Lois Turner v. Temptu Inc. , 586 F. App'x 718 ( 2014 )

13-3440-cv
Lois Turner v. Temptu Inc., et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall United
3 States Courthouse, 40 Foley Square, in the City of New York,
4 on the 23rd day of September, two thousand fourteen.
5
6 PRESENT: DENNIS JACOBS,
7 CHRISTOPHER F. DRONEY,
8 Circuit Judges
9 LEWIS A. KAPLAN,*
10 District Judge.
11
12 - - - - - - - - - - - - - - - - - - - -X
13 LOIS TURNER,
14 Plaintiff-Appellant,
15
16 -v.- 13-3440-cv
17
18 TEMPTU INC., TEMPTU MARKETING INC.,
19 MICHAEL BENJAMIN,
20 Defendants-Appellees.
21 - - - - - - - - - - - - - - - - - - - -X
22
*
The Honorable Lewis A. Kaplan, of the United
States District Court for the Southern District of New York,
sitting by designation.
1
1 FOR APPELLANT: DAVID G. EBERT (with Mioko C.
2 Tajika and Alissa G. Friedman on
3 the brief), Ingram Yuzek Gainen
4 Carroll & Bertolotti, LLP, New
5 York, New York.
6
7 FOR APPELLEES: JUSTIN M. SHER, Sher Tremonte
8 LLP, New York, New York.
9
10 Appeal from a judgment of the United States District
11 Court for the Southern District of New York (Furman, J.).
12
13 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
14 AND DECREED that the judgment of the district court be
15 AFFIRMED.
16
17 Lois Turner appeals from the judgment of the United
18 States District Court for the Southern District of New York
19 (Furman, J.), granting summary judgment in favor of
20 defendants-appellees. We assume the parties’ familiarity
21 with the underlying facts, the procedural history, and the
22 issues presented for review.
23
24 This action arises out of a failed business
25 relationship between Turner and defendants Temptu Inc.,
26 formerly known as Temptu Marketing Inc. (“Temptu”), and
27 Michael Benjamin (collectively, “Defendants”). Turner
28 alleges that after she entered into a partnership agreement
29 with them, Defendants stole her concept of a home-use
30 airbrush makeup system, thereby breaching the parties’
31 contract. Turner’s complaint asserts eight causes of action
32 under New York law. On August 15, 2013, the district court
33 granted Defendants’ motion for summary judgment and
34 dismissed all of Turner’s claims. This appeal followed.1
35
36 “We review the district court’s grant of summary
37 judgment de novo, applying the same standards that govern
38 the district court’s consideration of the motion.” Summa v.
39 Hofstra Univ., 708 F.3d 115, 123 (2d Cir. 2013) (internal
1
Turner does not appeal the dismissal of her claims
for breach of fiduciary duty, fraudulent inducement,
fraudulent concealment, and negligent misrepresentation.
Remaining are her causes of action for breach of contract
(express and implied), misappropriation of ideas, unjust
enrichment, and unfair competition.
2
1 quotation marks omitted). “The court shall grant summary
2 judgment if the movant shows that there is no genuine
3 dispute as to any material fact and the movant is entitled
4 to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A
5 fact is material if it “might affect the outcome of the suit
6 under the governing law.” Anderson v. Liberty Lobby, Inc.,
7 477 U.S. 242, 248 (1986). A dispute concerning a material
8 fact is genuine “if the evidence is such that a reasonable
9 jury could return a verdict for the nonmoving party.” Id.10 On a motion for summary judgment, “[w]e resolve all
11 ambiguities and draw all reasonable inferences in the light
12 most favorable to the nonmoving party.” Summa, 708 F.3d at
13 123.
14
15 A. Breach of Partnership / Joint Venture Agreement
16
17 Turner’s first claim is that she and Benjamin “were
18 joint venturers by express and implied contract,” and that
19 Benjamin breached the parties’ agreement when he terminated
20 their partnership and marketed the airbrush system through
21 Temptu.2 Compl. ¶¶ 45-47. Under New York law, the elements
22 of a cause of action for breach of contract are: (1) the
23 existence of a contract, (2) performance of the contract by
24 one party, (3) breach by the other party, and (4) damages
25 suffered as a result of the breach. Johnson v. Nextel
26 Commc’ns, Inc., 660 F.3d 131, 142 (2d Cir. 2011).
27
28 The requirements for a joint venture under New York law
29 include (1) that the parties’ agreement “evidence their
30 intent to be joint venturers,” (2) that each party “have
31 some degree of joint control over the venture,” and (3) that
32 there be “a provision for the sharing of both profits and
33 losses.” Dinaco, Inc. v. Time Warner, Inc., 346 F.3d 64,
34 67-68 (2d Cir. 2003) (quoting Itel Containers Int’l Corp. v.
