Liberty Harbor Coffee Inc. v. Maggie Moss and Moss Business Consulting

Background

Maggie Moss previously worked for Plaintiffs Liberty Harbor Coffee Inc., also known as Brewshot, and NYNJ COFFEE2 LLC, also known as Jersey Social. Plaintiffs alleged that Moss first worked as a part-time consultant for Jersey Social, later managed Brewshot, and then orally agreed to provide Brewshot with management, marketing, branding, and other services in exchange for a 5% equity interest. Brewshot allegedly advanced tens of thousands of dollars to Moss’s limited liability company against future equity distributions, with repayment due when Brewshot became profitable.

Moss left on or about June 19, 2024, to attend school in Colorado. Plaintiffs alleged that she had not provided the agreed services or repaid the advance. Jersey Social also alleged that Moss encouraged employees to leave or be terminated. Plaintiffs asserted claims for breach of contract, breach of the implied duty of good faith and fair dealing, unjust enrichment, and tortious interference with a contract.

Procedural History and Materials Considered

Plaintiffs filed the action in New York state court, and Defendants removed it to federal court based on diversity jurisdiction. Defendants moved to dismiss on two grounds: forum non conveniens, meaning that another forum would be more convenient, and failure to state a legally sufficient claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiffs separately sought to return the case to state court, but the court had previously denied that request.

Defendants submitted two purported independent-contractor agreements, bank records for Moss’s LLC, and a text-message exchange. The court held that none of those documents was incorporated into or integral to the complaint. It therefore disregarded them rather than treating the motion as one for summary judgment.

Forum Non Conveniens

The court denied Defendants’ request to dismiss on forum non conveniens grounds. It held that Plaintiffs’ choice of New York was entitled to deference because Jersey Social was a New York citizen and the allegations did not show that Plaintiffs chose New York for an improper forum-shopping purpose. The court also noted that Defendants had not shown that New York was materially less convenient than New Jersey, particularly because New York and New Jersey are geographically close and Defendants were not located in New Jersey.

The court found that New Jersey appeared to be an adequate alternative forum, but concluded that this was not enough to justify dismissal. It also rejected Defendants’ reliance on New Jersey choice-of-law provisions in the written agreements because those agreements were not being considered, the case was based on an alleged later oral agreement, and the parties agreed that New York and New Jersey law did not materially conflict. The court therefore applied New York law.

Breach of Contract

The court dismissed Brewshot’s breach-of-contract claim. It held that the alleged oral agreement was too indefinite to establish an enforceable contract. Plaintiffs described Moss’s duties as a broader “series of services,” with management, marketing, and branding given only as examples. The complaint did not adequately identify the nature, scope, quantity, goals, deliverables, or duration of those services. It also did not clearly identify who negotiated the agreement for Brewshot, or when and where the agreement was made.

The court separately held that Plaintiffs had not adequately pleaded a breach. The complaint did not specify which services Moss failed to provide. Although Plaintiffs alleged that Moss failed to repay the advance, they also alleged that repayment was due when Brewshot became profitable, and they did not allege that Brewshot had become profitable. The court further found no allegation that Moss was required to remain in her role until that event occurred.

The court rejected Defendants’ argument that the alleged agreement necessarily violated New York’s Statute of Frauds, which generally requires a writing for an agreement that cannot be performed within one year. The court held that the alleged agreement was not, by its terms, impossible to perform within one year. Nevertheless, the court dismissed the contract claim because the agreement and breach were inadequately pleaded.

Implied Covenant of Good Faith and Fair Dealing

The court dismissed Brewshot’s claim for breach of the implied covenant of good faith and fair dealing. Under New York law, this duty is part of a contract. The court held that Plaintiffs based this claim on the same allegations as the breach-of-contract claim—Moss’s alleged failure to provide services and repay the advance. Because the two claims relied on the same facts and did not allege a distinct wrong, the implied-covenant claim was duplicative.

Unjust Enrichment

The court allowed Plaintiffs to plead unjust enrichment as an alternative to the contract claim because Defendants disputed the existence of the alleged oral agreement. It nevertheless dismissed the unjust-enrichment claim as inadequately pleaded.

The court held that Plaintiffs had not sufficiently alleged that Moss was enriched at Brewshot’s expense. Plaintiffs did not adequately identify the services Moss failed to provide, and their allegations indicated that Moss was entitled to retain the advance until Brewshot became profitable. Plaintiffs also did not explain why retaining the advance would be unfair when the alleged repayment condition had not occurred. The court held that these omissions defeated the claim.

Tortious Interference with a Contract

The court dismissed Jersey Social’s tortious-interference claim. Although Plaintiffs alleged that Jersey Social had employment contracts with its employees and that Moss intentionally interfered with them, they did not identify any contract provisions that the employees breached. The allegations that employees resigned or were terminated at Moss’s instigation did not explain how those events violated the employees’ contracts.

The court did not decide whether Plaintiffs could state a claim for interference with a prospective economic advantage because Plaintiffs had not brought that claim.

Disposition

Judge Rochon’s order denied Defendants’ motion to dismiss based on forum non conveniens and granted Defendants’ motion to dismiss for failure to state a claim. The court dismissed the complaint’s claims and directed the Clerk of Court to terminate the motion and close the case. The opinion does not state that the dismissal was with or without prejudice.