Tratado De Libre Comercio, LLC v Splitcast Tech. LLC

Annotate this Case

Download PDF

Tratado De Libre Comercio, LLC v Splitcast Tech. LLC 2019 NY Slip Op 33507(U) November 25, 2019 Supreme Court, New York County Docket Number: 652650/2016 Judge: Gerald Lebovits Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] NEW YORK COUNTY CLERK 11/25/2019 04:17 PM NYSCEF DOC. NO. 186 PRESENT: INDEX NO. 652650/2016 RECEIVED NYSCEF: 11/25/2019 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART HON. GERALD LEBOVITS IAS MOTION 7EFM Justice --------------------------------------------------------------------------------X INDEX NO. TRATADO DE LIBRE COMERCIO, LLC, and PEDRO CHAVEZ, MOTION SEQ. NO. 652650/2016 008 Plaintiffs, -vSPLITCAST TECHNOLOGY LLC, SPLITCAST INC., SPLITCAST TECNOLOGIA, SPA, AURUS S.A. ADMINSTRADORA GENERAL DE FONDOS, RAIMUNDO CERDA, CAMERON WENDT, HUGO NEIRA, FELIPE ARREDONDO, JOSE FLORES, JAVIER SALCEDO, IGNACIO LEON, and DOES 1-10, inclusive, DECISION AND ORDER Defendants. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 008) 1, 10, 69, 72, 98, 99, 107, 119, 141, 151, 166, 167, 168, 172, 173, 183, 184, 185 were read on this motion to DISMISS CKR Law LLP, New York (Michael James Maloney, Rosanne Felicello, and Nydia Shahjahan of counsel), for plaintiffs. Comar LLP, New York (D. Inder Comar and Rajeev E. Ananda of counsel), for defendant Cameron Wendt. Gerald Lebovits, J.: Defendant Cameron Wendt moves under CPLR 306-b, 308, 313, and 3211 (a) (5), (a) (7), and (a) (8) for an order dismissing all causes of action against himself. Plaintiffs, Tratado de Libre Comercio, LLC, and Pedro Chavez, cross-move for an order under CPLR 2215, 7503, and 2201 to stay the proceedings or, in the alternative, a traverse hearing to address service of process. Wendt's CPLR 3211 (a) (7) motion is granted. Plaintiffs' cross-motion is denied. Background Plaintiffs and defendants Splitcast, Inc., Splitcast Technology LLC, and Splitcast, SpA (collectively Splitcast), engaged in a business venture in which plaintiffs invested in the Splitcast project. Wendt was an independent contractor, acting as Splitcast's U.S. representative pending formation of a U.S. Splitcast entity. Plaintiffs commenced this action on May 17, 2016. (See Summons & Compl., NYSCEF No. I.) Plaintiffs allege that along with other defendants, Wendt enriched himself at the expense of plaintiffs, deceived them by failing to disclose material corporate action, used the venture to commit torts and wrongful acts against them, and participated in, directed, and approved of conduct that harmed plaintiffs. (See Am. Comp!., NYSCEF No. 69, at if 14.) Plaintiffs allege that 1 of 8 [*FILED: 2] NEW YORK COUNTY CLERK 11/25/2019 04:17 PM NYSCEF DOC. NO. 186 INDEX NO. 652650/2016 RECEIVED NYSCEF: 11/25/2019 Wendt, as U.S. representative of Splitcast, forwarded written materials regarding funding allocated to Splitcast. (See id. at iJ 26.) Plaintiffs further allege that they relied on Wendt's representation, in the form of written materials, that defendant A URUS had made an investment in Splitcast SpA. Plaintiffs allege that based on this representation, they decided to lend money to Splitcast SpA; and that negotiations with Wendt and other defendants led to an advisory agreement between plaintiff Chavez and Splitcast. (See id. at W40-41.) Plaintiffs assert claims for conversion, breach of fiduciary duty, fraud and deceit, breach of contract, money had and received, an imposition of a constructive trust, and a permanent injunction against defendant Wendt. Plaintiffs' opposition papers argue that as Wendt held himself out to be an officer of Splitcast, the alleged injurious actions must be attributed to him. (See NYSCEF 183, at 9.) Discussion Wendt argues that plaintiffs failed to serve him timely and properly, and thus that this court lacks personal jurisdiction over him under CPLR 3211 (a) (8); and argues in the alternative that the complaint should be dismissed for failure to state a cause of action under CPLR 3211 (a) (7). This court concludes that even assuming plaintiffs succeeded in effecting service on Wendt, plaintiffs' complaint fails to state a cause of action against him. Conversion Plaintiffs' first cause of action sounds in conversion. Plaintiffs seek return of the $200,000 in funds loaned to the venture and claim $500,000 in damages. To state a cause of action for conversion, a plaintiff must allege its "possessory right or interest in the property,'' and "defendant's dominion over the property or interference with it, in derogation of plaintiffls'] rights." (Dobroshi v Bank ofAm., N.A., 65 AD3d 882, 885 [lst Dept. 2009].) Here, plaintiffs have not alleged that the funds loaned by plaintiffs to the Splitcast venture were paid to Wendt directly, such that he could be said to exercise dominion over those funds. Although plaintiffs also claim that defendants wrongfully interfered with plaintiffs' interest in certain intellectual properly, plaintiffs have not alleged that Wendt, in particular, exercised control over that intellectual property, either. Since plaintiffs have failed to allege that Wendt exercised dominion over the allegedly converted property, this court dismisses plaintiffs' conversion claim against Wendt. (See Abacus Fed. Sav. Bank v Lim, 75 AD3d 472, 473 [1st Dept. 2010].) Breach of Fiduciary Duty Plaintiffs' second cause of action is for breach of fiduciary duty. Wendt argues that plaintiffs' breach-of-fiduciary claim against him should be