Motion for Writ in Sparx Logistics Hong Kong Ltd., Spark Logistics Us Limited v. Shoez, Inc., Brands Unlimited, Gif Services, Inc., Deepak Ramchandani a/k/a Deepak Parikh, Gina Napolitano| Trellis.Law

On February 21, 2017 a Motion-Secondary was filed involving a dispute between Spark Logistics Us Limited, Sparx Logistics Hong Kong Ltd., and Brands Unlimited, Deepak Ramchandani A K A Deepak Parikh, Gif Services, Inc., Gina Napolitano, Shoez, Inc., for Commercial - Contract in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 06/29/2023 11:03 PM INDEX NO. 650884/2017
NYSCEF DOC. NO. 193 RECEIVED NYSCEF: 06/29/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
------------------------------------------------------------ X
SPARX LOGISTICS HONG KONG LTD. and
SPARX LOGISTICS USA LIMITED,
Index No. 650884/2017
Plaintiffs,

- against -

SHOEZ, INC., BRANDS UNLIMITED,
GIF SERVICES, INC., DEEPAK
RAMCHANDANI a/k/a DEEPAK PARIKH
and GINA NAPOLITANO,

Defendants.
------------------------------------------------------------ X
PLAINTIFFS’ POST-TRIAL FINDINGS OF FACT AND CONCLUSIONS OF LAW

LAZARUS & LAZARUS, P.C.
Harlan M. Lazarus, Esq.
Yvette J. Sutton, Esq.
240 Madison Avenue, 8th Floor
New York, New York 10016
(212) 889-7400
(212) 684-0314 (fax)
Attorneys for Plaintiffs

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Table of Contents

I. PRELIMINARY STATEMENT…………………………………………… 1

II. PROPOSED FINDINGS OF FACTS……….………..……….……………. 5
POINT A: THE PARTIES…………………………………….……….. 5

POINT B: SHOEZ AND BRANDS WERE CORPORATE
INSTRUMENTALITIES OF RAMCHANDANI……………………… 6

POINT C: PLAINTIFF’S INTRODUCTION TO
DEFENDANTS………………………………………………………… 9

POINT D: THE TRANSACTIONS GIVING RISE
TO THE ACTION……………………………………………………... 9

POINT E: ALLEGED DEDUCTIONS FROM THE AMOUNT DUE
DUE………………………….…………………………………………. 12

POINT F: THE HABIB ACTION………………………………………. 13

POINT G: THE SUMMARY JUDGMENT DECISION……………….. 14

III. PROPOSED CONCLUSIONS OF LAW…………………………………... 15
POINT A: SHOEZ AND BRANDS WERE UNJUSTLY ENRISHED AT
PLAINTIFFS’ EXPENSE………………………………………………… 15

POINT B: PLAINTIFFS ARE ENTITLED TO $510,802.62 IN DAMAGES
FOR PLAINTIFFS’ UNJUST ENRICHMENT CLAIM…………………. 15

POINT C: PLAINTIFFS ARE ENTITLED TO INTEREST FROM MARCH 22,
2016 FOR PLAINTIFFS’ UNJUST ENRICHMENT CLAIM……………. 18

POINT D: DEFENDANT RAMCHANDANI IS LIABLE TO PLAINTIFFS’
ON PLAINTIFFS’ UNJUSTENRICHMENT CLAIM…………………….. 19

POINT E: PLAINTIFFS’ CLAIM FOR INDEMNIFICATION AND/OR
CONTRIBUTION HAS BEEN ESTABLISHED
AS A MATTER OF LAW……………………………………………………. 22

POINT F: THE SHOEZ DEFENDANTS AND GIF ARE LIABLE TO
PLAINTIFFS FOR FRAUDULENT INDUCEMENT…………………… 25

IV. CONCLUSION…………………………………………………………………. 30

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Table of Authorities

Cases

Aris Isotoner Inc. v Dong Jin Trading Co., Inc.
17 USPQ2d 1017 [SDNY Sept. 22, 1989]………………………..…….….. 16

Andersen v Weinroth
13 Misc 3d 1204(A) [Sup Ct 2006]…………….…..……………..….…… 18

Andersen ex rel. Andersen, Weinroth & Co., L.P. v Weinroth
48 AD3d 121 [1st Dept 2007]……………………..……..…………………... 18

Blue Cross of Cent. New York, Inc. v. Wheeler
93 A.D. 2d 995, 996 (4th Dep’t 1983)……………………………….……… 16

CB Richard Ellis, Inc. v Terra Nostra Consultants
230 Cal App 4th 405, 645 [Cal Ct App 2014]…………....……………..…. 22

Collins Tuttle and Co., Inc. v Leucadia, Inc.
153 AD2d 526, 526 [1st Dept 1989]……………..………………………….. 16

Cruz v McAneney
31 AD3d 54, 59 [2d Dept 2006]……………………………………………… 19

Curreri v Heritage Prop. Inv. Tr., Inc.
48 AD3d 505, 507 [2d Dept 2008]………………………….…….…………… 23

