CHARLES W. DOLLER, Appellant, v DAVID J. PRESCOTT et al., Respondents.
526578
Appellate Division, Third Department, New York
December 20, 2018
2018 NY Slip Op 08733
Published by
Decided and Entered: December 20, 2018
CHARLES W. DOLLER, Appellant, v DAVID J. PRESCOTT et al., Respondents.
Calendar Date: November 13, 2018
Before: McCarthy, J.P., Lynch, Clark, Mulvey and Rumsey, JJ.
Hawkins Parnell Thackston & Young LLP, New York City (Mark Debrowski of counsel), for appellant.
Dayter Volkheimer LLP, Valatie (F. Charles Dayter of counsel), for respondents.
MEMORANDUM AND ORDER
Lynch, J.
Appeal from an order of the Supreme Court (Platkin, J.), entered June 26, 2017 in Albany County, which, among other things, granted defendants’ motion to partially dismiss the complaint.
Defendant David J. Prescott was the majority shareholder in defendant Integra Optics, Inc. In 2012, Prescott and plaintiff — who had previously provided financial and investment advice to Prescott — entered into a memorandum of understanding (hereinafter MOU) that memorialized, among other things, plaintiff‘s future right of first refusal to acquire “equity” in Integra. In 2013, plaintiff executed an employment agreement with Integra to serve as its executive vice-president and chief financial officer. In September 2014, plaintiff notified Prescott that he wished to exercise a right of first refusal to purchase certain Integra shares (hereinafter the Ryan Trust Shares). Prescott refused, advised that he would be purchasing the shares for himself and fired plaintiff. In this ensuing action, plaintiff asserted eight causes of action, including breach of the MOU and employment agreement, fraud and unjust enrichment. Prescott, Integra and defendant Goshawk Funding Limited — an entity purported to be Prescott‘s alter ego and “shell corporation” organized under the laws of Hong Kong — moved to dismiss the causes of action related to the MOU pursuant to
On a motion to dismiss pursuant to
Plaintiff‘s first, second, fifth and seventh causes of action for breach of contract, fraud, unjust enrichment and breach of the duty of good faith and fair dealing, respectively, as well as the sixth cause of action for a declaratory judgment, all stem from the MOU and plaintiff‘s attempt to purchase the Ryan Trust Shares. The MOU defines the Ryan Trust Shares as those that were in the control of a trust that was a party to litigation involving both Prescott and Integra pending at the time the MOU was executed. In relevant part, the MOU included an “[o]ffer of [e]quity,” specifically, that plaintiff was to “be given a right of first refusal for [e]quity.” The MOU defined equity as “ownership or the rights of ownership in Integra.” The “[o]ffer of [e]quity” provided that plaintiff‘s first refusal right “shall include, but not be limited to, the right of first refusal to acquire the Ryan Trust Shares should they become available and/or equity grants or an equity earn in. However, the precise manner in which this [e]quity is offered shall be determined subsequent to the [e]nd of [l]itigation or circumstances deemed mutually sufficient by both Prescott and [plaintiff].” Further, the MOU confirmed the parties’ understanding that “the offer of [e]quity [was] a material inducement to [plaintiff] entering into [the] [a]greement.” Plaintiff alleged that Prescott misrepresented his intention to allow plaintiff to purchase the Ryan Trust Shares, made similar offers of equity to other Integra employees and intentionally refused to issue the Ryan Trust Shares to plaintiff.
In the MOU — which is documentary evidence that may be considered in the context of a motion pursuant to
To establish a cause of action for fraud, plaintiff was obligated to “allege misrepresentation or concealment of a material fact, falsity, scienter by the wrongdoer, justifiable reliance on the deception and resulting injury” (Lusins v Cohen, 49 AD3d 1015, 1017 [2008] [internal quotation marks and citation omitted]). Defendants correctly argue that a cause of action is
Supreme Court also properly dismissed plaintiff‘s fifth cause of action for unjust enrichment. Initially, and contrary to plaintiff‘s argument, we find that defendants argued — and Supreme Court properly considered — whether plaintiffs stated a cause of action pursuant to
Next, we consider defendants’ motion to dismiss the claims against Goshawk pursuant to
Turning to defendants’ alternative jurisdictional argument, plaintiff was not obligated to plead a basis for personal jurisdiction (see Fischbarg v Doucet, 9 NY3d 375, 381 n 5 [2007]). Further, although defendants correctly argued that “the ultimate burden of proof rests with the party asserting jurisdiction,” to successfully oppose defendants’ motion, “[plaintiff] needed only [to] make a prima facie showing that [Goshawk] was subject to the personal jurisdiction of . . . Supreme Court” (Constantine v Stella Maris Ins. Co., Ltd., 97 AD3d 1129, 1130 [2012]; see Nick v Schneider, 150 AD3d 1250, 1251 [2017]). In our view, accepting plaintiff‘s allegations to be true and construing them in a light favorable to him, plaintiff‘s submissions were sufficient to establish that jurisdiction was proper pursuant to
Finally, we find that Supreme Court properly granted defendants’ motion to stay the third and fourth causes of action stemming from the employment agreement and to compel arbitration, notwithstanding plaintiff‘s claim that the agreement was induced by fraud (see Markowits v Friedman, 144 AD3d 993, 996-997 [2016]).
McCarthy, J.P., Clark, Mulvey and Rumsey, JJ., concur.
ORDERED that the order is affirmed, with costs.