Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fly Shoes S.R.L. v. Bettye Muller Designs Inc.

United States District Court, S.D. New York

July 6, 2015

FLY SHOES S.R.L., Plaintiff,
v.
BETTYE MULLER DESIGNS INC., NEW YORK TRANSIT INC., and BETTYE MULLER, Defendants.

OPINION & ORDER

LOUIS L. STANTON, District Judge.

Defendants New York Transit Inc. ("NY Transit") and Bettye Muller move to dismiss the first amended complaint ("complaint"). For the reasons that follow, the motion is denied.

BACKGROUND

For purpose of deciding this motion, I accept all factual allegations in the complaint as true.

According to it, plaintiff Fly Shoes s.r.l. ("Fly Shoes") is an Italian company that manufactures shoes. Defendant Bettye Muller Designs Inc. ("BMDI"), a New York corporation, sold shoes under the trademark BETTYE MULLER. Ms. Muller is the principal shareholder and Chief Executive Officer of BMDI.

From 2008 to 2013, Fly Shoes sold wholesale shoes to BMDI via purchase order. In early 2012, BMDI began to fall behind in its payments, and there remains due a balance of 139, 467 on purchase orders made between September 13, 2011 and March 7, 2013.

On September 23, 2013, BMDI assigned the BETTYE MULLER trademark to NY Transit. The agreement stated that "Assignor and Assignee are parties to a certain Employment and Intellectual Property Agreement, dated as of September 23, 2013." First Am. Compl. Ex. 3 at Assignment of Intellectual Property 1, Dkt. No. 15. The agreement was signed by Ms. Muller as CEO of BMDI.

That same day, NY Transit and Ms. Muller, individually, executed an Employment and Intellectual Property Agreement. According to the agreement, NY Transit would employ Ms. Muller as the line builder for the shoe brands Betty Muller, Bettye by Bettye Muller, Ann Marino by Bettye Muller, and Ann Mario. NY Transit agreed to pay Ms. Muller an annual salary of $180, 000 plus incentive compensation based on the sales of those brands.

Also on September 23, Ms. Muller wrote to Fly Shoes: "Despite my best efforts to make Bettye Muller Designs Inc.' a success, I have found it necessary to cease business operations as of August 31, 2013. The Company has sustained substantial losses. Unfortunately, there is no cash or other assets available to pay any outstanding liabilities." First Am. Compl. ΒΆ 35.

There was no formal shareholder action taken to authorize BMDI selling off its assets and ceasing business operations.

Fly Shoes claims BMDI breached its contract by failing to pay the balance due on the purchase orders and that the transfer of the BETTYE MULLER trademark to NY Transit was a fraudulent conveyance under New York law. It further claims that it should be able to pierce the corporate veil and collect personally against Ms. Muller because she abused the corporate form by directing the sale of BMDI's trademark in exchange for a personal offer of employment, and that NY Transit is liable as the successor to BMDI because the trademark transfer was undertaken to defraud Fly Shoes.

DISCUSSION

NY Transit moves to dismiss the complaint for lack of personal jurisdiction and failure to state a claim, and Ms. Muller moves to dismiss the complaint for failure to state a claim. See Fed.R.Civ.P. 12(b)(2), (6).

I. PERSONAL JURISDICTION

NY Transit is incorporated and has its principal place of business in California and is registered to do business in New York. Fly Shoes argues that this court has personal jurisdiction over NY Transit as the successor to BMDI.

"An allegation of successor liability against an entity whose predecessor is subject to personal jurisdiction can provide personal jurisdiction over the successor entity." Time Warner Cable, Inc. v. Networks Grp., LLC, No. 09 Civ. 10059 (DLC), 2010 WL 3563111, at *5 (S.D.N.Y. Sept. 9, 2010) (citing Libutti v. United States, 178 F.3d 114, 124-25 (2d Cir. 1999)); accord Patin v. Thoroughbred Power Boats, 294 F.3d 640, 653 (5th Cir. 2002) ("[F]ederal courts have consistently acknowledged that it is compatible with due process for a court to exercise personal jurisdiction over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in that court when the individual or corporation is an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court."); see also Transfield ER Cape Ltd. v. Indus. Carriers, Inc., 571 F.3d 221, 224 (2d Cir. 2009) ("Although we have never addressed the significance vel non of alter ego' liability in the context of maritime attachments, we have previously observed that, in general, alter egos are treated as one entity' for jurisdictional purposes.") (quoting Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 F.2d 131, 142-43 (2d Cir. 1991)).

There is personal jurisdiction over BMDI because it is a New York corporation. As discussed below, Fly Shoes has stated a claim that NY Transit is the successor to BMDI. Accordingly, this court has personal jurisdiction over NY Transit.

NY Transit's motion to dismiss for lack of personal jurisdiction is denied.

II. FAILURE TO STATE A CLAIM

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.