Court Opinion

ID: 9929185
Source: CourtListenerOpinion
Date Created: 2024-02-01 21:08:18.183382+00
Date Added: 2024-06-11T10:05:29.991721
License: Public Domain

Bochenek v Ashton
               2024 NY Slip Op 30332(U)
                    January 26, 2024
           Supreme Court, New York County
        Docket Number: Index No. 654904/2022
                 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. 654904/2022
  NYSCEF DOC. NO. 168                                                                                           RECEIVED NYSCEF: 01/26/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. MELISSA A. CRANE                                            PART                              60M
                                                                                      Justice
            ----------------------------------------------------------------- ----------------X
                                                                                                  INDEX NO.           654904/2022
             ETHAN BOCHENEK,
                                                                                                  MOTION DATE             N/A
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         3,4,5
                                                 - V -

             GREG ASHTON, GROW EVENTS, LLC,TWENTY SEVEN
                                                                                                    DECISION + ORDER ON
             INVESTMENT GROUP, LLC,
                                                                                                          MOTION
                                                         Defendant.
            ------------------------------------------------------------------- --------------X

             GROW EVENTS, LLC                                                                                  Third-Party
                                                                                                         Index No. 596059/2023
                                                          Plaintiff,

                                                  -against-

             ETHAN BOCHENEK, VEROSAFE PTY. LTD. D/B/A RETAIL
             GLOBAL AND RETAIL FEST

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

            The following e-filed documents, listed by NYSCEF document number (Motion 005) 94, 95, 96, 97, 98,
            99,100,101,102, 103,104,105,106,107,108, 109,110,114,117,120,137,138,139,140,141,142,
            143, 157, 158
            were read on this motion to/for                                                        DISMISSAL

            Upon the foregoing documents, it is

                      For the reasons discussed on the record on 1/26/2024, the court grants in part and denies

            in part the motion to dismiss. In sum, the court denies TSIG's motion to dismiss for lack of

            personal jurisdiction. Plaintiff has sufficiently alleged that TSIG is a sham corporation, that

            defendant Ashton completely controls TSIG and that he used TSIG to divert Los Angeles

            business from Grow Events LLC. Because plaintiff has adequate alter ego allegations, there is

           jurisdiction over TSIG because it is undisputed there is jurisdiction over defendant Ashton (see

             654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL                                                        Page 1 of4
             Motion No. 005

                                                                            1 of 4
[* 1]
                                                                                                   INDEX NO. 654904/2022
  NYSCEF DOC. NO. 168                                                                      RECEIVED NYSCEF: 01/26/2024

            Clingerman v. Ali, 212 A.D.3d 572 [!81 Dep't 2023][trial court had jurisdiction over corporate

            defendants based on theory that corporate defendants and individual defendant, over whom trial

            court found it had personal jurisdiction, were alter egos];Transjield ER Cap Ltd. v. Indus.

            Carriers. Inc., 571 F.3d 221,224 (2d Cir. 2009) "It is also well established that the exercise of

            personal jurisdiction over an alter ego corporation does not offend due process" [citations

            omitted]).

                    The court sustains the first cause of action for breach of contract. Obviously, Grow

            Events LLC as a signatory is liable for breach of contract and the complaint alleges that plaintiff

            has not received his commissions or his 8% of the company as the contract allegedly requires.

            With respect to the other defendants, plaintiff has alleged facts sufficient to pierce the corporate

            veil with respect to Ashton and TSIG, as well as Ashton and Grow (see SAC EDOC 60 ,i 170-

            188). Notably, plaintiff has also alleged that Ashton used TSIG to divert so much business away

            from Grow that there is no money left to flow to Mr. Bochenek were he to be awarded his

            contractual equity stake (see SAC ,i 116). Thus, if the veil piercing allegations prove true, all

            three defendants could be liable for breach of contract.

                   As Ashton and plaintiff could be in the position of majority and minority shareholders,

            respectively, Bochenek' s direct claim for breach of fiduciary duty (second cause of action)

            stands against Ashton only. The other two defendants did not owe plaintiff a fiduciary duty and

            plaintiff has not alleged facts sufficient to support reverse veil piercing.

                    The third cause of action a derivative claim for breach of fiduciary duty on behalf of

            Grow against Ashton is sustained. The allegations sufficiently allege that Ashton engaged in self

            -dealing and diverted assets away from Grow to himself and TSIG (see in particular ,i,i 143-144

            of the SAC).

             654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL                                    Page 2 of 4
             Motion No. 005

                                                            2 of 4
[* 2]
                                                                                                    INDEX NO. 654904/2022
  NYSCEF DOC. NO. 168                                                                       RECEIVED NYSCEF: 01/26/2024

                   The court sustains the fourth cause of action for an accounting because, if plaintiff is

            entitled to 8%, Ashton and plaintiff had a fiduciary relationship as majority to minority

            shareholder.

                   The fifth cause of action, for account stated is sufficient as explained on the record.

                   However, the court dismisses the sixth cause of action, for wage theft, for the reasons

            explained on the record. Namely, plaintiffs role does not come under the protection of NY

            Labor Law§ 191-c and plaintiff was not a freelancer under NYC's Administrative Code.

                   The court also dismisses all claims for punitive damages with prejudice. As explained on

            the record, plaintiff still has not pleaded a pattern of conduct directed at the public generally

            which is a requirement for punitive damages in the commercial context (see Eastern Effects, Inc.

            v 3911 Lemmon Ave., 2024 WL 234846, [1 st Dep't January 23, 2024]).

                   Finally, the court dismisses the seventh cause of action for piercing the corporate veil

            only because this is not an independent cause of action (see Perez v LIC, 203 AD3d 552 [1 st

            Dep't 2022]). However, the court incorporates the substantive allegations into the factual portion

            of the complaint.

                   Accordingly, it is

                   ORDERED THAT the court grants the motion to dismiss to the extent of dismissing the

            6th and seventh causes of action and the request for punitive damages and otherwise denies the

            motion; and it is further

                   ORDERED THAT plaintiff is directed to edit the SAC to move the veil piercing factual

            allegations at ,i,i 170-187 of the complaint to the factual portion of the complaint; and it is further

             654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL                                      Page 3 of 4
             Motion No. 005

                                                           3 of 4
[* 3]
                                                                                                  INDEX NO. 654904/2022
  NYSCEF DOC. NO. 168                                                                       RECEIVED NYSCEF: 01/26/2024

                    ORDERED THAT defendant shall have 30 days from the efiled date of the edited SAC

            to answer.

                    1/26/2024
                      DATE                                                      MELISSA A. CRANE, J.S.C.
             CHECK ONE:
                                        CASE DISPOSED                ~ NON-FINAL DISPOSITION
                                                        □ DENIED
                                                                                                 □
                                        GRANTED                          GRANTED IN PART             OTHER

             APPLICATION:               SETTLE ORDER                     SUBMIT ORDER

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

             654904/2022 BOCHENEK, ETHAN vs. ASHTON, GREG ET AL                                   Page4 of 4
             Motion No. 005

[* 4]                                                     4 of 4