FILED: NEW YORK COUNTY CLERK 02/14/ :21 PM INDEX NO /2016 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 02/14/2017

Transcription

1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ANGELA RIBBLER AND RACHEL FRIEDMAN, Plaintiffs, Index No.: /2016 -AGAINST- CHICKSATION INC. D/B/A THE CHICKSTARTER AND ANDREA HORBLITT, Defendants. MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS MOTION TO DISMISS MOORE KUEHN, PLLC Justin A. Kuehn Fletcher W. Moore 30 Wall Street, 8 th floor New York, New York Tel: (212) jkuehn@moorekuehn.com fmoore@moorekuehn.com Attorneys for Defendants 1 of 18

2 TABLE OF CONTENTS Page TABLE OF AUTHORITIES... ii PRELIMINARY STATEMENT... 1 BACKGROUND... 2 LEGAL STANDARD... 3 ARGUMENT... 3 A. Plaintiffs New York Labor Law Claims Should Be Dismissed as Inadequately Pleaded The Complaint Fails to Allege an Employer-Employee Relationship Even With an Employer-Employee Relationship, Plaintiffs Unpaid Compensation Claim Can Only Be Asserted as a Breach of Contract Even if an Employer-Employee Relationship Is Alleged, Plaintiffs Overtime and Minimum Wage Claims Fail... 8 a. Plaintiffs claim for overtime fails... 8 b. Plaintiffs claim for minimum wage fails Even if an Employer-Employee Relationship Is Alleged, Plaintiffs Claim for Violations NYLL 195(3) Fails B. Horblitt Has No Personal Liability for Chickstarter Contracts C. Plaintiffs Equitable Claims Fail Claims for Quantum Meruit and Unjust Enrichment Fail When a Governing Contract Is Asserted Plaintiffs Fail to Allege Facts to State a Claim for Quantum Meruit and Unjust Enrichment Even if Plaintiff Could State a Claim for Quantum Meruit and Unjust Enrichment, These Claims Fail as to Horblitt CONCLUSION i 2 of 18

3 Cases TABLE OF AUTHORITIES ii Page(s) Almanzar v. Townhouse Mgmt. Co., Inc., No /2014, 2015 N.Y. Misc. LEXIS 4625 (Sup. Ct. Bronx Cnty. Nov. 13, 2015)... 3, 8 Bazak Int l Corp. v. Tarrant Apparel Grp., 347 F. Supp. 2d 1 (S.D.N.Y. 2004) Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573 (2d Cir. 2006) Bhanti v. Brookhaven Mem l Hosp. Med. Ctr., 260 A.D.2d 334 (2d Dep t 1999)... 4 Bizjak v. Gramercy Capital Corp., 95 A.D.3d 469 (1st Dep t 2012)... 6 Broad-Bussel Family LP v. Bayou Group LLC, 472 F. Supp. 2d 528 (S.D.N.Y. 2007) Bustillos v. Acad. Bus, LLC, No. 13 Civ. 565, 2014 U.S. Dist. LEXIS 3980 (S.D.N.Y. Jan. 13, 2014)... 8 Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193 (2003)... 4 Caniglia v. Chicago Tribune-N.Y. News Syndicate, 204 A.D.2d 233 (1st Dep t 1994)... 3 Crowe v. Gerling Global Reinsurance Corp. of Am., No , 2000 U.S. Dist. LEXIS (E.D. Pa. 2000)... 7 Crozier v. Sauers, 109 A.D.3d 507 (2d Dep t 2013) Fin. Techs. Int l, Inc. v. Smith, 247 F. Supp. 2d 397 (S.D.N.Y. 2002)... 7 Gold v. Am. Med. Alert Corp., No. 14 Civ. 5485, 2015 U.S. Dist. LEXIS (S.D.N.Y. Aug. 13, 2015)... 7 Gottlieb v. Kenneth D. Laub & Co., 82 N.Y.2d 457 (1993)... 6, 7 In re Estate of Gifford, 144 A.D.2d 742 (3d Dep t 1988) of 18

