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- 1532

- cv Zhang v. Schlatter 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 APP ENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION

A 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 for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the Ci ty of New York, on the 2 nd day of January , two thousand fourteen

. PRESENT: REENA RAGGI ,

DENNY CHIN , CHRISTOPHER F. DRONEY ,

Circuit Judges

.

---------------------------------------------------------------------- HAINING ZHANG and CHINA VENTURE PARTNERS, INC. , Plaintiffs

- Appellants ,

v. No. 1 3

- 1532

- cv GARY H. SCHLATTER, ORALABS, INC., ROBERT C. GUST, MICHAEL I. FRIESS, ALLEN R. GOLDSTONE, CREATIVE BUSINESS STRATEGIES, INC., CHINA PRECISION STEEL, INC., BELMONT CAPITAL GROUP LIMITED, HENNY WEE & CO., SOON CHIANG HENNY WEE, KAM KAU EDDIE WONG, EDWON, INC., HUNG WAN, ADVANZ CAPITAL, INC., and ORALABS HOLDING CORP. , Defendants

- Appell ee s .

----- ----------------------------------------------------------------- APPEARING FOR APPELLANT S : KEVIN K. T UNG, ESQ. , Kevin Kervung Tung, P.C., Flushing, New York

.2

APPEARING FOR APPELLEE S : ANTHONY L. LEFFERT, Robinson Waters & O’Dorisio, P.C., Denver, Colorado, for Appellees Gary H. Schlatter, OraLabs, Inc., Robert C. Gust, Michael I. Friess , Allen R. Goldstone , and Creative Business Strategies, Inc. JOHN MICHAEL DEITCH, Coughlin Duffy LLP, Morristown, New Je rsey, for Appellees China Precision Steel, Inc. and OraLabs Holding Corp. MARY H. TOLBERT (Harry A. Woods, Jr., Bruce W. Day, and Tara A. LaClair, Crowe & Dunlevy , P.C., Oklahoma City, Oklahoma ; Thomas J. Mullaney, Leventhal, Cursio, Mullaney & Sliney, L LP, Roslyn, New York, on the brief

) Crowe & Dunlevy, P.C., Oklahoma City, Oklahoma, for Appellees Belmont Capital Group Limited, Henny Wee & Co., Soon Chiang Henny Wee, Kam Kau Eddie Wong, Edwon, Inc., Hung Wan, and Advanz Capital, Inc. Appeal from a judgment of the United States District Court for the Southern District of New York ( Andrew L. Carter, Jr. , Judge ). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgme nt entered on March 19, 201 3 , is AFFIRMED

. Plaintiffs Haining Zhang and China Venture Partners, Inc. (“CVP”) appeal the
dismiss al of the ir Amended Complaint , challeng ing , among other things, the district
court’s determination that (1) the ir breach of contract and unjust enrichment claims are barred by the applicable statutes of limitations , (2) they failed adequately to plead a claim
for fraud , and (3 ) the ir breach of contract claim against Belmont Capital Group Limited3

(“Belmont Capital”) is subject to arbitration. “We review de novo the dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6), accepting all factual allegations as true and drawing all reasonable inferences in favor of the plaintiff.” Askins v. Doe No.
1 , 72 7 F.3d 248, 252

– 53 (2d Cir. 2013) (internal quotation marks omitted). We assume the parties’ familiarity with the facts and the record of prior proceedings, which we reference only as necessary to explain our decision to affirm.
1. Claims Against OraLabs Defendants

a. Breach of Contract Claims “Under New York law, a claim for breach of contract must be filed within six years of when the claim accrues.” Muto v. CBS Corp. , 668 F.3d 53, 57 (2d Cir. 2012) (citing N.Y. C.P.L.R. § 213(2)). “A cause of action for breach of contract ordinarily accrues and the limitations period begins to run upon breach.” Guilbert v. Gardner , 480 F.3d 140, 149 (2d Cir. 2007). “The plaintiff need not be aware of the breach o r wrong to start the period running.” Id. “If, however, a contract requires continuing performance over a period of time, each successive breach may begin the statute of limitations running anew.” Id. at 150. Plaintiffs specifically allege that defendants OraLabs, Inc., Gary H. Schlatter, Robert C. Gust, Michael I. Friess, and Allen R. Goldstone (together, “OraLabs Defendants”) breached the N on - Dis c l osure/Non

