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Key Items, Inc. v. Ultima Diamonds

August 17, 2010

KEY ITEMS, INC., PLAINTIFF,
v.
ULTIMA DIAMONDS, INC., GLOBAL JEWELLERY SOLUTIONS LTD., ULTIMA 2008 LTD. AND EDWARD MAIEROVITZ, DEFENDANTS.



The opinion of the court was delivered by: Pitman, United States Magistrate Judge

OPINION AND ORDER

I. Introduction

By notice of motion dated August 11, 2009 (Docket Item 14), defendants Ultima 2008 Ltd. and Global Jewellery Solutions Ltd. ("Global Defendants") move to dismiss plaintiff Key Items, Inc.'s, ("Key Items'"), claims against them pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In addition to opposing the Global Defendants' motion, Key Items seeks leave to amend its complaint. This action was referred to me for all purposes with the consent of the parties pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73. For the reasons set forth below, the Global Defendants' motion to dismiss is granted, and Key Items' application for leave to serve an amended complaint is denied without prejudice.

II. Facts

This action arises out of defendants' alleged failure to pay for two shipments of jewelry that Ultima Diamonds, Inc., ("Ultima Diamonds"), ordered from Key Items. Key Items alleges that defendants are responsible for the price of this jewelry based on theories of breach of contract and account stated.

On or about September 12, 2008, Ultima Diamonds ordered 1,800 rings and 1,500 earrings from Key Items. The rings were to be delivered on approximately October 15, 2008 and the earrings were to be delivered on approximately November 15, 2008 (Complaint, dated Apr. 13, 2009 (Docket Item 1), ("Compl."), ¶ 10). Key Items confirmed this order in an e-mail dated September 12, 2008 which states, under the heading "Recap of conversation with Rob," the method of pricing the jewelry, product specifications and the dates on which each order would be due (Compl. Ex. A).

Key items delivered the rings to Ultima Diamonds on approximately October 15, 2008 (Compl. ¶ 12 and Ex. B). On or around October 23, 2008, Maierovitz, who, according to the complaint, "singularly control[s] and dominate[s]" the corporate defendants, notified Key Items that he might not need the shipment of earrings (Compl. ¶¶ 6, 13). Key Items informed Maierovitz that it had already prepared a "significant" portion of this order for delivery, but that it would cancel approximately 700 pairs of earrings. Maierovitz agreed to accept the remainder of the shipment (Compl. ¶¶ 13-14).

Key Items shipped the remaining 803 pairs of earrings to Ultima Diamonds on approximately December 3, 2008 (Compl. ¶ 15 and Ex. C). Maierovitz then informed Key Items that he would not accept the shipment (Compl. ¶ 16). Key Items and the Global Defendants arranged for the return of the earrings (Compl. ¶ 17). Then on approximately February 9, 2009, Maierovitz returned 100 of the rings that had been delivered in October 2008 (Compl. ¶ 18) and on approximately March 3, 2009, Maierovitz notified Key Items via e-mail that Ultima Diamonds and the Global Defendants wanted to return still more of the rings delivered in October 2008 (Compl. ¶ 19). Key Items responded that it would accept a return of up to 30 percent of the account balance in rings if Maierovitz paid the remaining 70 percent of the account balance (Compl. ¶ 19). On March 17, 2009, Key Items sent Ultima Diamonds a statement reflecting a $112,917.96 account balance (Compl. ¶ 21 and Ex. D). Although Key Items has repeatedly requested payment, none of the defendants has paid this balance (Compl. ¶ 22).

Key Items alleges that Ultima Diamonds and the Global Defendants "exist[] at the pleasure of Maierovitz, and . . . are run in a fashion that cannot be distinguished from the management of Maierovitz's personal affairs" (Compl. ¶ 6). Key Items also alleges that Ultima Diamonds and the Global Defendants are all Ontario corporations, share the same address, and were involved in the transaction that is the subject of the complaint (Compl. ¶ 6).

Based on the foregoing allegations, Key Items alleges that defendants are responsible for the price of the jewelry retained by Ultima Diamonds under theories of breach of contract and account stated. The Global Defendants contend that Key Items' claims against them should be dismissed because the complaint does not allege that Key Items entered into a contract with the Global Defendants or presented an account to the Global Defendants. In its opposition to the motion, Key Items seeks leave to amend in the event that the Global Defendants' motion to dismiss is granted.

III. Analysis

A. Standards Applicable to a Motion to Dismiss

The standards applicable to a motion to dismiss pursuant to Rule 12(b)(6) are well settled and require only brief review.

When deciding a motion to dismiss under Rule 12(b)(6), [the court] must accept as true all well-pleaded factual allegations of the complaint and draw all inferences in favor of the pleader. See City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 493, 106 S.Ct. 2034, 90 L.Ed.2d 480 (1986); Miree v. DeKalb County, 433 U.S. 25, 27 n.2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977)(referring to "well-pleaded allegations"); Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993). "'[T]he complaint is deemed to include any written instrument attached to it as an exhibit or any statement or documents incorporated in it by reference.'" Int'l Audiotext Network, Inc. v. Am. Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)(quoting Cortec Indus., Inc. v. Sum Holdings L.P., 949 F.2d 42, 47 (2d Cir. 1991)). The Court also may consider "matters of which judicial notice may be taken." Leonard T. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999) (citing Allen v. WestPointPepperill, Inc., 945 F.2d 40, 44 (2d Cir. 1991)). In order to avoid dismissal, a plaintiff must do more than plead mere "[c]onclusory allegations or legal conclusions masquerading as factual conclusions." Gebhardt v. Allspect, Inc., 96 F.Supp.2d 331, 333 (S.D.N.Y. 2000) (quoting 2 James Wm. Moore, Moore's Federal Practice ¶ 12.34[a][b] (3d ed. 1997)).

Hoffenberg v. Bodell, 01 Civ. 9729 (LAP), 2002 WL 31163871 at *3 (S.D.N.Y. Sept. 30, 2002) (Preska, D.J.); see also In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d Cir. 2007); Johnson & Johnson v. Guidant Corp., 525 F. Supp. 2d 336, 345 (S.D.N.Y. 2007) (Lynch, D.J.).

The Supreme Court has clarified the proper mode of inquiry to evaluate a motion to dismiss pursuant to Rule 12(b)(6), which uses as its starting point the principle that "[a] pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a).

[I]n Bell Atl[antic] Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Court disavowed the well-known statement in Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." 550 U.S. at 562. Instead, to survive a motion to dismiss under Twombly, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Id. at 570.

Talley v. Brentwood Union Free Sch. Dist., Civ. 08-790, 2009 WL 1797627 at *4 (E.D.N.Y. June 24, 2009).

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative ...


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