Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00475/USCOURTS-casd-3_15-cv-00475-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DANIEL ZANG,

Plaintiff,

v.

UMAMI SUSTAINABLE SEAFOOD,

INC.,

Defendant.

Case No.: 15cv475 AJB (DHB)

ORDER GRANTING DEFENDANT’S 

MOTION FOR SUMMARY 

JUDGMENT

Presently before the Court is Daniel Zang’s (“Plaintiff”) complaint asserting two 

causes of action: (1) breach of contract; and (2) breach of implied covenant of good faith 

and fair dealing. (Doc. No. 23.) On November 2, 2016, Defendant Umami Sustainable 

Seafood, Inc. (“Umami”) filed a motion for summary judgment. (Doc. No. 37.) Plaintiff 

opposes the motion. (Doc. No. 40.) Pursuant to Local Rule 7.1.d.1, the Court finds the 

instant motion suitable for determination on the papers and without oral argument. 

Accordingly, the motion hearing set for February 2, 2017, is hereby vacated. For the 

reasons set forth below, the Court GRANTS Umami’s motion for summary judgment.

I. BACKGROUND

The instant action arises from a 2010 employment agreement (hereafter referred to 

as “the Agreement”) between Lions Gate Lighting Corporation (“Lions Gate”) and

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Plaintiff. (Doc. No. 23 ¶ 9.) After a subsequent reverse merger, Lions Gate changed its 

name to Umami Sustainable Seafood, Inc. (Id. ¶ 19; Doc. No. 37-1 at 6; Neach Decl. Ex. 

1 (“Zang Depo. I”) 7:18-8:4, Doc. No. 37-3.)1 Under the Agreement, Plaintiff was hired as 

Chief Financial Officer of Umami, and received an annual base salary of $179,000. (Doc. 

No. 23 ¶¶ 10, 11.) 

In December of 2012, due to the actions of various current and previous 

shareholders, and creditors including Umami, Atlantis2and its wholly owned subsidiary 

Atlantis Kabushiki Kaisha (collectively referred to as “Atlantis”), were declared in default 

under various credit and collateral agreements. (Id. ¶ 24.) As a result of the foreclosures, 

Atlantis is no longer a shareholder of Umami, and Mr. Oli Steindorsson3(“Mr. 

Steindorsson”), Umami’s previous Chief Executive Officer, is no longer a direct or 

beneficial owner of the shares in Umami. (Id. ¶¶ 23, 26.)

On December 8, 2012, Mr. Steindorsson was removed from his position as Chief 

Executive Officer and Chairman of the Board of Umami. (See id. ¶ 27; Lorenz Decl. Ex. 3

(“Fitzpatrick Depo. II”) 6:9-11, Doc. No. 40-5.) The reason for Mr. Steindorsson’s removal 

was that there was the concern that based on Mr. Steindorsson’s past actions, that he would 

sell inventory from one of the companies and put that money into his own pocket; resulting 

in a devastating impact to Umami. (Fitzpatrick Depo. II 8:13-18.) Thus, the board agreed 

to remove Mr. Steindorsson without his knowledge, which required the board to form a 

plan in absolute secrecy. (Id. at 8:19-9:16.) 

At around the same time, creditors took the collateral that they were entitled to and 

redistributed the shares that were previously held by Mr. Steindorsson.4(Neach Decl. Ex. 

 

1 Page numbers are in reference to the automatically generated CM/ECF page number and not the 

number listed on the document. 

2 At the time, Atlantis was Umami’s largest shareholder, owning 62.1% of Umami’s issued shares. (Doc. 

No. 23 ¶ 22.)

3 Prior to the foreclosures, Atlantis was largely owned by Mr. Steindorsson. (Id. ¶ 23.)

4 The Secured Creditors received their collateral through various agreements entered into with Atlantis 

who had secured its obligations by pledging its Umami stock as collateral. (Doc. No. 40 at 6-7.) 

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3 (“Fitzpatrick Depo. I”) 8:21-24, Doc. No. 37-5.) These creditors included Daito Gyorui 

Co., LTD. (“Daito”), Victoria Ross and Donald M. Ross c/o Jones Gable and Company 

Limited (collectively referred to as “Jones Gable”), Robert Gudfinnsson c/o Salander 

Holdings Limited (“Robert Gudfinnsson”), Baja Aqua Farms, S.A. de C.V. (“Baja”), and 

Kali Tuna d.o.o (“Kali”) (collectively referred to as “Secured Creditors”).

