Pirri v. Cheek
| Decision Date | 13 June 2019 |
| Docket Number | 19 Civ. 180 (PAE) |
| Parties | ALFRED PIRRI, JR., Plaintiff, v. LORI CHEEK, JOANNE RICHARDS, LOCKE RAPER, CHARLES KICKHAM, AND CHEEK'D, INC., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Alfred Pirri, Jr., brings claims related to U.S. Patent No. 8,543,465 (the "Patent") against Lori Cheek, Locke Raper, Charlie Kickham, and Cheek'd, Inc., (together, the "Cheek'd Defendants"), and Joanne Richards, his former social worker. Pirri seeks to be added as an inventor on the Patent, pursuant to 35 U.S.C. § 256. He also brings (1) state-law claims against Richards, for breach of fiduciary duty and fraud and (2) state-law claims against the Cheek'd Defendants, for conversion and unjust enrichment.
The present action is Pirri's second lawsuit related to the Patent. In 2017, in Pirri v. Cheek, 17 Civ. 7089 (PAE), Pirri sought a declaratory judgment of patent invalidity and asserted the same four state-law causes of action raised here as well as a claim of unfair competition. The Court dismissed Pirri's claims for lack of subject matter jurisdiction without prejudice to his right to refile his state-law claims in state court or to file them in federal court provided that his new complaint adequately pled federal jurisdiction. See 17 Civ. 7089, Dkt. 64 at 11-12.
Defendants now move to dismiss Pirri's state-law claims pursuant to Federal Rule of Civil Procedure 12(b)(6) principally on the ground that those claims are time-barred. For the following reasons, the Court grants the defendants' partial motion to dismiss in its entirety, and thereby dismisses all state-law claims.
In 2006, Pirri alleges, he conceived of an idea for a dating method that he calls "online dating in reverse," which involved distributing business cards that can unlock online dating profiles. Compl. ¶ 15. Participants in this dating method hand out business cards with basic information about themselves to people they find attractive. The business cards contain a code that the recipient can use to unlock more information about the cardholder. Under Pirri's idea, the cardholder would pay to create a website profile and for the cards, and the card recipient would pay a fee to access the profile. Id. ¶¶ 25-29.
On September 18, 2006, Pirri committed the idea to paper before a notary public, and in early 2007, he hired a patent attorney to conduct a patentability search. Id. ¶¶ 30-31. This search did not reveal an identical or even similar idea in any registered patent, pending patent application, or nonpatent application. Id. ¶ 32. The report of the attorney's search is dated January 24, 2007. Id. Pirri does not allege that, at any time before filing the 2017 action, he took any further step towards patenting his invention.
In 2008, Pirri alleges, he shared his dating-method idea, in confidence, with Richards, who was then assisting Pirri in her capacity as a social worker. Id. ¶ 39. Richards then passedPirri's idea on to defendant Cheek. Id. ¶ 41. Richards notified Pirri that she had shared his idea with Cheek, but she assured Pirri that Cheek would not pursue the idea and allegedly discouraged Pirri from initiating legal action. Id. ¶¶ 42, 45-48. Meanwhile, Pirri alleges, the Cheek'd Defendants filed, with Richards's knowledge, a patent application disclosing Pirri's invention. Id. ¶ 50. In the patent application submitted on November 1, 2010, the Cheek'd Defendants listed themselves as inventors and, on September 24, 2013, obtained the patent. Id., Ex. A ("Patent") at 2. In July 2015, Pirri saw defendant Cheek on an episode of the reality TV show "Shark Tank" presenting the idea as her own. Compl. ¶ 58.
On January 7, 2019, Pirri filed the Complaint, Dkt. 2, and, on January 22, 2019, with permission of the Hon. Valerie E. Caproni, to whom this case was initially assigned, a corrected Complaint, Dkt. 21.
On February 19, 2019, the case was transferred to this Court, after Pirri, pursuant to Local Civil Rule 1.6, disclosed his prior action before this Court relating to the Patent. Dkt. 15.
