### Lopez v Martini 2024 NY Slip Op 31982(U) June 6, 2024 Supreme Court, New York County Docket Number: Index No. 657018/2021 Judge: Judy H. Kim Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local government sources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024 

### SUPREME COURT OF THE STATE OF NEW YORK NEWYORK COUNTY PRESENT: HON. JUDY H. KIM Justice

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GILBERTO LOPEZ, Plaintiff,

- V - ANDREW MARTINI, NEW YORK CAPITAL TECHNOLOGIES, LLC, Defendants.

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INDEX NO. 657018/2021 MOTION DATE 03/18/2022 MOTION SEQ. NO. 001 DECISION + ORDER ON MOTION 04

The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,26,27,28,29, 30, 31,32, 33,34, 36,37 were read on this motion to DISMISS Uponthe foregoing documents, defendants' motion seeking variouspreliminaryinjunctive reliefis denied and is granted, in part, with respect to dismissal ofplaintiffs complaint. The following allegations are, unless otherwise noted, drawn from plaintiffs complaint and assumed to be true solely for purposes ofthis motion (See ~' Grassi & Co. v Honka, 180 AD3d 564 [1st Dept 2020]). Lopez met defendant Andrew Martini, a member ofdefendant New YorkCapital Technologies, LLC ("NYCT") in early2017. Afterthismeeting, MartinihiredLopez to work for NYCT, building its website and working on marketing, branding, and search engine optimization as well as customer acquisition (NYSCEF Doc. No. 1 [Compl. at ,iino-11]). At an unspecified point in time, Martini promised Lopez a partnership stake in NYCT (Id. at 

### ,JIO). Thereafter, Lopez began paying for certain NYCT expenses, including hiring lawyers to review contracts with new clients, without seeking reimbursement "becausehe saw this as an investment in [NYCT]" (Id. at ,JI6).

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### [* 1]NYSCEF DOC. NO. 38

On April 5, 2019, Lopez and Martini signed a document stating: INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024

Inregardto New York Capital Technologies LLCAndrew Martini agrees to giving [sic] Gilberto Lopez Jr 49% company shares as ofApril 5, 2019. In the event of future shares being diluted or redistributed to bring in agreed upon partner(s) Gilberto Lopez Jr. Agrees itwill come from his shares at a portion up to 10%. It is agreed that after that amount should there be a need for more than 10% shares the portion can be agreed upon to be diluted or redistributed to a prospective partner from Andrew Marini [sic] ofhis 51% shares at a portion ofhis own discretion On or about July 25, 2020, however, Martini cut off Lopez's access to NYCT's administrative systems. Over a year later, in August 2021, Lopez requested that NYCT provide himwith access to itsbooks andrecords. NYCT deniedthis requeston the grounds thatLopezwas not a member ofNYCT. On December 16, 2021, plaintiff commenced this action asserting claims for: (1) unjust enrichment against NYCT; (2) promissory estoppel against Martini, individually; and (3) breach offiduciary duty against Martini, individually, and seeking a declaratoryjudgmentthat Lopez has been a member of NYCT since April 5, 2019, an injunction barring Martini and NYCT from interfering with Lopez'srights as a member ofNYCT, as well as an accounting ofNYCT'sbooks and records. In theirAnswer, defendants acknowledge that Lopez worked for NYCT but maintain that Lopez was fully compensated for this work as a 1099 independent contractor. Defendants also agree that Martini raised the possibility ofLopez becoming a member ofNYCT ifLopezbrought in clients and "dramatically improved his performance" but maintain that he was never actually given a membership interest. 1 Instead, Martini ended NYCT's relationship with Lopez in the
summer of2020, after which Lopez changed the logins for NYCT's website, Google Analytics

1 In an affidavit submitted in support of defendants' motion, Martini states that, under duress, he signed a piece of paper "acknowledging that [Lopez] couldbecome a partner in the future" but that this document was not the April 5, 2019 agreement referenced in plaintiff's complaint (NYSCEF Doc. No. 8 [Martini Aff. at 18]).