5

(Doc. No. 23 ¶ 

28; Fitzpatrick Depo. I 9:7-10:13.) The parties then increased their ownership of Umami 

or became financial owners of Umami, as defined in 17 C.F.R. 240.13d-3 (“Rule 13d-3”)6

as follows: (1) Daito 21.8%; (2) Robert Gudfinnsson 11.7%7; (3) Jones Gable 13.4%8; and 

(4) Kali and Baja 15.1%.

9

(Doc. No. 23 ¶ 28.) 

In March of 2013, as a result of the events listed above, Plaintiff spoke to Mr. Tim 

Fitzpatrick (“Mr. Fitzpatrick”), Umami’s former Chief Financial Officer and current Chief 

Executive Officer, stating that he believed a Non-Negotiated Change in Control (“Change 

in Control”) had occurred. (Id. ¶ 31.)

Under Paragraph 4(c)(A)(iii) of the Agreement, Plaintiff may terminate the 

Agreement for “Good Reason.” (Id. ¶ 12; Doc. No. 37-4 at 4.) Included in the Agreement’s 

definition of “Good Reason” is “the occurrence of a Non-Negotiated Change in Control of 

the Company.” (Id.) The definition of a Non-Negotiated Change in Control at issue in the 

present matter is:

Any individual, corporation (other than the Company, any 

trustees or other beneficiary holding securities under any 

employee benefit plan of the Company, or any company owned, 

 

5 The Court notes that Mr. Fitzpatrick in his deposition states that the creditors who took collateral also 

included Sirius Ocean. (Fitzpatrick Depo. I 9:5-12.) 

6

17 C.F.R. 240.13d-3 states that for purposes of sections 13(d) of the Act, a beneficial owner of a 

security includes any person who has or shares: (1) voting power; and/or (2) investment power. 

7Mr. Gudfinnsson’s 13d-3 states he owned 11.8%. (Doc. No. 37-9 at 2-3.)

8

Jones Gable’s attached 13d-3 document states that the number of shares it owned was 16.2%. (Doc. 

No. 37-7 at 3.) Victoria Ross also filed a 13d-3 which states that she had shares in the amount of 5.9%. 

(Doc. No. 40-10 at 2.) 

9 Plaintiff attaches to his Opposition a 13d-3 document for Motomax S.A. de C.V. (Doc. No. 40-12 at 2.) 

The Court is unsure of who this is, and whether or not they are one of the Secured Creditors at issue. 

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directly or indirectly, by the shareholders of the Company in 

substantially the same proportions as their ownership of stock of 

the Company), partnership, trust, association, pool, syndicate, or 

any other entity or any group of persons acting in concert 

becomes the beneficial owner (within the meaning of Rule 13d3 under the Securities Exchange Act of 1934) of securities of the 

Company possessing more than fifty percent (50%) of the voting 

power for the election of directors of the Company.

(Doc. No. 23 ¶ 14; Doc. No. 37-4 at 4.) 

Subsequently, on March 13, 2013, Plaintiff wrote to Mr. Fitzpatrick pursuant to 

paragraph 4(d) of the Agreement and provided Umami with formal Notice of Termination

for Good Reason. (Doc. No. 23 ¶ 33.) Additionally, Plaintiff’s termination letter included 

a section that stated that per paragraph 5(a) of the Agreement, as Plaintiff wished to resign 

for “Good Reason,” Umami shall:

(i) pay Employee’s accrued but unpaid portion of the Annual 

Base Salary to the Employee in a lump sum in cash within twenty 

(20) days after the Date of Termination, (ii) continue to pay (in 

periodic intervals consistent with Company’s regular payroll 

practices) pay the Annual Base Salary for the remainder of the 

Employment period, and (iii) if the termination takes place for 

Good Reason as a result of a Non-Negotiated Change in Control, 

the Company will pay the Employee two (2) times the Annual 

Base Salary in a lump sum in cash within thirty (30) days after 

the Date of Termination and permit all unvested options granted 

hereunder to be vested immediately.

(Id. ¶ 35; Doc. No. 37-4 at 5.) 

