Court Opinion

ID: 9945520
Source: CourtListenerOpinion
Date Created: 2024-02-27 21:09:55.084848+00
Date Added: 2024-06-11T14:25:32.990583
License: Public Domain

Ogee NYC, Inc. v Lei
               2024 NY Slip Op 30580(U)
                   February 23, 2024
           Supreme Court, New York County
        Docket Number: Index No. 652757/2023
                  Judge: Lyle E. Frank
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.
 [FILED: NEW YORK COUNTY CLERK 02/23/2024 05:01 P~                                                                    INDEX NO. 652757/2023
  NYSCEF DOC. NO. 29                                                                                            RECEIVED NYSCEF: 02/23/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. LYLE E. FRANK                                               PART                              11M
                                                                                       Justice
            ----------------------------------------------------------------- ----------------X   INDEX NO.          652757/2023
             OGEE NYC, INC. D/B/A EVERTRUE MICROBLADING
             SALON,
                                                                                                  MOTION DATE         09/29/2023

                                                         Plaintiff,                               MOTION SEQ. NO.         001

                                                 - V -

             MANXIAN LEI, IDO MICROBLADING SALON, ELENA                                             DECISION + ORDER ON
             TSIAKLIS                                                                                     MOTION

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

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 10, 11, 12, 13, 14,
            15, 16, 19,21,23,25,27
            were read on this motion to/for                                                        DISMISSAL

                      This action arises out of allegations of breach of contract, misappropriation of

            confidential information, and unfair competition, inter alia. Upon the foregoing documents,

            defendants', Manxian Lei ("Lei") and Ido Micro blading Salon ("Ido"), motion to dismiss the

            complaint is granted in part.

                      Plaintiff contends that defendant Lei, in breach of her employment contract, used

            confidential information to open a competing business, Ido Micro blading. Plaintiff contends that

            defendant Lei, with the assistant of defendant Elena Tsiaklis, breached its fiduciary duty to

            plaintiff which resulted in monetary damages. Defendants Lei and Ido move to dismiss the

            complaint pursuant to CPLR § 321 l(a)(l) and (7). Plaintiff opposes the instant motion.

            Standard of Review

                      When considering a motion to dismiss based upon CPLR § 32ll(a)(7), the court must

            accept the alleged facts as true, accord the plaintiff the benefit of every possible favorable

            inference, and determine whether the facts alleged fit into any cognizable legal theory. Leon v.

             652757/2023 Motion No. 001                                                                               Page 1 of 6

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 [FILED: NEW YORK COUNTY CLERK 02/23/2024 05:01 P~                                                  INDEX NO. 652757/2023
  NYSCEF DOC. NO. 29                                                                        RECEIVED NYSCEF: 02/23/2024

            Martinez, 84 NY2d 83 [1994]. On a motion to dismiss the court "merely examines the adequacy

            of the pleadings", the court "accept as true each and every allegation made by plaintiff and limit

            our inquiry to the legal sufficiency ofplaintiff s claim." Davis v Boeheim, 24 NY3d 262,268

                    Under CPLR Rule 321 l(a)(l) documentary evidence provides a basis for dismissing a

            cause of action "where the documentary evidence utterly refutes plaintiff's factual allegations,

            conclusively establishing a defense as a matter of law." Goshen v Mutual Life Ins. Co. ofNY, 98

            NY2d 314, 326 [2002].

                    The complaint asserts eight causes of action as against moving defendants. Defendants

            repeatedly contend that plaintiff has failed to establish various elements of the alleged causes of

            action, as such is not the standard on a motion to dismiss, the Court will address whether the

            complaint contains sufficient allegations for each cause of action.

            First and Second Causes of Action: Breach of Contract

                    Plaintiff's first and second causes of action allege that Lei breached its contract. First, by

            disclosing the confidential information obtained while employed and second, by opening Ido, a

            competing business, a violation of the non-compete clause in the contract.

                    Preliminarily, defendants contend that the contract is unenforceable and that portions of

            the contract are overly broad. Defendants have failed to establish prima facie showing that the

            underlying contract is unenforceable. The first case cited to support its contention that the

            agreement is unenforceable, specifically states "absent restrictive covenant not to compete, an

            employee is free to compete", p. 5 of defendants' memorandum of law citing Walter Karl, Inc. v

            Wood, 137 AD2d 22, 27 [2d Dept 1988] emphasis added. Here, there is not an absence of a

            restrictive covenant, rather the basis of the underlying action is the alleged breach of that

            covenant.

             652757/2023 Motion No. 001                                                             Page 2 of 6

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 [FILED: NEW YORK COUNTY CLERK 02/23/2024 05:01 P~                                                   INDEX NO. 652757/2023
  NYSCEF DOC. NO. 29                                                                         RECEIVED NYSCEF: 02/23/2024

                      It is well established to recover damages for breach of contract, plaintiff must show (1)

            the existence of a valid, enforceable contract between the parties (2) the plaintiffs full

            performance thereunder (3) the defendant's breach of the contract and (4) resulting damages.

            (see Detringo v South Island Family Medical LLC, 158 AD3d 609 [2nd Dept 2018]).

            Contrary to defendants' contention, plaintiffs have sufficiently alleged a breach of contract.

                      Defendants have not established on this motion that the contract is void or unenforceable,

            however based on the contention the Court finds that plaintiff's quasi contractual claim of unjust

            enrichment, the fifth cause of action, as against defendants Lei and Ido, survives the instant

            motion to dismiss. Further, the Court finds that the complaint adequately pleads a breach of

            contract cause of action, thus the motion to dismiss the first and second causes of action is

            denied.

