Vioni et al v. Providence Investment Management, L.L.C.

Filing 110

OPINION & ORDER re: 101 MOTION for Summary Judgment . filed by American Capital Strategies, Ltd., Providence Investment Management, L.L.C., Providence Investment Partners, L.L.C., Russell Jeffrey. For the reasons above, Jeffrey and Providence's motion for summary judgment is GRANTED. Vioni's sole remaining quantum meruit claim is dismissed and the Clerk of Court is directed to enter judgment and close this case. (Signed by Judge Paul A. Crotty on 5/19/2015) (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

VSDCSDNY

DOCUMENT

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ELECTRONICALLY FILED

/l?OC#:

LISA VIONI and HEDGE CONNECTION,
INC.,

li?ATE FILED: 5-

;9-15

Plaintiffs,

08

-against-

PROVIDENCE INVESTMENT
MANAGEMENT, LLC, PROVIDENCE
INVESTMENT PARTNERS, LLC, and,
RUSSELL JEFFREY,

CV

2950 (PAC)

OPINION & ORDER

Def endants.
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HONORABLE PAUL A. CROTTY, United States District Judge:
Plaintiffs Lisa Vioni ("Vioni") and Hedge Connection, Inc. ("HCI") 1 bring this quantum
meruit action against Defendants Providence Investment Management, LLC, Providence

Investment Partners, LLC (together, "Providence"), and Russell Jeffrey ("Jeffrey"), claiming
Jeffrey and Providence failed to compensate Vioni for her role in arranging a business
opportunity with American Capital Strategies, Ltd. ("American Capital"). Jeffrey and Providence
move for summary judgment under Fed. R. Civ. P. 56, arguing there was no reasonable
expectation of compensation between the parties. For the reasons below, and Jeffrey and
Providence' s motion for summary judgment is GRANTED.

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Though HCI is named as a plaintiff, Vioni ' s amended complaint makes it clear that HCI has no
claim against Jeffrey and Providence. See Am. Compl. ~ 7 ("Vioni, individually, took the actions
alleged in this amended complaint."); see also Klausner Deel., Ex. 4 25, 29 (during HCl's
deposition, Vioni, on HCl's behalf, stated that HCI did not introduce Jeffrey to American Capital
and that Providence "never hired Hedge Connection to do anything"). Accordingly, HCI cannot
maintain a quantum meruit claim against Jeffrey and Providence.
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BACKGROUND
Over seven years ago, Vioni commenced this action against Jeffrey, Providence, and
American Capital for breach of contract, quantum meruit, and promissory estoppel. The
amended complaint alleges that, through her work connecting American Capital with Jeffrey and
Providence, Vioni earned fees that were never paid.
On January 23, 2009, the Court dismissed Vioni' s breach of contract claim for failing to
satisfy the New York statute of frauds. Vioni v. American Capital Strategies, Ltd., No. 08 Civ.
2950 (PAC), 2009 WL 174937 (S.D.N.Y. Jan. 23, 2009). The Court also dismissed Vioni' s
promissory estoppel claim for failing to allege an unconscionable injury. Id.
On September 26, 2011, the Court granted Jeffrey, Providence, and American Capital's
motion for summary judgment and dismissed the remaining quantum meruit claim for failing to
satisfy the New York statute of frauds. Vioni v. American Capital Strategies, Ltd., No. 08 Civ.
2950 (PAC), 2011WL4444276 (S.D.N.Y. Sept. 26, 2011).
On January 18, 2013, the United States Court of Appeals for the Second Circuit affirmed
the Court' s summary judgment order regarding American Capital but reversed the Court's order
regarding Jeffrey and Providence. See generally Vioni v. American Capital Strategies, Ltd., 508
Fed. Appx. 1 (2d Cir. 2013) (abbreviated and redacted version of the Second Circuit' s sealed
order). The Second Circuit determined that the parties' emails from March 26, 2007, April 19,
2007, and June 5, 2007 satisfied the statute of frauds for Vioni ' s quantum meruit claim against
Jeffrey and Providence and remanded that claim for further proceedings.
On December 1, 2014, Jeffrey and Providence renewed their motion for summary
judgment, arguing that while the parties' emails satisfy the statute of frauds, Vioni ' s quantum
meruit claim fails as a matter of law because there was no reasonable expectation of

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compensation between the parties.