4 Ishin v. QRT Mgmt., LLC, 133 A.D.3d 449 (1st Dep t 2015) James v. Countrywide Fin. Corp., 849 F. Supp. 2d 296 (E.D.N.Y. 2012)... 3, 8 Joan Hansen & Co. v. Everlast World s Boxing Headquarters Corp., 296 A.D.2d 103 (1st Dep t 2002) Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106 (2d Cir. 2013)... 8 Malinowski v. Wall St. Source, Inc., No. 09 Civ. 9592, 2012 U.S. Dist. LEXIS (S.D.N.Y. Jan. 31, 2012)... 7 Martin Roofing, Inc. v. Goldstein, 60 N.Y.2d 262 (1983) Mount Sinai Sch. of Med. v. Konstadinos A. Plestis, M.D., No /2010 (Sup. Ct. N.Y. Cnty. Dec.14, 2010) Perella Weinberg Partners LLC v. Kramer, No /2015, 2016 N.Y. Misc. LEXIS 2701 (Sup. Ct. N.Y. Cnty. July 19, 2016)... 7 Serrano v. I. Hardware Distribs., Inc., No. 14-cv-2488, 2015 U.S. Dist. LEXIS (S.D.N.Y. July 27, 2015)... 9, 10 Statutes General Obligations Law 5-701(a)(2) N.Y. Civil Practice Law & Rules Rule 3211(a)(7)... 1, 3 N.Y. Labor Law 195(1)... 2 N.Y. Labor Law 195(3)... 1, 2, 4, 10 iii 4 of 18

5 Defendants Chickstation Inc. d/b/a The Chickstarter ( Chickstarter ) and Andrea Horblitt ( Horblitt ) (collectively Defendants ) submit this memorandum of law in support of their motion to dismiss the complaint (the Complaint ) of plaintiffs Angela Ribbler ( Ribbler ) and Rachel Friedman ( Friedman ) (collectively, Plaintiffs ) pursuant to CPLR 3211(a)(7). 1 PRELIMINARY STATEMENT This action concerns employment law claims stemming from prefatory discussions between Plaintiffs and their former friend, Andrea Horblitt, about a possible collaboration on a start-up company known as Chickstarter. Plaintiffs signed no employment agreements, signing bonuses, nor any other contracts with Chickstarter. Six weeks after learning of the start-up opportunity, while maintaining other fulltime jobs, Plaintiffs abandoned Chickstarter. Disappointed with their short-lived misadventure as entrepreneurs, Plaintiffs now advance a mix of improperly-pleaded claims arising from their supposed association with Chickstarter. These claims include conclusory demands for minimum wage, overtime, signing bonuses, equity, and compensation. Plaintiffs New York Labor Law ( NYLL ) claims should be dismissed. Plaintiffs must allege an employer-employee relationship to state a claim under the NYLL. Plaintiffs do not allege facts to support such a relationship here. This alone is fatal to Plaintiffs first five causes of action. Even if Plaintiffs could allege an employer-employee relationship, their claims for unpaid compensation, unpaid overtime, unpaid minimum wage, and violations of NYLL 195(3) still fail. This is because (i) the claim for unpaid compensation is merely a breach of oral contract claim dressed up as an NYLL claim; (ii) Plaintiffs do not plead the hours they claim to have worked with the necessary specificity to support claims for unpaid overtime and minimum wage; 1 Defendants also submit in support of their motion the affirmation of Justin A. Kuehn, dated February 14, 2017 ( Kuehn Aff. ). A copy of the Complaint is attached to the Kuehn Aff. as Exhibit A. 1 5 of 18

6 and (iii) an NYLL 195(3) claim requires a payment of wages, which is not alleged here. Consequently, even with an employer-employee relationship, Plaintiffs first, second, third, and fifth causes of action should be dismissed. Plaintiffs also cannot state a claim for breach of oral contract against Horblitt because an individual is not personally liable for corporate contracts. 2 Finally, Plaintiffs equitable claims fail because (i) Plaintiffs claim an oral contract governs this case, (ii) Plaintiffs do not allege how Defendants profited at their expense, and (iii) Plaintiffs allege no basis to assert these claims against Horblitt personally. BACKGROUND Plaintiffs filed the Complaint on or about November 17, The Complaint asserts eight causes of action for unpaid minimum wage, unpaid compensation, unpaid overtime, violations of NYLL 195(1) and 195(3), breach of oral contract, quantum meruit, and unjust enrichment. Founded in 2013, Chickstarter is a Delaware Corporation. Chickstarter is a product incubator and female-focused social commerce marketplace that sells products directly to the market at discount rates. Chickstarter has no offices, revenue, products, subscribers, or other notable assets on its balance sheet. Horblitt is a minority shareholder in Chickstarter. Horblitt has no express or implied authority to act for Chickstarter without the permission of various investors, partners, managers, and other outside advisers. Ribbler is a resident of Colorado. Complaint 5. Ribbler claims to have performed work for Chickstarter as a Director from May 22, 2016 through July 19, Complaint 12, 25. During the time Ribbler claims to have been a Director for Chickstarter, she had a full-time job 2 On this motion, Defendants do not seek dismissal of Plaintiffs claim for breach of oral contract to the extent it is asserted against Chickstarter. 2 6 of 18