Umami accepted Plaintiff’s notice of termination, and Plaintiff’s last day of 

employment was March 22, 2013. (Doc. No. 23 ¶ 39.) On March 31, 2013, Plaintiff 

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received his last paycheck. (Id. ¶ 44.) This paycheck only included payment of Plaintiff’s 

prorated annual base salary, and accrued but unused vacation through March 31, 2013. (Id.

¶ 45.) Plaintiff claims that Umami withheld and/or deducted from his paycheck $42,500.00, 

and asserts that Umami owes him no less than $382,500.00, which includes the 

$340,000.00 he was owed for payment of two times of his annual base salary. (Id. ¶¶ 46, 

47, 50.) 

In May of 2013, Mr. Fitzpatrick wrote to Plaintiff and stated that Umami had 

determined that no Change in Control had occurred; thus no payments were due to Plaintiff

under the Agreement. (Id. ¶ 51; Doc. No. 37-11 at 5-6.) Disagreeing with Umami, Plaintiff 

reached out to Mr. Fitzpatrick on more than one occasion between June and November of 

2013 regarding Umami’s decision not to pay. (Doc. No. 23 ¶ 52; Doc. No. 37-11 at 3-6.)

Plaintiff contends that Mr. Fitzpatrick would not provide him with any explanation for why 

Umami believed non-payment was appropriate. (Doc. No. 23 ¶ 52.) On November 25, 

2013, Plaintiff wrote to Umami’s Board of Directors requesting an explanation for their 

decision that no Change in Control occurred. (Id. ¶ 53; Doc. No. 37-11 at 3.) Plaintiff then 

wrote Umami, through his counsel, on September 11, 2014 and October 3, 2014, again 

requesting payment pursuant to paragraphs 4 and 5 of the Agreement, or for justification

for non-payment. (Doc. No. 23 ¶ 54.) Plaintiff alleges that Umami’s Board of Directors 

has not responded to any of his requests. (Id. ¶ 55.) 

On March 3, 2015, Plaintiff instituted this action against Umami. (Doc. No. 1.) On 

April 10, 2015, Umami filed a motion to dismiss, (Doc. No. 8), which was granted in part 

and denied in part on July 14, 2015. (Doc. No. 22.) On July 24, 2015, Plaintiff filed his 

first amended complaint (“FAC”). (Doc. No. 23.) Plaintiff asserts three causes of action: 

(1) breach of contract; (2) breach of covenant of good faith and fair dealing; and (3) 

violation of New York Labor Law 190. (Id. ¶¶ 56-80.) On August 10, 2015, Umami filed 

a motion to dismiss Plaintiff’s third claim for relief, (Doc. No. 24), which was granted on 

September 30, 2015. (Doc. No. 29.) On November 2, 2016, Umami filed the present action, 

its motion for summary judgment. (Doc. No. 37.) 

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II. LEGAL STANDARD 

Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the 

moving party demonstrates the absence of a genuine issue of material fact and entitlement 

to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact 

is material when, under the governing substantive law, it could affect the outcome of the 

case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if a 

reasonable jury could return a verdict for the nonmoving party. Id.

A party seeking summary judgment bears the initial burden of establishing the 

absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. The moving 

party can satisfy this burden in two ways: (1) by presenting evidence that negates an 

essential element of the nonmoving party’s case; or (2) by demonstrating the nonmoving 

party failed to establish an essential element of the nonmoving party’s case on which the 

nonmoving party bears the burden of proving at trial. Id. at 322–23. 

Once the moving party establishes the absence of a genuine issue of material fact, 

the burden shifts to the nonmoving party to set forth facts showing a genuine issue of a 

disputed fact remains. Id. at 330. When ruling on a summary judgment motion, the Court 

must view all inferences drawn from the underlying facts in the light most favorable to the 

nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 

(1986). 

III. DISCUSSION

A. New York Law Applies

Paragraph 9(a) of the Agreement plainly states that “[t]his Agreement shall be 

governed by, and construed in accordance with, the laws of the State of New York, without 

reference to principals of conflicts of laws.” (Doc. No. 37-4 at 7.) “In determining the 

enforceability of a choice of law provision in a diversity action, a federal court applies the 

choice of law rules of the forum state. . . .” Hatfield v. Halifax PLC, 564 F.3d 1177, 1182 

(9th Cir. 2009). The California Supreme Court has held that parties’ choice of law should 

be respected if the “chosen state has a substantial relationship to the parties or their 

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transaction, or [] whether there is any other reasonable basis for the parties’ choice of law.” 

