Eloquence Corp. v Elba Jewelry Servs., LLC 2024 NY Slip Op 33907(U) October 31, 2024 Supreme Court, New York County Docket Number: Index No. 654526/2022 Judge: Lyle E. Frank 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. 654526/2022 NYSCEF DOC. NO. 58 RECEIVED NYSCEF: 10/31/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 654526/2022 ELOQUENCE CORPORATION, MOTION DATE 02/29/2024 Plaintiff, MOTION SEQ. NO. 002 - V -
ELBA JEWELRY SERVICES, LLC,BERNARD BACHOURA, ELBA JEWELRY DESIGN CENTER, LLC,FIORI DECISION + ORDER ON DIAMONDS LLC MOTION
Defendant. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 002) 46, 47, 48, 49, 50, 51,52,53,54,55,56,57 were read on this motion to/for DISMISS
This action arises out of an alleged breach of a consignment agreement. Defendants, Elba
Jewelry Services, LLC ("Elba Services"), Bernard Bachoura ("Mr. Bachoura"), Elba Jewelry
Design Center, LLC (the "Design Center") and Fiori Diamonds LLC ("Fiori
Diamonds")( collectively the "Defendants") move to dismiss the second through sixth causes of
action in the complaint pursuant to CPLR § 3211 (a) (7) for failure to state a cause of action.
Plaintiff opposes the instant motion. For the reasons set forth below, the motion to dismiss is
granted in part.
Background
Plaintiff and defendant, Elba Jewelry Services, LLC, d/b/a/ Sophia Fiori, entered into a
Consignment Agreement dated September 15, 2015. Plaintiff contends that defendants failed to
pay for goods as required by the agreement and subsequent invoices, leaving an amount due and
owing of 129,182.50 plus interest as required by the agreement.
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Defendant Mr. Bachoura is the owner and principal officer of Elba, the Design Center, and
Fiori Diamonds. Plaintiff contends that the Design Center and Fiori Diamonds are successors and
mere continuations of Elba.
Standard of Review
When considering a motion to dismiss based upon CPLR § 3211(a)(7), the Court must
accept the alleged facts as true, accord the plaintiff the benefit of every possible favorable
inference, and determine whether the facts alleged fit into any cognizable legal theory. See Leon v
Martinez, 84 NY2d 83 [1994].
Breach of Contract-First Cause o{Action
To state a claim for breach of contract, a plaintiff must allege: ( 1) the parties entered into
a valid agreement, (2) plaintiff performed, (3) defendant failed to perform, and (4) damages.
VisionChina Media Inc. v Shareholder Representative Servs., LLC, 109 A.D.3d 49, 58 [1st Dept
2013].
The complaint sufficiently alleges that plaintiff and defendant Elba had a valid contract,
however, the complaint fails to state a cause of action as to the remaining defendants. Although
the complaint alleges that the first cause of action is alleged as against all of the corporate
defendants, the contract simultaneously provides that it was signed by "both parties" specifically
"plaintiff and Elba". See Complaint ,J52. Accordingly, the first cause of action for breach of
contract is dismissed as against all defendants except Elba 1.
Account Stated-Second Cause ofAction
1 Although defendants' memorandum of law contends that all but the first cause of action should be dismissed, the notice of motion requests dismissal of the complaint in its entirety, without limitation, thus the Court addresses the first cause of action for completeness. 654526/2022 Motion No. 002 Page 2 of 6
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"To state a claim for an account stated, the plaintiff must plead that: ' ( 1) an account was
presented; (2) it was accepted as correct; and (3) debtor promised to pay the amount stated."' Nat'l
Econ. Research Assocs. v. Purolite "C" Corp., 2011 U.S. Dist. LEXIS 24458, *6-7. The second
and third elements "may be implied if 'a party receiving a statement of account keeps it without
objecting to it within a reasonable time." Id.
