Ortega et al v. Burgos

Filing 31

MEMORANDUM & ORDER: The defendants motion 27 to dismiss or stay the fraud claim is denied and their motion is granted for the remaining claims. Counsel shall contact MJ Mann to schedule a Rule 16 conference with respect to discovery. Ordered by Judge Frederic Block on 5/22/2014. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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BELLA AURORA MONTENEG
ORTEGA and KELLY STEPHANIE
ROJAS MONTENEGRO,
Plaintiffs,
MEMORANDUM AND ORDER
12-CV-05421 (FB) (RLM)

-againstHECTOR BURGOS and ROBERT
BURGOS,
Defendants.
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Appearances
For the Plaintiffs:
JOSE RAUL ALCANTAR VILLAGRAN, ESQ.
Alcantar Law PLLC
22 Cortlandt St, 16th Floor
New York, NY 10007

For the Defendants:
CHARLES ZOLOT, ESQ.
37-06 82nd St
Jackson Heights, NY 11372

BLOCK, Senior District Judge:
Bella Aurora Monteneg Ortega (“Ortega”) and her daughter, Kelly Stephanie Rojas
Montenegro (“Montenegro”) bring claims of fraud, conversion, and intentional infliction of
emotional distress (“IIED”) under New York law against Hector Burgos (“Hector”) and his
son, Robert Burgos (“Robert” and collectively the “Burgoses”). Defendants move to dismiss
all claims. For the reasons stated below, their motion is denied for the fraud claim and
granted for the conversion and IIED claims.
I
For purposes of this motion, the Court must take as true all of the allegations of

plaintiffs’ complaint, and must draw all inferences in their favor. See Weixel v. Bd. of Educ.,
287 F. 3d 138, 145 (2d Cir. 2002). The Court may also consider “documents attached to the
complaint as an exhibit or incorporated in it by reference,” “matters of which judicial notice
may be taken, or . . . documents either in plaintiffs’ possession or of which plaintiffs had
knowledge and relied on in bringing suit.” Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150
(2d Cir. 1993).
Ortega and Hector created an Ecuadorian company — Produsa Ecuador — that
exports food to the United States under the trade name “La Cholita.” Ortega alleges that in
2008, the Burgoses obtained her consent to sell the “La Cholita” trademark rights to a third
party, Iberia Foods (“Iberia”), in exchange for a 10-year supply agreement between Produsa
Ecuador and Iberia, but that no supply agreement ever materialized.
The fraud claim survives a motion to dismiss because the Amended Complaint clearly
sets forth allegations of the elements of a cause of action for fraud, and provides the
particularity required under the N.Y. CPLR § 3016(b). See Eurycleia Partners, LP v. Seward
& Kissel, LLP, 12 N.Y.3d 553, 559 (2009) (reciting the requirements of “a material
misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable
reliance by the plaintiff and damages”). Moreover, “the purpose underlying the statute is to
inform a defendant of the complained-of incidents,” and the Amended Complaint notifies the
Burgoses that the events surrounding the trademark sale to Iberia are the basis of Ortega’s
claim. Id. The motion to stay the claim is also denied. The allegations allege fraud under New
York law, based on actions initiated in New York and performed by New York residents.
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The conversion and IIED claims, however, must be dismissed. Not only has this
Court been unable to find any authority that recognizes trademark conversion, the leading
treatise on trademark law states that, “[e]very court to consider such a claim has rejected it.”
MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 25:9.50 (4th ed. 2014). As for
IIED, “[c]ommencement of litigation, even if alleged to be for the purpose of harassment and
intimidation, is insufficient to support such a claim.” Walentas v. Jones, 683 N.Y.S.2d 56,
58 (1st Dep’t 1999) (citing Fischer v. Maloney, 43 N.Y.2d 553 (1978), and collecting cases).
III
For the foregoing reasons, defendants’ motion to dismiss or stay the fraud claim is
denied; their motion is granted for the remaining claims.
SO ORDERED
/S/ Frederic Block___________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
May 22, 2014

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