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YS Catering Holdings, Inc. v. Attollo Partners LLC

Florida Court of Appeals, Third District

June 19, 2019

YS Catering Holdings, Inc., etc., et al., Appellants,
v.
Attollo Partners LLC, etc., et al., Appellees.

Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 17-7504, Daryl E. Trawick, Judge.

          The Bernstein Law Firm and Michael I. Bernstein and Jordan C. Kaplan, for appellants.

          Solowsky & Allen and Richard L. Allen and Lauren Kain Whaley, for appellees.

          Before EMAS, C.J., and SALTER, J., and LEBAN, Senior Judge.

          SALTER, J.

         YS Catering Holdings, Inc. ("YSCH") and Scher Duchman ("Duchman") appeal from a final order granting a motion by the appellees, Attollo Partners, LLC ("Attollo"), Rajesh Rawal ("Rawal"), and Roy Heggland ("Heggland"), to dismiss the second amended complaint by YSCH and Duchman with prejudice.

         The underlying dispute involves complex business transactions and the detailed documents memorializing the parties' agreements. The trial court correctly concluded that the written documents precluded the artfully pled tort claims and other theories of liability advanced by YSCH and Duchman. We affirm the dismissal of those claims with prejudice.

         Background and Procedural History

         The circuit court lawsuit filed by YSCH and Duchman alleged, in its third formulation (the second amended complaint, referred to here as the "Complaint"), a long litany of claims for breach of fiduciary duty; aiding and abetting breaches of fiduciary duty; fraud in the inducement; civil conspiracy to commit fraud; declaratory judgment; injunctive relief; breach of contract; and breach of the covenant of good faith and fair dealing.[1]

         The parties on both sides were experienced, sophisticated investors and entrepreneurs. Duchman founded a company, YS Catering, Inc., which provided ready-to-eat meals to customers under the trade name of "The Fresh Diet, Inc." That company, referred to here as "Fresh Diet," entered into a series of bank loans for $1.2 million, personally guaranteed by Duchman. Under New York law, Duchman was also personally responsible for assuring that Fresh Diet made the required state tax filings and payments.

         In 2013, Duchman met appellees Rawal and Heggland, who were members of Attollo. Following negotiations between Duchman and Attollo, Attollo acquired an 18% ownership interest in Fresh Diet. Duchman was a shareholder of YSCH, and that company owned a 46% interest in Fresh Diet. Rawal became the chief executive officer, and Heggland became general counsel, of Fresh Diet.

         In 2014, Duchman introduced a principal of Attollo to the chief executive officer of a publicly-traded company, Innovative Food Holdings, Inc. ("IVFH"). IVFH engaged in a line of business similar to that of Fresh Diet, and soon the two companies agreed to a merger. Duchman approved and signed an Agreement and Plan of Merger ("Merger Agreement") in August 2014. The 31-page, detailed Merger Agreement (subsequently an attachment to the Complaint), contained several terms pertinent here:

• A rather typical, boilerplate merger/integration provision, section 6.3, acknowledging that the Merger Agreement and related written agreements "constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof." The provision also disclaimed any intention to benefit non-parties, and precluding amendment ...

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