DiIorio v Gibson & Cushman of New York, Inc.
167 AD2d 267, 268 [1st Dept 1990]………………………..…………….. 24

E. Mishan & Sons, Inc. v Novel Brands LLC
18CV02932VSBSN, 2020 WL 9815178, at *6 [SDNY Feb. 13, 2…………… 3, 16

Eighteen Holding Corp. v. Drizin
268 A.D.2d 371, 372 [1st Dep't 2000] …..…………………………………….…. 18

Freund v Weinstein
2009 WL 10706591, at *6 [EDNY July 23, 2009]……………………………… 23

Gass v. Gass
42 AD3d 393, 394 (1st Dept 2007)……………………………………………….. 27

Gibbs v. Breed, Abbott & Morgan
181 Misc.2d 346, 354 [Sup.Ct 1999]…………………………………………... 18

iii

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Giordano v. Thomson
564 F3d 163, 170(2nd Cir. 2009)………………………………………………… 17

Great W. Ins. Co. v Graham
13344 [SDNY June 22, 2020]…………………………….…………………… 20

Hoover v Galbraith
7 Cal 3d 519, 522-23, 498 P2d 981 [1972]………………………………..…… 21

IDT Corp. v Morgan Stanley Dean Witter & Co.
12 NY3d 132, 142 [2009]…………………………………………………….... 19

In re Campbell
547 BR 49, 62 [Bankr EDNY 2016]………………………………. 16

In re Platinum-Beechwood Litig.
377 F Supp 3d 414, 427 [SDNY 2019]…………………………………………. 19

Kirby McInerney & Squire, LLP v. Hall Charne Burce & Olson, S.C.
15 A.D.3d 233, 790 N.Y.S.2d 84 [2005]…………………………………..…… 19

Life Sourcing Co. LTD v. Shoez, Inc., Brands Unlimited, LLC and GIF Services, Inc.
179 AD3d 439, 115 NYS3d 305 [1st Dept 2020]………………………………… 15

Markwica v. Davis
64 N.Y.2d 38 473 N.E.2d 750 [1984]………………………………………..…… 19

Miller v. Schloss
218 N.Y. 400, 113 N.E. 337 [1916]……………………………………………… 19

Mobarak v Mowad
117 AD3d 998, 1001 [2d Dept 2014]…………………………………………… 20

Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC
813 F.Supp.2d 489, 534 (S.D.N.Y.2011)………………………………………… 15

Schaffer v. Batheja
76 A.D.3d 970, 908 N.Y.S.2d 82 (2 Dept. 2010)……………………………... 25

Shea v Hambros PLC
244 AD2d 39, 46 [1st Dept 1998]………………………………………………… 25

Tiffany at Westbury Condominium By Its Bd. of Managers v Marelli Dev. Corp.
40 AD3d 1073, 1077 [2d Dept 2007]……………………………………………. 23

U.S. ex rel. Taylor v. Gabelli
*4 (S.D.N.Y. Nov. 4, 2005) ………………………………………………….. 15

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Statutes and Other Cites

CPLR §5001[a]…………………………………………………………………………… 18

CPLR § 5001[b]………………………………………………………………………… 18

CPLR 3212(b)…………………………………………………………………………… 20

GOL §15-108(c)………………………………………………………………………. 24

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Plaintiffs SPARX LOGISTICS HONG KONG LTD. (“Sparx HK”) and SPARX

LOGISTICS USA LIMITED (“Sparx US”)(collectively the “Plaintiffs”) submit the within post

trial memorandum containing proposed findings of facts and conclusions of law in connection

with the May 22, 2023- May 24, 2024 trial (the “Trial”) in the above captioned action (the

“Action”).

I. PRELIMINARY STATEMENT

The Action, brought by Plaintiff on February 21, 2017, contains causes of action against the

Defendants sounding in unjust enrichment, indemnification, contribution, breach of contract,

quantum meruit,1 fraudulent inducement, and aiding and abetting fraud. See NYSCEF #2,

Complaint at ¶¶62-127.

At the summary judgment phase of this Action, the Court (Hon. Shawn T. Kelly, J.S.C.) held

that the Shoez Defendants,2 including Deepak Ramchandani, were unjustly enriched by Plaintiffs

as a matter of law (NYSCEF $135 “the Decision & Order”). It is uncontroverted that the Shoez

Defendants received, sold and profited from the sale of 93,066 units of clothing (the “Goods”),

which the Shoez Defendants never paid anyone not even One Dollar ($1.00) for.

THE COURT: Did you pay any money for those goods? Did you pay a dollar for
those goods?
THE WITNESS: No.
Ramchandani Trial Tr. Pg. 174: 20-22 (NYSCEF #158)

As a result of the Shoez Defendants non-payment for the Goods, Plaintiffs were left holding

the bag. Judgment was entered in Hong Kong against Sparx HK for the conversion of the Goods

1
Plaintiffs are not proceeding with their breach of contract and quantum meruit claims as against
any Defendants.
2
The Shoez Defendants as used herein refers to Defendants Shoez, Inc., (“Shoez”) Brands
Unlimited (“Brands”) and Deepak Ramchandani (“Ramchandani”).

