Preview
FILED: NEW YORK COUNTY CLERK 01/14/2021 01:56 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 218 RECEIVED NYSCEF: 01/14/2021
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. ANDREW BORROK PART IAS MOTION 53EFM
Justice
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INDEX NO. 652343/2018
CRESCO LABS NEW YORK, LLC,CRESCO LABS LLC,AN
ILLINOIS LIMITED LIABILITY COMPANY, MOTION DATE 03/02/2020
Plaintiff, MOTION SEQ. NO. 009
-v-
FIORELLO PHARMACEUTICALS, INC.,ERIC SIROTA, DECISION + ORDER ON
SUSAN YOSS, JOHN DOES 1 - 10 MOTION
Defendant.
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The following e-filed documents, listed by NYSCEF document number (Motion 009) 146, 147, 148, 149,
150, 151, 152, 153, 167, 177, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196,
197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212
were read on this motion to/for LEAVE TO FILE .
Upon the foregoing documents, and after further consideration following oral argument, Cresco
Labs, LLC and Cresco Labs New York, LLC’s (collectively, Cresco) motion to amend is denied.
Although Eric Sirota and Susan Yoss may have allegedly interfered with the No Shop provision
in a certain letter of intent between Cresco and Fiorello Pharmaceuticals, Inc. (Fiorello) and
Cresco was allegedly damaged by such interference, the damages of the cover costs of doing a
substitute transaction and the transaction costs did not enrich Mr. Sirota or Ms. Yoss.
Reference is made to a Decision and Order dated May 17, 2019, as amended by an Amended
Decision and Order dated October 15, 2019 (collectively, the Prior Decision; NYSCEF Doc.
Nos. 119, 142). Familiarity is presumed. In the Prior Decision, the unjust enrichment claim was
dismissed because “Cresco has failed to allege that Eric Sirota and Susan Yoss actually benefited
652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 1 of 3
Motion No. 009
1 of 3
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in any way at Cresco’s expense, or that Cresco suffered any cognizable loss” (NYSCEF Doc.
No. 142 at 11).
Leave to amend pleadings should be freely given unless there is prejudice or surprise resulting
from the delay to the opposing party or if the proposed amendment is “palpably improper or
insufficient as a matter of law” (McGhee v Odell, 96 AD3d 449, 450 [1st Dept 2012]). Upon
further consideration and following oral argument, the proposed claim for unjust enrichment
fails.
The elements of unjust enrichment are: (1) the defendant was enriched, (2) at the plaintiff’s
expense, and (3) that it is against equity and good conscience to permit the defendant to retain
what is sought to be recovered” (Georgia Malone & Co., Inc. v Rieder, 19 NY3d 511, 516
[2012]).
In the proposed second amended complaint, Cresco alleges that (i) Mr. Sirota and Ms. Yoss
personally received $20,000,000 from the sale of Fiorello, which they would not have received
under the agreement with Cresco, and (ii) that Cresco suffered a cognizable loss by paying a
higher purchase price for a replacement transaction (NYSCEF Doc. No. 150, ¶¶ 55-57, 67-71).
The unjust enrichment claim fails because the damages of the transaction cost and the cover
costs (i.e., the delta between the new purchase price paid by Cresco for a replacement transaction
and the $20,000,000 which Mr. Sirota and Ms. Yoss received from a third-party purchaser) did
not benefit Mr. Sirota and Ms. Yoss – i.e., those damages did not enrich Mr. Sirota and Ms. Yoss
(see also Swain v Brown, 135 AD3d 629, 632 [1st Dept 2016] [“[u]njust enrichment occurs when
652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 2 of 3
Motion No. 009
2 of 3
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NYSCEF DOC. NO. 218 RECEIVED NYSCEF: 01/14/2021
a defendant enjoys a benefit bestowed by the plaintiff”]). Thus, Cresco fails to state a claim for
unjust enrichment under these circumstances (see Georgia Malone, supra). Accordingly,
Cresco’s motion to amend is denied.
Accordingly, it is
ORDERED that plaintiffs’ motion for leave to file a second amended complaint is denied.
1/14/2021
DATE ANDREW BORROK, J.S.C.
CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION
GRANTED X DENIED GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 3 of 3
Motion No. 009
3 of 3
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FILED: NEW YORK COUNTY CLERK 01/14/2021 01:56 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 218 RECEIVED NYSCEF: 01/14/2021 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. ANDREW BORROK PART IAS MOTION 53EFM Justice ---------------------------------------------------------------------------------X INDEX NO. 652343/2018 CRESCO LABS NEW YORK, LLC,CRESCO LABS LLC,AN ILLINOIS LIMITED LIABILITY COMPANY, MOTION DATE 03/02/2020 Plaintiff, MOTION SEQ. NO. 009 -v- FIORELLO PHARMACEUTICALS, INC.,ERIC SIROTA, DECISION + ORDER ON SUSAN YOSS, JOHN DOES 1 - 10 MOTION Defendant. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 009) 146, 147, 148, 149, 150, 151, 152, 153, 167, 177, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212 were read on this motion to/for LEAVE TO FILE . Upon the foregoing documents, and after further consideration following oral argument, Cresco Labs, LLC and Cresco Labs New York, LLC’s (collectively, Cresco) motion to amend is denied. Although Eric Sirota and Susan Yoss may have allegedly interfered with the No Shop provision in a certain letter of intent between Cresco and Fiorello Pharmaceuticals, Inc. (Fiorello) and Cresco was allegedly damaged by such interference, the damages of the cover costs of doing a substitute transaction and the transaction costs did not enrich Mr. Sirota or Ms. Yoss. Reference is made to a Decision and Order dated May 17, 2019, as amended by an Amended Decision and Order dated October 15, 2019 (collectively, the Prior Decision; NYSCEF Doc. Nos. 119, 142). Familiarity is presumed. In the Prior Decision, the unjust enrichment claim was dismissed because “Cresco has failed to allege that Eric Sirota and Susan Yoss actually benefited 652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 1 of 3 Motion No. 009 1 of 3 FILED: NEW YORK COUNTY CLERK 01/14/2021 01:56 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 218 RECEIVED NYSCEF: 01/14/2021 in any way at Cresco’s expense, or that Cresco suffered any cognizable loss” (NYSCEF Doc. No. 142 at 11). Leave to amend pleadings should be freely given unless there is prejudice or surprise resulting from the delay to the opposing party or if the proposed amendment is “palpably improper or insufficient as a matter of law” (McGhee v Odell, 96 AD3d 449, 450 [1st Dept 2012]). Upon further consideration and following oral argument, the proposed claim for unjust enrichment fails. The elements of unjust enrichment are: (1) the defendant was enriched, (2) at the plaintiff’s expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” (Georgia Malone & Co., Inc. v Rieder, 19 NY3d 511, 516 [2012]). In the proposed second amended complaint, Cresco alleges that (i) Mr. Sirota and Ms. Yoss personally received $20,000,000 from the sale of Fiorello, which they would not have received under the agreement with Cresco, and (ii) that Cresco suffered a cognizable loss by paying a higher purchase price for a replacement transaction (NYSCEF Doc. No. 150, ¶¶ 55-57, 67-71). The unjust enrichment claim fails because the damages of the transaction cost and the cover costs (i.e., the delta between the new purchase price paid by Cresco for a replacement transaction and the $20,000,000 which Mr. Sirota and Ms. Yoss received from a third-party purchaser) did not benefit Mr. Sirota and Ms. Yoss – i.e., those damages did not enrich Mr. Sirota and Ms. Yoss (see also Swain v Brown, 135 AD3d 629, 632 [1st Dept 2016] [“[u]njust enrichment occurs when 652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 2 of 3 Motion No. 009 2 of 3 FILED: NEW YORK COUNTY CLERK 01/14/2021 01:56 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 218 RECEIVED NYSCEF: 01/14/2021 a defendant enjoys a benefit bestowed by the plaintiff”]). Thus, Cresco fails to state a claim for unjust enrichment under these circumstances (see Georgia Malone, supra). Accordingly, Cresco’s motion to amend is denied. Accordingly, it is ORDERED that plaintiffs’ motion for leave to file a second amended complaint is denied. 1/14/2021 DATE ANDREW BORROK, J.S.C. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE 652343/2018 CRESCO LABS NEW YORK, LLC, vs. FIORELLO PHARMACEUTICALS, Page 3 of 3 Motion No. 009 3 of 3