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### [* 2]NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024



### and Cloudflare accounts and deleted other information from NYCT accounts. Lopez also began operating a website imitating NYCT's using the URL, nycapital-tech.com, nearly identical to NYCT's actual URL, nycapitaltech.com. Based upon these allegations, defendants assert counterclaims for tortious interferencewithprospectivebusinessrelations, unfair competition, and conversion, and seek, as pertinent here, a declaratoryjudgment that Lopez is not a member of NYCT and a permanent injunction barring him from holding himselfout as having a relationship with NYCT, including operatingthe website "nycapital-tech.com," or otherwiseutilizing NYCT's name or logo. Defendants now move for a preliminary injunction barring plaintiff from operating the website "nycapital-tech.com," utilizing NYCT's name or logo, or otherwise holding himselfout
as having arelationship with NYCT. Defendants also move to dismiss the complaint, on the basis thatNYCT's OperatingAgreement establishes thatLopez neverbecame amember ofNYCT such that he cannot assert a claim for breach of fiduciary duty and is not entitled to a declaratory judgment or accounting. They also argue that the complaint fails to state a claim for unjust enrichment orpromissory estoppel. In opposition, plaintiff argues that the Operating Agreement does not conclusively establish that he is not a member ofNYCT because questions offact must be resolved before the Court can determine which ofthe Operating Agreement's requirements for the addition ofnew members applied and ifthey were satisfied. Plaintiffalso maintains that the complaint sufficiently sets out all the elements for unjust enrichment and promissory estoppel.

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### [* 3]NYSCEF DOC. NO. 38

DISCUSSION Preliminary Injunction INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024

Defendants' application for apreliminaryinjunction is denied. A party seekingpreliminary injunctivereliefpursuantto CPLR §6301 mustestablish: "(1) alikelihood ofsuccess on themerits, (2) irreparable injury ifprovisional reliefis not granted, and (3) that the equities are in his favor" (Marsh USA, Inc. v Alliant Ins. Services, Inc., 49 Misc 3d 1210(A) [Sup Ct, NY County 2015] citing J.A. Preston Corp. v. Fabrication Enterprises Inc., 68 NY2d 397,406 [1986]). As an initial matter, that branch of defendants' motion which seeks an order enjoining Lopez from operating the website "nycapital-tech.com" is denied as moot, as plaintiffhas already taken the website down (See~' Rapaport v Diamond Dealers Club, Inc., 95 AD2d 743, 744 [1st Dept 1983]; Bd. ofManagers of 1835 E. 14th St. Condominium v Singer, 186 AD3d 1477, 1478 [2d Dept 2020]). The remainder ofdefendants' motion-seeking an order barring plaintifffrom using NYCT's name or logo, or otherwise holding himself out as having a relationship with NYCT-isdenied; this is the ultimatereliefsoughtbydefendants in theirAnswer."[ A] mandatory preliminaryinjunction (onemandating specific conduct),bywhichthemovantwouldreceive some form ofthe ultimate reliefsought as a finaljudgment, is granted only in unusual situations, where the granting ofthe reliefis essential to maintain the status quo pending trial ofthe action" (Jones
v Park Front Apts., LLC, 73 AD3d 612, 612 [1st Dept 2010] [internal citations and quotations omitted]). Defendants have not established that extraordinary circumstances or irreparable injury warrant such relief (See~' Emanuel Mizrahi, DDS, P.C. v Angela Andretta, DMD, P.C., 170 AD3d 1120 [2d Dept 2019] [trial court erred in issuing, sua sponte, a preliminary injunction enjoining defendants' from using "Forest Hills Orthodontics" trade name, including internet domain name]).

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### [* 4]NYSCEF DOC. NO. 38



### Dismissal Breach of FiduciaryDuty INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024



### Defendants' motion, pursuant to CPLR §321 l(a)(l), to dismiss plaintiffs causes ofaction for breach of fiduciary duty is denied. Defendants argue that NYCT's Operating Agreement establishes that plaintiffis not a member ofNYCT and therefore not owed any fiduciary duties to support such a claim or entitle plaintiffto the declaratoryjudgment and accounting thathe seeks. On a CPLR §321 l(a)(l) motion, "dismissal is warranted onlyifthe documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter oflaw" (SchmidtSarosi v Offices for FertilityandReproductiveMedicine, P.C., 195 AD3d479,480 [1stDept2021] [internal citations omitted]) and the Operating Agreement fails to do so. The Operating Agreement submitted byNYCT provides, in pertinentpart, as follows: THIS OPERATING AGREEMENT is made and entered into effective September 28th. 2016, by and among: ANDREW MARTINI Gregory 0. 