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in the amount of $510,802.62, the “said to contain” value of the containers transporting the

Goods (NYSCEF #135 Decision & Order at pg. 3).

Trial was scheduled to flesh out the amount of damages to award Plaintiffs on their unjust

enrichment cause of action and determine all the Defendants’ liability on the remaining causes of

action.

For the reasons set forth at the Trial, and as further stated below, Plaintiffs proved by a

preponderance of the evidence that the Shoez Defendants are liable to Plaintiffs on Plaintiffs’

unjust enrichment cause of action in the amount of $510,802.62 plus statutory interest running

from the first ascertainable date of the claim, March 22, 2016 (See DX69, March 22, 2016 letter

from Plaintiffs’ US counsel to Shoez requesting the return of the original seven bills of lading).

$510,802.62 was the total amount said to be contained in the containers transporting the

Goods. The $510,802.62 “said to contain” invoice value was admitted to being “true and correct”

by Shoez’s sole owner, Ramchandani, in his December 23, 2019 Affidavit (PX55). At Trial, the

Shoez Defendants claimed certain incorrect pricing on the Invoices (DX1C, DX2C, DX3C,

DX4C, DX5C, DX6C, DX7C)(the “Invoices”) and/or chargebacks that allegedly should have

been taken off the $510,802.62 invoice value of the Goods.

However, the chargebacks and agreed upon sales price for the Goods are irrelevant to

Plaintiffs’ unjust enrichment claim. Plaintiffs does not stand in the shoes of the contracting party

and are not required to accept chargebacks or different prices than the amount said to be

contained in the containers transporting the Goods. Judgment was entered against Sparx HK for

the full amount of the “said to contain” value of the Goods. Had Habib Bank sought payment

directly from the Shoez Defendants, the amount sought would be the same “said to contain”

value of $510,802.62, which Habib Bank sought from Plaintiffs. The Shoez Defendants reaped

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the benefit of Plaintiffs satisfying the Shoez Defendants debt due to Habib Bank/Ravissant. The

Shoez Defendants should therefore be liable to Plaintiffs in the principal amount of $510,802.62.

In the alternative, the Shoez Defendants are liable to Plaintiffs in the amount of

$438,960.73, or the amount the Shoez Defendants unjustly profited from the sale of the Goods

(Court Ex. 1 ¶28). See E. Mishan & Sons, Inc. v Novel Brands LLC, 18CV02932VSBSN, 2020

WL 9815178, at *6 [SDNY Feb. 13, 2020], report and recommendation adopted, 18-CV-2932

(VSB), 2022 WL 407393 [SDNY Feb. 10, 2022](“Plaintiff may recover

Defendant's gross revenue from the sale of the Accused Products… less proven deductions.”)

At Trial, the Shoez Defendants did not proffer any evidence of deductions from their

gross revenue from the Shoez Defendants’ sale of the Goods. (The chargebacks Defendants did

proffer relate to the Invoice amount due to be paid by Shoez to its supplier, Ravissant.)

Therefore, Plaintiffs are entitled to the Shoez Defendants’ unjust profits of $438,960.73.

Plaintiffs’ evidence presented at Trial also establishes that GIF Services, Inc. (“GIF”) and

the Shoez Defendants are liable to Plaintiffs for fraudulently inducing Plaintiffs to release the

Goods to the Shoez Defendants without the original bills of lading (a “telex release”) based on

the promise that Defendants, in particular defendant Gina Napolitano (“Napolitano”), would

return the original seven bills of lading (“7 BLS”) to Plaintiffs shortly thereafter.

It is uncontroverted that, pursuant to the Invoices, Shoez was obligated to pay for Goods

prior to their release to the Shoez Defendants. Each Sales Confirmation and Invoice listed the

payment terms as “DP” or “DP at sight”(sp) which means the purchaser only receives the goods

once they are paid for. (Tr. Pg. 247: 14- 16 “Q Does DP at site mean you get the goods when you

pay? A Correct, unless there's an adjustment or conversation from the supplier.”)

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Given the Shoez Defendants urgency to receive the Goods, in lieu of waiting for payment

via the bank and Plaintiffs waiting to receive the original bills of lading prior to releasing the

Goods, Plaintiffs agreed to release the Goods to the Defendants without the original bills of

lading. Plaintiffs did so based on assurances by the Defendants, made through Napolitano, that

the Defendants would pay for the Goods and the original bills of lading would be turned over

within a few days after the release of the Goods.

Defendants, via Napolitano, painted a picture of the Shoez Defendants as a reputable

wholesaler selling to well-known national U.S. retailers, who would, without a doubt, pay for the

Goods. The bills of lading would be returned by Napolitano to Plaintiffs shortly thereafter. See

Tr. Pg 36: 6- 16

“A She told me I would get the BL a few times. She told me the consignee is a very
respected company. She told me she know him for many years. She told me they are
very strong. She told me they are a vendor of many of the top seller in the retailer in
the US like Dollar General, Dollar Tree, et cetera. She told me they participate in fair.
She told me they own their own brands. She give me a picture of a very powerful
consignee.