Here, plaintiff did plead a sufficient account stated claim by alleging that it issued Elba
outstanding invoices, and those invoices were retained without object and that "Elba [ ... ]
acknowledged the sums owed". See Complaint ,J61-62 These allegations are not objected by
defendants.
Defendants do not contend that this cause of action is duplicative of the breach of contract
claim, rather based on the pleadings plaintiff has not adequately pled a cause of action as against
any defendant other than Elba. Consequently, as with the first cause of action, the complaint fails
to state a cause of action as against defendants the Design Center and Fiori diamonds.
Uniust Enrichment-Third Cause o(Action
"To state a cause of action for unjust enrichment, a plaintiff must demonstrate "that (1)
defendant was enriched, (2) at plaintiff's expense, and (3) that it is against equity and good
conscience to permit defendant to retain what is sought to be recovered."' Farina v Bastianich,
116 AD3d 546, 548 [1st Dept 2014] (internal citations omitted.)
Defendants contend that this cause of action is invalid because there is an undisputed
contract that governs the dispute between the parties. In opposition, plaintiff argues that it
should be allowed to plead in the alternative when the underlying agreement is in dispute. That
is not the issue here. Defendants have conceded that there is a binding consignment agreement
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between plaintiff and defendant Elba, accordingly, the unjust enrichment cause of action is
dismissed.
Fraudulent Inducement and Fraud-Fourth and Fifth Causes o(Action
"For a fraudulent inducement cause of action to be viable, it must be demonstrated that
there was a false representation, made for the purpose of inducing another to act on it, and that the
party to whom the representation was made justifiably relied on it and was damaged. Perrotti v
Becker, Glynn, Melamed & Mujjly LLP, 82 AD3d 495,495 [1st Dept 2011].
Moreover, "[t]o establish fraud, a plaintiff must show 'a misrepresentation or a material
omission of fact which was false and known to be false by [the] defendant, made for the purpose
of inducing the other party to rely upon it, justifiable reliance of the other party on the
misrepresentation or material omission, and injury."' Ambac Assur. Corp. v Countrywide Home
Loans, Inc., 151 AD3d 83 at 85 [1st Dept 2017]. "The element of justifiable reliance is 'essential'
to any fraud claim" [internal citations omitted]. Id. Further, CPLR § 3016(b) provides that when a
cause of action is based upon fraud "the circumstances constituting the wrong shall be stated in
detail."
Here, plaintiff failed to plead a sufficient fraud and fraudulent inducement claim. Even if
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Eloquence Corp. v Elba Jewelry Servs., LLC 2024 NY Slip Op 33907(U) October 31, 2024 Supreme Court, New York County Docket Number: Index No. 654526/2022 Judge: Lyle E. Frank 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. 654526/2022 NYSCEF DOC. NO. 58 RECEIVED NYSCEF: 10/31/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 654526/2022 ELOQUENCE CORPORATION, MOTION DATE 02/29/2024 Plaintiff, MOTION SEQ. NO. 002 - V -
ELBA JEWELRY SERVICES, LLC,BERNARD BACHOURA, ELBA JEWELRY DESIGN CENTER, LLC,FIORI DECISION + ORDER ON DIAMONDS LLC MOTION
Defendant. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 002) 46, 47, 48, 49, 50, 51,52,53,54,55,56,57 were read on this motion to/for DISMISS
This action arises out of an alleged breach of a consignment agreement. Defendants, Elba
Jewelry Services, LLC ("Elba Services"), Bernard Bachoura ("Mr. Bachoura"), Elba Jewelry
Design Center, LLC (the "Design Center") and Fiori Diamonds LLC ("Fiori
Diamonds")( collectively the "Defendants") move to dismiss the second through sixth causes of
action in the complaint pursuant to CPLR § 3211 (a) (7) for failure to state a cause of action.
Plaintiff opposes the instant motion. For the reasons set forth below, the motion to dismiss is
granted in part.