### Lee Jr, [list the full legal names ofthe LLC members] (collectivelyreferred to in this agreement as the "Members").

1.8 Admission of AdditionalMembers. Except as otherwise expressly provided in this Agreement, no additional members may be admitted to the Company through issuance by the Company of a new interest in the Company without the prior unanimous written consent ofthe Members

2.I Initial Contributions. The Members initially shall contribute to the Company capital as described in Schedule 2 attached to this Agreement

8.1 Sale or Encumbrance Prohibited. Except as otherwise permitted in this Agreement, no Member may voluntarily or involuntarily transfer, sell, convey, encumber, pledge, assign, or otherwise dispose of (collectively, "Transfer") an interest in the Companywithoutthe prior written consent ofamajority ofthe other non-transferring Members determined on aper capita basis.
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### [* 5]NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024



### 8.2 Rightof FirstRefusal. 

### Notwithstanding Section 8.1, a Membermay transfer all or any part ofthe Member's interest in the Company (the "Interest") as follows: 8.2.1 The Member desiring to transfer his orher Interest first mustprovide written notice (the "Notice") to the otherMembers, specifyingtheprice andterms onwhich the Member is prepared to sell the Interest (the "Offer"). 8.2.2 For a period of30 days after receipt ofthe Notice, the Members may acquire all, butnot less than all, ofthe Interest at the price and under the terms specified in the Offer. If

### the otherMembers desiring to acquire the Interest cannot agree among themselves on the allocation of the Interest among them, the allocation will be proportional to the Ownership Interests ofthose Members desiring to acquire the Interest. 8.2.3 Closing ofthe sale ofthe Interest will occur as stated in the Offer; provided, however, that the closing will not be less than 45 days after expiration ofthe 30- day notice period. 8.2.4 If

### the other Members fail orrefuse to notify the transferring Member oftheir desire to acquire all of the Interest proposed to be transferred within the 30-day period following receipt ofthe Notice, then the Members will be deemed to have waived their right to acquire the Interest on the terms described in the Offer, and the transferring Membermay sell and convey the Interest consistent with the Offer to any other person or entity; provided, however, that notwithstanding anything in Section 8.2 to the contrary, should the sale to athirdpersonbe at aprice or on terms that are more favorable to the purchaser than stated in the Offer, then the transferring Membermustreoffer the sale ofthe Interestto the remaining Members at that otherprice or other terms; provided, further, that ifthe sale to a third person is not closed within six months after the expiration ofthe 30-day period describe above, then the provisions ofSection 8.2 will again apply to the Interest proposed to be sold or conveyed. 8.2.5 Notwithstanding the foregoing provisions of Section 8.2, should the sole remaining Member be entitled to and elect to acquire all the Interests ofthe other Members ofthe Company in accordance with the provisions of Section 8.2, the acquiring Member may assign the right to acquire the Interests to a spouse, lineal descendent, or an affiliated entity ifthe assignment is reasonably believed to be necessary to continue the existence ofthe Company as a limited liability company. 8.3 Substituted Parties. 

### Any transfer in which the Transferee becomes a fully substituted Member is not permitted unless and until: (1) The transferor and assignee execute and deliver to the Company the documents and instruments ofconveyance necessary or appropriate in the opinion ofcounsel

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### [* 6]NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024



### to the Companyto effect the transfer and to confirmthe agreement ofthe permitted assignee to be boundby the provisions ofthis Agreement; and (2) The transferor furnishes to the Company an opinion ofcounsel, satisfactory to the Company, that the transfer will not cause the Company to terminate for federal income tax purposes or that any termination is not adverse to NYCT or the other Members. (NYSCEF Doc. No. 17 [Operating Agreement] [emphasis added]). Defendants argue that the plaintiffs complaint does not establish that the Operating Agreement's requirements for adding a member including, inter alia, a capital contribution from the new member and the priorwritten consent ofcurrent members. In opposition, plaintiffsubmits an affidavit stating: Ihave neverknown about or seen the alleged operating agreement that Defendants now claim exists. I doubt that it is still the operating agreement governing the Company as oftoday. The operating agreement lists a Gregory 0. 

### Lee Jr. as a 50% member ofthe Company. Upon information and belief, Gregory 0. 

### Lee Jr. is no longer a member ofNYCT. Upon information and belief, prior to granting me a 49% interest, Andrew Martini was the sole member of the Company. Andrew Martini told me that Gregory 0. 