Such material representations were relied on by Plaintiffs and induced the Plaintiffs to

release the Goods without the 7 BLS, to Plaintiffs detriment. Napolitano falsely continued to

represent to Plaintiffs that the Shoez Defendants would pay and the bills of lading returned even

after issues arose (Dagan Trial Tr. Pg. 68:2-5)(PX61) and did so despite the fact that Napolitano

later admitted under oath that she did not have the ability to return the 7 OBLS to Plaintiffs

(PX44 ¶19 “….the assertion that I promised the delivery of a bill of lading, which was never

even in my control, is not only false but nonsensical since I would have no ability to do.”)

For the reasons set forth herein, and as proven at Trial, Plaintiffs respectfully request that

the below findings of fact and conclusions of law be entered by this Court in a post-trial decision

and order in Plaintiffs’ favor.

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II. PROPOSED FINDINGS OF FACTS.

Plaintiffs set forth the following proposed findings of facts, many of which are from the

parties pre-trial Stipulation of Facts (NYSCEF #151) that was entered into evidence as

Court Exhibit 1 (“Court Ex. 1”) and the Court Hon. Shawn Timothy Kelly, J.S.C’s July 29,

2021 Decision & Order on Plaintiffs’ Motion for Partial Summary Judgment (NYSCEF

#135):

A. The Parties.

1. Sparx HK is an international freight forwarder, transportation, and logistics company.

(Court Ex. 1¶1)

2. Sparx USA is the American affiliate of Sparx HK and also provides freight forwarding,

shipping, and logistics services. (Court Ex. 1¶2).

3. Life Logistics is a Hong Kong based company that provides freight forwarding, cargo

management, and logistical services for shippers and importers. (Court Ex. 1¶3).

4. At all relevant times, an individual named Adi Dagan (“Dagan”) was the managing

officer of Life Logistics, as well as an officer of Sparx Hong Kong and Sparx USA. (Court Ex.

1¶4).

5. Shoez, Inc. (“Shoez”) is an importer and reseller of apparel that is wholly owned by the

defendant Deepak Ramchandani (“Ramchandani”)(Court Ex. 1¶5).

6. Brands Unlimited (“Brands”) was in the wholesale clothing business selling to retailers in

the United States, Canada and Mexico. (Court Ex. 1¶6)

7. Ramchandani is one of three principals of Brands. (Court Ex. 1¶7)

8. GIF Services, Inc. (“GIF”) was the customs broker for Shoez in connection with the goods

subject of this Action. (Court Ex. 1¶9)

9. Defendant Gina Napolitano (“Napolitano”) is the Vice President of Defendant GIF. (Court

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Ex. 1¶10)

10. Defendant GIF and Napolitano ensured that goods shipped to Shoez from overseas cleared

customs in the United States. GIF and Napolitano also coordinated the shipment of goods from

overseas to the United States by communicating with freight forwarding companies on behalf of

Shoez. (Court Ex. 1¶11)

11. Napolitano acted as the agent for Shoez in connection with freight forwarding matters.3

B. Shoez and Brands were Corporate Instrumentalities of Ramchandani

12. Shoez operates its business by purchasing clothes from overseas and transferring the

clothing, without any formalities or consideration, to its affiliate, Brands, who in turn sells to

wholesalers and retailers throughout the United States, Canada, and Mexico (NYSCEF #135

Decision & Order on Motion at pg. 2)(See read in from Ramchandani’s deposition at the

Trial transcript (NYSCEF #158) between pages 154- 169, Alternatively see NYSCEF #47,

Ramchandani deposition tr pg. 65: 15-17, pg. 72: 4-8, pg. 75: 7-13, pg. 84: 20-23, pg. 93:

23-25).

13. Shoez was the corporate vehicle purchasing goods from overseas because it had a

reputation overseas since 2005 (prior to Brands formation) (Ramchandani Trial Tr. Pg. 182: 13-

3
Dagan Trial Tr. Pg. 14: 21-23 Yes. Our dealing was actually with GIF. We knew that the
customer was Shoez, but our dealing was with GIF.
Dagan Trial Tr. Pg. 18: 8-10 “She was nominate to handle Shoez business and for me, actually, I
didn't see much difference. I know it's two different entity, but they work like she control
everything.”
Dagan Trial Tr. Pg. 140:8-11
Q Was GIF the agent for Sparx in connection with the transactions that you engaged in with
GIF?
A She was the agent and she was Shoez, that's what she is.”

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18 “A. So Shoez was primarily -- the only object of Shoez was to buy product. Since it had

reputation overseas from 2005, so it was helpful to buy goods under Shoez. So we continued

buying goods under Shoez and Shoez would only import product for this purpose.”)

14. The Shoez Defendants did not maintain any corporate records evidencing the transfer of

the Goods at issue in this Action from Shoez to Brands. (Ramchandani Trial Tr. Pg. 266: 6-8 “Q.

