5:22-cv-00121
E.D. Ky.Mar 28, 2024Background
- DNA Health, LLC (NJ), led by Michael Antonelli, entered an agreement with Liv Health LLC and Tailor Made Health LLC to purchase nutraceuticals, granting security interests as part of the deal.
- Antonelli previously worked for BioTE Medical, which sued him and DNA Health for violating a non-compete, leading to a Texas court injunction barring them from selling BPC-157 to certain customers.
- After contractual disputes and an alleged default, DNA Health NJ’s business was essentially taken over by a new Kentucky entity formed by defendants, with continued use of products and customer lists.
- DNA Health NJ (and Antonelli) sued Defendants for breach of contract and later added Lanham Act claims; defendants counterclaimed against Antonelli individually.
- Antonelli moved to dismiss several counterclaims, including those for various torts and unjust enrichment, arguing they failed to state plausible claims.
Issues
| Issue | Plaintiff's Argument (Antonelli) | Defendant's Argument (Liv/Tailor Made) | Held |
|---|---|---|---|
| Fraudulent/negligent misrepresentation | No actionable misstatement; representations not material | Antonelli concealed/did not disclose contractual restrictions, inducing deal | Pleading sufficiently alleges all elements; motion denied |
| Theft (KRS § 514.030) | No special or proximate injury alleged | Withdrawal of $100,000 constituted unlawful taking after default | Sufficiently pled: pecuniary loss and proximate cause shown |
| Conversion | No demand for return of property alleged | Made demand via letter post-default, as per Security Agreement | Demand adequately pled; claim survives dismissal |
| Unjust Enrichment | No specific "offending acts" identified; claim precluded by contract | Alternative theory allowed at pleading; acts and benefit identified | Alternative theory allowed at motion to dismiss; motion denied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (Rule 12(b)(6) plausibility standard for complaints)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (formulaic recitation of elements insufficient under Rule 8)
- DirecTV, Inc. v. Treesh, 487 F.3d 471 (pleadings construed in plaintiff's favor at motion to dismiss)
- Bangura v. Hansen, 434 F.3d 487 (burden on movant for Rule 12(b)(6) dismissal)
- PCR Contrs., Inc. v. Danial, 354 S.W.3d 610 (Kentucky elements for fraudulent misrepresentation)
- Republic Bank & Trust Co. v. Bear, Stearns & Co., 707 F. Supp. 2d 702 (Kentucky elements for negligent misrepresentation)
- Jones v. Marquis Terminal, Inc., 454 S.W.3d 849 (elements of conversion under Kentucky law)