# Kakarla v. Penakalapati

> District Court, W.D. New York · July 23, 2021

URL: https://www.frixlaw.com/law-library/cases/10363967

## Case

- **Court:** District Court, W.D. New York
- **Decided:** July 23, 2021
- **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/10363967

## How later opinions describe it (automated extraction)

- affirming grant of summary judgment on fraud claim because it was “clear from the record” that the plaintiff did not rely on the defendant’s purported false representation
- explaining that under New York law, a modification to a contractual agreement is unenforceable unless supported by consideration

## Opinion text

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
___________________________________

SWAMIJEE KAKARLA,

Plaintiff, DECISION AND ORDER

v. 6:18-CV-06555 EAW

SAMEER PENAKALAPATI, AVANI
TECHNOLOGY SOLUTIONS, INC.,
CEIPAL CORP., AVANI BUSINESS
PARK, LLC, and INDOTRONIX
INTERNATIONAL CORP.,

Defendants.
___________________________________

INTRODUCTION
Plaintiff Swamijee Kakarla (“Plaintiff”) asserts claims of breach of contract, fraud,
discrimination, and retaliation against defendants Sameer Penakalapati (“Penakalapati”),
Avani Technology Solutions, Inc. (“Avani”), Ceipal Corp. (“Ceipal”), Avani Business
Park, LLC (“ABP”), and Indotronix International Corp. (“Indotronix”) (collectively
“Defendants”). (Dkt. 1). Plaintiff further seeks a declaratory judgment related to his
claimed ownership interest in the corporate defendants. (Id.). Defendants seek summary
judgment on all of Plaintiff’s claims against them.1 (Dkt. 65). For the reasons set forth
below, Defendants’ motion for summary judgment is granted in part and denied in part.

1 Defendants have also asserted counterclaims against Plaintiff. (See Dkt. 41).
Defendants do not presently seek summary judgment as to any of their counterclaims.
(Dkt. 65-2 at ¶ 12 (“Defendants’ Motion does not concern their own claims.”)).
BACKGROUND
I. Factual Background
The following facts are derived from Defendants’ Statement of Uncontested Facts

submitted in support of their motion for summary judgment (Dkt. 66), Plaintiff’s Response
to Defendants’ Statement of Uncontested Facts (Dkt. 75-2 at 1-14), Plaintiff’s
Counterstatement of Uncontested Facts submitted in opposition to Defendants’ motion
(Dkt. 75-2 at 15-21), Defendants’ Response to Plaintiff’s Statement of Additional Material
Facts (Dkt. 81), and the exhibits submitted by the parties. Unless otherwise noted, these

facts are uncontested.
Plaintiff was born in India, is of Indian ethnicity, and has Indian citizenship. (Dkt.
81 at ¶ 1). Plaintiff worked in the United States from 2007 until 2018 on L-1A and H-1B
visas. (Id. at ¶ 2). Penakalapati was Plaintiff’s supervisor at Mascon Global Limited
(“MGL”), where Plaintiff began working in 2008. (Id. at ¶ 3). Penakalapati interviewed

and hired Plaintiff to work at MGL. (Dkt. 66 at ¶ 4; Dkt. 75-2 at 1).
Penakalapati was born in the same Southern Indian State as Plaintiff. (Dkt. 66 at
¶ 2; Dkt. 75-2 at 1). Plaintiff and Penakalapati had a “good relationship that extended
outside of work,” which included visiting each other’s homes and socializing with each
other’s families once per week. (Dkt. 66 at ¶ 6; Dkt. 75-2 at 1). They further spoke to each

other in Telugu, “a language primarily spoken in states in Southern India.” (Dkt. 66 at ¶ 8;
Dkt. 75-2 at 1).
By 2010, MGL was experiencing financial difficulties, which included failing to
pay employees monies owed. (Dkt. 66 at ¶ 11; Dkt. 75-2 at 2). Plaintiff and Penakalapati
were concerned about the continuing viability of MGL and had discussions regarding other
business opportunities. (Dkt. 66 at ¶¶ 12-13; Dkt. 75-2 at 2).
Penakalapati had formed Avani as a Michigan corporation in 2008. (Dkt. 66 at ¶ 15;

Dkt. 75-2 at 2). Plaintiff claims that he and Penakalapati jointly agreed to develop Avani
as an information technology business and that because “Penakalapati could not afford to
pay a salary to [Plaintiff] and officially bring him to Avani as an employee, . . . Penakalapati
promised [Plaintiff] a 20% interest in Avani if [Plaintiff] agreed to work to build the new
company in his free time.” (Dkt. 75-2 at 2). Plaintiff further claims to have been promised

that he would “receive 20% ‘sweat equity’ in any future ventures related to or stemming
from Avani.” (Id.). Defendants acknowledge that Penakalapati and Plaintiff “had
discussed Plaintiff working for sweat equity in lieu of salary,” but maintain that “before
Plaintiff left MGL to join Avani, [Penakalapati] determined that Plaintiff had to be paid
the prevailing wage and could not work for sweat equity or be an owner of the company.”

