# St. Francis LLC v. MMP Capital, Inc.

> District Court, E.D. New York · March 31, 2022

URL: https://www.frixlaw.com/law-library/cases/10307822

## Case

- **Court:** District Court, E.D. New York
- **Decided:** March 31, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10307822

## How later opinions describe it (automated extraction)

- stating that a “sufficiently broad” choice-of-law clause would reach claims of tort arising incident to the contract
- stating that “a broker will be held to have acted as the insurer’s agent where there is some evidence of ‘action on the insurer’s part, or facts from which a general authority to represent the insurer may be inferred’”

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------
ST. FRANCIS HOLDINGS, LLC and FRANCIS J.
AVERILL, M.D.,

Plaintiffs, MEMORANDUM & ORDER
20-CV-4636 (MKB)
v.

MMP CAPITAL, INC.,

Defendant.
--------------------------------------------------------------
MARGO K. BRODIE, United States District Judge:
Plaintiffs St. Francis Holdings, LLC and Francis J. Averill, M.D. filed the
above-captioned action on June 12, 2020, against Defendant MMP Capital, Inc. (“MMP”),
alleging that (1) a sales agent acting on behalf of Defendant fraudulently induced Plaintiffs to
enter into a finance agreement, (2) Defendant violated the Florida Deceptive and Unfair Trade
Practices Act (the “FDUTPA”), (3) Plaintiffs canceled and/or rescinded the finance agreement,
and (4) Defendant committed civil conspiracy.1 (Am. Compl. ¶¶ 94–105, 116–52, Docket Entry
No. 21.) Plaintiffs allege that they executed a finance agreement with Defendant following a

1 Plaintiffs commenced the initial action on December 30, 2019 against Cynosure, LLC
(“Cynosure”) in the Sixth Judicial Circuit of Florida, (Compl., annexed to Notice of Removal as
Ex. B, Docket Entry No. 1-2), and Cynosure removed the case to the Middle District of Florida
on May 12, 2020, (Notice of Removal, Docket Entry No. 1). On June 12, 2020, Plaintiffs filed
an Amended Complaint asserting claims against Defendant, Cynosure, Pawnee Leasing Corp.,
and Amur Equipment Finance, Inc. (“Amur”). (Am. Compl., Docket Entry No. 21.) Defendant
moved to transfer venue to the Eastern District of New York based on a forum-selection clause
in the parties’ finance agreement. (Mot. to Change Venue, Docket Entry No. 55.) Judge
William F. Jung of the Middle District of Florida granted Defendant’s motion and transferred the
claims against Defendant and Amur to this Court. (Order dated Sept. 23, 2020, Docket Entry
No. 81.) On February 10, 2022, Plaintiffs voluntarily dismissed their claims against Amur.
(Notice of Voluntary Dismissal dated Feb. 10, 2022, Docket Entry No. 108.)
“cold call[]” from a sales agent attempting to sell them on the idea of purchasing equipment to
start a new aesthetics practice and a June 26, 2019 sales meeting, (id. at ¶¶ 35–36, 48), and
further allege that the agent made a number of “inflated claims and material misrepresentations
and omissions” concerning the efficacy and operation of the equipment, (id.at ¶¶ 37–44, 66, 75–

79). Plaintiffs seek rescission of the agreement and disgorgement of amounts paid to purchase
the equipment. (Id. at ¶¶ 105, 130–39.)
Defendant moves to dismiss the Amended Complaint for failure to state a claim pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Plaintiffs oppose the motion.2
Plaintiffs also seek leave to further amend the Complaint.3 For the reasons explained below, the
Court grants Defendant’s motion to dismiss in part and denies it in part. The Court grants
Plaintiffs leave to file a second amended complaint.
I. Background
The Court assumes the truth of the factual allegations in the Amended Complaint for the
purpose of deciding Defendant’s motion.

a. Factual background
i. June 2019 “cold call” and agreements
In or around June of 2019, Kristopher Huston, the Director of Sales Growth of Cynosure,
LLC, (“Cynosure”), a manufacturer of aesthetic medical devices, “cold called” Plaintiffs’ office

2 (Def.’s Mot. to Dismiss (“Def.’s Mot.”), Docket Entry No. 100; Def.’s Mem. in Supp.
of Def.’s Mot. (“Def.’s Mem.”), Docket Entry No. 100-2; Pls.’ Mem. in Opp’n to Def.’s Mot.
(“Pls.’ Opp’n”), Docket Entry No. 104.)

3 (Pls.’ Mot. to File Second Am. Compl. (“Pls.’ Mot.), Docket Entry No. 103; Def.’s
Reply to Pls.’ Opp’n. and Opp’n to Pls.’ Mot. (“Def.’s Reply and Opp’n”), Docket Entry No.
101.)
seeking to sell Plaintiffs on the idea of establishing a new aesthetics practice.4 (Am. Compl.
¶¶ 4–6, 35.) Huston recommended that Plaintiffs purchase Cynosure’s (1) SculpSure Contouring
Platform (“SculpSure System”) — a non-invasive body-contouring device that eliminates
unwanted fat cells without surgery — and (2) TempSure Envi System (“TempSure System”) —

a device that purportedly reduces the appearance of wrinkles — for the new aesthetic practice.
(Id. at ¶¶ 4, 33–35.) On June 26, 2019, Huston visited Plaintiffs’ office and conducted a
presentation on the SculpSure and TempSure Systems. (Id. at ¶ 36.) Dr. Averill, a
board-certified physician and managing member of St. Francis Holdings, LLC, attended the
presentation. (Id. at ¶¶ 2, 36.)
During the presentation, Huston described the SculpSure System as “virtually painless”
for patients and claimed that the device could be used “hands free” or without a trained staff
member present during most of the treatment. (Id. at ¶¶ 40–41, 95.) In addition to stating that
the SculpSure and TempSure Systems were well-suited for a new aesthetics practice and likely to
be highly profitable, (id. at ¶¶ 38–42), Huston also represented that Cynosure would provide

financing for the equipment, including a six-month payment deferral after signing, and a
$26,750.00 “marketing rebate check” within six to eight weeks after purchase, (id. at ¶¶ 43–45).
Based on Huston’s representations, Plaintiffs entered into four agreements to procure
both systems. (Id. at ¶¶ 48–49.) First, they executed two purchase agreements with Cynosure—
a purchase order for the SculpSure System and a purchase order for the TempSure System (the
“Purchase Agreements”). (Id.; Purchase Agreements at 2–3, annexed to Am. Compl. as Ex. 4,
Docket Entry No. 21.) Second, Plaintiffs signed a finance agreement contract with Defendant,

4 Plaintiffs already maintained a medical practice specializing in pulmonary care prior to
Huston’s call; Plaintiffs did not offer aesthetic or cosmetic services. (Am. Compl. ¶ 38.)
an equipment finance company, for the financing to procure the TempSure System (the “Finance
Agreement”). (Am. Compl. ¶¶ 21, 48; Def.’s Mem. at 10.) Lastly, Plaintiffs signed an
equipment leasing agreement with Pawnee Leasing Corp., (“Pawnee”), an equipment financing
company, allowing St. Francis to lease the SculpSure System from Pawnee (the “Leasing

Agreement”). (Id. at ¶¶ 13, 16, 48; Def.’s Mem. at 1 n.1.) Huston presented the agreements to
Plaintiffs predated and preprinted with Dr. Averill’s personal identifying information. (Id. at
¶ 48.)
ii. The Purchase Agreements with Cynosure
The Purchase Agreements list the SculpSure and TempSure Systems for $205,750 and
$140,750, respectively. (Product Descriptions, Purchase Agreements at 2–3.) They also provide
a $26,750 marketing rebate as a part of the purchase. (Id; Am. Compl. ¶ 44; Cynosure Letter
dated Aug. 30, 2019 at 1, annexed to Am. Compl. as Ex. 12, Docket Entry No. 21.) However, in
a letter Cynosure sent to Plaintiffs after Plaintiffs attempted to return the equipment, Cynosure
stated that it was unable to amend the terms of the Leasing Agreement or the Finance Agreement

— or otherwise release Plaintiffs from their obligations thereunder — because it “is not a party
to the [agreements].” (Cynosure Letter dated Aug. 30, 2019 at 1.) The Purchase Agreements
promise “on-site installation” and “clinical in-service” to train Plaintiffs on how to utilize the
SculpSure and TempSure Systems. (Product Descriptions, Purchase Agreements at 2–3; Am.
Compl. ¶¶ 63–64.) They also limit cancellation of purchase, stating that “[a]ll [s]ales are final
[and] Cynosure [g]rants no right of return.” (Purchase Agreements at 1; Cynosure Letter dated
Aug. 30, 2019 at 1.)
iii. The Finance Agreement with Defendant for TempSure System
The Finance Agreement states that “[Defendant] agrees to lend to [Plaintiffs] and
[Plaintiffs] agree to borrow[] from [Defendant] an amount for the financing of the [TempSure
System]” and that Plaintiffs “authorize [Defendant] to pay [Cynosure] for the [TempSure

System].” (Agreement, Finance Agreement at 2, annexed to Am. Compl. as Ex. 10, Docket
Entry No. 21.) It requires Plaintiffs to make monthly installment payments of $99 for the first
six months, followed by sixty monthly payments of $3,349.29. (Monthly Installment Payment,
Finance Agreement at 2; Am. Compl. at ¶¶ 55–56.) It also requires Plaintiffs to make an
advanced payment of $99 and a documentation fee of $350. (Advanced Payment (if any) and
Documentation Fee (if any), Finance Agreement at 2.) The Finance Agreement does not specify
the principal amount to be financed. (Am. Compl. ¶ 57.)
The Finance Agreement includes, among others, (1) a choice-of-law provision, (2) a
warranty disclaimer provision, and (3) an agency disclaimer provision. The choice of law
provision states:

This [Finance Agreement] shall be governed and construed under
the laws of the State of New York (NY), without reference to its
principle of conflicts of laws and is deemed to have been performed
in Nassau County, NY. [Plaintiffs] submit to the jurisdiction of NY
and agree that the state and federal courts sitting in Nassau County,
New York, shall have the exclusive jurisdiction over any action or
proceeding to enforce this [Finance Agreement] or any action or
proceeding arising under this [Finance Agreement].
(General, Finance Agreement at 2.) With respect to the warranty disclaimer, the Finance
Agreement states:
Disclaimer of Warranties and Claims. We make no
representation or warranty to any matter whatsoever including the
merchantability or fitness for particular purpose the [TempSure
System]. This [Finance Agreement] is irrevocable. Your obligation
to pay all amounts hereunder is non-cancellable, absolute, and
unconditional and will not be subject to any reduction, setoff,
defense, counterclaim, deferment or recoupment for any reason,
even if the [TempSure System] is damaged, destroyed or
defective.
(Disclaimer of Warranties and Claims, Finance Agreement at 2 (emphasis in original).) The
Finance Agreement also includes two agency disclaimer provisions. One is included on the face
of the Finance Agreement in the warranty disclaimer provision and states:
You acknowledge you selected the [TempSure System] and the
supplier and your supplier is not our agent, nor are we their agent.
You acknowledge that no one, including the supplier, has been
authorized to waiver or change any term or condition of this
[Finance Agreement]. No representation by the supplier as to any
matter shall bind us or affect your duty to pay all amounts and
perform all obligations hereunder. You will use the [TempSure
System] for commercial purposes only, in compliance with the law
and not for any personal, family or household use.
(Id.) The second disclaimer provision is included in an Equipment Acceptance Certificate5 (the
“Acceptance Certificate”), incorporated into the Finance Agreement, which states:
Neither the Vendor nor any of its salespersons or other agents are
agents of ours or are authorized to waive or modify any term or
condition of this Acceptance Agreement, the Agreement and/or
related documents. Any representation as to the Equipment or any
other matter made by the Vendor shall not in any way affect your
duty to make payments to us and perform all your other obligations
as set forth in the Agreement or the other documents related thereto.
(Acceptance Certificate ¶ 3, Finance Agreement at 1.) The Acceptance Certificate also provides
that Plaintiffs “irrevocably accept[ed]” the TempSure System “AS IS” and Defendant made “NO
EXPRESS OR IMPLIED WARRANTIES AS TO ITS MERCHANTABILITY AND/OR
FITNESS FOR A PARTICULAR PURPOSE.” (Acceptance Certificate ¶ 1, Finance Agreement
at 1–2 (emphasis in original).) The Acceptance Certificate also instructs Plaintiffs to “look only
to the vendor/supplier of the Equipment (the Vendor) or manufacturer (not [Defendant]) for any

