Oyster Fight!

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I spend a lot of time handling cases on or near the waterfront.  One recent opinion caught my eye.  Judge Jackson ruled on a Motion to Dismiss concerning an oyster farm and distribution business.  The individual defendants were the founders of the corporate defendant—Wharf Oyster Company, LLC.  The Plaintiff was an investor.  After a period of investment in the domestic business, Plaintiff was solicited to invest in an Indian subsidiary.  The investment in the Indian company was subject to a “Participation Form” outlining some of the specifics regarding the investment.  Shortly after the investment, one of the individual defendants was subject to “multiple serious felony offenses” and Plaintiff demanded return of the investment.

At issue was the old Virginia “Source of the Duty Rule” and how the Participation Form might limit tort claims against the Defendants.  The Court, at least on the allegations of the Complaint, concluded that the Participation Form was not a valid contract and was not intended to be binding.  Accordingly, the Court found it was no bar to claims for fraud or conversion.

But the Court dismissed the conversion claim on other grounds.  Finding that the voluntary investment, even if based on fraud, “relinquished [the] ownership interest and right of possession” of the invested funds, a claim for conversion could not continue because the Plaintiff could not meet the ownership prong of the conversion test.

Oysters have always been rumored to be an aphrodisiac, but these parties are making war, not love, over the oyster investment.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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