(Dkt. 66 at ¶ 17).
In January 2010, Penakalapati gave Plaintiff a stock certificate (the “Stock
Certificate”) for 20 shares in Avani. (Dkt. 66 at ¶ 6; Dkt. 75-2 at 1). The Stock Certificate
was dated January 16, 2010, and indicated that Avani was authorized to issue 200 common
shares. (Dkt. 66-4 at 2). The parties dispute whether it is accurate that there were 200

shares of Avani at that time—Plaintiff maintains that there were only 100 such shares, that
the stock register from which the Stock Certificate originated inaccurately indicated that
there were 200 such shares, and that Plaintiff’s 20 shares thus represented a 20% interest
in Avani. (Dkt. 75-2 at 2-3). Defendants acknowledge that Avani had only 100 outstanding
shares “at one time” but deny that there were only 100 shares at the time the Stock
Certificate was issued. (Dkt. 81 at ¶ 11). Defendants further contend that Penakalapati
gave the Stock Certificate to Plaintiff before he learned that, consistent with the terms of

his H1-B visa, “Plaintiff had to be paid the prevailing wage and could not work for sweat
equity.” (Dkt. 81 at ¶ 9; see also id. at ¶ 11 (“Defendants do not contest that Plaintiff
received a certificate for 20 shares of Avani, but contest[] whether Plaintiff held ownership
interest and contest[] whether Plaintiff was owner of Avani, because it was understood that
the failure to pay the prevailing wage or granting of ownership could result in the denial of

his H1-B application.”)).
Plaintiff claims that he worked for Avani without pay from January 2010 until April
2011, while also continuing to work for MGL. (Dkt. 75-2 at 17). Defendants deny that
Plaintiff worked for Avani prior to April 2011. (Dkt. 81 at ¶¶ 12-13).
The parties agree that in October 2010, Penakalapati provided Plaintiff with an

employment agreement indicating that Plaintiff would work for Avani for an annual wage
of $50,203. (Dkt. 75-2 at 18; Dkt. 81 at ¶ 14). Defendants contend that this salary
represented the prevailing wage for the position Plaintiff was expected to take at Avani and
that the purpose of the employment agreement was to effectuate the transfer of Plaintiff’s
authority to work pursuant to his H1-B visa from MGL to Avani. (Dkt. 81 at ¶ 14).

Defendants further maintain that “Plaintiff was expected to start with Avani only after it
could offer a salary more competitive with his salary at MGL.” (Id.).
In April 2011, Plaintiff resigned from MGL and executed a new employment
agreement (the “April 2011 Employment Agreement”) with Avani. (Id. at ¶ 16). The April
2011 Employment Agreement provides for an annual wage of $84,000. (Dkt. 66-7 at 2).
It further provides as follows:
ENTIRE AGREEMENT: This Agreement and any Addendum attached
represent the entire agreement of the parties and supersede all prior
statements, discussions, and understandings and may [be] amended only by
the writing [sic] signed by both parties. The terms of this Agreement and its
Addendum’s [sic] shall be applied as written and, if necessary, shall be
deemed modified as necessary so as to render them valid and enforceable to
the fullest extent permissible by applicable law.

(Id. at 3-4).
Plaintiff claims that “[o]ver the ensuing years, as Avani grew . . ., Penakalapati
repeatedly restated his promise to [Plaintiff] that he was entitled to a 20% interest” in
businesses acquired by Penakalapati, including Ceipal, ABP, and Indotronix. (Dkt. 75-2
at 3). Plaintiff further claims that “Penakalapati repeatedly promised to formalize
[Plaintiff’s] 20% sweat equity interest in these companies by creating a holding company
to hold all of the corporate defendants, and giving [Plaintiff] 20% of the shares of the
holding company.” (Id.). Defendants deny that Penakalapati made any such promises.
(Dkt. 81 at ¶ 22-24).
According to Plaintiff, his final conversation with Penakalapati “concerning his
20% stake in the defendant companies” took place “near the end of 2016.” (Dkt. 75-2 at
19). Defendants acknowledge that Plaintiff “requested equity in or around October and
November of 2016.” (Dkt. 81 at ¶ 27). However, Defendants assert that on November 21,
2016, Penakalapati “informed Plaintiff that Avani would not provide him with equity but
Avani would increase his annual salary to $135,000 and provide a $7,500 bonus for every
10 million dollars of revenue.” (Dkt. 66 at ¶ 53). In an email sent that day, Penakalapati
wrote that:
Regards to the sweat stake in the company, that will be given as stocks among
other qualified employees, all based in contributions and other growth
activities we do as a group company. As we continue to evolve as a bigger
organization, the parties who becomes part of the sweat stake increases and
will be calculated based on the remaining stake and debt of the company at
the time.

