Oved v. Wiener
2:17-cv-01348
E.D.N.YDec 21, 2017Background
- Plaintiff Elan Oved alleges that in 2011 he received a 10% ownership interest in Lone Star Equities, Inc. (LSE) and related promises from Louis Weiner in exchange for transferring a 40% stake in Top Fortune to a foundation and for past/anticipated services. A stock certificate and a Delegation of Authority were executed reflecting a 10% interest.
- Over several years Louis publicly treated Oved as a 10% owner and in 2015 announced Oved would lead the companies; Louis’s son Daniel Weiner (Defendant) allegedly reacted by removing files, redirecting mail, isolating Louis, and causing Louis to reassert control and sue Oved in state court, alleging forgery of the stock certificate.
- Separately, Oved paid Daniel $2,000/month for several years as purported rent for a Lawrence, NY residence he never occupied; Oved stopped payments after learning the arrangement may have been used to evade New York residency tax and seeks reimbursement, unjust enrichment, and indemnification for any liability.
- Oved filed this diversity action in federal court asserting state-law claims: tortious interference with contract, tortious interference with prospective business relations, breach of contract, unjust enrichment, and contractual indemnification.
- Defendant moved to dismiss under Fed. R. Civ. P. 12(b)(1) (jurisdiction/abstention) and 12(b)(6) (failure to state a claim). The court granted dismissal only as to the contractual indemnification claim and otherwise denied the motion, and ordered Oved to amend diversity allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held | |
|---|---|---|---|---|
| Subject-matter jurisdiction (diversity) | Oved alleged parties resided in different states; diversity exists in good faith based on evidence Defendant is domiciled in Florida | Defendant questioned domicile but did not assert he was domiciled in NY; offered tax returns | Court denied dismissal; allowed amended complaint to plead citizenship more precisely (good-faith basis for diversity exists) | |
| Abstention under Colorado River | Oved argued federal forum appropriate; state suit does not resolve all federal claims | Weiner argued federal case should be dismissed because parallel state action can resolve issues | Court held actions are not sufficiently parallel (state action will not dispose of all federal claims) and denied abstention/dismissal | |
| Tortious interference with contract | Oved alleged valid contract with Louis (10% LSE), Defendant knew of it, caused Louis to sue and exclude Oved, causing breach and damages | Defendant sought dismissal (not successful) | Claim survives; complaint sufficiently alleges elements including but-for causation | |
| Tortious interference with prospective relations | Oved alleged interference with ongoing/anticipated business relations and cited Defendant’s improper means (removing files, isolating Louis) | Defendant argued lack of allegation that malice was sole motive and absence of specific prospective third parties | Court held allegations of improper means suffice; claim survives | |
| Breach of contract / Unjust enrichment (rent payments) | Oved alleges a promise to reimburse rent payments; consideration exists (promise to repay); he was unaware of alleged tax-evasion purpose | Defendant argued arrangement was illegal (tax evasion) and lacked consideration | Court denied dismissal: consideration adequately alleged and illegality is an affirmative defense, not a basis to dismiss on the pleadings | |
| Contractual indemnification | Oved seeks indemnity for liability from assisting Defendant’s alleged tax evasion | Oved contended the reimbursement agreement implied indemnification | Defendant argued no contractual basis for indemnity | Court dismissed indemnification claim for failure to plead a clear contractual basis |
Key Cases Cited
- Makarova v. United States, 201 F.3d 110 (2d Cir.) (standards for Rule 12(b)(1) jurisdictional dismissal)
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (U.S.) (narrow circumstances warrant federal abstention when parallel state litigation exists)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S.) (abstention requires clearest of justifications)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (pleading standard; legal conclusions vs. factual allegations)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility pleading standard)
- Kirch v. Liberty Media Corp., 449 F.3d 388 (2d Cir.) (elements of tortious interference claims)
- Dittmer v. County of Suffolk, 146 F.3d 113 (2d Cir.) (definition of parallel actions for Colorado River analysis)