Bochenek v Ashton

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Bochenek v Ashton 2023 NY Slip Op 33040(U) August 31, 2023 Supreme Court, New York County Docket Number: Index No. 654904/2022 Judge: Melissa A. Crane 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. INDEX NO. 654904/2022 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 08/31/2023 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. MELISSA A. CRANE Justice ----------------------------------------------------------------- ----------------X ETHAN BOCHENEK, Plaintiff, INDEX NO. 60M 654904/2022 MOTION DATE N/A MOTION SEQ. NO. 002 - V - GREG ASHTON, GROW EVENTS, LLC,TWENTY INVESTMENT GROUP, LLC,EACH AND EVERY SUBSIDIARY, HOLDING, EVENT HELD BY GROW EVENTS, LLC,JOHN DOES 1-10, ABC CORPORATIONS 110 DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X The following e-filed documents, listed by NYSCEF document number (Motion 002) 28, 29, 30, 31, 32, 33,34,45,46,48,49,50,51,52,53,54,55,56,57 were read on this motion to/for DISMISSAL Upon the foregoing documents, it is Plaintiff, Ethan Bochenek is an individual domiciled in New York. The defendant, Greg Ashton, resides in Los Angeles, CA. Ashton was and allegedly is an officer, director, member and principal of GROW and TWENTY SEVEN INVESTMENT LLC, (TSIG). GROW EVENTS, LLC is a limited liability company registered in Middletown, Delaware, was and still is a company operating in the State of New York, and is in the business of brand marketing and organizing industry events. GROW hosted a series of events in New York, New York, and in Los Angeles, California. GROW operated under various names, including but not limited to, Grow, NY and Grow, LA. Defendant TSIG is a limited liability company registered in Delaware, was and still is a company operating in the State of California, and is in the business of brand marketing and organizing industry events. On November 23, 2020, Bochenek and GROW entered into the independent contractor agreement. Ashton acted as the representative and signed, individually, as the "Founder" of GROW EVENTS, LLC . Bochenek claims he fully performed his obligations under the employment agreement until defendants terminated him on or about November 30, 2022. 654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL Motion No. 002 [* 1] 1 of 5 Page 1 of 5 INDEX NO. 654904/2022 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 08/31/2023 Bochenek was allegedly not paid $63,547.50 in commissions due from Defendants under the contract, exclusive of interest, costs. Also, plaintiff claims he sold more than $450,000.00 in sponsorship sales, before June 24, 2022, thus fulfilling the contract and vesting his interest in the eight (8%) Percent in the company GROW EVENTS, LLC (including but not limited to Grow, NY and Grow, LA), and each of GROW EVENTS, LLC's subsidiaries. TSIG is a subsidiary of and/or wholly owned by GROW, and conducts the business formerly conducted by GROW in California as Grow, LA Ashton, was and allegedly still is an officer, director, member and/or a principal of GROW and TSIG. Defendants claim these subsidiaries were not part of the original agreement. For reasons unknown, plaintiff has chosen to blow up this relatively straightforward breach of contract case into 16 causes of action, most of which are unsustainable. The substantive allegations only concern defendants' failure to pay plaintiff commissions and grant him 4% equity and 8% equity in Grow, and TSIG respectively. Although it is unclear why, plaintiff has also named anonymous parties, defendants, 1-10 JOHN DOES, individuals that the plaintiff claims acted, colluded, with defendants or acted in forming and operating GROW, TSIG and 1-10 ABC CORPORATIONS, to defraud and deprive Bochenek of an equity interest in Grow and TSIG. For the reasons discussed on the record on July 31, 2023, the court renders its decision on the motion to dismiss as follows: Defendants did not move to dismiss the 1st cause of action for breach of contract, so it remams. The 2 nd cause of action for quantum meruit and 3rd for unjust enrichment are dismissed with prejudice. Plaintiff cannot recover under these theories where there exists an express contract governing the subject matter in dispute. The 4th cause of action for breach of fiduciary duty is dismissed with leave to replead. The gist of this claim, although somewhat unclear, appears to be that defendant Ashton, through TSIG, diverted business away from Grow LA in which plaintiff claims to have an equity stake. The complaint does not discuss the basis for the fiduciary relationship, which the court supposes could be that of majority and minority shareholders, but the complaint is silent. It also fails to delineate what portions are derivative, and what portions, if any, are direct. 