5 The Acceptance Certificate is a one-page document attached to the Finance Agreement
that confirms Plaintiffs’ acceptance of the TempSure System.
claim concerning the Equipment, which shall not relieve [Plaintiffs] from any obligations to
[Defendant], including any payment obligations.” (Id. at 1.)
Defendant subsequently assigned its interest in the Finance Agreement to Amur. (Am.
Compl. ¶¶ 25, 102, 146; Def.’s Mem. at 20.)

iv. The Leasing Agreement with Pawnee for SculpSure System
The Leasing Agreement directs Pawnee to pay Cynosure for the SculpSure System and
allows Plaintiffs to rent the SculpSure System from Pawnee for sixty-one months, with the
option for Plaintiffs to purchase the equipment from Pawnee. (Schedule A, Leasing Agreement
at 4, annexed to Am. Compl. as Ex. 6, Docket Entry No. 21; Leasing Agreement 1, 5.) The
Leasing Agreement requires Plaintiffs to pay $99 per month for the first six months and
$4,662.12 per month for months seven to sixty-one to rent the equipment. (Schedule B, Leasing
Agreement at 5; Am. Compl. ¶¶ 16, 56.) It also requires Plaintiffs to pay an administration fee
of $350. (Schedule of Rental Payments, Leasing Agreement at 1.) In addition, it disclaims all
warranties as to the condition of the equipment and states that “[n]either the vendor of the

[SculpSure System] nor any salesman is [Pawnee’s] agent or authorized to waive or alter any
terms or conditions of [the Leasing Agreement]” and that “[n]o representations as to the
[SculpSure System] or any other matter by the vendor or salesman effect [Plaintiffs’] obligations
to [Pawnee].” (Disclaimers of Warranties; Limitation of Remedies, Leasing Agreement at 2.)
After Plaintiffs executed the four agreements, Huston attempted to leave Plaintiffs’
offices without providing Plaintiffs with copies of the agreements. (Am. Compl. ¶ 50.)
Plaintiffs did not receive fully executed copies of the Leasing Agreement or the Finance
Agreement until after the June 26, 2019 meeting. (Id.)
v. Attempts to return the SculpSure and TempSure Systems
Both the SculpSure and TempSure Systems were delivered, assembled and installed in
Plaintiffs’ office in early July of 2019. (Am. Compl. ¶ 62.) Plaintiffs claim that they were
unable to use either the SculpSure or TempSure Systems because Cynosure failed to send a

representative to train Plaintiffs on their use. (Id. at ¶¶ 63–64.) Not long after the equipment
was delivered, Plaintiffs attempted to cancel the Finance Agreement and the Leasing Agreement
and to return the SculpSure System to Pawnee and the TempSure System to Defendant. (Id. at
¶¶ 67–68.) Plaintiffs claim that return of the equipment was warranted after they learned that the
system was not “virtually ‘pain free.’” (Id. at ¶ 68.) Defendant refused to cancel the Finance
Agreement or accept return of the TempSure System. (Id.) Pawnee also refused to cancel the
Leasing Agreement and accept return of the SculpSure System. (Id. at ¶ 67.) John-Paul
Smolenski, President of Defendant, claimed that he had received treatment using the SculpSure
System and that he did not consider the treatment to be painful. (Id. at ¶¶ 68, 120.)
A Cynosure manager, Mike Russo offered to discuss cancelling the purchase of the

SculpSure and TempSure Systems if Plaintiffs were still not satisfied after attending a
conference where Cynosure would demonstrate the use of the equipment. (Id. at ¶¶ 69, 72.) At
the conference, Plaintiffs learned that the SculpSure and TempSure Systems require the use of
anesthesia and that patients would need to be monitored by a physician during procedures. (Id.
at ¶¶ 75, 78–79.) Plaintiffs also learned that the SculpSure and TempSure Systems were not
suitable for starting an aesthetics practice and that instead, these systems were more suitable for
established aesthetics practices, in part because procedures using the systems were expensive and
“only a relatively small subset of patients would elect or even be able to regularly afford
procedures.” (Id. at ¶¶ 83–85.) Immediately after the conference, Plaintiffs sent Cynosure a
notice cancelling the Purchase Agreements. (Id. at ¶ 87.) The cancellation notice stated that the
SculpSure and TempSure Systems had not been used and tendered return of the equipment. (Id.)
Cynosure refused to cancel the Purchase Agreements or to accept the return of the SculpSure and
TempSure Systems. (Id. at ¶ 88.)

b. Procedural background

Plaintiffs commenced the action on December 30, 2019 against Cynosure in the Sixth
Judicial Circuit of Florida, (Compl.), and Cynosure removed the case to the Middle District of
Florida on May 12, 2020, (Notice of Removal). On June 12, 2020, Plaintiffs filed an Amended
Complaint asserting claims against both Defendant, Cynosure, Pawnee, and Amur. (Am.
Compl.) Defendant moved to sever and transfer the claims against it to the Eastern District of
New York based on a forum-selection clause in the Finance Agreement. (Mot. to Change
Venue, Docket Entry No. 55.) Cynosure also moved to sever and transfer the claims against it to
the District of Massachusetts in accordance with a forum-selection clause found in the Purchase
Agreements. (Cynosure Mot. to Change Venue, Docket Entry No. 49.) The Middle District of
Florida severed and transferred the claims against Defendant and Cynosure to the relevant courts
pursuant to their forum-selection clauses. (Order dated Sept. 23, 2020, Docket Entry No. 81.)
On February 20, 2022, Plaintiffs voluntarily dismissed all claims against Amur. (Notice
of Voluntary Dismissal dated Feb. 10, 2022.) Only the claims against Defendant for fraudulent
inducement, violation of the FDUTPA, rescission, and civil conspiracy were transferred to the
Court, and the issues concerning Plaintiffs’ obligations to Cynosure and Pawnee were voluntarily
dismissed in parallel proceedings in other federal judicial districts. See Order dated Sep. 23,
2020; Notice of Settlement, ECF No. 109, St. Francis Holdings, LLC v. Pawnee Leasing Corp.,
No. 20-CV-1101 (M.D. Fla. July 21, 2021); Stipulation of Dismissal, ECF No. 131, St. Francis
Holdings, LLC v. Cynosure, Inc., No. 20-CV-11747 (D. Mass. July 22, 2021).
II. Discussion
a. Standard of review

In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a court must construe the complaint liberally, “accepting all factual allegations
therein as true and drawing all reasonable inferences in the plaintiffs’ favor.” Sacerdote v. N. Y.
Univ., 9 F.4th 95, 106–107 (2d Cir. 2021); Vaughn v. Phoenix House N.Y. Inc., 957 F.3d 141,
145 (2d Cir. 2020) (same). A complaint must plead “enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Bacon v. Phelps,
961 F.3d 533, 540 (2d Cir. 2020) (quoting Twombly, 550 U.S. at 570). A claim is plausible
“when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Matson v. Bd. of Educ., 631 F.3d 57, 63
(2d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); Cavello Bay Reinsurance

Ltd. v. Shubin Stein, 986 F.3d 161, 165 (2d Cir. 2021) (quoting Iqbal, 556 U.S. at 678).
Although all allegations contained in the Amended Complaint are assumed to be true, this tenet
is “inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678; Vaughn, 957 F.3d at 145 (same).
b. Only the Finance Agreement between Plaintiffs and Defendant is before the
Court
Defendant argues that Plaintiffs improperly “lump” the Purchase Agreements, the
Finance Agreement, and the Leasing Agreement together as “one” throughout their general
allegations, making it virtually impossible for Defendant to formulate a response to Plaintiffs’
claims. (Def.’s Mem. at 11–12.) In support, Defendant argues that at times in the Amended
Complaint, Plaintiffs make allegations regarding the operability, tolerability, and economic
viability pertaining to both systems, and at other times Plaintiffs limit the same allegations to
only the SculpSure System, making it difficult to ascertain what allegations relate to the
TempSure System specifically. (Id. at 12.)
Plaintiffs contend that the agreements should be construed together as one document

because Huston presented each on the same day, as part of the same transaction, and each
concerns the same subject matter — “the acquisition of equipment Huston marketed to Plaintiffs
using deceptive sales tactics.” (Pls.’ Opp’n at 11.)
“Under New York law, ‘all writings which form part of a single transaction and are
designed to effectuate the same purpose [must] be read together, even though they were executed
on different dates and were not all between the same parties.’” TVT Recs. v. Island Def Jam
Music Grp., 412 F.3d 82, 89 (2d Cir. 2005) (alteration in original) (quoting This is Me, Inc. v.
Taylor, 157 F.3d 139, 143 (2d Cir. 1998)); accord Nau v. Vulcan Rail & Constr. Co., 286 N.Y.
188, 197 (1941); see also Commander Oil Corp. v. Advance Food Serv. Equip., 991 F.2d 49, 53
(2d Cir. 1993) (“Generally, separate writings are construed as one agreement if they relate to the

same subject matter and are executed simultaneously.”); Prod. Res. Grp., L.L.C. v. Martin Pro.,
A/S, 907 F. Supp. 2d 401, 413 (S.D.N.Y. 2012) (“Under general principles of contract law,
separate agreements executed contemporaneously by the same parties, for the same purposes,
and as part of the same transaction, are to be construed together.” (quoting Neal v. Hardee’s
Food Sys., Inc., 918 F.2d 34, 37 (5th Cir. 1990))); Polner v. Monchik Realty Co., 803 N.Y.S.2d
370, 376 (N.Y. Sup. Ct. 2005) (“These two documents were executed at substantially the same
time by the same parties, concern the same subject matter, and refer to each other.
Consequently, they were contemporaneous writings, forming part of the same transaction and
their provisions must be read and interpreted together and harmonized.”). Whether contracts
should be viewed as one agreement depends upon the intent of the parties. TVT Recs., 412 F.3d
at 89. The legally operative question is “whether the contracts were part of a single transaction
intended to effectuate the same purpose.” 6 Id. at 90.
The Court does not construe the contracts as one agreement because they were not

designed to effectuate the same purpose. While all four agreements were for the TempSure
System and the SculpSure System, Plaintiffs signed the four agreements with three different
entities; Plaintiffs signed the Purchase Agreements with Cynosure, the Finance Agreement with
Defendant as to the TempSure System, and the Leasing Agreement with Pawnee as to the
SculpSure System. (Am. Compl. ¶ 48; Purchase Agreements; Finance Agreement; Leasing
Agreement.) Plaintiffs do not allege that Defendant signed the Purchase Agreements or the
Leasing Agreement. In addition, the intent of the parties, as demonstrated through the
agreements, indicates that each agreement was entered into for a different purpose. See Torres v.
Walker, 356 F.3d 238, 245 (2d Cir. 2004) (“If a contract is clear, courts must take care not to
alter or go beyond the express terms of the agreement, or to impose obligations on the parties

that are not mandated by the unambiguous terms of the agreement itself.” (quoting Red Ball
Interior Demolition Corp. v. Palmadessa, 173 F.3d 481, 484 (2d Cir. 1999))). The Finance
Agreement solely related to the financing of the TempSure System, (see generally Finance
Agreement), while the Leasing Agreement related to the lease of the SculpSure System, and the
Purchase Agreements with Cynosure concerned the purchase of both systems. (Am. Compl.
¶ 48; Purchase Agreements; Leasing Agreement.) Indeed, the Finance Agreement contains an

