Kozyrkov v. Aculocity, LLC
Filing
35
MEMORANDUM Opinion and Order: For the reasons set forth in the attached memorandum opinion and order, defendant's motion to dismiss is denied in part and granted in part. 19 A status hearing is set for 2/16/2017 at 09:00 a.m. to set a discovery schedule in this matter. Signed by the Honorable Thomas M. Durkin on 2/9/2017:Mailed notice(srn, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
VADIM KOZYRKOV,
PLAINTIFF,
v.
ACULOCITY, LLC,
DEFENDANT.
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No. 16 C 6961
Judge Thomas M. Durkin
MEMORANDUM OPINION AND ORDER
On March 9, 2006, California resident Vadim Kozyrkov, non-party GVW
Holdings, LLC (“GVW”), and Illinois-headquartered Aculocity, LLC (“Aculocity” or
“the company”) executed a Limited Liability Company Agreement in connection
with the Delaware filing of Aculocity’s Certificate of Formation. The Agreement
establishes Kozyrkov’s role as an employee and Class A member of Aculocity, and
sets forth his various rights and obligations in connection with that role, including
his rights and obligations upon termination. A superseding contract signed by the
same parties and Tech Trust U/A/D 4/10/10 (“Tech Trust”), the assignee of GVW’s
Class A and Class B Units, was executed on May 1, 2010. Kozyrkov was terminated
from Aculocity on July 3, 2013, and was paid nothing by the company in connection
with the mandatory sale of his membership interest. Kozyrkov brings this suit
alleging that Aculocity failed to fulfill its purchase obligations under the
Agreement. He also seeks an accounting and access to the company’s books and
records. Because the parties are diverse and the amount in controversy exceeds
$75,000, this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.
See R. 34.
Aculocity moves to dismiss the complaint under Rule 12(b)(6) for failure to
state a claim. R. 19. For the reasons set forth below, that motion is denied in part
and granted in part.
Standard
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g.,
Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th
Cir. 2009). A complaint must provide “a short and plain statement of the claim
showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), sufficient to
provide defendant with “fair notice” of the claim and the basis for it. Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels
and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.’”
Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In
2
applying this standard, the Court accepts all well-pleaded facts as true and draws
all reasonable inferences in favor of the non-moving party. 1 Mann, 707 F.3d at 877.
Background
Kozyrkov was a founding member and original employee of Aculocity, a
Delaware limited liability company incorporated on March 9, 2006. R. 1 ¶ 7. On the
day the company’s certificate of formation was filed, Kozyrkov signed the Limited
Liability Company Agreement of Aculocity, LLC (2006 Agreement) with Aculocity’s
other founding member, GVW. Id. According to the 2006 Agreement, Kozyrkov was
under no obligation to make a capital contribution—defined as “the amount of cash
and the value of any property (other than cash) contributed to the [company].” (Art.
I, clause (e)). Rather, in recognition of “services rendered,” the 2006 Agreement
granted him ownership of 10,000 of the company’s 40,000 Class A units. 2 (Arts. 5.1,
A motion under Rule 12(b)(6) can be based “only on the complaint itself,
documents attached to the complaint, documents that are critical to the complaint
and referred to in it, and information that is subject to proper judicial notice.”
Geinosky v. City of Chicago, 675 F.3d 743, 745 n. 1 (7th Cir. 2012) (citations
omitted). However, a party opposing a Rule 12(b)(6) dismissal may elaborate on the
factual allegations in the complaint so long as the new elaborations are consistent
with the pleadings. Id. (collecting authority). In deciding this motion, the Court
therefore considers the applicable LLC Agreements, mentioned throughout the
complaint and filed under seal by Aculocity in connection with its motion to dismiss,
as well as the additional facts set forth by Plaintiff’s counsel in the affidavit
attached to Kozyrkov’s response brief.
1
All remaining Class A Units and all 60,000 Class B Units were allocated to
managing member GVW. (Art. 5.1, Ex. A). The Agreement also gave Kozyrkov the
right to purchase additional Class A units at a fixed price during a period of months
by tendering notice and payment to Aculocity. (Art. 5.4). Kozyrkov did not exercise
that option, which expired on March 9, 2009. See 2010 Amended Agreement, Art.
