Court Opinion

ID: 9958737
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:10:21.36597+00
Date Added: 2024-06-11T08:18:40.051872
License: Public Domain

Odeon Capital Group LLC v AEON Biopharma, Inc.
               2024 NY Slip Op 31088(U)
                      April 1, 2024
           Supreme Court, New York County
        Docket Number: Index No. 654547/2023
                 Judge: Melissa A. Crane
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.
                                                                                                                      INDEX NO. 654547/2023
  NYSCEF DOC. NO. 28                                                                                            RECEIVED NYSCEF: 04/01/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. MELISSA A. CRANE                                            PART                             60M
                                                                                      Justice
            ----------------------------------------------------------------- ----------------X
                                                                                                  INDEX NO.          654547/2023
             ODEON CAPITAL GROUP LLC,
                                                                                                  MOTION DATE            N/A
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         001
                                                 - V -

             AEON BIOPHARMA, INC.,FORMERL Y KNOWN AS
             PRIVETERRA ACQUISITION CORP., CONTINENTAL                                              DECISION + ORDER ON
             STOCK TRANSFER & TRUST COMPANY                                                               MOTION

                                                         Defendant.
            ------------------------------------------------------------------- --------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 18, 19, 20, 21, 22,
            24,25,26
            were read on this motion to/for                                                         DISMISS

            Upon the foregoing documents, it is

                      This entire case and every cause of action involve plaintiff trying to recover for its failure

            to receive its "promised contractual fee" for serving as underwriter to a "Business Combination"

            via a SPAC (a special purpose entity) in the medical technology sector. Plaintiff does not assert

            any unique damages attributable to the alleged commission of a tort in its Complaint. Rather, it

            seeks contract damages of $1,255,800 for each of its claims (see complaint page 25).

                      Plaintiff has pled a decent breach of contract claim. Defendants have apparently

            recognized this, because they have not moved to dismiss the claims for breach of contract.

                      However, for the reasons stated on the record of April 1, 2024, the court dismisses all

            other causes of action against defendant AEON, because each of them merely duplicate the

            breach of contract claim. In addition to asking for the same damages, these other causes of

            action simply do not add anything beyond what the claim for breach of contract asserts. For

             654547/2023 ODE ON CAPITAL GROUP LLC vs. AEON BIOPHARMA, INC., FORMERLY KNOWN                            Page 1 of4
             AS PRIVETERRA ACQUISITION CORP. ET AL
             Motion No. 001

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                                                                                                     INDEX NO. 654547/2023
  NYSCEF DOC. NO. 28                                                                         RECEIVED NYSCEF: 04/01/2024

            example, the cause of action for conversion (Count II) merely seeks a vindication of plaintiffs

            contractual rights.

                    Further, Count III, for tortious interference with the Trust Agreement, duplicates breach

            of contract concerning the Underwriting Agreement, because, as plaintiffs counsel conceded on

            the record, the way plaintiff was to be paid under the Underwriting Agreement was through the

            Trust Agreement. Thus, by allegedly "instructing Continental to distribute the entire amount

            held in the Trust Account without paying Odeon its deferred underwriting fee," plaintiff has only

            described the means by which defendants breached the contract. Hence, this claim duplicates the

            cause of action for breach of contract. In addition, Count III is insufficient because it does not

            allege sufficiently that the breach would not have occurred but for AEON's conduct (see

            Eisenberg v. Weisbecker, 190 A.D.3d 549, 550 (1 st Dep't 2021).

                    Count IV for breach of the covenant of good faith and fair dealing also duplicates the

            claim for breach of contract. Although plaintiff alludes to this claim as a tort (it isn't), this

            characterization in no way describes a situation where plaintiff was deprived of its bargain even

            though the contract was not technically breached. This type of deprivation without breach is the

            essence of a claim for breach of the implied covenant of good faith and fair dealing ( see

            Carovillano v. Sirius XM Radio Inc., _Fsupp3d _, 2024 WL 450040, at *12 [S.D.N.Y. Feb. 6,

            2024][ "[t]he implied covenant is "breached when a party acts in a manner that, although not

            expressly forbidden by any contractual provision, would deprive the other party of the right to

            receive the benefits under their agreement" [citations omitted]]). Thus, "[w]here a good faith

            claim arises from the same facts and seeks the same damages as a breach of contract claim, it

            should be dismissed" (Mill Fin., LLC v. Gillett, 122 A.D.3d 98, 104 [1st Dep't 2014]. Here, all

            we have is a synonym for breach of contract. Accordingly, and also for the reasons discussed on

             654547/2023 ODE ON CAPITAL GROUP LLC vs. AEON BIOPHARMA, INC., FORMERLY KNOWN            Page 2 of 4
             AS PRIVETERRA ACQUISITION CORP. ET AL
             Motion No. 001

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                                                                                                   INDEX NO. 654547/2023
  NYSCEF DOC. NO. 28                                                                       RECEIVED NYSCEF: 04/01/2024

            the record, the court dismisses Count IV for breach of the covenant of good faith and fair

            dealing.

                   Count V for aiding and abetting breach of fiduciary duty suffers from the same problems

            as the tortious interference claim. Namely, this cause of action merely describes how AEON

            breached the contract. The allegations concerning substantial assistance are also insufficient.

            Accordingly, the court dismisses this Count.

                   As plaintiff concedes, there is no basis to award punitive damages on the claim for breach

            of contract alone (see Eisenberg v. Weisbecker, 190 A.D.3d 549, 550, [1 st Dep't 2021] ["Plaintiff

            is not entitled to punitive damages on his contract claim because the complaint does not allege

            that the breach was associated with outrageous conduct that was part of a pattern directed at the

            public generally"]). However, even were a tort claim to survive, punitive damages would not be

            appropriate (see Seymour v. Hovnanian, 211 A.D.3d 549, 557 [!81 Dep't 2022 [defendant's

            "conduct does not rise to the level of wanton disregard of plaintiffs' property rights so as to

            warrant punitive damages"]).

                   Accordingly, it is

                   ORDERED THAT AEON's motion to dismiss Counts II-V of the complaint as well as

            any demand for punitive damages is granted without prejudice; and it is further

                   ORDERED THAT Count I is severed and shall continue; and it is further

             654547/2023 ODE ON CAPITAL GROUP LLC vs. AEON BIOPHARMA, INC., FORMERLY KNOWN         Page 3 of 4
             AS PRIVETERRA ACQUISITION CORP. ET AL
             Motion No. 001

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                                                                                                 INDEX NO. 654547/2023
  NYSCEF DOC. NO. 28                                                                       RECEIVED NYSCEF: 04/01/2024

                    ORDERED THAT should the parties desire mediation, they should contact the part by

            email: SFC-Part60@nycourts.gov.

                                                                                         4E66AD6ABE2~0BF7EA

                     4/1/2024
                      DATE                                                    MELISSA A. CRANE, J.S.C.
             CHECK ONE:                 CASE DISPOSED                  NON-FINAL DISPOSITION

                                        GRANTED         □ DENIED       GRANTED IN PART          □ OTHER
             APPLICATION:               SETTLE ORDER                   SUBMIT ORDER

             CHECK IF APPROPRIATE:      INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT    □ REFERENCE

             654547/2023 ODEON CAPITAL GROUP LLC vs. AEON BIOPHARMA, INC., FORMERLY KNOWN        Page4 of 4
             AS PRIVETERRA ACQUISITION CORP. ET AL
             Motion No. 001

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