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Brummer v. Red Rabbit, LLC

Supreme Court, Appellate Division, First Department, New York.
Apr 7, 2015
127 A.D.3d 438 (N.Y. App. Div. 2015)

Opinion

2015-04-07

John BRUMMER, Plaintiff–Appellant–Respondent, v. RED RABBIT, LLC, et al., Defendants–Respondents–Appellants.

Balestriere Fariello, New York (Jillian McNeil of counsel), for appellant-respondent. Thomas M. Lancia, PLLC, New York (Thomas M. Lancia of counsel), for respondent-appellant.



Balestriere Fariello, New York (Jillian McNeil of counsel), for appellant-respondent. Thomas M. Lancia, PLLC, New York (Thomas M. Lancia of counsel), for respondent-appellant.
FRIEDMAN, J.P., ACOSTA, MOSKOWITZ, RICHTER, KAPNICK, JJ.

Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered on or about July 28, 2014, which granted defendants' motion for summary judgment dismissing the complaint and plaintiff's cross motion for summary judgment dismissing the counterclaim, unanimously affirmed, without costs.

The complaint alleges that defendant Rhys Powell was a patient of plaintiff John Brummer, a podiatrist. In 2005, Powell formed defendant Red Rabbit, LLC to provide healthy lunches to New York City preschools. Powell used his own funds and those of other investors, including a total of $25,000 from Brummer at the inception of the business, giving Brummer a 7% interest.

In the summer of 2010, Powell approached Brummer and offered him $40,000 for 6% of the company (leaving Brummer with 1%), but without disclosing that he had been in negotiations for a large investment in Red Rabbit by two investors. Powell allegedly based his valuation of Brummer's interest on a percentage of Red Rabbit's average income for the past year and the next year as projected, and, in September 2010, Brummer accepted the $40,000.

The evidence of plaintiff's long-held desire to sell back his interest in defendant Red Rabbit, LLC demonstrates that the alleged false representations regarding the company's value and alleged concealment of impending investments from additional investors were neither relied upon nor material to plaintiff's decision to sell. Accordingly, dismissal of both the fraud and breach of fiduciary duty claims was warranted ( see generally Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ).

Absent an allegation of actual loss by plaintiff, his unjust enrichment claim is also deficient ( see Edelman v. Starwood Capital Group, LLC, 70 A.D.3d 246, 250–251, 892 N.Y.S.2d 37 [1st Dept.2009], lv. denied14 N.Y.3d 706, 2010 WL 1235618 [2010] ).

The counterclaim failed to allege the breach of any duty found in defendant Red Rabbit's operating agreement. Accordingly, it was properly dismissed.


Summaries of

Brummer v. Red Rabbit, LLC

Supreme Court, Appellate Division, First Department, New York.
Apr 7, 2015
127 A.D.3d 438 (N.Y. App. Div. 2015)
Case details for

Brummer v. Red Rabbit, LLC

Case Details

Full title:John BRUMMER, Plaintiff–Appellant–Respondent, v. RED RABBIT, LLC, et al.…

Court:Supreme Court, Appellate Division, First Department, New York.

Date published: Apr 7, 2015

Citations

127 A.D.3d 438 (N.Y. App. Div. 2015)
127 A.D.3d 438
2015 N.Y. Slip Op. 2912