FILED: NEW YORK COUNTY CLERK 02/27/2013 INDEX NO. 651127/2013 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/28/2013 IN THE SUPREME COURT OF NEW YORK COUNTY, NEW YORK J. GARY MCINTYRE. an individual, and DAMON MCINTYRE, an individual, Index No: Plaintiffs, SUMMONS v. DAVID CHEN, an individual, MICHAEL GIZAW, an individual, TROY AHWAH, an individual and CITRINE LOUNGE LLC (alkja CITRINE LLC, d/b/a STUDIO XXI), a New York limited liability company, Defendants. ------------------------------,/ To the Persons Named as Defendants above: PLEASE TAKE NOTICE THAT YOU ARE HEREBY SUMMONED to appear in the Supreme Court of the County of New York, at the office of the clerk of the said court at 60 Centre Street, in the County of New York, City and State of New York, and to do so within 20 days after the service of this Summons (not counting the day of service itself), or within 30 days after service is complete if the Summons is not delivered personally to you within the State of New York. YOU ARE HEREBY NOTIFIED THAT should you fail to answer or appear, a judgment will be entered against you by default for the relief demanded in the Complaint. Respectfully submitted, ~ T.'Stein, Attorney for Plaintiffs 403 East 62nd Street, Suite lob New York, New York 10065 Dated: March 28, 2013 New York Bar No.: 4289278
(Addresses of Defendants) Troy Ahwah 5 Gold Circle Freeport, NY 11520 David Chen 676 Sixth Avenue New York, NY 10010 Michael Gizaw 676 Sixth Avenue New York, NY 10010 2
IN THE SUPREME COURT OF NEW YORK COUNTY, NEW YORK J. GARY MCINTYRE, an individual, and DAMON MCINTYRE, an individual, Plaintiffs, Index No: COMPLAINT v. DAVID CHEN, an individual, MICHAEL GIZAW, an individual, TROY AHWAH, an individual and CITRINE LOUNGE LLC (alk/a CITRINE LLC, d/b/a STUDIO XXI), a New York limited liability company, Defendants. ----------------------------~/ COMPLAINT Plaintiffs, 1. Gary McIntyre and Damon McIntyre, hereby sue Defendants David Chen ("Chen"), Michael Gizaw ("Gizaw"), Troy Ahwah ("Ahwah") and Citrine Lounge LLC (alkla Citrine LLC, d/b/a Studio XXI) ("Citrine") and, in support, state as follows: INTRODUCTION 1. This is litigation over Citrine, located on the second floor at 676 Sixth Avenue, New York, New York 10010. J. Gary McIntyre and Damon McIntyre purchased 12.5% of the membershjp interests of Citrine (owned by Gizaw, Chen and Ahwah) pursuant to an Interest Purchase Agreement, dated as of September 24, 2010 (the "Interest Purchase Agreement"), after being fraudulently induced to do so by Gizaw, Chen and Ahwah. J. Gary McIntyre and Damon McIntyre were duped into buying 12.5% of the membership interests of Citrine for $60,000, when Gizaw, Chen and Ahwah provided them with the Interest Purchase Agreement and written financial documentation Gizaw, Chen and Ahwah - acting on behalf of themselves and as actual 3
or apparent agents of Citrine - knew to be false. That Interest Purchase Agreement and financial information, along with other false misrepresentations from Gizaw, Chen and Ahwah, misled J. Gary McIntyre and Damon McIntyre into believing that they were making a sound investment. 1. Gary McIntyre and Damon McIntyre bring claims for (i) fraudulent inducement to enter into the Interest Purchase Agreement, (i) fraudulent misrepresentation, (iii) negligent misrepresentation, (iv) fraud by omission, (v) breach of contract and (vi) unjust enrichment..lljrisdiction AND VENUE. 2. Venue is proper in the Supreme Court of New York County, New York because the acts and omissions that led to plaintiffs' harm occurred in New York County, New York. 3. Moreover, venue is properly laid in New York County, New York despite any purported venue provision to the contrary in the Interest Purchase Agreement because, as alleged below, the Interest Purchase Agreement was procured by fraud that permeated every part of the Interest Purchase Agreement. GENERAL FACTS 4. Citrine is a company that operates the Studio XXI nightclub located on the second floor of 676 Sixth Avenue, New York, New York. 6. Gizaw, Chen and Ahwah acquired Citrine from Adam Elzer, David Rodolitz and Audrey Gabel for $160,000 plus rent payments of $7,200, pursuant to an Interest Purchase Agreement, dated as of March 25,2010. 7. On or around April 20, 2010, Chen, Gizaw and Ahwah provided Damon McIntyre with revenue projections for the rest of201o, a cost analysis and a weekly break even numbers as well as other financial information regarding Studio XXI. 4
