Opinion
19 Civ. 6157 (LLS)
03-18-2020
Jeffrey GREENE, Plaintiff, v. SCORES HOLDING COMPANY, INC., Scores Media Group, LLC, Swan Media Group, Inc., Scores Digital Gaming, LLC, Robert Gans, Charilaos Yioves a/k/a Harry Yioves, Defendant.
Virginia Eve Anello, Michael A. London, Douglas & London, New York, NY, for Plaintiff. Steven Jay Harfenist, Harfenist Kraut & Perlstein, LLP, Lake Success, NY, for Defendant.
Virginia Eve Anello, Michael A. London, Douglas & London, New York, NY, for Plaintiff.
Steven Jay Harfenist, Harfenist Kraut & Perlstein, LLP, Lake Success, NY, for Defendant.
OPINION & ORDER
Louis L. Stanton, U.S.D.J.
Plaintiff Greene claims that his employment contract with the defendants, and their later promises to compensate him for bringing in business (which he claims he did) were disregarded or breached by the defendants. They move to dismiss his complaint, for lack of a showing of what, if any, business he brought in, and suggested no concrete basis for (or even a particular method of calculating) his claim for damages.
After analyzing the essential facts as set forth in the complaint, and drawing the relevant inferences favorably for the plaintiff, all claims except breach of contract and unjust enrichment are dismissed.
The Consultancy Agreement
Defendants agree that "an express, valid and enforceable contractual agreement existed between the parties with respect to the Scores Consultancy Agreement." Defendants’ Feb. 5, 2020 Reply Mem., p. 2. The Third cause of Action, claiming unjust enrichment, is thus replaced by the claim of breach of contract, and is dismissed.
(a) Draws. The Consultancy Agreement gave Greene a draw of $ 10,000 a month to be drawn against the revenue from new customers and new business generated by Greene, after payments to models, studios or affiliates. § 1 a) and b). Although this provision seems to assume that the revenue will be more sufficient to cover the draw, that is not an explicit condition of the draw. The contract does not state that the monthly draw is contingent on the receipt of enough revenue from Greene's customers to pay it, nor that any particular amount is necessary to "meet the threshold" or "trigger" the draw, as defendants argue. Rather, tending somewhat to the contrary, the Agreement provides that if Greene's quarterly revenue is too low to qualify for a Share (see below) to be payable to Greene "it shall not affect Greene's" right and entitlement to have been paid his monthly draw during that quarter, or his right and entitlement to receive his monthly draw" in subsequent quarters. § 1 c) and d).
If either party terminates the Agreement, Greene's right to the draw ceases immediately. § 1 f).
(b) Shares. The Consultancy Agreement also gives Greene, in addition to his draw, a "Share" at the end of each three-month period, calculated as 15 percent of the net revenues generated by Greene, after deducting the $30,000 he received in his three monthly draws. As defined by the Agreement ("CONSULTANT" is Greene):
For purposes of example and illustration, the Parties anticipate that, during the first quarter of 2013, CONSULTANT shall be paid and receive a Draw of $10,000 on or about each of January 1st, February 1st and March 1st of 2013. On March 1st of 2013, the first quarter of 2013 shall have ended, and SCORES shall promptly calculate whether CONSULTANT is owed a Share for the quarter. If, again for purposes of example and illustration, Net Revenue from Leads for that quarter were determined to be $300,000.00, then Consultant would be due and owed, by or before April 15, 2013, a Share for that quarter equal to $45,000.00 minus $30,000.00, which is $15,000.00. Payment of said Share, again for purposes of example and illustration, would have no effect upon CONSULTANT'S right and entitlement to be paid and receive his monthly Draw on or about April 1, 2013, or any future Draw thereafter.
§ 1 c).
As noted above, if there is not enough Greene revenue to provide a Share, that has no effect on his right to the draw. § 1d).
(c) Termination
If either party terminates the agreement, Greene's right to his Share continues for three years (although his draw stops immediately), unless the termination is for cause. In that event, all payments stop at once. §§ 1f) and 3. Otherwise, the calculation of his share continues as before. id.
Claims of Breach
Plaintiff Greene claims he performed all his obligations under the Consultancy agreement, but defendants stopped paying his monthly draw of $10,000 about September 2014, and never paid him his quarterly 15% of the net revenue he produced.
