Jun Young Lim v. Radish Media, Inc.

JUN YOUNG LIM, Plaintiff, v. RADISH MEDIA, INC. and SEUNG YOON LEE, Defendants.

No. 21 Civ. 4379 (ER)

United States District Court, S.D. New York

June 24, 2022

OPINION & ORDER

EDGARDO RAMOS, U.S.D.J.

Jun Young Lim filed this action on May 14, 2021 against Radish Media, Inc. and Seung-Yoon Lee. Doc 1. Lim alleges that he did not receive the contractual equity interest that he acquired while employed by Radish Media. Id. He brings claims for breach of contract and unjust enrichment and seeks a declaratory judgment that his equity interest is due. Id. Defendants filed a motion to dismiss for failure to state a claim on November 5, 2021. Doc. 20, 21.

For the reasons set forth below, the motion to dismiss is GRANTED.

I. BACKGROUND

The following facts are based on the allegations in the complaint, which the Court accepts as true for purposes of the instant motion. See, e.g., Koch v Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012).^[1]

Lim is a California resident. ¶ 1. Radish Media is incorporated in Delaware with its principal place of business in New York. ¶ 2. Seung-Yoon Lee is a resident of South Korea. ¶ 3.

Radish Media, formerly known as Byline Media, launched in February 2016 as a publishing and digital media company which provides a mobile platform for the publication of serialized fiction. ¶ 6. Lee is the co-founder and chief executive officer (“CEO”) of Radish Media and, at all relevant times, was a major shareholder in the company. ¶ 7.

Lim and Lee have been close personal friends for eight years and began working together at Byline Media in late 2014. ¶¶ 8-9. In March 2015, Lim became Head of Product at Byline Media and carried that position with him through the company's transition into Radish Media. ¶ 10. According to Lim, Radish Media agreed to pay him a salary of $54,000 a year and initially granted him a 1.2% interest in the company, which they later increased to 1.5%. ¶¶ 11, 13. Once vested, Lim's equity interest was not subject to divestment or forfeiture. ¶ 13. One quarter of the equity granted to Lim vested after one-year of employment with the company. ¶ 14. After the first year, Lim's interest was to vest at 1/48 per month until the entire grant vested. Id.

On June 20, 2016, after sixteen months of service, Lim voluntarily left his employment at Radish Media. ¶ 15. On June 22, 2016, Lee emailed Lim stating that he had calculated that Lim was entitled to 536.6 shares of Radish Media stock and that his vesting period ran from the time his employment started until June 20, 2016. ¶ 16. In a later email to Lim on March 6, 2018, Lee calculated that 167.687 of the shares had vested based on a start date of January 3, 2015. ¶ 17. The calculation was as follows: 536.6 shares multiplied by 15/48 months = 167.687 shares. Id. However, Lim alleges that he actually worked at Radish Media for 16 months, as reflected in Lee's calculation resulting in a vested ownership of 0.5%. ¶¶ 17-18.^[2] The complaint does not state the date of the purported agreement between Lim and Radish Media, or whether the agreement was oral or in writing. The only details alleged are the salary and grants of equity to be provided to Lim. Since leaving Radish Media, Lim has demanded payment of his equity interest several times, and Radish Media has refused to grant him his equity in the company, even that to which the company allegedly agrees he is entitled to. ¶ 20.

Based on information published last year in Forbes magazine and a statement from Lee, Lim alleges that Radish Media generates revenue of $100,000 per day and more than $3 million per month. ¶¶ 22-23. Lim alleges that Radish Media was due to be acquired by Kakao Entertainment for $440 million in June 2021. ¶ 25.

Lim filed the instant action on May 14, 2021, approximately five years after he left Radish Media. Lim seeks a declaratory judgment against Radish Media that he is entitled to the equity interest he earned during his employment. ¶¶ 27-35. Lim also brings a claim for breach of contract against Radish Media, ¶¶ 36-43, as well as a claim of unjust enrichment, ¶¶ 44-51, against both defendants.

In the motion to dismiss, defendants argue that the complaint is barred by the statute of limitations and, in the alternative, fails to plead a plausible cause of action. Doc. 21.