(Dkt. 66-5 at 3). On November 26, 2016, Avani provided Plaintiff a $13,000 bonus. (Dkt.
66 at ¶ 57; Dkt. 75-2 at 8).
Plaintiff began looking for a new job in November or December of 2016. (Dkt. 66
at ¶ 58; Dkt. 75-2 at 8). Plaintiff claims that “the greatest reason” he began looking for
other employment was because Penakalapati “had threatened to revoke his H1-B visa and
[Plaintiff] might then be deported from the United States.” (Dkt. 75-2 at 8). The details
of this alleged threat are discussed further below. Plaintiff further states that he “began to
look for another job because he knew that . . . Penakalapati’s promise to award 20% sweat
equity would never come to fruition[.]” (Id.).
On December 2, 2016, Penakalapati presented a letter (the “December 2016 Letter”)
to Plaintiff that thanked Plaintiff for his contributions to Avani, stated that Penakalapati
was “hopeful that [Plaintiff] would continue to be one of the key people for Avani,” and
stated a desire to pay Plaintiff “a bonus of cash and/or stock” when Avani reached revenue
of $100 million per year. (Dkt. 66-15 at 2; Dkt. 81 at ¶ 28). Plaintiff acknowledges having
received and signed the December 2016 Letter. (Dkt. 75-2 at 19-20).
Plaintiff claims that later in the day on December 2, 2016, Penakalapati approached
him and demanded that he return the Stock Certificate, asserting that Plaintiff must do so
because he had signed the December 2016 Letter. (Id. at 20). Plaintiff further claims that

he initially refused to return the Stock Certificate, but that Penakalapati told him that if he
did not comply, Penakalapati would revoke Plaintiff’s H1-B visa. (Id.). Plaintiff then
claims to have retrieved the Stock Certificate from his home, made a copy, and returned
the original to Penakalapati. (Id.). Defendants admit that Penakalapati asked Plaintiff to
return the Stock Certificate on December 2, 2016, but deny Plaintiff’s claim that he refused

to do so and that Penakalapati threatened Plaintiff with revocation of his visa. (Dkt. 81 at
¶¶ 31-34).
Plaintiff successfully interviewed for a position with Tachyon Technologies
(“Tachyon”) in January 2017. (Dkt. 81 at ¶ 36). In March 2017, having signed an
agreement with Tachyon and transferred his visa, Plaintiff advised Penakalapati of his

intention to resign from Avani. (Dkt. 66 at ¶ 79; Dkt. 75-2 at 90). Defendants have stated
and submitted evidence that Penakalapati attempted to persuade Plaintiff to remain with
Avani, including by offering to contribute $5,000 per month for each of Plaintiff’s
children’s educations. (See Dkt. 66 at ¶¶ 80-83). Plaintiff does not substantively dispute
that Penakalapati took these actions, but merely asserts his opinion that these facts are “not

material to this motion.” (Dkt. 75-2 at 10)2.

2 Indeed, in response to 12 of the numbered paragraphs set forth in Defendants’
Statement of Uncontested Facts, Plaintiff has simply asserted that the facts set forth by
Defendants are not material to the instant motion. (See Dkt. 75-2). This District’s Local
Rules of Civil Procedure make clear that unless a numbered paragraph in a moving party’s
Plaintiff resigned from Avani effective April 14, 2017, and began working for
Tachyon on or about April 17, 2017, for an annual salary of $100,000. (Dkt. 66 at ¶ 83).
On December 27, 2017, Plaintiff filed a charge of discrimination against Avani.

(Dkt. 66 at ¶ 84; Dkt. 75-2 at 10). ABP, Ceipal, and Indotronix are not named in Plaintiff’s
charge of discrimination. (Dkt. 66 at ¶ 85; Dkt. 75-2 at 100).
II. Procedural Background
Plaintiff commenced the instant action on July 30, 2018. (Dkt. 1). Discovery closed
on October 30, 2020. (Dkt. 78).

Defendants filed the instant motion on June 11, 2020. (Dkt. 65; Dkt. 66). Plaintiff
filed his response on August 20, 2020 (Dkt. 75), and Defendants filed their reply on
September 17, 2020 (Dkt. 80; Dkt. 81).
DISCUSSION
I. Legal Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment
should be granted if the moving party establishes “that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). The Court should grant summary judgment if, after considering the evidence in
the light most favorable to the nonmoving party, the Court finds that no rational jury could

statement is “specifically controverted by a correspondingly numbered paragraph in the
opposing statement,” it may be deemed admitted for purposes of the motion. L. R. Civ. P.
56(a)(2) (emphasis added). Materiality is for the Court to decide, and in the absence of
any controverting submission by Plaintiff, the Court will treat the facts set forth by
Defendants in paragraphs 14, 23, 75, 76, 77, 78, 80, 81, 82, 83, 111, and 113 of their
Statement of Uncontested Facts as admitted for purposes of the instant motion.
find in favor of that party. Scott v. Harris, 550 U.S. 372, 380 (2007) (citing Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).
“The moving party bears the burden of showing the absence of a genuine dispute as

to any material fact. . . .” Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 486
(2d Cir. 2014). “Where the non-moving party will bear the burden of proof at trial, the
party moving for summary judgment may meet its burden by showing the evidentiary
materials of record, if reduced to admissible evidence, would be insufficient to carry the
non-movant’s burden of proof at trial.” Johnson v. Xerox Corp., 838 F. Supp. 2d 99, 103

