E&B Giftware, LLC v Mauer

Annotate this Case

Download PDF

E&B Giftware, LLC v Mauer 2016 NY Slip Op 31569(U) August 17, 2016 Supreme Court, New York County Docket Number: 651672/2015 Judge: O. Peter Sherwood Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SllPREl\ff COURT OF TME STATF- Of NEW YORK COUNTY OF NE\\/ YORK: COIViMERClAL DlVl.S!ON l'ART 49 ----------------------·· --~- ----------------------______ ., _____ ----------------.. x E&B f~IFTvVARE, LLC !LB BRANDS HOLDINGS, INC., anti Ei:rn HOLOING COMPANY LLC, DECISION AND ORDER Plaintiffs, Index No.: 651<172!2015 t\foHon ShjlH'IH'C No.: 005 -again.Sf·· DA \"ID M:\lJER, FHANI' KIRBY ;1nd HARHIS METii, Defendants. -----------------------------~---------··--------------·----------------------X O. PETl~R SHEH.\VOOD .. J. On lvbn:h 8. 20 l (\this cour:l :-:igncd an order gnmtiilf;' a mot inn to dismiss the cornpbint in this action withoot ptejudice 10 a motion tu repkad iNYSCEF Doc. No. 55). Now. pl:iinti!h ITH>ve 1n ~.1mend their rnmpb1inl aµainsl def;;;rnfant David Mauer pursuant lo CPLR 3015<,b). Leave to amend a pleading pursuant to CPU~~ 3025 ''shall he freely given;· in the absence (ii'pl'l'.jud!cc ~;urprise (see e.g. Tl1r1111p.rnn 1· Coo11er, 24 ,\D3d 203, 205 I. Isl Dept 2005]: Zaid Thewr.~ Corp, (1!' 1· Sona Realty Co .. 18 /\D3d 352, .154 [Jst Dept 20051). Prejudice in this ctmtext is shown where the nonm(wing party is ·'hindcr..:d in the preparation of his ease or has been pn::vcntcd from taking some nH:asurc i.11 support o I' Jfr; po~sit ion .. (/,uomis 1· Ci1·et10 Corimw ('onsr. Co .• 5·~ NY2d 18. 23 ! 19i\1 j). In order to c0ns1:·rve judicial resources. cxaminJtion of the underlying merit of the proptlsed ;1111cndnlt:'nl is mandrtt(:d ( Tltmnp.wn. s11pra. 24 AD3d at 205: laid, .rnprtl. l 8 AD3d at 35:') ). Lca\'C will be denied where the proposed pkading foib to stated cause oi"action. or is palpably insufficient as a mailer orlaw (se1? Aero!ineos Galapagos. S ..·L v ,'iundmrner Alewmdria. 74 /\D3d 652 [ l sl Dc:pl 2010]: T/10111p.rnn. supra. 24 /\l)Jd at 205). Thus, a motion for k:aVL' to amend a pleading must hl: :>uppl)rtcd by ~m al'fidavit. of meri1 or hthcr .;vidcntiary pnK\f (De/1a Dallas Alpha C'wp. ,. S'. St. Sc11;1or1 .Ud. Partm nliip. 127 i\.D3d 419. 4~'.0 1 ! l s1 Dept 20 I 5 ]). /\s the party seeking tile amendment. plaintifb have tlic burden in the first instance to tkmonslrnlc their prop\)S(·d claims' merit~:. but de f'1::ndanis, as the part ics opposing the motirm. "must o\·crcomc a presumption nf v~llid ity in the movi11g party's favor, and demonstrnll' that the facts alleged in the moving p;ipcro-; an: obviously w1r(:\iahk or insul'ficicnt to support the amcmlim:m·· (Pc:od1 Parking ('wp. .\'r U..C, 42 A U3 d 82, 86 11 st Dept 2007 j). 2 of 5 F 3-16 IY. ./Ot/1 [* 2] CPLR 3025(bl requires a rnntioH to ;1rn..:ml "be ac1.:\!mpanied by the prop(lSt:d ,i;rn:mkd or suppknicntal pleading clearly showing lilt: diangcs or ndditions lo lx: made. to the pleading." Plaintiffs attach a copy <1f1bdr Proposed Sc-.:ond Amended Complaint (PSAC Berman all. exhibit A. NYSCEF Doc No 60}. but do not ~;how the pr(1pOSL~d changes in their moving papl~rs. Plaintiffs <illach <i black.line to their reply papers (NYSCEF Doc. No. 67). but this d0t::s not cure llK' deli.:ct. Whi k pL1 inti !Ts argue th<1t th is i'trnrt allov.:cd such :1 nu-e in S.',A·r 1· (',\ U I foldings Cmp. (20 l 5 N. Y. Slip Op. 314<)8!UJ, ·1·:' !Sup CL New York Cuunty :2015j). Scher had submitted an <dlinnation explaininb~ the pmposcd changes to the complaint, follilling the .stalutor; requircrrn:nt and el iminatin~ pn:j udicc to tht.: defendants (se,:, id.). Such is not the cas..:~ lie re. The affirmation provided by plaintills mcrdy prcscmcd lhe PSAC without c.xphnation. It speaks m:ithcr tu the proposed c.;ha.nges noi to tlH:ir merib. Additionally. while the absence oLm a ff davit of merit is not alont.:. fotaL the plaintiffs ha\'c 1wl sll(lwn this arncndmL~nt tn have merit, so the cour1 decline~• lo use its discrt:tion to a!lO\v it T!te first caw•c of actioli, !'or brcnch 01' liduciary duty. is lxurcd by Lhc rcka~;e (Semel ;if{ cxhibi1 A NY SC Fl-' 1)(1c. No. 63) and the three year .statuk' t)f limitations, as discussed in the decision on the prior motion lo dismiss (NYSCEF Doc. No.55. al 44). The nllcgatinns supporting the portion of the sccrn1d cause of action. frll' frmid. <Ire also lacking in merit. "To stale a cause or act inn for J'r;:iud. a plaintiff must al kgc a rl.!pn:.