Friedman, J.P., Saxe, Richter, Manzanet-Daniels, JJ.
151101511115112

Index 652183/13
Theodore F. Schroeder, et al.,
Plaintiffs-Appellants-Respondents,
-againstPinterest Inc.,
Defendant-Respondent,
Brian S. Cohen, et al.,
Defendants-Respondents-Appellants.
_________________________

Montgomery McCracken Walker & Rhoads, LLP, New York (Sidney S.
Liebesman of counsel), for appellants-respondents.
Jenner & Block LLP, New York (Brian J. Fischer of counsel), for
respondents-appellants.
Quinn Emanuel Urquhart & Sullivan, LLP, New York (William B.
Adams of counsel), for respondent.
_________________________

Judgment, Supreme Court, New York County (Melvin L.
Schweitzer, J.), entered July 29, 2014, bringing up for review
orders, same court and Justice, entered July 11, 2014 and July
25, 2014, modified, on the law, to grant the Cohen defendants’
motion as to the promissory estoppel claim, to deny the Cohen
defendants’ motion as to the misappropriation of trade
secrets/ideas and breach of fiduciary duty claims, and otherwise
affirmed, without costs. Appeals from the aforesaid orders,
dismissed, without costs, as subsumed in the appeals from the
judgment.
Opinion by Richter, J.

All concur.

Order filed.

55

 SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT,
David Friedman,
David B. Saxe
Rosalyn H. Richter
Sallie Manzanet-Daniels,

J.P.
JJ.

15110-15111-15112
Index 652183/13
________________________________________x
Theodore F. Schroeder, et al.,
Plaintiffs-Appellants-Respondents,
-againstPinterest Inc.,
Defendant-Respondent,
Brian S. Cohen, et al.,
Defendants-Respondents-Appellants.
________________________________________x
Cross appeals by plaintiffs and defendants Brian S. Cohen and New
York Angels, Inc. from the judgment of the
Supreme Court, New York County (Melvin L.
Schweitzer, J.), entered July 29, 2014, and
from the order, same court and Justice,
entered July 25, 2014, and appeal by
plaintiffs from the order, same court and
Justice, entered July 11, 2014, which, to the
extent appealed from as limited by the
briefs, granted defendant Pinterest’s motion
to dismiss the complaint as against it, and
granted the Cohen defendants’ motion to
dismiss the complaint to the extent of
dismissing the causes of action for
misappropriation of trade secrets/ideas and

 breach of fiduciary duty, and denied the
motion as to the causes of action for
misappropriation of skills and expenditures
and promissory estoppel.
Montgomery McCracken Walker & Rhoads, LLP,
New York (Sidney S. Liebesman, Richard L.
Scheff, Charles Palella and Steven Pachman of
counsel), for appellants-respondents.
Jenner & Block LLP, New York (Brian J.
Fischer, Andrew H. Bart and Alison I. Stein
of counsel), for respondents-appellants.
Quinn Emanuel Urquhart & Sullivan, LLP, New
York (William B. Adams, Michael B. Carlinsky
and Benjamin J. Gildin of counsel), for
respondent.

2

 RICHTER, J.
In this action, plaintiff Theodore F. Schroeder and two
companies founded by him, plaintiffs Rendezvoo LLC (Rendezvoo)
and Skoop Media Associates, Inc. (Skoop Media), allege that
defendants Brian S. Cohen, New York Angels, Inc. (NY Angels), and
Pinterest Inc. (Pinterest) stole and illegally used Schroeder’s
confidential ideas, technology and business plans in developing
the popular website, Pinterest.com.

According to plaintiffs,

Schroeder conceived of a novel web application that would allow
Internet users to share information about themselves by posting
interests, ideas and pictures to their interface boards, a
concept very different from then-existing popular social network
sites like Facebook, MySpace and Friendster.
Schroeder and two friends embarked on the project and later
invited Cohen, an investor and self-proclaimed “entrepreneurial
mentor,” to join the group.

Plaintiffs allege that after

learning all about Schroeder’s ideas, technology and business
plans, Cohen absconded with them, and gave them to Pinterest,
which then used the information to develop its own highlysuccessful website.

After subsequently learning that Cohen

played a material role in the early stages of the Pinterest
website, plaintiffs brought this action for, inter alia, breach
of fiduciary duty, misappropriation and unjust enrichment.
3

 The facts alleged in the complaint are as follows.

