Easton LLC f/k/a Sprezzatura, LLC v. Violet Grey, Inc.

Background

Easton Rae, LLC, formerly known as Sprezzatura LLC, sued Violet Grey, Inc. Easton Rae alleged that it had been providing consulting services to Violet Grey and that the parties modified their prior arrangement on January 5, 2021. Under that modified arrangement, Easton Rae was to perform nine obligations connected to a three-year plan in exchange for $26,250 per month.

The complaint further alleged that Violet Grey’s CEO recruited Easton Rae’s CEO, Jessica Davidoff, to serve as Violet Grey’s chief business officer. Davidoff allegedly performed sixteen duties in that role for approximately two or three months, including work connected to a transaction involving Farfetch, Ltd. The parties did not memorialize an agreement covering the chief business officer role. Easton Rae alleged that Violet Grey’s CEO made statements suggesting that Davidoff would receive compensation for that work, but later told Davidoff that she would not serve in the role.

The case originally included claims for breach of contract, quantum meruit, and unjust enrichment. After amendments, the breach-of-contract claim was dropped. The court’s opinion addressed Violet Grey’s motion to dismiss the Third Amended Complaint.

Violet Grey’s arguments

Violet Grey moved under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal for lack of subject-matter jurisdiction, arguing that Easton Rae had not adequately alleged the amount required for diversity jurisdiction. Violet Grey also moved under Rule 12(b)(6), which tests whether a complaint states a legally sufficient claim. It argued that New York’s statute of frauds barred the claims and that the alleged chief business officer arrangement impermissibly attempted to change the parties’ written agreement orally despite an integration clause and a restriction on oral modifications.

Easton Rae argued that Rule 12(g)(2) barred Violet Grey from raising those Rule 12(b)(6) defenses in a later pre-answer motion because Violet Grey could have raised them in its first motion to dismiss.

Court’s analysis

The court denied the Rule 12(b)(1) motion. The parties’ citizenship was not disputed, and the Third Amended Complaint alleged damages exceeding $75,000. The court explained that a complaint’s claimed amount is generally presumed to be made in good faith unless the opposing party shows to a legal certainty that the claim cannot satisfy the jurisdictional threshold. Violet Grey challenged the plausibility of the damages allegations but did not make that showing. The court also stated that the remaining disputes about the value of Easton Rae’s work were factual issues inappropriate for resolution on a motion to dismiss for lack of jurisdiction.

The court also denied the Rule 12(b)(6) motion because Rule 12(g)(2) barred Violet Grey from raising the statute-of-frauds and no-oral-modification defenses in this successive pre-answer motion. Those defenses had been available when Violet Grey filed its first motion to dismiss. The later amendments concerning jurisdictional facts did not change the theory or scope of the case in a way that created a new opportunity to raise them.

The court did not decide whether those defenses would ultimately defeat Easton Rae’s claims. It explained that Violet Grey could still raise the defenses in an answer, through a motion for judgment on the pleadings after the pleadings closed, or at trial.

Disposition

The court denied Violet Grey’s motion to dismiss on both grounds. It ordered Violet Grey to file an answer within 21 days after March 29, 2023, and directed the clerk to close the motion at ECF Number 41.