--- ---- 8. In reliance upon this information and Gizaw, Chen and Ahwah's repeated representations, J. Gary McIntyre and Damon McIntyre agreed to purchase 12.5% of the membership interests of Citrine for $60,000 pursuant to the Interest Purchase Agreement. 9. As part of the Interest Purchase Agreement, Gizaw, Chen and Ahwah were required to provide J. Gary McIntyre and Damon McIntyre with certain financial information as requested. Upon information and belief, Gizaw, Chen and Ahwah never provided such financial information as required by the Interest Purchase Agreement. 10. On or about June 13, 2011, after repeated requests from Damon McIntyre for a detailed breakdown of the company's specific fmancial information, Chen provided information regarding the promotional and payroll cost of Studio XXI and claimed that he had notified the accountants to provide a summary of the profit and loss statements from December 2010 to June 2011. Upon information and belief, the profit and loss statements were never provided. Chen also claimed that he was in discussions with parties interested in purchasing J. Gary McIntyre and Damon McIntyre's membership interests. 11. In addition to Gizaw, Chen and Ahwah not providing the required financial information, over time, J. Gary McIntyre and Damon McIntyre realized that the financial information that was provided to them to induce them to purchase the membership interests was horribly inaccurate. 12. Thus, the fmancial information provided to J. Gary McIntyre and Damon McIntyre was false and the representations made by Gizaw, Chen and Ahwah regarding Citrine were also false. 5
13. At all times material, Gizaw, Chen and Ahwah acted not only for themselves but also as actual or apparent agents of Citrine. COUNT 1- FRAUDULENT INDUCEMENT TO ENTER INTO CONTRACT 14. J. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set forth in Count I, the allegations of paragraphs 1-13. 15. As set forth in paragraphs 7-12, Gizaw, Chen and Ahwah's statements and actions on behalf of Citrine were false statements of material fact. 16. At the time they made the statements referred to above, Gizaw, Chen and Ahwah, as Citrine's actual or apparent agent, knew or should have known that the statements were false and intended J. Gary McIntyre and Damon McIntyre to rely upon and act upon the statements in entering into the Interest Purchase Agreement with Citrine. 17. 1. Gary McIntyre and Damon McIntyre relied upon the representations made by Gizaw, Chen and Ahwah, as actual or apparent agent of Citrine to enter into the Interest Purchase Agreement, to their detriment. 18. As a direct, natural, proximate and foreseeable result of the false misrepresentations of Gizaw, Chen and Ahwah, who acted on behalf of themselves and Citrine, J. Gary McIntyre and Damon McIntyre have suffered damages. WHEREFORE, 1. Gary McIntyre and Damon McIntyre request judgment in their favor and adverse to Defendants for damages, pre-judgment interests and for any other relief that the Court considers just and appropriate. 6 -- - --- - -------
COUNT II - FRAUDULENT MISREPRESENTATION 19. 1. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set forth in Count II, the allegations set forth in paragraphs 1-18. 20. The representations made by Gizaw, Chen and Ahwah, on behalf of Citrine and themselves, as set forth in paragraphs 7-12, were false representations of material fact. 21. Gizaw, Chen and Ahwah knew that these representations were false at the time they made them and they knew that 1. Gary McIntyre and Damon McIntyre would rely on the false representations and intended that J. Gary McIntyre and Damon McIntyre would rely on them. 22. 1. Gary McIntyre and Damon McIntyre did in fact rely upon those false representations to their detriment. 23. As a direct, natural, proximate and foreseeable result of the false representations of Gizaw, Chen and Ahwah, who acted on behalf of themselves and Citrine, J. Gary McIntyre and Damon McIntyre have suffered damages. WHEREFORE, 1. Gary McIntyre and Damon McIntyre request judgment in their favor and adverse to Defendants for damages, pre-judgment interests and for any other relief that the Court considers just and appropriate. COUNT III - FRAUD BY OMISSION 24. 1. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set forth in Count III, the allegations set forth in paragraphs 1-23. 7