What documents did you produce showing a sale from Shoez to Brands? A. Email

correspondence. See also Ramchandani Trial Tr. Pg. 268: 6- pg. 269:12.4

15. Defendants Shoez had no salaried employees. All employees were paid through Brands

(Tr. Pg. 155: 9-12).

16. Both Shoez and Brands used the same trademarks on merchandise (Tr. Pg. 156: 8- 18).

4
Q Well, sir, do you see where I read to you that the defendant, that's you, will produce any non
privileged discoverable documents responsive to this request to the extent
that they exist and are within the defendant's possession, custody, and control, do you see that?
A Yes.
Q Can you tell me whether or not you produced any financial records that show the transfer of
Shoez goods to Brands?
A We gave the documents that were asked for. We were --in the process, we figured if we miss
something, somebody would say that, you know what, we don't have this, this is missing,
please provide these certain documents that are missing and that's what we did.
Q These are supplemental requests because we asked you specifically -- Ms. Sutton asked you
specifically at your deposition for these documents and you wrote back through your
counsel if you had them, you were going to give them, didn't you?
A Yeah.
Q Where are they?
A That's what I'm saying, the accountant manages, keeps, and that's where it was. Whether they
kept, managed, we didn't check. Our business is very small. We didn't understand what
they needed to do, the accountant.
Q You didn't understand what we meant when we say show the sale from Shoez to Brands?
A No.
Q You didn't understand that?
A No.
Q You didn't understand that?
A Now I understand after you repeating.
Q Now you understand it, okay.

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17. The Defendants shared office space (Tr. Pg 154:12-14).

18. When asked how the work of Shoez and Brands differed Ramchandani replied, “there

was no difference” (Tr. Pg 158: 11-13)

19. All Sales Confirmations (DX1A, DX2A, DX3A, DX4A, DX5A, DX6A, DX7A) subject

of this Action were addressed to “Bleu Royale,” another company owned and controlled by

Ramchandani.

20. Ramchandani exercised all decision-making authority with respect to the Shoez

Defendants and determined that Shoez would not pay Ravissant for the Goods subject of this

Action (Tr. pg. 159: 3- 9)

21. The Shoez Certificate of Dissolution, dated January 2, 2018, states that known debts and

liabilities have been paid (See PX44 and Ramchandani Trial Tr pg. 270: 10-23), when in fact

there was still an open balance with Ravissant and pending litigation with Plaintiffs as of the date

of dissolution.

22. Shoez filed its certificate of dissolution in or about 2018 (PX44 Cert of Dissolution) yet

continued filing trademark renewals stating that Shoez uses the RIVER ROCK registered

trademark in commence thereafter (PX62 Statement of Use) (Ramchandani Trial Tr. Pg. 278: 9-

225 and pg. 391:1- 12).

5
Q.… This document, sir, says that in July of 2020 the owner, that's Shoez, was still using the
mark; correct?
A May I explain?
Q Is that what the document says, Mr. Ramchandani?
A This was done for renewal purposes and the renewal never went through and this was
corrected. USPTO record shows that.
Q Mr. Ramchandani, in 2020 you put down and filed with the United States government a
declaration that the mark was used in commerce, is that true or not true?
A It was done wrongly, that's exactly what I'm saying.
Q Is this another mistake?
A So the purpose of this document is to renew and then we realized it was a mistake, yes.

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23. Shoez and Brands lack of corporate formalities and failure to document the transfer or a

sale of the Goods from Shoez to Brands, renders Ramchandani personally liable to Plaintiffs

herein.

C. Plaintiff’s Introduction to Defendants

24. Both Ramchandani (Shoez and Brands’ officer) on the one hand and Dagan (Sparx and

Life Logistic’s officer) on the other, had—through their respective companies—worked for

several years with a mutual acquaintance named Manoj Panjabi (Court Ex. 1 ¶12).

25. Manoj Panjabi was the principal of a Hong-Kong based global sourcing agent named

Ravissant Limited (“Ravissant”). As a global sourcing agent, Ravissant coordinated with

factories in Asia to manufacture apparel on behalf of Ravissant’s customers. Shoez was one

such customer (Court Ex. 1 ¶13)

26. Prior to the transactions at issue, Shoez and Ravissant had done business since at least

February 2014 (NYSCEF #135 Decision and Order at pg 2)

27. Ravissant had also worked with Adi Dagan, Life Logistics, and Sparx HK (Court Ex.

1 ¶14)

28. In or about the Spring of 2015, Ravissant’s owner, Panjabi, introduced Napolitano of GIF

to Dagan (Court Ex. 1 ¶15).

29. The purpose of the introduction was for GIF to coordinate with Life Logistics, Sparx HK,

and Sparx USA, to act as freight forwarders and arrange for the shipment of goods purchased by

Shoez from factories sourced by Ravissant to the United States (Court Ex. 1 ¶16).

D. The Transactions Giving Rise to the Action.

30. A freight forwarder is a company that organizes shipments to transport goods from an

origin port to a destination port (Court Ex. 1 ¶19).