Nedlloyd Lines B.V. v. Superior Court of San Mateo Cnty., 3 Cal. 4th 459, 466 (1992). 

Here, the Agreement was executed while Umami’s principal place of business was 

in New York. (Doc. No. 23 ¶¶ 8, 9; Doc. No. 37-1 at 10.) Thus, there is a “reasonable basis” 

for the parties’ choice of New York Law. See Peleg v. Neiman Marcus Grp., 204 Cal. App. 

4th 1425, 1446 (2012). Moreover, both parties agree that New York law applies. (Doc. No. 

37-1 at 10-11; Doc. No. 40 at 10-11.) Accordingly, the Court will apply New York law to 

Plaintiff’s breach of contract and breach of the implied covenant claims. 

B. Plaintiff’s Breach of Contract Claim10

For clarity, the Court reiterates the relevant parts of the Agreement at issue in the 

present matter: (1) any group of persons; (2) acting in concert; (3) becomes the beneficial 

owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of 

securities of Umami; and (4) possessing more than fifty (50%) of the voting power for the 

election of directors of Umami. (Doc. No. 37-4 at 4.) 

Umami moves for summary judgment on Plaintiff’s breach of contract claim

asserting that: (1) there was no group that acted in concert; and (2) the lack of beneficial 

ownership by a “group” means no Change in Control occurred. (Doc. No. 37-1 at 11-15.) 

In direct contrast, Plaintiff argues that summary judgment is not warranted because: (1) the 

Secured Creditors acted in concert by agreeing to forbear on foreclosing on their various 

credit and collateral agreements; and (2) the Secured Creditors were a group that obtained 

more than 50% of beneficial ownership in Umami following the Change in Control. (Doc. 

No. 40 at 11-19.) 

///

///

 

10 A plaintiff must plead and prove three elements to establish a prima facie case for breach of contract: 

(1) the existence of a contract; (2) a breach of that contract; and (3) damages resulting from the breach. 

Nat. Mkt. Share, Inc. v. Sterling Nat’l Bank, 392 F.3d 520, 525 (2d Cir. 2004). The parties do not dispute 

that there was a valid contract. The only question is whether Umami breached its duties as set forth in 

the Agreement. 

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i. A Genuine Issue Of Material Fact Remains as to Whether a “Group” 

Obtained Beneficial Ownership of Umami

Umami argues that the term “group” has a well understood meaning that does not 

include creditors foreclosing on cross-defaults. (Doc. No. 37-1 at 14.) In addition, by its 

terms, Umami contends that Section 4(c)(x) incorporates the provisions of Rule 13d-3 

which provides:

(a) For the purposes of 13(d) and 13(g) of the Act a beneficial 

owner of a security includes any person who, directly or 

indirectly, through any contract, arrangement, understanding, 

relationship, or otherwise has or shares:

(1) Voting Power which includes the power to vote, or to direct 

the voting of such security; and/or 

(2) Investment power which includes the power to dispose, or to 

direct the disposition of, such security.

17 C.F.R. 240.13d-3. (Id. at 13.) Thus, as there is no evidence indicating that the Secured 

Creditors had any kind of understanding to share voting or investment power, no “group” 

held beneficial ownership of Umami stock. (Id. at 14-15.) In opposition, Plaintiff contends 

that his reading of the term “group” in the Agreement’s context was not limited to Rule 

13d-3, but included any combination of people acting in concert. (Doc. No. 40 at 19.) 

Under New York law, “[c]onstruction and interpretation of an unambiguous written 

contract is an issue of law within the province of the court.” Maser Consulting P.A., v. 

Viola Park Realty, LLC, 91 A.D.3d 836, 837, 936 N.Y.S.2d 693 (N.Y. App. Div. 2012). 