6 The Second Circuit has clarified that although the question of whether multiple
writings should be construed as one agreement is “typically a question of fact for the jury,” “if
the documents in question reflect no ambiguity as to whether they should be read as a single
contract, the question is a matter of law for the court.” TVT Recs. v. Island Def Jam Music Grp.,
412 F.3d 82, 89 (2d Cir. 2005).
integration clause expressly disclaiming any additional terms or conditions. (Disclaimer of
Warranties and Claims, Finance Agreement at 2; Acceptance Certificate ¶ 3, Finance Agreement
at 1.) In view of the fact that the Amended Complaint does not contain any allegations regarding
the Defendant’s intent to construe the Finance Agreement in line with or inclusive of the other

three agreements, the Court declines to construe these agreements as a single contract. See
Grand Manor Health Related Facility, Inc. v. Hamilton Equities Inc., 941 F. Supp. 2d 406, 420
(S.D.N.Y. 2013) (declining to construe two contemporaneous contracts as one agreement
because the “agreements were between different parties and were entered into for different
reasons”); Schonfeld v. Thompson, 663 N.Y.S.2d 166, 167 (N.Y. App. Div. 1997) (declining to
construe separate written agreements involving different parties, serving different purposes and
not referring to each other as a unitary contract, notwithstanding oral misrepresentations); see
also Geller Biopharm, Inc. v. Amunix Pharms., Inc., No. 20-CV-4334, 2021 WL 4155015, at *5
(S.D.N.Y. Sept. 13, 2021) (“[E]ven if the parties entered into certain contracts in pursuit of one
ultimate goal, that does not transform every agreement in pursuit of that goal into one

agreement.”); Snyder v. Wells Fargo Bank, N.A., No. 11-CV-4496, 2011 WL 6382707, at *5
(S.D.N.Y. Dec. 19, 2011) (holding that “while multiple documents executed at the same time and
concerning the same subject-matter are required to be read together under New York law, this
does not mean that . . . any [ ] particularized [promises] . . . can be lifted from one document and
transferred to another”).
Accordingly, the Court declines to construe the four agreements together and analyzes
Plaintiffs’ claims against Defendant based on the Finance Agreement between Plaintiffs and
Defendant.
c. Florida law governs Plaintiffs’ fraudulent inducement and FDUTPA claims
The parties dispute the law that governs Plaintiffs’ fraudulent inducement and FDUTPA
claims. Defendant argues that based on the choice-of-law provision in the Finance Agreement
— which submits to the jurisdiction of New York any action or proceeding arising under the

contract, (General, Finance Agreement at 2) — New York law should govern all claims related
to the Finance Agreement because it is “sufficiently broad” to encompass the entire relationship
between the contracting parties. (Def.’s Reply and Opp’n at 5–6 (quoting Turtur v. Rothschild
Registry Int’l, Inc., 26 F.3d 304, 309–10 (2d Cir. 1994)).)
Plaintiffs argue that while New York law governs the interpretation of the Finance
Agreement, Florida law governs the fraudulent inducement and FDUTPA claims. (Pls.’ Opp’n
at 4–5.) In support, Plaintiffs argue that the choice-of-law provision contained in the Finance
Agreement is too narrow to extend to tort claims and assert that because the alleged fraudulent
conduct occurred during a meeting at Plaintiffs’ offices in Florida, and Plaintiffs are domiciled in
Florida, Florida has the “greatest interest” in the case and therefore Florida law governs. (Id. at

5–6.)
“Under New York’s choice of law rules, it is clear that ‘in cases involving a contract
with an express choice of law provision . . . a court is to apply the law selected in the contract as
long as the state selected has sufficient contacts with the transaction,’ unless there is fraud,
violation of public policy, or no ‘reasonable basis for choosing the law of the jurisdiction
designated by the parties.’” Aramarine Brokerage, Inc. v. OneBeacon Ins. Co., 307 F. App’x
562, 564 (2d Cir. 2009) (alteration in original) (quoting Hartford Fire Ins. Co. v. Orient
Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000)); see also Currier,
McCabe & Assocs., Inc. v. Pub. Consulting Grp., Inc., No. 13-CV-729, 2017 WL 4842023, at
*11 (N.D.N.Y. Oct. 24, 2017) (“Generally, courts will honor a contract’s express choice of law
provision unless there is an allegation of fraud . . . . Under New York law, such tort claims are
outside the scope of contractual choice-of-law provisions that specify what law governs
construction of the terms of the contract.”). However, “in order for a choice-of-law provision to

apply to claims for tort arising incident to the contract, the express language of the provision
must be ‘sufficiently broad’ as to encompass the entire relationship between the contracting
parties.” Mayagüez S.A. v. Citigroup, Inc., No. 16-CV-6788, 2018 WL 1587597, at *8
(S.D.N.Y. Mar. 28, 2018) (quoting Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir. 1996)); see Yak v.
BiggerPockets, L.L.C., No. 20-CV-3498, 2022 WL 67740, at *3 (2d Cir. Jan. 7, 2022) (“Under
New York law, a choice-of-law provision indicating that the contract will be governed by a
certain body of law does not dispositively determine that law which will govern a claim of fraud
arising incident to the contract.” (quoting Krock, 97 F.3d at 645)); G.L.M. Sec. & Sound, Inc. v.
LoJack Corp., No. 10-CV-04701, 2011 WL 4594825, at *4 (E.D.N.Y. Sept. 30, 2011); Drenis v.
Haligiannis, 452 F. Supp. 2d 418, 425–26 (S.D.N.Y. 2006) (finding that a choice-of-law

provision “governs only a cause of action sounding in contract, not one sounding in tort, unless
the express language of the choice-of-law provision is sufficiently broad as to encompass the
entire relationship between the contracting parties” (quoting H.S.W. Enters., Inc. v. Woo Lae
Oak, Inc., 171 F. Supp. 2d 135, 141 n.5 (S.D.N.Y. 2001))).
“New York courts confronted with a choice of law issue in torts conduct an ‘interest
analysis,’ assessing which of the competing jurisdictions has the greatest interest in seeing its
law applied to the matter at issue.” Stichting Ter Behartiging Van de Belangen Van
Oudaandeelhouders In Het Kapitaal Van Saybolt Int’l B.V. v. Schreiber, 407 F.3d 34, 50 (2d Cir.
2005) (quoting Padula v. Lilarn Props. Corp., 84 N.Y.2d 519, 521 (1994)); see Toretto v.
Donnelley Fin. Sols., Inc., No. 20-CV-2667, 2022 WL 348412, at *7 (S.D.N.Y. Feb. 4, 2022)
(quoting GlobalNet Financial.Com, Inc. v. Frank Crystal & Co., 449 F.3d 377, 384 (2d Cir.
2006)); see also Kinsey v. N.Y. Times Co., 991 F.3d 171, 176 (2d Cir. 2021) (“In tort cases, New
York ‘applies the law of the state with the most significant interest in the litigation.’” (quoting

Lee v. Bankers Tr. Co., 166 F.3d 540, 545 (2d Cir. 1999))). “[T]he interest analysis is applied
differently depending on whether the rules in question are conduct-regulating rules that ‘people
use as a guide to governing their primary conduct,’ or loss-allocating rules that ‘prohibit, assign,
or limit liability after the tort occurs.’” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 739
F.3d 45, 49 (2d Cir. 2013).
Claims of fraud are conduct-regulating rules. VeroBlue Farms USA Inc. v. Canaccord
Genuity LLC, No. 20-CV-4394, 2021 WL 3913555, at *11 (S.D.N.Y. Sept. 1, 2021); see Reed
Constr. Data Inc. v. McGraw-Hill Cos., Inc, 49 F. Supp. 3d 385, 425 (S.D.N.Y. 2014) (noting
that fraud “is generally a conduct-regulating doctrine”), aff’d, 638 F. App’x 43 (2d Cir. 2016);
H.S.W. Enters., Inc., 171 F. Supp. 2d at 142 (“[F]raudulent inducement is a conduct-regulating

law.”); La Luna Enters. v. CBS Corp., 74 F. Supp. 2d 384, 389 (S.D.N.Y. 1999) (claims of fraud
are conduct-regulating); see also Fargas v. Cincinnati Mach., LLC, 986 F. Supp. 2d 420, 423
(S.D.N.Y. 2013) (“Conduct-regulating rules are defined as those that ‘have the prophylactic
effect of governing conduct to prevent injuries from occurring.’” (quoting Padula, 84 N.Y.2d at
522)). When a conduct-regulating rule is at issue, “the law of the jurisdiction where the
[allegedly tortious acts] occurred will generally apply because that jurisdiction has the greatest
interest in regulating behavior within its borders.” Licci, 739 F.3d at 49 & n.3 (alteration in
original) (collecting cases); see also Bullock v. Caesars Ent. Corp., 83 F. Supp. 3d 420, 423
(E.D.N.Y. 2015) (noting that when a conduct-regulating rule is at issue, “the law of the place of
the tort ‘will usually have a predominant, if not exclusive, concern’” (quoting Padula, 84 N.Y.2d
at 522)). “In cases involving conduct-regulating laws, like fraudulent inducement, ‘[w]here the
parties are domiciled in different states, the locus of the tort will almost always be
determinative.’” H.S.W. Enters., Inc., 171 F. Supp. 2d at 142 (quoting Krock, 97 F.3d at 646);

Chigirinskiy v. Panchenkova, No. 14-CV-4410, 2015 WL 1454646, at *6 n.7 (S.D.N.Y. Mar. 31,
2015) (same); see also Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 72 (1993) (“If conflicting
conduct-regulating laws are at issue, the law of the jurisdiction where the tort occurred will
generally apply because that jurisdiction has the greatest interest in regulating behavior within its
borders.”).
The Finance Agreement’s choice-of-law provision is not “sufficiently broad” to cover
Plaintiffs’ tort claims. Krock, 97 F.3d at 645 (stating that a “sufficiently broad” choice-of-law
clause would reach claims of tort arising incident to the contract). While the provision includes a
broad forum clause, (see General, Finance Agreement at 2 (“[Plaintiffs] submit to the
jurisdiction of NY and agree that the state and federal courts sitting in Nassau County, New

