United States District Court, S.D. New York
BANK CAPITAL SERVICES LLC d/b/a F.N.B. EQUIPMENT FINANCE, a subsidiary of FIRST NATIONAL BANK OF PENNSYLVANIA, Plaintiff,
CHEF'S DEPOT INC. d/b/a CULINARY DEPOT, Defendant.
OPINION AND ORDER
VINCENT L. BRICCETTI UNITED STATES DISTRICT JUDGE
Bank Capital Services LLC d/b/a F.N.B. Equipment Finance, a
subsidiary of First National Bank of Pennsylvania, brings
this diversity action against defendant Chef's Depot Inc.
d/b/a Culinary Depot, to recover money advanced to defendant
in connection with an equipment purchase and lease agreement
between plaintiff and a non-party. Specifically, plaintiff
brings state law claims for unjust enrichment, imposition of
a constructive trust, and replevin and trover.
pending is defendant's motion to dismiss the amended
complaint pursuant to Rule 12(b)(6). (Doc.
following reasons, the motion is DENIED.
Court has subject matter jurisdiction pursuant to 28 U.S.C.
purpose of ruling on the motion to dismiss, the Court accepts
as true all well-pleaded allegations in the amended complaint
and draws all reasonable inferences in plaintiff's favor,
as summarized below.
Seasons Cleveland LLC (“Seasons Cleveland”)
planned to develop and operate a supermarket in South Euclid,
Ohio. To do so, it needed supermarket equipment. In November
2017, defendant, a commercial kitchen equipment merchant,
provided Seasons Cleveland with a list of necessary equipment
and a price estimate (the “project summary”).
Defendant's project summary estimated the total cost of
equipment to be $3, 962, 999.98.
11, 2018, plaintiff and Seasons Cleveland entered into a
Master Equipment Lease (the “equipment lease”),
whereby plaintiff agreed to purchase, and Seasons Cleveland
agreed to lease, supermarket equipment for Seasons Cleveland
to develop and operate the South Euclid supermarket.
Non-party Zvi Bloom, the principal of Seasons Cleveland,
guaranteed full performance of the equipment lease by
executing an equipment lease guaranty. On June 13, 2018,
plaintiff filed a UCC-1 Financing Statement with the Ohio
Secretary of State to secure its interest in the equipment.
11, 2018, Seasons Cleveland also executed a Progress Payment
Addendum, which authorized plaintiff to advance funding to
purchase the equipment for Seasons Cleveland's use, and a
“Progress Payment Request Form” (the
“progress payment form”), which authorized and
directed plaintiff to advance to defendant $1, 505, 500 (the
“progress payment”) as a deposit for the
equipment purchase. The next day, defendant sent Seasons
Cleveland LLC an invoice indicating the total cost of
equipment, $3, 962, 999.98, and the then-due $1, 505, 500
progress payment. Plaintiff remitted the progress payment to
defendant that day.
Cleveland defaulted on its obligations under the equipment
lease by failing to make any payments to plaintiff. Seasons
Cleveland's financial troubles, however, were much deeper
than its default. In May 2018-prior to Seasons
Cleveland's execution of the equipment lease and progress
payment form-an $8, 325, 000 judgment was entered against
Seasons Cleveland's parent company, various affiliates,
and Bloom. Seasons Cleveland and Bloom allegedly failed to
notify plaintiff of this judgment prior to the execution of
the equipment lease and plaintiff's remittance of the
progress payment to defendant. According to plaintiff, it
would never have consummated or finalized the equipment
lease, or advanced the progress payment to defendant, had it
known of the May 2018 judgment and Seasons Cleveland's
and Bloom's financial difficulties.
September 16, 2018, Seasons Cleveland, its parent company,
and its affiliates filed a Chapter 11 voluntary petition for
bankruptcy protection in the U.S. Bankruptcy Court for the
Eastern District of New York. By that time, the only
equipment identified in the June 12 invoice that defendant
had delivered to Seasons Cleveland were floor troughs, valued
at $6, 000.
February 15, 2019, plaintiff commenced an action against
Bloom in the U.S. District Court for the Middle District of
Pennsylvania to enforce the equipment lease guaranty.
Specifically, plaintiff sued Bloom for breach of contract,
fraud, and negligent misrepresentation. Bloom failed to
appear, and on May 8, 2019, plaintiff obtained a default
judgment against Bloom. On September 10, 2019, the judgment
was amended to reflect a corrected judgment amount of $1,
time prior to the commencement of the instant action,
plaintiff demanded that defendant return the $1, 505, 500
progress payment. Defendant has allegedly refused to do so.
Standard of Review
deciding a Rule 12(b)(6) motion, the Court evaluates the
sufficiency of the operative complaint under the
“two-pronged approach” articulated by the Supreme
Court in Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009). First, a plaintiff's legal conclusions
and “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, ”
are not entitled to the assumption of truth and are thus not
sufficient to withstand a motion to dismiss. Id. at
678; Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir.
2010). Second, “[w]hen there are well-pleaded factual