In 2005,

while attending Columbia Law School, Schroeder and a law school
classmate, nonparty Brandon Stroy, developed an idea for a social
network bulletin board where users could share their physical
locations with their friends over the Internet.
plaintiffs, no such website existed at the time.

According to
Lacking

technological expertise, Schroeder taught himself computer
programming, and spent more than 2,000 hours learning the
necessary programming skills to develop the idea into a web
application.

Another law school classmate, nonparty William

Bocra, came on board to further develop the idea and prepare a
business model for the project.
Eventually, the three entrepreneurs formalized the project
by forming Rendezvoo, a limited liability company in which
Schroeder held a 65% interest, with Stroy and Bocra each holding
a 17.5% interest.

Schroeder was given a majority interest in the

company because the idea was originally his, and because he was
solely responsible for developing the web application and all
technical processes.

Schroeder was named president of Rendezvoo

and was tasked with overseeing the day-to-day activities of the
company, and performing all technical work in developing
Rendezvoo’s website.

Under Rendezvoo’s operating agreement, all

members of the company owed each other fiduciary duties, and were
4

 expressly prohibited from unilaterally taking any corporate
opportunities.
In 2006, the first version of Rendezvoo’s web application,
Rendezvoo.com, was released to the public.

Schroeder had both

originated the concepts underlying the website and developed all
of its technical aspects.

Shortly after the release, Schroeder

and his friends decided to redesign the website to allow users to
share not only their physical locations but also any interests
they had.

Rendezvoo’s business plan described the website as a

place “where people meet to share opinions, views, items and
tastes on a variety of subjects – products, services, events,
politics, economics – nearly anything of human interest.”
Schroeder rebuilt the web application to reflect this
expanded scope, and in August 2006, the new concepts were
introduced in an “alpha release” to the website’s existing user
community.

This second version of Rendezvoo.com included

bulletin boards for users to post their interests, and also
featured an infinite scroll to make it easier for users to browse

5

 large amounts of data.1

By mid-2006, Schroeder had invested over

5,000 hours developing Rendezvoo’s web applications, and delayed
his legal career to focus solely on generating additional
interest in the website.
Excited about their endeavor, Schroeder, Stroy and Bocra
began to look for additional capital to further advance the
Rendezvoo website.

They were eventually introduced to Cohen, an

investor affiliated with NY Angels, a not-for-profit corporation
that provided capital to entrepreneurs starting new businesses.2
In January 2007, the three men met with Cohen and shared with him
Rendezvoo’s concepts, business model and business plan; by this
time, the Rendezvoo website had more than 5,000 users.

Cohen

told the men that although he was happy to meet with them again,
he did not “get the concept” of people being interested in
viewing other people’s interests.

1

Infinite scrolling allows users to peruse a website’s
content on a seemingly single long page, instead of having to
open separate pages to retrieve additional content. According to
the complaint, when the second version of Rendezvoo.com was
released, the concept of infinite scrolling was in its infancy,
and standard web technologies provided inefficient ways to browse
large amounts of data.
2

The complaint describes NY Angels as an independent
consortium of “angel investors” in New York City that works with
entrepreneurs. According to the complaint, at all material
times, Cohen was an officer of NY Angels, and was acting in
furtherance of NY Angel’s business and within the scope of his
authority as an officer.
6

 At a subsequent meeting later that month, Cohen and the
three men discussed reformulating Rendezvoo.com to focus solely
on new ideas, products and services.

Schroeder and his friends

agreed to narrow the website’s scope, and Schroeder developed the
Launchbed platform, a web application based on the original
concepts of the second version of Rendezvoo.com.

The initial

branding statement described the new platform as a “user
community where people and companies can launch new products,
services, ideas, and media in order to ignite word-of-mouth
efforts and receive targeted feedback.”

In March 2007, Schroeder

provided the Launchbed business model to Cohen, who reacted
positively to the new project.
In May 2007, Schroeder, Stroy and Bocra asked Cohen to
become a partner in Rendezvoo.

Under the proposal, Schroeder

would reduce his ownership interest to 46% and Stroy, Bocra and
Cohen would each own 18%.