35 Atlanttrafik Express Serv. Ltd., 909 F.2d 698, 701 (2d Cir.
36 1990)); see also Steinbeck v. Gerosa, 4 N.Y.2d 302, 151
37 N.E.2d 170, 178 (1958) (“An indispensable essential of a
38 contract of partnership or joint venture, both under common
39 law and statutory law, is a mutual promise or undertaking of
2
Under New York law, “joint ventures are governed
by the same legal rules as partnerships because a joint
venture is essentially a partnership for a limited purpose.”
Scholastic, Inc. v. Harris, 259 F.3d 73, 84 (2d Cir. 2001).
Accordingly, this summary order, like Turner’s briefing,
will use both terms.
3
1 the parties to share in the profits of the business and
2 submit to the burden of making good the losses.”).
3
4 Turner argues that a blog edited by herself, Benjamin,
5 and Roger Braimon constituted a binding joint venture
6 agreement. Turner testified that this blog--an “editable”
7 working document that was "constantly changing and
8 modifying,” Turner Dep. at 93:4-94:11--contained the terms
9 of their oral partnership agreement and “served as a living
10 document for [them] to write, edit, and memorialize [their]
11 discussions.” Turner Aff. ¶ 28. Having reviewed the
12 evidence in the light most favorable to Turner, we agree
13 with the district court that no rational juror could find
14 that Turner and Benjamin had finalized an agreement to which
15 they manifested an intent to be bound.
16
17 The key question whether a binding contract exists can
18 be answered only by looking to “the objective manifestations
19 of the intent of the parties as gathered by their expressed
20 words and deeds.” Brown Bros. Elec. Contractors, Inc. v.
21 Beam Constr. Corp., 361 N.E.2d 999, 1001 (N.Y. 1977). “In
22 doing so, disproportionate emphasis is not to be put on any
23 single act, phrase or other expression, but, instead, on the
24 totality of all of these, given the attendant circumstances,
25 the situation of the parties, and the objectives they were
26 striving to attain.” Id. at 1001.
27
28 Although the parties’ blog contained a number of
29 possible contract terms, Turner admitted at her deposition
30 that many of these had not been finalized, see Turner Dep.
31 at 99:24-100:12, indeed, several of them were marked “to be
32 determined.” Turner also acknowledged her understanding
33 that the alleged agreement was not finalized as late as
34 April 2007, when “still some discussion [] needed to take
35 place with respect to the contents of [their] contract.”
36 Turner Dep. at 126:23-127:2; see also Turner Aff. Exs. 20,
37 21 (Turner stating that she could “bring a suggestion for a
38 contract/agreement” to the parties’ meeting)). Also in
39 April, Braimon sent an e-mail to a lawyer, stating that the
40 parties had yet to “establish a contract” and were still
41 “undecided” even on the “actual product” they would develop
42 together. Sher Decl. Ex. 14. Perhaps most telling is that,
43 when asked at her deposition if the parties had ever
44 finalized their agreement, Turner responded, “No. I would
45 have loved to.” Turner Dep. at 99:24-25. Given this
46 record, no reasonable jury could find that the parties
4
1 manifested the requisite intent to enter into a binding
2 partnership agreement.3
3
4 Accordingly, we affirm the dismissal of Plaintiff’s
5 breach of contract claim.4
6
3
Defendants also argue (and the district court
held) that there was no agreement to form a joint venture,
because Turner, Benjamin, and Braimon never discussed--let
alone agreed on--how the parties would share any losses.
See Turner Dep. at 131:11-13 (“Did you ever discuss what
would happen if the company lost money?” “No.”)). There is
some authority for Turner’s proposition that courts will
imply an equal division of losses where the parties have
agreed to share equally in profits, see, e.g., Penato v.
George, 383 N.Y.S. 2d 900, 904 (N.Y. App. Div. 2d Dep’t
1976); but such cases “are inconsistent with more recent
Appellate Division, Second Department authority,” Mawere v.