5.4 (“The Vadim Option as defined in the 2006 Agreement was not exercised and
has expired.”).
2
3
5.2, Ex. A). According to Kozyrkov, in consideration of his 10% ownership interest
and “what [he] understood would be an opportunity to build a company . . . in whose
long-term profits and/or increased value he would share,” he agreed to work for
Aculocity at a salary not commensurate with his experience and level of expertise. 3
R. 27 ¶ 3A.
As a Class A member, Kozyrkov was entitled to profit distributions “at such
times and in such amounts as determined by the manager,” subject to tax
withholdings and setoffs for past-due obligations or advances on income tax
payments. (Arts. 6.1-6.4). It is unclear from the complaint whether any such
distributions were ever made, though it is alleged that to the extent they were, they
were never paid out to Kozyrkov, but instead were “placed in [his] capital account.”
R. 1 ¶ 9. In addition to these entitlements of membership, Kozyrkov was obligated
to pay income taxes on the amount of Aculocity’s profits and losses allocated to his
3
Article II of the Agreement, which follows the definitions section, reads:
Each Member hereby represents and warrants that: (a) such Member
has such knowledge and experience in financial and business matters
and is capable of evaluating the merits and risks of an investment in
the LLC and is capable of making an informed investment with respect
thereto; (b) such Member is able to bear the economic and financial
risk of an investment in the LLC for an indefinite period of time;
(c) such Member is acquiring Units in the LLC for investment only and
not with a view to, or for resale in connection with, any distribution to
the public or public offering thereof . . . and (f) this Agreement is valid,
binding and enforceable against such Member in accordance with its
terms.
The amended agreement, executed in 2010, contains an identical provision. Both
agreements also contain a comprehensive integration clause noting, among other
things, that the agreements “contain[ ] the entire understanding among the
Members.”
4
capital account. (Arts. 6.4-6.7). He was prohibited from withdrawing any capital
contributed to his account (Art. 5.7), except upon liquidation or dissolution (Arts.
10.2-10.4), or in Kozyrkov’s case as an employee member, upon dissociation (Art.
9.1).
The Agreement provided that in the event Kozyrkov dissociated, whether
upon
death,
permanent
disability,
resignation,
retirement,
insolvency
or
termination with or without cause (Art. I(k)), the company and its remaining
members had the right, but not the obligation, to purchase—and Kozyrkov had the
obligation to sell—his membership units (Art. 9.1). The purchase price for the units
was to be “the lower of [ ] the aggregate cash contributions to the [company] on
account of such Units less all distributions made on account of such Units; and [ ]
the Fair Market Value of such Units.” 4 (Art. 9.3(b)). In the event that the purchase
price for Kozyrkov’s units exceeded one-third of Aculocity’s net income, the
Agreement entitled the company to defer payment up to 36 months. (Art. 9.3(e)).
On May 1, 2010, the parties entered into the First Amended and Restated
Limited Liability Company Agreement of Aculocity, LLC (2010 Agreement), the
primary purpose of which was to memorialize a transfer by GVW of its Class A and
Class B units to third-party Tech Trust. R. 1 ¶ 10; (2010 Agreement, Recitals).
Though differently numbered, the provisions of the 2010 Agreement corresponding
with those set forth above were identical or substantially similar to those in the
The purchase price also contemplated offsets for any amounts owed to the
company by the dissociating member.
4
5
2006 Agreement, with two notable exceptions. 5 First, unlike the 2006 Agreement,
which stated that that Kozyrkov received his membership units without making
any capital contribution, the 2010 Agreement recognized that “[e]ach of the Class A
Members . . . have contributed property to the capital of Aculocity and have received
[their] respective Units.” 6 (Art. 5.1). The Agreement did not specify what “property”
Kozyrkov contributed, but he alleges that he “understood that the property thus
referred to” was the amount of undistributed profits allocated to his capital account,
less the income tax payments Aculocity paid on his behalf. R. 1 ¶ 14. Second, the
2010 Agreement created a new schedule for determining the purchase price of
Kozyrkov’s Units upon termination:
Purchase Price. The purchase price of the Dissociating Units shall
equal the number of Units to be purchased multiplied by (i) if
[Kozyrkov]’s employment terminates for a reason other than for Cause,
the lesser of (A) the Fair Market Value of the Units as of the date the
Dissociation Right is exercised; and (B) the amount of cash contributed
by [Kozyrkov] to Aculocity for the Units; and (ii) if [Kozyrkov]’s
employment is terminated for Cause, the lesser of fifty percent of (X)
the Fair Market Value of the Units as of the date the Dissociation
Right is exercised; and (Y) the amount of cash contributed by
[Kozyrkov] to Aculocity for the Units.