York, shall have the exclusive jurisdiction over any action or proceeding to enforce this [Finance
Agreement] or any action or proceeding arising under this [Finance Agreement].”)), the
choice-of-law provision is narrow and therefore does not extend to tort claims, (see id. (“This
[Finance Agreement] shall be governed and construed under the laws of the State of New
York.”)). See Fin. One Pub. Co. Ltd. v. Lehman Bros. Special Fin., Inc., 414 F.3d 325, 335 (2d
Cir. 2005) (“Under New York law . . . tort claims are outside the scope of contractual choice-of-
law provisions that specify what law governs construction of the terms of the contract, even
when the contract also includes a broader forum-selection clause.”); TransPerfect Glob., Inc. v.
Lionbridge Techs., Inc., No. 19-CV-3283, 2020 WL 1322872, at *7 (S.D.N.Y. Mar. 20, 2020)
(“Where a choice-of-law clause specifies only that the contract will be ‘governed by and
construed in accordance with’ the law of a certain state, New York courts hold that the clause
does not control the law that applies to tort claims.”); see also Arnone v. Aetna Life Ins. Co., 860
F.3d 97, 108 (2d Cir. 2017) (noting that while “[c]ontractual choice of law provisions are

generally enforceable under both New York law and federal common law[,] . . . New York
courts are ‘reluctan[t] to read choice-of-law clauses broadly’” (alteration in original) (quoting
Fin. One Pub. Co., 414 F.3d at 335); Twinlab Corp. v. Paulson, 724 N.Y.S.2d 496, 497 (N.Y.
App. Div. 2001) (holding that a Florida civil Racketeer Influenced and Corrupt Organizations
Act claim fell outside of the scope of the contractual choice-of-law and forum-selection
provisions that “designated New York as the forum for any actions ‘relating directly or
indirectly’ to the consultant agreement”).
With respect to the interest analysis, the contacts between Florida and the underlying
allegations are strong, while contacts with New York are virtually nonexistent. The alleged
fraudulent conduct occurred during a meeting in Plaintiffs’ office in Florida, where Plaintiffs are

domiciled. (See Am. Compl. ¶¶ 1, 36.) The equipment at issue was delivered to Florida and
remains in Florida. (Id. ¶¶ 22, 51.) In addition, Plaintiffs learned additional information about
the TempSure System at a conference in Florida. (Id. ¶ 72.) Defendant’s principal place of
business is the only New York connection. (Id. ¶ 18.) Both Plaintiffs have no apparent contact
with New York other than their relationship with Defendant. (Id. ¶¶ 1–2.) In view of the
minimal contacts with New York and the fact that the locus of the fraud and FDUPTA claims are
in Florida, the Court applies Florida law for the purposes of analyzing Defendant’s motion to
dismiss Plaintiffs’ fraudulent inducement and FDUTPA claims.7 See Fin. One Public Co., 414
F.3d at 339 (rejecting choice-of-law clause designating New York law as governing law and
applying Thai law because the issues implicated Thai interests and the parties had minimal
contacts or transactions to New York).

d. Plaintiffs sufficiently allege a claim for fraudulent inducement
Defendant argues that Plaintiffs fail to state a claim for fraudulent inducement because
they are not liable for any of Huston’s misrepresentations. In support, Defendant argues that (1)
the Finance Agreement plainly disclaims an agency relationship between Defendant and
Cynosure, and (2) Plaintiffs have failed to sufficiently allege an agency relationship between
Defendant and Huston. (Def.’s Mem. at 7–11.) In addition, Defendant claims that Plaintiffs
improperly rely on Huston’s oral representations because the Finance Agreement “specifically
disavows the incorporation of non-written representations.” (Id. at 13–15.) Lastly, Defendant
argues that Plaintiffs’ claims for fraud in the inducement are barred by the economic loss rule in

7 Defendant cites to Turtur v. Rothschild Registry Int’l, Inc., 26 F.3d 304 (2d Cir. 1994),
to suggest that the Finance Agreement’s choice-of-law provision is sufficiently broad to
encompass Plaintiffs’ tort claims, but the Court is not persuaded. In Turtur, the case was
transferred from Texas to New York for the convenience of the parties and witnesses, pursuant to
28 U.S.C. § 1404(a). The Second Circuit applied Texas choice-of-law rules to determine the
validity and scope of the contractual choice-of-law clause at issue because “[f]ollowing such a
transfer, ‘the transferee court must follow the choice-of-law rules that prevailed in the transferor
court.’” Fin. One Pub. Co. Ltd. v. Lehman Bros. Special Fin., Inc., 414 F.3d 325, 333 (2d Cir.
2005) (quoting Ferens v. John Deere Co., 494 U.S. 516, 519 (1990)). Unlike in Turtur, the
Middle District of Florida did not transfer this case for the convenience of the parties, but to
enforce a valid forum-selection clause, and therefore the Court must apply the choice-of-law
rules of the forum state, i.e., New York law. Thus, Turtur is not binding authority because it
applied Texas law, rather than New York law to determine the scope of the contractual
choice-of-law clause at issue. See Fin. One Pub. Co., 414 F.3d at 334 (recognizing that Turtur is
not binding when applying New York law to determine the scope of a contractual choice-of-law
clause); see also Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49,
64 (2013) (“[W]hen a party bound by a forum-selection clause flouts its contractual obligation
and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original
venue’s choice-of-law rules”).
that the allegations pertain to product performance and are also barred by the Finance
Agreement’s “hell or high water” clause. (Id. at 16–17.)
Plaintiffs allege that Huston is an agent of Defendant, (Am. Compl. ¶¶ 97, 123–24, 134,
142), because the agency disclaimer provision in the Finance Agreement is not controlling and

Huston had express or implied authority to act on behalf of Defendant. (Pls.’ Opp’n at 8–11.) In
addition, Plaintiffs argue that the misrepresentations made by Huston during the June 26, 2019
meeting at Plaintiffs’ office are false statements or omissions concerning material facts. (Id. at 3,
14.) Plaintiffs further argue that under Florida law, justifiable reliance is not a necessary element
of fraudulent misrepresentation and the economic loss rule only applies to product liability
claims. (Id. at 12–16.)
i. Defendant’s agency disclaimer provision is not controlling
Defendant argues that all claims against it must be dismissed because the Finance
Agreement disclaims an agency relationship between it and Cynosure and Plaintiffs are
attempting to circumvent the “clear language” of the Finance Agreement, which states that

Huston was not an agent of Defendant and bars Plaintiffs from raising claims against Defendant
for any representations made by Huston. (Def.’s Mem. at 7–8.) In support, Defendant highlights
sections of the Finance Agreement, including the section entitled “Disclaimer of Warranties,”
which states that “[Cynosure] is not [Defendant’s] agent” and that “[n]o representation by
[Cynosure] as to any matter shall bind [Defendant] or affect [Plaintiffs’] duty to pay all amounts
and perform all obligations hereunder.” (Disclaimer of Warranties and Claims, Finance
Agreement at 2.) In addition, Defendant relies on the Acceptance Certificate which states that
“[n]either [Cynosure] nor any of its salespersons or other agents are agents of [Defendant’s]” and
“[a]ny representation as to the [TempSure System] or any other matter made by [Cynosure] shall
not in any way affect [Plaintiffs’] duty to make payments to [Defendant] and perform all
[Plaintiffs’] other obligations as set forth in the Agreement or the other documents related
thereto.” (Acceptance Certificate ¶ 3, Finance Agreement at 1.)
Plaintiffs contend that Defendant’s generic agency disclaimer does not apply to Huston’s

conduct because “conclusory no-agency clauses cannot trump the actual conduct of the parties
evidencing express or implied authority.” (Pls.’ Opp’n at 8 (citing Rensselaer Polytechnic Inst.
v. Amazon.com, Inc., No. 18-CV-549, 2019 WL 3755446, at *12 (N.D.N.Y. Aug. 7, 2019).)
“Under New York law, an agency relationship ‘results from a manifestation of consent by
one person to another that the other shall act on his behalf and subject to his control, and the
consent by the other to act.’”8 Steinbeck v. Steinbeck Heritage Found., 400 F. App’x 572, 575
(2d Cir. 2010) (quoting New York Marine & Gen. Ins. Co. v. Tradeline (L.L.C.), 266 F.3d 112,
122 (2d Cir. 2001)). A principal’s ability to exercise control over its agent is an essential
element of agency. Id.; see also In re Parmalat Sec. Litig., 375 F. Supp. 2d 278, 290 (S.D.N.Y.
2005) (“The element of control often is deemed the essential characteristic of the principal-agent

8 As noted above, the Court finds that Florida law applies to the alleged non-contract
claims. On the issue of agency however, Defendant and Plaintiffs cite to Second Circuit cases
applying New York law. See Def.’s Mem. at 7–9; Pls.’ Opp’n at 8–9. While “such ‘implied
consent . . . is sufficient to establish choice of law,’” Santalucia v. Sebright Transp., Inc., 232
F.3d 293, 296 (2d Cir. 2000) (alteration in original) (quoting Tehran-Berkeley Civ. & Env’t
Eng’rs v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989)), a choice-of-law
analysis is not necessary because, as relevant to Defendant’s motion to dismiss, there are no
substantial conflicts between New York and Florida agency law. Under both New York and
Florida law, an agency disclaimer provision is not controlling and a necessary element of an
agency relationship is control by the principal — which, for reasons discussed below, are the
pertinent issues before the Court. See Bigio v. Coca-Cola Co., 675 F.3d 163, 175 (2d Cir. 2012);
In re JVJ Pharmacy Inc., 630 B.R. 388, 403 (S.D.N.Y. 2021); Witover v. Celebrity Cruises, Inc.,
161 F. Supp. 3d 1139, 1149 (S.D. Fla. 2016); see also Villazon v. Prudential Health Care Plan,
Inc., 843 So. 2d 842, 853–54 (Fla. 2003) (holding that the nature and scope of the agency
relationship is a factual question determined by the totality of the circumstances and cannot be
decided based on how the parties define the relationship in a contract or series of contracts). The
Court therefore applies New York agency law.
relationship.”); Mazart v. State, 441 N.Y.S.2d 600, 605 (N.Y. Ct. Cl. 1981) (noting that “there
can be no agency relationship where the alleged principal has no right of control over the alleged
agent”). Where parties contend that an agency relationship is established by contract, a court
will look to the language of that agreement to ascertain the relationship created between the

parties. See Steinbeck, 400 F. App’x at 575; EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11,
19–21 (2005). However, contractual agency disclaimers are not always dispositive, and a court
may look to the facts and circumstances of the parties’ relationship to determine whether an
agent-principal relationship existed. In re JVJ Pharmacy Inc., 630 B.R. 388, 404 (S.D.N.Y.
2021) (recognizing that it is a “well-settled principle” that provisions purporting to disclaim an
agency relationship are not dispositive on the contract’s language alone even though some courts
have given effect to agency disclaimers that are “express and unambiguous” (quoting Supreme
Showroom, Inc. v. Branded Apparel Grp. LLC, No. 16-CV-5211, 2018 WL 3148357, at *9
(S.D.N.Y. June 27, 2018))); Taylor Grp., Inc. v. Indus. Distrib. Int’l Co., 506 F. Supp. 3d 1256,
1270 (S.D. Fla. Dec. 10, 2020) (finding that under Florida law, “[e]xpress disclaimers of agency

