Scaminaci v. Jaffrey

Background

Andres Scaminaci and Omar Jaffrey were co-owners and managers of the Melody Capital family of investment funds. The parties entered into a 2018 agreement allowing each to launch separate funds while giving each a 5% carry share—a right to receive a share of certain future investment businesses created by the other. Jaffrey launched Melody Investment Advisors L.P. (MIA), and Scaminaci alleged that MIA qualified under the agreement.

In 2020, the parties entered into another agreement governing Melody during its period of selling or monetizing existing investments. That agreement generally prohibited either partner, or entities controlled by either partner, from causing specified Melody entities to enter into legally binding agreements without the other partner’s prior consent.

Scaminaci arranged an effort to sell Melody Wireless Infrastructure, Inc. (MWI), including by signing nondisclosure agreements with potential buyers. He signed those agreements on behalf of his separate fund, MCG, which did not own MWI. During the earlier hearing on Scaminaci’s request for a preliminary injunction, however, his lawyer admitted that Scaminaci should be treated as having signed the agreements on behalf of Melody and had therefore breached the 2020 agreement. The court denied the preliminary injunction. MWI was later sold for $1.625 billion, and Scaminaci apparently approved the sale, signed the sale documents, and received a substantial payout, although the opinion states that Jaffrey made those representations and that Scaminaci did not appear to disagree.

Scaminaci then filed an amended complaint asserting claims for breach of the 2020 agreement, breach of the 2018 agreement, breach of fiduciary duty, and defamation and defamation under circumstances that could support presumed damages. Jaffrey moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), which concerns subject-matter jurisdiction, and 12(b)(6), which concerns whether a complaint states a legally sufficient claim.

Rulings on the Claims

2020 agreement. The court held that Scaminaci failed to state a breach-of-contract claim. New York law governed this agreement, and a contract claim requires, among other things, the plaintiff’s adequate performance. The court concluded that Scaminaci’s own allegations and the hearing admission established that he was the first partner to breach the agreement by signing nondisclosure agreements relating to the MWI sale without Jaffrey’s prior consent. The court rejected Scaminaci’s argument that his breaches were not material, reasoning that if his conduct was not a material breach, Jaffrey’s alleged comparable conduct would not be material either. The court also rejected Scaminaci’s argument that Jaffrey may have waived a breach claim, because Jaffrey was not asserting a breach claim against Scaminaci. This claim was dismissed with prejudice as one of the remaining claims.

2018 agreement. The court held that Scaminaci lacked standing to pursue his claim concerning a 5% carry share in MIA. Standing requires a concrete and particularized injury that is actual or imminent, rather than hypothetical. Scaminaci alleged that Jaffrey appeared to believe he was no longer bound by the 2018 agreement and had refused to acknowledge Scaminaci’s carry share, but he also acknowledged that Jaffrey had never expressly disputed his entitlement to that asset. The court further explained that injuries Scaminaci raised in his opposition brief—such as lacking information about MIA or being unable to use, sell, assign, or donate the carry share—were not alleged in the amended complaint. The court said Scaminaci might have standing in the future if Jaffrey failed or imminently threatened to fail to include him when MIA issued equity. The claim was dismissed without prejudice.

Fiduciary duty. The court held that Scaminaci failed to state a fiduciary-duty claim. To the extent the claim was based on Jaffrey’s exclusion of Scaminaci from the MWI sale and other management decisions, the court concluded that it arose from the same facts as the alleged contract breach and was therefore duplicative. The court also rejected the claim insofar as it was based on Jaffrey’s pursuit of competing investment opportunities and use of Melody personnel, because the 2018 agreement permitted Jaffrey to pursue competing opportunities and build a team within Melody to support that effort. The court noted that the allegation that Jaffrey favored MIA over Melody could also be duplicative of the contract claim. This claim was dismissed with prejudice as one of the remaining claims.

Defamation. The court held that Scaminaci failed to state a defamation claim. Under New York law, a plaintiff generally must allege a defamatory factual statement, publication to a third party, fault, falsity, and either special damages or circumstances making the statement actionable without proof of special damages. The court concluded that the alleged statements describing Scaminaci’s effort to sell MWI as a “clandestine” or “improper” scheme were substantially true descriptions of conduct alleged in the complaint or were nonactionable opinions. The defamation claims were dismissed with prejudice as remaining claims.

Disposition

The court granted Jaffrey’s motion to dismiss the amended complaint. It dismissed Scaminaci’s breach-of-the-2018-agreement claim without prejudice and dismissed all remaining claims with prejudice. The Clerk of Court was directed to terminate the pending motion and close the case.