DISCUSSION
I.

Summary Judgment Standard
A motion for summary judgment should be granted when there is "no genuine dispute as

to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.
56(a). A genuine issue of material fact cannot exist if "after adequate time for discovery and
upon motion, [a party] fails to make a showing sufficient to establish the existence of an element
essential to that party' s case, and on which that party will bear the burden of proof at trial."

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In such cases, "Rule 56(c) mandates the
entry of summary judgment . . . . since a complete failure of proof concerning an essential
element of the nonmoving party' s case necessarily renders all other facts immaterial." Id. at 32223 . While courts must "constru[ e] the evidence in the light most favorable to the nonmoving
party," LaSalle Bank Nat 'l Ass'n v. Nomura Asset Capital Corp. , 424 F.3d 195, 205 (2d Cir.
2005) (quotation omitted), the moving party must prevail "[w]here the record taken as a whole
could not lead a rational trier of fact to find for the non-moving party," Matsushita Elec. Indus.

Co. v. Zenith Radio Corp. , 475 U.S . 574, 587 (1986).

II.

Analysis
To prevail on her quantum meruit claim, Vioni must establish "(1) the performance of

services in good faith, (2) the acceptance of the services by the person to whom they are
rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the
services." Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168,

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175 (2d Cir. 2005) (citation omitted).
In 2006, Robert Grunewald, the managing director of American Capital, contacted HCI

to seek Vioni ' s assistance in arranging investment opportunities. Approximately one year into
their relationship, Vioni introduced Grunewald to her friend Jeffrey, an executive of Providence.
Starting then, a relationship developed between American Capital, Jeffrey, and Providence.
Vioni argues Jeffrey and Providence owe her a finder's fee, marketing fee, management fee, and
performance fee to compensate her for arranging the introduction to American Capital. Am.
Compl. if 186.
Certainly, Vioni introduced Jeffrey, Providence, and American Capital. Nonetheless
Vioni fails to provide evidence that she expected Jeffrey and Providence to compensate her for
the introduction. Rather, Vioni expected American Capital to compensate her for that. For
example, Vioni made multiple explicit demands for payment from American Capital, and even
outlined her desired fee structure to Grunewald. See Klausner Deel., Ex. 22 (email from Vioni to
Grunewald: "Is there any type of ownership that I could tie myself to in this structure so that I
can participate in the growth of the business? Could I act as a consultant and get paid an ongoing
fee on money raised for [Jeffrey]'s business for example? Any guidance you can give would be
very appreciated."); see also id. at 31 (email from Vioni to Grunewald: "I have outlined what
industry standard would be as payment for the deal you are about to close with [Providence]. I
see payment as two different things: [marketing fees and ACAS fees] "). Moreover, when
Grunewald informed Vioni that American Capital "does not pay fees other than those for a
retained search for the introduction of employees," id. (email from Grunewald to Vioni), instead
of seeking compensation from Jeffrey and Providence, Vioni sought Jeffrey' s assistance in
further negotiating her compensation with Grunewald. See id. at Ex. 30 (email from Vioni to

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Jeffrey: "I must now rely on you to help negotiate marketing fees into your deal [with American
Capital] for me."). And when it became clear that American Capital would not pay Vioni ' s fees,
Vioni counselled Jeffrey and Providence to walk away from their American Capital deal. See id.
at Ex. 34 (email from Vioni to Jeffrey: "Then I think we give [Grunewald] a week to 10 days and
if he doesn't have anything concrete we consider walking."). At no point in the parties'
discussions did Vioni request Jeffrey and Providence to compensate her in place of American
Capital. The evidence adduced permits the Court to draw but one reasonable conclusion: Vioni
did not expect Jeffrey and Providence to compensate her.
Even if Vioni did expect Jeffrey and Providence to compensate her, Vioni failed to
communicate this expectation to them. 2 See United Resource Recovery Corp. v. Ramko Venture

Management, Inc. , No. 07 Civ. 9452, 2009 WL 2746232, at *9 (S.D.N.Y. Aug. 28, 2009)
(denying quantum meruit because the claimant "never shared with [the respondent] its belief that
it would be paid"). Vioni is unable to point to any discussion with Jeffrey and Providence in
which she expresses a clear expectation that they compensate her. Though Vioni informed
Jeffrey that she sought "a significant upfront payment for the introduction to [American Capital]
and then [to be] tied to the growth of the business going forward," Carey Deel., Ex. D, at no
point does Vioni indicate that she sought this upfront payment from Jeffrey and Providence.
Consequently, there is insufficient evidence demonstrating Jeffrey and Providence' s intent to

