Defendants are often faced with complaints that assert multiple causes of action arising from the same set of facts and circumstances. A prime example of such a complaint is presented in CIM Urban Lending v. Cantor Commercial Real Estate Sponsor, L.P. C.A. No. 11060-VCN (Del. Ch. Feb. 26, 2016). In an effort to recover for a general partner’s alleged improper payments to an affiliate, the plaintiffs in CIM asserted claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty and unjust enrichment. On the defendant’s motion to dismiss, the court found that only the breach of contract claim could stand. The remaining claims, including for breach of fiduciary duty, were dismissed as duplicative of the core claim for breach of the limited partnership agreement.
Analysis
The plaintiffs—limited partners in Cantor Commercial Real Estate Co. (CCRE)—alleged that the defendant, CCRE’s general partner, paid improper underwriting fees to one of its affiliates in breach of the LP agreement. According to the plaintiffs, the defendant breached provisions of the LP agreement that restricted the compensation payable to affiliates of the general partner that provided services to CCRE. CCRE was a Delaware-limited partnership that originated and purchased mortgage loans secured by commercial real estate and securitized those loans in commercial mortgage-backed securities. The defendant engaged its affiliate to provide necessary underwriting services, and the plaintiffs alleged the defendant paid that affiliate “blatantly improper” fees for its services.