“Pursuant to well-settled rules of contract interpretation, ‘when parties set down their 

agreement in a clear, complete document, their writing should be as a rule be enforced 

according to its terms.’” In Re El-Roh Realty Corp., 74 A.D.3d 1796, 1798–99, 902

N.Y.S.2d 727 (N.Y. App. Div. 2010) (citation omitted). “[I]f the contract is ambiguous and 

relevant extrinsic evidence as to its meaning is available, its interpretation is a question of 

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fact for the factfinder.” New Windsor Volunteer Ambulance Corps, Inc. v. Meyers, 442 

F.3d 101, 111 (2d Cir. 2006). 

Having reviewed both parties’ arguments and the applicable law, the Court finds that

there are disputed issues of material fact as to whether a “group” acted in concert. First, 

both parties dispute the meaning of “group” as defined in the Agreement. Umami argues 

that “group” is defined by Rule 13d-3. (Doc. No. 37-1 at 13.) Thus, the group must share 

voting or investment power. (Id.) However, Plaintiff disagrees and argues that as the word 

“group” is placed in the Agreement’s paragraph containing broader language, the 

Agreement does not explicitly limit “group” to be defined by Rule 13d-3. (Doc. No. 40 at 

19.) Second, even if Rule 13d-3 were to apply to the definition of “group,” both parties 

dispute what criteria should be used to classify a “group.” Umami cites to Dreiling v. Am. 

Online, Inc., 578 F.3d 995, 1002–1003 (9th Cir. 2009) to argue that the “key inquiry” in 

these cases is whether the alleged group “agree[d] to act together for the purpose of 

acquiring, holding, voting or disposing” of Umami stock. (Doc. No. 37-1 at 14.) In contrast, 

Plaintiff cites to Morales v. New Valley Corp., 999 F. Supp. 470, 475 (S.D.N.Y. 1998) to 

assert that the “touchstone of a group” within the meaning of Section 13d-3 is that the 

members “combined in furtherance of a common objective.” (Doc. No. 40 at 18.) Finally, 

Plaintiff argues that his own understanding of the word “group” is not limited to Rule 13d3. (Id. at 19.)

In light of Plaintiff’s assertions stated above, the Court finds that Plaintiff has 

satisfied his burden in providing evidence that demonstrates that the word “group” is 

ambiguous. See Compagnie Financiere De Cic Et De L’Union Europeenne v. Merrill 

Lynch, Pierce, Fenner & Smith Inc., 232 F.3d 153, 157–158 (2d Cir. 2000) (“[c]ontract 

language is ambiguous if it is ‘capable of more than one meaning when viewed objectively 

by a reasonably intelligent person . . .’”) (citation omitted). Moreover, in regards to what 

the key inquiry of a “group” is for purposes of Rule 13d-3, the Court notes that Umami’s 

case law is unpersuasive as it cites to cases from the First and Ninth Circuit instead of the 

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Second Circuit.

11 Accordingly, finding a rational basis for the difference in opinion as to

the understanding of the word “group,” the Court finds summary judgment as to this aspect 

of Plaintiff’s breach of contract claim inappropriate. See Mellon Bank v. United Bank 

Corp., 31 F.3d 113, 115 (2d Cir. 1994) (holding that summary judgment is proper in a 

contract dispute only if the language of the contract is “wholly unambiguous”); see also 

Pfizer, Inc. v. Stryker Corp., 348 F. Supp. 2d 131, 142 (N.Y. Ct. 2004) (“Whether a contract 

is unambiguous is a threshold question. The existence of an ambiguity depends on whether 

there is a reasonable basis for difference of opinion as to the meaning of the contract.”).

ii. Plaintiff has Failed to Provide Evidence of a Group “Acting in Concert”

The Court now turns to its next inquiry: whether a genuine issue of material fact 

exists as to whether a group “acted in concert.” Umami alleges that Plaintiff’s own 

testimony shows the Court that there is no indication that any of the Secured Creditors 

“acted in concert.” (Doc. No. 37-1 at 12.) In addition, Umami highlights that Daito’s filed 

Schedule 13D12 with the Securities and Exchange Commission (“SEC”) specifically states 

that it is filing “not as a group.”13 (Id.) Accordingly, without Daito and its 21.8% holding 

in Umami’s stock, Umami argues that the Secured Creditors could not have created a 

Change in Control with over 50% of the voting share. (Id. at 12-13.)14

In opposition, Plaintiff alleges that there is ample evidence to support the idea that 

the Secured Creditors “acted in concert” to facilitate Mr. Steindorsson’s removal as CEO 

of Umami. (Doc. No. 40 at 12.) Plaintiff also asserts that the evidence reveals that the 

 

11Umami requested and the Court granted, supra pp. 6-7, that New York Law applies to the instant 

matter.