do not eliminate the existence of an agency relationship . . . . [but that] [n]evertheless,
considerable efforts to avoid an agency relationship through express disclaimers is ‘palpable
evidence’ that there was no consent or acquiescence to an agency relationship” (first quoting
Carr v. Stillwaters Dev. Co., L.P., 83 F. Supp. 2d 1269, 1279 (M.D. Ala. 1999); and then citing
Commodity Futures Trading Comm’n v. Gibraltar Monetary Corp., Inc., 575 F.3d 1180, 1189
(11th Cir. 2009))), aff’d, 859 F. App’x 439 (11th Cir. 2021); Bank of New York Mellon Tr. Co.,
Nat’l Ass’n v. Morgan Stanley Mortg. Cap., Inc., No. 11-CV-505, 2013 WL 3146824, at *26
(S.D.N.Y. June 19, 2013) (“While parties may disclaim agency relationship in an agreement, a
‘court is not bound by the disclaimer of . . . agency between the parties in determining their true
relationship.’” (alteration in original) (quoting Gulf Ins. Co. v. Transatlantic Reinsurance Co.,
886 N.Y.S.2d 133, 152 (N.Y. App. Div. 2009))); see also Rensselaer Polytechnic Inst., 2019 WL
3755446, at *12 (“Defendant places undue reliance on the contracts’ disclaimer of an agency
relationship, . . . [but] such disclaimers ‘are not dispositive as to the existence of an agency

relationship[.]’” (quoting Pacific Gas & Elec. Co. v. United States, 838 F.3d 1341, 1359 (Fed.
Cir. 2016))); Rubenstein v. Small, 75 N.Y.S.2d 483, 485 (N.Y. App. Div. 1947) (“The court is
not bound by the disclaimer of partnership, joint venture or agency between the parties in
determining their true relationship.”); see, e.g., Onebeacon Ins. Co. v. Forman Int’l, Ltd., No.
04-CV-2271, 2005 WL 100849, at *4 (S.D.N.Y. Jan. 19, 2005) (holding that the fact that the
defendants were characterized as agents was not dispositive of the agency issue, but rather, “the
alleged acts of the defendant and not the label are determinative of potential liability”); Rendeiro
v. State-Wide Ins. Co., 777 N.Y.S.2d 323, 324 (N.Y. App. Div. 2004) (stating that “a broker will
be held to have acted as the insurer’s agent where there is some evidence of ‘action on the
insurer’s part, or facts from which a general authority to represent the insurer may be inferred’”).

Although the Finance Agreement contains an agency disclaimer because such disclaimers
are not dispositive, the Court will analyze the relationship between Huston and Defendant to
determine if there is an agent-principal relationship. See TD Waterhouse Inv. Servs., Inc. v.
Integrated Fund Servs., Inc., No. 01-CV-8986, 2003 WL 42013, at *14 (S.D.N.Y. Jan. 6, 2003)
(“[O]ne does not become an agent through the mere utterance of that term. Rather, a party
claiming an agency relationship — to which a fiduciary duty might apply — must demonstrate
that the alleged fiduciary ‘occup[ied] a position of trust or special confidence with regard to [the
plaintiff] that imposed obligations beyond the express agreements.’” (quoting
Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d 13, 20 (2d Cir. 1996))); see
also In re Shulman Transp. Enters., Inc., 744 F.2d 293, 295–96 (2d Cir. 1984) (affirming district
court’s refusal to find agency relationship despite “agency” contract); Rensselaer Polytechnic
Inst., 2019 WL 3755446, at *12 (“Defendant places undue reliance on the contracts’ disclaimer
of an agency relationship; such disclaimers ‘are not dispositive as to the existence of an agency

relationship.’” (citation omitted)); N. Shipping Funds I, LLC v. Icon Cap. Corp., 921 F. Supp. 2d
94, 103–04 (S.D.N.Y. 2013) (analyzing the facts and circumstances of the parties’ relationship to
determine whether an agent-principal relationship existed even though an agency relationship
was purported to be established by contract).
ii. Plaintiffs have sufficiently pled that Huston is an agent of Defendant

Defendant argues that Plaintiffs fail to allege that Cynosure, or its salesperson Huston, is
its agent because it is “a mere legal conclusion and cannot be assumed to be true in analyzing the
sufficiency of a complaint.” (Def.’s Mem. at 8–9.) In support, Defendant argues that the Court
determines whether an agency relationship exists based on “the actual interactions of the putative
agent and principal and not on the perception a third party may have of the relationship,” and
further argues that Plaintiffs have failed to allege any facts that Defendant did anything to
authorize Huston to act as its agent. (Id. at 10–11 (quoting Maung Ng We v. Merrill Lynch &
Co., No. 99-CV-9687, 2000 U.S. Dist. LEXIS 11660, at *12 (S.D.N.Y. Aug. 14, 2000)).)
Plaintiffs argue that factual allegations in the Amended Complaint — construed in
Plaintiffs’ favor — support the reasonable inference that Defendant vested Huston with the
apparent or actual authority to negotiate the Finance Agreement on Defendant’s behalf. (Pls.’
Opp’n at 9–10.) In support, Plaintiffs argue that Defendant’s website — “boast[ing] that
[Defendant] has a close relationship with . . . Cynosure” — and Smolenski’s restatement of
Huston’s misleading claims — “that procedures using the equipment were virtually painless” —
corroborate Defendant’s and Cynosure’s “close relationship . . . and illustrate[] that [Defendant]
was aware of and authorized Huston’s [misrepresentations].” (Id. at 10.) In addition, Plaintiffs
argue that Huston’s representation that Cynosure would provide financing with no mention of
Defendant or the need for its approval supports a reasonable inference that Defendant authorized

Huston to present the Finance Agreement and act on behalf of Defendant. (Id.)
A principal can be held vicariously liable for the acts of another under a theory of actual
or apparent authority. DeAngelis v. Corzine, 17 F. Supp. 3d 270, 286 (S.D.N.Y. 2014)
(discussing potential vicarious liability of principal under a theory of actual and apparent
authority); Douyon v. N.Y. Med. Health Care, P.C., 894 F. Supp. 2d 245, 272 (E.D.N.Y. 2012)
(“Where a principal does not control an agent, the principal may still be vicariously liable for the
agent’s actions where the agent is vested with apparent authority.” (citing Green Door Realty
Corp. v. TIG Ins. Co., 329 F.3d 282, 289 (2d Cir. 2003))), amended by, No. 10-CV-3983, 2013
WL 5423800 (E.D.N.Y. Sept. 25, 2013); see also Banks v. Pro Custom Solar, 416 F. Supp. 3d
171, 173–74 (E.D.N.Y. 2018) (finding that a defendant may be held vicariously liable under the

Telephone Consumer Protection Act consistent with traditional agency principles); Meisel v.
Grunberg, 651 F. Supp. 2d 98, 121 (S.D.N.Y. 2009) (finding that the plaintiff had sufficiently
alleged a co-defendant’s indirect liability for fraud pursuant to an agency theory of vicarious
liability).
“Actual authority ‘is the power of the agent to do an act or to conduct a transaction on
account of the principal which, with respect to the principal, he is privileged to do because of the
principal’s manifestations to him.’” Dinaco, Inc. v. Time Warner, Inc., 346 F.3d 64, 68 (2d Cir.
2003) (quoting Minskoff v. Am. Express Travel Related Servs. Co., 98 F.3d 703, 708 (2d Cir.
1996)); see United States v. Gatto, 986 F.3d 104, 127 (2d Cir. 2021) (recognizing that actual
authority occurs “when the agent receives ‘explicit permission from the principal to act on its
behalf’” (quoting Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading Inc., 697 F.3d 59,
71 (2d Cir. 2012))). Such authority “is created by direct manifestations from the principal to the
agent, and the extent of the agent’s actual authority is interpreted in the light of all circumstances

attending those manifestations, including the customs of business, the subject matter, any formal
agreement between the parties, and the facts of which both parties are aware.” ABM Indus.
Grps., LLC v. Int’l Union of Operating Eng’rs, Loc. 30, 30A, 30B, AFL-CIO, 968 F.3d 158, 163
(2d Cir. 2020) (quoting Highland Cap. Mgmt. LP v. Schneider, 607 F.3d 322, 327 (2d Cir.
2010)). A court may infer actual authority “from words or conduct which the principal has
reason to know indicates to the agent that he is to do the act.” United States v. Int’l Bhd. of
Teamsters, 986 F.2d 15, 20 (2d Cir. 1993).
“Apparent authority exists when a principal, either intentionally or by lack of ordinary
care, induces [a third party] to believe that an individual has been authorized to act on its behalf.”
Highland Cap. Mgmt., 607 F.3d at 328 (quoting Peltz v. SHB Commodities, Inc., 115 F.3d 1082,

1088 (2d Cir. 1997)); see Gatto, 986 F.3d at 127 (recognizing that apparent authority occurs
“when an agent has the ability to bind the principal to transactions with third parties because
representations that the principal made to the third party make it reasonable for the third party to
believe the agent has such an ability”); Dinaco, 346 F.3d at 69 (“Apparent authority arises from
the ‘written or spoken words or any other conduct of the principal which, reasonably interpreted,
causes [a] third person to believe that the principal consents to have [an] act done on his behalf
by the person purporting to act for him.’” (quoting Minskoff, 98 F.3d at 708)); New York Wheel
Owner LLC v. Mammoet Holding B.V., 481 F. Supp. 3d 216, 232–33 (S.D.N.Y. 2020) (same);
Edinburg Volunteer Fire Co., Inc. v. Danko Emergency Equip. Co., 867 N.Y.S.2d 547, 549
(N.Y. App. Div. 2008) (“Apparent authority will only be found where words or conduct of the
principal — not the agent — are communicated to a third party, which give rise to a reasonable
belief and appearance that the agent possesses authority to enter into the specific transaction at
issue.”). To prove that an agent has apparent authority, the plaintiff must establish that “(1) the

principal was responsible for the appearance of authority in the agent to conduct the transaction
in question and (2) the third party reasonably relied on the representations of the agent.” Star
Funding, Inc. v. Tire Ctrs., LLC, 717 F. App’x 38, 41 (2d Cir. 2017) (quoting Herbert Constr.
Co. v. Cont’l Ins. Co., 931 F.2d 989, 993–94 (2d Cir. 1991)).
Plaintiffs’ allegations support a reasonable inference that Huston had actual authority to
act on behalf of Defendant. Huston’s and Defendant’s agency relationship can be implied
through Defendant’s “conduct as construed in light of the surrounding circumstances.”
DeAngelis, 17 F. Supp. 3d at 286 (“[C]onsent for actual authority may be either express or
implied from the parties’ words and conduct as construed in light of the surrounding
circumstances.” (quoting Cromer Fin. Ltd. v. Berger, Nos. 00-CV-2284, 00-CV-2498, 2002 WL

