Ormeno v. Relentless Consulting Inc

Background

Victor Ormeno, doing business as KH Entertainment, alleged that he reached an oral agreement in or around August 2015 for Wisin to perform at five concerts scheduled for September and October 2015. The performances were to occur in California, Nevada, and Arizona. Ormeno alleged that he paid deposits totaling either $115,000 or $120,000 to Relentless Consulting and spent thousands of dollars on promotion, tickets, hotels, rentals, and venue deposits.

The defendants never returned a signed contract. In September 2015, Juan Toro told Ormeno that the agreements and newly arranged performances had been canceled. Ormeno sent a demand letter on December 9, 2015, seeking return of the deposits and reimbursement of additional expenses, but the defendants did not pay or respond.

Ormeno filed this action on February 24, 2021, asserting claims for breach of an implied-in-fact contract, fraudulent misrepresentation, and unjust enrichment. Juan Luis Morera Luna, professionally known as Wisin, and W Entertainment, LLC, moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. They argued that all of the claims were barred by the applicable statutes of limitations.

Reasoning

The court applied New York’s borrowing statute, N.Y. C.P.L.R. § 202. That statute requires a claim accruing outside New York to meet the time limits of both New York and the place where the claim accrued, unless the plaintiff is a New York resident. The court stated that Ormeno was a California resident and that each claim accrued in California because that was where he sustained the economic impact of the alleged loss.

Under California law, an action on an oral contract generally must be filed within two years after the claim accrues. The court concluded that the alleged contract breaches occurred in 2015, including the cancellation of the performances and the defendants’ failure to provide a signed agreement or return the money. Because Ormeno did not sue until 2021, the contract claim was time-barred.

California law provides a three-year limitations period for fraudulent misrepresentation after discovery of the fraud. The court determined that Ormeno knew by the fall of 2015 that Wisin would not perform and that the agreement had been canceled, giving him the facts underlying his fraud claim. The court also concluded that the unjust-enrichment claim was untimely because Ormeno knew of the alleged enrichment in 2015 and did not sue within three years.

The court rejected Ormeno’s argument that New York law should apply because payments were sent to New York. It explained that New York’s borrowing statute does not use a general “center of gravity” or “nexus” approach to determine the limitations period.

Ruling

Judge Lewis J. Liman granted the motion to dismiss with prejudice. The court directed the Clerk of Court to close the case. The opinion does not separately describe the procedural effect of the ruling on each nonmoving defendant, although the motion discussed in the opinion was filed by Wisin and W Entertainment, LLC.