CTK Marketing, LLC v. Tristar Products, Inc.
- Edgardo Ramos
- 1:22-cv-07998
- U.S. District Court · Southern District of New York
- 15
In CTK Marketing v. Tristar Products, Judge Ramos granted Tristar’s and Mirchandani’s dismissal motions, dismissed claims with prejudice, and terminated iMedia’s motion because of bankruptcy.
CTK Marketing’s claims against Tristar Products, Inc. and Kishore L. Mirchandani were dismissed with prejudice. iMedia Brands, Inc.’s motion to dismiss was terminated because of the automatic bankruptcy stay and may be re-filed after its Chapter 11 proceedings end.
What happened
CTK Marketing, LLC v. Tristar Products, Inc. involved CTK Marketing’s claims that Tristar Products, Inc. and Kishore L. Mirchandani failed to pay royalties promised for introductions to athletes, brands, companies, and celebrities. CTK Marketing also sued iMedia Brands, Inc. and asserted related claims for fair dealing, an accounting, and a court declaration of the parties’ rights.
The court ruled that CTK Marketing could not sue under the June 2018 agreement because the complaint alleged that the agreement was between Robert Alexander and Mirchandani, while CTK Marketing did not exist until October 2018. The court also found that CTK Marketing did not allege that Alexander assigned the agreement to it. The related fair-dealing and declaration claims were duplicative, and CTK Marketing abandoned its accounting claim by not opposing dismissal arguments on that claim.
Judge Edgardo Ramos granted Tristar’s and Mirchandani’s motions to dismiss and dismissed CTK Marketing’s claims against both defendants with prejudice. The court terminated iMedia’s motion because iMedia’s Chapter 11 bankruptcy proceedings triggered an automatic stay; iMedia may re-file that motion after those proceedings end.
The detailed version
- CTK Marketing, LLC v. Tristar Products, Inc. · No. 1:22-cv-07998
- Edgardo Ramos
- Sept. 26, 2023
Background
CTK Marketing, LLC sued Tristar Products, Inc., Kishore L. Mirchandani, and iMedia Brands, Inc. for breach of contract and related claims. CTK Marketing alleged that Tristar and Mirchandani failed to pay royalties connected to third-party introductions, including introductions involving athletes, brands, companies, and celebrities. The defendants filed motions to dismiss the second amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.
The alleged June 2018 Third Party Agreement provided for royalties on products resulting from third-party introductions. The complaint alleged that Mirchandani and Robert Alexander agreed to those terms and that Alexander planned to form CTK Marketing with Charles Oakley. CTK Marketing was formed in October 2018, several months after the alleged June agreement. A later Oakley Agreement was signed by Tristar, Oakley, and CTK Enterprises LLC, which the opinion identifies as a separate entity from CTK Marketing. The opinion also describes a May 2020 agreement modifying the relationship concerning the Oakley Agreement.
Court’s Analysis
The court dismissed CTK Marketing’s breach-of-contract claim against Tristar because CTK Marketing did not adequately allege that it was a party to the June 2018 Third Party Agreement. Under New York law, a breach-of-contract claim requires, among other things, an enforceable agreement between the parties. The complaint identified Alexander and Mirchandani as the parties to the June 2018 agreement and did not allege that CTK Marketing later received an assignment of Alexander’s rights. Because CTK Marketing did not exist when the alleged agreement was made, the court concluded that it lacked standing to sue on that agreement.
The court did not resolve Tristar’s arguments that the June 2018 agreement was superseded by the Oakley Agreement or that the Oakley Agreement was terminated by the May 2020 agreement. It found those issues unnecessary to decide because CTK Marketing was not alleged to be a party to the June 2018 agreement.
The court also dismissed CTK Marketing’s claim for breach of the implied covenant of good faith and fair dealing and its claim for declaratory relief. It found both claims duplicative because they relied on the same conduct and agreement as the breach-of-contract claim. The court dismissed the accounting claim because CTK Marketing did not respond to Tristar’s arguments seeking dismissal, which the court treated as abandonment of that claim.
Disposition
The court concluded that amendment would be futile because additional allegations could not make CTK Marketing a party to the June 2018 agreement formed before CTK Marketing existed. It therefore dismissed CTK Marketing’s claims against Tristar with prejudice.
The court also dismissed CTK Marketing’s claims against Mirchandani with prejudice. It relied on CTK Marketing’s failure to oppose Mirchandani’s motion or explain why dismissal was unwarranted, as well as the court’s conclusion that Mirchandani had not been served. The court granted Mirchandani leave to request fees for preparing his motion to dismiss.
As to iMedia, the court did not decide the pending motion to dismiss. It terminated that motion because iMedia’s Chapter 11 bankruptcy proceedings triggered an automatic stay. The court stated that iMedia may re-file its motion after the bankruptcy proceedings conclude. Judge Edgardo Ramos ordered the dispositions described above on September 26, 2023.
Read the full 15-page opinion on CourtListener, the free public archive maintained by the Free Law Project.