25. Gizaw, Chen and Ahwah, acting on behalf of Citrine and themselves failed to inform J. Gmy McIntyre and Damon McIntyre of material information as set forth in paragraphs 7-12. The failure to do so under these circumstances amounts to material misrepresentations of fact by omission. 26. Gizaw, Chen and Ahwah knew that these misrepresentations by omission were false at the time they made them and they knew that J. Gary McIntyre and Damon McIntyre would rely on the misrepresentations by omission and intended that J. Gary McIntyre and Damon McIntyre would rely on them. 27. J. Gary McIntyre and Damon McIntyre did in fact rely upon the misrepresentations by omission to their detriment. 28. As a direct, naturai, proximate and foreseeable result of the misrepresentations by omission of Gizaw, Chen and Ahwah, who acted on behalf of themselves and Citrine, 1. Gary McIntyre and Damon McIntyre have suffered damages. WHEREFORE, J. Gary McIntyre and Damon McIntyre request judgment in their favor and adverse to Defendants for damages, pre-judgment interests and for any other relief that the Court considers just and appropriate. COUNT IV - NEGLIGENT MISREPRESENTATION 29. 1. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set forth in Count IV, the allegations set forth in paragraphs 1-28. 8
30. As set forth in paragraphs 7-12, Gizaw, Chen and Ahwah, acting on behalf of Citrine and themselves made misrepresentations of material facts that, based on their knowledge at the time, they either knew or should have known were false. 31. Chen and Gizaw, acting on behalf of Citrine and themselves, intended 1. Gary McIntyre and Damon McIntyre to rely upon the misrepresentations. 32. 1. Gary McIntyre and Damon McIntyre did in fact reasonably rely upon those representations to their detriment. 33. As a direct, natural, proximate and foreseeable result of the false misrepresentations by omission of Gizaw, Chen and Ahwah, who acted on behalf of themselves and Citrine, J. Gary McIntyre and Damon McIntyre have suffered damages. WHEREFORE, J. Gary McIntyre and Damon McIntyre request judgment in their favor and adverse to Defendants for damages, pre-judgment interests and for any other relief that the Court considers just and appropriate. COUNT V - BREACH OF CONTRACT 34. J. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set. forth in Count IV, the allegations set forth in paragraphs 1-33. 35. Pursuant to the Interest Purchase Agreement - Rights of Buyer, "Each Member as specified (Damon McIntyre and J. Gary McIntyre are indicated as one member combined, shall be granted equal voting rights in [SIC] regardless to whichever percentage of the company held. The Members shall be empowered to vote from time to time and in whatever manner shall be 9 -------
necessary to obtain majority vote, except in the case of accepting new Members or decision to sell stock in which case that will require unanimous vote by all of the Members." 36. Upon information and belief, J. Gary McIntyre and Damon McIntyre were never given notice of any company matter upon which to be voted upon. Upon information and belief, additional Members were admitted into Citrine, which would have required the unanimous vote of all of the Members (including J. Gary McIntyre and Damon McIntyre), which vote was never solicited nor obtained. 37. 1. Gary McIntyre and Damon McIntyre suffered damages as a result of the breach of contract outlined in paragraph 35. COUNT VI - UNJUST ENRICHMENT 38. 