(W.D.N.Y. 2011) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). Once the
moving party has met its burden, the opposing party “must do more than simply show that
there is some metaphysical doubt as to the material facts, and may not rely on conclusory
allegations or unsubstantiated speculation.” Robinson v. Concentra Health Servs., Inc.,
781 F.3d 42, 44 (2d Cir. 2015) (quoting Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d

Cir. 2011)). Specifically, the non-moving party “must come forward with specific
evidence demonstrating the existence of a genuine dispute of material fact.” Brown, 654
F.3d at 358. Indeed, “the mere existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247-48 (1986).
II. Defendants’ Motion for Summary Judgment

Plaintiff asserts the following claims in his complaint: (1) a claim for a declaratory
judgment related to his purported ownership interest in Avani and the other corporate
defendants; (2) a claim for fraud based on Penakalapati’s purported promise in November
or December 2016 to provide Plaintiff with a 20% ownership interest in Avani “and its
related companies” in order to induce Plaintiff “to continue working for Avani . . . and to

surrender his Stock Certificate. . . .” (Dkt. 1 at ¶¶ 37-38); (3) a breach of contract claim
related to Penakalapati’s purported agreement to “exchange Plaintiff’s Stock Certificate
. . . and Plaintiff’s continued employment with Avani . . . for a 20% share of Avani . . . and
its related holding companies” (id. at ¶ 43); (4) claims of disparate treatment and hostile
work environment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C.

§ 2000e et. seq. (“Title VII”); (5) a claim of retaliation in violation of Title VII; (6) a claim
of discrimination and retaliation in violation of the New York State Human Rights Law,
New York Executive Law §§ 291-296 (the “NYSHRL”); and (7) a claim for discrimination
and retaliation in violation of 42 U.S.C. § 1981. (Dkt. 1). The Court considers the viability
of each of these claims below.

A. Declaratory Judgment Claim
“The Declaratory Judgment Act is properly invoked where ‘there is a substantial
controversy, between parties having adverse legal interests, of sufficient immediacy and
reality to warrant the issuance of a declaratory judgment.’” Classic Liquor Importers, Ltd.
v. Spirits Int’l B.V., 151 F. Supp. 3d 451, 454 (S.D.N.Y. 2015) (quoting Md. Cas. Co. v.

Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). Here, before proceeding to the merits of
Plaintiff’s request for a declaratory judgment, the Court notes that there is some uncertainty
as to what particular declaration Plaintiff seeks. As Defendants correctly note in their
moving papers, the heading for Plaintiff’s “First Claim for Relief” indicates that Plaintiff
seeks “Declaratory Judgment that Plaintiff is the Rightful Owner of 20% of Avani
Technology and its Related Companies.” (Dkt. 1 at 6). However, the body of the “First
Claim for Relief” indicates that Plaintiff seeks “a declaration that he is, in fact, the rightful

owner of 20 shares of Avani Technology Solutions Inc.” (Id. at 7). Then, in his prayer for
relief, Plaintiff “demands . . . [a] declaratory judgment that Plaintiff is the owner of 20
shares of Avani Technology stock and 20% of Avani Technology and its related
companies.” (Id. at 13 (emphasis added)). Plaintiff’s opposition to Defendants’ motion
for summary judgment provides no clarification as to the contours of the declaration he

seeks. Accordingly, the Court considers the viability of both requests identified in
Plaintiff’s prayer for relief.
To the extent that Plaintiff seeks a declaratory judgment that he is the owner of 20%
of Avani and the other corporate defendants, the Court agrees with Defendants that
summary judgment is appropriate. While there is a genuine dispute between the parties as

to whether Penakalapati agreed to give Plaintiff a 20% ownership interest in return for
Plaintiff working for Avani without pay, the record is clear that the only step taken to
actually consummate any such agreement was the delivery of the Stock Certificate. Indeed,
Plaintiff’s own Counterstatement of Uncontested Facts acknowledges that his purported
“20% sweat equity interest” was never formalized and that while at one point he“believed

