Kalaj v. Kay

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

------------------------------------x

JUSTINA KALAJ and ANNA KALAJ,

Plaintiffs, MEMORANDUM & ORDER

21-CV-4395(EK)(JRC)

-against-

JOYCE P. KAY, EUNICE TOH-KAY, GLENN

KAY, and JPKJJ HOLDINGS INC.,

Defendants.

------------------------------------x

ERIC KOMITEE, United States District Judge:

Justina Kalaj and Anna Kalaj brought this action

against Joyce P. Kay, Eunice Toh-Kay, Glenn Kay,1 and JPKJJ

Holdings Inc. The plaintiffs allege that the defendants wronged

them in two primary ways: first, Eunice and Joyce induced

Justina to consult for the defendants’ swimsuit merchandise

venture but never compensated her. Second, the plaintiffs

allege that all defendants schemed to “lure” them to invest in

the defendants’ personal protective equipment (PPE) venture, but

then “purloined” that capital for their own “personal benefit

and financial gain.”

Both plaintiffs sued for breach of contract,

conversion, fraud, fraudulent inducement, unjust enrichment, and

violation of Section 349 of New York’s General Business Law.

1 For clarity, this Order will refer to Justina Kalaj, Anna Kalaj, Joyce

P. Kay, Eunice Toh-Kay, and Glenn Kay by their first names.

In response, Joyce and Glenn have now moved to dismiss

for lack of personal jurisdiction, and all defendants have moved

to dismiss for failure to state a claim.

For the following reasons, the motion to dismiss for

lack of personal jurisdiction is denied, and the motion to

dismiss for failure to state a claim is granted.

I. Background

The following recitation is taken from the Amended

Complaint and from a subsequent declaration from Justina Kalaj.2

A. The Swimwear Venture

From “the end of 2018 to the beginning of 2019,” id.

¶ 8, the defendants “enticed” Justina into providing consulting

services to support their launch of a swimwear line. Id. ¶¶ 8–

9. Anna Kalaj was not involved in the swimwear venture. Thanks

to Justina’s consulting, Eunice, Glenn and Joyce profited,

shipping swimsuit merchandise “all over the world.” Justina

Decl. ¶¶ 8–9. Although Eunice and Glenn “repeatedly promis[ed]”

2 The plaintiffs attached a declaration from Justina to their opposition

brief, Decl. of Justina Kalaj (“Justina Decl.”), ECF No. 28–1, and

“respectfully request[ed]” that it “be made part of the complaint.” Pls.’

Mem. Opp. Mot. Dismiss (“Pls.’ Mem.”) 1 n.2, ECF No. 28. The plaintiffs

later submitted a letter “respectfully request[ing] that the Court accept

[Justina’s] Declaration as part of a Second Amended Complaint.” Pls.’ Letter

1, ECF No. 36. To “save time and a needless waste of resources,” I will

“deem the pleadings amended to incorporate the allegations . . . contained in

the [Justina] Declaration.” New York v. Shore Realty Corp., 648 F. Supp.

255, 262 (E.D.N.Y. 1986).

Unless otherwise noted, when quoting judicial decisions this order

accepts all alterations and omits all citations, footnotes, and internal

quotation marks.

Justina that she would receive “approximately $20,000.00 from

this ‘partnership,’” they never compensated her. Am. Compl.

¶¶ 14–15. The complaint does not specify when or where these

promises were made.

B. The PPE Venture

In or about April 2020, following the start of the

Covid-19 pandemic, Eunice told Justina that the defendants would

“engage in the process of transforming” a “shell corporation”

called JPKJJ into a seller of personal protective equipment, or

PPE. Id. ¶¶ 7, 18, 20.3 To induce both Justina and Anna to

invest, the defendants represented that they had “connections

abroad” that would assist with packing the PPE products and

delivering them to the tri-state area. Am. Compl. ¶¶ 20–21;

Justina Decl. ¶ 16. Justina attests that “[t]he agreement

between all of us were made [sic] sometime in August 2020 with

delivery of products in October 2020.” Justina Decl. ¶ 23. At

the defendants’ request, the plaintiffs wired over $800,000 from

New York to a California account for Eunice, Joyce and Glenn in

a series of transfers. Am. Compl. ¶ 26; Justina Decl. ¶¶ 22,

3 The Amended Complaint refers to JPKJJ as “operated by the individual

defendants,” see id. ¶ 7, but as belonging to Joyce. See id. ¶ 18

(“[D]efendant Joyce had an existing business, defendant JPKJJ . . . .”).

24.4 The transfers occurred over “several months in 2020.” Am.

Compl. ¶ 23.

The plaintiffs allege that the defendants had no

intention of adhering to their representations. Id. ¶ 22. The

PPE supplier had “no capabilities to produce the items that the

Plaintiff’s [sic] investment had promised.” Id. ¶ 29. Although

Joyce, through JPKJJ, leased warehouses in New York and New

Jersey, the defendants filled the warehouses with “faulty” PPE

products that were of no use in the United States. Id. ¶¶ 30–

31. Moreover, “[i]nstead of investing the funds into the

business venture of PPE on behalf of plaintiff as promised by

defendants, defendants purloined the funds for their own

personal benefit and financial gain.” Id. ¶ 24; see Justina

Decl. ¶ 24. Justina claims that the defendants transferred

money to “their family member and associates in Southeast Asia,”

and says she “believe[s]” that “investment was indeed flowing

4 Confusingly, the Amended Complaint’s introduction states that the suit

is being brought by “Plaintiff Justina Kalaj on behalf of herself and Anna

Kalaj,” and defines that phrase by the singular term “Plaintiff.” Sprinkled

throughout the complaint, however, are references to Plaintiff that are

clearly singular in nature. And to add to the confusion, the complaint also

deploys the phrase “Plaintiff Justina” from time to time. See, e.g., Am.

Compl. ¶¶ 9, 36. The Amended Complaint also evidences a decided lack of

clarity regarding which plaintiffs assert which claims.

Nevertheless, the Justina Declaration, which I have deemed incorporated

into the plaintiffs’ pleading, provides allegations pertaining to each

plaintiff that are at least sufficient to justify their joinder in this

action. See Fed. R. Civ. P. 20(a)(1)(A) (allowing joinder of plaintiffs who,

as here, “assert any right to relief jointly, severally, or in the

alternative with respect to or arising out of the same transaction,

occurrence, or series of transactions or occurrences”).

back to” the defendants in the United States. Justina Decl.

¶ 29. Justina does not say why she believes this.

The plaintiffs filed this suit in August 2021,

alleging breach of contract, conversion, fraud, fraudulent

conveyance, and violation of Section 349 of New York’s General

Business Law. Compl., ECF No. 3. They amended the Complaint on

November 29, 2021, adding a claim for unjust enrichment. Am.

Compl. The Court denied the plaintiffs’ requested leave to

amend a second time to add two new plaintiffs. See Mem. &

Order, ECF No. 26. On February 22, 2022, the defendants filed

the instant motions. Defs.’ Mot. Dismiss, ECF No. 27.5 I held

oral argument, Hr’g Tr., ECF No. 38, after which I received

supplemental letter briefs from both parties. Pls.’ Letter, ECF

No. 36; Defs.’ Letter, ECF No. 37.

