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Vioni v. American Capital Strategies Ltd.

January 23, 2009

LISA VIONI AND HEDGE CONNECTION INC., PLAINTIFFS,
v.
AMERICAN CAPITAL STRATEGIES LTD., PROVIDENCE INVESTMENT MANAGEMENT LLC, PROVIDENCE INVESTMENT PARTNERS LLC, AND RUSSELL JEFFREY, DEFENDANTS.



The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge

OPINION & ORDER

Plaintiffs Lisa Vioni ("Vioni") and Hedge Connection Inc. ("HCI")*fn1 bring this action against Defendant American Capital Strategies Ltd. ("Capital"), Defendants Providence Investment Management LLC and Providence Investment Partners LLC (together, "Providence"), and Defendant Russell Jeffrey ("Jeffrey"), seeking recovery under theories of breach of contract, quantum meruit, and promissory estoppel. Vioni claims that she separately agreed with Capital and Providence to act for each as a finder for new business opportunities, and satisfied her obligations to each by introducing Capital and Providence to one another, but that neither Defendant compensated her for her services.

Defendants move to dismiss Vioni's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. They contend that: (1) Vioni's breach of contract and quantum meruit claims fail because the e-mails that she alleges constitute her written agreement with Defendants do not satisfy New York's Statute of Frauds; (2) Vioni does not meet any of the basic pleading requirements for promissory estoppel; and (3) any purported agreement between Vioni and Defendants is void and unenforceable because Vioni never registered as a broker with the Securities and Exchange Commission (SEC).

For the following reasons, Defendants' motion to dismiss is GRANTED with respect to Vioni's breach of contract and promissory estoppel claims and DENIED with respect to her quantum meruit claims.

BACKGROUND

I. Facts*fn2

According to Vioni, between October 2006 and September 2007, she was separately retained by both Capital and Providence, independent of one another, to introduce each to companies that could help further their respective business goals. Capital is a publicly-traded investment corporation, while Providence was a small investment management company. In April 2007, Vioni arranged a face-to-face meeting between Robert Grunewald, Capital's Managing Director, and Russell Jeffrey, Providence's Chief Executive Officer and Chief Investment Strategist.

Following this initial meeting, Capital expressed interest in acquiring Providence, and the two companies began working out the details of a series of transactions (referred to as the "ACSL Transactions") through which Capital would acquire Providence's investments, funds, clients, and employees. Vioni claims that during the course of these negotiations, Capital (through Grunewald) and Providence (through Jeffrey) repeatedly assured her that she would be compensated for her efforts once the ACSL Transactions were finalized. According to Vioni, these assurances were made both verbally and by e-mail.*fn3

The ACSL Transactions were completed in September 2007. Capital hired Providence's employees, including Jeffrey, who it placed in charge of a new mortgage-backed securities investment team. Jeffrey and Providence also moved their investments, funds, and future business opportunities to Capital.

According to Vioni, despite their earlier oral and written statements indicating that she would be compensated for her role in facilitating the ACSL Transactions, neither Defendant paid her for her work.

II. Vioni's Claims

Vioni's Amended Complaint*fn4 advances nine causes of action that may be grouped into three categories. First, Vioni brings breach of contract claims against Capital and Providence/Jeffrey. (Amended Complaint ("Am. Compl.") ¶¶ 135-47, 154-69, 176-88.) This includes a claim that Capital breached a "lift-out"*fn5 contract with Vioni. (Id. ¶¶ 154-69.) Second, Vioni seeks recovery in quantum meruit from both Defendants. (Id. ¶¶ 148-53, 170-75, 189-94.) Again, Vioni seeks recovery from Capital for the value of the lift-out services she claims to have provided. (Id. ¶¶ 170-75.) Third, Vioni claims she is entitled to relief under the theory of promissory estoppel (id. ¶¶ 195-253), including the value of the lift-out services provided to Capital. (Id. ¶¶ 223-25.)

DISCUSSION

III. Motion to Dismiss ...


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