. . . that he would soon receive a 20% interest in all of the defendant companies as a reward
for [his] sacrifice,” he eventually realized that “Penakalapati’s promise to award 20% sweat
equity would never come to fruition[.]” (Dkt. 75-2 at 8, 19). In other words, even accepting
as true Plaintiff’s version of events, Penakalapati promised 20% ownership of Avani and
the other corporate defendants, but never took the steps necessary to fulfill that promise.
“A declaratory judgment does not compel parties to act; rather, it declares the rights

and other legal relations of any interested party seeking such a declaration in cases of actual
controversy.” Scheiner v. ACT Inc., No. 10-CV-0096 RRM RER, 2013 WL 685445, at *2
n.2 (E.D.N.Y. Feb. 24, 2013) (quotations and alteration omitted). In other words, a request
for a declaratory judgment is not a vehicle to force compliance with contractual obligations,
and cannot be used to alter the legal relationship between two parties, rather than to state

the details of the legal relationship. Plaintiff cannot obtain a declaration that he is the
owner of 20% of Avani or any of the other corporate defendants because he indisputably
is not, regardless of whether, as he claims, he should have been made such.3
However, the Court finds that genuine issues of material fact exist as to Plaintiff’s
claim that he is an owner of 20 shares of Avani. It is undisputed that Penakalapati delivered

the Stock Certificate to Plaintiff in January of 2010 and that the Stock Certificate on its
face indicates that Plaintiff owns 20 shares of Avani. On the record before the Court, a

3 The Court does not read Plaintiff’s complaint as seeking a declaration regarding the
enforceability of Penakalapati’s purported promises to give Plaintiff a 20% ownership
interest in Avani and any related companies. Further, such a claim would not be viable in
any event. Courts routinely “reject declaratory judgment claims when other claims in the
suit will resolve the same issues, because, under such circumstances, a declaratory
judgment will not serve any useful purpose.” Optanix, Inc. v. Alorica, Inc., No. 1:20-CV-
09660-GHW, 2021 WL 2810060, at *3 (S.D.N.Y. July 6, 2021) (quotation omitted). Here,
a declaratory judgment solely regarding the enforceability of Penakalapati’s claimed
agreement to provide Plaintiff with a 20% ownership interest in the corporate defendants
would be duplicative of Plaintiff’s breach of contract claim and thus cannot be maintained
in tandem therewith. See id. at *4 (collecting cases finding declaratory judgment claim
duplicative of breach of contract claim).
rational jury could conclude that Plaintiff obtained 20 shares of Avani in January 2010 in
exchange for his agreement to work with pay to get the new business venture up and
running.

There are further genuine issues of material fact surrounding the circumstances
under which the Stock Certificate was returned to Penakalapati. Defendants contend that
Plaintiff “voluntarily relinquished the [Stock] Certificate for [c]onsideration” (Dkt. 65-1 at
15)—specifically, the increased salary and bonuses he was awarded in late November
2016. However, acceptance of this argument would require the Court to discount

Plaintiff’s testimony that Penakalapati did not ask him to return the Stock Certificate until
December 2, 2016, and that Penakalapati claimed Plaintiff was obligated to do so because
he had signed the December 2016 Letter (and not because he had accepted a salary increase
in late November 2016). This is precisely the sort of factfinding that the Court cannot
engage in when deciding a motion for summary judgment.

Further, if, as Plaintiff contends, he received no consideration for the return of his
Stock Certificate4, then his agreement to do so was unenforceable. See L.B. Kaye Assocs.,
Ltd. v. Jews for Jesus, 677 F. Supp. 160, 165 (S.D.N.Y. 1988) (explaining that under New
York law, a modification to a contractual agreement is unenforceable unless supported by
consideration), aff’d, 854 F.2d 1314 (2d Cir. 1988). While Defendants contend that “in

4 The parties are in agreement that the December 2016 Letter created no legal
obligations as to any party and did not reference the Stock Certificate. (See Dkt. 81 at
¶ 28). Accordingly, nothing set forth therein can constitute consideration for the return of
the Stock Certificate.
response to Plaintiff’s October 2016 request for equity, Avani increased his salary to
$135,000 and paid a $13,000 bonus on November 26, 2016” (Dkt. 80 at 9), they have failed
to produce or point to any undisputed evidence establishing that Plaintiff agreed to

relinquish the shares he claims to have already owned in exchange for his increased pay.5
Finally, the record before the Court reveals a genuine issue of material fact regarding
Avani’s treatment of the shares represented by Plaintiff’s Stock Certificate. It is undisputed
that, at least as of October 23, 2019, no transfer of Plaintiff’s claimed shares had been
recorded in Avani’s stock register. (Dkt. 81 at ¶ 34). While Defendants claim that this is

because “the [Stock] Certificate was never treated as making Plaintiff an owner because he
had not worked for Avani two years without wages” (id.), Plaintiff contests that this is the
case. Again, the Court cannot resolve this conflict on a motion for summary judgment.
For all these reasons, the Court denies Defendants’ request for summary judgment
as to Plaintiff’s declaratory judgment claim solely to the extent that Plaintiff seeks a

declaration that he is the owner of 20 shares of Avani. Defendants’ motion is granted as
to all other aspects of Plaintiff’s declaratory judgment claim.
B. Fraud Claim
The Court turns next to the viability of Plaintiff’s claim of fraud. Plaintiff’s
particular claim is that he continued to work for Avani and surrendered the Stock