(Art. 8.7(b)).
A third notable exception, which is not relevant to this motion but certainly is
relevant to the case, is that the Amended Agreement defines “Cause” as a
determination that Kozyrkov has engaged in specifically enumerated prohibited
conduct.
5
The 2010 Agreement created a third class of members, Class C Members.
Class C was to include employees who could purchase or be granted units pursuant
to a Management Equity Ownership Plan. (Art. 5.2). Kozyrkov was not expressly
included in or excluded from this group of potential members.
6
6
On July 3, 2013, Kozyrkov was terminated, triggering Aculocity’s option to
purchase his membership units. R. 1 ¶ 20(a). Aculocity exercised that option, but
claimed that the purchase price for the units was $0, because Kozrykov contributed
no cash to Aculocity to acquire his Class A units. Id. ¶ 20(b). Following his
termination, Kozyrkov “repeatedly requested that Aculocity provide [him] . . . with
complete and accurate accountings of the amounts of his cash contributions to
Aculocity for the Units . . . and of the fair market value of the units.” Id. ¶ 25. The
2006 Agreement provided that “books of account shall be kept at the principal office
of the LLC, and each Member and the accountants, attorneys, and other designated
agents of each Member shall at all reasonable times have free access to and the
right to inspect the same Agreement,” (Art. 10.12), but the 2010 Agreement omitted
this language from an otherwise identical provision, (Art. 9.12). Aculocity refused to
provide Kozyrkov with access to the company’s books and records. Id.
Kozyrkov alleges that his termination constituted a breach of the 2010
Agreement in two ways. R. 1 ¶ 20. First, he alleges that Aculocity claimed falsely
and in bad faith that the termination was for Cause, when in fact he had never
engaged in any conduct prohibited by the Agreement. Second, he alleges that
Aculocity breached the 2010 Agreement by refusing to consider the undistributed
profits and undisbursed or reinvested distributions allocated to his capital account
in determining the purchase price for his units. He also requests an accounting “of
the amounts of his cash contributions to Aculocity for the Units and of the fair
market value of the Units.” Id. ¶ 30.
7
Discussion
Under Delaware law, the role of a court in interpreting a contract is to give
effect to the intention of the parties as expressed in the agreed terms. Life Plans,
Inc. v. Sec. Life of Denver Ins. Co., 800 F.3d 343, 349 (7th Cir. 2015) (citing Norton v.
K–Sea Transportation Partners L.P., 67 A.3d 354, 360 (Del. 2013)). “Delaware
adheres to the ‘objective’ theory of contracts, i.e. a contract’s construction should be
that which would be understood by an objective, reasonable third party.” Osborn ex
rel. Osborn v. Kemp, 991 A.2d 1153, 1159-60 (Del. 2010) (citation omitted).
Contracts are to be read as a whole, giving “each provision and term effect, so as not
to render any part of the contract mere surplusage.” Id. (citation omitted). In other
words, courts are not to interpret a contract in such a way as to render a provision
or term “meaningless or illusory.” Id. (citation omitted); accord Norton, 67 A.3d at
365 n. 52 (recognizing the “goal of giving each [contract] term an independent
meaning”).
When a contract is clear and unambiguous, courts are to give effect to the
plain-meaning of its terms and provisions. Osborn, 991 A.2d at 1160 (citations
omitted). But when multiple and different interpretations can reasonably be
ascribed to a contract, it is ambiguous and courts may consider extrinsic evidence of
the parties’ intent to construe its meaning. Life Plans, Inc., 800 F.3d at 349-50. In
general, ambiguities in a contract are to be construed against the drafter. Osborn,
991 A.2d at 1160 (citations omitted). Courts will not countenance an interpretation
that “produces an absurd result or one that no reasonable person would have
accepted when entering the contract.” Id. (citations omitted).