Background
Plaintiff and defendant, Elba Jewelry Services, LLC, d/b/a/ Sophia Fiori, entered into a
Consignment Agreement dated September 15, 2015. Plaintiff contends that defendants failed to
pay for goods as required by the agreement and subsequent invoices, leaving an amount due and
owing of 129,182.50 plus interest as required by the agreement.
654526/2022 Motion No. 002 Page 1 of 6
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Defendant Mr. Bachoura is the owner and principal officer of Elba, the Design Center, and
Fiori Diamonds. Plaintiff contends that the Design Center and Fiori Diamonds are successors and
mere continuations of Elba.
Standard of Review
When considering a motion to dismiss based upon CPLR § 3211(a)(7), the Court must
accept the alleged facts as true, accord the plaintiff the benefit of every possible favorable
inference, and determine whether the facts alleged fit into any cognizable legal theory. See Leon v
Martinez, 84 NY2d 83 [1994].
Breach of Contract-First Cause o{Action
To state a claim for breach of contract, a plaintiff must allege: ( 1) the parties entered into
a valid agreement, (2) plaintiff performed, (3) defendant failed to perform, and (4) damages.
VisionChina Media Inc. v Shareholder Representative Servs., LLC, 109 A.D.3d 49, 58 [1st Dept
2013].
The complaint sufficiently alleges that plaintiff and defendant Elba had a valid contract,
however, the complaint fails to state a cause of action as to the remaining defendants. Although
the complaint alleges that the first cause of action is alleged as against all of the corporate
defendants, the contract simultaneously provides that it was signed by "both parties" specifically
"plaintiff and Elba". See Complaint ,J52. Accordingly, the first cause of action for breach of
contract is dismissed as against all defendants except Elba 1.
Account Stated-Second Cause ofAction
1 Although defendants' memorandum of law contends that all but the first cause of action should be dismissed, the notice of motion requests dismissal of the complaint in its entirety, without limitation, thus the Court addresses the first cause of action for completeness. 654526/2022 Motion No. 002 Page 2 of 6
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"To state a claim for an account stated, the plaintiff must plead that: ' ( 1) an account was
presented; (2) it was accepted as correct; and (3) debtor promised to pay the amount stated."' Nat'l
Econ. Research Assocs. v. Purolite "C" Corp., 2011 U.S. Dist. LEXIS 24458, *6-7. The second
and third elements "may be implied if 'a party receiving a statement of account keeps it without
objecting to it within a reasonable time." Id.
Here, plaintiff did plead a sufficient account stated claim by alleging that it issued Elba
outstanding invoices, and those invoices were retained without object and that "Elba [ ... ]
acknowledged the sums owed". See Complaint ,J61-62 These allegations are not objected by
defendants.
Defendants do not contend that this cause of action is duplicative of the breach of contract
claim, rather based on the pleadings plaintiff has not adequately pled a cause of action as against
any defendant other than Elba. Consequently, as with the first cause of action, the complaint fails
to state a cause of action as against defendants the Design Center and Fiori diamonds.
Uniust Enrichment-Third Cause o(Action
"To state a cause of action for unjust enrichment, a plaintiff must demonstrate "that (1)
defendant was enriched, (2) at plaintiff's expense, and (3) that it is against equity and good
conscience to permit defendant to retain what is sought to be recovered."' Farina v Bastianich,
116 AD3d 546, 548 [1st Dept 2014] (internal citations omitted.)
Defendants contend that this cause of action is invalid because there is an undisputed
contract that governs the dispute between the parties. In opposition, plaintiff argues that it
should be allowed to plead in the alternative when the underlying agreement is in dispute. That
is not the issue here. Defendants have conceded that there is a binding consignment agreement
654526/2022 Motion No. 002 Page 3 of 6
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between plaintiff and defendant Elba, accordingly, the unjust enrichment cause of action is
dismissed.
Fraudulent Inducement and Fraud-Fourth and Fifth Causes o(Action
"For a fraudulent inducement cause of action to be viable, it must be demonstrated that
there was a false representation, made for the purpose of inducing another to act on it, and that the
party to whom the representation was made justifiably relied on it and was damaged. Perrotti v
Becker, Glynn, Melamed & Mujjly LLP, 82 AD3d 495,495 [1st Dept 2011].