Certificate in December 2016 because “Penakalapati, on behalf of all Defendants, promised

5 Having found a genuine dispute as to the existence of consideration, the Court need
not and does not reach Defendants’ arguments regarding the adequacy of Plaintiff’s
alternative claim of duress.
plaintiff 20% of Avani Technology and its related companies as ‘sweat equity’ for
Plaintiff’s past and future work for Avani Technology” despite knowing that such promise
was false. (Dkt. 1 at ¶¶ 37-39). The Court agrees with Defendants that no rational jury

could find in Plaintiff’s favor on this claim.
Under New York law, a claim for fraudulent misrepresentation requires a plaintiff
to demonstrate “that (1) the defendant made a material false representation, (2) the
defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon
the representation, and (4) the plaintiff suffered damage as a result of such reliance.”

Eternity Glob. Master Fund Ltd. v. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168, 186-87
(2d Cir. 2004). Plaintiff cannot, on the record before the Court, establish that he reasonably
relied upon Penakalapati’s claimed promise. To the contrary, Plaintiff’s own version of
events establishes that he did not do so.
Plaintiff maintains that he “knew that . . . Penakalapati had no intention of honoring

his promise to create [a] holding company and give [Plaintiff] a 20% interest in that
company.” (Dkt. 75-2 at 21). Indeed, Plaintiff states that he began looking for other
employment in late 2016 precisely because he had no trust in Penakalapati’s purported
promise. (Id.). Further, as discussed above, Plaintiff’s position is that he returned the Stock
Certificate to Penakalapati not because he believed Penakalapati’s alleged representations,

but because Penakalapati threatened to revoke his visa and render him susceptible to
deportation. (Id. at 20-21). On these facts, Plaintiff cannot maintain his claim of fraud.
See, e.g., Rodriguez v. It’s Just Lunch, Int’l, No. 07 CIV. 9227 SHS, 2013 WL 1749590,
at *4 (S.D.N.Y. Apr. 23, 2013) (“Because Rodriguez’s sworn testimony demonstrates that
she did not rely on any misrepresentation of defendants, her fraudulent inducement claim
must be dismissed.”); Dyke v. Peck, 279 A.D.2d 841, 843 (3d Dep’t 2001) (affirming grant
of summary judgment on fraud claim because it was “clear from the record” that the

plaintiff did not rely on the defendant’s purported false representation). Defendants’
request for summary judgment is granted as to Plaintiff’s claim of fraud.
C. Breach of Contract Claim
The Court turns next to Plaintiff’s claim for breach of contract. This claim is based
on Plaintiff’s allegation that “in December 2016, . . . Penakalapati, on behalf of all

Defendants, agreed to exchange Plaintiff’s Stock Certificate #2 and Plaintiff’s continued
employment with Avani Technology for a 20% share of Avani Technology and its related
holding companies.” (Dkt. 1 at ¶ 43). The Court agrees with Defendant that Plaintiff
cannot maintain this claim.
Plaintiff’s April 2011 Employment Agreement expressly provides that it may be

modified only in writing. (See Dkt. 66-7). New York General Obligations Law § 15-
301(1) provides that:
A written agreement or other written instrument which contains a provision
to the effect that it cannot be changed orally, cannot be changed by an
executory agreement unless such executory agreement is in writing and
signed by the party against whom enforcement of the change is sought or by
his agent.

This “statute indicates that where a contract contains a ‘no oral modification’ clause, that
clause will be enforceable.” Israel v. Chabra, 12 N.Y.3d 158, 163 (2009). “The party
seeking to avoid the effect of this provision . . . can only do so by showing either partial
performance or equitable estoppel.” Baraliu v. Vinya Cap., L.P., 765 F. Supp. 2d 289, 297
(S.D.N.Y. 2011). Further, partial performance will vitiate the need for a writing only where
it is “‘unequivocally referable’ to the new contract.” Merrill Lynch Interfunding v. Argenti,
155 F.3d 113, 122 (2d Cir. 1998) (quoting Rose v. Spa Realty Associates, 42 N.Y.2d 338,

343-44 (1977)). “[T]he key aspect of New York law is that, for either partial performance
or equitable estoppel to apply and show an effective oral modification to the written
contract, the conduct relied upon by the plaintiff to prove the modification must be not
otherwise compatible with the agreement as written.” Baraliu, 765 F. Supp. 2d at 298
(quotation omitted).

Here, it is undisputed that Penakalapati’s alleged December 2016 promise to
exchange equity for Plaintiff’s continued employment was not made in writing. Further,
Plaintiff cannot demonstrate either partial performance or equitable estoppel because he
cannot show conduct that is otherwise incompatible with the April 2011 Employment
Agreement. Plaintiff’s continued employment was expressly anticipated by the April 2011

Employment Agreement. Further, Plaintiff’s own factual contentions—namely, that his
relinquishment of the Stock Certificate was done not as part of any agreement but because
Penakalapati threatened him with deportation—preclude any finding that this action was
“explainable only with reference to the oral agreement.” Randolph Equities, LLC v.
Carbon Capital, Inc., 648 F. Supp. 2d 507, 518 (S.D.N.Y. 2009) (quotation omitted).