            Third Cause of Action: Misappropriation of Confidential Information

                      To establish a cause of action alleging misappropriation of trade secrets, a plaintiff must

            allege "( 1) that it possessed a trade secret, and (2) that the defendants used that trade secret in

            breach of an agreement, confidential relationship or duty, or as a result of discovery by improper

            means" Schroeder v Pinterest Inc., 133 AD3d 12, 27 [1st Dept 2015] (internal quotation marks

            citations omitted). "A trade secret is any formula, pattern, device or compilation of information

            which is used in one's business, and which gives him an opportunity to obtain an advantage over

            competitors who do not know or use it" id (internal quotation marks and citations omitted). To

            determine whether information constitutes a trade secret several factors should be considered,

                             "(1) the extent to which the information is known outside of [the]
                             business; (2) the extent to which it is known by employees and
                             others involved in [the] business; (3) the extent of measures taken
                             by [the business] to guard the secrecy of the information; (4) the
                             value of the information to [the business] and [its] competitors; (5)
                             the amount of effort or money expended by [the business] in

             652757/2023 Motion No. 001                                                               Page 3 of 6

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 [FILED: NEW YORK COUNTY CLERK 02/23/2024 05:01 P~                                                   INDEX NO. 652757/2023
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                             developing the information; ( 6) the ease or difficulty with which
                             the information could be properly acquired or duplicated by
                             others".

            Id. Whether information is in fact a trade secret is generally a question (Ashland

            Mgt. v Janien, 82 NY2d 395,407 [1993]).

                      Here, the Court finds that the complaint does allege sufficient facts and allegations to

            establish that information maintained by plaintiff, namely the client lists with contact

            information and the services received, constitute trade secrets, at this stage in the litigation.

            Further, the allegations that defendants used this information and that it was obtained solely on

            the basis of its confidential relationship with plaintiff are sufficient to survive the instant motion.

            Accordingly, the portion of the motion to dismiss the third cause of action is denied.

            Fourth Cause of Action: Unfair Competition

                      Defendants seek to dismiss the fourth causes of action on the grounds that it is

            duplicative of the breach of contract claim and misappropriate of confidential information cause

            of action. Further, defendants contend that the complaint fails to state a cause of action.

                      The complaint alleges that Lei used plaintiffs confidential information and client

            relationships to establish Ido and could not have done so without this knowledge. Here, the

            Court finds that the complaint adequately states a cause of action for unfair competition (see

            EVEMeta, LLC v Siemens Convergence Creators Corp., 173 AD3d 551,553 [1st Dept 2019]).

            Accordingly, the portion of the motion that seeks dismissal of the fourth cause of action is

            denied.

            Sixth Cause of Action: Breach of Fiduciary Duty

                      In order to adequately plead a cause of action, plaintiff must allege the existence of a

            fiduciary relationship, misconduct by the defendant and damages caused by the misconduct. See

             652757/2023 Motion No. 001                                                              Page 4 of 6

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 [FILED: NEW YORK COUNTY CLERK 02/23/2024 05:01 P~                                                INDEX NO. 652757/2023
  NYSCEF DOC. NO. 29                                                                      RECEIVED NYSCEF: 02/23/2024

            Pokoikv Pokoik, 115 AD3d 428,429 [1st Dept 2014]. Pursuant to CPLR § 3016(b), where a

            cause of action alleges breach of trust, "the circumstances constituting the wrong shall be stated

            in detail".

                    It is well-settled that a "fiduciary relationship exists between two persons when one of

            them is under a duty to act for or to give advice for the benefit of another upon matters within the

            scope of the relation." (Faith Assembly v Titledge of NY Abstract, LLC, 106 AD3d 47, 62 [2d

            Dept 2013]).

                    Here, the Court finds that the complaint fails to adequately allege that defendant owed

            plaintiff a fiduciary duty. The complaint alleges nothing more than Lei's status as a former

            employee to establish a fiduciary relationship. Accordingly, the sixth cause of action for breach

            of a fiduciary duty is dismissed.

            Seventh Cause of Action: Breach of Loyalty

                    A claim for breach of loyalty is "available only where the employee has acted directly

            against the employer's interests - as in embezzlement, improperly competing with the current

            employer[ ... ]" (Veritas Capital Mgt., L.L.C. v Campbell, 82 AD3d 529,530 [1st Dept 2011]

            internal citations omitted).

                    The Court finds that the complaint sufficiently alleges a cause of action against Lei for

            breach of loyalty. The complaint contains allegations of Lei's conduct while employed with the

            purpose and intent to improperly compete with her employer. As such, at the pleading stage, the

            seventh cause of action survives.

            Ninth Cause of Action: Attorney's Fees

                    The agreement between the parties specifically provides that plaintiff may seek

            restitution, including attorney's fees for Lei's failure to comply with the agreement. Defendant

             652757/2023 Motion No. 001                                                           Page 5 of 6

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 !FILED: NEW YORK COUNTY CLERK 02/23/2024 05: 01 PM!                                                 INDEX NO. 652757/2023
  NYSCEF DOC. NO. 29                                                                           RECEIVED NYSCEF: 02/23/2024

            contends that this cause of action should be dismissed on the conclusory assertion that the

            contract is unenforceable and that she did not breach the agreement.

                    The Court finds that defendant Lei has failed to submit any irrefutable documentary

            evidence to dismiss this cause of action and the Court finds based on the plain language of the

            contract, the complaint adequately states a cause of action for attorney's fees. The Court has

            reviewed the parties remaining contentions and finds them unavailing. Accordingly, it is hereby

                    ORDERED that motion to dismiss is granted in part in that the sixth cause of action is

            dismissed.

                    2/23/2024
                      DATE                                                          LYLE E. FRANK, 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

             652757/2023 Motion No. 001                                                              Page 6 of 6

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