On April 3, 2019, the parties appeared for an initial pretrial conference. Pirri there agreed to voluntarily dismiss several claims. The following day, Pirri dismissed his claim against the Cheek'd Defendants for breach of fiduciary duty of confidentiality and his claims against Richards for unjust enrichment and correction of the inventorship of the Patent. Dkt. 32. On April 29, 2019, Pirri voluntarily dismissed his claims against all defendants for misappropriation of trade secrets, his claims against the Cheek'd Defendants for fraud, and his claims against Richards for conversion. Dkt. 36.
On April 15, 2019, defendants filed a joint motion to dismiss all remaining state-law claims, Dkt. 34, and a supporting memorandum of law, Dkt. 35 ("Def. Mem."). Defendants principally argue that Pirri's claims are barred by the applicable statute of limitations.Defendants do not seek dismissal of Pirri's sole federal law claim—i.e., to be added as an inventor on the patent. On April 29, 2019, Pirri filed a memorandum of law in opposition. Dkt. 37 ("Pl. Mem."). On May 6, 2019, defendants collectively filed a reply. Dkt. 39 ("Def. Reply").
To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim will only have "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is properly dismissed where, as a matter of law, "the allegations in a complaint, however true, could not raise a claim of entitlement to relief." Twombly, 550 U.S. at 558. For the purpose of resolving the motion to dismiss, the Court must assume all well-pled facts to be true, drawing all reasonable inferences in favor of the plaintiff. See Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, that tenet "is inapplicable to legal conclusions." Iqbal, 556 U.S. at 678. A pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.
A statute of limitations defense may be cognizable on a Rule 12(b)(6) motion to dismiss. Like other affirmative defenses, a defendant must plead and prove the lapse of a statute of limitations period. Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008) (citing Fed. R. Civ. P. 8(c)(1)). But, as with other affirmative defenses, a defendant may raise a statute of limitations defense in a pre-answer motion to dismiss under Rule 12(b)(6) if the allegations in the complaint are such that "the defense appears on the face of the complaint." Id. (citation omitted).
Following Pirri's various voluntary dismissals, the Complaint brings two state-law claims against Richards (for breach of the fiduciary duty of confidentiality and fraud), and two state-law claims against the Cheek'd Defendants (for unjust enrichment and conversion). These claims all arise under New York law and implicate the applicable limitations periods. Guar. Tr. Co. v. York, 326 U.S. 99, 110 (1945).
Defendants argue that these claims are untimely. Under N.Y. C.P.L.R. § 203 (2009), the period within which an action may timely be commenced is ordinarily computed based on the point in time when liability for the wrong arises, even if the injured party is as-yet unaware of the wrong or potential claim, Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 403 (1993). As reviewed below, however, by statute, a distinct discovery rule applies in cases of fraud, under which an otherwise untimely claim may be brought within two years of the date when the fraud was discovered or could reasonably have been discovered, whichever is later. N.Y. C.P.L.R. §§ 203(g), 213(8). But merely invoking the word "fraud" does not trigger application of the exception. "[C]ourts will not apply the fraud statute of limitations if the fraud allegation is only incidental to the claim asserted; otherwise, fraud would be used as a means to litigate stale claims." Kaufman v Cohen, 760 N.Y.S.2d 157, 265 (1st Dep't 2003) (citing Powers Mercantile Corp. v. Feinberg, 490 N.Y.S.2d 190, 191 (1st Dep't 1985)).
No single statute of limitations applies to a breach of fiduciary duty. Rather, the applicable statute of limitations turns on the substantive remedy that the plaintiff seeks. IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 139 (2009). Id. () (citing Yatter v. Morris Agency, 682 N.Y.S.2d 198, 199 (1st Dep't 1998); Loengard v. Santa Fe Indus., 70 N.Y.2d 262, 266 (1987)). Under New York law, "the limitations period for claims arising out of a fiduciary relationship does not commence until the fiduciary has openly repudiated his or her obligation or the relationship has been otherwise terminated." Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 518-19 (2d Cir. 2001) (internal quotation marks and citations omitted); see id. (). This rule protects a beneficiary from having to interrupt a productive, continuing fiduciary...
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