- Circumvention Agreement at issue by meeting with representatives from Belmont Capital and P artner Success Holdings Limited4

(later nam ed China Precision Steel, Inc. (“CPSI”)) between December 2005 and January 2006, a time frame more than six years before the March 2012 filing of the instant suit.
See Am. Compl. ¶¶ 97

– 98, J

. A. 150

– 52. This pleading belies the contention that the date of breach is “unclear” and requires discovery. Appellant s’ Br. 11

. P laintiffs also argue that (1) obligations under the Non

- Disclosure /
Non

- Circumvention Agreement were ongoing , such that conduct in December 2005 was , at most , an anticipat ory repudiation, and subsequent breach es after March 2006 re - started
the limitations clock ; and (2) the OraLabs Defendants should be equitably estopped from asserting a limitations defense (or the limitations period should be equitably tolled)
because they concealed their breach. Because plaintiffs failed to argue anticipatory repudiation in the district court , we deem the argument forfeited. See In re Flanagan , 503 F.3d 171, 182 (2d Cir. 2007) (“We generally will not consider arguments raised for the fir st time on appeal

. ”). In any event, the argument fails because p laintiffs do not allege a breach by Goldstone

— the only
OraLabs Defendant who signed the Agreement

— that occurred after OraLabs, Inc. and CPSI signed their letter of intent on January 9 , 2006, that could re

- trigger the statute of
limitations

. Indeed, plaintiffs cannot plausibl y allege that Goldstone “re

- disclose d ”
confidential information to Belmont Capital and CPSI or “re

- circumvent ed ” p laintiffs’ role
in the r everse merger after the essential terms of the transaction had been agreed upon

. Nor can p laintiffs benefit from equitable tolling or estoppel

. Even assuming that5

the OraLabs Defendants fraudulently concealed their breach in December 2005, plaintiffs unquestionably were aware of the breach in April 2006 when the transaction between OraLabs, Inc. and CPSI was publicly announced and filed with the Securi ties and Exchange Commission , which provided plaintiffs with sufficient time to investigate and timely file their cl aims for breach of contract by December 2011

. See Putter v. N. Shore Univ. Hosp. , 7 N.Y.3d 548, 55 3

– 5 54 , 825 N.Y.S.2d 435, 43 8 (2006) (holding equitable estoppel “inappropriate as a matter of law” because defendant’s alleged misstatement “did not alter [p laintiff’s] timely awareness of the facts requiring him to make further inquiry before the statute of limitations expired” ) ; Simcuski v. Saeli , 44 N.Y.2d 442, 449

– 50, 406 N.Y.S.2d 259 (1978) (holding that, where equitable estoppel applies, “ burden is on th e plaintiff to establish that the action was brought within a reasonable time after the facts giving rise to the estoppel have ceased to be operational ”) ; Kotlyarsky v. N.Y. Post , 195 Misc. 2d 150, 154, 757 N.Y.S.2d 703, 707 (N.Y. Sup. Ct. 2003) (“A plaint iff seeking to invoke either the doctrines of equitable estoppel or equitable tolling is required to demonstrate that the failure to timely commence the lawsuit is not attributable to a lack of diligence on his or her part.”)