826847, at *4 (S.D.N.Y. May 2, 2002))). Huston, as a representative of Cynosure, offered to sell
Plaintiffs the TempSure and SculpSure Systems and told Plaintiffs that Cynosure would provide
financing for the products. (Am. Compl. ¶¶ 43–45.) To effectuate the sale of the products,
Huston presented all four agreements to Plaintiffs and provided Plaintiffs with information
related to the financing of the TempSure System (as well as the leasing of the SculpSure
System). (Id. at ¶¶ 38–48.) Huston presented Plaintiffs with the Finance Agreement that was
predated and preprinted with Dr. Averill’s personal identifying information. (Id. at ¶ 48.)
Drawing all reasonable inferences in Plaintiffs’ favor, Plaintiffs have alleged that Huston
impliedly represented that he was acting on behalf of Defendant when he provided Plaintiffs
financing for the purchase of the TempSure by presenting them with the Finance Agreement
complete with Dr. Averill’s information. Moreover, Huston did not explain or counter-sign the
Finance Agreement and Plaintiffs did not receive a fully executed copy of the Finance
Agreement from Defendant until later, suggesting that Defendant maintained some control over

the transaction. See DeAngelis, 17 F. Supp. 3d at 286 (recognizing that the plaintiffs must also
show that “the principal . . . maintain[ed] control over key aspects of the undertaking,” but that
“the control asserted need not include control at every moment”) (first quoting Com. Union Ins.
Co. v. Alitalia Airlines, S.p.A., 347 F.3d 448, 462 (2d Cir. 2003); and then quoting Cleveland v.
Caplaw Enters., 448 F.3d 518, 522 (2d Cir. 2006)). (Id. at ¶¶ 50, 58.) Based on Plaintiffs’
allegations, it is reasonable to infer — from Defendant’s conduct of (1) providing Huston with a
preprinted and prefilled Finance Agreement and permission to present the Finance Agreement to
Plaintiffs, and (2) expecting Huston to return an executed Finance Agreement for Defendant to
countersign — that Defendant conferred actual authority upon Huston to offer its financing for
the TempSure System to Plaintiffs. See Craig v. Sandals Resorts Int’l, 69 F. Supp. 3d 322, 328

(E.D.N.Y. 2014) (“[T]o adequately allege an actual agency relationship, a plaintiff need only
allege facts sufficient to support a reasonable inference of actual authority, and its pleadings may
rely upon facts that would constitute circumstantial evidence of authority.” (quoting Skanga
Energy & Marine Ltd. v. Arevenca S.A., 875 F. Supp. 2d 264, 269 (S.D.N.Y. 2012), aff’d sub
nom. Skanga Energy & Marine Ltd. v. Petroleos de Venezuela S.A., 522 F. App’x 88 (2d Cir.
2013))); DeAngelis, 17 F. Supp. 3d at 286 (“To establish an actual agency theory of liability,
Plaintiffs must allege ‘(1) the principal’s manifestation of intent to grant authority to the agent,
and (2) agreement by the agent.’” (quoting Com. Union Ins. Co., 347 F.3d at 462)); Skanga
Energy & Marine Ltd., 875 F. Supp. 2d at 270 (“Whether actual authority exists ‘depends on the
actual interaction between the putative principal and agent, not on any perception a third party
may have of the relationship.’” (quoting Itel Containers Int’l Corp. v. Atlanttrafik Express Serv.
Ltd., 909 F.2d 698, 702 (2d Cir. 1990))). 9
Thus, Plaintiffs have plausibly alleged that Huston had implied actual authority to act as

Defendant’s agent.
iii. Plaintiffs have plausibly stated a claim for fraudulent inducement
under Florida law

Based on the allegations in the Complaint, Plaintiffs have adequately pled a fraudulent
inducement claim.
“The elements of fraudulent misrepresentation and fraudulent inducement are: (1) a false
statement concerning a material fact; (2) the representor’s knowledge that the representation is
false; (3) an intention that the representation induce another to act on it; and (4) consequent
injury by the party acting in reliance on the representation.” Moriber v. Dreiling, 194 So. 3d
369, 373 (Fla. Dist. Ct. App. 2016) (citing Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010)).10

9 Plaintiffs fail to plausibly allege that Defendant held Huston out as its agent under a
theory of apparent authority. Plaintiffs do not allege that Defendant made any representations to
Plaintiffs about Huston’s authority and Huston’s conduct or words to Plaintiffs alone is
insufficient to infer an apparent authority relationship. See Elbit Sys., Ltd. v. Credit Suisse Grp.,
917 F. Supp. 2d 217, 226 (S.D.N.Y. 2013) (finding that apparent authority was not adequately
alleged in the complaint because it “contain[ed] no allegations that [the defendant] made any
representations about [the alleged agent]’s authority to [the plaintiff]”); Star Energy Corp. v.
RSM Top-Audit, No. 08-CV-329, 2008 WL 5110919, at *5 (S.D.N.Y. Nov. 26, 2008) (“An
‘agent cannot confer authority upon himself or make himself an agent merely by saying that he is
one.’” (quoting Nuevo Mundo Holdings v. PriceWaterhouseCoopers LLP, No. 03-CV-613, 2004
WL 112948, at *6 (S.D.N.Y. Jan. 22, 2004))).

10 While reasonable reliance is an element of a fraudulent inducement claim under New
York law, it is not an element under Florida law. See Goonewardena v. Forster & Garbus LLP,
No. 18-CV-00029, 2019 WL 121677, at *6 (E.D.N.Y. Jan. 7, 2019) (“A party has made out a
claim of fraudulent inducement if [the party] has pled (i) a material misrepresentation of a
presently existing or past fact; (ii) an intent to deceive; (iii) reasonable reliance on the
Plaintiffs alleged that Huston, who had actual authority to act on behalf of Defendant,
made false representations of material fact that the TempSure System was “a good fit for a new
aesthetics practice” for Plaintiffs and virtually “pain-free” for patients. (Am. Compl. ¶¶ 40, 42.)
Prior to the June 26, 2019 presentation, Huston knew that Plaintiffs did not have an aesthetics

practice, (id. at ¶ 38), and at a conference facilitated by Huston’s employer, Cynosure, Plaintiffs
learned that the TempSure System requires the use of anesthesia, indicating that the equipment
was not “pain-free” or suitable for starting an aesthetics practice, (id. at ¶¶ 75–84). Plaintiffs
also alleged that when Plaintiffs expressed interest in one of the systems, Huston “pounced,”
“hastily” presented Plaintiffs with the prefilled Finance Agreement, (see id. at ¶¶ 37, 48), and
after Plaintiffs executed it, Huston attempted to leave Plaintiffs’ offices without providing
Plaintiffs with a copy of the Finance Agreement, (id. ¶ 50). Plaintiffs are indebted for the
financing of the TempSure System even though it is not well-suited for their medical practice
and they are unable and untrained to use it. (See id. at ¶¶ 63–64, 82–86, 90.) Accepting these
factual allegations as true and drawing all reasonable inferences in Plaintiff’s favor, Plaintiffs

have adequately alleged that (1) Huston made false statements concerning material facts; (2)
Huston knew that the representations were false; (3) Huston made the representations to induce
Plaintiffs to act on them; and (4) Plaintiffs were injured by acting in reliance on Huston’s
representations. See Moriber, 194 So. 3d at 373 (citing Butler, 44 So. 3d at 105).

misrepresentation . . . ; and (iv) resulting damages.” (quoting Ipcon Collections LLC v. Costco
Wholesale Corp., 698 F.3d 58, 62 (2d Cir. 2012))).
Accordingly, the Court denies Defendant’s motion as to Plaintiffs’ fraudulent inducement
claim.11
e. Plaintiffs fail to state a claim for violation of the FDUTPA
Defendant argues that Plaintiffs’ claim that Defendant violated the FDUTPA is not

sufficiently pled. In support, Defendant contends that Plaintiffs’ allegation that Smolenski,

11 The Court also finds unpersuasive Defendant’s argument that Plaintiffs’ fraudulent
inducement claim is barred by the economic loss rule and the “hell or high water” clause in the
Finance Agreement. (Def.’s Mem. 16–19.) Under Florida law, the economic loss rule does not
bar an independent fraudulent inducement claim. See Tiara Condo. Ass’n, Inc. v. Marsh &
McLennan Cos., Inc., 110 So. 3d 399, 402 (Fla. 2013) (“The economic loss rule has not
eliminated causes of action based upon torts independent of the contractual breach . . .” (quoting
Indemnity Ins. Co. of N. Am. v. Am. Aviation, Inc., 891 So. 2d 532, 537 (Fla. 2004))); see also
HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238, 1239 (Fla. 1996) (finding that
fraudulent inducement is not covered by the economic loss rule because the facts needed to
prove the tort are different than those needed to prove breach of contract); Castillo Grand LLC v.
Sheraton Operating Corp., No. 06-CV-5526, 2009 WL 2001441, at *10 (S.D.N.Y. July 9, 2009)
(interpreting Florida law) (same). In addition, the Court cannot find as a matter of law that the
alleged hell-or-high water clause bars this action; where a contract has been fraudulently
induced, a hell-or-high-water clause is unlikely to be enforced because the alleged fraud may
invalidate the contract and make it unenforceable. See U.C.C § 2A-407 cmt. 5 (recognizing that
that a “hell or high water” provision is only enforceable “[a]bsent . . . application of the
principles of law and equity, including the law with respect to fraud.”); In re Brican Am. LLC
Equip. Lease Litig., No. 10-MD-2183, 2015 WL 235409 (S.D. Fla. Jan. 16, 2015) (recognizing
that various claims of fraudulent inducement affect enforcement of “hell-or-high-water” clauses
and lessee’s waivers of defenses), supplemented sub nom. In re: Brican Am. LLC, No.
10-MD-2183, 2015 WL 11681185 (S.D. Fla. Apr. 23, 2015), aff’d sub nom. Blank v. NCMIC
Fin. Corp., 671 F. App’x 734 (11th Cir. 2016); Leasetec Corp. v. Orient Sys., Inc., 85 F. Supp.
2d 1310, 1316–17 (S.D. Fla. 1999) (recognizing that in order to authorize rescission of a finance
lease, including a “hell or high water” clause, the purported fraud of the employees of the
equipment supplier must be imputed to the assignee lessors or the lease must be unconscionable
(quoting Colonial Pac. Leasing Corp. v. McNatt, 486 S.E.2d 804, 808–09 (Ga. 1997))); Hitachi
Data Sys. Credit Corp. v. Precision Discovery, Inc., No. 17-CV-6851, 2019 WL 3802178, at *5
(S.D.N.Y. Aug. 13, 2019) (recognizing that fraud constitutes an exception to the otherwise
enforceable “hell or high water” clause); Sterling Nat’l Bank v. Kings Manor Estates, LLC, 808
N.Y.S.2d 920 (N.Y. Civ. Ct. 2005) (“As a procedural matter, the party seeking to enforce a ‘hell
or high water’ clause must show that a fraud defense lacks merit.” ); CIT Fin. LLC v. Treon,
Aguirre, Newman & Norris PA, No. 14-CV-800, 2016 WL 6610604, at *4 (D. Ariz. Nov. 9,
2016) (“[A] hell or high water clause in a lease that was induced by fraud is invalid because the
lease itself is invalid.”).
Defendant’s President, said that he had undergone a painless treatment is irrelevant because he
was referring to the SculpSure System — not the TempSure System — and, in any event,
Plaintiffs’ reliance on the alleged statement was not reasonable because the statement was
allegedly made after Plaintiffs acquired the SculpSure and TempSure Systems. (Def.’s Mem. at