II. Legal Standards

Prior to discovery, a plaintiff may defeat a Rule

12(b)(2) motion by “pleading in good faith legally sufficient

allegations of jurisdiction. At that preliminary stage, the

plaintiff’s prima facie showing may be established solely by

allegations.” Ball v. Metallurgie Hoboken-Overpelt, S.A., 902

F.2d 194, 197 (2d Cir. 1990). The court “construe[s] the

pleadings and affidavits in the light most favorable to

5 The plaintiffs withdrew the fraudulent conveyance claim in their

memorandum in opposition to the motions to dismiss. Pls.’ Mem. 9.

plaintiffs, resolving all doubts in their favor.” Dorchester

Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 85 (2d Cir.

2013).

On a motion to dismiss under Federal Rule of Civil

Procedure 12(b)(6), “the court’s task is to assess the legal

feasibility of the complaint.” Lynch v. City of New York, 952

F.3d 67, 75 (2d Cir. 2020). In doing so, the court “must take

all facts alleged in the complaint as true and draw all

reasonable inferences in favor of [the] plaintiff[s].” Morrison

v. Nat’l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008),

aff’d, 561 U.S. 247 (2010). To survive a motion to dismiss, a

complaint must contain “sufficient factual matter, accepted as

true, to state a claim to relief that is plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Courts “are not

bound to accept as true a legal conclusion couched as a factual

allegation,” and “[t]hreadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not

suffice.” Id.

III. Discussion

A. Joyce and Glenn’s Motion to Dismiss for Lack of Personal

Jurisdiction is Denied

I consider the defendants’ jurisdictional argument

first. See Arrowsmith v. United Press Int’l, 320 F.2d 219, 221

(2d Cir. 1963). Personal jurisdiction over a non-resident

defendant is governed by the law of the forum state, subject to

constitutional limitations of due process. Henderson v. INS,

157 F.3d 106, 123 (2d Cir. 1998); see Fed. R. Civ. P. 4(k).

Thus, the inquiry is a “two-part analysis.” Bank Brussels

Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d

Cir. 1999). First, New York State law must provide personal

jurisdiction over Joyce and Glenn. Whitaker v. Am. Telecasting,

Inc., 261 F.3d 196, 208 (2d Cir. 2001). If it does, the

exercise of personal jurisdiction must comport with due process.

Daimler AG v. Bauman, 571 U.S. 117, 126 (2014).

While the plaintiffs may establish their prima facie

showing “solely by allegations,” Ball, 902 F.2d at 197, “all

pertinent documentation submitted by the parties may be

considered in deciding the motion.” Pilates, Inc. v. Pilates

Inst., Inc., 891 F. Supp. 175, 178 n.2 (S.D.N.Y. 1995). Here,

the plaintiffs’ allegations, the attestations in Justina’s

declaration, and the statements in plaintiffs’ opposition brief

are sufficient to satisfy the requirements of both New York law

and due process.

1. The Court Has Specific Personal Jurisdiction Under

N.Y. C.P.L.R. § 302(a)(1)

The complaint states that Joyce and Glenn are subject

to specific personal jurisdiction under Section 302(a)(1) and

(a)(3) of New York’s Civil Practice Law and Rules. Am. Compl.

¶¶ 32-33; see also Pls.’ Mem. 12-13, ECF No. 28.

Pursuant to Section 302(a)(1), a court may exercise

personal jurisdiction over an out-of-state defendant who, “in

person or through an agent,” (1) “transacts any business within

the state” or (2) “contracts anywhere to supply goods or

services in the state.” N.Y. C.P.L.R. § 302(a)(1). “This

subsection thus has two prongs, either of which can form a basis

for the exercise of personal jurisdiction over a non-

domiciliary.” Bank Brussels, 171 F.3d at 786. To invoke this

section, “the claim asserted must arise from [the New York-

connected] business activity.” Solé Resort, S.A. de C.V. v.

Allure Resorts Mgmt., LLC, 450 F.3d 100, 103 (2d Cir. 2006)

(citing N.Y. C.P.L.R. § 302(a)). As elaborated further below,

Joyce and Glenn transacted business within New York, and the

plaintiffs’ claims arise from that business activity, so Section

302(a)(1) allows personal jurisdiction.

Transacted business within the state. Joyce and Glenn

contend that they did not transact business in New York because

(1) the swimwear consultancy arrangement “occurred entirely in

California,” and (2) they had minimal, if any, involvement in

both the swimwear and PPE ventures. Defs.’ Reply Supp. Mot.

Dismiss 6-8, ECF No. 29. However, for purposes of a Rule 12(b)

motion to dismiss, the court resolves all factual disputes in

favor of the plaintiffs. See Baron Philippe de Rothschild, S.A.

v. Paramount Distillers, Inc., 923 F. Supp. 433, 435–436

(S.D.N.Y. 1996). Accepting the complaint’s allegations as

true, the plaintiffs have sufficiently alleged that Joyce and

Glenn transacted business in New York within the meaning of

Section 302(a)(1).

A defendant’s purposeful creation of a continuing

business relationship with a New York party grants New York

courts personal jurisdiction. See, e.g., Fischbarg v. Doucet,

880 N.E.2d 22, 26 (N.Y. 2007) (New York courts had jurisdiction

over a California company that hired a New York attorney by

phone and repeatedly communicated with him for over nine

months). This is true even when a defendant never physically

enters the state, because the growth of the national market and

technological advances in communication “enable a party to

transact enormous volumes of business within a state without

physically entering it.” Deutsche Bank Sec., Inc. v. Mont. Bd.

of Invs., 850 N.E.2d 1140, 1142-43 (N.Y. 2006).

A defendant’s communications with a New York resident

suffice to establish personal jurisdiction if the defendant

“projected himself” into some transaction with a “center of

gravity” inside New York. Wilhelmshaven Acquisition Corp. v.

Asher, 810 F. Supp. 108, 112 (S.D.N.Y. 1993) (citing N.Y.

C.P.L.R. § 302(a)(1)); see also Roxx Allison Ltd. v. Jewelers

Inc., 385 F. Supp. 3d 377 (S.D.N.Y. 2019) (exercising personal

jurisdiction where New York was “at least one center of gravity

of the transactions at issue”). For example, calling from

California into an auction in New York sufficed for personal

jurisdiction under the first prong of Section 302(a)(1). See

Parke-Bernet Galleries, Inc. v. Franklyn, 256 N.E.2d 506, 507-08

(N.Y. 1970). Even where a party “has no offices [in New York],

conducted no meetings with the plaintiff here, and its agents

purportedly have not visited the State,” that party’s

transaction may have a “center of gravity” in New York. Caronia

v. Am. Reliable Ins. Co., 999 F. Supp. 299, 304 (E.D.N.Y. 1998)

(insuring New York horse from out of state satisfied Section

302(a)(1)).