7 a fact not disclosed in the Complaint as a Sales Associate at Relix Magazine. Kuehn Aff. Ex. B. Friedman is a resident of New York. Complaint 6. Friedman claims to have performed work for Chickstarter as its President from June 3, 2016 through July 19, Complaint 16, 25. During the time Friedman claims to have been President for Chickstarter, she had a fulltime job a fact not disclosed in the Complaint as a Credit Risk Analyst at Nomura Securities. Kuehn Aff. Ex. C. LEGAL STANDARD On a CPLR 3211(a)(7) motion, the facts pleaded are presumed to be true and are accorded every favorable inference. However, allegations consisting of bare legal conclusions, as well as factual claims inherently incredible or flatly contradicted by documentary evidence are not entitled to such consideration. Caniglia v. Chicago Tribune-N.Y. News Syndicate, 204 A.D.2d 233, (1st Dep t 1994). As discussed in greater detail below, Plaintiffs claims do not state any violation of wage laws nor do Plaintiffs claims clearly set forth any basis for relief under any cause of action. Therefore, Plaintiffs Complaint must be dismissed. ARGUMENT A. Plaintiffs New York Labor Law Claims Should Be Dismissed as Inadequately Pleaded Vague legal conclusions do not state a claim under New York Labor Laws. See Almanzar v. Townhouse Mgmt. Co., Inc., No /2014, 2015 N.Y. Misc. LEXIS 4625, at *6 (Sup. Ct. Bronx Cnty. Nov. 13, 2015) ( Pleading requirements under the Labor Law are the same as those under the Fair Labor Standards Act. ); James v. Countrywide Fin. Corp., 849 F. Supp. 2d 296, 321 (E.D.N.Y. 2012) (granting motion to dismiss because plaintiff did little more than assert, in a vague 3 7 of 18

8 and conclusory manner, entitlement to overtime compensation under the Fair Labor Standard Act ( FLSA ) and NYLL). Plaintiffs NYLL claims (causes of action one through five) fail because the Complaint does not allege material facts establishing an employer-employee relationship. Without an employer-employee relationship, an NYLL claim cannot survive. Furthermore, even if Plaintiffs alleged an employer-employee relationship, Plaintiffs unpaid compensation, unpaid overtime, unpaid minimum wage, and NYLL 195(3) claims still fail. The unpaid compensation claim fails because it does not allege a substantive NYLL violation, and therefore can only be asserted as a breach of contract claim. The unpaid overtime and minimum wage claims fail because Plaintiffs do not allege specific uncompensated hours worked for Chickstarter overtime or otherwise in any given work week. Finally, the NYLL 195(3) claim fails because the obligation to provide a statement was never triggered by the payment of wages to Plaintiffs. A fact Plaintiffs expressly acknowledge. 1. The Complaint Fails to Allege an Employer-Employee Relationship To state an NYLL claim of any kind, a plaintiff must allege facts to support the existence of an employer-employee relationship. See Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193, 198 (2003). Whether the requisite employment relationship exists to sustain a claim under NYLL is determined by the amount of control the alleged employer has over the worker s outcomes and practices used to achieve those outcomes. Id.; Bhanti v. Brookhaven Mem l Hosp. Med. Ctr., 260 A.D.2d 334, 335 (2d Dep t 1999) ( Minimal or incidental control over an employee s work product without the employer s direct supervision or input over the means used to complete the work is insufficient to establish a traditional employment relationship. ). As explained by the Court of Appeals in Bynog, the relevant factors to assess control are if the worker (1) worked at 4 8 of 18