Plaintiff argues that the claimed December 2016 oral agreement is nevertheless
enforceable, because New York Uniform Commercial Code (“N.Y. U.C.C.”) § 8-113(a)
provides that “a contract or modification of a contract for the sale or purchase of a security
is enforceable whether or not there is a writing signed or record authenticated by a party
against whom enforcement is sought, even if the contract or modification is not capable of
performance within one year of its making.” However, with certain exceptions not relevant
here, “the effect of provisions of [the N.Y. U.C.C.] may be varied by agreement.” N.Y.

U.C.C. Law § 1-302. In this case, the parties expressly agreed in the April 2011
Employment Agreement that its terms could not be changed except in writing. That
agreement governs, not the default rule set forth in N.Y. U.C.C. § 8-113(a).
In sum, the April 2011 Employment Agreement, which all parties agree constituted
a valid and binding contract, required that any modification to its terms be made in writing.

The claimed December 2016 agreement to provide Plaintiff with a 20% ownership interest
in a to-be-formed holding company in exchange for his continued employment plainly
would have constituted such a modification. The lack of any writing memorializing the
alleged December 2016 modification is thus fatal to Plaintiff’s breach of contract claim.
See Baraliu, 765 F. Supp. 2d at 297-98 (granting summary judgment in favor of the

defendants on the plaintiff’s claim that his employment agreement had been orally
modified so as to guarantee him a $500,000 bonus and a 2.5% ownership stake, because
the employment agreement contained a no-oral-modification clause and “[w]hile [the
plaintiff] . . . claims that he continued to work at [the defendant company] in reliance upon
[the defendant owner’s] oral promises of additional bonus payments or ownership grants,

he has provided no evidence of conduct or performance that cannot be traced to the Original
Agreement, which bound him to work for [the defendant company]”).
D. Title VII Claims
Plaintiff asserts discrimination and retaliation claims under Title VII. These claims
must fail, for the reasons discussed below.

As a threshold matter, a Title VII claim can be maintained only against an employer.
See Kern v. City of Rochester, 93 F.3d 38, 45 (2d Cir. 1996) (“Title VII is an employment
law, available only to employees (or prospective employees) seeking redress for the
unlawful employment practices of their employers.”) (citation omitted)). Here, it is
undisputed that ABP, Ceipal, and Indotronix never employed Plaintiff. Accordingly,

Plaintiff cannot maintain a Title VII claim against them. Further, there is no individual
liability under Title VII. See Tawfik v. Georgatos, No. 20-CV-5832(JS)(AKT), 2021 WL
2953227, at *4 (E.D.N.Y. July 14, 2021). Thus, the only potentially viable defendant as to
Plaintiff’s Title VII claims is Avani.
Further, as Defendants correctly argue in their motion for summary judgment,

Plaintiff’s Title VII claims are time-barred. “As a precondition to filing a Title VII claim
in federal court, a plaintiff must first pursue available administrative remedies and file a
timely complaint with the EEOC.” Hardaway v. Hartford Pub. Works Dep’t, 879 F.3d
486, 489 (2d Cir. 2018) (citation omitted). Title VII requires that a charge of discrimination
be filed within 300 days of the unlawful conduct. 42 U.S.C. § 2000e-5(e)(1). This statutory

requirement functions as a statute of limitations. See Ohuche v. New York City Bd. of
Educ., 161 F. App’x 68, 69 (2d Cir. 2005).
In this case, Plaintiff filed his charge of discrimination on December 27, 2017. (Dkt.
66-19 at 2-3). March 2, 2017, was 300 days prior to this date. However, Plaintiff admits
that after December 2, 2016, the terms and conditions of his employment did not change,
he was not harassed, and no adverse employment action was taken against him. (Dkt. 66
at 10; Dkt. 75-2 at 9). In other words, none of the allegedly unlawful conduct occurred

within 300 days of the filing of Plaintiff’s charge of discrimination.
As discussed further below, in opposition to Defendants’ motion for summary
judgment, Plaintiff has identified only the discrete instance in which Penakalapati allegedly
threatened to revoke his H1-B visa as the basis for his various discrimination claims. (See
Dkt. 75 at 16-17). That alleged threat occurred well outside the 300-day window. Further,

even to the extent that Plaintiff was trying to assert a continuing violation of his rights,
“[t]o bring a claim within the continuing violation exception, a plaintiff must at the very
least allege that one act of discrimination in furtherance of the ongoing policy occurred
within the limitations period.” Patterson v. Cty. of Oneida, N.Y., 375 F.3d 206, 220 (2d
Cir. 2004). Again, in this case, Plaintiff has conceded that none of the alleged acts of