The plaintiffs adequately allege that Joyce and Glenn

transacted business in New York within the meaning of Section

302(a)(1). Joyce and Glenn’s alleged interactions are more

substantial than those of the defendant in Parke-Bernet, for

example, who merely called into a New York auction but was

nevertheless subject to personal jurisdiction in New York.

Parke-Bernet, 256 N.E.2d at 508.

With respect to the swimwear venture, the plaintiffs

allege that Joyce and Glenn engaged with Justina regularly in

the venture from 2018 through 2019. Justina Decl. ¶ 2.

Specifically, the complaint alleges that Justina consulted on

phone calls, emails and text messages while Justina was in New

York, Am. Compl. ¶¶ 11-12, though Justina also worked with Joyce

and Eunice in person at their home and Justina’s hotel in

California. Justina Decl. ¶ 4. Glenn (with Eunice) “travelled

to New York City and displayed the swim[wear] line at the Conrad

Hotel in Manhattan.” Id. ¶ 6. The swimwear venture therefore

amounted to the transaction of business within New York state

under Section 302(a)(1).

As for the PPE venture, Glenn is alleged to have

reached out to Justina via text, phone and email when starting

the venture, while Joyce rented several warehouses in New York

and paid rent on these warehouses both personally and through

JPKJJ. Pls.’ Mem. 12; Am. Compl. ¶ 30. The plaintiffs further

state that both Joyce and Glenn knew the PPE products would be

shipped to and sold in New York. Pls.’ Mem. 12; see Caronia,

999 F. Supp. at 304 (finding insurance transaction had a “center

of gravity” in New York in part because “the insured was known

by the defendant to be a New Yorker”). Thus, the PPE

transaction, too, had a “center of gravity” in New York.

Accordingly, for both ventures, Justina alleges that Joyce and

Glenn established a prolonged relationship with Justina, a New

York resident, through repeated, purposeful communications, and

thus are subject to personal jurisdiction under the first prong

of Section 302(a)(1). See Fischbarg, 880 N.E.2d at 26.

Because Plaintiffs satisfy the first prong of Section

302(a)(1), I need not discuss the second prong. See Bank

Brussels, 171 F.3d at 786.

“Arising from” the business activity. The claims

against Joyce and Glenn concern their alleged failure to provide

compensation for Justina’s services — services rendered, as

noted above, in substantial part from New York — and failure to

deliver promised profits. The defendants do not dispute that

these claims arise out of Joyce and Glenn’s business

transactions in New York, i.e. that there is “an articulable

nexus . . . between the claim[s] asserted and the actions that

occurred in New York.” Best Van Lines, Inc. v. Walker, 490 F.3d

239, 246 (2d Cir. 2007). Accordingly, the plaintiffs have

satisfied Section 302(a)(1).

Because there is personal jurisdiction over Joyce and

Glenn pursuant to Section 302(a)(1), “it is unnecessary” to

consider the plaintiffs’ Section 302(a)(3) argument. Gianino v.

Panacya, Inc., No. 00–CV–584, 2000 WL 1224810, at *7 (S.D.N.Y.

Aug. 29, 2000).

2. The Exercise of Personal Jurisdiction Here Comports

with Constitutional Due Process

Due process requires that a defendant have “certain

minimum contacts with [the forum] such that the maintenance of

the suit does not offend traditional notions of fair play and

substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S.

310, 316 (1945). To exercise jurisdiction over a defendant that

is not “at home” in a forum — i.e., specific, rather than

general, jurisdiction — “the defendant must have deliberately

“reached out beyond its home” by, for example, “entering a

contractual relationship centered” in the forum. Ford Motor Co.

v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1025 (2021).

Moreover, the plaintiff’s claims “must arise out of or relate to

the defendant’s contacts with the forum.” Id.

In addition, the exercise of jurisdiction must comport

with “traditional notions of fair play and substantial justice.”

Int’l Shoe, 326 U.S. at 316. The following factors govern this

inquiry:

(1) the burden that the exercise of jurisdiction will

impose on the defendant; (2) the interests of the forum

state in adjudicating the case; (3) the plaintiff’s

interest in obtaining convenient and effective relief; (4)

the interstate judicial system’s interest in obtaining the

most efficient resolution of the controversy; and (5) the

shared interest of the states in furthering substantive

social policies.

Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568

(2d Cir. 1996) (citing Asahi Metal Indus. Co. v. Superior Ct.,

480 U.S. 102, 113-14 (1987)).

Exercise of personal jurisdiction over Joyce and Glenn

comports with due process. While “personal jurisdiction

permitted under [New York’s] long-arm statute may theoretically

be prohibited under due process analysis,” the Second Circuit

“would expect such cases to be rare.” Eades v. Kennedy, PC L.

Offs., 799 F.3d 161, 168 (2d Cir. 2015); see also D & R Glob.

Selections, S.L. v. Bodega Olegario Falcon Pineiro, 78 N.E.3d

1172, 1177 (N.Y. 2017) (same for New York Court of Appeals).

With respect to Section 302(a)(1), “[i]t would be unusual,

indeed, if a defendant transacted business in New York and the

claim asserted arose from that business activity within the

meaning of section 302(a)(1), and yet, in connection with the

same transaction of business, the defendant” had a due process

right not to be hauled into the New York courts. Licci ex rel.

Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 170 (2d Cir.

2013).

Given the extensive contacts discussed above, the

plaintiff’s allegations of purposeful business activities by

out-of-state defendants Joyce and Glenn satisfy the minimum

contacts analysis. See Chloe v. Queen Bee of Beverly Hills,

LLC, 616 F.3d 158, 172 (2d Cir. 2010) (“[b]ecause . . . [the

defendant] ha[d] purposefully availed himself of the benefits of

the New York forum,” constitutional test was satisfied).

Moreover, personal jurisdiction here comports with

fair play and substantial justice. On the first factor,

litigating in New York would not be “so gravely difficult and

inconvenient” for Joyce and Glenn that they “unfairly [are] at a

severe disadvantage.” Burger King, 471 U.S. at 478. Although

Joyce and Glenn reside in California, “the conveniences of

modern communication and transportation ease” any burden that

might impose on them. Kernan v. Kurz-Hastings, Inc., 175 F.3d

236, 244 (2d Cir. 1999) (New York specific jurisdiction over

Japanese indemnitor satisfied due process). On the second and

third factors, New York has a “manifest interest in providing

effective means of redress for its residents.” Burger King, 471

U.S. at 483. On the fourth factor, even if Joyce and Glenn were

dismissed, Eunice and JPKJJ would still proceed to trial with

evidence and witnesses from California (in Eunice’s case, trial

regarding both the swimsuit and PPE claims); thus the refusal to

exercise jurisdiction here would produce no meaningful

efficiency gains. Finally, the fifth factor “is not a major

issue here” because Joyce and Glenn “fail to offer a persuasive

social policy that would counsel against exercising jurisdiction

in this case.” Sea Tow Servs. Int’l, Inc. v. Pontin, 472 F.

Supp. 2d 349, 362 (E.D.N.Y. 2007). Personal jurisdiction here

is thus consistent with due process.