12 When a person or group of persons acquires a beneficial ownership of more than 5% of a voting class 

of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934, 

they are required to file a Schedule 13D with the Securities and Exchange Commission. (See Generally, 

Doc. No. 37-6.) 

13 Daito checked box “b” on Line 2 of its Schedule 13D. As Code of Federal Regulation §240.13d-101 

provides, the reporting party checks box “b” if it “disclaims membership in a group” or “does not affirm 

the existence of a group.” (Doc. No. 37-1 at 12.)

14 Umami also cites to a New York case to argue that the meaning of “acting in concert” requires 

something more than a “common objective.” (Doc. No. 37-1 at 12.) As this case cited by Umami 

involves a charge for harassment, the Court finds its definition to be unpersuasive to the matter at hand. 

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Secured Creditors acted in concert by “agree[ing] to forbear on foreclosing on their various 

credit and collateral agreements until December 2012 . . . .” (Id. at 13.)

Here, the underlying facts and evidence presented by both parties, as well as the 

deposition testimony of Plaintiff could not permit a rational trier of fact to find that a group 

“acted in concert.” Significant to the Court’s determination is the fact that Plaintiff provides 

no evidence to show that Daito, Robert Gudfinnsson, Jones Gable, Kali, and Baja each 

came together in union to act as a group. Instead, Plaintiff asserts in his Opposition that 

Mr. Fitzpatrick acted on behalf of Robert Gudfinnsson and Jones Gable to transfer their 

secured collateral shares in Umami into their own respective names. (Id. at 14.) Then

Plaintiff claims that Mike Gault, a member of Umami’s Board of Directors, had been 

working with Daito to prevent Daito from foreclosing on its collateral prior to finalizing 

Umami’s removal of Mr. Steindorsson. (Id.) However, the shortcomings of Plaintiff’s 

assertions are that they are devoid of any evidence to support Plaintiff’s conclusion that all 

five of the Secured Creditors “acted in concert.” Thus, this piecemeal attempt by Plaintiff 

fails to satisfy his burden of demonstrating that a genuine issue of material fact exists. 

Moreover, Plaintiff’s own deposition testimony admits that he has no facts or 

evidence of the Secured Creditors acting together, but merely that he has based his 

allegations on his own inferences of the situation. (Zang Depo. I 17:14-24; Lorenz Decl.

(“Zang Depo. II”) 9:4-23, Doc. No. 40-14.) Plaintiff counters and argues that the actions 

of the Secured Creditors had to be done in complete secrecy so as not to warn Mr. 

Steindorsson of his impending resignation. (Fitzpatrick Depo. II 9:10-16.) Thus, Plaintiff 

contends that though he does not have all of the facts, the complete removal of Mr. 

Steindorsson could only be accomplished through the concerted actions of the Secured 

Creditors. (Zang Depo. II 4:9-25.) However, the Court notes that “[t]he mere existence of 

a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must 

be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. 

at 252. Thus, despite the arguments advanced by Plaintiff in support of the conclusion that 

a group “acted in concert,” the Court finds that Plaintiff has not provided evidence or facts 

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to withstand a motion for summary judgment. See Matsushita Elec. Indus. Co., 475 U.S. 

at 586 (finding that the non-moving party must go beyond the pleadings and “must do more 

than simply show that there is some metaphysical doubt as to the material facts”); see also 

Anderson, 477 U.S. at 256 (“[a] party opposing a properly supported motion for summary 

judgment may not rest upon the mere allegations or denials of his pleading, but must set 

forth specific facts showing that there is a genuine issue for trial.”).

Accordingly, though Plaintiff was able to demonstrate that a genuine issue of 

material fact exists as to the definition of “group,” Plaintiff has failed to satisfy his burden 

in providing the Court with any specific facts to demonstrate that the Secured Creditors 

“acted in concert.” See Zuckerman v. City of New York, 49 N.Y.2d 557, 563, 404 N.E.2d 

718 (N.Y. 1980) (granting summary judgment as the city’s arguments were considered 

speculation and this was “patently inadequate to establish the existence of a factual issue 

requiring a trial . . .”). Consequently, as currently configured, a reasonable jury could not 

return a verdict for Plaintiff in regards to his breach of contract claim. As a result, Umami’s 

motion for summary judgment is GRANTED. 

