United States District Court, S.D. New York
OPINION AND ORDER
Edgardo Ramos, U.S.D.J.
Deitrick, Jr. brings this diversity action for breach of
contract and tortious interference against Cibolo Capital
Partners I, LLC (“Cibolo”) and TG LLC
(“TG”) (collectively, “Defendants”).
Before the Court is Defendants' motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief can be granted
based on principles of collateral estoppel and res judicata,
or, alternatively, Federal Rule of Civil Procedure 12(b)(3)
for improper venue. See Memorandum in Support of
Defendants' Motion to Dismiss Plaintiff's Complaint
(“Defs' Mem.”) (Doc. 14) at 1.
reasons stated below, Defendants' motion to dismiss is
December 1, 2015, Plaintiff brought an action in New York
Supreme Court against these Defendants and the Gypsy Guitar
Corporation (“Gypsy”) seeking to recover monetary
damages pursuant to an Engagement Letter. See Deitrick v.
The Gypsy Guitar Corp., 16 Civ. 616 (ER) (S.D.N.Y. Dec.
28, 2016) (“Deitrick I”). Defendants
removed the action to the Southern District of New York on
the basis of diversity jurisdiction on January 27, 2016.
See Deitrick I, Notice of Removal, 16 Civ. 616 (Doc.
1) at 1. The Deitrick I Complaint alleged breach of
contract, tortious interference, and unjust enrichment
stemming from the same facts that are at issue here.
Deitrick I, Complaint (Doc. 1-A) at 3-15.
On March 11, 2016, Defendants Cibolo and TG filed a motion to
dismiss the Deitrick I Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(2) for lack of personal
jurisdiction. See Deitrick I, Defendants Cibolo and
TG's Motion to Dismiss (Doc. 22). Gypsy filed a motion to
dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)
on August 11, 2016. See Deitrick I, Defendant
Gypsy's Motion to Dismiss (Doc. 40). On December 28,
2016, this Court granted Defendants Cibolo and TG's
motion to dismiss without prejudice and denied Gypsy's
motion to dismiss. See Deitrick I, Opinion and Order
on Defendants' Motions to Dismiss (“Opinion and
Order”) (Doc. 59). Thereafter, on June 4, 2017,
Plaintiff filed the instant Complaint against Defendants
Cibolo and TG, which Defendants now move to dismiss.
See Plaintiff's Complaint
(“Complaint”) (Doc. 1).
a Tennessee corporation in the business of crafting high-end
designer guitars, hired Plaintiff, a New York resident, as
its exclusive agent “in connection with a private
placement, or other financing of, or asset or stock sale by,
Gypsy.” Complaint at ¶ 10. The parties executed a
written agreement (the “Engagement Letter”) on
July 9, 2013, pursuant to which Plaintiff was entitled to
reimbursement for all fees and expenses incurred and to
receive a “Placement Fee”-both sums to be paid
contemporaneously with the closing of the anticipated
transaction. Id. at ¶ 11. As an alternative to
the Placement Fee, Gypsy agreed to pay Plaintiff a
“Facilitation Fee, ” entitling Plaintiff to a
percentage of both cash and the warrants of the total capital
raised in any related transaction involving Gypsy and a
client introduced by Plaintiff. Id. at ¶ 12. A
non-circumvention clause prohibited Gypsy from dealing
directly with parties introduced to it by Plaintiff absent
Plaintiff's written consent. Id. at ¶ 14.
By its terms, the Engagement Letter automatically renewed for
additional 12-month periods until Gypsy delivered written
notice stating that the term would not be renewed.
Id. at ¶ 15. Plaintiff claims that Gypsy has
not provided him with written notice of its desire to
terminate the agreement, and thus claims that the Engagement
Letter is still in effect. Id.
pursuant to the Engagement Letter, Plaintiff prepared an
eighty-one page offering memorandum, financial models, and a
due diligence folder. Id. at ¶ 16. Plaintiff
also traveled extensively to meet with investors on behalf of
Gypsy, including Cibolo, a private equity investor in Texas.
Id. After Cibolo expressed interest in Gypsy,
Plaintiff and Cibolo entered into a non-disclosure agreement
(“NDA”) to allow Cibolo to review Plaintiff's
offering materials. Id. at ¶ 17. In pertinent
part, the NDA, dated September 10, 2013, provided that Cibolo
or any of its affiliates could not deal directly with Gypsy
without Plaintiff's written consent. Id.
also contained a forum selection clause, which is of
particular significance here:
Any claim arising out of this Agreement or any transaction
contemplated hereby shall be instituted in any state or
federal court in the State of New York located in New York
County, each party hereby irrevocably submits to the
jurisdiction of such courts, and each party agrees not to
assert, by way of motion, any defense or otherwise, in any
such claim, that it is not subject personally to the
jurisdiction of such court, that the claim is brought in an
inconvenient forum, that the venue of the claim is improper
or that this Agreement or the subject matter hereof may not
be enforced in or by such court.
of Matthew J. Press (“Press Decl.”) (Doc. 17),
Ex. 3(b), Non-Disclosure Agreement (Doc. 17-7) at 4.
the parties signed the NDA, Cibolo entered into due diligence
discussions with Plaintiff and Gypsy regarding the
investment. Id. at ¶ 18. Plaintiff alleges that
sometime thereafter, Win Purifoy, a manager at Cibolo,
instructed Gypsy to exclude Plaintiff from the negotiations.