In sum, the plaintiffs have met their burden, at this

stage, to establish a prima facie case of personal jurisdiction

over Joyce and Glenn. The motion to dismiss for lack of

personal jurisdiction is denied.

B. The Failure to State a Claim

The defendants assert that the complaint fails to

state a claim for (1) breach of contract, (2) fraud and

fraudulent inducement, (3) conversion, (4) violation of General

Business Law Section 349, and (5) unjust enrichment. For the

reasons set forth below, I dismiss all of the plaintiffs’ claims

under Rule 12(b)(6).6

1. Anna Kalaj’s Swimwear Venture Claims

Although the complaint defines the term “Plaintiff” to

include both Justina and Anna, Am. Compl. 1, it contains no

plausible allegation that Anna took part in the swimwear

venture. Because “a plaintiff must establish his or her own

injuries, a plaintiff seeking redress for alleged injuries

inflicted on another person or entity has not established

standing.” Gutterman v. Herzog, No. 20-CV-1081, 2020 WL

6728787, at *4 (E.D.N.Y. Nov. 16, 2020); see also Warth v.

Seldin, 422 U.S. 490, 501 (1975) (to establish constitutional

standing, each plaintiff must allege “a distinct and palpable

injury to himself”). Anna thus lacks standing, on the existing

6 The plaintiffs’ request that I convert the instant motion into one for

summary judgment under Rule 56, see Pls.’ Letter 1, is also denied. When

only one party seeks to convert a motion to dismiss into a motion for summary

judgment prior to discovery by offering material outside the pleadings, a

court may simply decide the motion to dismiss on the pleadings. Access 4

All, Inc. v. Trump Int’l Hotel & Tower Condo., 458 F. Supp. 2d 160, 165

(S.D.N.Y. 2006). Here, the defendants limited their motion to the pleadings

and would be “deprived of a reasonable opportunity to contest facts averred

outside the pleadings” if the motion were converted. Id.

pleadings, to bring any claims related to the swimwear venture,

and I treat all such claims as if they were brought by Justina

alone.

2. Breach of Contract Claims: Legal Standard

The plaintiffs assert that the defendants breached two

contracts: first, an agreement to pay for Justina’s

consultations on the swimwear venture, Am. Compl. ¶ 39; and

second, an agreement “wherein defendants directed the

[p]laintiff[s] to deposit and wire funds as investment” in the

PPE venture. Id. ¶ 41. However, the plaintiffs do not allege

sufficient facts to support a breach of contract claim in either

case.

New York law controls the plaintiffs’ contract claims.

In a diversity case, federal courts apply the choice of law

rules prevailing in the states where they sit. See Klaxon Co.

v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Under New

York’s rules, the first step is to determine whether there is an

actual conflict between the laws invoked by the parties.

Booking v. Gen. Star Mgmt. Co., 254 F.3d 414, 419–420 (2d Cir.

2001). An actual conflict exists when the jurisdictions’

substantive rules differ and the differences have a

“significant” potential to affect the outcome. Fin. One Pub.

Co. v. Lehman Bros. Special Fin., Inc., 414 F.3d 325, 331 (2d

Cir. 2005). “If no actual conflict exists, and if New York is

among the relevant jurisdictions, the court may simply apply New

York law.” Licci, 672 F.3d at 157. Because there is no actual

conflict between New York and California law regarding the

elements of breach of contract claims, New York law applies

here. See Labajo v. Best Buy Stores, L.P., 478 F. Supp. 2d 523,

528 (S.D.N.Y. 2007) (citing Bridgeway Corp. v. Citibank, N.A.,

132 F. Supp. 2d 297, 305 (S.D.N.Y. 2001) and Reichert v. Gen.

Ins. Co., 442 P.2d 377, 381 (Cal. 1968)).7

To state a claim for breach of contract, New York law

requires that a plaintiff allege: (1) a contract; (2)

performance by the plaintiff; (3) breach by the defendant; and

(4) damages. Fischer & Mandell, LLP v. Citibank, N.A., 632 F.3d

793, 799 (2d Cir. 2011). To establish the existence of an

enforceable agreement, the plaintiffs “must establish an offer,

acceptance of the offer, consideration, mutual assent, and an

intent to be bound.” Lamda Sols. Corp. v. HSBC Bank USA, N.A.,

574 F. Supp. 3d 205, 213 (S.D.N.Y. 2021) (quoting Kowalchuk v.

Stroup, 61 A.D.3d 118, 121 (N.Y. App. Div. 1st Dep’t 2009)).

“The manifestation or expression of assent necessary to form a

7 The defendants suggested such a potential conflict only after oral

argument, when they submitted a letter asserting that the statute of

limitations for breach of oral contract claims differs between California and

New York. See Defs.’ Letter 6 (citing Cal. Code Civ. Proc. § 339 and N.Y.

C.P.L.R. § 213(2)). However, those statutes of limitations are not relevant

here, Fin. One, 414 F.3d at 331, because the defendants did not raise them in

their motion to dismiss, as Rule 8(c) requires, and have never suggested they

bar any of the plaintiffs’ claims.

contract may be by word, act, or conduct . . . .” Minelli

Const. Co. v. Volmar Const., Inc., 82 A.D.3d 720, 721 (N.Y. App.

Div. 2d Dep’t 2011).

A complaint “fails to sufficiently plead the existence

of a contract” if it does not provide “factual allegations

regarding, inter alia, the formation of the contract, the date

it took place, and the contract’s major terms, including under

what circumstances Plaintiff could demand payment.” Lim v.

Radish Media Inc., No. 22-1610, 2023 WL 2440160, at *2 (2d Cir.

Mar. 10, 2023) (summary order). “Conclusory allegations that a

contract existed or that it was breached do not suffice.” Lamda

Sols., 574 F. Supp. 3d at 213. Accordingly, a breach of

contract claim “that fails to allege facts sufficient to show

that an enforceable contract existed between the parties is

subject to dismissal.” Fuji Photo Film U.S.A., Inc. v. McNulty,

669 F. Supp. 2d 405, 412 (S.D.N.Y. 2009).

Likewise, the material terms of the contract must be

alleged in non-conclusory fashion. Cobble Hill Nursing Home,

Inc. v. Henry & Warren Corp., 548 N.E.2d 203, 206 (N.Y. 1989)

(agreement whose material terms are not reasonably certain is

not legally enforceable); 28 Glen Banks, New York Contract Law

§ 2:25, at 81 (2d ed. 2017) (same); see also Negrete v.

Citibank, N.A., 187 F. Supp. 3d 454, 468 (S.D.N.Y. 2016), aff’d,

759 F. App’x 42 (2d Cir. 2019) (“A breach of contract claim will

be dismissed . . . where the plaintiff fails to allege, in

nonconclusory fashion, the essential terms of the parties’

purported contract, including the specific provisions of the

contract upon which liability is predicated.”).

3. Justina’s Claim for Breach of the Swimwear Contract

For the swimwear venture, the complaint fails to set

forth the material terms required for an enforceable contract

under New York law. See Cobble Hill, 548 N.E.2d at 206. The

complaint never articulates Justina’s duties as a consultant or

the duration of her consultancy. The complaint even vacillates

on the price term — an obviously material term in a consulting

arrangement. Compare Am. Compl. ¶ 15 (“Eunice and Joyce would

repeatedly promise [Justina] that she would receive

approximately $20,000.00 from this ‘partnership.’”), with id.