. The district court thus correctly dismissed all breach of contract claims against the OraLabs Defendants.
b. Fraud Claims
R easonable reliance on the part of the plaintiff is also an element of fraud under
New York law. See C rigger v. Fahnestock & Co. , 443 F.3d 230, 234 (2d Cir . 2006). For6

reasons already discussed in rejecting plaintiffs’ equitable arguments , plaintiffs cannot plausibly plead reasonable reliance on oral statements that OraLabs , Inc. did not intend to

consummate a reverse merger with CPSI to state a claim for f raud

. To the extent p laintiffs allege fraud based upon statemen ts that the OraLabs Defendants would not disclose confidential and proprietary data provided by p laintiffs , would not circumvent p laintiffs, and would compensate p laintiffs for their efforts , the district court properly held that such claims were not sufficiently distinct from the d efendants ’ contract obligations under the
Non

- Disclosure/Non

- Circumvention Agreement to avoid dismissal

. See A.L. Eastmond
& Sons, Inc. v. Keevily, Spero

- Whitelaw, Inc. , 107 A. D.3d 503, 503, 968 N.Y.S.2d 436,
437 (1st Dep’t 2013) (“[P]laintiff’s proposed fraud claims fail since plaintiff failed to plead a breach of duty distinct from, or in addition to, the breach of contract or failure to perform
under the contract.”).

c. Unjust Enrichment Claim “Under New York law, for a plaintiff to prevail on a claim of unjust enrichment, he must establish (1) that the defendant was enriched; (2) that the enrichment was at the plaintiff’s expense; and (3) that the cir cumstances are such that in equity and good conscience the defendant should return the money or property to the plaintiff.” Golden Pac. Bancorp v. F.D.I.C. , 273 F.3d 509, 519 (2d Cir. 2001). Unjust enrichment claims are subject to a six

- year statute of l imitations, which “accrues ‘upon the occurrence of the wrongful act giving rise to a duty of restitution and not from the time the facts constituting7

the fraud are discovered.’” Cohen v. S.A.C. Trading Corp. , 71 1 F.3d 353, 364 (2d Cir. 2013) (quoting Coom bs v. Jervier , 74 A.D.3d 724, 724, 906 N.Y.S.2d 267 , 268 (2d Dep’t 2010)).
A s discussed above, p laintiffs allege that the OraLabs Defendants wrongfully
disclosed p laintiffs’ proprietary information to CPSI and Belmont Capital and improperly
circumvented p laintiffs’ role in the reverse merger. In other words, the OraLabs
Defendants allegedly committed the “wrongful act[s] giving rise to a duty of restitution” in
December 2005 when they contacted Belmont Capital employees and CPSI

. At the very latest, the O raLabs Defendants were unjustly enriched when p laintiffs’ proprietary information resulted in the execution of the letter of intent between OraLabs, Inc. and CPSI on January 6, 2006. As th is alleged misconduct occurred more than six years prior to the
fil ing of the instant suit in March 2012 , p laintiffs’ unjust enrichment claim is time

- barred.
2. Claims Against the Belmont Defendants
P laintiffs submit that the district court erred in dismissing CVP’s contract claim against Belmont Capital as subject to the arbitration provision of the Investment Banking and Reverse Merger Cooperation Agreement (“Cooperation Agreement”) because subsequent agreements between these parties , which are not the basis for CVP’s breach of
contract claim , fail to inc lude an arbi tration clause. 1 The Federal Arbitration Act

1 P laintiffs do not sufficiently develop their challenge s to the district court’s conclusion that because only CVP and Belmont Capital executed the Cooperation Agreement , (1) Zhang cannot state a claim for breach of contract against Belmont Capital, Henny Wee8

“establishes a national policy favoring arbitration when the parties contract for that mode of dispute resolution.” Preston v. Ferrer , 552 U.S. 346, 349 (2008). “[T]hough the presumption in favor of arbitra ti on is strong, the law still requires that parties actually agree to arbitration before it will order them to arbitrate a dispute.” Opals on Ice Lingerie v. Bodylines Inc. , 320 F.3d 362, 36 9 (2d Cir. 2003). CVP and Belmont Capital clearly agreed to arbitr ate any disputes concerning t he Cooperation Agreement , which requires that “ [a]ny controversy, dispute or claim regarding the interpretation or performance of this Agreement shall be resolved by binding
arbitration ” in Hong Kong