1. Gary McIntyre and Damon McIntyre re-allege and incorporate, as if fully set forth in Count IV, the allegations set forth in paragraphs 1-37. 39. As set forth in paragraphs 7-12 above, J. Gary McIntyre and Damon McIntyre conferred a benefit upon Citrine, and each of the defendants was aware of that benefit at the time it was received (check receipts from 1. Gary McIntyre and Damon McIntyre payable to Citrine LLC, in the amount of$60,010 are attached to this complaint). 40. Each of the defendants voluntarily accepted and retained their respective benefits. 41. The circumstances are such that it would be inequitable for the defendants to retain their respective benefits without paying the value of those benefits to J. Gary McIntyre and Damon McIntyre. 10 - - ------
WHEREFORE, 1. Gary McIntyre and Damon McIntyre respectfully request that the Court grant judgment in their favor and adverse to the Defendants for damages, pre judgment interest and for any further relief that the Court considers just and appropriate..jury DEMAND Plaintiffs respectfully demand trial by jury on all issues so triable. Respectfully submitted, Kevin T. Stem, Attorneyfor Plaintiffs 403 East 62nd Street, Suite 10B New York, New York 10065 Dated: March 28,2013 New York Bar No.: 4289278 11
EXIllBITA (check receipts copies for $60,010 from 1. Gary McIntyre and Damon McIntyre to Citrine LLC) 12
CHASEt, Prima,y fo.cc:nm:: 000000750430852 /TRAf!JSACTfON DET AI DATE 07/13 ODP Transfer To Crecking OTf15 D7116 O?!2D C7!20 Online Trafisfer To C;,K Xxxxx0852 T:ansaction#: 424293143 ini-8rest Payment tending Balance S1~185.14 c,035.74 You earned a higher interest ra1t: on your Chase :?fussavings ac :ount during t,is s1atert'..eni "!uahfyfngchase Prernier Checking account. perloti because yeu {fad a dmagesj ACCOUNT:# 000000750430852 Sel?both front and back images of dear~d checks at Chase.com. email 110W, if you're not enrolled In this free ser"k:e, piea&<:
'",~t!!!:"f~~~;~.';::~~~~':!1~i::::~ :!~~, -,' ''';:~'=.<J"""Alflf."1C.. He:!.rnri1_*'t flii 1 Z ~ :'i4... -t &~--}\T7tk'iiili~t;J~. ii}\ccountnum: '=- 76-2000016.- --.. ~~ -. -- /CheckAmt 20,0003]0 ~_V'C$~_,_ {C::- t~fn~","",~$~ 1~"... 8!10n9~"':?~7< V '.J "T... v 'V J ProcDaie~ 20"10108131 i fvmmseqnum: 110D79Ci515, L ~ _ ~"":'; 0 J>(: 0,... '" f::,. 'Ct :t~ n.,..r ~ -, ';:"-- -...;J i>x.....: ---- 1}\ccounif\lum: 762C«JDOiB I">'ecvJ\mt. ;v:~. '">f' Mf'I "'n f\f"'"u l ~_. ~v!-...~...-0~{..l~ ]Sedal$\iutJt 8000942573!ProcDate: 2010/08/31 ; >.-.r: -," r..'... "ti'7"'"'~-'l'" ;'JI',ffivSq!'wm: l'iut" ~Ubl~ i --,-------
..~.. -------. S1:4TEMEf-.JT SAVlNGS!CHECKlNG/f.fMA WITHDRAWAL 1\ /, K Htf) OOt.L4RB 'l- 1\ f C,\ f f.<j, II "'1--i-?J,.~$ - "'"'7Y'4n"f j ~ -1;...... ~ -._~ ~ ('!/ ~.l it $ n <) ~)!"?'\, ~t..-t? L.J ( ~j LJ "'!I') {/ i\ccountj~juttt 7010146679 CheckArnt 2fl.01QQD SeriaJNum: 4830 ProcDate: 2010108/31 ivlfimseqnutn: 5400377185._--- --,,"';!f\ccountr'~um:70:c14ej37b! CheckAmt 201'010.00 SeriaiNum: 4830 PrJcOate: 2010/00/31 MflmSeqNum: 5400377185 '-~~---------~------------.---------. -'--~' ~~.,'
---._--_._---_.-. --'---~---.~ ~z~j ~h;;. [~'.'~.:r$~2~-: ~')r~~:::,;"c.;-~ ~-:i:y;-m~,~jo~(i1!;,.~i~l,.~.:;~{~ 3f k,~;. d:<;!."~;-{::-j. -~ s~{jfc:1~""j:;r's C.i1(i,::k. l ~l\ccoijnu'_lurn: 76200D016 l:::i1eck.i-\fnt: 1D:OOtlOO Seria~~Jurf';: 8D00942577 ~pr ccdat.e: 2~Y:O,:-t0jC4 :;',/I;ln~Seq~!urr1: 3GCC243S'~6 25??p --------_._----------------_.._---- -;.s:,...,. ---'- f~... -"".,.,..._... ~'.,...;.~~'L ",-.-l''' - '. ~-...-' '-~'!"~'~,~, 7:5 c:::;:, 7" --' r--. ~-.(~._._--_.-._------_.1< ; Se!'1~3~Nuln:800094257"1?tQt.;Date: 2010/10!04
-" tvlthj1~{(f v If. / I ~1. 51". v '/ 1-,. i COLi..4f!S t 0 () I {; iil,cccuntnum: 7010146679 ~V~ I("' 1~""Cl\' 1_,'t "'1<' "iii th Ii r'~v,", I ~.i1- {~ f"v~v ~V~Vi I1'""~ ;~I'N'" '. '...,.,'17 VCk ~d -1'>:Urrt '0-0 i'" iprecdste: 2010110/C'4 IMflmSeqNum: 5900192055 L ~ Ii AccZ}Untf\lum: 7010146679 ICheckft,tt1t iujii0.go I Seria1f\jHm: 6317 4Pro-eDate: 201Ql1(VD4 f t fvifirns-eq;\fum: 59001'92055 --------., -- ---
.,~ 1 ;)L~1r~~L": ;~.'~::SC.c G i~-s:- }-.",:;;.-r' ~... _.--0,,~.,.,:"..:" -- -------------_.
~:~::~~ statsc ~-..~~c:.~::.. ~.f:.-::.-:~~2::--:'~,s --- - --------