13-3440-cv Lois Turner v. Temptu Inc., et al.



### UNITED STATES COURT OF APPEALS **FOR THE SECOND CIRCUIT**



## SUMMARY ORDER

**R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT**  **. C**  **ITATION TO A SUMMARY ORDER FILED**
**ON OR AFTER J** **ANUARY 1,**  **2007, IS PERMITTED AND IS GOVERNED BY**  **F EDERAL**  **R ULE OF**  **A PPELLATE**  **P ROCEDURE**  **32.1 AND THIS COURT**  **’ S**  **L OCAL**  **R ULE**  **32.1.1. W**  **HEN CITING A SUMMARY ORDER IN A**
**DOCUMENT FILED WITH THIS COURT ,**  **A PARTY MUST CITE EITHER THE F** **EDERAL A** **PPENDIX 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 .** 
**At a stated term of the United States Court of Appeals** 1 **for the Second Circuit, held at the Thurgood Marshall United** 2 **States Courthouse, 40 Foley Square, in the City of New York,** 3 **on the 23 rd** **day of September, two thousand fourteen.** 4 5 **PRESENT: DENNIS JACOBS,** 6 **CHRISTOPHER F. DRONEY,** 7 **Circuit Judges** 8 **LEWIS A. KAPLAN,** ***** 9 **District Judge**

**.** 10 11
- - - - - - - - - - - - - - - - - - - -X 12 **LOIS TURNER,** 13 **Plaintiff-Appellant ,**  14 15 **-v.- 13-3440-cv** 16 17 **TEMPTU INC., TEMPTU MARKETING INC.,** 18 **MICHAEL BENJAMIN,** 19 **Defendants-Appellees**

**.** 20
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* The Honorable Lewis A. Kaplan, of the United States District Court for the Southern District of New York, sitting by designation.

1**FOR APPELLANT:** DAVID G. EBERT (withMioko C. 1 Tajika andAlissa G. Friedman on 2 the brief ), Ingram Yuzek Gainen 3 Carroll & Bertolotti, LLP, New 4 York, New York. 5 6 **FOR APPELLEES:** JUSTIN M. SHER, Sher Tremonte 7 LLP, New York, New York. 8 9 Appeal from a judgment of the United States District 10 Court for the Southern District of New York (Furman, J. ). 11 12 **UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED** 13 **AND DECREED**that the judgment of the district court be 14
**AFFIRMED**

. 15 16 Lois Turner appeals from the judgment of the United 17 States District Court for the Southern District of New York 18 (Furman, J. ), granting summary judgment in favor of 19 defendants-appellees

. We assume the parties’ familiarity 20 with the underlying facts, the procedural history, and the 21 issues presented for review. 22 23 This action arises out of a failed business 24 relationship between Turner and defendants Temptu Inc., 25 formerly known as Temptu Marketing Inc. (“Temptu”), and 26 Michael Benjamin (collectively, “Defendants”). Turner 27 alleges that after she entered into a partnership agreement 28 with them, Defendants stole her concept of a home-use 29 airbrush makeup system, thereby breaching the parties’ 30 contract. Turner’s complaint asserts eight causes of action 31 under New York law. On August 15, 2013, the district court 32 granted Defendants’ motion for summary judgment and 33 dismissed all of Turner’s claims. This appeal followed. 1 34 35 “We review the district court’s grant of summary 36 judgment de novo , applying the same standards that govern 37 the district court’s consideration of the motion.” Summa v. 38 Hofstra Univ. , 708 F.3d 115, 123 (2d Cir. 2013) (internal 39

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.

2quotation marks omitted). “The court shall grant summary 1 judgment if the movant shows that there is no genuine 2 dispute as to any material fact and the movant is entitled 3 to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A 4 fact is material if it “might affect the outcome of the suit 5 under the governing law.” Anderson v. Liberty Lobby, Inc.