Landau, 39 Misc. 3d 1229(A), 1229A (N.Y. Sup. Ct. 2013)
(collecting cases). Judicially implied loss sharing would
seem to be particularly inappropriate where, as here, a
plaintiff risks losing only the value of services she has
invested while her putative partners stand to lose cash.
Id. We decline to reach this issue, however, having found
that the parties did not manifest a mutual assent to
contract.
4
In the alternative, Turner argues that the
parties’ communications and conduct created an
implied-in-fact contract. See Leibowitz v. Cornell Univ.,
584 F.3d 487, 506-07 (2d Cir. 2009) (internal quotation
marks and alterations omitted) (“Under New York law, a
contract implied in fact may result as an inference from the
facts and circumstances of the case, although not formally
stated in words, and is derived from the presumed intention
of the parties as indicated by their conduct.”). Like any
contract, an implied-in-fact contract “requires such
elements as consideration, mutual assent, legal capacity and
legal subject matter.” Id. at 507. As explained above, the
parties never finalized their agreement and never consented
to its terms. Thus, no implied contract was formed. Id. at
507.
5
1 B. Misappropriation of Ideas
2
3 Next, Turner alleges that Defendants misappropriated
4 her idea to develop a new cosmetic airbrush system. “In
5 order for an idea to be susceptible to a claim of
6 misappropriation, two essential elements must be
7 established: the requisite legal relationship must exist
8 between the parties, and the idea must be novel and
9 concrete.” McGhan v. Ebersol, 608 F. Supp. 277, 284
10 (S.D.N.Y. 1985) (citing Vantage Point, Inc. v. Parker Bros.,
11 Inc., 529 F. Supp. 1204, 1216 (E.D.N.Y.), aff’d without op.
12 sub. nom. Vantage Point, Inc. v. Milton Bradley, 697 F.2d
13 301 (2d Cir. 1982)). “The legal relationship between the
14 plaintiff and defendant may be either a fiduciary
15 relationship, or based on an express contract, an implied-
16 in-fact contract, or a quasi-contract.” Id.17
18 Turner argues that the legal relationship between her
19 and Benjamin is a contract or quasi-contract. As discussed
20 above, Turner fails to establish a contractual relationship;
21 and because the theory of quasi-contract is not distinct
22 from the theory of unjust enrichment, her quasi-contract
23 arguments fails for the reasons stated below. See Beth
24 Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of
25 N.J., Inc., 448 F.3d 573, 587 (2d Cir. 2006); Goldman v.
26 Metro. Life Ins. Co., 841 N.E.2d 742, 746 (N.Y. 2005).
27
28 Accordingly, we affirm the district court’s dismissal
29 of this claim as well.
30
31 C. Unjust Enrichment & Unfair Competition
32
33 Plaintiff’s claims for unjust enrichment and unfair
34 competition allege that Benjamin tricked her into working to
35 develop a novel airbrush system, only to steal it and take
36 the idea to Temptu, with which he was working all the while.
37
38 To establish unjust enrichment, a plaintiff must show
39 that the defendant was unjustly enriched at plaintiff’s
40 expense and should in equity and good conscience return the
41 money. See In re First Cent. Fin. Corp., 377 F.3d 209, 213
42 (2d Cir. 2004); Bradkin v. Leverton, 257 N.E.2d 643 (N.Y.
43 1970). To sustain a claim for unfair competition, a
44 plaintiff must show that the defendant misappropriated the
45 plaintiff’s labors or expenditures and that the defendant
46 displayed some element of bad faith in doing so. See, e.g.,
6
1 Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58
2 F.3d 27, 34-35 (2d Cir. 1995).
3
4 Both these claims fail. Temptu hired an independent
5 and highly trained engineer, Gennadi Fedorov, to develop and
6 design a new airbrush. There is no evidence that Fedorov
7 used any information or ideas from Turner, a graphic artist.
8 On the contrary, despite her awareness of Temptu’s
9 application to patent the airbrush, Turner never objected.
10 The evidence demonstrates only that Turner and Benjamin
11 negotiated for a possible business venture that was never
12 formalized. That does not constitute unjust enrichment or
13 unfair competition. Accordingly, we affirm the dismissal of
14 these claims as well.
15
16 For the foregoing reasons, and finding no merit in
17 Turner’s other arguments, we hereby AFFIRM the judgment of
18 the district court.
19
20 FOR THE COURT:
21 CATHERINE O’HAGAN WOLFE, CLERK
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