the administration of the Trust is undermined by the very Forensic Audit Report relied upon as

an exhibit to the Amended Complaint. The Forensic Audit Report reviewed the inner workings of

the HITNY Trust and CRM’s acts and omissions in painstaking detail. Plaintiffs cite to this report

as a basis for their claims and damages in this lawsuit. However, it is telling that in the 92 pages

that make up this report, there is not a single assertion, allusion, or comment that would allow

anyone to find that the broker defendants were involved in the actual administration and inner



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workings of the Trust. This contention is pure conjecture, which Plaintiffs pluck out of the air at

the eleventh hour in yet another desperate grasp to save their poorly pleaded complaint. The

contention is without merit and should be disregarded.

105. Further, Plaintiffs contend that the Defendants acted negligently in their role of

marketing the Trust. Specifically, Plaintiffs state that Defendants still attempted to increase the

Trust’s membership, despite the mounting deficit. However, when these allegations are boiled

down, they still resemble nothing more than the same basis for Plaintiffs’ breach of contract

claim. Specifically, Plaintiffs allege that Defendants are in breach of their agreements, due to

“improperly placing and continuing to place Plaintiffs in the Trust with knowledge of the

Trust’s deficit.” (Amended Complaint ¶ 220).

106. Suffice it to say, there is no distinction in the allegations between the two causes

of action. As such, Plaintiffs’ negligence claim must be dismissed as a matter of law.

CONCLUSION

107. The present record before the Court establishes, as a matter of law, that

Plaintiffs’ Amended Complaint as to the HUB defendants must be dismissed in its entirety.

108. HUB has appropriately cited to the “Law of the Case” Doctrine, establishing that

this Court’s prior decision on Plaintiffs’ Motion to Amend is dispositive for purposes of the

timeliness of Plaintiffs’ direct claims against HUB. Moreover, Plaintiffs’ new arguments regarding

the statute of limitations are devoid of merit and can be easily disregarded by the Court. Simply

stated, these direct claims as to HUB are wholly barred by the statute of limitations.

109. Furthermore, HUB has definitively established that Plaintiffs cannot rely upon the

“Relation Back” doctrine to save their claims. HUB did not enter into a merger (de facto or

otherwise) with Defendant Hirsch Wolf, Inc. The Asset Purchase Agreement provides

unquestionable evidence of this fact. HUB has not entered into any transaction with Hirsch Wolf,

Inc. or acquired any of that entity’s assets.



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110. Rather, the Agreement clearly reflects a transaction between HUB and non-party

Hirsch Wolf, LLC. This undisputable fact is fatal to any and all of Plaintiffs’ claims regarding a

purported de facto merger. Moreover, it precludes Plaintiffs from establishing that HUB and

Defendant Hirsch Wolf, Inc are “united in interest” and forecloses any application of the

“Relation Back” Doctrine. Plaintiffs’ opposition wholly fails to present any evidence to the

contrary. There is simply no basis for Plaintiffs’ claims of successor liability.

111. Moreover, HUB has established that, even if the statute of limitations did not bar

its claims, the vast majority of its causes of action are deficient as a matter of law. Plaintiffs have

failed a state a cognizable cause of action, warranting the dismissal of such toothless

allegations.

112. Finally, HUB has presented uncontroverted evidence to the Court, which

warrants a ruling on the pleadings. This Motion is in no way premature and Plaintiffs have failed

to present a legitimate basis for allowing their meritless claims to proceed into discovery.

113. Therefore, for the foregoing reasons, the Court should issue an order granting

HUB’s Motion to Dismiss the Amended Complaint in its entirety, together with such other and

further relief as this Court deems just and proper.

Dated: February 17, 2017 Valhalla, New York

Yours, etc. KAUFMAN BORGEEST & RYAN LLP By: Lee E. Berger, Esq. Attorneys for Defendants

HUB International Northeast Limited; HUB International Group Northeast Inc. HUB International Limited 200 Summit Lake Drive, First Floor

Valhalla, New York 10595 (914) 449-1000 Our File No.: 173.001



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