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In a prior dealing with Jeffrey and Providence, Vioni demonstrated an expectation of
compensation for her work locating a different investor for Provitlence. This expectation was
understood by Jeffrey, who wanted Vioni "to have a comfort and ~onfidence about [the] whole
process, so that if a deal is consummated, [she] was compensated dccordingly." Klausner Deel.,
Ex. 17. Though the Second Circuit ruled that Jeffrey' s written statement-interpreted within the
context of two other emails-satisfied the statute of frauds, it does not show Vioni
communicated an expectation that Jeffrey and Providence compensate her for the introduction to
American Capital.
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compensate her. 3 See 22A N.Y. Jur. 2d Contracts § 610 ("To

prove ~ claim for quantum meruit,

there must be proof of some intent on the part of the recipient to pay for the services rendered. ").
Even if an expectation of compensation existed between the parties, Vioni would not be
entitled to the fees demanded. First, Vioni only ever sought the "finder ' s fee" 4 from American
Capital. Am. Compl.

if 145. But since the Court has dismissed all claims against American

Capital, Vioni now seeks this fee from Jeffrey and Providence. Vioni ' s attempt at impermissibly
amending her pleading in her motion papers must fail. See Fed. R. Civ. P. 7(a). Next, Vioni is
plainly not entitled to a "marketing fee" 5 since the predicate investments between American
Capital and Providence never occurred. Statement of Uncontested Facts if 28. Moreover, Vioni ' s
status as an unlicensed broker at the time prevents her from recovering the type of transactionbased income at issue here. See 15 U.S.C. § 78cc(b). Finally Vioni presents no evidence
indicating any entitlement to either a "management fee" or a "performance fee. " In fact, the
evidence submitted focuses on just two types of fee: the finder ' s fee and the marketing fee. See

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At best, a jury would have to glean Jeffrey and Providence' s intent to compensate Vioni from
statements such as "let's meet again if your schedule permits to iron out more specifics," Casey
Deel., Ex. D, or " Lisa Vioni expects payments for the initial introduction and for any capital that
is managed for [American Capital] out of its newly created [Providence] office," id. at Ex. G.
But these statements merely indicate that Jeffrey and Providence were aware of Vioni' s desire to
be compensated. They cannot demonstrate that Vioni expected Jeffrey and Providence to
compensate her; nor can they demonstrate that Jeffrey and Providence intended to compensate
Vioni.
4

Vioni ' s use of the term "finder ' s fee" is largely interchangeable with her use of "lift-out fee"
and "ACAS fee. " Essentially, Vioni sought the fee as compensation for "finding" employees at
one company (Providence) who would be "lifted-out" to join another company (American
Capital). See Klausner Deel., Ex. 31 (email from Vioni to Grunewald seeking an "ACAS fee" for
"introduc[ing] a key team of [Providence] executives that are joining [American Capital]").
5

Vioni defined "marketing fees" as follows: " If there was going to be a fund that was created
that was managed by [Providencce][,] and [American Capital] invested money into that fund .. .
fees [ ] traditionally would go to the manager, Russell. And traditionally the marketing person
would get a percentage of those fees. " Id. at Ex. 3 231:3-10 (Vioni Deposition).
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Klausner Deel., Ex. 31 .
Accordingly, Vioni fails to present sufficient evidence demonstrating an expectation of
compensation from Jeffrey and Providence. Moreover, Vioni fails to present sufficient evidence
demonstrating Jeffrey and Providence ' s intent to compensate her. Finally, Vioni fails to
demonstrate an entailment to the fees demanded. The Court, therefore, cannot imply a contract
between the parties and Jeffrey and Providence' s motion for summary judgment is GRANTED.
CONCLUSION

For the reasons above, Jeffrey and Providence' s motion for summary judgment is
GRANTED. Vioni ' s sole remaining quantum meruit claim is dismissed and the Clerk of Court is
directed to enter judgment and close this case.

Dated: New York, New York
May 19, 2015

SO ORDERED

PAUL A. CROTTY
United States District Judge

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