dismissed because this court already has held that no fiduciary relationship existed between plaintiffs and other defendants (see NYSCEF No. 151, at 9) and because plaintiffs have not put forward a basis to find a distinct fiduciary relationship between plaintiffs and Wendt individually. The court agrees. "A fiduciary relationship 'exists between two persons when one of them is under a duty to act for or to give 2 2 of 8 [*FILED: 3] NEW YORK COUNTY CLERK 11/25/2019 04:17 PM NYSCEF DOC. NO. 186 INDEX NO. 652650/2016 RECEIVED NYSCEF: 11/25/2019 advice for the benefit of another upon matters within the scope of the relation.'" (MP Cool lnvs. Ltd. v Forkosh, 142 AD3d 286, 292 [1st Dept. 2016].) The relationship here is not one of"a higher level of trust than normally present in the marketplace between those involved in arm's length business transactions." (EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11,19 [2005].) At most, plaintiffs have alleged only that Wendt forwarded written materials about the venture. That, standing alone, does not give rise to a fiduciary relationship. Plaintiffs' second cause of action is dismissed as to Wendt. Fraud and Deceit Plaintiffs' third cause of action sounds in fraud. Plaintiffs assert that representations were made at the closing of the note purchase agreement, according to which the funds plaintiffs lent were to be secured by the venture's intellectual property. (See NYSCEF No. 68, at Jr 98.) But this court previously dismissed plaintiffs' fraud claim as against other defendants, holding that the claim merely duplicated plaintiffs' breach-of-contract claim and that plaintiffs had disclaimed reliance in the note purchase agreement itself on extrinsic representations by defendants, thus foreclosing a fraud claim premised on alleged extrinsic misrepresentations. (See NYSCEF No. 151, at 10.) The allegations as to Wendt similarly duplicate plaintiffs' breach-of-contract claim. Further, plaintiffs have failed to allege that Wendt knowingly misrepresented a material fact or that plaintiffs justifiably and detrimentally relied on any such misrepresentation. (See Pope v Sagel, 29 AD3d 437, 441 [1st Dept. 2006].) Plaintiffs' fraud claim against Wendt is dismissed. Breach of Contract With respect to plaintiffs' fourth cause of action (for breach of contract), plaintiffs have not alleged that any contract between themselves and Wendt ever existed. (See NYSCEF No. 69, at 28.). Additionally, the alleged breach of the promissory note, consulting agreement, note purchase agreement, and amended advisory agreement did not involve Wendt. Plaintiffs' breachof-contract claim against Wendt is dismissed. Money Had and Received In plaintiffs' fifth cause of action they allege that defendants received and benefitted from $500,000 from plaintiff Tratado and that equity should bar defendants from retaining that money. A had-and-received claim requires proof that, absent agreement, a party possesses money it should not retain and which belongs to another. (See Melcher v Apollo Med. Fund Mgt. L.L.C., 105 AD3d 15, 27 [1st Dept. 2013].) Plaintiffs have not alleged that Wendt, in particular, was paid the $500,000 or that he ever possessed those funds. Imposition of a Constructive Trust A court will not impose a constructive trust absent "a confidential or fiduciary relationship, a promise, a transfer in reliance thereon, and unjust enrichment." (Abacus Fed. Sav. Bank v Lim, 74 AD3d 472,474 [1st Dept. 2010].) This court has already dismissed plaintiffs' claim for a constructive trust as against other defendants because of plaintiffs' failure to establish a fiduciary relationship between the parties. (See NYSCEF No. 151, at 9.) Here, plaintiffs' 3 3 of 8 [*FILED: 4] NEW YORK COUNTY CLERK 11/25/2019 04:17 PM NYSCEF DOC. NO. 186 INDEX NO. 652650/2016 RECEIVED NYSCEF: 11/25/2019 allegations do not satisfy the requirements for a constructive-trust remedy as against Wendt, either. Plaintiffs' sixth cause of action is dismissed as to Wendt. Permanent Injunction Plaintiffs state in their seventh cause of action that they are entitled to an injunction enjoining the conveyance of the venture's intellectual property. But they do not allege that Wendt has that property or that he helped keep plaintiffs from the property. (See Lemle v Lemle, 92 AD3d 494, 500 [1st Dept. 2012].) Plaintiffs' request for a permanent injunction against Wendt is dismissed. Conclusion In light of plaintiffs' failure to state any cause of action against Wendt, plaintiffs' claims against him are subject to dismissal under CPLR 3211 (a) (7), irrespective of any issues of service and personal jurisdiction. Accordingly, it is hereby ORDERED that the motion of defendant Wendt to dismiss plaintiffs' complaint as against him, pursuant to CPLR 3211, is granted and the complaint is dismissed in its entirety as against Wendt, with costs and disbursements to Wendt as taxed by the Clerk of the Court upon submission of an appropriate bill of costs; and it is further ORDERED that plaintiffs' cross-motion to stay the proceeding is denied; and it is further ORDERED that counsel for Wendt shall serve a copy of this order with notice of entry upon all parties and on the Office of the County Clerk, which is directed to enter judgment accordingly. 11/25/2019 DATE CHECK ONE: CASE DISPOSED x GRANTED D x DENIED NON-FINAL DISPOSITION GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 4 4 of 8 D D OTHER REFERENCE

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.