9 his/her own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer s payroll, and (5) was on a fixed schedule. 1 N.Y.3d at 198. Here, a review of the Bynog factors demonstrates that dismissal is appropriate. The Complaint fails to make any allegations as to how Plaintiffs were controlled by Defendants. This alone is fatal to their NYLL claims. The Complaint supports only one conclusion: that Plaintiffs dealt with Chickstarter at their convenience (Bynog factor 1). Nowhere do Plaintiffs allege that Defendants had control over Plaintiffs schedules. Plaintiffs make no allegations that they worked from Chickstarter offices (which do not exist); had desks, offices, or workstations provided by Chickstarter; were required to work during specific time periods; or used Chickstarter equipment (computers, phones, etc.). The Complaint is likewise devoid of allegations that Plaintiffs collaborated with other Chickstarter employees. Indeed, to the extent Plaintiffs worked at all for Chickstarter, they did so on their own accord, without any instruction to do so from Defendants, and Plaintiffs do not allege otherwise. Furthermore, Plaintiffs do not, and cannot, allege that they were prohibited from taking on other employment because both Plaintiffs had concurrent fulltime employment while dealing with Chickstarter a material fact omitted from the Complaint (Bynog factor 2). Plaintiffs respective LinkedIn profiles show that Plaintiffs had other fulltime employment during the relevant time period, and neither profile lists Chickstarter in its employment history. Kuehn Aff. Exs. B & C. Ribbler s profile shows only that she worked as a Sales Associate at Relix Magazine from May 22, 2016 through July 19, See Kuehn Aff. Ex. B. Similarly, Friedman s profile shows only that she worked as a Credit Risk Analyst at Nomura Securities from June 3, 2016 through July 19, See Kuehn Aff. Ex. C. Plaintiffs not only had other employment at all times throughout their alleged dealings with Chickstarter, but failed to disclose such in the Complaint. This glaring 5 9 of 18

10 omission highlights the absence of any perceived employer-employee relationship with Chickstarter. Finally, the Complaint does not allege Plaintiffs received fringe benefits (Bynog factor 3), were included on the Chickstarter s payroll (Bynog factor 4), or had a fixed schedule (Bynog factor 5). Thus, Plaintiffs have not alleged the required employer-employee relationship to state an NYLL claim. A review of Bizjak v. Gramercy Capital Corp., 95 A.D.3d 469 (1st Dep t 2012) is instructive here. In Bizjak, the First Department affirmed dismissal of plaintiff s NYLL claim despite an alleged oral contract that plaintiff was an employee when it was undisputed that plaintiff did not receive fringe benefits and was not on any of defendants payroll. The court also found no employer-employee relationship, notwithstanding that plaintiff (i) was required to be in the office at a fixed time, attend weekly meetings, and receive prior approvals before he could take vacation; (ii) had his work closely monitored and edited by defendant; (iii) was subject to defendant s office policies; and (iv) was provided with, among other things, a business card with defendant s name on it and a desk in defendant s offices. Here, it cannot be disputed that the vague allegations of the Complaint fall far short of the record in Bizjak. Unlike Bizjak, Plaintiffs here do not purport to have had, among other things, mandatory work hours, close supervision, office policies, company , or business cards. Therefore, just as in Bizjak, Plaintiffs NYLL claims fail. 2. Even With an Employer-Employee Relationship, Plaintiffs Unpaid Compensation Claim Can Only Be Asserted as a Breach of Contract The remedies of NYLL are not recoverable on common-law contract claims. See Gottlieb v. Kenneth D. Laub & Co., 82 N.Y.2d 457, (1993); Perella Weinberg Partners LLC v. Kramer, No /2015, 2016 N.Y. Misc. LEXIS 2701, at *53 (Sup. Ct. N.Y. Cnty. July 19, 6 10 of 18