¶ 39 (“Eunice and Joyce agreed that plaintiff was owed in excess

of $20,000.00 for her work on the consultancy. . . .”) (emphases

added). And the complaint is silent as to the timing of any

such payments.

Moreover, the complaint similarly fails to allege

formation of any swimwear contract. Justina alleges simply that

the defendants “enticed her to act as a consultant to enter into

an apparel sale type of partnership” and that she “helped Eunice

and Joyce launch the swimsuit line of apparel.” Id. ¶¶ 8-9.

These allegations do not describe an explicit offer or

acceptance with any measure of plausibility. They likewise fail

to establish an implicit offer or acceptance. An implied-in-

fact contract requires the plaintiff to allege “specific

interactions between [the parties] that would establish th[e]

specific terms and demonstrate the parties’ intent to be bound.”

Soley v. Wasserman, 823 F. Supp. 2d 221, 230-31 (S.D.N.Y. 2011)

(no implied-in-fact financial advisory contract where parties

did not agree on specific terms of the arrangement, such as

“what kind of interest, if any” the investor would receive or

“when and how often that interest was to be paid”).

For these reasons, Justina has not sufficiently

alleged the terms of the consultancy contract. A breach of

contract claim “does not meet the Twombly-Iqbal standard and

must be dismissed when the Complaint does not specify which

clause of the Agreement Defendant is alleged to have breached.”

Negrete, 187 F. Supp. 3d at 468. Even where the parties

“believe they are bound, if the terms of the agreement are so

vague and indefinite that there is . . . no means by which such

terms may be made certain, then there is no enforceable

contract.” Candid Prods., Inc. v. Int’l Skating Union, 530 F.

Supp. 1330, 1333-34 (S.D.N.Y. 1982); see also Eaves v. Designs

for Fin., Inc., 785 F. Supp. 2d 229, 258–59 (S.D.N.Y. 2011)

(plaintiffs’ failure to “provide facts regarding any specific

contract between the parties, how or when such contract was

formed, or any terms of the contract at issue” was “fatal” to

the claims); Time, Inc. v. Kastner, 972 F. Supp. 236, 239

(S.D.N.Y. 1997) (declining to enforce a purported agreement that

omitted to state “material terms” such as the “timing or manner”

of performance).

Moreover, the complaint fails to allege that the

agreement was supported by consideration. This failure is a

function of the complaint’s omission to say anything about the

timing of any offer or acceptance in relation to Justina’s

performance. The general rule in New York is that past

consideration is no consideration, because the “the detriment

did not induce the promise.” Samet v. Binson, 122 A.D.3d 710,

711 (N.Y. App. Div. 2d Dep’t); see also Banks, supra, § 2:46, at

114. If the defendants promised to pay $20,000 (or something

like that amount) only after the consultations, the contract

would be unenforceable for lack of consideration.

4. Breach of the PPE Contract

Similarly, with respect to the PPE venture, the

factual allegations are inadequate to show an enforceable

contract. The plaintiffs claim they “entered into an agreement”

pursuant to which the “defendants directed the Plaintiff to

deposit and wire funds as investment into this ‘PPE venture.’”

Am. Compl. ¶ 41. But they say virtually nothing about the form

this investment contract was to take, let alone its key terms.

For example, the plaintiffs do not explain the

allegation that they contracted with the individual defendants

in making this investment, in addition to JPKJJ itself. And the

complaint vacillates on whether the PPE investment comprised one

contract or several. See, e.g., id. ¶ 26 (alleging that the

“over $800,000” in money transfers “were made in smaller amounts

at the request of the defendants to ensure that the Plaintiff

would believe that she was investing in different

opportunities”).

Perhaps even more fundamentally, it is unclear what

kind of investment contract allegedly existed.8 Was it a debt

investment or an equity investment? If the investment was in

the nature of debt — for example a loan — the complaint is

silent about the applicable rate of interest, the timeline for

repayment, and other basic terms. See Red Fort Cap., Inc v.

Guardhouse Prods. LLC, 397 F. Supp. 3d 456, 480 (S.D.N.Y. 2019)

(noting that interest rates and maturity dates are material

terms of a loan agreement). If it was to have been an equity

8 During oral argument, the plaintiffs stated that the alleged

investment was a purchase agreement to buy PPE from the defendants. Hr’g Tr.

33:21-22. But the Amended Complaint does not so characterize the PPE

venture, and “the Court must assume the truth of the factual allegations

stated in the Amended Complaint for purposes of this motion; the [plaintiffs]

may not constructively amend those allegations at oral argument.” United

States v. Int’l Longshoremen’s Ass’n, 518 F. Supp. 2d 422, 430 (E.D.N.Y.

2007). Even if Plaintiffs could, because “a contract for the sale of goods

for the price of $500 or more” is not enforceable unless it is put in

writing, see N.Y. U.C.C. § 2–201(1), an oral contract will not suffice.

investment in JPKJJ, the complaint is silent as to what

percentage interest the plaintiffs were purchasing, the number

of shares, the price per share, and the like. See Benham v.

eCommission Sols., LLC, 118 A.D.3d 605, 607 (N.Y. App. Div. 1st

Dep’t 2014) (“The failure of the parties to agree on the precise

form of the equity stake causes plaintiff’s contract claim to

fail for lack of definiteness in the material terms of her

equity compensation.”). Likewise, if this was to have been a

partnership agreement or a joint venture, then New York law

requires a provision in the agreement for the sharing of both

profits and losses (among other things), and no such provision

is alleged here. See Cleland v. Thirion, 268 A.D.2d 842, 843–44

(N.Y. App. Div. 3d Dep’t 2000) (partnerships); Schnur v. Marin,

285 A.D.2d 639, 640 (N.Y. App. Div. 2d Dep’t 2001) (joint

ventures). “Nor are there any reasonable means for filling in

the missing terms; the intent of the parties simply cannot be

ascertained.” Baker v. Robert I. Lappin Charitable Found., 415

F. Supp. 2d 473, 480, 483–84 (S.D.N.Y. 2006) (finding no

financing contract absent agreement on terms including “the

nature of the investment (whether loan or equity or otherwise);

the time of performance . . . ; the manner of performance

(whether the funds would be paid in a lump sum or installments);

the terms of repayment (if the monies were to be repaid at all);

whether interest would be paid and if so at what rate; [and]

whether [the parties] would share in profits and if so in what

manner and to what extent”).

Given these omissions, the complaint does not

adequately allege a common understanding as to the nature of the

venture or the most basic terms of investment. At bottom,

therefore, the plaintiffs fail to establish the existence of a

contract.

5. Fraud and Fraudulent Inducement

Justina Kalaj brings the complaint’s third cause of

action — for “fraud and fraud in the inducement” in connection

with the PPE venture. Am. Compl. ¶¶ 58-71. “[T]he tort of

fraud is intended to protect a party from being induced to act

or refrain from acting based on false representations . . . .”

