Growth Alliance Group LLC v. Christmas Square Group LLC

Background

Growth Alliance Group LLC sued Christmas Square Group LLC and Francisco Santos. It alleged that the parties entered a marketing and intellectual-property license agreement to market and promote Horrorland. According to the complaint, Growth Alliance was required to spend $150,000 on marketing between September and November 2024. After gross revenue exceeded $558,748, Growth Alliance allegedly was entitled to the next $150,000 in revenue and 25% of gross revenue above $708,748. Growth Alliance alleged that it performed its obligations and that the defendants failed to pay $187,436.25.

Growth Alliance asserted claims for breach of contract, quantum meruit, and promissory fraud. Quantum meruit is a claim seeking the reasonable value of services provided when withholding payment would unjustly benefit the recipient. Growth Alliance also asserted the claims against Santos individually, relying on the alter-ego doctrine, which can allow a plaintiff to treat a company and an individual as legally connected when the company is not genuinely separate and respecting that separation would cause injustice. The defendants moved to dismiss.

Court’s Analysis

Breach of contract. The court held that Growth Alliance adequately pleaded a breach-of-contract claim against Christmas Square Group LLC. The complaint alleged the agreement, Growth Alliance’s performance, the defendants’ failure to pay, and resulting damages. The court rejected the argument that Growth Alliance had to attach the entire agreement to the complaint, explaining that the complaint included relevant excerpts sufficient to state a plausible claim. The motion to dismiss this claim was denied.

Quantum meruit. The court explained that a plaintiff generally cannot recover under a payment-for-services theory when an enforceable contract covers the same subject. A plaintiff may plead that theory as an alternative when there is a dispute about the contract’s validity, but Growth Alliance did not allege such a dispute or other facts supporting the claim. The motion to dismiss this claim was granted with leave to amend.

Promissory fraud. Promissory fraud requires an allegation that the defendant made a promise it had no intention of keeping. Fraud claims also must describe the alleged fraud with particularity, including the time, place, content, and participants in the misrepresentation. The court found that Growth Alliance’s allegations that the defendants did not intend to pay, based mainly on their failure to pay or respond to payment demands, were conclusory and did not adequately allege fraudulent intent. The motion to dismiss this claim was granted with leave to amend. The court also noted that fraudulent inducement can be an exception to the economic-loss rule if it is adequately pleaded.

Claims against Francisco Santos. The court found that the complaint merely listed factors supporting an alter-ego theory—such as commingling funds, control of the company, inadequate capitalization, and disregard of company formalities—without providing supporting facts. The motion to dismiss all claims against Santos was granted with leave to amend.

Damages and attorneys’ fees. The defendants argued that the contract barred consequential, incidental, indirect, exemplary, special, and punitive damages, and sought dismissal of requests for punitive damages and attorneys’ fees. The court held that a request for punitive or other damages is a remedy rather than a separate claim, making a motion to dismiss an improper way to seek dismissal of those requests at this stage. The motion to dismiss the remedies was denied.

Disposition

The court denied in part and granted in part the motion to dismiss. Specifically, it denied dismissal of the breach-of-contract claim against Christmas Square Group LLC and denied dismissal of the requested remedies. It granted dismissal with leave to amend as to the quantum meruit and promissory-fraud claims, and dismissed all claims against Santos with leave to amend.

Growth Alliance was permitted to file an amended complaint by July 3, 2025, limited to correcting the identified deficiencies. It could not add new claims or parties, or otherwise change the allegations, without permission from the court or agreement of the parties. If no amended complaint was filed by that date, the case would proceed only on the breach-of-contract claim against Christmas Square Group LLC, and the remaining claims would remain dismissed with prejudice.