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Berrada v. Cohen

United States District Court, D. New Jersey

April 24, 2017

MARK BERRADA, Plaintiffs,
v.
GADI COHEN, PNY TECHNOLOGIES, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          LEDA DUNN WETTRE. U.S.M.J.

         Before the Court is plaintiff Mark Berrada's motion under Federal Rule of Civil Procedure 15(a)(2) for leave to file an Amended Complaint to add new factual allegations, remove claims for unpaid wages asserted under Florida common law, and include new claims of fraud, promissory estoppel, quantum meruit, and for violations of the New Jersey Wage Payment Act, the New Jersey Wage and Hour Law, and the New Jersey Independent Sales Representative Act. (ECF No. 161). By supplemental brief, plaintiff also moves to add a claim of retaliation under the Fair Labor Standards Act ("FLSA"). (ECF No. 173). Defendants Gadi Cohen and PNY Technologies oppose the motion. (ECF Nos. 163, 174). For the reasons set forth below, plaintiffs motion is GRANTED in part, as to all amendments except for the proposed FLSA retaliation claim, and is DENIED in part, as to the FLSA retaliation claim only.[1]

         BACKGROUND

         Plaintiff filed this action in state court in Florida in September 2015. (ECF No. 1-2). In October 2015, defendants removed the action to the United States District Court for the Southern District of Florida. (ECF No. 1). In February 2016, it was transferred here. (ECF No. 88).

         Plaintiffs Complaint, which has not previously been amended, essentially alleges that defendants PNY and Gadi Cohen failed to compensate him fully for services he provided to PNY. PNY is a technology company that manufactures and sells electronics and electronics accessories. Cohen is its founder and CEO, among other titles. (ECF No. l-2("Compl.")¶ 10)- Plaintiff claims experience in the development, marketing, and sales of "computer peripheral and electronics accessory" products. (Id. ¶ 8).

         Plaintiff alleges that after being approached by defendant Cohen to start providing services to PNY, he entered into two contracts with PNY: an oral one, in September 2013 (the "2013 contract") and a written one, in July 2014 (the "2014 contract"). Under these contracts, plaintiff allegedly would receive, inter alia, percentages of sales proceeds and gross profits for certain PNY products in exchange for developing and launching new products, meeting with retailers, and other services. Plaintiff alleges that defendants have not compensated him in accordance with these agreements. (Id. ¶¶ 12-18). He asserts claims of breach of contract, unjust enrichment, unpaid wages under Florida law, and FLSA violations for failure to pay wages and overtime compensation. (Id. ¶¶ 21-60).

         PNY counterclaims for breach of oral contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, unjust enrichment, and fraudulent and negligent misrepresentation. (ECF No. 8 (Counterclaim) ¶¶ 11 -49). In support of these counterclaims, PNY alleges that plaintiff failed to source and distribute shredders for PNY and manage PNY's portable power business, as promised. Defendants seek to recover the resulting business losses allegedly suffered. (7rf.¶¶4-10).

         Plaintiff filed the instant motion to amend the Complaint on October 10, 2016. (ECF No. 161). At that time, the deadline set by the Pretrial Scheduling Order to seek to amend pleadings was October 14, 2016, and fact discovery was to be completed by December 31, 2016. (ECF No. 130). In February 2017, while the motion was subjudice, plaintiff sought leave to file a second motion to amend. (ECF No. 171). The Court allowed supplemental briefing on the proposed further amendments sought by plaintiff. (ECF Nos. 172, 173, 174).

         Plaintiffs motion seeks to amend his complaint to add claims of fraud, promissory estoppel, quantum meruit as to both alleged contracts, and an FLSA retaliation claim. (See ECF No. 173-2 (Proposed Amended Complaint ("PAC")) ¶¶ 23-30, 46-51, 56-63). It further seeks to substitute New Jersey wage claims for those previously pleaded under Florida law. (Id. ¶¶ 64-68, 79-87).

         The PAC also includes additional factual allegations not contained in the initial complaint. These concern defendants' alleged representations concerning his prospective employment at PNY (Id. ¶¶ 24-26), as well as revised allegations concerning the monies to which plaintiff allegedly was entitled under the 2013 contract. In the initial Complaint, plaintiff alleged that he was entitled under the 2013 oral contract to receive "5% of the sales proceeds of Accessories including new products that were sourced, developed, and/or managed by [plaintiff]" and "25% of the gross profit from the worldwide sale of such products." (Compl. ¶ 13). In contrast, the PAC alleges that under the 2013 contract, plaintiff was entitled to "5% of the worldwide gross sales of all accessories ... including existing products and new products that were managed, sourced, developed, . . . designed, marketed and/or sold by [plaintiff] or under his leadership . . . for as long as those existing and new products are sold" and "25% of the gross profit from the worldwide sales of such existing and new products/or so long as they are sold." (PAC ¶ 12 (emphasis added)).

         Defendants oppose the motion, arguing that plaintiff unduly delayed in filing the motion, the motion is prejudicial, and plaintiff filed it in bad faith. (ECF Nos. 163 at 9-14). They also argue that plaintiffs allegations about his commissions under the 2013 contract, claims regarding the 2014 contract, and FLSA retaliation claim, are futile. (ECF Nos. 163 at 14-18 and 174).

         DISCUSSION

         I. Applicable Law

         Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that a court should "freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a)(2). Leave to amend is liberally granted in light of "the principle that the purpose of pleading is to facilitate a proper decision on the merits." Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted). Leave to amend should be granted unless there is "substantial or undue prejudice, . . . bad faith or dilatory motives, truly undue or unexplained delay, repeated failures to cure the ...


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