8
The contract term at the heart of this motion is the buyout provision of the
2010 Agreement. 7 As set forth above, it contains a formula for the purchase price of
Kozyrkov’s membership units calculated by reference to “the amount of cash
contributed by [Kozyrkov] to Aculocity for the Units.” In this motion, Aculocity
argues that its calculation of the purchase price as $0 was correct because
(1) Kozyrkov did not make any “cash contributions” to Aculocity as defined by the
Agreements; and (2) even if he did, those contributions are immaterial to
calculating the purchase price because they were not made for the purpose of
acquiring membership units. Kozyrkov counters that he understood that
undistributed profits allocated to his capital account were to be considered “cash
contributed for his Units” under the buyout clause. Applying the principles of
contract construction set forth above, the Court addresses the parties’ arguments.
A.
The phrase “amount of cash contributed” is ambiguous.
Aculocity begins its argument in support of dismissal by noting that the term
“Cash Contributions” is defined in Article I of the 2010 Agreement as “the portion of
the Capital Contributions constituting cash.” Aculocity argues that the phrase “cash
contributed by [Kozyrkov]” in the buyout clause refers back to the Article I
definition of “Cash Contribution” as a “Capital Contribution constituting cash.” The
Whether Kozyrkov was properly terminated for cause is a contested issue,
but Aculocity concedes that Kozyrkov has adequately alleged claim for breach of
contract on the basis of his for-cause termination. For the purposes of this motion,
however, that is irrelevant; under either the without cause or for cause subsections
of the contractual buyout provision, the purchase price for Kozyrkov’s units depends
on a determination of the “amount of cash,” if any, he contributed to Aculocity “for
the units.” Whether Kozyrkov was damaged, therefore, depends on whether
Aculocity breached the buyout provision.
7
9
Court sees no reason why it must. The buyout clause could have read “the amount
of Cash Contributions made by Kozyrkov to Aculocity,” but it refers more generally
to “the amount of cash contributed by [Kozyrkov] to Aculocity.” This phrasing could
reasonably read to refer to cash contributed as part of a “Capital Contribution” or
cash otherwise contributed to the capital of the organization for the operation of its
affairs. Thus, the definition upon which Aculocity premises its argument does not
provide an unambiguous, plain-meaning rule by which to interpret the buyout
clause. 8
Aculocity also cites a number of cases that distinguish between “distributable
profits” or “retained profits” and “capital contributions” to argue that Kozyrkov’s
share of undistributed profits cannot, under well-established accounting principles,
be considered “cash contributions.” R. 20 at 10-11. All of the cases reflect the
uncontroversial principle that undistributed profits from a limited liability
company’s operations are not the same as capital contributions by its members. 9
But the fact that “retained profits” are not “capital contributions” does not
Even if the Court were to accept Aculocity’s position that the buyout clause
set pricing by reference to Kozyrkov’s capital contributions only, that still would not
require dismissal here. The Article I definition of “Cash Contributions” does not
explicitly exclude additional contributions made from a member’s earnings (Art.
5.5) (emphasis added). Kozyrkov alleges that any distributions authorized by
management were reinvested by him in Aculocity. These allegations suggest he may
have infused his own capital into the Company.
8
Interestingly, the primary case on which Aculocity relies in advancing its
argument suggests in dicta that on facts like those alleged here—where a
distribution has been declared or profits are required to be distributed under the
partnership agreement—retention of to-be-distributed profits is, in fact, tantamount
to a forced capital contribution. Brooke v. Mt. Hood Meadoes Oreg., Ltd., 81 Or. App.
387, 392-93 (Or. Ct. App. 1986).
9
10
necessarily defeat Kozyrkov’s claim that he contributed cash to Aculocity, at least
not at this stage of the proceedings. As explained above, the buyout clause does not
limit the purchase price of Kozyrkov’s units to the amount of his “capital
contributions” that are “cash.” Rather, it applies more broadly to “cash contributed
by [Kozyrkov] to Aculocity.” On its face, that does not necessarily exclude retained
profits allocated to his capital account. Nothing in the case law requires a contrary
interpretation of the contract.