. Cooperation Agreement ¶ 10 , J

. A. 372. The subsequent agreements executed by these two entities do not address this arbitration clause , let alone
alter its clear and broad mandate. Indeed, the Cooperation Agreement specifies that “[c]ontract addendums may alter details on individual deals but not the overall Agreement between the two parties

. ” Id. ¶ 13, J

. A. 372

. Accordingly, like the district court, w e conclude that CVP’s breach of contract claim against Belmont Capital

— the only potentially viable claim again st any of the Belmont Defendants

— is unambiguously subject
to arbitration and, therefore, required no discovery to support dismissal

. See Collins v.

& Co., Soon Chiang Henny Wee, Kam Kau Eddie Wong, Edwo n, Inc., Hung Wan, and Advanz Capital, Inc. (together, “Belmont Defendants”); and (2) CVP cannot state a breach of contract claim against every Belmont Defendant apart from Belmont Capital. These claims are therefore deemed abandoned. See United States v. Botti , 711 F.3d 299, 313 (2d Cir. 2013) (“It is a settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.” (internal quotation marks omitted)).9

Harrison

- Bode , 303 F.3d 429, 433 (2d Cir. 2002) (“Under New York law, the question of ambiguity vel non mus t be determined from the face of the agreement, without reference to extrinsic evidence.” (footnote omitted))

. 3. Claims Against CPSI and OraLabs Holding Corp.
Because p laintiffs have failed meaningfully to challenge the dismissal of their claims against CPSI and OraLabs Holding Corp ., we deem these claims abandoned. See
United States v. Botti , 711 F.3d 299, 313 (2d Cir. 2013). In any event, for reasons already discussed with respect to the OraLab s Defendants, plaintiffs’ contract claims against OraLabs Holding Corp. and CPSI are time

- barred

. Further, all allegations of fraud in the Amended Complaint refer only to statements of the OraLabs Defendants and , thus , are not attributed with the requisite particularity to CPSI or OraLabs Holding Corp

. S ee Nakahata v. New York

- Presbyterian Healthcare Sys., Inc. , 723 F.3d 192, 197 (2d Cir. 2013) (reiterating that particularit y requirement of Fed. R. Civ. P. 9(b) requires plaintiff (1) to specify fraudulent statements , (2) to identify the speaker , (3) to state where and when statements were made, and (4) to explain why statements were fraudulent)

. 4. Claims Against Creative Business Strategies, Inc. In oppos ing defendants’ motion to dismiss, p laintiffs voluntarily withdrew their claims against Cre ative Business Strategies, Inc. (“CBSI”) , “reserving the right to seek leave to add CBSI as a defendant should discovery reveal a basis to assert valid causes of action against CBSI.” Pl s
. ’ Mot. to Dismiss Opp’n 6 n.5, J .A. 471. On appeal, the10

OraLabs Defendants request that the court “dismiss with prejudice any and all remaining claims against CBSI . . . because Plaintiffs have abandoned all claims against CBSI and have failed to allege or state any cause of action against CBSI.” OraLabs Defen dants’ Br. 1 n.1 (emphasis in original). Because the OraLabs Defendants failed to request this relief
in the district court, see Zhang v. Schlatter , No. 12

- CV

- 1793 (ALC) (GWG), 2013 U.S. Dist. LEXIS 138968 , at *5 (S.D.N.Y. Mar. 13, 2013) ( stating only tha t “ Plaintiffs’ Opposition d ismissed CBSI without prejudice ”), we decline to award it on appeal but without prejudice to CBSI making a proper application in the district court

. See In re Flanagan , 503 F.3d at 182.
We have considered plaintiffs ’ remaining arguments and conclude that they too are without merit

. We therefore AFFIRM the judgment of the district court

. FOR THE COURT: CATHERINE O = HAGAN WOLFE, Clerk of Court