C. Plaintiff has Failed to Demonstrate that a Genuine Issue of Material 

Fact Exists Regarding his Breach of Implied Covenant Claim 

Next, the Court turns to Plaintiff’s claims for breach of implied covenant. Umami

argues that the undisputed evidence, including Plaintiff’s own admissions, demonstrates 

that Plaintiff received an immediate communication from Umami stating that it believed 

that no Change in Control had occurred. (Doc. No. 37-1 at 15.) In addition, Umami asserts

that Plaintiff’s own testimony that he had already accepted a job offer with a new company 

demonstrates that Umami did not induce Plaintiff to terminate his employment. (Id.) In 

opposition, Plaintiff contends that Umami accepted his termination for good reason without 

intending to pay him pursuant to the Agreement. (Doc. No. 40 at 27.)

“Implicit in all contracts is a covenant of good faith and fair dealing in the course of 

contract performance.” Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389, 663 N.E.2d 289

(N.Y. 1995) (citation omitted). Under New York law, a covenant of good faith and fair 

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dealing implies that “neither party to a contract shall do anything which has the effect of 

destroying or injuring the right of the other party to receive the fruits of the contract.” 

Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400, 407 (2d Cir. 2006). 

Here, Plaintiff’s own deposition shows that he was aware that Mr. Fitzpatrick and 

Umami agreed that no Change in Control had happened. (Doc. No. 37-1 at 15; Zang Depo. 

I 20:12-21:21.) Specifically, Plaintiff admits that Mr. Fitzpatrick was “100 percent 

consistent” in communicating to Plaintiff that a Change in Control did not apply. (Zang 

Depo. I 20:12-16.) Therefore, the Court finds Plaintiff’s assertion that Umami induced 

Plaintiff to terminate his employment with the understanding that they would not pay him 

for the alleged Change in Control is without merit.

Additionally, Plaintiff tries to argue that he was forced to leave his position as Mr. 

Fitzpatrick would not discuss Plaintiff’s continued employment with Umami, and informed 

Plaintiff that Umami was in a difficult financial position. (Doc. No. 40 at 21.) That then 

put Plaintiff in the position of being unemployed or having to look for a new job. (Id.) 

However, the evidence presented by Plaintiff is a far cry from proving breach of implied 

covenant. All Plaintiff has shown is that he was employed by a company in financial 

distress, and believing that a Change in Control happened, despite being told that no such 

change had occurred, he chose to terminate his employment. None of the evidence 

presented by Plaintiff goes to show that he was induced to terminate his employment under 

the guise that he would be paid under the terms of the Agreement providing for termination 

for Good Cause. 

On a final note, this claim fails for a separate reason. The Court highlights that this 

claim as well as Plaintiff’s claim for breach of contract assert that the underlying wrong is 

Umami’s failure to pay Plaintiff according to the terms of the Agreement. Accordingly, as 

this claim is duplicative of Plaintiff’s breach of contract claim, it is dismissed. See

Lorterdan Prop. At Ramapo I, LLC, v. Watchtower Bible and Tract Soc’y of New York, 

Inc., No. 11-CV-3656 CS, 2012 WL 2873648, at * 8 (S.D.N.Y. Jul. 10, 2012); see also 

Fleisher v. Phoenix Life Ins. Co., 858 F. Supp. 2d 290, 299 (N.Y. Ct. 2012) (“New York 

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law . . . does not recognize a separate cause of action for breach of the implied covenant of 

good faith and fair dealing when a breach of contract claim, based upon the same facts, is 

also pled.”) (citation omitted). Accordingly, Umami’s motion for summary judgment is 

GRANTED as to Plaintiff’s claim for breach of the implied covenant. 

CONCLUSION

For the reasons stated more fully above, the Court GRANTS Umami’s motion for 

summary judgment as to Plaintiff’s breach of contract and breach of implied covenant of 

good faith and fair dealing claims. 

IT IS SO ORDERED.

Dated: February 16, 2017

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