### Lee misappropriated funds from the Company; that it was an ordeal to remove him, but that he is long gone and that he had him removed as a member and from the paperwork of the LLC with the help of an attorney ... (NYSCEF Doc. No. 27 [Lopez Aff. in Opp. at ,111]). At oral argument, defense counsel conceded that the Operating Agreement was amended to remove Gregory 0. 

### Lee as a member (NYSCEF Doc. No. 37 [Tr. at pp. 14-15]). Accordingly,
an issue of fact exists as to what version ofthe Operating Agreement was in effect during the period at issue, precluding dismissal based upon the submitted Operating Agreement (See Parekh
v Cain, 96 AD3d 812, 815 [2d Dept 2012] [where disputed issues relating to the authenticity of the operating agreement remained, dismissal "was not warranted pursuant to CPLR §321 l(a)(l)"]). However, even assuming that this was the operative Operating Agreement, as the questions ofwhether Gregory 0.

### Lee was amember during the period at issueremains unresolved,

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### [* 7]NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024

the complaint's allegations that plaintiff worked for NYCT and that Martini, its sole member, granted plaintiff a membership interest in NYCT are sufficient to raise an issue of fact as to whetherthe Operating Agreement'srequirements for the admission ofnew members were waived by Martini (See Sherman v Zampella, 214 AD3d 545 [1st Dept 2023]; see also Laurel Hill Advisory Group, LLC v Am. Stock Transfer & Tr. Co., LLC, 112 AD3d 486 [1st Dept 2013] [inconsistent terms between operating agreement and alleged oral agreement in which plaintiff
was grantedmembership interest in LLC raised factual issues that couldnotberesolved on motion to dismiss]). Neither is the Courtpersuadedbydefendants' arguments thatthis claimmustbe dismissed
as against Martini because the allegations in the complaintrelate to actions taken in his corporate capacity. To state a claim for breach of fiduciary duty, plaintiffmust allege "the existence of a fiduciary relationship, misconductby the otherparty, and damages directly causedby thatparty's misconduct" (Pokoik v Pokoik, 115 AD3d 428, 429 [1st Dept 2014]). Taking the complaint's allegations as true, Martini's fiduciary duty "runs to plaintiffas a member ofthe LLC" (Shatz v Chertok, 180 AD3d 609 [1st Dept 2020]) and plaintiffs allegations that Martini denies plaintiff
access to NYCT'sbooks andrecords andfailed to make distributions to or shareprofits withLopez sufficiently alleges self-dealing and misconductbyMartini to supportthis claim (See~' Hausen
v N. Fork Radiology, P.C., 171 AD3d 888, 892 [2d Dept 2019] ["allegations that the other shareholders andboardmembers ofthe radiology corporations purposefully excluded the plaintiff from shareholder meetings and denied her all access to financial information" stated breach of fiduciary duty claim]).

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### [* 8]NYSCEF DOC. NO. 38
PromissoryEstoppel INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024

Defendants' motion, pursuant to CPLR §3211(a)(7), to dismiss plaintiffs promissory estoppel claim against Martini is granted. "The elements ofa promissory estoppel claim are: (i) a sufficientlyclearandunambiguouspromise; (ii) reasonablereliance onthepromise; and (iii) injury causedby the reliance" (Castellotti v Free, 138 AD3d 198,204 [1st Dept 2016] [internal citations omitted]). Plaintiffs allegationsthatMartinipromisedLopezthathewouldbe amemberofNYCT and that, in reliance on this promise, Lopez performed work for NYCT without reasonable compensation does not satisfy this standard-the complaint's reference to "reasonable" compensation concedes thatplaintiffwas, in fact, paidfor this work (See TheLaurel Hill Advisory Group, LLC v Am. Stock Transfer & Tr. Co., LLC, 2012 NY Slip Op 33461[U] [Sup Ct, NY County 2012] affd as mod sub nom. Laurel Hill Advisory Group, LLC v Am. Stock Transfer & Tr. Co., LLC, 112 AD3d 486 [1st Dept 2013] [allegations that counterclaim plaintiffleftjob to work for counterclaim defendant LLC based on promise that he would have a ten percent interest in thatLLC failed to state a claim for promissory estoppel wherehis only contribution in exchange for membership interest was work for which he was compensated by the LLC with a salary]). To the extent plaintiff also alleges that he paid certain NYCT expenses without seeking reimbursement, the complaint indicates that this was something he did based on his emotional investment in the company rather than as a precondition for him becoming a member. As such, these amounts are properly sought through plaintiffs unjust enrichment claim. UnjustEnrichment againstNYCT Defendants' motion to dismiss plaintiffsunjust enrichment claim is denied. To establish a claim for unjust enrichment, plaintiff"must show that (1) the otherpartywas enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit [the otherparty] to