, 6 477 U.S. 242, 248 (1986). A dispute concerning a material 7 fact is genuine “if the evidence is such that a reasonable 8 jury could return a verdict for the nonmoving party.” Id. 9 On a motion for summary judgment, “[w]e resolve all 10 ambiguities and draw all reasonable inferences in the light 11 most favorable to the nonmoving party.” Summa , 708 F.3d at 12 123. 13 14 A. Breach of Partnership / Joint Venture Agreement 15 16 Turner’s first claim is that she and Benjamin “were 17 joint venturers by express and implied contract,” and that 18 Benjamin breached the parties’ agreement when he terminated 19 their partnership and marketed the airbrush system through 20 Temptu. 2Compl. ¶¶ 45-47. Under New York law, the elements 21 of a cause of action for breach of contract are: (1) the 22 existence of a contract, (2) performance of the contract by 23 one party, (3) breach by the other party, and (4) damages 24 suffered as a result of the breach. Johnson v. Nextel 25 Commc’ns, Inc. , 660 F.3d 131, 142 (2d Cir. 2011). 26 27 The requirements for a joint venture under New York law 28 include (1) that the parties’ agreement “evidence their 29 intent to be joint venturers,” (2) that each party “have 30 some degree of joint control over the venture,” and (3) that 31 there be “a provision for the sharing of both profits and 32 losses.” Dinaco, Inc. v. Time Warner, Inc. , 346 F.3d 64, 33 67-68 (2d Cir. 2003) (quoting Itel Containers Int’l Corp. v. 34 Atlanttrafik Express Serv. Ltd. , 909 F.2d 698, 701 (2d Cir. 35 1990)); see alsoSteinbeck v. Gerosa , 4 N.Y.2d 302, 151 36 N.E.2d 170, 178 (1958) (“An indispensable essential of a 37 contract of partnership or joint venture, both under common 38 law and statutory law, is a mutual promise or undertaking of 39

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.

3the parties to share in the profits of the business and 1 submit to the burden of making good the losses.”). 2 3 Turner argues that a blog edited by herself, Benjamin, 4 and Roger Braimon constituted a binding joint venture 5 agreement. Turner testified that this blog--an “editable” 6 working document that was "constantly changing and 7 modifying,” Turner Dep. at 93:4-94:11--contained the terms 8 of their oral partnership agreement and “served as a living 9 document for [them] to write, edit, and memorialize [their] 10 discussions.” Turner Aff. ¶ 28. Having reviewed the 11 evidence in the light most favorable to Turner, we agree 12 with the district court that no rational juror could find 13 that Turner and Benjamin had finalized an agreement to which 14 they manifested an intent to be bound. 15 16 The key question whether a binding contract exists can 17 be answered only by looking to “the objective manifestations 18 of the intent of the parties as gathered by their expressed 19 words and deeds.” Brown Bros. Elec. Contractors, Inc. v. 20 Beam Constr. Corp. , 361 N.E.2d 999, 1001 (N.Y. 1977). “In 21 doing so, disproportionate emphasis is not to be put on any 22 single act, phrase or other expression, but, instead, on the 23 totality of all of these, given the attendant circumstances, 24 the situation of the parties, and the objectives they were 25 striving to attain.” Id. at 1001. 26 27 Although the parties’ blog contained a number of 28 possible contract terms, Turner admitted at her deposition 29 that many of these had not been finalized, seeTurner Dep. 30 at 99:24-100:12, indeed, several of them were marked “to be 31 determined.” Turner also acknowledged her understanding 32 that the alleged agreement was not finalized as late as 33 April 2007, when “still some discussion [] needed to take 34 place with respect to the contents of [their] contract.” 35 Turner Dep. at 126:23-127:2; see alsoTurner Aff. Exs. 20, 36 21 (Turner stating that she could “bring a suggestion for a 37 contract/agreement” to the parties’ meeting)). Also in 38 April, Braimon sent an e-mail to a lawyer, stating that the 39 parties had yet to “establish a contract” and were still 40 “undecided” even on the “actual product” they would develop 41 together. Sher Decl. Ex. 14. Perhaps most telling is that, 42 when asked at her deposition if the parties had ever 43 finalized their agreement, Turner responded, “No. I would 44 have loved to.” Turner Dep. at 99:24-25. Given this 45 record, no reasonable jury could find that the parties 46

4manifested the requisite intent to enter into a binding 1 partnership agreement. 3 2 3 Accordingly, we affirm the dismissal of Plaintiff’s 4 breach of contract claim. 4 5 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. SeeTurner 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. SeeLeibowitz 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.