II. Legal Standard

a. Rule 12(b)(6)

Under Rule 12(b)(6), a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. See Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). The Court is not required, however, to credit “mere conclusory statements” or “[t]hreadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'” Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). More specifically, the plaintiff must allege sufficient facts to show “more than a sheer possibility that a defendant has acted unlawfully.” Id. If the plaintiff has not “nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.

III. Discussion

a. The Statute of Limitations Bars Lim's Claims

The defendants first argue that Lim's claims are barred by the statute of limitations.

While courts cannot ordinarily decide a statute of limitations defense on a motion to dismiss, “courts in this district have made an exception where (1) the complaint facially shows noncompliance with the limitations period, and (2) the affirmative defense clearly appears on the face of the pleadings.” Essex Capital Corporation v. Garipalli, No. 17 Civ. 6347, 2018 WL 6618388, at *2 (S.D.N.Y. Dec. 18, 2018) (citation omitted); see also McKenna v. Wright, 386 F.3d 432, 436 (2d Cir. 2004) (statute of limitations bar warrants 12(b)(6) dismissal “if the defense appears on the face of the complaint”). “Where a plaintiffs ‘claims are time-barred on the face of its own complaint, [plaintiff] has the burden of pleading facts sufficient to establish that the statutes of limitations should be tolled.'” Essex Capital Corporation, 2018 WL 6618388, at *2 (quotation omitted).

A motion to dismiss for failure to comply with the statute of limitations is treated as a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). Adams v. Crystal City Marriot Hotel, No. 02 Civ. 10258, 2004 WL 744489, at *2 (S.D.N.Y. Apr. 6, 2004) (citing Ghartey v. St. John's Queens Hospital, 869 F.2d 160, 162 (2d Cir. 1989)). “The pleading requirements in the Federal Rules of Civil Procedure do not compel a litigant to anticipate potential affirmative defenses, such as the statute of limitations, and to affirmatively plead facts in avoidance of such defenses.” Abbas v. Dixon, 480 F.3d 636, 640 (2d Cir. 2007) (citing Jones v. Bock, 549 U.S. 199 (2007)). Because the defendant bears the burden of establishing the expiration of the statute of limitations as an affirmative defense, a pre-answer motion to dismiss on this ground may be granted only if it appears on the face of the complaint that the statute of limitations has run. Staehr v. Hartford Financial Services Group, Inc., 547 F.3d 406, 425-26 (2d Cir. 2008). “Where there is even ‘some doubt' as to whether dismissal is warranted, a court should not grant a Rule 12(b)(6) motion on statute of limitations grounds.” PK Music Performance, Inc. v. Timberlake, No. 16 Civ. 1215 (VSB), 2018 WL 4759737, at *7 (S.D.N.Y. Sept. 30, 2018) (citation omitted).

In New York, the statute of limitations is considered procedural. Stafford v. International Harvester Co., 668 F.2d 142, 147 (2d Cir. 1981). However, New York's borrowing statute requires the application of another state's shorter statute of limitations where a non-resident plaintiff sues upon a cause of action that arose outside of New York. N.Y. C.P.L.R. § 202. Lim does not reside in New York and is suing upon a cause of action which accrued outside of New York.

California's statute of limitations for a breach of contract claim is two years for oral contracts and four years for written contracts, whereas New York's statutory period of limitations for a breach of contract, either written or oral is six years. Compare Cal. Civ. Proc. Code §§ 339(1) (oral contracts); 337(a) (written contracts) with N.Y. C.P.L.R. § 213 (2022). In California, the statute of limitations for a declaratory judgment claim is subject to the same statute of limitations as the legal or equitable claim on which it was based; therefore, the statute of limitations of two years for an oral contract and four years for a written contract for a breach of contract claim would also be applicable to Lim's declaratory judgment claim. Bank of New York Mellon v. Citibank, N.A., 214 Cal.Rptr.3d 504, 510 (Cal.Ct.App. 2017). However, New York's statute of limitations for declaratory judgment claims is six years. N.Y. C.P.L.R. § 213. In California, the statute of limitations for an unjust enrichment claim alleging fraud or mistake in the pleadings is three years, whereas the statute of limitations for an unjust enrichment claim that does not allege fraud or mistake is two years. See Cal. Civ....