Despite lacking technical training and

skills, Cohen accepted the offer and became Rendezvoo’s Chairman
and Chief Executive Officer.

Cohen agreed to be bound by the

restrictive covenants contained in Rendezvoo’s operating
agreement, including not taking Schroeder’s ideas or using
Rendezvoo’s work product.

Cohen’s addition to Rendezvoo was

never formally memorialized, and plaintiffs allege that the
parties routinely ignored corporate formalities at Cohen’s
7

 direction.3
At Cohen’s urging, Schroeder, Stroy and Bocra took down the
Rendezvoo.com website to concentrate on the more narrowly-focused
Launchbed platform.

They created a prototype for the new site,

and rebranded it as Skoopwire.com, a direct-to-consumer news wire
connecting businesses to bloggers, sophisticated consumers and
journalists wanting easy access to information about new products
and services before they were covered in the mainstream media.
Thus, Skoopwire.com was a narrower version of Rendezvoo.com;
whereas Rendezvoo.com users could post anything of interest to
them, Skoopwire.com was focused solely on new product launches.
Schroeder developed a technology plan for the Skoopwire website,
which included information about the architecture and platform
for the site, as well as customer data analysis.

Schroeder

shared that technology plan with Cohen, and also taught him about
the social networking niche in which both the Rendezvoo and
Skoopwire websites existed.
In June 2007, the four men formed Skoop Media, with
Schroeder named as President, and Cohen serving as Chairman and
Chief Executive Officer.

Again, corporate formalities were

3

Cohen also promised to contribute $20,000 to the project,
yet never paid despite repeated calls to contribute.
8

 ignored by the parties.4

In July 2007, the Skoopwire website was

“privately launched” for “testing, customer review and analysis”
by “family members, friends and others,” including focus groups.
The information gathered was used to further develop and refine
the website.

The focus groups returned favorable results, and

the parties planned to release the Skoopwire website to the
general public.
Things, however, did not go as planned.

Plaintiffs allege

that Cohen was upset with what he perceived to be Stroy’s lack of
involvement in the project.

Cohen believed that he should have a

greater ownership interest in Skoop Media than his equal 18%
share with Stroy, and was displeased with Schroeder’s desire to
protect Stroy’s interest.

Cohen balked at Schroeder’s attempt to

finalize a shareholder’s agreement that included Stroy as an
owner.

The tension between Cohen and Schroeder grew greater, and

Cohen continued to press for Stroy’s ouster and a greater stake
in Skoop Media.
According to the complaint, Cohen’s actions caused
significant strains among the four partners and effectively
deadlocked the project.

By early 2008, the parties began

contemplating a liquidation of Skoop Media.

4

Plaintiffs allege

Rendezvoo remained intact, and was never dissolved or
merged into Skoop Media.
9

 that in an effort to conceal his plan to steal Schroeder’s ideas,
technology and business plans, Cohen stated in an email that he
was “saddened that such a marvelous idea and execution is lost
forever.”

In fact, plaintiffs claim that Cohen purposely

deadlocked the endeavor “so he could steal the core ideas for
himself and freeze out Schroeder from reaping any benefits.”
A proposed liquidation agreement circulated among the
partners provided that each would not “develop, pursue, or
otherwise work on . . . an entity or business reasonably related
to the purposes, goals, aims and business models” of Rendezvoo or
Skoop Media.

Schroeder’s requests to have the others sign the

liquidation agreement went unanswered.

Although the agreement

was never executed, Cohen sent a July 1, 2008 email to Schroeder
stating:

“I have absolutely NO interest in PROFITING from your

specific design work on Skoopwire.”

Plaintiffs allege that in

mid-2008, Cohen “abandoned” Rendezvoo and Skoop Media.

Although

the Skoopwire website was never officially released to the
general public, Skoop Media, like Rendezvoo, was never dissolved.
In 2009, Cohen met Pinterest founders Ben Silbermann and
Evan Sharp at a business school competition at New York
University.

Silbermann and another Pinterest founder, Paul

Sciarra, had previously formed Cold Brew Labs, Inc., a mobile
shopping start-up, and were in the process of developing a mobile
10

 shopping application called Tote.

Tote, however, was not

successful, and by early 2010, Cold Brew Labs altered its plans
and instead created Pinterest.com, a social commerce application
where “curating and sharing collections of products” was made
“dead simple.”