Moreover, "[t]o establish fraud, a plaintiff must show 'a misrepresentation or a material
omission of fact which was false and known to be false by [the] defendant, made for the purpose
of inducing the other party to rely upon it, justifiable reliance of the other party on the
misrepresentation or material omission, and injury."' Ambac Assur. Corp. v Countrywide Home
Loans, Inc., 151 AD3d 83 at 85 [1st Dept 2017]. "The element of justifiable reliance is 'essential'
to any fraud claim" [internal citations omitted]. Id. Further, CPLR § 3016(b) provides that when a
cause of action is based upon fraud "the circumstances constituting the wrong shall be stated in
detail."
Here, plaintiff failed to plead a sufficient fraud and fraudulent inducement claim. Even if
the Court agrees with plaintiff that the statements made by defendant Mr. Bachoura that Elba was
financially solvent were made falsely with the intent to induce plaintiff into entering the
consignment agreement, the complaint fails to allege how reliance on this statement was
reasonable. Notwithstanding, the complaint does not allege damages based on the alleged material
misrepresentations, the damages are based on defendants' failure to perform under the contract
and submit payments for the items sold. Further, plaintiff alleges that the fraudulent conduct was
the statement that Elba was working on securing financing to pay plaintiff. Plaintiff contends that
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based on that statement it did not immediately take steps to initiate a collection action. It is clear,
that the fraud claim is duplicative of the breach of contract cause of action. Accordingly, the
causes of action for fraud and fraudulent inducement are insufficiently pled to withstand the
motion to dismiss.
Successor Liability-Sixth Cause ofAction
Plaintiffs sixth cause of action alleges successor liability based on mere continuation.
The First Department has held the "the mere-continuation and de-facto-merger doctrines are so
similar that they may be considered a single exception"(Matter of TBA Global, LLC v Fidus
Partners, LLC, 132 AD3d 195,211, n 17 [1st Dept 2015]). "The de facto merger doctrine creates
an exception to the general principle that an acquiring corporation does not become responsible
thereby for the pre-existing liabilities of the acquired corporation" (Fitzgerald v Fahnestock &
Co., 286 AD2d 573, 574 [1st Dept 2001]). It is well established that courts consider the
following factors to determine whether the doctrine of de facto merger applies: ( 1) continuity of
ownership; (2) cessation of ordinary business and dissolution of the acquired corporation; (3)
assumption by the successor of the liabilities for the continuation of the business of the acquired
corporation; and (4) continuity of personnel, physical location, general business operation. Id.
The complaint fails to state a cause of action for successor liability as a matter of law.
Although it does not appear disputed that Mr. Bachoura is the principal of the other two
corporate entities, there are no allegations that Elba is dissolved and no longer conducting
business and that the other two entities acquired any assets of Elba. Accordingly, it is hereby
ORDERED that the complaint is dismissed in its entirety as to defendants Bernard
Bachoura, Elba Jewelry Design Center, LLC and Fiori Diamonds LLC; and it is further
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ORDERED that the action is severed and continued against the remaining defendant,
except that the third through sixth causes of action are dismissed as against the remaining
defendant; and it is further
ORDERED that the caption be amended to reflect the dismissal and that all future papers
filed with the court bear the amended caption; and it is further
ORDERED that counsel for the moving party shall serve a copy of this order with notice
of entry upon the Clerk of the Court (60 Centre Street, Room 141B) and the Clerk of the General
Clerk's Office (60 Centre Street, Room 119), who are directed to mark the court's records to reflect
the change in the caption herein; and it is further
ORDERED that such service upon the Clerk of the Court and the Clerk of the General
Clerk's Office shall be made in accordance with the procedures set forth in the Protocol on
Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-
10/31/2024 DATE LYLE E. FRANK, J.S.C. CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
654526/2022 Motion No. 002 Page 6 of 6
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