discrimination occurred within the 300 days preceding the filing of his charge.
Accordingly, Plaintiff’s Title VII claims are untimely and Defendants are entitled to
summary judgment thereon.
E. NYSHRL and § 1981 Discrimination Claims
Defendants are also entitled to summary judgment on Plaintiff’s claims of

discrimination under the NYSHRL and § 1981. Although there are differences between
these two anti-discrimination statutes, they both require adverse action because of a
protected characteristic. See Littlejohn v. City of New York, 795 F.3d 297, 314 (2d Cir.
2015) (§ 1981); Soloviev v. Goldstein, 104 F. Supp. 3d 232, 248 (E.D.N.Y. 2015)
(NYSHRL).
Here, although Plaintiff identified various forms of alleged discrimination during

the discovery phase of this litigation, the sole argument he makes in opposition to
Defendants’ motion for summary judgment is that he was discriminated against on the
basis of his national origin when Penakalapati threatened to revoke his H1-B visa unless
he surrendered the Stock Certificate. (See Dkt. 75 at 16-17). “A court may, and generally
will, deem a claim abandoned when a plaintiff fails to respond to a defendant’s arguments

that the claim should be dismissed.” Banyan v. Sikorski, No. 17-CV-4942 (LJL), 2021 WL
2156226, at *2 (S.D.N.Y. May 27, 2021) (citation omitted and finding summary judgment
appropriately granted based on the plaintiff’s “failure to respond to arguments set forth in
a moving party’s brief”). Here, because Plaintiff has failed to respond to Defendants’
contention that they are entitled to summary judgment with respect to the other allegedly

discriminatory conduct previously identified by Plaintiff, the Court finds that he has
abandoned any discrimination claim based on such conduct.
Further, no rational jury could find, on the record before the Court, that
Penakalapati’s threat to revoke Plaintiff’s H1-B visa was motivated by Plaintiff’s national
origin (or any other protected characteristic). Plaintiff himself testified at his deposition

that the claimed threat was not motivated by Plaintiff’s national origin, but was instead
aimed at getting back the Stock Certificate. (Dkt. 66-2 at 105-106). Plaintiff’s contention
that Penakalapati could not have successfully made his threat if Plaintiff were a citizen of
the United States misses the mark. “[D]iscriminatory intent is a necessary element of a
§ 1981 claim.” Hill v. Rayboy-Brauestein, 467 F. Supp. 2d 336, 368 (S.D.N.Y. 2006)
(emphasis added). The same is true of a claim under the NYSHRL. See Smith v. City of
New York, 385 F. Supp. 3d 323, 332 (S.D.N.Y. 2019). Here, Plaintiff has conceded that

Penakalapati’s motivation was economic and not discriminatory. No rational jury could
find for him on his claims of unlawful discrimination.
F. Retaliation Claims
Finally, the Court finds that Defendants are entitled to summary judgment on
Plaintiff’s claims of retaliation under the NYSHRL and § 1981. “To establish a prima facie

case of retaliation under Title VII, Section 1981, and the NYSHRL, an employee must
show that: (1) he engaged in protected participation or opposition, (2) that the employer
was aware of this activity, (3) that the employer took adverse action against the plaintiff,
and (4) that a causal connection exists between the protected activity and the adverse
action.” Gerald v. DCV Holdings, Inc., No. 17-CV-6525(EK)(RLM), 2021 WL 2809915,

at *11 (E.D.N.Y. July 6, 2021) (quotation and alteration omitted). Here, the only protected
activity identified by Plaintiff is a complaint made after December 2, 2016. (See Dkt. 66-
2 at 135). However, as noted above, Plaintiff also concedes that he did not suffer any
adverse action after December 2, 2016. (Dkt. 66 at 10; Dkt. 75-2 at 9). To the contrary,
the evidence before the Court demonstrates that Plaintiff was offered substantial incentives

to continue working for Avani. “[T]o constitute retaliation, the alleged protected activity
must predate evidence of the alleged retaliatory animus.” Furk v. Orange-Ulster BOCES,
No. 15-CV-6594 (NSR), 2016 WL 6560408, at *4 (S.D.N.Y. Nov. 2, 2016) (citation and
original alteration omitted). Plaintiff cannot maintain a retaliation claim where he
concededly suffered no adverse consequences after making his complaint.
CONCLUSION

For the foregoing reasons, Defendant’s motion for summary judgment is denied
solely as to Plaintiff’s claim for a declaratory judgment that he is the owner of 20 shares of
Avani Technology Solutions, Inc., and is granted in all other respects. The Clerk of Court
is instructed to terminate Ceipal Corp., Avani Business Park, LLC, and Indotronix
International Corp. as defendants in this action.

SO ORDERED.

___________________________________
ELIZABETH A. WOLFORD
Chief Judge
United States District Court
Dated: July 23, 2021
Rochester, New York

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10363967. Public record. Not legal advice.