-scntalinn nf material fr1ct, lhe l~ilsil) of the n:prcscnlatiun. knowlcdgl.! by the party making tli<.: n.:~presentati.un that it \\HS fi1be wbcn made. justifiable reliance by the plaintifLmd resulting iiliur;,·" (Kar1/lnwi \'Cohen, 307 AD2d l 11. 119 !lst Dept 20031 citing Monaco v New Vink Umr. ,\fed ('tr., 213 AD2d 167, 169 [1st [kpl 19951.lv. denied 86NY2d 882 [1995]; Ca/fas1· Eise11herg, 192 AD2d 349, 350 [1st Dept 1993]). Such claims are rcqufred tn be slated in detail (CPLR 3016[h'l:1. For the portion of the fraud claim n:lah:'d hl FunGoPlay, plaintilfa now allcg.l.! l\faucr ··fi.ilscly por1rnycd FunGoPlay as is jsic] it '.Ven: a Company with assets and ongoing operations.'· by representing FunGol'lay as "a Company he \\as acquainted with. 1ha1 was interested in ha\'ing EB Brand~~ rnanulhctrn·c a six-figure shipment of clccuonic soccer balls and Frisbees" (PS:\C. ii~f 58-59). Thc;;~7 broad ~md vngtlc nllcgations, when: misleading al all {as plaintiff has conceded thatrvlauer was, in foc1. acquainted with FunGoPlay. and as the PS/\C supports rhc concluslnn that FunGoPlay was actually inlercsh:d in htffing 3 of 5 Brnmls [* 3] ,. manufoctun: soccer balls and frisbces [PSAC ~!'IJ 56. 62J ), c;mnot support a claim for rraud. Nor has the plaintiff alleged the required justifiable rclian1:c. ThL' PSAC fraud claim also cont:lins allegations regarding [Vlauer' s presentation o!' false financial information to the: shareholders and board or directors. Plaintiffs dai1n the financial statcn.icn!s omincd in rnrrnation about returned merchandise (!':SAC at •,;~i 7 l -TL 79). llowcv;;·r. th ...: h; financial statements attached to lhc PSAC disclose the sales programs and that the nmoimt of returns under t!K'.SC programs can range in the millions of dollars ([B Brands Holdings. Inc., Consolidated Financial Report. Dcu:rnbcr 31, 2009. PS/\C. ex hi hit A, al l 0, 12: EB Brands Holdings. Inc .. Consolidated Finnncial Report. December 31. 20 J 0. PS/\C. exhibit B. at 9. 12: EB Brands Holdings. In.:: .. Consolidated Financial Report. Lkccmber 31. 2011. PSAC, exhibit C, at 10, 12). Instead of' showing ih<..'. rn..::rits of plninliffs' alki::at.ions, the exhibits clmlr:1dict them. /\dditi(mally, plaintiffs again foil to ;dlcgc jusiiliahic rdiencc. Nor have plaintiffs shovv·n the third claim, frlr fraudulent concealment. has n1cri1. /\ C~iusc of action for fraudulent concealment "must allege that the defendant made a material misrepresentation of f~1ct: that the misrcprcscnl"tion was made inltmtionally in order to defraud or mislead the plaintiff: th;it the plaintiff reasonably relied on the misrepresentation; ... th~1t the p!aintirl suffered damage as a result uf its relianci: on the ddendani's misrepresentation [and] that the di:fonda11t had a duty to disclose material information and that it foiled to dos(/' (.P.T. Bank Cent. Asia v AON Al'V!RO Bank N.V., 301 /\1)2d 373, 376 [Isl Dept 2001]). As for us this claim is predicated on the fi1i::ncial statements, the attached financial st<1tcmen!s do not support plaintiff:< alkgations oJ a rnisrepreseniution, as dis(;usscd above. As for as this claim is based on defendants' alleged rnnccalment of the credit request forms, which d1..'.kndants atlegcdly failed to pnH.:css properly. plaimiffs have not alleged any fa<.:t~>. sugg0s!ing th1..~ board or directors relied on rnisrcpn.~scntations by t.he defendants about the existence of' merchandise returns, or how the a! legcd conccaltm~11t c:ius\_~d damage. Finally. the. fourth claim. for 1..:ivil conspir;-Ky. aho foils. a.'> "'a cause or action sounding in civil conspiracy cannot stand alone, but stands or falls \Vi th the underlying torf' (Romuno v Romano. 2 AD.3d 430, 43'.? 12003]). /\s discussed above, plaintiffS' uth<:r <.:!aims have foiled. Thc.rL'.fore. the claim for civil con:;piraq• also fails. 4 of 5 [* 4] Accordingly. this motion for lca\'C lo amenJ the complain! is DENIED. This constitutes th<: decisiun and order of the court. DATED: August 17, 2016 5 of 5

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.