31. Plaintiffs served as freight forwarders to arrange for the transport of a number of

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containers of men’s clothing (e.g., jeans, shorts, and jackets) from Ravissant as the

shipper/seller to Shoez as the “consignee” or “importer” or “buyer” (Court Ex. 1 ¶17).

32. Seven of the containers transported, containing approximately 93,066 units of clothing

are at issue in this action. The items of clothing included in these seven containers are referred

to as the “Goods” (Court Ex. 1 ¶18)(NYSCEF #135 Decision and Order at pg. 2)

33. One of GIF’s roles was to coordinate, on behalf of Shoez, with the Plaintiffs for their

freight forwarding services (Court Ex. 1 ¶20). Napolitano was the only person that Plaintiffs

spoke to on behalf of Shoez relative to the transactions in issue. (Napolitano Cross Tr. pg. 344:

7-9 “Q And, in fact, the only person that Mr. Dagan spoke to relative to these transactions,

these bills of lading, was you? A Yes.”)

34. Napolitano confirmed the particulars of the transaction such as shipping rates, dates,

amounts, and delivery ports first with Shoez to get the Shoez Defendants authorization, and then

with Sparx and Life Ltd. (Napolitano Trial Tr. Pg. 305: 6-14). The shipping rates and schedules

provided by Life Logistics and Sparx HK employees to Napolitano, concerning the Goods in

issue in this Action, were all approved by the Shoez Defendants prior to booking.

35. Napolitano discussed with Sparx how the bills of lading would be provided to Plaintiffs

once Gina received the bills of lading from the ultimate consignee (DX12 at pg 2 “Just clear

with Gina the local charges The freight payment and the collection of the BL after it will be

release by The Bank”)(See also DX12 at of 6 “Just for the sake of good order, again you need to

agree with Gina How you collect the BL once Gina get it from the ultimate consignee”)(See

also DX32 Napolitano did not dispute Mr. Dagan’s email stating that “…we both know that we

released those cargo Based on the trust that shoez will pay ravissant and after get those BL

from their Bank they will pass them to you and you will send it to us.”).

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36. Pursuant to the 7BLs, the original bills of lading must be “surrendered to GIF”, in order

for GIF to transfer the original bills of lading to Plaintiff (DX1D, DX2D, DX3D, DX4D,

DX5D, DX6D, DX7D).

37. Plaintiffs released the Goods to the Shoez Defendants' customs agent, GIF, who

subsequently provided the Goods to the Shoez Defendants (NYSCEF #135 Decision & Order

on Motion at pg. 2).

38. Plaintiffs released the Goods to the Shoez Defendants' customs agent, GIF with the

understanding that despite the fact that an original BOL was needed, Plaintiffs would release

the Goods to the Defendants and the Defendants would thereafter provide proof of payment and

the original BOL to Plaintiffs (NYSCEF #135 Decision & Order on Motion at pg. 2).

39. GIF paid Sparx USA for Plaintiffs’ freight forwarding services (Court Ex. 1 ¶21). The

Shoez Defendants, in turn, paid GIF for Plaintiffs’ freight forwarding services.

40. Shoez received all the Goods (Court Ex. 1 ¶27) and never paid anyone not even One

Dollar ($1.00) for the Goods (NYSCEF #135 Decision and Order at pg 4 )(Tr. Pg. 174: 20-22

“THE COURT: Did you pay any money for those goods? Did you pay a dollar for those

goods? THE WITNESS: No.).

41. Shoez transferred the Goods to Brands, for no consideration, without any formalities and

did not record the transfers on the Shoez Defendants’ corporate books or records.(Ramchandani

Trial Tr. Pg. 266: 6-8 “Q. What documents did you produce showing a sale from Shoez to

Brands? A. Email correspondence. See also Tr. Pg. 268: 6- pg. 269:12).

42. Brands sold all of the Goods to its retail customers (Court Ex. 1 ¶28).

43. Defendants never received the original Bills of Lading for the Goods (Court Ex. 1 ¶29).

44. Trial Exhibits DX-1(A)-(F) through DX-7(A)-(F) comprise for each of the seven

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shipments of Goods at issue: (A) the Sales Confirmation of Ravissant; (B) the Packing List of

Ravissant; (C) the Invoice List of Ravissant; (D) the Bill of Lading (the “7BLS”); and (E);

email chain between GIF and Sparx relating to the arrival and telex release of that shipment;

and (F) Arrival Notices (Court Ex. 1 ¶22).

45. The sum of the prices in the Sales Confirmations in Exhibits DX-1A, 2A, 3A, 4A, 5A,

6A, and 7A is $423,465.60 (Court Ex. 1 ¶23).

46. The sum of the prices in the invoices in Exhibits DX-1C, 2C, 3C, 4C, 5C, 6C, and 7C is

$510,802.62 (Court Ex. 1 ¶26) (DX-1C, 2C, 3C, 4C, 5C, 6C, and 7C) (the "Amount Due").

