Enbridge v Marinaccio: 2012 ONCA: Fraud Breach of Trust Bribery
- OVERVIEW
[1] Piro and Montaldi appeal the summary judgment granted to Enbridge.
[2] Piro was a labourer. Montaldi was an accountant. The primary defendant,
Marinaccio, was an operations supervisor for Enbridge. Enbridge, a regulated
utility, frequently had to repair property it had damaged during its regular
maintenance. In 2001, Marinaccio, Piro and Montaldi devised a scheme to do
this repair work.
[3] According to the appellants, the scheme was to operate as follows. Piro
alone would register business entities to do the work. Marinaccio’s involvement
would be concealed from his employer, Enbridge. However, Marinaccio would
hire contractors to do the work. Montaldi would prepare the invoices to be given
to Enbridge. Marinaccio would approve the invoices. Marinaccio, Piro and
Montaldi would share the
the payments from Enbridge in predetermined percentages.
[4] The appellants and Marinaccio carried out the venture for over six years.
Enbridge paid out over $6.5 million. Marinaccio has now admitted that the entire
scheme was a fraud. No work was ever done. All the invoices were phoney.
Marinaccio also claims that Piro and Montaldi were aware of the fraud. After the
lawsuit began, Marinaccio settled Enbridge’s claim against him for $1.9 million.
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[5] Enbridge then moved for summary judgment against Piro and Montaldi.
The motion judge, Newbould J., found that Marinaccio owed a fiduciary duty to
Enbridge and that he breached his fiduciary duty by secretly profiting at the
expense of his employer. The motion judge granted summary judgment against
Piro and Montaldi on three separate bases: knowing assistance to Marinaccio in
breaching his fiduciary duty; bribery; and unjust enrichment.
[6] On Enbridge’s main claim for knowing assistance, the motion judge found
Piro and Montaldi jointly and severally liable for $5,723,339.60, which was the
entire amount received from Enbridge less the net settlement amount paid by
Marinaccio (after deducting the costs ofcollection).