Pasternack v. Lab’y Corp. of Am. Holdings, 59 N.E.3d 485, 493

(N.Y. 2016). Fraudulent inducement refers, generally speaking,

to the subcategory of frauds that occur in the process of

persuading another person to enter into an agreement. See 26

Williston on Contracts § 69:3 (4th ed.) (“Fraud in the

inducement occurs when the promisor knows what he is signing but

his consent is induced by fraud.”); accord Gaidon v. Guardian

Life Ins. Co. of Am., 725 N.E.2d 598, 606 (N.Y. 1999).

Justina claims that she was fraudulently induced to

enter into the PPE venture. See Am. Compl. ¶¶ 58-63 (referring

throughout to “Plaintiff,” singular, and setting forth

allegations relating solely to the PPE venture).9 Parties

injured by fraud in the inducement may terminate a contract or,

alternatively, seek damages, as Justina does here. Goldsmith v.

Nat’l Container Corp., 40 N.E.2d 242, 244 (N.Y. 1942).

Fraud and fraudulent inducement claims are subject to

the heightened pleading standard of Federal Rule of Civil

Procedure 9(b). See, e.g., Kamdem-Ouaffo v. Pepsico, Inc., 160

F. Supp. 3d 553, 567 (S.D.N.Y. 2016). Rule 9(b) provides that

“[i]n all averments of fraud or mistake, the circumstances

constituting fraud or mistake shall be stated with

particularity.” Fed. R. Civ. P. 9(b). “[C]onclusory

allegations that defendant’s conduct was fraudulent or deceptive

are not enough.” Decker v. Massey-Ferguson, Ltd., 681 F.2d 111,

114 (2d Cir. 1982). Rule 9(b) requires that a complaint “(1)

specify the statements that the plaintiff contends were

fraudulent, (2) identify the speaker, (3) state where and when

the statements were made, and (4) explain why the statements

were fraudulent.” Mills v. Polar Molecular Corp., 12 F.3d 1170,

1175 (2d Cir. 1993). “Sweeping references to the collective

fraudulent actions of multiple defendants will not satisfy the

9 See supra note 4, regarding the confusion as to which plaintiff

alleges which claims in the Amended Complaint. As noted in this opinion, I

deem certain claims to be asserted by Justina alone. To be clear, however,

Anna’s assertion of those claims would suffer from the same pleading

shortfalls, if she were deemed to be asserting them as well.

particularity requirements of Rule 9(b).” Aetna Cas. & Sur. Co.

v. Aniero Concrete Co., 404 F.3d 566, 579–80 (2d Cir. 2005).

Justina’s allegations fall well short of satisfying

this standard. For one thing, the complaint exhibits the

classic “group pleading” problem. See Luce v. Edelstein, 802

F.2d 49, 54 (2d Cir. 1986) (allegations that “fail to specify

the time, place, speaker, and sometimes even the content of the

alleged misrepresentations, lack the ‘particulars’ required by

Rule 9(b).” (emphasis added)). In the paragraphs specifying the

Third Cause of Action, Justina asserts that “Defendants Eunice

and Glenn agreed with plaintiff that the investment from the

Plaintiff would be used for investment in PPE equipment which

would be available for sale in the tri-state area for a profit.”

Am. Compl. ¶ 59 (inconsistent capitalization of “plaintiff” in

original). That section goes on to allege that “Defendants

Eunice and Glenn induced plaintiff into giving them and

transferring funds at their behest in furtherance of the fraud.”

Id. ¶ 60. As is apparent, the reader gets no particularity

regarding which defendant did the agreeing or inducing in these

passages, let alone what statements they made, where or when

they made them, or why the statements were fraudulent.

The remainder of the complaint (even with the Justina

Declaration appended) does not meaningfully fill these gaps. In

the four-page “Factual Background” section preceding the

individual causes of action, the complaint alleges that the

“Defendants” — again plural — stated that “they had connections

abroad that would facilitate” the investment and falsely assured

Justina that “the investment was progressing properly” with a

qualified supplier. Am. Compl. ¶¶ 20-21, 28-29. These

allegations, too, fail to “specify . . . the speaker.” Luce,

802 F.2d at 54; see Mills, 12 F.3d at 1175 (“Rule 9(b) is not

satisfied where the complaint vaguely attributes the alleged

fraudulent statements to ‘defendants’” without specifying which

of three defendants). Moreover, even assuming Justina could

attribute the same statement to multiple speakers, e.g. Justina

Decl. ¶ 17 (“Eunice and Glenn informed me that they had a

relative in southeast Asia who would assist with the” PPE

venture), she still fails to allege “why” what the speakers said

was false. See Mills, 12 F.3d at 1175. These failures require

dismissal.

Setting aside the Rule 9(b) issues, the fraudulent

inducement claim is insufficient even under Rule 8. The

strongest fraud allegation the plaintiffs have mustered is that

the defendants “had no intentions of adhering to the promises”

they made — that they solicited the funds for their “personal

benefit and financial gain.” Am. Compl. ¶¶ 22, 24-25. Yet the

complaint acknowledges that the defendants actually “leased

warehouse spaces in New York and New Jersey” to store PPE, see

id. ¶ 30, and actually “filled these warehouses with PPE,” id.

¶ 31, even if that equipment was “faulty.” Id.; see also id.

¶ 48 (alleging that the defendants breached the PPE contract

when they “delivered shoddy product” (emphasis added)); id. ¶ 56

(alleging the defendants “delivered defective products”

(emphasis added)). These allegations of actual steps taken to

conduct the PPE venture bely the theory that “none of the

individual defendants intended to follow through on the ‘PPE

venture.’” Id. ¶ 62. The plaintiffs’ own allegations — to the

extent they provide any meaningful factual content at all — more

plausibly suggest that the failure to deliver profits was the

result of operational ineptitude rather than fraud. See In re

Livent, Inc. Noteholders Sec. Litig., 151 F. Supp. 2d 371, 407

(S.D.N.Y. 2001) (“allegations of fraud [that] are internally

self-contradictory” “support defendants’ motions to dismiss.”).

The plaintiffs do posit — albeit in conclusory fashion

— that the defendants rented warehouse space “simply” as “a

ruse” to facilitate the fraud. Am. Compl. ¶ 62; see also id.

¶ 30. But “given [the] more likely explanations” appearing on

the face of the complaint — that the defendants were attempting

to run a PPE venture, albeit unsuccessfully or even

incompetently — “they do not plausibly establish this purpose.”