19–20.) In addition, Defendant argues that Plaintiffs have not pled actual damages or consumer
harm as required to establish a FDUTPA claim. (Id. at 20.)
Plaintiffs contend that Huston’s misrepresentations and Smolenski’s statement that the
SculpSure System was virtually “pain-free” were false and deceptive attempts to bolster the
credibility of the equipment and caused them to incur expenses related to being burdened with
the SculpSure and TempSure Systems, which Plaintiffs cannot use. (Am. Compl. ¶ 120; Pls.’
Opp’n at 20.) Plaintiffs claim that they cancelled patient appointments, paid staff for training
that never occurred, and hired an electrician to make modifications to their office to
accommodate the equipment that they could never use. (Am. Compl. ¶¶ 62, 64; Pls.’ Opp’n at
20.) In addition, Plaintiffs argue that they “did not receive the benefit of the bargain,” because

the TempSure System d[id] not live up to the misrepresentations wielded by [D]efendant.” (Am.
Compl. ¶ 91; Pls,’ Opp’n at 20 (quoting Debernardis v. IQ Formulations, LLC, 942 F.3d 1076,
1084 (11th Cir. 2019)).)
The FDUTPA prohibits “[u]nfair methods of competition, unconscionable acts or
practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084, 1097 (11th Cir. 2021) (alteration in original)
(quoting Fla. Stat. § 501.204(1)); Wyndham Vacation Ownership, Inc. v. Sussman, No.
18-CV-2171, 2021 WL 5177339, at *2 (M.D. Fla. Nov. 5, 2021) (same). In order to assert a
claim for damages under the FDUTPA, a “plaintiff must only establish three objective elements:
(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.”12 Carriuolo v. Gen.
Motors Co., 823 F.3d 977, 985–86 (11th Cir. 2016) (citing City First Mortg. Corp. v. Barton,
988 So. 2d 82, 86 (Fla. Dist. Ct. App. 2008)); Hasemann v. Gerber Prods. Co., 331 F.R.D. 239,
256 (E.D.N.Y. 2019) (same). The Florida Supreme Court has noted that “deception occurs if

there is a representation, omission, or practice that is likely to mislead the consumer acting
reasonably in the circumstances, to the consumer’s detriment.” Zlotnick v. Premier Sales Grp.,
Inc., 480 F.3d 1281, 1284 (11th Cir. 2007) (quoting PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842
So. 2d 773, 777 (Fla. 2003)); State v. Beach Blvd Auto. Inc., 139 So. 3d 380, 387 (Fla. Dist. Ct.
App. 2014) (same). As for damages, generally, there are two ways to measure actual damages in
a FDUTPA claim: (1) the value between what was promised and what was delivered; or (2) the
total price paid for a valueless good or service. Dem. Rep. Congo v. Air Cap. Grp., LLC, 614 F.
App’x 460, 472 (11th Cir. 2015) (citing Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. Dist.
Ct. App. 1984)); HRCC, Ltd. v. Hard Rock Cafe Int’l (USA), Inc., 703 F. App’x 814, 816 (11th
Cir. 2017) (per curiam) (citing Carriuolo, 823 F.3d at 986); Hasemann v. Gerber Prod. Co., 331

F.R.D. 239, 256 (E.D.N.Y. 2019) (“FDUTPA damages are measured according to the difference
in the market value of the product or service in the condition in which it was delivered and its
market value in the condition in which it should have been delivered according to the contract of
the parties.” (quoting Carriuolo, 823 F.3d at 986)). “In short, plaintiffs must marshal evidence to
prove the gap in value between what was promised and what was delivered, unless defendant

12 The Court finds unpersuasive Defendant’s argument that the transfer of this action to
the Eastern District of New York invalidates Plaintiffs’ FDUTPA claim because New York law
governs the Finance Agreement. (Def.’s Mem. at 19.) As discussed above, Plaintiffs’ fraud
claims are construed under Florida law. Moreover, the Court is adequately situated to address
Plaintiffs’ FDUTPA claim and give proper deference to Florida law. See Hasemann v. Gerber
Prods. Co., 331 F.R.D. 239, 258–64 (E.D.N.Y. 2019) (applying Florida law to analyze plaintiffs’
FDUTPA claim and determine whether class certification was proper).
palmed off a product that was truly worthless. In the latter situation, plaintiff may recoup the full
price he paid for the valueless good or service.” Dem. Rep. Congo, 614 F. App’x at 472.
Moreover, “Florida courts have consistently held that [the] FDUTPA does not allow recovery of
consequential damages, including lost profits.”13 GE Transp. Parts, LLC v. Cent. Ry. Mfg., LLC,

No. 19-CV-4826, 2021 WL 827146, at *4 (S.D.N.Y. Mar. 4, 2021) (collecting cases).

13 The Court recognizes that federal district courts in Florida have reached differing
views as to whether lost profits are available for damages under the FDUTPA. Compare Tymar
Distrib. LLC v. Mitchell Grp. USA, LLC, --- F. Supp. 3d ---, ---, 2021 WL 4077966, at *7 (S.D.
Fla. Sept. 8, 2021) (holding that lost profits are “actual damages” that are recoverable under
FDUTPA), with Midway Labs USA, LLC v. S. Serv. Trading, S.A., No. 19-CV-24857, 2020 WL
2494608, at *6–7 (S.D. Fla. May 14, 2020) (holding that lost profits are “consequential
damages” that are not recoverable and collecting cases on the differing views); Sandshaker
Lounge & Package Store LLC v. RKR Beverage Inc., No. 17-CV-686, 2018 WL 7351689, at *6
n.15 (N.D. Fla. Sept. 27, 2018) (collecting cases). As explained in Midway:
[S]ome Florida district courts find that . . . lost profits are actual
damages and may be recovered . . . . On the other hand, other
district courts within Florida also find that . . . lost profits
constitute consequential damages and may not be recovered under
FDUTPA. The Florida Supreme Court has not decided the issue
. . . [and] the Eleventh Circuit Court of Appeals has not resolved
the split either.
Midway Labs, 2020 WL 2494608, at *6. In Tymar Distribution LLC, the Southern District of
Florida clarified the district court split. 2021 WL 4077966. The court explained that both
consumers and corporate-competitor businesses can seek damages under the FDUTA, but “in a
claim brought by a corporate competitor, there is no bargain giving rise to the expectancy
measure of damages employed in traditional consumer cases.” Id. at *5. Rather, unlike
contract-based causes of action, “[c]orporate competitors instead suffer lost profits, lost revenue,
reputational harm, and other damages commonly observed in business torts claims.” Id. The
court discerned that the differing views among Florida district courts is created, in part, by some
courts holding that lost profits are available to a competitor company under the FDUTPA and
others finding otherwise. Id. at *5–6. The court distinguished these business tort FDUTPA
claims from FDUTPA claims arising in the consumer transaction context and recognized that
corporate competitor plaintiffs can recover lost profits, but consumer plaintiffs cannot. See id. at
*7 (explaining that “a corporate-competitor plaintiff may seek lost profits damages under the
FDUTPA.”); Desue v. 20/20 Eye Care Network, Inc., No. 21-CV-61275, 2022 WL 796367, at
*10 (S.D. Fla. Mar. 15, 2022) (“The court’s holding in Tymar applies specifically to ‘FDUTPA
claims arising outside the consumer transaction context.’”). Plaintiffs’ claims arise out of a
contract-based consumer transaction, not a corporate competitor business context. (See Am.
Compl. ¶¶ 6, 9; see also Pls.’ Opp’n at 19.) Accordingly, Plaintiffs’ recovery is limited to
Plaintiffs have satisfied the first two prongs of a FDUTPA claim. As discussed above,
Plaintiffs have alleged that Huston, acting on behalf of Defendant, engaged in a deceptive act by
making false statements about the TempSure System to induce Plaintiffs into financing it.
However, Plaintiffs have failed to plead actual damages. Plaintiffs allege that they cancelled

patient appointments, paid staff for training that never occurred, hired an electrician to make
modifications to their office to accommodate the equipment that they could never use, (Am.
Compl. ¶¶ 62, 64), and that they “did not receive the benefit of the bargain,” (id. at ¶ 91; Pls.’
Opp’n 20). The costs Plaintiffs incurred in anticipation of utilizing the TempSure System are not
actual damages that are recoverable under the FDUTPA. See Dorestin v. Hollywood Imports,
Inc., 45 So. 3d 819, 824–25 (Fla. Dist. Ct. App. 2010) (“The [FDUTPA] does not allow the
recovery of other damages, such as consequential damages.” (citing Fort Lauderdale Lincoln
Mercury, Inc. v. Corgnati, 715 So. 2d 311 (Fla. Dist. Ct. App. 1998); Casa Dimitri Corp. v.
Invicta Watch Co. of Am., Inc., 270 F. Supp. 3d 1340, 1352 (S.D. Fla. 2017) (“Lost profits are a
‘quintessential example’ of consequential damages [and] ‘harm in the manner of competitive

harm, diverted or lost sales, and harm to the goodwill and reputation’ are consequential
damages.” (first quoting BPI Sports, LLC v. Labdoor, Inc., No. 15-CV-62212, 2016 WL 739652,

“damages attributable to the diminished value of the goods or services received.” Fort
Lauderdale Lincoln Mercury, Inc. v. Corgnati, 715 So. 2d 311, 314 (Fla. Dist. Ct. App. 1998);
see also Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084, 1098 (11th Cir. 2021) (“FDUTPA
‘does not provide for the recovery of nominal damages, speculative losses, or compensation for
subjective feelings of disappointment.’” (quoting City First Corp. v. Barton, 988 So. 2d 82, 86
(Fla. Dist. Ct. App. 2008))); Wound Care Concepts, Inc. v. Vohra Health Servs., P.A., No.
19-CV-62078, 2022 WL 320952, at *18 (S.D. Fla. Jan. 28, 2022) (“Lost profits, competitive
harm, lost sales, and harm to goodwill or reputation are deemed consequential damages which
are ineligible to establish actual damages under a FDUTPA claim.” (citing Casa Dimitri Corp. v.
Invicta Watch Co. of Am., 270 F. Supp. 3d 1340, 1344 (S.D. Fla. 2017))); GE Transp. Parts,
LLC v. Cent. Ry. Mfg., LLC, No. 19-CV-4826, 2021 WL 827146, at *4–5 (S.D.N.Y. Mar. 4,
2021) (dismissing FDUTPA claim because only lost profits were requested and lost profits are
not allowable under FDUTPA).
at *6 (S.D. Fla. Feb. 25, 2016); and then quoting Krupa v. Platinum Plus, LLC, No. 16-CV-3189,
2017 WL 1050222, at *7 (M.D. Fla. Mar. 20, 2017))). In addition, while Florida courts have
recognized that a “benefit of the bargain” allegation may constitute actual damages, see
Carriuolo, 823 F.3d at 986, Plaintiffs have not pled enough information in the Amended

