Odeon Capital Group LLC v. AEON Biopharma, Inc.

2024 NY Slip Op 31088(U)

• Court: New York Supreme Court, New York County
• Decided: April 1, 2024
• Status: Unpublished

Opinion

Odeon Capital Group LLC v AEON Biopharma, Inc. 2024 NY Slip Op 31088(U) April 1, 2024 Supreme Court, New York County Docket Number: Index No. 654547/2023 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. 654547/2023 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 04/01/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MELISSA A. CRANE PART 60M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 654547/2023 ODEON CAPITAL GROUP LLC, MOTION DATE N/A Plaintiff, MOTION SEQ. NO. 001 - V -

AEON BIOPHARMA, INC.,FORMERL Y KNOWN AS PRIVETERRA ACQUISITION CORP., CONTINENTAL DECISION + ORDER ON STOCK TRANSFER & TRUST COMPANY MOTION

Defendant. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 18, 19, 20, 21, 22, 24,25,26 were read on this motion to/for DISMISS

Upon the foregoing documents, it is

This entire case and every cause of action involve plaintiff trying to recover for its failure

to receive its "promised contractual fee" for serving as underwriter to a "Business Combination"

via a SPAC (a special purpose entity) in the medical technology sector. Plaintiff does not assert

any unique damages attributable to the alleged commission of a tort in its Complaint. Rather, it

seeks contract damages of $1,255,800 for each of its claims (see complaint page 25).

Plaintiff has pled a decent breach of contract claim. Defendants have apparently

recognized this, because they have not moved to dismiss the claims for breach of contract.

However, for the reasons stated on the record of April 1, 2024, the court dismisses all

other causes of action against defendant AEON, because each of them merely duplicate the

breach of contract claim. In addition to asking for the same damages, these other causes of

action simply do not add anything beyond what the claim for breach of contract asserts. For

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example, the cause of action for conversion (Count II) merely seeks a vindication of plaintiffs

contractual rights.

Further, Count III, for tortious interference with the Trust Agreement, duplicates breach

of contract concerning the Underwriting Agreement, because, as plaintiffs counsel conceded on

the record, the way plaintiff was to be paid under the Underwriting Agreement was through the

Trust Agreement. Thus, by allegedly "instructing Continental to distribute the entire amount

held in the Trust Account without paying Odeon its deferred underwriting fee," plaintiff has only

described the means by which defendants breached the contract. Hence, this claim duplicates the

cause of action for breach of contract. In addition, Count III is insufficient because it does not

allege sufficiently that the breach would not have occurred but for AEON's conduct (see

Eisenberg v. Weisbecker, 190 A.D.3d 549, 550 (1 st Dep't 2021).

Count IV for breach of the covenant of good faith and fair dealing also duplicates the

claim for breach of contract. Although plaintiff alludes to this claim as a tort (it isn't), this

characterization in no way describes a situation where plaintiff was deprived of its bargain even

though the contract was not technically breached. This type of deprivation without breach is the

essence of a claim for breach of the implied covenant of good faith and fair dealing ( see

Carovillano v. Sirius XM Radio Inc., _Fsupp3d _, 2024 WL 450040, at *12 [S.D.N.Y. Feb. 6,

2024][ "[t]he implied covenant is "breached when a party acts in a manner that, although not

expressly forbidden by any contractual provision, would deprive the other party of the right to

receive the benefits under their agreement" [citations omitted]]). Thus, "[w]here a good faith

claim arises from the same facts and seeks the same damages as a breach of contract claim, it

should be dismissed" (Mill Fin., LLC v. Gillett, 122 A.D.3d 98, 104 [1st Dep't 2014]. Here, all

we have is a synonym for breach of contract. Accordingly, and also for the reasons discussed on

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the record, the court dismisses Count IV for breach of the covenant of good faith and fair

dealing.

Count V for aiding and abetting breach of fiduciary duty suffers from the same problems

as the tortious interference claim. Namely, this cause of action merely describes how AEON

breached the contract. The allegations concerning substantial assistance are also insufficient.

Accordingly, the court dismisses this Count.

As plaintiff concedes, there is no basis to award punitive damages on the claim for breach

of contract alone (see Eisenberg v. Weisbecker, 190 A.D.3d 549, 550, [1 st Dep't 2021] ["Plaintiff

is not entitled to punitive damages on his contract claim because the complaint does not allege

that the breach was associated with outrageous conduct that was part of a pattern directed at the

public generally"]). However, even were a tort claim to survive, punitive damages would not be

appropriate (see Seymour v. Hovnanian, 211 A.D.3d 549, 557 [!81 Dep't 2022 [defendant's

"conduct does not rise to the level of wanton disregard of plaintiffs' property rights so as to

warrant punitive damages"]).

Accordingly, it is

ORDERED THAT AEON's motion to dismiss Counts II-V of the complaint as well as

any demand for punitive damages is granted without prejudice; and it is further

ORDERED THAT Count I is severed and shall continue; and it is further

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ORDERED THAT should the parties desire mediation, they should contact the part by

email: SFC-Part60@nycourts.gov.

4E66AD6ABE2~0BF7EA

4/1/2024 DATE MELISSA A. CRANE, 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

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