Aculocity also argues that the meaning of the buyout clause is clarified by
reference to the term “Capital Contributions,” which is defined as “the amount of
cash and the value of any property (other than cash) contributed to Aculocity with
respect to the Units held by such Member.” According to Aculocity, the
differentiation of “cash” from “property (other than cash)” in this definition requires
a finding that undistributed profits—though certainly payable in cash and
measured in dollars and cents—are nevertheless “property (other than cash).” R. 20
at 8. The Court cannot see why this is the inevitable (or even preferred) reading of
the contract; indeed, it seems strained to classify profits as anything other than
cash. In support of its position, however, Aculocity notes that the 2010 Agreement
explicitly states that “Each of the Class A Members . . . have contributed property to
the capital of Aculocity and have received the[ir] respective Units.” (emphasis
added). According to Aculocity, the use of the word “property” as opposed to “cash”
in this provision was intentional, because “[t]he principal consequence of the cash[versus]-other-property distinction [in the definition of “Capital Contributions”]
11
pertained to what would happen in the event that Kozyrkov left the company
(whether voluntarily or involuntarily).” R. 20 at 7-8. First, the Court is skeptical
that this was the “principal consequence” of the distinction; multiple provisions of
the Agreement consider the type of capital contribution underlying a member’s
interest for a variety of reasons. 10 More importantly, though, without the modifier
“(other than cash)” beside it as set forth in the definition of “Capital Contribution,”
the term “property” used to describe the nature of Kozyrkov’s contribution could just
as reasonably be read to include property that is cash. Where, as here, multiple
reasonable meanings can be ascribed to a contract term, the term is ambiguous.
Moreover, the logic of Aculocity’s argument is suspect. If, as Aculocity argues,
the term “property” was intentionally used in Section 5.1 “to bar . . . Kozyrkov
[from] . . . get[ting] a distribution on termination,” then the very existence of the
buyout clause makes little sense. According to Aculocity’s argument, unless
Kozyrkov made an additional cash contribution–which the Agreement explicitly
specified he was not required to do (see Art. 5.5)–then he never would have been
able to collect any value for his units upon dissociation despite having “contributed
property to the capital of Aculocity.” 11 The Court cannot see how Kozyrkov, acting
reasonably, could have agreed to a buyout provision knowing that regardless of the
fair market value of his units, if he dissociated from Aculocity he would be forced to
For instance, provisions regarding tax allocations, distributions in
liquidation, and priority returns also turn on the type of capital contribution
underlying the contributing member’s interest.
10
By the time the 2010 Agreement was executed, the “Vadim Option” to
purchase additional Class A units at a fixed price had expired.
11
12
sell his shares for naught. The suggestion is absurd, particularly as it applies to the
2010 Amended Agreement which acknowledges that Kozyrkov made contributions
for Class A Units.
Similarly, the Court is not convinced that Aculocity believed Kozyrkov was
entitled to nothing under the buyout clause when the 2010 Agreement was signed.
After all, if Aculocity believed the buyout price was limited to “cash contributions,”
and Aculocity also believed Kozyrkov was issued the units “for property” other than
cash, then why would Aculocity include a follow-up provision in the buyout clause
protecting itself from purchasing Kozyrkov’s units at a price it could not afford?
Section 8.7(e) reads, in relevant part:
[I]n the event the aggregate payments due and payable . . .
exceed 331/3% of Aculocity’s net income (as determined by the
Manager in the Manager’s reasonable discretion), such
payments shall be deferred for successive twelve-month periods,
provided that any such deferral may not exceed 36 months.
The interpretation of the buyout clause advanced by Aculocity would render this
provision “illusory,” a “mere surplusage” devoid of any practical consequence. Such
an interpretation is disfavored. This too creates ambiguity preventing the Court
from deciding the contract’s meaning at this stage in the proceedings.
In summary, none of Aculocity’s arguments prohibit the interpretation of
“cash contributed” that Kozyrkov advances in his Complaint and moving papers.
Indeed, reading the Agreement as an objective third party, the Court finds
Kozyrkov’s interpretation to be a plausible one, consistent with the inclusion of a
buyout clause and related provisions in the contract. In the end, there is at least
13
ambiguity as to what the phrase “cash contributed” means. That is sufficient to
survive a motion to dismiss.
B.
The phrase “for the units” is also ambiguous.