Complaint as to what the bargain was for the TempSure System. See St. Francis Holdings, LLC
v. Pawnee Leasing Corp., No. 20-CV-1101, 2020 WL 6287684, at *7 (M.D. Fla. Oct. 27, 2020)
(dismissing FDUTPA claim because “Plaintiffs have not pled enough information as to what the
‘bargain’ is”); Emondson v. 2001 Live, Inc., No. 16-CV-3243, 2017 WL 10085029, at *2 (M.D.
Fla. July 25, 2017) (dismissing FDUTPA claim because plaintiff pled only conclusory
allegations of actual damages).
Accordingly, the Court grants Defendant’s motion as to Plaintiffs’ FDUTPA claims.
f. Plaintiffs sufficiently allege a claim for rescission
Defendant argues that Plaintiffs cannot seek rescission of the Finance Agreement against
it because Defendant assigned the Finance agreement to Amur. (Def.’s Mem. at 20.) In

addition, Defendant argues that even if the Court finds that Plaintiffs can seek rescission of the
Finance Agreement against Defendant, Plaintiffs’ claim nevertheless fails because it is premised
on Plaintiffs’ claim for fraudulent inducement and Plaintiffs fail to state a cause of action for
fraud. (Id. at 21.)
Plaintiffs contend that they have pled their fraudulent inducement and FDUTPA claims
with specificity and therefore their rescission claim must proceed. (Pls.’ Opp’n at 21.) In
support, Plaintiffs rely on Huston’s misrepresentations and their attempts to rescind the Finance
Agreement and return the TempSure System. (Id.; see also Am. Compl. ¶¶ 68–70.) In addition,
Plaintiffs allege that their failed attempts to return the TempSure System demonstrate that they
do not have an adequate remedy at law to be made whole. (Id.)
“[R]escission of [a] contract [is] an ‘extraordinary remedy’ that is generally unavailable
under New York law.” Shane Campbell Gallery, Inc. v. Frieze Events, Inc., 441 F. Supp. 3d 1, 5

(S.D.N.Y. 2020) (quoting Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 143 (2d Cir. 2000));
Courchevel 1850 LLC v. Espinosa, No. 17-CV-799, 2020 WL 635498, at *4 (S.D.N.Y. Feb. 11,
2020), aff’d sub nom. Courchevel 1850 LLC v. Wisdom Equities LLC, 846 F. App’x 33 (2d Cir.
2021); see Pyskaty v. Wide World of Cars, LLC, 856 F.3d 216, 227 (2d Cir. 2017) (“Because it is
an equitable remedy, rescission is available only if damages would not be a ‘complete and
adequate’ remedy and ‘the status quo may be substantially restored’ by equitable relief.”
(quoting Rudman v. Cowles Commc’ns, Inc., 30 N.Y.2d 1, 13 (1972)); Coscarelli v. ESquared
Hosp. LLC, No. 18-CV-5943, 2021 WL 5507034, at *5 (S.D.N.Y. Nov. 24, 2021) (recognizing
that “[r]escission is an equitable remedy through which a party to a contract can seek the
unilateral unmaking of [the] contract” (alterations in original)); Empire Outlet Builders LLC v.

Constr. Res. Corp. of New York, 97 N.Y.S.3d 68, 69 (N.Y. App. Div. 2019) (recognizing that
“the equitable remedy of rescission is not available where there is an adequate legal remedy”
(citing Lantau Holdings Ltd. v. General Pac. Grp. Ltd., 81 N.Y.S.3d 384 (N.Y. App. Div.
2018))). “The elements of a claim for rescission based on fraud are misrepresentation,
concealment or nondisclosure of a material fact; an intent to deceive; and an injury resulting
from justifiable reliance by the aggrieved party.” Allen v. WestPoint-Pepperell, Inc., 945 F.2d
40, 44 (2d Cir. 1991) (citing Nat’l Union Fire Ins. Co. v. Walton Ins. Ltd., 696 F. Supp. 897, 902
(S.D.N.Y. 1988)); New Paradigm Software Corp. v. New Era of Networks, Inc., 107 F. Supp. 2d
325, 329 (S.D.N.Y. 2000) (“In order to justify the remedy of rescission, ‘a party must allege
fraud in the inducement of the contract; failure of consideration; an inability to perform the
contract after it is made; or a breach in the contract which substantially defeats the purpose
thereof.’” (quoting Mina Inv. Holdings Ltd. v. Lefkowitz, 16 F. Supp. 2d 355, 362 (S.D.N.Y.
1998))); see also Perlbinder v. Vigilant Ins. Co., 141 N.Y.S.3d 141, 146 (N.Y. App. Div. 2021)

(“Generally, a party’s unilateral mistake is a ground for rescission of a contract only where it was
induced by fraud or other wrongful conduct by the other party.”) (collecting cases); Channel
Master Corp. v. Aluminium Ltd. Sales, Inc., 4 N.Y.2d 403, 406 (1958).
Plaintiffs have adequately pled a claim for rescission based on their claim for fraudulent
inducement. As explained above, Plaintiffs have sufficiently alleged facts to support their claim
that Huston, acting on behalf of Defendant, intentionally induced Plaintiffs to execute the
Finance Agreement and based on his false statements of material fact, Plaintiffs executed the
Finance Agreement and were injured. Thus, Plaintiffs have properly established fraud as a
ground for rescission. See Robinson v. Sanctuary Rec. Grps., Ltd., 826 F. Supp. 2d 570, 575
(S.D.N.Y. 2011) (“Rescission is used as a remedy in limited circumstances [including] fraud in

the inducement of the contract . . .”).
Accordingly, the Court denies Defendant’s motion to dismiss Plaintiffs’ rescission claim.
g. Plaintiffs abandoned their civil conspiracy claim

Defendant argues that Plaintiffs fail to state a claim for civil conspiracy because they
have not established an underlying tort that the parties have conspired to commit. (Def.’s Mem
at 21–22.)
Plaintiffs have not addressed Defendant’s arguments to dismiss their civil conspiracy
claim in their opposition briefing and, in their motion to amend the Amended Complaint,
Plaintiffs state that they plan to eliminate the civil conspiracy claim in a second amended
complaint. (Pls.’ Mot. at 4.)
Accordingly, the Court finds that Plaintiffs have abandoned this claim. See BYD Co. Ltd.
v. VICE Media LLC, 531 F. Supp. 3d 810, 821 (S.D.N.Y. Mar. 31, 2021) (“Plaintiffs’ failure to

oppose [d]efendants’ specific argument in a motion to dismiss is deemed waiver of that issue.”
(quoting Kao v. Brit. Airways, PLC, No. 17-CV-232, 2018 WL 501609, at *5 (S.D.N.Y. Jan. 19,
2018))); MYL Litig. Recovery 1 LLC v. Mylan N.V., No. 19-CV-1799, 2020 WL 1503673, at *7
(S.D.N.Y. Mar. 30, 2020) (“[The plaintiff] has failed to respond to this argument in its
opposition. Accordingly, any argument opposing [the defendant’s] position here is waived.”
(citing Kao, 2018 WL 501609, at *5)); Levy v. Maggiore, 48 F. Supp. 3d 428, 452 (E.D.N.Y.
2014) (“Plaintiff does not respond to this argument and the [c]ourt therefore construes Plaintiff's
failure to respond as an abandonment of this claim.”); see also Jackson v. Fed. Express, 766 F.3d
189, 196 (2d Cir. 2014) (“Generally, but perhaps not always, a partial response reflects a
decision by a party’s attorney to pursue some claims or defenses and to abandon others.

Pleadings often are designed to include all possible claims or defenses, and parties are always
free to abandon some of them.”).
h. Leave to amend
Defendant argues that the Court should deny Plaintiffs leave to file a second amended
complaint. In support, Defendant claims that any amendment would be “fatally flawed” because
all of Plaintiffs’ claims are predicated on agency and there is no agency relationship. (Def.’s
Reply and Opp’n at 8.) In addition, Defendant argues that the “hell or high water clause” in the
Finance Agreement bars all of Plaintiffs claims, (id. at 9), and it “absolute[ly] and
unconditional[ly]” requires Plaintiffs to make payment regardless of any defenses, (id.; Def.’s
Mem. at 17–19).14
Plaintiffs request an opportunity to amend the Amended Complaint in order to assert
specific claims against Defendant, streamline the allegations, and address issues with the

sufficiency of its allegations. (Pls.’ Mot. at 4.) Plaintiffs argue that leave is particularly
necessary because Cynosure and Pawnee are not before the Court. (Id.) In addition, Plaintiffs
contend that Defendant would not suffer prejudice as the case is still in its early stages and
discovery has not commenced, and the proposed second amended complaint is premised on the
same underlying facts. (Id.) Therefore, the proposed pleading would not unnecessarily expand
the scope of discovery or delay the progress of the litigation. (Id.)
Rule 15 of the Federal Rules of Civil Procedure provides that “[l]eave to amend should
be ‘freely give[n] . . . when justice so requires,’ but ‘should generally be denied in instances of
futility, undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by
amendments previously allowed, or undue prejudice to the non-moving party[.]’” United States

ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 28 (2d Cir. 2016) (second and third alterations in
original) (citation omitted) (first quoting Fed. R. Civ. P. 15(a)(2); and then quoting Burch v.
Pioneer Credit Recovery, Inc., 551 F.3d 122, 126 (2d Cir. 2008)); see also Kainz v. Bernstein,
841 F. App’x 249, 253 (2d Cir. 2020) (noting that leave to amend should be freely given).
The Court grants Plaintiffs leave to amend the Amended Complaint. See Woo Hee Cho
v. Oquendo, No. 16-CV-4811, 2018 WL 9945701, at *12 (E.D.N.Y. Aug. 25, 2018) (“When a

14 The clause Defendant relies on states that “[Plaintiffs’] obligation to pay all amounts
hereunder is non-cancellable, absolute, and unconditional and will not be subject to any
reduction, setoff, defense, counterclaim, deferment or recoupment for any reason, even if the
[TempSure System] is damaged, destroyed or defective.” (Disclaimer of Warranties and
Claims, Finance Agreement at 2.)
motion to dismiss is granted, the usual practice is to grant leave to amend the complaint.”
(quoting Hayden v. County of Nassau, 180 F.3d 42, 53 (2d Cir. 1999))); Caren v. Collins, 696 F.
App’x 19, 22 (2d Cir. 2017) (“[D]ismissals for insufficient pleadings are ordinarily with leave to
replead.”); see also Cotiviti, Inc. v. Deagle, 501 F. Supp. 3d 243, 264 (S.D.N.Y. 2020) (sua

sponte granting leave to file a second amended complaint where plaintiff could provide missing
facts necessary to support its claims); Hitachi Data Sys. Credit Corp, No. 17-CV-6851, 2019 WL
3802178, at *4 (S.D.N.Y. Aug. 13, 2019) (recognizing that fraud constitutes an exception to the
otherwise enforceable “hell or high water” clause).
Any second amended complaint must be filed within thirty days of the date of this
Memorandum and Order. A second amended complaint will completely replace the Amended
Complaint and must stand on its own without reference to the Amended Complaint and must
contain all of the claims Plaintiff seeks to pursue. The second amended complaint must be
captioned “Second Amended Complaint” and bear the same docket number as this Memorandum
and Order. If Plaintiffs elect not to file a second amended complaint or fails to file a second

amended complaint within thirty days of this Memorandum and Order, the Court will direct the
Clerk of Court to enter judgment dismissing the Amended Complaint for the reasons stated
above.
III. Conclusion
Accordingly, the Court grants Defendant’s motion to dismiss in part and denies it in part.
The Court grants the motion as to Plaintiff’s FDUTPA and civil conspiracy claims and denies the
motion as to Plaintiffs’ fraudulent inducement and rescission claims. The Court grants Plaintiffs

leave to file a second amended complaint within thirty days of the date of this Memorandum and
Order. Plaintiffs’ fraudulent inducement and rescission claims may proceed to discovery.
Dated: March 31, 2022
Brooklyn, New York
SO ORDERED:

s/ MKB
MARGO K. BRODIE
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10307822. Public record. Not legal advice.