Samtani v. Cherukuri
| Decision Date | 31 December 2014 |
| Docket Number | 11-CV-02159 (CBA) (RER) |
| Parties | SUNIL SAMTANI, Plaintiff, v. RAMAKRISHNA CHERUKURI, Individually and in his official capacity as Chief Executive Officer of New York Fragrance, Inc., and NEW YORK FRAGRANCE, INC., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
NOT FOR PUBLICATION
On May 4, 2011, plaintiff Sunil Samtani brought this action against defendants Ramakrishna Cherukuri and New York Fragrance, Inc. ("NYF"). In addition to several claims pursuant to 42 U.S.C. § 1983, Samtani brought two claims under New York state tort law—one claim for malicious prosecution and one claim for intentional infliction of emotional distress ("IIED"). All of Samtani's claims arose from his prosecution by the Richmond County District Attorney's Office (the "D.A.'s Office"). On May 11, 2012, this Court dismissed Samtani's federal claims for failure to state a claim upon which relief could be granted, see Fed. R. Civ. P. 12(b)(6), because defendants were not state actors. Samtani's state law claims were permitted to proceed, however, because this Court possessed subject matter jurisdiction over the parties based on diversity of citizenship, see 28 U.S.C. § 1332. (D.E. 29.)
Defendants now move for summary judgment on the state law claims. For the following reasons, the motion is denied with respect to the malicious prosecution claim but is granted with respect to Samtani's IIED claim.
Defendant NYF is a perfume wholesaler incorporated in New York and with its principal place of business in Staten Island, New York. (Complaint ("Compl.") ¶ 3; Deposition of Ramakrishna Cherukuri ("Cherukuri Dep.") at 23.) Defendant Cherukuri is the Chief Executive Officer and president of NYF. (Compl. ¶ 4; Cherukuri Dep. at 23-24.) Plaintiff Samtani owned Grande Perumeria, Inc., also a perfume wholesaler, from 2001 until 2006, when it was dissolved pursuant to Chapter 7 bankruptcy proceedings. (Deposition of Sunil Samtani ("Samtani Dep.") at 16-21.) This case arises from defendants' sale of perfume in bulk to Samtani and Grande Perfumeria, a business relationship that began in 2001. (Samtani Dep. at 21.) In total, the defendants sold Grande Perfumeria approximately $1.5 million worth of merchandise over about four years. (Recommendation for Dismissal ("RFD") at 6.)1
Samtani initially paid defendants for shipments check on delivery ("C.O.D."). (Cherukuri Dep. at 44-45.)2 Around May 2001, however, defendants began accepting postdated checks from Samtani, effectively letting him make purchases on limited credit. (Id. at 67-68; Samtani Dep. at 27-29.) Both Cherukuri and Samtani indicated that this practice was not uncommon in the perfume industry. (Cherukuri Dep. at 67; Samtani Dep. at 31-32.) Then, at some point after 2002—by which time the parties had conducted twenty to thirty transactions—Cherukuri granted Samtani an "open account," which allowed Samtani to accumulate debt and pay it off as hepleased. (Samtani Dep. at 49-50.) At peak, Samtani accumulated a balance of approximately $400,000. (Id)
Over time, Samtani sent the defendants checks to pay off his balance. (Id. at 42-50.) However, around 2004, Grande Perfumeria encountered financial difficulties, and Samtani stopped payment on a number of postdated checks because the accounts on which they would draw contained insufficient funds to cover them. (Id. at 42-48.) As of December 2004, Samtani had reduced to $160,000 the balance owed to the defendants. (NYF Customer Ledger ("NYF Ledger") at 2.)
Grande Perfumeria's financial woes persisted, however, and in 2006, the company filed for Chapter 7 bankruptcy in the Southern District of Texas. Court records indicate that at least seven different notices were sent to NYF's business address, seeking to alert the company to the bankruptcy proceedings. (Declaration of Gerald M. Cohen ("Cohen Decl."), Exhibit ("Exh.") B, Bankruptcy Notices.) Cherukuri never appeared in the bankruptcy and denied having received the notices. (Cherukuri Dep. at 98-108.) At least one similarly situated creditor acknowledged having received by mail notice of the bankruptcy proceedings. (Deposition of Kanak Golia ("Golia Dep.") at 33-34.)