11 2016); see also Gold v. Am. Med. Alert Corp., No. 14 Civ. 5485, 2015 U.S. Dist. LEXIS , at *5 (S.D.N.Y. Aug. 13, 2015) ( It is settled that section 198 does not permit recovery... on a common-law contractual remuneration claim as the recovery of attorney s fees and liquidated damages is limited to actions for wage claims founded on the substantive provisions of Labor Law article 6. (quoting Gottlieb, 82 N.Y.2d at )); Malinowski v. Wall St. Source, Inc., No. 09 Civ. 9592, 2012 U.S. Dist. LEXIS 11575, at *7-8 (S.D.N.Y. Jan. 31, 2012) ( [T]the remedies supplied by 198 of Article 6 are available only when a claimant has established a violation of his rights under a substantive portion of [NYLL.] ); Fin. Techs. Int l, Inc. v. Smith, 247 F. Supp. 2d 397, 413 (S.D.N.Y. 2002) ( The remedies of [NYLL] may not be invoked when the claim is in substance a contract claim to enforce the payment of obligations other than statutory wages.... ). Plaintiffs claim for unpaid compensation is nothing more than a breach of contract claim dressed up as an NYLL claim. Compare Complaint with In support of this claim, Plaintiffs allege no substantive violation of NYLL as required nor cite to any portion of the NYLL they claim to be applicable. Rather, Plaintiffs refer only to their supposed oral contracts with Chickstarter for management positions. Complaint Ribbler claims to have been a Director. Complaint 12. Friedman claims to have been President. Complaint 16. Management positions do not qualify as employees. To the contrary, Plaintiffs own admissions in the Complaint that they had management positions, not employee positions, undermines an essential element needed to succeed on their NYLL claims. The Labor Law does not apply to employees serving in an executive, managerial or administrative capacity. Crowe v. Gerling Global Reinsurance Corp. of Am., No , 2000 U.S. Dist. LEXIS 14314, at *5 (E.D. Pa. 2000) (quoting Gottlieb, 82 N.Y.2d at 461). The purported oral contract with Chickstarter for 7 11 of 18

12 management positions does not allege a substantive violation of NYLL. In the most favorable view for Plaintiffs, it is solely a breach of contract claim. 3. Even if an Employer-Employee Relationship Is Alleged, Plaintiffs Overtime and Minimum Wage Claims Fail a. Plaintiffs claim for overtime fails To state a claim for unpaid overtime, a plaintiff must allege 40 hours of work in a specific week, and uncompensated time in excess of those 40 hours. See Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106, 114 (2d Cir. 2013). Allegations that a plaintiff regularly or typically worked overtime are insufficient to state a claim for overtime. Almanzar, 2015 N.Y. Misc. LEXIS 4625, at *6; Bustillos v. Acad. Bus, LLC, No. 13 Civ. 565, 2014 U.S. Dist. LEXIS 3980, at *10-11 (S.D.N.Y. Jan. 13, 2014) (dismissing claim for overtime because allegations that plaintiff regularly worked 60 to 90 hours a weeks were threadbare and speculative ). Additionally, a plaintiff must specify the various positions he or she worked in at the time of being denied overtime compensation, explain whether those positions were, in fact, exempt, and set forth the number of hours plaintiff allegedly worked without overtime compensation. James, supra, 849 F. Supp. 2d at 321 ( Plaintiff has done little more than assert, in vague and conclusory manner, his entitlement to overtime compensation under the FLSA and NYLL, and this is insufficient to withstand a motion to dismiss. ). Nowhere do Plaintiffs claim to have worked a fixed number of hours for Chickstarter in a given week, let alone a week in which either Plaintiff worked over 40 hours. The Complaint s only allegations concerning hours worked by Plaintiffs which fail to identify the employer are at best misleading and, at worst, intentionally deceptive. See Complaint 15, 19. As these allegations allege only what each Plaintiff typically worked, and omit any reference to a certain number of hours worked for Chickstarter, they are facially deficient. Id. It is Plaintiffs obligation 8 12 of 18

13 to identify a certain calendar week, identify the employer, and state the number of hours worked in that week for the particular employer. They must point to each such week that justifies unpaid overtime and set forth how it does so. Plaintiffs have not satisfied this obligation. These omissions alone require dismissal of Plaintiffs claim for unpaid overtime. Similarly, it strains credulity that Ribbler typically worked 56 to 70 hours per week (Complaint 15) and Friedman typically worked 70 to 105 hours per week (Complaint 19) for Chickstarter while both maintained fulltime jobs elsewhere (Kuehn Aff. Exs. B & C). This is underscored by the Complaint s failure to identify the employer for these hours. Nowhere does the Complaint allege Plaintiffs worked all, or even any, of these hours for Chickstarter. See Complaint 15, 19. Indeed, it is difficult to understand how Plaintiffs could devote as much as 105 hours a week to Chickstarter while simultaneously working other fulltime jobs. For example, assuming Friedman worked the hours as alleged in the Complaint for Chickstarter while working an additional 40-hour work week for her primary employer, Nomura Securities, Friedman would have worked an astounding 145 hours in a single week over 20.7 hours a day. This is simply not credible. Without allegations tying Chickstarter to the alleged hours worked by Plaintiffs in a given week, Plaintiffs claim for unpaid overtime fails. b. Plaintiffs claim for minimum wage fails New York law does not permit a minimum wage claim absent allegations setting forth the number of hours actually worked per week. Serrano v. I. Hardware Distribs., Inc., No. 14-cv- 2488, 2015 U.S. Dist. LEXIS 97876, at *8 (S.D.N.Y. July 27, 2015). As explained in Serrano, just as with a claim for unpaid overtime, to state a claim for unpaid minimum wage, a plaintiff must allege the number of hours actually worked per week. Id. The Serrano court dismissed 9 13 of 18

