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Monte-Carlo v. Diamond Quasar Jewelry, Inc.

United States District Court, S.D. New York

February 20, 2018

STARDUST MONTE-CARLO, S.A.R.L., Plaintiff,
v.
DIAMOND QUASAR JEWELRY, INC., Defendant.

          OPINION AND ORDER

          EDGARDO RAMOS, U.S.D.J.

         Plaintiff Stardust Monte-Carlo, S.A.R.L. (“Stardust”) brings this motion to dismiss the three counterclaims asserted by Defendant Diamond Quasar Jewelry, Inc. (“Diamond Quasar”). Doc. 17. For the reasons set forth below, Plaintiff's motion is GRANTED in part and DENIED in part.

         I. FACTUAL AND PROCEDURAL BACKGROUND[1]

         Stardust operates a jewelry boutique at the Hermitage Hotel in Monaco. Answer to Complaint and Counterclaims (“Countercl.”) (Doc. 10) ¶¶ 30-31. Diamond Quasar is a New York corporation that creates and sells timepieces and jewelry. ¶¶ 6, 24.

         Since 2011, Stardust has assisted Diamond Quasar in a jewelry exhibition held annually in Monaco. Id. ¶ 25. In 2016, the annual exhibition was to be held in August in the ballroom of the Hermitage Hotel, and Stardust agreed to assist Diamond Quasar again. Id. ¶¶ 28-29. Stardust has alleged that its contract with Diamond Quasar entitled it to a portion of Diamond Quasar's proceeds from the August exhibition with a minimum commission of $300, 000.00. See Compl. (Doc. 1) ¶ 11.[2] Stardust further alleged that Diamond Quasar's sales during the exhibition were sufficiently voluminous that it is owed more than $300, 000.00; despite this, it alleged that it received no remuneration whatsoever from Diamond Quasar. Id. ¶¶ 12-13.

         On December 23, 2016, Stardust filed its Complaint in this matter, alleging breach of contract. See Compl. On January 27, 2017, Diamond Quasar filed its Answer and Counterclaims, seeking damages for breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and tortious interference with prospective business relations. See Countercl. ¶¶ 24-48. According to Diamond Quasar, during the August 2016 exhibition, one of Stardust's principals approached Diamond Quasar customers, escorted them from the hotel ballroom, and brought them to Stardust's boutique in the hotel so that he could make sales to those customers on behalf of Stardust rather than Diamond Quasar. Id. ¶¶ 30-31. Diamond Quasar alleges that it lost sales to those customers and other potential customers, damaging the company by at least $1 million. Id. ¶¶ 32-33. The company also denied Stardust's allegations and stated that it made no payment to Stardust because “no payments are due or owing to it.” Id. ¶¶ 12-13.

         On March 28, 2017, Plaintiff filed this motion to dismiss Diamond Quasar's counterclaims. See Doc. 17.

         II. LEGAL STANDARD

         The applicable standard for a motion to dismiss a claim pursuant to Rule 12(b)(6) also applies to a motion to dismiss a counterclaim pursuant to Rule 12(b)(6). Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., 531 F.Supp.2d 620, 622 (S.D.N.Y. 2008); Revonate Mfg., LLC v. Acer Am. Corp., No. 12 Civ. 6017 (KBF), 2013 WL 342922, at *2 (S.D.N.Y. Jan. 18, 2013). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court must accept all factual allegations in the counterclaim as true and draw all reasonable inferences in the non-moving party's favor. Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, the court is not required to credit “mere conclusory statements” or “threadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also Kirch v. Liberty Media Corp., 449 F.3d 388, 398 (2d Cir. 2006) (“Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to defeat a motion to dismiss.”) (quoting Smith v. Local 819 I.B.T. Pension Plan, 291 F.3d 236, 240 (2d Cir. 2002)) (internal quotations omitted).

         III. DISCUSSION

         In support of its motion to dismiss, Stardust relies on two arguments. First, Stardust argues, the counterclaims are governed by Monégasque law. Stardust argues that the counterclaims should be dismissed because Diamond Quasar did not provide evidence showing that Monaco recognizes claims for breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and tortious interference with prospective business relations. See Memorandum of Law in Support of Plaintiff's Motion to Dismiss (“Pl.'s Mem.”) (Doc. 19) at 3- 5. Second, and in the alternative, Stardust argues that each of Diamond Quasar's three counterclaims fails to state a claim under New York law. Id. at 5-7.

         A. Failure to State a Claim under Monégasque Law

         Stardust argues that Diamond Quasar “has failed to state any claim under Monaco law as [D]efendant failed to establish that the counterclaims exist under the law of Monaco.” Pl.'s Mem. at 4. Stardust's position is that Federal Rule of Civil Procedure 44.1, which allows a court to consider “any relevant material or source . . . whether or not submitted by a party” in determining the substance of foreign law, also requires a party in its pleading to state the law that applies to each claim and to prove that its allegations state a claim under that law. Id. at 4-5. Stardust offers no citation for this argument.

         Courts in this District have routinely held that when “parties fail to provide information as to the content of applicable foreign law, the law of the forum determines how the [substantive] issue should be resolved.” Dar El-Bina Engineering & Contracting Co. v. Republic of Iraq,79 F.Supp.2d 374, 383 (S.D.N.Y. 2000); see also Shtofmakher v. David, No. 14 Civ. 6934 (AT), 2015 WL 5148832, at *7 n.10 (S.D.N.Y. Aug. 17, 2015) (“Although Defendants' motion papers may suffice as evidence of intent to rely on foreign law, Defendants have provided no evidence concerning the substance of French or Swiss law from which the court could conclude that Plaintiff has failed to adequately plead her claims.”); Wujin Nanxiashu Secant Factory v. Ti-Well Int'l Corp., No. 01 Civ. 8871 (JCF), 2002 WL 1144903, at *2 (S.D.N.Y. May 29, 2002) (same). Here, Stardust does not point to any way in which Diamond Quasar's claims would fail under Monégasque law and offers only the unsupported proposition that “it is unclear that [Monaco] ...


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