Crowley v. VISIONMAKER, LLC

512 F. Supp. 2d 144, 2007 U.S. Dist. LEXIS 72710, 2007 WL 2823130
CourtDistrict Court, S.D. New York
DecidedSeptember 25, 2007
Docket06 Civ. 9388(DAB)
StatusPublished
Cited by22 cases

This text of 512 F. Supp. 2d 144 (Crowley v. VISIONMAKER, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crowley v. VISIONMAKER, LLC, 512 F. Supp. 2d 144, 2007 U.S. Dist. LEXIS 72710, 2007 WL 2823130 (S.D.N.Y. 2007).

Opinion

MEMORANDUM & ORDER

DEBORAH A. BATTS, District Judge.

Plaintiff Steven Crowley brought suit against Defendants VisionMaker, LLC (“VisionMaker”), Palace Entertainment Holdings, Inc. (“Palace Holdings”), MidO-eean Partners LP and MidOcean Partners II, LP (collectively “MidOcean Defendants”) to recover damages for the alleged breach of an agreement to provide financial advisory services. In his Amended Complaint, Plaintiff asserts four causes of action against VisionMaker and against Palace Holdings, as the alleged successor in interest to VisionMaker: (1) breach of contract, (2) promissory estoppel, (3) quantum meruit (4) and unjust enrichment. The Fifth Cause of Action contained in the Amended Complaint alleges that MidOcean Defendants tortiously induced VisionMaker to breach its contract with Plaintiff.

VisionMaker moves to dismiss the Amended Complaint, pursuant to Fed. R.Civ.P. 12(b)(6), on the principal ground that it did not breach its unambiguous written agreement with Plaintiff and therefore that Plaintiff is also precluded from seeking equitable relief with respect to the agreement. Palace Holdings and MidOcean Defendants also move to dismiss the Amended Complaint on the same grounds as VisionMaker. For the reasons that follow, the Defendants’ Motions to Dismiss the Amended Complaint are GRANTED.

I. BACKGROUND

Plaintiff alleges that “[o]n or about January 28, 2004, after substantial negotiation” he and VisionMaker entered into a written agreement (the “Agreement”) whereby VisionMaker retained his financial advisory services. (Am.Compl. ¶ 8.) VisionMaker sought Plaintiffs financial advisory services in order to find “investors to invest in, or with, VisionMaker.” (Id. ¶9.) A copy of the written Agreement between VisionMaker and Plaintiff is appended to the Amended Complaint and incorporated by reference. (Id. ¶ 10 & Ex. A.)

The Agreement 1 provides that its purpose is as follows:

*148 The purpose of this letter is to confirm the engagement of Brad Bohling 2 and Steven Crowley (“Advisor”) to act as financial advisor to [VisionMaker] in connection with a potential transaction or series or combination of transactions (collectively, a “Transaction”) involving the offer and sale of equity securities of [VisionMaker], or securities convertible into or exchangeable for equity securities of [VisionMaker].

(Id Ex. A at 1.) Pursuant to the Agreement, Plaintiff would “evaluate the business and financial prospects of Vision-Maker, develop transaction plans, assist in financing and evaluate financing options, prepare and distribute offering materials, conduct due diligence, negotiate the structure and terms of any transaction, negotiate any transaction agreement and close that transaction.” (Id. ¶ 11.)

In exchange for the provision of these services, VisionMaker agreed to pay Plaintiff promptly in cash, an advisory fee “based on the aggregate amount of funds invested in Equity Securities by investors).” (I d. Ex. A at 2.) The Agreement provided the following formula to determine the final advisory fee that would be due to Plaintiff as a result of securing outside investment in VisionMaker:

First $100 million investment, fee equal to 6% of Transaction, plus Additional a [sic] fee equal to 5% of the next $50 million investment, plus A fee equal to 4% of the next $50 million investment, plus A fee of 3% of any additional other investment dollars.

(Id. at 3.) Provision is made for the payment of a “break-up fee of $250,000” in the event that Plaintiff secures an investment of at least “$20 million” but VisionMaker chooses not to pursue the transaction. (Id.) In addition, the Agreement provides for reimbursement of “reasonable out-of-pocket expenses.” (Id.) In the instant suit, Plaintiff seeks enforcement of the final advisory fee provision of the Agreement only. The Agreement provides, however, that the final advisory fee shall be due to Plaintiff only at “the closing of a Transaction(s).” (I d. at 2.)

The Agreement provides that it “may be terminated by either party ... upon thirty (30) days prior written notice to the other party” but that termination does not relieve VisionMaker of the obligation to pay any fee due to Plaintiff under the Agreement. (I d. at 3.) Plaintiff alleges that the Agreement was never terminated. (Id. ¶ 15.) The Agreement also explicitly provides that it shall be governed by New York law and that it “constitutes the sole agreement regarding the engagement of [Plaintiff] by VisionMaker, and may be amended only in writing.” (Id. Ex. A at 4.)

Plaintiff alleges that, pursuant to the Agreement, beginning in January 2004, he “focused his efforts on pursuing opportunities for VisionMaker and raising equity capital for the same.” (Id. ¶ 18.) In the spring of 2004, Plaintiff allegedly introduced VisionMaker to MidOcean Defendants and “cultivated a relationship with MidOcean and facilitated MidOcean’s interest in investing in VisionMaker.” (Id. ¶ 19.) Plaintiff also explored other possible sources of investment in VisionMaker in addition to MidOcean Defendants. (Id. ¶¶ 22-23.) Plaintiff alleges that his efforts on behalf of VisionMaker ultimately resulted in MidOcean Defendants’ commitment *149 to purchase a third entity, Palace Entertainment, Inc. (“Palace Entertainment”), which is distinct from Palace Holdings, a named defendant in this suit. 3 (Id. ¶¶ 23-24.)

MidOcean Defendants and Palace Entertainment are not, of course, parties to the Agreement between Plaintiff and Vi-sionMaker. Plaintiff thus acknowledges that neither he nor VisionMaker “had any control over MidOcean or its investment protocol.” {Id. ¶ 25.) In structuring the transaction to purchase Palace Entertainment, MidOcean Defendants “tried to control all aspects of the transaction process, including but not limited to the economic terms and conditions of the same.” {Id. ¶ 24.)

Prior to MidOcean Defendants’ acquisition of Palace Entertainment, VisionMaker also apparently attempted to acquire that entity at auction through Plaintiffs efforts. {Id. ¶¶ 27-29.) Plaintiff also worked with several companies to “develop investment and acquisition strategies regarding [Palace Entertainment], as well as other financing options.” {Id. ¶ 30.) Plaintiff alleges that, as a result of his efforts, MidOcean Defendants ultimately purchased Palace Entertainment on behalf of VisionMaker. {Id. ¶ 31.)

According to Plaintiff, “[tjhrough its purchase of [Palace Entertainment], MidO-cean purchased ‘securities convertible into or exchangeable for equity securities of [VisionMaker],’ ” under the Agreement. {Id.

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Cite This Page — Counsel Stack

Bluebook (online)
512 F. Supp. 2d 144, 2007 U.S. Dist. LEXIS 72710, 2007 WL 2823130, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crowley-v-visionmaker-llc-nysd-2007.