14 the claim for unpaid overtime, despite allegations that plaintiffs on average worked over 60 hours per week for years because those allegations were insufficient to determine the amount allegedly owed through a simple arithmetical calculation. Id. Here, just like Serrano, Plaintiffs failure to allege the hours actually worked for Chickstarter is fatal to their claim for unpaid minimum wages. 4. Even if an Employer-Employee Relationship Is Alleged, Plaintiffs Claim for Violations NYLL 195(3) Fails Plaintiffs claim for violations of NYLL 195(3) is facially deficient. Section 195(3) states, in relevant part, [e]very employer shall... furnish each employee with a statement with every payment of wages.... (emphasis added). The Complaint alleges that Plaintiffs were denied all wages and compensation earned during the course of their employment. Complaint 20. Plaintiffs are express in their allegation in being denied all wages. Id. Without wages, there can be no duty to furnish a wage statement. Plaintiffs cannot have it both ways. Thus, the Section 195(3) obligation to provide a statement was never triggered because Plaintiffs acknowledge never receiving wages. Complaint 20. The plain language of Section 195(3) requires that this claim be dismissed. B. Horblitt Has No Personal Liability for Chickstarter Contracts Plaintiffs erroneously claim Horblitt has liability for Chickstarter s alleged oral contracts. An individual has no personally liability for contracts entered into in their corporate capacity unless there is express intent to assume such liability. Ishin v. QRT Mgmt., LLC, 133 A.D.3d 449, 450 (1st Dep t 2015) (holding a member of a limited liability company not personally liable for breach of employment agreement); Joan Hansen & Co. v. Everlast World s Boxing Headquarters Corp., 296 A.D.2d 103, 109 (1st Dep t 2002) ( It is settled that a corporation exists independently of its owners, as a separate legal entity, that the owners are normally not liable for the debts of the of 18

15 corporation, and that it is perfectly legal to incorporate for the express purpose of limiting the liability of the corporate owners. ) (citation omitted); see also Crozier v. Sauers, 109 A.D.3d 507, 508 (2d Dep t 2013) (holding no personal liability for oral contract made for corporate purposes ). The Complaint alleges, at best, an oral agreement between Plaintiffs and Chickstarter. It does not allege an agreement between Plaintiffs and Horblitt or express intent by Horblitt to assume Chickstarter s liability. Similarly, nowhere do Plaintiffs allege they performed work for Horblitt unrelated to Chickstarter, that Horblitt guaranteed debts to Plaintiffs, 3 or any facts that would justify piercing Chickstarter s corporate veil. In re Estate of Gifford, 144 A.D.2d 742, 744 (3d Dep t 1988) ( The mere fact that the corporation s management was controlled by an officer or controlling shareholder is, by itself, insufficient evidence to warrant piercing the corporate veil so as to impose personal liability on the shareholder. ). Plaintiffs seek extraordinary relief in piercing the corporate veil to hold Horblitt personally liable for Chickstarter. Yet, they provide no legal or factual basis that would allow them to do so. Plaintiffs breach of contract claim must be dismissed as to Horblitt. C. Plaintiffs Equitable Claims Fail Plaintiffs seventh and eighth claims for quantum meruit and unjust enrichment should be dismissed for two reasons. First, Plaintiffs contend an oral contract governs this case. Complaint Second, Plaintiffs offer no allegations as to how Defendants profited at their expense. In all events, these claims, just as Plaintiffs breach of contract claim, fail against Horblitt personally. 3 Oral guarantees are unenforceable under the Statute of Frauds. See General Obligations Law 5-701(a)(2); Martin Roofing, Inc. v. Goldstein, 60 N.Y.2d 262 (1983) of 18