47. The “said to contain” value of the Goods listed on the 7BLS that were transferred from

Shoez to Brands totaled $510,802.62. Dagan Tr. Pg. 130: 20-24 “…the goods set to contain --

the container set to contain goods worth 510,000 US dollar.” Dagan Tr. Pg. 145: 10-16.6

48. The total amount invoiced for the sale of the 93,066 Goods by Brands to its downstream

customers was $438,960.73 (Court Ex. 1 ¶28). No evidence of deductions or offsets from the

$438,960.73 gross revenue was introduced at Trial.

49. The Shoez Defendants did not receive any chargebacks from their customers for the Goods.

Tr. Pg. 163: 19- 23 “Page 87, line 10 through 14. "Did Brands receive charge-backs from its

customers for the goods reflected on Exhibits 3, 4, 5, 6, and 7? "ANSWER: We just reduced the

pricing and sold the goods.” See also Tr. Pg. 165:14-18.

E. Alleged Deductions from the Amount Due

50. Shoez claimed entitlement to a total of $234,265.45 in chargebacks based on various

6
Q. “The particulars given below are as stated by the shipper and the weight measured quantity,
conditions, contents, and values of the goods are unknown to the carrier." Do you see that?
A Yes.
Q Isn't that what you've been telling the Court all day?
A Said to contain shipping account and loading count.”

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unrelated orders plus the application of Shoez’s $50,000 initial deposit with Ravissant, are

inapplicable to the Goods subject of the 7BLs. DX-56. (Tr. Pg. 225: 12- pg. 226:2).

51. Only $39,832.60 in contested chargebacks are applicable to the invoiced amount of the

Goods subject of the 7BLS. See DX62. See also Tr. Pg. 263:1-167

52. Ravissant never consented to the chargebacks. (Trial Tr. Pg. 237: 9-12 “A Ravissant

suggested on his way to Panama he will stop by New York, and we will sit and sort out all the

charge-backs. Q Did that happen? A No, it never happened.”) (See also Trial Tr. Pg. 239- 240:

1-2 “Q Is the issue still unresolved? A Yes”).

53. Prior to reaching a resolution on the chargebacks, Ravissant went out of business

(NYSCEF #135 Decision and Order pf. 3). Ravissant never scheduled a meeting regarding the

chargeback issues.

54. Nor was the alleged incorrect pricing listed on the Invoices (DX1C- 7C) corrected by

Manoj of Ravissant or even included in the list of chargebacks due Shoez (Tr. Pg. 232: 4-6).

F. The Habib Action

55. “Unbeknownst to plaintiffs, Habib Bank Zurich (Hong Kong) Limited (herein

"Habib") financed the production and shipment of the Goods for Ravissant and was the

holder of the original BOLs.” (NYSCEF #135 Decision & Order on Motion at pg. 3).

56. “As Habib was not paid and the Goods which were the subject of the BOLs released

without a payment, on or about June 3, 2016, Habib commenced an action in Hong Kong

against Sparx HK as carrier of the Goods by the filing and service of a Writ of Summons

7
Tr. Pg. 263:1-16
“THE COURT: How many invoices did you see? That's one question. Overruled. You can
answer.
A. Two invoices.

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and Statement of Claim (the "Habib Action") claiming, inter alia, conversion of the Goods

in the amount of $510,802.62.” (NYSCEF #135 Decision & Order on Motion at pg. 3).

57. Sparx HK filed an answer to the complaint (Court Ex. 1 ¶31).

58. A “judgment was entered against Sparx HK for the Amount Due plus interest

thereon (the "Hong Kong Judgment").” (NYSCEF #135 Decision & Order on Motion at

pg. 3).

59. “Pending Sparx HK's appeal of that judgment, Sparx HK and Habib Bank entered

into a settlement on December 1, 2017 whereby the parties did not admit liability. Sparx HK

agreed to pay $300,000.00, and Habib Bank agreed to release its rights under the BOLs as to

any party, upon the full satisfaction of the settlement amount.” (NYSCEF #135 Decision &

Order on Motion at pg. 3-4).

60. “On December 8, 2018, Sparx HK fully paid the settlement.” (NYSCEF #135 Decision

& Order on Motion at pg. 4).

61. “Plaintiffs paid Habib in satisfaction of Ravissant's claim for payment” from the

Shoez Defendants (NYSCEF #135 Decision & Order on Motion at pg. 5).

G. The Summary Judgment Decision.

62. On Juy 29, 2021 the Court (Hon. Shawn Timothy Kelly, J.S.C.), granted Plaintiffs’

summary judgment motion made against the Shoez Defendants on unjust enrichment liability.

(NYSCEF #135). The Court held that the Shoes Defendants have been enriched in two ways.

T h e Shoez Defendants received the Goods and Plaintiffs' payment (to Habib) extinguished

claims Ravissant may have had against Shoez. (NYSCEF #135 Decision & Order on Motion

at pg. 5).

63. The Court (Hon. Shawn Timothy Kelly, J.S.C.), left open the calculation of Plaintiffs’

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damages for the Shoez Defendants’ unjust enrichment. The Court also left open liability and

damages on Plaintiffs’ causes of action for breach of contract, quantum meruit,

indemnification, contribution and fraudulent inducement claims (NYSCEF #136).