Iqbal, 556 U.S. at 681. For obvious reasons, the mere fact of a

business failure does not suffice to establish fraud. See

Diesenhouse v. Soc. Learning & Payments, Inc., No. 20-CV-743,

2022 WL 3100562, at *1, 8 (S.D.N.Y. Aug. 3, 2022) (statements

that investors would materialize were not fraudulent under New

York law simply because, in “hindsight,” investors never

materialized); cf. Cox v. Blackberry Ltd., 660 F. App’x 23, 25

(2d Cir. 2016) (“[P]laintiffs’ theory . . . is that because the

release of the [product] ultimately turned out to be a failure,

defendants must have known that it would be a failure and lied

about this fact to investors. [That is] fraud by

hindsight” . . . .). And the complaint simply contains no other

factual content consistent with fraud, apart from the bare

assertion that the defendants never intended to succeed. Under

Twombly and Iqbal, therefore, the complaint does not adequately

allege fraud.10

6. Conversion

Justina Kalaj also asserts a cause of action for

conversion. She levies this claim against “all individual

defendants.” See Am Compl. ¶¶ 51-57. She contends that “[a]ll

individual defendants were to deliver equipment to Plaintiff in

10 The defendants’ alleged statements that “the investment was

progressing properly . . . and·the Plaintiff together with the defendants

would benefit from the investment,” Am. Compl. ¶ 28, are “mere puffery,

opinions of value or future expectations” and not actionable as fraud. Kato

Int’l LLC v. Gerard Fox L., P.C. 195 A.D.3d 516, 516-17 (N.Y. App. Div. 1st

Dep’t) (alleged misrepresentations that rent in a lease was “below market

rate” and that the “premises could be sublet easily” did not support a fraud

claim), leave to appeal dismissed, 178 N.E.3d 933 (N.Y. 2021).

New York for the ‘PPE venture’ but instead delivered defective

products that were rejected by potential buyers and defendants

all kept the money.” Id. ¶ 56. As in her fraudulent inducement

claim, Justina is contending that the defendants presented an

investment opportunity but then simply pocketed her capital.

The defendants thus argue that the conversion claim,

too, “sound[s] in fraud” and must satisfy Rule 9(b). Defs.’

Mem. Supp. Mot. Dismiss 10, ECF 27-1. Whether a claim “sounds

in fraud necessarily requires a case-by-case analysis.” Levy v.

Young Adult Inst., Inc., 103 F. Supp. 3d 426, 442 (S.D.N.Y.

2015). “Generally, a non-fraud claim will sound in fraud if [1]

the claim arose out of events that the pleading describes in

terms of fraud or the pleading includes a claim based on fraud,

and [2] the non-fraud claim incorporates the fraud allegations.”

Id.

The plaintiffs’ conversion claim “rests on an

allegation of fraudulent taking” through the PPE venture “and is

therefore subject to the pleading requirements of Rule 9(b).”

Daly v. Castro Llanes, 30 F. Supp. 2d 407, 414 (S.D.N.Y. 1998).

The plaintiffs premise their conversion claim on an intentional

misrepresentation. See Am. Compl. ¶ 54 (the defendants, “while

knowing no legitimate investments would be made,” “knowingly and

intentionally” demanded that the plaintiffs transfer money).

Thus, “the Plaintiffs brand the Defendants as liars, not

thieves” — even if they do so without adequate factual content

in support — and Rule 9(b) applies. Schwartzco Enterprises LLC

v. TMH Mgmt., LLC, 60 F. Supp. 3d 331, 352 (E.D.N.Y. 2014).

The conversion claim fails the Rule 9(b) particularity

requirement. As discussed above, the plaintiffs’ allegations

fall well short of identifying the roles of each participant in

the fraudulent scheme and providing necessary factual content

about the fraudulent acts. Accordingly, the claim for

conversion is dismissed for failure to satisfy Rule 9(b) and

Rule 8. See supra Section III.B.5; see also Daly, 30 F. Supp.

2d at 414 (dismissing conversion claim sounding in fraud under

Rule 9(b)).

7. Violation of General Business Law Section 349

The plaintiffs also argue that the defendants violated

Section 349 of New York’s General Business Law by

misrepresenting the character of the PPE investment. To state a

claim under Section 349, “a plaintiff must demonstrate that (1)

the defendant’s deceptive acts were directed at consumers, (2)

the acts are misleading in a material way, and (3) the plaintiff

has been injured as a result.” Maurizio v. Goldsmith, 230 F.3d

518, 521 (2d Cir. 2000). The critical question is whether “the

acts or practices have a broad impact on consumers at large.”

Kilgore v. Ocwen Loan Servicing, LLC, 89 F. Supp. 3d 526, 535

(E.D.N.Y. 2015).

The plaintiffs have not alleged that the defendants

directed any conduct at consumers at large. Instead, they argue

that “the agreement between plaintiff and the defendants was

consumer oriented because defendants were to supply PPE

equipment to the public at large.” Pls. Mem. 11. But Justina

is not alleging that the public at large was deceived; instead,

the deceptive business practices at issue were purely private in

nature. The consumer-oriented element precludes a claim based

on “private contract disputes, unique to the parties.”

Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v.

Matthew Bender & Co., Inc., 171 N.E.3d 1192, 1198 (N.Y. 2021);

see also Euchner-USA, Inc. v. Hartford Cas. Ins. Co., 754 F.3d

136, 143 (2d Cir. 2014). As a result, the Section 349 claim

must also be dismissed.

8. Unjust Enrichment: Legal Standard

The plaintiffs additionally bring unjust enrichment

claims based on both ventures. Am. Compl. ¶¶ 80-84. Under New

York law, to prevail on a claim of unjust enrichment, “a party

must show that (1) the other party was enriched, (2) at that

party’s expense, and (3) that it is against equity and good

conscience to permit the other party to retain what is sought to

be recovered.” Citibank, N.A. v. Walker, 12 A.D.3d 480, 481

(N.Y. App. Div. 2d Dep’t 2004), abrogated on other grounds by

Butler v. Catinella, 58 A.D.3d 145 (N.Y. App. Div. 2d Dep’t

2008). Recovery for unjust enrichment “is available only in

unusual situations when, though the defendant has not breached a

contract nor committed a recognized tort, circumstances create

an equitable obligation running from the defendant to the

plaintiff.” Corsello v. Verizon N.Y., Inc., 967 N.E.2d 1177,

1185 (N.Y. 2012). One such unusual situation is when a

plaintiff can establish “(1) the performance of services in good

faith, (2) the acceptance of the services by the person to whom

they are rendered, (3) an expectation of compensation therefor,

and (4) the reasonable value of the services.” Mid-Hudson

Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418

F.3d 168, 175 (2d Cir. 2005). As with fraud and conversion

claims, when an unjust enrichment claim “sounds in fraud,” it

must “satisfy th[e] heightened pleading standard” of Rule 9(b).

MacNaughton v. Young Living Essential Oils, LC, 67 F.4th 89, 99

(2d Cir. 2023).

9. Unjust Enrichment: PPE Venture

With respect to the PPE venture, the unjust enrichment

claim sounds in fraud. It is premised on the same factual

allegations as those supporting the plaintiffs’ fraud and

conversion claims. The plaintiffs offer no additional facts or

arguments to distinguish their unjust enrichment claim from

these claims beyond the conclusory statements that the

defendants “w[ere] unjustly enriched,” Am. Compl. ¶ 89, and

“retained the fruits of” the plaintiffs’ money transfers. Id.

¶ 87. Thus, like the plaintiffs’ fraud and conversion claims,

their unjust enrichment claim regarding the PPE venture must

satisfy Rule 9(b) — and, for the same reasons as those other

claims, the unjust enrichment claim does not. That alone is

grounds to dismiss the unjust enrichment claim.