16 1. Claims for Quantum Meruit and Unjust Enrichment Fail When a Governing Contract Is Asserted New York law precludes unjust enrichment claims whenever there is a valid and enforceable contract governing a particular subject matter, whether that contract is written, oral, or implied-in-fact. Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573, 587 (2d Cir. 2006). A plaintiff may not seek to recover in quantum meruit of unjust enrichment when they claim to be entitled to recovery under a contract governing the subject matter of the dispute. Id.; see also Mount Sinai Sch. of Med. v. Konstadinos A. Plestis, M.D., No /2010 (Sup. Ct. N.Y. Cnty. Dec. 14, 2010) (employer not permitted to recover on unjust enrichment claim against employee where payments at issue are governed by employment contract). 4 As alleged by Plaintiffs, Plaintiffs accepted Defendants offers and performed work on Defendants behalf pursuant to the oral contracts offered. Complaint 52. These allegations bar claims for quantum meruit and unjust enrichment. Counts seven and eight should be dismissed. 2. Plaintiffs Fail to Allege Facts to State a Claim for Quantum Meruit and Unjust Enrichment To sustain a claim for unjust enrichment, the plaintiff must plead and prove that the defendant was benefitted or enriched at the plaintiff s expense, such that equity and good conscience require restitution of the funds. Broad-Bussel Family LP v. Bayou Group LLC, 472 F. Supp. 2d 528, 531 (S.D.N.Y. 2007). Therefore, a claim for unjust enrichment must be dismissed if it fails to allege that defendant received something of value which belongs to the plaintiff. Bazak Int l Corp. v. Tarrant Apparel Grp., 347 F. Supp. 2d 1, 4 (S.D.N.Y. 2004) (citation omitted). 4 Available at: em=prod of 18

17 Notwithstanding the preclusive effect of Plaintiffs claimed oral contract, these claims should also be dismissed as boilerplate legal conclusions. Plaintiffs equitable claims state in full: As alleged herein, Plaintiffs performed services for Defendants in good faith. As alleged herein, Defendants accepted and appreciated Plaintiffs services. As alleged herein, Plaintiffs performed services on Defendants behalf with the expectation of receiving compensation for their services. As a result, Plaintiffs have suffered economic losses and are entitled to recover the reasonable value of their services rendered to Defendant. Complaint As alleged herein, Defendants benefitted from Plaintiffs provision of services. As alleged herein, Defendants benefitted from Plaintiffs services at the expense of Plaintiffs. As a result, Plaintiffs have suffered economic losses and equity and good conscience require restitution to Plaintiffs. Complaint Nowhere do Plaintiffs allege what they did for Chickstarter, the value of the unspecified services rendered to Chickstarter, or how Chickstarter was benefited by their supposed efforts. As such, the Complaint falls far short of the required pleading standard for unjust enrichment claims, and counts seven and eight should be dismissed. 3. Even if Plaintiff Could State a Claim for Quantum Meruit and Unjust Enrichment, These Claims Fail as to Horblitt As explained in the context of Plaintiffs purported oral contracts (Point B, supra), to the extent Plaintiffs equitable claims survive, they fail against Horblitt. If Plaintiffs conferred a benefit, which they have not alleged, it was to Chickstarter, not Horblitt. Thus, just as with Plaintiffs breach of contract claim, these claims fail against Horblitt personally. CONCLUSION Plaintiffs Complaint is a classic throw mud on the wall and hope something sticks approach. It is bereft of substantive allegations regarding the weeks Plaintiffs worked overtime, the number of hours worked each week, the nature of the services rendered to Chickstarter, the of 18

18 value of services rendered to Chickstarter, and Plaintiffs primary fulltime employment. At most, the Complaint reveals passing consideration by Plaintiffs in joining Chickstarter. New York law does not provide for liability under such tenuous circumstances. The Complaint should be dismissed. Dated: February 14, 2017 New York, New York MOORE KUEHN, PLLC _s/justin Kuehn Justin A. Kuehn Fletcher W. Moore 30 Wall Street, 8 th floor New York, New York Tel: (212) jkuehn@moorekuehn.com fmoore@moorekuehn.com Attorneys for Defendants of 18