Roxx Alison Ltd. v. Shutle, Inc., 2021-51102

CourtNew York Court of Claims
Writing for the CourtRobert R. Reed, J.
PartiesRoxx Alison Ltd., Plaintiff, v. Shutle, Inc., Spectrum by Roxx Ltd., Egor Israelov, Defendant.
Docket NumberIndex 656596/2019,2021-51102
Decision Date19 November 2021

Roxx Alison Ltd., Plaintiff,
v.

Shutle, Inc., Spectrum by Roxx Ltd., Egor Israelov, Defendant.

No. 2021-51102

Index No. 656596/2019

Court of Claims

November 19, 2021


Unpublished Opinion

Robert R. Reed, J.

The following e-filed documents, listed by NYSCEF document number (Motion 002) 18, 19, 20, 21, 23, 24, 25, 26, 28 were read on this motion to/for DISMISSAL

Upon the foregoing documents, it is ordered that this motion for dismissal is granted in part and denied in part.

Plaintiff Roxx Alison LTD. ("Roxx Alison") brings this action involving contract and tort claims against defendants Shutle, Inc. ("Shutle"), Spectrum by Roxx Ltd. ("Spectrum"), and Egor Israelov ("Israelov"). Defendants collectively move to dismiss, pursuant to CPLR 3211(a)(7), the first, second, fifth, sixth, and ninth causes of action in the amended complaint. Plaintiff opposes the motion.

BACKGROUND

Plaintiff is a diamond and fine jewelry wholesaler. Shutle and Spectrum are manufacturers and sellers of jewelry. Plaintiff alleges that Israelov is a shareholder, director, officer, or employee of both Shutle and Spectrum.

Around January 2015, plaintiff hired Shutle to manufacture jewelry for plaintiff. Plaintiff would deliver pieces of jewelry and loose diamonds to Shutle. Shutle was to make molds and copies of the jewelry. Also, Shutle was to mount the loose diamonds in pieces of jewelry and return any unused loose diamonds to plaintiff. During the period from about March 2015 through about January 2017, plaintiff paid Shutle approximately $13, 375.00 for the jewelry models and molds that Shutle created for plaintiff.

Plaintiff alleges that Shutle failed to provide the models and molds to plaintiff and did not return the jewelry or loose diamonds that plaintiff had tendered to Shutle. Plaintiff also alleges that Israelov transferred some or all the jewelry, loose diamonds, models, and molds to himself, his other companies, or third parties, or that Shutle and Israelov continue to possess those items. The total agreed value of the jewelry, loose diamonds, models, and molds that Shutle and Israelov have failed to return is approximately $224, 145.09. The first cause of action claims unjust enrichment against Israelov and Shutle. The second cause of action claims conversion by Israelov and Shutle.

Plaintiff's allegations against Spectrum are similar to its allegations against Shutle. Plaintiff alleges that it delivered pieces of jewelry and loose diamonds to Spectrum so Spectrum could copy the jewelry styles and mount the loose diamonds on the manufactured pieces. Plaintiff alleges that there was a mutual understanding that Spectrum would return any loose diamonds, previously provided by plaintiff, that were not used by Spectrum to manufacture jewelry for plaintiff. During the period from about September 2016 through about January 2017, plaintiff paid Spectrum approximately $7, 785.00 for the jewelry models and molds that Spectrum created for plaintiff.

Plaintiff alleges that, despite plaintiff's demands, Spectrum neither provided the models and molds to plaintiff nor returned the jewelry and loose diamonds plaintiff had previously delivered to Spectrum. Plaintiff further alleges that Israelov has transferred all or some of the jewelry, loose diamonds, models and molds to himself, his other companies or third parties or that Spectrum and Israelov have continued to enjoy possession, use and benefit of the jewelry up to and through the present time. The total agreed value of the jewelry, loose diamonds, models and molds that Spectrum has allegedly failed to return to plaintiff is approximately $325, 875.48. The fifth cause of action alleges unjust enrichment against Israelov and Spectrum. The sixth cause of action alleges conversion by Israelov and Spectrum.

The ninth cause of action, solely against Israelov, asserts a claim for aiding and abetting a conversion by non-party Val Katayev ("Katayev"). In or around August 2016, Israelov introduced plaintiff's owners to his brother-in-law, Katayev, as a possible source of capital for plaintiff. Katayev has his own company, Spectrum Blue LLC ("Spectrum Blue"). In or around November 2016, Spectrum Blue began providing plaintiff with funding.

In or around April 2017, Katayev demanded that plaintiff consign jewelry and loose diamonds to Spectrum Blue as "collateral" for plaintiff's debt. Plaintiff began to consign jewelry and loose diamonds to Spectrum Blue on...

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