Kiehl v. Cavicchio
Background
- Plaintiff John Kiehl and defendant Robert Cavicchio allegedly formed a business relationship beginning in 1977 to build and operate Soundtrack (studios in Boston and New York); Kiehl performed technical/creative work while Cavicchio handled business affairs.
- Kiehl claims decades of profit-sharing, personal expenditures for the business, deferred salary, and that he was publicly and privately held out as a co‑founder/partner; he alleges Soundtrack acquired valuable real estate and that Cavicchio diverted property/ownership interests to family trusts and entities.
- Dispute arose when Kiehl sought retirement and demanded his asserted share (around 50%) of the business and its real‑estate value (circa $35M+); Kiehl sued asserting partnership/joint venture claims, breach of fiduciary duty, accounting, declaratory relief, unjust enrichment, and money had and received.
- Defendants moved pre‑answer under CPLR § 3211 to dismiss (arguing no partnership/joint venture, no sharing of losses, documentary evidence shows employment/W‑2 status, statute of limitations and frauds defenses, and lack of NY jurisdiction over some Massachusetts entities); plaintiff moved to admit a recorded conversation transcript and a client affidavit.
- Court denied the motion to strike the transcript and client affidavit, found insufficient showing of jurisdiction over two family trusts (Cavicchio Family Massachusetts LLC and Cavicchio Children Trust) and dismissed them, denied dismissal as to Soundtrack Boston pending jurisdictional discovery, dismissed causes of action 1–5 (partnership/joint venture-based claims), and allowed causes of action 6–7 (unjust enrichment and money had and received) to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of partnership / joint venture | Kiehl: long‑standing profit sharing, public holding out, capital/effort contributions, deferred salary and other payments show partnership/joint venture | Cavicchio: plaintiff received W‑2s and commissions, lacked access to accounts, did not share losses or capital for Soundtrack; documentary record shows employee status | Court: dismissed partnership/joint venture claims (1–5). Plaintiff failed to plead the required sharing of losses/capital contribution for partnership/joint venture at CPLR 3211 stage |
| Ownership interest in real estate | Kiehl: properties were purchased with partnership funds or for Soundtrack and thus belong to partnership | Cavicchio: deeds/mortgages show purchases by trusts/other entities, not Soundtrack; statute of frauds and documentary evidence rebut ownership claim | Court: dismissed claims premised on partnership ownership of real estate (part of causes 1–5); factual dispute remains for restitution causes but documentary record undermined partnership property allegations |
| Statute of limitations / statute of frauds defenses | Kiehl: dispute arose only when he sought retirement/accounting; fiduciary duty tolls and partnership claims not time‑barred | Cavicchio: claims accrued earlier (W‑2s/commissions known), six‑year limit and statute of frauds bar oral land/ownership claims | Court: these affirmative defenses raise factual issues; court did not dismiss on statute grounds at this stage |
| Personal jurisdiction over Massachusetts entities and Soundtrack Boston | Kiehl: Soundtrack Boston shares systems, storage, staff and holds out joint NY/MA operation; seek discovery on jurisdiction | Cavicchio: Massachusetts entities do not do business in NY; domicile of trustee insufficient; no specific NY activities | Court: dismissed two family trusts for lack of jurisdiction; denied dismissal of Soundtrack Boston and allowed jurisdictional discovery (plaintiff need only show facts may exist to support jurisdiction) |
Key Cases Cited
- Kidz Cloz, Inc. v. Officially For Kids, Inc., 320 F. Supp. 2d 164 (S.D.N.Y. 2004) (elements of partnership analyzed)
- Itel Containers Int'l Corp. v. Atlanttrafik Exp. Serv. Ltd., 909 F.2d 698 (2d Cir. 1990) (joint venture element framework)
- Chanler v. Roberts, 200 A.D.2d 489 (1st Dep't 1994) (sharing of losses is critical to partnership determination)
- J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., 21 N.Y.3d 324 (2013) (standard for CPLR § 3211(a)(7) dismissal; liberal construction)
- A.G. Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 5 N.Y.3d 582 (2005) (pleadings construed liberally; favorable inferences for plaintiff)
- Georgia Malone & Co., Inc. v. Rieder, 19 N.Y.3d 511 (2012) (elements and equitable nature of unjust enrichment)
- Lebedev v. Blavatnik, 193 A.D.3d 175 (1st Dep't 2021) (joint venture loss‑sharing exception discussed)
- Soumayah v. Minnelli, 41 A.D.3d 390 (1st Dep't 2007) (scope of CPLR § 4547 exclusion for settlement negotiations)