Starke v. Krupica

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CHARLES H. STARKE, Plaintiff, v. ROBERT BRIAN KRUPICA, Defendant.

No. 22cv4464 (DLC)

United States District Court, S.D. New York

November 7, 2023

For the plaintiff Charles H. Starke: Jonathan B. Strauss

For the defendant Robert Brian Krupica: Luke C. Lirot Law Offices of Luke Lirot, P.A. Vincent S. Verdiramo Verdiramo &amp Verdiramo, P.A.

OPINION AND ORDER

DENISE COTE UNITED STATES DISTRICT JUDGE

Charles H. Starke ("Starke") has brought an action against Robert Brian Krupica ("Krupica"), seeking damages on claims of fraud, misrepresentation, and for money loaned. Krupica has moved for summary judgment on the plaintiff's claims. In addition, Starke has moved for summary judgment on two of Krupica's counterclaims. For the following reasons, the defendant's motion for summary judgment is granted, as is the plaintiff's motion.

Background

The following facts are undisputed or taken in the light most favorable to Starke, unless otherwise indicated. Starke is an anesthesiologist licensed to practice in New York. Krupica is an attorney and operates the law firm Hughes Krupica Consulting Company Limited in Phuket, Thailand ("Hughes Krupica"). From September 2015 to July 2018, Starke employed Krupica's legal services for various business dealings and legal proceedings.

In December 2015, Krupica introduced Starke to Daniel Matts ("Matts"), a bar owner in Phuket. Matts was involved in several business ventures, including an import business. Starke himself owns a liquor store in Brooklyn, New York. Over the summer of 2017, Starke and Krupica discussed Starke entering into business with Matts. On August 8, Starke and Matts, along with two other individuals, entered into a shareholders' agreement (the "Agreement") for Lavish Global Imports, Inc. ("Lavish"). As described in the Agreement, Lavish's purpose was to import alcoholic beverages for distribution and sale in Thailand. Starke initialed each page and signed the last page of the Agreement. Starke received nine thousand shares of Lavish, amounting to 45 percent of Lavish's total shares. Matts was the sole director of Lavish and managed the day-to-day operations of the company.

Over the span of five months in 2017, Starke wired $246,000 to Hughes Krupica, which operated an account from which funds were dispersed to Lavish. These funds included Starke's initial buy-in to Lavish and loans to Lavish to import the inventory.

Krupica served as a director of Lavish for one day in February of 2018. Following a meeting at the offices of Hughes Krupica between Matts, Starke, and Krupica, Krupica agreed to become a director of Lavish on February 14, 2018. On February 15 Starke and Krupica exchanged emails about Starke's desire to restructure Lavish. Krupica immediately resigned as director of Lavish.

From March 18, 2018 to January 6, 2020, Matts and Starke exchanged emails regarding Lavish and its finances. On February 13, 2019, Matts emailed Starke to address concerns about Lavish's inventory and its finances. Matts explained that the storage facilities housing Lavish's inventory in Bangkok and Laguna were threatening confiscation of the inventory because of unpaid bills. In addition, Matts wrote, "The company has no incoming revenue apart from 3-5 bottles a month . . . which goes directly to our rent bill."

In emails to Starke later that month, Matts emphasized that he had pursued various avenues to sell Lavish's inventory to no avail, that Lavish was in need of liquidation or dissolution in order to pay outstanding bills, and that Lavish's disputes with its storage facilities would lead to legal proceedings. In an email dated February 25, Matts expressed that Starke had "rendered [him] unable to continue fulfilling [his] duties as director of the company."

On October 22, 2019, Matts emailed Starke to inform him of an offer from a buyer interested in Lavish's stock of vodka. Matts explained that this buyer was willing to purchase the stock at a below-market price, adding "I know this is a big loss, but I honestly don't see another way to sell it off. Our bills are continuing to build up and we have no income coming into the company."

On January 26, 2020, Starke filed a police report (the "Police Report") with the Muang Phuket Provincial Police Station, accusing Krupica of embezzlement. In April 2021, Starke posted a negative review of Krupica's law firm on the firm's Google page (the "Review").

Starke filed this action against Krupica on May 31, 2022. He filed the first amended complaint ("FAC") on August 31, in response to a motion to dismiss. On December 14, the Court denied the defendant's motion to dismiss this action for lack of personal jurisdiction over Krupica.