Aculocity argues that even if the undisbursed authorized distributions can be
considered “additional cash contributions” as Kozyrkov alleges, they are still
irrelevant to determining the purchase price of Kozyrkov’s units because they were
not contributed by Kozyrkov for the purpose of acquiring his Class A units.
Aculocity explains that “the Agreement does not provide that [Kozyrkov] gets back
all the cash he contributed upon termination. Rather, he only gets back ‘the amount
of cash contributed by [him] to Aculocity for the Units.’” R. 20 at 12 (emphasis
added). Aculocity interprets the phrase “for the units” to mean that the price must
be set by reference to cash contributed “for the acquisition of the Units.” But this is
not the only reasonable interpretation of the phrase. “For the units” could just as
easily mean to support the operation of the organization or otherwise fulfill the
obligations of membership. In other words, regardless of whether Kozyrkov
contributed cash to acquire his units, he most certainly left cash (on which he held a
personal income tax obligation) in the business. That cash was used, presumably, to
fund the operation of the business. Simply, it is not unreasonable to consider that
Kozyrkov contributed cash to Aculocity precisely because he held membership units.
In addition, Aculocity argues that Kozyrkov’s interpretation of the buyout
clause “is completely inconsistent with” the provisions in the agreement prohibiting
members from withdrawing any capital or seeking a partition or distribution of
14
corporate assets prior to the sale or dissolution of the company. The provisions
Aculocity cites in support of this position state, in relevant part:
5.7
Withdrawal of Capital Contributions. Except as expressly
provided herein, no member shall withdraw any capital from the LLC.
10.2 Partition. Each Member and Assignee irrevocably waives any
right that the Member or Assignee may have to . . . (d) otherwise
obtain a distribution of LLC assets which constitutes a return of any
part of the Member's contribution to Aculocity prior to the occurrence
of a Dissolution Event.
According to Aculocity, “[t]here is simply no way to reconcile these provisions, that
no capital can be withdrawn and that [Kozyrkov] has waived his rights to obtain a
return of any part of his capital contribution, with Kozyrkov’s claim that he may
obtain the value of allocations made to his capital account. Indeed, his reading
would render both provisions meaningless because it would mean that all he had to
do to get capital out was to quit or be fired.” R. 20 at 9. This argument is puzzling,
because even Aculocity acknowledges that the dissociation provision permitting a
buyout of Kozyrkov’s shares is “an exception to [these] waivers.” R. 20 at 9.
More fundamentally, however, the reality is not quite as Aculocity says—
Kozyrkov could not simply quit or be fired and remove his share of undistributed
profits from the company. Instead, the Agreement provides that in the event
Kozyrkov dissociates, his interest can be purchased at the option of the company,
for the lesser of the value (or half the value if termination is for cause) of the cash
he contributed for the units and their fair market value. Using the amount of “cash
contributed for the units” as a benchmark for determining a buyout price does not,
on its face, contravene the prohibitions against withdrawing capital.
15
The motion to dismiss the breach of contract claim is denied.
C.
Accounting
In Kozyrkov’s breach of contract claim he seeks “an accounting of the
amounts of his cash contributions to Aculocity for the Units and of the fair market
value of the Units.” R. 1 ¶30. He alleges that he “has no adequate remedy at law by
which he can determine these amounts.” Id.
Kozyrkov does have an adequate remedy at law—this lawsuit. See Drake
Enter., Inc. v. Colloid Envtl. Tech. Co., 2009 WL 1789355, at *3 (N.D. Ill. June 24,
2009) (“Courts have dismissed claims for accounting where plaintiffs have plead a
claim for breach of contract, which generally provides an adequate legal remedy.”)
(collected cases). All of the accounting information pertinent to this claim will be
revealed through discovery. Id. at *2 (noting that the need to pursue an accounting
cause of action has been “greatly minimized in light of the modern federal discovery
rules). Kozyrkov has not alleged any reason discovery will be inadequate. Because
the accounting claim gives Kozyrkov nothing he does not have in his breach of
contract claim, the claim is superfluous. It is therefore dismissed.
Conclusion
For the foregoing reasons, Defendant’s motion to dismiss is denied in part
and granted in part. The parties are directed to appear one week from the date of
this Order to set a discovery schedule in this matter.
16
ENTERED:
Honorable Thomas M. Durkin
United States District Judge
Dated: February 9, 2017
17
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