The defendants claim that Greene's complaint is too vague, general and conclusory about what he did to perform the contract, that his payments were dependent on the production of enough revenue to cover them, and that he fails to plead that he "met the threshold to entitle him to $10,000.00 each month" or "met the triggers" to receive 15% after deduction of $30,000 in draws. (Reply, p. 3)
Greene's pleading is very general. He alleges that he has many years experience with internet marketing and sales, strong connections with prominent individuals in technology, investment, financial and business industries; that he contributed to defendants’ financial success in promoting new business, and that defendants profited handsomely from his services. (Complt. ¶¶ 53-60)
For the purpose of pleading when all inference must be drawn in favor of the pleadings, that is enough to give notice of the nature of a plausible claim, particularly where the contract mentions neither thresholds or triggers, and no articulated provision that the draws are dependent on a particular amount of revenue.
Defendants’ motion to dismiss the First Cause of Action is denied.
The Casino Agreement
The allegation is that starting around January 2016, and for 21 months thereafter, Greene "spent hundreds of hours of his time, and his resources, targeting and developing potential investors" in return for a promised job at Scores Casino.com website as a salaried employee with preferred stock shares and company equity. Complt. ¶¶ 84-91. Defendants assured him over 35 separate times that Greene would be compensated for any investors he brought in, id. ¶ 97, and he produced two investors who contributed two million dollars worth of internet traffic. ¶¶ 101-104, 105-108.
Nevertheless, Greene has not received any of the compensation he was promised. Id. ¶109.
Claims of Breach
(a) Breach of Contract
Defendants argue that there is no contract: the terms of Greene's prospective compensation are entirely speculative, and in the complaint's extensive recital of the situation there is no suggestion of any agreed mechanism for determing how the amount of his compensation is to be set. Lacking agreement on even a method for ascertaining an essential element of the claim, there is no contract and the claim of breach must be dismissed.
That reflects the state of the law in New York. A court cannot impose "its own conception of what the parties should or might have undertaken, rather than confining itself to the implementation of a bargain to which they have mutually committed themselves. Thus, definiteness as to material matters is of the very essence of contract law." Joseph Martin Jr. Delicatessen. Inc. v. Henry P. Schumacher, 52 N.Y.2d 105, 436 N.Y.S.2d 247, 417 N.E. 2d 541, 543 (Ct. App. 1981). The highest characterization the claim achieves would be that it was an agreement to agree, and "... a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable" (citing cases) ibid.
Defendants’ motion to dismiss the Second Cause of action is granted.
(b) Unjust Enrichment
As defendants recognize (their Nov. 21, 2019 brief p. 14), "The basic elements of an unjust enrichment claim in New York require proof that (1) defendant was enriched, (2) at plaintiff's expense, and (3) equity and good conscience militate against permitting defendant to retain what plaintiff is seeking to recover." quoting Briarpatch Ltd. L.P. v. Phoenix Pictures, Inc., 373 F. 3d 296 (2nd Cir. 2004).
Defendants argue that "what plaintiff is seeking to recover" in his unjust enrichment claim is undefined, but in the perspective of the allegations with respect to the Casino "agreement" and the defendants’ claimed promises that is just a quibble. The purpose of litigating the unjust enrichment claim is to determine (if plaintiff wins) a fair and reasonable amount.
The defendants’ motion to dismiss the Fourth Cause of Action is denied.
Other Causes of Action
The promissory estoppel claims (Fifth and Sixth Causes of Action) are dismissed as inapplicable to employment actions and lacking a showing of enforceable promises which were clear and unambiguous. The Seventh and Eighth claims of fraudulent inducement (which are inconsistent with enforcement of the Consultancy Agreement) are dismissed for lack of specific evidence of knowing misrepresentation of a present fact, and as redundant, when charging only that defendant never intended to perform his promises, with the claim of breach of contract. Gutkowski v. Steinbrenner, 680 F. Supp. 2d 602, 614 (S.D.N.Y. 2010).
The Ninth and Tenth Causes of action, for breaches of the duty of good faith and fair dealing are dismissed as based on the same facts as the breach of contract claims, which encompass them.
Conclusion
All other alleged causes of action being dismissed, the case will proceed on the claims best fitting the facts as set forth in the Complaint: breach of contract as respects the Consultancy Agreement, and unjust enrichment with respect to the Casino Agreement.
So Ordered.