ADYB Engineered For Life, Inc. v. Edan Administration Services LTD.

Background

ADYB sued Edan Administration Services Ltd. (EDAN) and Pom Advanced Armor Solutions LLC (PAAS) for breach of contract, conversion, and abuse of process. EDAN and PAAS, together with Edwin Cohen (E. Cohen), asserted counterclaims against ADYB and Hananya Cohen (H. Cohen), including breach of contract, fraud, and unjust enrichment. E. Cohen also asserted independent breach-of-contract and unjust-enrichment claims against ADYB and H. Cohen.

The dispute arose from a 2011 Investment Agreement concerning armor technology developed by H. Cohen. The agreement called for E. Cohen to invest $250,000 in exchange for a 20% interest in ADYB. E. Cohen alleged that ADYB and H. Cohen never issued that interest or paid the related dividends and other financial benefits. The parties had completed discovery and had requested a trial date when the court considered the motions addressed in this opinion.

Rulings on E. Cohen’s Claims

The court granted in full ADYB’s motion to dismiss E. Cohen’s independent counterclaims for breach of contract and unjust enrichment. Under New York law, the applicable limitations period for each claim was six years. The court concluded that E. Cohen’s breach-of-contract claim accrued when the promised 20% interest was not issued after the 2011 agreement and was therefore untimely when asserted in January 2020. The court rejected E. Cohen’s arguments that a statement in earlier related litigation extended the limitations period or that ADYB should be prevented from relying on the limitations defense.

The court also concluded that E. Cohen’s unjust-enrichment claim was untimely. In addition, the claim was duplicative because it concerned the same subject matter as the alleged breach of the Investment Agreement. The court dismissed both claims against H. Cohen as well because they failed as a matter of law.

Requests to Amend the Pleadings

The court denied ADYB’s request for leave to amend its complaint to add E. Cohen as a defendant to ADYB’s existing breach-of-contract claim against EDAN and PAAS. The deadline for amended pleadings had passed, ADYB had not shown good cause for the delay, and allowing the amendment would have required reopening discovery and delayed the case.

The court also denied E. Cohen’s request for leave to add a conversion claim against ADYB and H. Cohen concerning his alleged 20% interest in ADYB. The court found that the proposed claim would be futile because the court would lack supplemental jurisdiction over it. The court also found the request untimely and noted that the proposed claim was essentially the same as a previously rejected proposed fraudulent-conveyance claim.

Requests for Permission to File Motions

The court granted H. Cohen leave to move to dismiss the breach-of-contract counterclaim asserted by EDAN, PAAS, and E. Cohen. It denied H. Cohen leave to move to dismiss their unjust-enrichment counterclaim because the court had previously allowed that claim to proceed against him and further motion practice would delay trial. It denied as moot H. Cohen’s request for leave to move to dismiss E. Cohen’s independent claims because those claims had already been dismissed against H. Cohen.

The court denied EDAN and PAAS leave to move to dismiss part of ADYB’s breach-of-contract claim on statute-of-limitations grounds. It also denied, in the alternative, their request to amend their answer to add a statute-of-limitations defense. The court found the request late because discovery was complete and the deadline for amended pleadings had long passed.

The court granted EDAN, PAAS, and E. Cohen leave to move to dismiss H. Cohen’s counterclaims for lack of subject-matter jurisdiction. They had not yet answered those counterclaims, and the court stated that further briefing would help it assess the jurisdictional issues.

Disposition and Next Steps

The order granted ADYB’s motion to dismiss E. Cohen’s independent counterclaims for breach of contract and unjust enrichment; denied ADYB’s request to add E. Cohen to its breach-of-contract claim; granted, denied, or denied as moot H. Cohen’s requests as specified above; denied EDAN and PAAS’s request concerning ADYB’s breach-of-contract claim and a statute-of-limitations defense; granted EDAN, PAAS, and E. Cohen leave to move to dismiss H. Cohen’s counterclaims; and denied E. Cohen’s request to add a conversion claim.

The court directed counsel to appear for a status conference on May 17, 2022, and ordered the parties to submit a joint status letter one week beforehand. The clerk was directed to terminate docket entries 179 and 181.