Mochitto LLC v. Gurung
This text of 2024 NY Slip Op 34261(U) (Mochitto LLC v. Gurung) is published on Counsel Stack Legal Research, covering New York Supreme Court, Kings County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Mochitto LLC v Gurung 2024 NY Slip Op 34261(U) December 3, 2024 Supreme Court, Kings County Docket Number: Index No. 506534/2024 Judge: Leon Ruchelsman 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: KINGS COUNTY CLERK 12/03/2024 09:00 AM INDEX NO. 506534/2024 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 12/03/2024
SUPREME COURT OF THE STATE OF NEW YOR.k COUNTY OF KINGS : CIVIL TERM: COMMERCIAL PART 8 --·-------------·--·· ----.------ .. - - - .. ----·--·-x MOCH.ITTO LLC, . Plaintiff, Deqision and order
- against - Index No. 506534/2024
MIMI GORUNG; JOHN DOES 1-lD; and BUSINESS ENTITIES A-K, Def endarits , December 3, 2024 -·- .. -- - - -·----- - - - - - - -·- - -. - - - - . -·- - - - -- - --- . .:x ·PRESENT: HON. LEON RUCHELSMAN MotionSeq. #2
The defendants have moved pursuant to CPLR §3211 seeking to
dismiss the lawsuit. The plaintiff has opppsed the motion.
Papers were submitted hy the parties and argI1ments held. After
reviewing all the arguments, this court no,w makes the :following
determination.
On October 5, 2023 the plaintiff and defendant entered into
an asset purchase agreement whereby the pl;aintiff agreed to
purchase all the assets of four of defe·nctant' s businesses, namely
cof.fe e shops in New York City. The pl<1 in t:i ff paid $ 200, 0 0 0 .
Paragraph 5.lO(d} of the asset purchase agreement provides that
"with respect to the Leases pertaining tolthe Business locations
described in Article 1. 01 (I) through Art:iqle l. 01 (iv) of this
Agreement, for each of them, Seller shall provide either an
assignment arid assumption executed by the respective landlord, or 1
shall provide documentation sufficient toishow that no such ' .
assignment and assumption is required" (see, Asset Purchase
Agreement, g[S.10 (d) [NYSCEF Doc. No. 3]). : According to the
complaint, the defendant failed to secure 'assignrnehts of the
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leases for two.from two bf the landlords which essentially
required the plaintiff to pay the security: deposits anew.
Further, the plaintiff all.eges the defendapt ntisrepresented the
potential profits of each location. This lawsuit was commenced
and the plaintiff has alleged causes of .. . action .. . ! . . . for breach of
contract, fraud an.ct conversion. The defe:ndarit has' now moved
seeking to dismiss the lawsuit on the grounds it f:ails to allege
arty cause of action. As .rioted the motion ls opposed.
Conclusions of Law:
It is well settled that Upon a motion tO dismiss the court
must determine, accepting the allegations :of the complaint as
true, whether the party can succeed upon any reasonable view of
those facts ( Davids v. State, 159 AD3d 987, 7 4 NYS3d 288 [ 2d
Dept,, 2018)). Further; all the allegation;s in the .complaint are
deemed true and all reasonable inferenc.es may be drawn in favor
of the plaintiff (Dunleavy v. Hilton Hall Apartments Co., LLC, 14
AD3d 4T9, 789 NYS2d 164 [2d Dept., 2005]) .:
It is further well settled that to sudceed upon a claim of
breach of contract the plaintiff must establish the existence of
a contract, the plaintiff's performance, the defendant's breach
and resulting damages (Harris V; Seward Park Housing Corp., 79
P,.D3d 425, 913 NYS2d 161 [Pt Dept., 2010]).
The defendant argues that while the asset purchase
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agreement did require the plaintiff to secure i3.ssignments of the
leases prior to closin•g the plaintiff waiv:ed that requirement by
closing anyway. The agreement contains a i"condition precedent'' ' .
namely, that the leases of the locations a1re "duly' .assigned" . . . . I . . . .
(see, Asset Purchase Agreement, '.!LS. 01 [NYs:cEF Doc. No. 3]) •
Howevf2r, that paragraph also states that '\the failure to obtain
landlord consent for any such assignment/a:ssumption shall be
grounds for either Party to terminate this! Agreement without
further recourse. This section survive [sic] Closing, and shall
be enforceable regardless of whether or not a Closing takes
place" (id). Thus, the agreement express1y ex.tends the right to
secure the assignments even past closing. Thus, the mere
closing, even without the assignments from the landlords, is not
a waiver at all.
MOreover, the words "without recoursie" in a :honnegot iabl e
instrument really has "no defined legal meaning" (Binswanqer v.
Hewitt, 79 Misc 425, 140 NYS 143 [Pt Dept . 1 , 1913]). Therefore,
the court "must imbue the phrase with 'such meaning as the
parties themselves intended to give it which must be determined
as a: question of fact taking into considetiation all the surroµnding circumstances'" (U.S. for Use and Benefit of
Ever.green Pipeline Construction Cbtrt'partv I~c., v. Merritt Meridian
Construction corp.,. 1998 WL 549570 [S, D~ N.:Y. 1998])..
In addition, the complaint alleges the defendant
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:triisrepresen:t ed thE::. acb,1al worth of the ·_bus1ne·S$. es \a·nd also
breached the contract by shutting down de.livery ; se:rvices. . These
factual assertions cannot be decided on a inotion t.o dismiss, The:ref.ore, there· are surely ·questionjs, which cannot be decided at this time, whether the p1aintifif mainta:ins a c.ause of
action for -breach ·of contract-. Consequenti}y , the. !motion -seeking·
to dismiss ·this cause o.-f act.;Lon is·-' deni_~.d.i
The cl~ims for fraud and fraudulent i:nducement.rii .ere1y
rei tera.te the cont tact ciaim c;once-;rning the worth ,of tn:e
busin~s.ses: _.and wh~_ther delivery was ceaseq. It is well settled
that ·iii'.here a cla·im to recover damages for ifrai.Jd "is premised upon
alleged breach o:f contra.ctua],. q.ut.i.e_s and. tjhe suppqrting
alleg.ations do not concern: misrepresent ations which are
collateral or extraneous to the terms of t,he parties. ;;igreement, a
c-ause _o,f action .;;oµndin_g in fraud does riotj lie." (McKernin v. Fanny
Farmer CandV Shops Inc., 176 AD2d 233, 57 4 NYS2d 58, [2 nd Dept.,
1991]}. Clearly where the misrepriasenta t,~ops that g_ive r-i:se t;o tp.e fraud a.re ciuties contained in the contract no fr.:i.ud cl_a:irtt is
viabie. (see·, Wyle Inc .• v. ITT Corporation, 130 AD3-.d 438, 13
··NYS:3d . 375 [Pt Dept... , 20'15]). The· fraud -ciaims are -.duplicative
of the contract cause of action ano consequently they are
·dismiss,ed.
La.st.ly, the ca/use of act:i,o_n for conyElrsion is duplicative ' of the b.reach of cor:1tract claim (AJW Partners LLC ·: v. Itroni.cs
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Inc., 68 AD3d 567, 892 NYS2d 46 [Pt Dept. ,i 2009]) .• Consequently,
that cause of ·action are dismissed.
Therefore, the motion seeking to dismiss the complaint
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2024 NY Slip Op 34261(U), Counsel Stack Legal Research, https://law.counselstack.com/opinion/mochitto-llc-v-gurung-nysupctkings-2024.