Id. at ¶ 19. Plaintiff claims that he was not
informed of this instruction and that he did not consent to
the communication between Gypsy and Cibolo, but that despite
his repeated requests, Cibolo and Gypsy continued their
discussions without involving him, thereby breaching Article
7 of the Engagement Letter and Section 5 of the
Id. at ¶ 20-21.
October 10, 2013, Cibolo formed Cibolo Guitar Partners, which
in turn, formed Teye Guitars, LLC, which later changed its
name to TG. Id. at ¶ 22. Plaintiff alleges that
Cibolo Guitar Partners is the sole member of TG, and Cibolo
Guitar Partners and TG were formed with the intent to
purchase Gypsy and evade their contractual obligations to
Plaintiff. Id. at ¶ 22-23. On October 18, 2013,
without Plaintiff's consent, Gypsy and TG executed an
Asset Purchase Agreement (the “APA”), by which TG
agreed to purchase the properties, rights, and assets used or
useful in connection with Gypsy's design and construction
of guitars. Id. at ¶ 24. Gypsy and TG also
agreed to pay Plaintiff, at closing, a brokerage fee of $120,
000 plus 2.2222% fully-diluted ownership in TG. Id.
at ¶ 25.
same day, on October 18, 2013, Gypsy and TG executed a
promissory note & security agreement (“Promissory
Note”), whereby TG lent $125, 000 to Gypsy, its
creative director, Teije Wijnterp, and CEO, Evert Wilbrink,
to pay the obligations owed to Plaintiff and specific working
capital needs. Id. at ¶ 26. Wilbrink also
entered into a separate employment agreement (also on October
18) to become the chief operating officer and director of
business development at TG. Id. at ¶ 27. On
October 30, 2013, Cibolo investors, Sanjay Chandra and
TAFLUMA Partners, L.P., executed a commercial loan agreement
& promissory note (“Commercial Agreement”)
with TG in which they agreed to loan TG $800, 000 to pay its
obligations, including those TG assumed when it acquired the
assets of Gypsy. Id. at ¶ 28. Plaintiff alleges
that, under the Commercial Agreement, Gypsy's first
obligation was to satisfy the amount owed to Plaintiff;
however, Plaintiff has yet to receive such payments.
Id. On April 1, 2014, Wijnterp signed an employment
agreement to become the chief executive officer and chief
creative director of TG. Id. at ¶ 29.
eight months later, on December 3, 2014, Plaintiff, through
his attorneys, submitted a demand letter to Gypsy and TG
seeking the money owed to him pursuant to the Engagement
Letter. Id. at ¶ 33. On December 31, 2014, in
response to the demand, Gypsy and TG entered into a
settlement agreement,  providing, in pertinent part, that the
parties never consummated the purchase transaction
contemplated in the APA. Id. at ¶ 34. Moreover,
Plaintiff alleges that the settlement agreement indicates
that TG held legal title of Gypsy's property for
approximately 14 months. Id. Plaintiff seeks
compensatory damages for the amount owed to him under the
Engagement Letter, including the Placement Fee, Facilitation
Fee, business expenses, and interest. Id. at ¶
Rule 12(b)(6) Motion to Dismiss
Rule 12(b)(6), a complaint may be dismissed for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). When ruling on a
motion to dismiss pursuant to Rule 12(b)(6), the Court must
accept all factual allegations in the complaint as true and
draw all reasonable inferences in the plaintiff'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 Id. at 681 (citing
Twombly, 550 U.S. at 551). “To survive a
motion to dismiss, a complaint must contain sufficient
factual matter . . . to ‘state a claim to relief that
is plausible on its face.'” Id. at 678
(quoting Twombly, 550 U.S. at 570). A claim is
facially plausible “when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550
U.S. at 556). If the plaintiff has not “nudged [his]
claims across the line from conceivable to plausible, [the]
complaint must be dismissed.” Twombly, 550
U.S. at 570.
Defendants allege that the Complaint should be dismissed
because it raises the same jurisdictional issues that were
actually raised and decided in Deitrick I.
See Defs' Mem. at 5. A 12(b)(6) motion “is
appropriate when a defendant raises claim preclusion . . .
and it is clear from the face of the complaint, and matters
of which the court may take judicial notice, that the
plaintiff's claims are barred as a matter of law.”
Conompco, Inc. v. Roll Int'l, 231 F.3d 82, 87
(2d Cir. 2000); see also Swiatkowski v. Citibank,
745 F.Supp.2d 150 (E.D.N.Y. 2010) (granting a 12(b)(6) motion
to dismiss on grounds of collateral estoppel and res
judicata). Moreover, dismissal under 12(b)(6) is proper when
the court has previously made a final jurisdictional
determination. Insurance Corp. of Ir., Ltd. v. Compagnie
des Bauxites de Guinee, 456 U.S. 694 (1982); see
also Romulus v. United States, 983 F.Supp. 336, 343
(E.D.N.Y. 1997) (“[A] dismissal for lack of
jurisdiction is preclusive as to the issue of
jurisdiction.”). A motion to dismiss premised on
personal jurisdiction requires the court to construe all
evidence in the light most favorable to the plaintiff.
DiStefano v. Carozzi N. America, Inc., 286 F.3d 81,
84 (2d Cir. 2001).
Rule 12(b)(3) ...