5B. Misappropriation of Ideas 1 2 Next, Turner alleges that Defendants misappropriated 3 her idea to develop a new cosmetic airbrush system. “In 4 order for an idea to be susceptible to a claim of 5 misappropriation, two essential elements must be 6 established: the requisite legal relationship must exist 7 between the parties, and the idea must be novel and 8 concrete.” McGhan v. Ebersol , 608 F. Supp. 277, 284 9 (S.D.N.Y. 1985) (citing Vantage Point, Inc. v. Parker Bros., 10 Inc. , 529 F. Supp. 1204, 1216 (E.D.N.Y.), aff’d without op. 11 sub. nom. Vantage Point, Inc. v. Milton Bradley , 697 F.2d 12 301 (2d Cir. 1982)). “The legal relationship between the 13 plaintiff and defendant may be either a fiduciary 14 relationship, or based on an express contract, an implied15 in-fact contract, or a quasi-contract.” Id. 16 17 Turner argues that the legal relationship between her 18 and Benjamin is a contract or quasi-contract. As discussed 19 above, Turner fails to establish a contractual relationship; 20 and because the theory of quasi-contract is not distinct 21 from the theory of unjust enrichment, her quasi-contract 22 arguments fails for the reasons stated below. SeeBeth 23 Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of 24 N.J., Inc. , 448 F.3d 573, 587 (2d Cir. 2006); Goldman v. 25 Metro. Life Ins. Co. , 841 N.E.2d 742, 746 (N.Y. 2005). 26 27 Accordingly, we affirm the district court’s dismissal 28 of this claim as well. 29 30 C. Unjust Enrichment & Unfair Competition 31 32 Plaintiff’s claims for unjust enrichment and unfair 33 competition allege that Benjamin tricked her into working to 34 develop a novel airbrush system, only to steal it and take 35 the idea to Temptu, with which he was working all the while. 36 37 To establish unjust enrichment, a plaintiff must show 38 that the defendant was unjustly enriched at plaintiff’s 39 expense and should in equity and good conscience return the 40 money. SeeIn re First Cent. Fin. Corp. , 377 F.3d 209, 213 41 (2d Cir. 2004); Bradkin v. Leverton , 257 N.E.2d 643 (N.Y. 42 1970). To sustain a claim for unfair competition, a 43 plaintiff must show that the defendant misappropriated the 44 plaintiff’s labors or expenditures and that the defendant 45 displayed some element of bad faith in doing so. See, e.g.

, 46

6Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc. , 58 1 F.3d 27, 34-35 (2d Cir. 1995). 2 3 Both these claims fail. Temptu hired an independent 4 and highly trained engineer, Gennadi Fedorov, to develop and 5 design a new airbrush. There is no evidence that Fedorov 6 used any information or ideas from Turner, a graphic artist. 7 On the contrary, despite her awareness of Temptu’s 8 application to patent the airbrush, Turner never objected. 9 The evidence demonstrates only that Turner and Benjamin 10 negotiated for a possible business venture that was never 11 formalized. That does not constitute unjust enrichment or 12 unfair competition. Accordingly, we affirm the dismissal of 13 these claims as well. 14 15 For the foregoing reasons, and finding no merit in 16 Turner’s other arguments, we hereby **AFFIRM** the judgment of 17 the district court. 18 19 FOR THE COURT: 20 CATHERINE O’HAGAN WOLFE, CLERK 21 22 23 24 25

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