Delaware Chancery Court has dismissed a lawsuit filed by two local entrepreneurs against a former business partner.
Plaintiffs and Touch of Italy owners Robert Ciprietti and Joseph Curzi say defendant Louis Bascio lied to them by saying he would not compete with their business after he resigned as a partner. But the plaintiffs’ suit fails to state any legal wrongdoing Vice Chancellor Sam Glasscock said in his Jan. 13 decision.
Sometimes, a lie is just a lie, Glasscock said.
Bascio, who partnered with Ciprietti in February 2009 to open Touch of Italy in Rehoboth Beach, left the limited liability corporation in December 2012. Ciprietti claims Bascio told him he was moving to Pennsylvania and would not compete with the business he had been involved with for nearly four years, the judge wrote.
More than two months later, Bascio and his brother, co-defendant Frank Bascio, formed Frank and Louie’s LLC, a rival Italian specialty store on the same block as Touch of Italy. “Louis’ former partners, understandably, feel betrayed,” Glasscock wrote.
But Bascio was associated with Touch of Italy under an agreement that allowed members to leave at any time and included no obligation to forgo competition afterward, Glasscock said. “Thus, Louis faced no legal impediment to withdrawing and opening Frank and Louie’s as a competing grocery,” he wrote.
Ciprietti and Curzi filed the initial Chancery Court complaint May 30. Lewes attorney Larry Fifer said the plaintiffs should be awarded monetary damages for Bascio’s breach of contract, breach of fiduciary duty, negligent and intentional misrepresentation to the plaintiffs and fraud.
According to the complaint, when Ciprietti and Bascio partnered to open Touch of Italy in Rehoboth Beach, Ciprietti supplied $100,000 to get the business up and running, while Bascio was tasked with on-the-ground operations at the shop.
According to the LLC agreement, Ciprietti was to be reimbursed the start-up funds after five years, Fifer wrote.
When Bascio notified his partners of his withdrawal, he assured them he would not take any action to compete with Touch of Italy’s business, and he indicated plans to move to Pennsylvania, Fifer said.
In the complaint, Fifer accused Bascio of misleading his former partners, denigrating the operation of Touch of Italy before his planned departure and trying to steal its employees for his new business, Frank and Louie’s.
Fifer asked the court to for the Bascios to pay the plaintiffs a minimum $100,000 – equal to the start-up funds Ciprietti lost, he said.
The Bascio’s attorney, David Hutt, filed a motion to dismiss the complaint June 27.
“This lawsuit has no basis in fact or law and appears to be nothing more than a transparent attempt by plaintiffs to put a competitor out of business by oppressing a start-up venture with the expense of litigation,” he wrote.
Hutt said he filed the motion to dismiss because Bascio was not contractually obligated not to compete with Touch of Italy or to repay the $100,000 to Ciprietti. “No reading or interpretation of the operating agreement supports plaintiff’s claims,” Hutt wrote.
In his opinion, Glasscock dismissed the plaintiffs’ charge of conversion – an act that deprives an owner of his property – without prejudice, meaning the plaintiffs could revisit the charge in a future action.
All other counts against the Bascios, including breach of contract, fraud and misrepresentation were dismissed with prejudice, meaning the plaintiffs cannot bring a new lawsuit based on the same subjects.
In a phone conversation, Bascio said when he resigned from Touch of Italy he told Ciprietti and Curzi he did not know what his plans were. “I never said I wasn’t going to open up a competing store; I never said anything like that,” he said. “They alleged that I lied.”
On the judge’s decision, Bascio said, “I’m thrilled to death.”
He said he is thankful for the community support and for the help of his attorney, Hutt. “He just did an excellent job presenting all the evidence to the courts,” Bascio said.
Bascio also said he was glad to put the difficult matter behind him.
Ciprietti said he feels betrayed by Bascio. “You don’t do that to friends,” he said.
“Morally, he understands where we’re coming from,” Ciprietti said of Glasscock’s opinion.
He said he has not yet decided whether to appeal the decision.