Even putting the Rule 9(b) issues aside, the PPE

venture unjust enrichment claim is too conclusory to survive a

motion to dismiss. To state an unjust enrichment claim under

New York law, the plaintiffs must allege “how [the defendants]

benefitted from the money” at the “[p]laintiffs’ expense.”

Amusement Indus., Inc. v. Stern, 786 F. Supp. 2d 758, 784

(S.D.N.Y. 2011) (emphasis added). Allegations that defendants

simply “used the money in a variety of unauthorized ways” are

“too vague and conclusory to constitute . . . proper

allegation[s] that [the defendants] themselves received a

benefit” at the plaintiffs’ expense. Id.

Here, the complaint alleges that “Defendants engaged

in [a] sophisticated series of money/wire transfers from the

United States of America into other accounts across the world,

which money then flowed back for the personal benefit and

financial gain for the defendants.” Am. Compl. ¶ 25. There is

no nonconclusory allegation permitting the inference that

whatever money “flowed back” to the defendants actually

“personally benefited” them. Meanwhile, there are

countervailing allegations suggesting that this money was spent

“leas[ing] warehouse spaces” and “fill[ing] th[o]se warehouses

with PPE.” Id. ¶¶ 30-31. Again, “given more likely

explanations,” the conclusion that the defendants benefited at

the plaintiffs’ expense is not plausibly established. Iqbal,

556 U.S. at 681. The PPE venture unjust enrichment claim thus

fails not only to plead with particularity under Rule 9(b), but

also to state a claim, and it is dismissed on both bases. See

Amusement Indus., 786 F. Supp. 2d at 778, 782, 784 (dismissing

unjust enrichment claim for failure to state a claim despite

finding parallel fraud claim satisfied Rule 9(b)).

10. Unjust Enrichment: Swimwear Venture

In contrast, with respect to the swimwear venture,

Justina may have a cognizable unjust enrichment claim for the

value of her services, as she allegedly performed them without

pay. Am. Compl. ¶¶ 86, 88. Nevertheless, I need not decide

whether Justina properly stated such a claim, as she has failed

to allege that this claim is for more than $75,000, the minimum

amount in controversy for a diversity claim. 28 U.S.C.

§ 1332(a); see Am. Compl. ¶ 15 (alleging approximately $20,000

as expected payment for Justina’s consulting services). All

other claims in this diversity action are being dismissed, and

Justina’s swimwear venture unjust enrichment claim cannot

sustain subject matter jurisdiction on its own. See Swan Media

Grp., Inc. v. Staub, 841 F. Supp. 2d 804, 809-10 (S.D.N.Y. 2012)

(dismissing New York unjust enrichment claim where “absent the

contract claim” being dismissed for failure to state a claim,

the “action as pled” could not “satisfy the amount-in-

controversy requirement”). The unjust enrichment claim is

therefore also dismissed with respect to the swimwear venture.

C. All Claims Except for the Swimwear Venture Unjust

Enrichment Claim are Dismissed with Prejudice

The defendants contend that the complaint should be

dismissed with prejudice. With one exception, I agree.

Generally speaking, courts in this circuit are

hesitant to dismiss claims with prejudice based on pleading

deficiencies absent “undue delay, bad faith, dilatory motive,

[or] futility.” Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo

Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015) (“[T]he permissive

standard” for granting leave to amend “is consistent with our

strong preference for resolving disputes on the merits.”). But

a court may dismiss with prejudice after “repeated failure to

cure deficiencies by amendments previously allowed.” Foman v.

Davis, 371 U.S. 178, 182 (1962).

Here, in advance of a November 3, 2021 premotion

conference, the defendants submitted a letter identifying

defects in each of the original Complaint’s claims. See Defs.’

Letter Req’ing Pre-Mot. Conf. 1-2, ECF No. 11. At the premotion

conference, the defendants (and, to some extent, the Court) laid

out the defects at issue here (except regarding the plaintiffs’

unjust enrichment claim, which first appeared in the Amended

Complaint). See Hr’g Tr., ECF No. 39. The plaintiffs conceded

Rule 9(b)’s standard is applicable. Id. at 9:20-21. The Court

“not only gave plaintiffs’ counsel the opportunity to correct

its defective pleading, but also offered significant guidance on

how to do so.” Adler v. Berg Harmon Assocs., 816 F. Supp. 919,

925 (S.D.N.Y. 1993) (dismissing claim with prejudice).

Moreover, after the defendants moved to dismiss and

filed their initial memorandum of law, the plaintiffs proffered

the Justina Declaration and “respectfully request[ed]” that it

“be made part of the [Amended Complaint].” Pls.’ Mem. 1 n.2.

Then, with the benefit of full briefing of the motion to dismiss

and oral argument, the plaintiffs asked that the Justina

Declaration be incorporated “as part of a Second Amended

Complaint.” Pls.’ Letter 1. The plaintiffs’ post-oral argument

letter proposed no further amendments besides incorporation of

the Justina Declaration.

I have now granted plaintiffs precisely the amendment

they requested, and their pleading remains deficient. The

plaintiffs are not entitled to amend yet again after receiving

“an opportunity to amend in response to full briefing of the

defendants’ motion to dismiss, and fail[ing] . . . to explain

how [they] propose[] to amend the complaint to cure its

defects.” F5 Cap. v. Pappas, 856 F.3d 61, 90 (2d Cir. 2017);

see also Felder v. U.S. Tennis Ass’n, 27 F.4th 834, 848 (2d Cir.

2022) (affirming dismissal with prejudice based on pleading

deficiencies “[a]bsent any indication as to what [the plaintiff]

might add to his complaint in order to make the[] claims

viable”). Accordingly, the breach of contract, conversion,

fraud and fraudulent inducement, and Section 349 claims are

dismissed with prejudice.

The plaintiffs’ PPE venture unjust enrichment claim,

which first appeared in the Amended Complaint, is also dismissed

with prejudice. The defects in that claim are precisely the

same defects that the plaintiffs failed to cure in their fraud

and fraudulent inducement and conversion claims – lack of

particularity about the alleged PPE fraud, plus implausible

allegations that the defendants stole, rather than lost, the

plaintiffs’ money.

However, as the swimsuit venture unjust enrichment

claim is dismissed for want of subject matter jurisdiction, that

claim alone is dismissed without prejudice. See Green v. Dep’t

of Educ. of N.Y., 16 F.4th 1070, 1074 (2d Cir. 2021)

(“[D]ismissals for lack of subject matter jurisdiction must be

without prejudice, rather than with prejudice.”).

IV. Conclusion

For the reasons set forth above, the motion to dismiss

for lack of personal jurisdiction is denied, and the motion to

dismiss for failure to state a claim is granted. The Amended

Complaint is dismissed in its entirety. The Clerk of Court is

respectfully directed to enter judgment and close the case.

SO ORDERED.

/s/ Eric Komitee__________

ERIC KOMITEE

United States District Judge

Dated: July 17, 2023

Brooklyn, New York