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### [* 9]NYSCEF DOC. NO. 38 INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024



### retain what is sought to be recovered" (Auction House 43, Inc. v Koblence, 67 Misc 3d 1209(A) [Sup Ct, NY County 2020] [internal citations omitted]). Here, plaintiff pleads that he devoted significant time to NYCT and arranged for business opportunities for NYCT without receiving reasonable compensation and paid certain business expenses without being reimbursed. Contrary to defendants' characterization, these claims are sufficiently particularized (See ~' PF2 Sec. Evaluations, Inc. v Fillebeen, 171 AD3d 551,552 [1st Dept 2019] [unjust enrichment claimbased
on allegations thatcounterclaimdefendantsunderpaid counterclaimplaintifffor shares in company and failed to compensate him for computer models he developed was pled with requisite specificity]). Defendants' efforts to rebut these allegations with an unauthenticated spreadsheet and an email from Lopez discussing an appropriate fee for workperformed are unavailing, as this material is not documentary evidence appropriate for a CPLR §321 l(a)(l) motion (See~' Johnson v Asberry, 190 AD3d 491, 492 [1st Dept 2021]). The Court also rejects defendants' argument that plaintiffsunjust enrichment claimis time-barredto the extenthe seeks to recoverNYCT expenses he paid in mid-2017 and early 2018. "The statute oflimitations on an unjust enrichment claim begins to run upon the occurrence of the wrongful act giving rise to the duty of restitution" (Ingrami v Rovner, 45 AD3d 806, 808 [2d Dept 2007] [internal citations omitted]) which, in this case, is the alleged August 2021 denial ofplaintiffs membership in NYCT (See ~' Zucker v Waldmann, 43 Misc 3d 1233(A) [Sup Ct, Kings County2014] [whereplaintiffinvestedinbusiness venture to develop real property, unjust enrichment claim accrued when defendants failed to develop the property within a reasonable time or respond to plaintiffs request for written accounting]). As such, this claim was brought within the six-year statute oflimitations for unjust enrichment claims (See~' Simon v Franclnvest, S.A., 192 AD3d 565, 567 [1st Dept 2021]).

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### [* 10]NYSCEF DOC. NO. 38

In light ofthe foregoing, itis INDEX NO. 657018/2021 RECEIVED NYSCEF: 06/06/2024

ORDERED that defendants' motion to dismiss the complaint is granted to the limited extent thatplaintiffs claim for promissory estoppel is hereby dismissed, andis otherwise denied; anditis further ORDEREDthatdefendants' requestfor apreliminaryinjunctionis denied; anditis further ORDEREDthatplaintiffshall, withintendays ofthe date ofthis decision andorder, serve a copy of this decision and order, with notice of entry, upon defendants as well as the Clerk ofthe Court (60 Centre St., Room 141B) andthe Clerkofthe General Clerk'sOffice (60 Centre St., Rm. 119); and it is further ORDERED that such service upon the Clerk ofthe Court and the Clerk ofthe General Clerk's Office shall be made in accordance with the procedures set forth in the 

### Protocol on Courthouse and County Clerk Proceduresfor Electronically Filed Cases (accessible at the "EFiling"page onthis court'swebsite atthe address www.nycourts.gov/supctmanh); anditis further ORDERED thattheparties are to appearfor a preliminary conference inPart4 (80 Centre Street, room 308) onAugust 16, 2024 at 10:00 a.m. This constitutes the decision and order ofthe Court.

6/6/2024

DATE CHECK ONE:
APPLICATION: CHECK IF APPROPRIATE:

# ~ CASE DISPOSED GRANTED**□** DENIED SETTLE ORDER INCLUDES TRANSFER/REASSIGN

657018/2021 LOPEZ, GILBERTO vs. MARTINI, ANDREW ET AL Motion No. 001
11 of 11 HON. JUDY H. KIM, J.S.C. NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT

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