III. PROPOSED CONCLUSIONS OF LAW

A. Shoez and Brands Were Unjustly Enriched at Plaintiffs’ Expense

In the Decision & Order on Motion (NYSCEF #135), the Court (Hon. Shawn Timothy Kelly,

J.S.C.) granted summary judgment on liability against the Shoez Defendants on Plaintiffs’ unjust

enrichment cause of action. The Decision & Order states:

In this case, it is not disputed that Shoez has received the Goods and has not paid for
the Goods; and that plaintiffs paid Habib in satisfaction of Ravissant' s claim for
payment. Thus, defendants have been enriched in two ways. It received the Goods and
plaintiffs' payment extinguished claims Ravissant may have had against Shoez. This
enrichment was at the expense of plaintiffs. In determining the equity, as Shoez has
had (and presumably sold) the Goods, and Shoez has not argued that Ravissant has
ever sought payment from Shoez, or has ever sought to enforce any legal rights, the
Court finds that as a matter of law, it is against equity and good conscience to permit
the defendants to retain the benefit of the Goods and the payment to Habib (see Life
Sourcing Co. LTD v. Shoez, Inc., Brands Unlimited, LLC and GIF Services, Inc., 179
AD3d 439, 115 NYS3d 305 [1st Dept 2020] [affirming granting of summary judgment
on unjust enrichment cause of action)

(NYSCEF #135) The Court also held that the only triable issue of fact arising on Plaintiffs’

motion for partial summary judgment on its unjust enrichment claim relates to the damages to

which Plaintiffs are entitled.

B. Plaintiffs are Entitled to $510,802.62 in Damages for Plaintiffs’ Unjust Enrichment
Claim
“An award of damages as a result of an unjust enrichment claim is limited to restitution

of the sum improperly received by the defendant. Pure Power Boot Camp, Inc. v. Warrior

Fitness Boot Camp, LLC, 813 F.Supp.2d 489, 534 (S.D.N.Y.2011) (citing U.S. ex rel. Taylor v.

Gabelli, No. 03–CV–8762 (PAC), 2005 WL 2978921, at *4 (S.D.N.Y. Nov. 4, 2005) (“Damages

typically focus on the plaintiff and provide ‘make-whole,’ compensatory monetary

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relief; restitution, by contrast, concentrates on the defendant preventing unjust enrichment,

disgorging wrongfully held gains, and restoring them to the plaintiff.”))” In re Campbell, 547 BR

49, 62 [Bankr EDNY 2016]

“Unjust enrichment applies, not only where a person receives money or property, but,

also, where he otherwise receives a benefit. He receives a benefit where his debt is satisfied or

where he is saved expense or loss.” Blue Cross of Cent. New York, Inc. v. Wheeler, 93 A.D. 2d

995, 996 (4th Dep’t 1983) (internal citations omitted). The measure of restitution damages for an

unjust enrichment claim is the “reasonable value” of the benefit conferred upon the defendants.

See Collins Tuttle and Co., Inc. v Leucadia, Inc., 153 AD2d 526, 526 [1st Dept 1989]. For

example, in. E. Mishan & Sons, Inc. v Novel Brands LLC, 18CV02932VSBSN, 2020 WL

9815178, at *6 [SDNY Feb. 13, 2020], report and recommendation adopted, 18-CV-2932

(VSB), 2022 WL 407393 [SDNY Feb. 10, 2022] the Southern District Court held that “Plaintiff

may recover Defendant's gross revenue from the sale of the Accused Products, less proven

deductions.” See also Aris Isotoner Inc. v Dong Jin Trading Co., Inc., 17 USPQ2d 1017 [SDNY

Case Info

Judge

Lori S. Sattler Track Judge’s New Case

Case No.

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Document Filed Date

June 29, 2023

Case Filing Date

February 21, 2017

County

Parties

BRANDS UNLIMITED Defendant
BRONSNICK, ANDREW REESE Attorney for the Defendant
Deepak Ramchandani a/k/a Deepak Parikh Defendant
GIF SERVICES, INC. Defendant
Gina Napolitano Defendant
HROVAT, DAVID MICHAEL Attorney for the Defendant
HROVAT, DAVID MICHAEL Attorney for the Defendants
ISRAEL, SAM PETER Attorney for the Defendant
LAZARUS, HARLAN MITCHELL Attorney for the Plaintiff
NADLER, BRETT A Attorney for the Defendants
SAVITSKY, TIMOTHY Attorney for the Defendant
SHOEZ, INC. Defendant
SPARK LOGISTICS US LIMITED Plaintiff
SPARX LOGISTICS HONG KONG LTD. Plaintiff
YVETTE SUTTON Attorneys for Plaintiffs
MARK LAZARUS Attorneys for Plaintiffs
RICHARD SIMON Attorneys for Defendants

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Motion-Secondary: Sparx Logistics Hong Kong Ltd., Spark Logistics Us Limited v. Shoez, Inc., Brands Unlimited, Gif Services, Inc., Deepak Ramchandani a/k/a Deepak Parikh, Gina Napolitano

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