At some point in 2007, Cherukuri—either personally or through a representative— approached the D.A.'s Office in Richmond County to file a criminal complaint against Samtani. (Deposition of Om Kakani ("Kakani Dep") at 12-13.) Assistant District Attorney ("A.D.A.") Om Kakani was assigned to the case in May of that year, (id. at 9), and thereafter received a packet of information from an attorney representing Cherukuri, which purported to include "documents . . . concerning the alleged fraudulent scheme by which [Samtani] bilked" Cherukuriand others "out of substantial sums of money." (Cohen Decl., Exh. C, Goodman & Saperstein Letter, July13, 2007 ("G & S Letter"); see also Kakani Dep. 17-18.) According to a letter that accompanied the documents, Samtani "instill[ed] credit confidence through placing small orders, paying for them, then submitting larger orders, paying on account of those orders, and finally not paying the large debit balances." (Cohen Decl., Exh. C, G & S Letter.) Among the documents was an independent forensic investigation demonstrating that Samtani owed defendants $160,000. (Kakani Dep. at 18.)
Kakani and Cherukuri met approximately five times in 2008. (Id at 35.) During those meetings, Cherukuri told Kakani that he was having "a problem with a dealer in Texas who had taken items from him on credit and had never paid back those items." (Id. at 16.) He further told Kakani the following. Cherukuri first met Samtani in 2002, (see RFD at 2; Kakani Dep. at 25), and they had initially engaged in two small transactions C.O.D., (RFD at 3). Thereafter, Samtani asked the defendants to extend him credit for the next shipment, and Cherukuri obliged, dispatching three shipments in return for postdated checks. (Id. at 3; Kakani Dep. at 76-77, 222.) When, on the appointed date, Cherukuri attempted to cash the checks, they did not clear due to insufficient funds in Samtani's accounts. (RFD at 3-4.) Cherukuri never received payment for "$160,000 worth of products" he had shipped to Samtani between December 12, 2002 through May 15, 2005. (Id. at 4; see also Kakani Dep. at 21.)
Kakani testified at his deposition that, during their meetings, Cherukuri did not inform him of several facts relating to his business dealings with Samtani. Those facts included: (1) that there had been shipments made on credit besides the three shipments at issue, (Kakani Dep. at 29); (2) that Samtani had previously paid off approximately $240,000 of the debt he owed defendants, (id. at 34, 78); (3) that the Cherukuri-Samtani business relationship had started inearly 2001, rather than December 2002, (id. at 32); (4) that Samtani had paid for shipments with postdated checks as early as 2001, (id. at 84); (5) that the two parties had entered into a financing agreement regarding Samtani's outstanding debt, (id. at 57); and (6) that Samtani had filed for bankruptcy, (id. at 49-50). Kakani also testified that none of the documents provided to the D.A.'s Office by Cherukuri or his lawyers indicated the full extent of the parties' nearly $1.5 million in business dealings between 2001 and 2005. Instead, Kakani said, the documents showed only the transactions that led to the $160,000 debt. (Id. at 37.) However, a ledger provided the D.A.'s Office, (id. at 144-46), appears to indicate a total number of transactions worth more than $160,000, (NYF Ledger).
After receiving the complaint, the D.A.'s Office subpoenaed financial information from Samtani and conducted a forensic investigation. (Kakani Dep. at 128-30.) However, the office's investigation relied almost entirely on the records provided by Cherukuri. (Id. at 41, 184-86.) Cherukuri also put Kakani in contact with two other perfume wholesalers who Samtani owed money: Vinnie Chabra and Kanak Golia. (Id. at 43-47; see also Deposition of Vinnie Chabra at 46 ().) Both men later testified before the grand jury that, like Cherukuri, they had shipped Samtani perfume on credit and never received payment. (Kakani Dep. at 45.) Finally, the D.A.'s Office sought to determine whether Samtani had filed for bankruptcy. However, Kakani searched only in New York, Georgia, and the Eastern District of Texas, and therefore never learned that Samtani had filed for bankruptcy in the Southern District of Texas. (RFD at 8.)
In April 2009, Kakani put the case against Samtani before a Richmond County grand jury. (Kakani Dep. 36.) During the proceedings, Cherukuri testified as follows. He first metSamtani in 2002 when Samtani came to NYF's offices and requested to buy perfume on credit. (Grand Jury Minutes ("GJM") at 16-17.) Cherukuri refused. Instead, he insisted Samtani pay prior to shipment. (Id. at 18.) After two shipments, Samtani sent him a check for a third shipment but asked him to "hold it one week." (Id.) Cherukuri agreed and permitted Samtani to pay for a few shipments with postdated checks. (Id. at 18-19.) When he attempted to cash the checks, "[a] lot of them bounced." (Id. at 19.) He then went on to describe a series of communications between him and Samtani in which he sought to obtain payment for the shipped merchandise. (Id. at 24-33.)
Kakani also placed before the grand jury a document provided by Cherukuri, which purported to show NYF's sales to Samtani. (NYF Ledger; see also Kakani Dep. at 145-46; Cherukuri Dep. at 140-41.) Cherukuri testified that the ledger contained the entirety of NYF's transactions with Samtani. (GJM at 21-24.) However, the ledger's first entry is for December 12, 2002, and it does not reflect any...
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