654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL Motion No. 002 [* 2] 2 of 5 Page 2 of 5 INDEX NO. 654904/2022 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 08/31/2023 The 5th cause of action for waste of corporate assets and the 6th cause of action for "Gross Mismanagement" duplicate the 4th cause of action for breach of fiduciary duty at this point and the allegations from these causes of action should be incorporated into the 4th cause of action, or fleshed out more if plaintiff meant something different. If they are meant to be derivative claims, they need to be labelled that way. Accordingly, these claims are dismissed. The second 6th cause of action for an accounting is dismissed with leave to replead once the cause of action for breach of fiduciary duty is repled. Without a valid fiduciary duty claim, there is no basis for an accounting The 7th cause of action, labelled "reach and apply," is dismissed with prejudice for the reasons discussed on the record. Namely, it would appear that plaintiff is seeking an end run around a proper showing for a pre judgment attachment through this cause of action. If plaintiff thinks it is entitled to a pre judgment attachment, it must make a separate motion for one with a proper showing, pursuant to Article 62 of the CPLR. The 8th cause of action for an account stated is deficient as it does not allege that defendant failed to object to invoices within a reasonable time. Therefore, the court dismisses the cause of action with leave to replead. As stated on the record, the 9th cause of action, for promissory estoppel, cannot stand in light of the contract between the parties, including that contract's merger clause. The court accordingly dismisses this count with prejudice. Plaintiff conceded on the record that he does not need the 10th cause of action alleging theft of services. In any event, it duplicates the breach of contract cause of action. Accordingly, the court dismisses the 10th cause of action with prejudice. The 11 th cause of action alleges intentional interference with contract. This cause of action relies on alter ego allegations between Ashton and TSIG, on the one hand and Grow Events LLC on the other. This would make Ashton/TSIG one and the same with Grow Events. However, a party cannot interfere with its own contract, for that is merely a breach. This claim is also an improper attempt at evading the legal principle that a corporate shareholder or member cannot be held personally liable for a contract signed in a corporate capacity. Without more, such as a breach of fiduciary duty, this cause of action cannot stand. Accordingly, the court dismisses it without prejudice. 654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL Motion No. 002 [* 3] 3 of 5 Page 3 of 5 INDEX NO. 654904/2022 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 08/31/2023 The court dismisses the 12th cause of action seeking to pierce the corporate veil with leave to replead. The current allegations are too conclusory to sustain. As explained on the record, the hallmark of New York's veil piecing law is the misuse of the corporate form to harm plaintiff (Sutton 58 Assocs. LLC v Pilevsky, 189 AD3d 726, 729 [1st Dept 2020]). Plaintiff has failed to plead this element. In particular, plaintiff has failed to plead facts sufficient to show that defendants left Grow so undercapitalized that Grow would be unable to satisfy its obligations to plaintiff or that the process of leaving Grow undercapitalized was by diverting business through TSIG. Plaintiff has conceded he does not need the 13 th cause of action asserting successor liability. In any event, it duplicates the twelfth cause of action. Accordingly, the court dismisses this claim. The 14th cause of action alleging fraud is dismissed without prejudice on these facts. As explained on the record, a promise made with no intention of performing is breach of contract, not fraud. All plaintiff has alleged is a future promise to perform, not a present misrepresentation of fact. Moreover, the amended complaint fails to plead fraud with the particularity that CPLR 3016 requires. The 15 th cause of action for breach of the covenant of good faith and fair dealing is dismissed as it duplicates the first cause of action for breach of contract. Accordingly, the court dismisses it with prejudice. To sustain an action for violation of GBL § 349, there needs to be a misrepresentation aimed at the public (KS Trade LLC v Intl. Gemological Inst., Inc., 190 AD3d 556, 557 [1st Dept 2021 ]). This is at bottom a private dispute between two individuals. Accordingly, the court dismisses the 16th cause of action with prejudice. The court also dismisses plaintiffs request for punitive damages for failure to plead a public injury (Linkable Networks, Inc. v Mastercard Inc., 184 AD3d 418,419 [1st Dept 2020]) and dismisses the request for attorney's fees because there is no basis in the remaining breach of contract cause of action to award them. As there are no remaining causes of action left against TSIG, the court will not reach the issue of personal jurisdiction ... until next time. However, as stated on the record, to the extent plaintiff manages to plead that TSIG is the alter ego of Ashton, and that TSIF was used to divert 654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL Motion No. 002 [* 4] 4 of 5 Page 4 of 5 INDEX NO. 654904/2022 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 08/31/2023 business away from Grow here in New York, or that TSIG utilized the services of a New York resident, jurisdiction will likely be found. Accordingly, it is ORDERED THAT defendants motion to dismiss is granted as set forth herein; and it is further ORDERED THAT any amended complaint must be served within 20 days of the efiled date of this decision and order (i.e September 20, 2023), otherwise waived; and it is further ORDERED THAT, defendant shall have until October 31, 2023, to answer, move or otherwise respond to the amended complaint, or if no amended complaint is forthcoming, to answer what is left of the current complaint. 8/31/2023 DATE CHECK ONE: MELISSA A. CRANE, J.S.C. CASE DISPOSED GRANTED NON-FINAL DISPOSITION DENIED SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL Motion No. 002 [* 5] GRANTED IN PART APPLICATION: 5 of 5 OTHER REFERENCE Page 5 of 5

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