On January 27, 2023, the defendant answered the FAC and filed seven counterclaims. Following discovery, on September 5, the plaintiff moved for summary judgment on the defendant's fourth and seventh counterclaims. On September 15, the defendant moved for summary judgment on each of the FAC's three claims. The plaintiff's motion became fully submitted on October 6, and the defendant's motion became fully submitted on October 16.

Discussion

Summary judgment may be granted only when "the movant shows that 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). "To present a genuine issue of material fact sufficient to defeat a motion for summary judgment, the record must contain contradictory evidence such that a reasonable jury could return a verdict for the nonmoving party." Horror Inc, v. Miller, 15 F.4th 232, 241 (2d Cir. 2021) (citation omitted). Material facts are facts that "might affect the outcome of the suit under the governing law." Choi v. Tower Rsch Cap. LLC, 2 F.4th 10, 16 (2d Cir. 2021) (citation omitted). In considering a motion for summary judgment, a court "construe[s] the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant." Kee v. City of New York, 12 F.4th 150, 158 (2d Cir. 2021) (citation omitted).

Although the movant bears the initial burden of showing that there is no genuine dispute as to a material fact, when "the burden of proof at trial would fall on the nonmoving party, the moving party can shift the initial burden by pointing to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim." McKinney v. City of Middletown, 49 F.4th 730, 738 (2d Cir. 2022) (citation omitted). "If the moving party carries its burden, the nonmoving party must come forward with evidence that would be sufficient to support a jury verdict in its favor." Id. (citation omitted). "The mere existence of a scintilla of evidence in support of the non-movant's position will be insufficient; there must be evidence on which the jury could reasonably find for the nonmovant." Id. (citation omitted). "[R]ather than merely deny the moving party's allegations in a general way, the party opposing summary judgment must present competent evidence that creates a genuine issue of material fact." Id. (citation omitted). Unsupported allegations do not create a material issue of fact. Id.

In briefing their respective motions for summary judgment, the parties rely on New York law. Therefore, this Court will apply New York law. See Trikona Advisers Ltd, v. Chuqh, 846 F.3d 22, 31 (2d Cir. 2017).

I. Defendant's Motion for Summary Judgment

The defendant has moved for summary judgment on all three of the plaintiff's claims. The plaintiff's fraud and misrepresentation claims arise out of the parties' dealings with Lavish. The plaintiff's third claim arises from money that Krupica allegedly borrowed from Starke.

The defendant has adequately shifted his burden as movant for summary judgment by pointing to a lack of admissible evidence to prove every element of plaintiff's claims. Along with his brief opposing the defendant's motion, the plaintiff has submitted his responses to the defendant's Rule 56.1 statement, his own affidavit, excerpts from three depositions, and additional documents. These documents do not provide sufficient evidence to support a verdict in the plaintiff's favor or to create material issues of fact to sustain the plaintiff's claims.

a. Fraud

The FAC alleges that Krupica defrauded the plaintiff by obtaining $225,000 from the plaintiff to fund Lavish. The FAC asserts that fraud has occurred because the plaintiff was never paid back any of his investment. "Under New York law, the five elements of fraud are "(1) a material misrepresentation or omission of fact (2) made by [a] defendant with knowledge of its falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and (5) resulting damage to the plaintiff." Loreley Fin. (Jersey) No. 3 Ltd, v. Wells Fargo Sec., LLC, 13 F.4th 247, 259 (2d Cir. 2021) (citation omitted). See also Hershman v. Bank of N.Y. Mellon, 196 N.Y.S.3d 84, 86 (2d Dep't 2023). "[S]tatements will not form the basis of a fraud claim when they are mere puffery or are opinions as to future events." Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 2000) (citation omitted) (applying New York law). See also Kato Int'l LLC v. Gerard Fox Law, P.C., 150 N.Y.S.3d 711, 712 (1st Dep't 2021). "The failure to fulfill a promise to perform future acts is not ground for a fraud action unless there existed an intent not to perform at the time the promise was made." Cap. Mgmt. Select Fund Ltd, v. Bennett, 670 F.3d 194, 205 (2d Cir. 2012) (citation omitted).

The plaintiff's claim of fraud in connection with his investment in Lavish arises from his assertion in the FAC that he would not have invested his money in Lavish but for Krupica's "guarantee" that...