According to the complaint, this radical change

in focus was the result of Cohen’s stealing Schroeder’s ideas and
technology and giving that information to Pinterest’s founders.
Pinterest.com was launched in March 2010.

The website

allows users to pull images from elsewhere on the Internet and
generate pins which are compiled into various topic boards.

Each

pin also functions as a link to its original Internet source,
such as a blog post, an article, or a shopping site where users
can immediately purchase the item pictured.

Users have the

ability to view both the most popular pins on the site as well as
the boards that other users have created.

The website also

allows users to “like” pins and “re-pin” items “creating a
microcosm of image-sharing based solely on user-created content.”
Upon seeing Pinterest.com, Schroeder noticed that it was
nearly identical to the second version of his Rendezvoo website.
Specifically, plaintiffs allege that key similarities include:
•

the ability for users to “post their interests for
their friends and the other users of the site to see;”

•

the ability to “connect things that mattered to a user
with other users,” and “provid[e] a place for a product
11

 or event promoter to gain visibility for its product;”
•

a primary business model of “product discovery through
friends,” whereby new product launches would be covered
by users and shared with friends, “thereby igniting
word of mouth about the product launch;”

•

an “infinite scroll” user interface technique;

•

the use of a “board” as both the main user interface,
and for each user’s profile page; and

•

a pink and purple color scheme “to attract female
users.”

According to the complaint, it was not until March 2012 that
Schroeder became aware of Cohen’s scheme to steal his ideas.

At

that time, Schroeder read an article wherein Cohen “bragged about
being Pinterest’s ‘first investor,’” and described how he met
Pinterest’s founders in 2009, shortly after he allegedly
deadlocked the Rendezvoo and Skoopwire projects.

Plaintiffs

allege that, in that article, Cohen falsely stated that he did
not know where the concept of “pinning on Boards” came from, and
claimed that the Pinterest website “came out of nowhere.”

The

complaint further alleges that Pinterest’s founders knew that the
ideas given to them by Cohen were not his own.
In June 2013, after learning that Cohen played a material
role in the early stages of the Pinterest website, plaintiffs
commenced this action against Cohen, NY Angels (together, the
Cohen defendants) and Pinterest.

12

The complaint asserts causes of

 action for:

(1) unjust enrichment (against all defendants); (2)

misappropriation (against all defendants); (3) misappropriation
of skills and expenditures (against all defendants); (4)
promissory estoppel (against Cohen); (5) breach of fiduciary duty
(against Cohen); and (6) aiding and abetting breach of fiduciary
duty (against Pinterest).

The complaint seeks, inter alia,

compensatory damages of more than one million dollars and a
constructive trust over the earnings derived by defendants from
Pinterest.
In September 2013, Pinterest and the Cohen defendants
separately moved, pursuant to CPLR 3211, to dismiss the
complaint.

By order entered July 11, 2014, the motion court

granted Pinterest’s motion in its entirety and dismissed the
complaint as against it.

By order entered July 25, 2014, the

motion court granted the motion of the Cohen defendants to the
extent of dismissing the causes of action for breach of fiduciary
duty, misappropriation and unjust enrichment.

The court,

however, denied dismissal of the causes of action for
misappropriation of skills and expenditures, and promissory
estoppel.

Judgment was entered on July 29, 2014, and this appeal

followed.
In the fifth cause of action, plaintiffs allege that Cohen
breached his fiduciary duties.

The parties agree that because
13

 the companies here are both Delaware entities, that state’s law
governs this claim.

Under Delaware law, this cause of action

requires proof of two elements:

(1) the existence of a fiduciary

duty; and (2) breach of that duty by the defendant (Beard
Research, Inc. v Kates, 8 A3d 573, 601 [Del Ch 2010]).

With

respect to the first element, it is beyond dispute that an
officer or director of a Delaware corporation owes fiduciary
duties to both the company and its shareholders (Agostino v
Hicks, 845 A2d 1110, 1122 n54 [Del Ch 2004]).

Likewise, unless

the operating agreement provides otherwise, a manager of a
Delaware LLC owes fiduciary duties to both the LLC and its
members (William Penn Partnership v Saliba, 13 A3d 749, 756 [Del
2011]; CMS Inv. Holdings, LLC v Castle, 2015 WL 3894021, *18,
2015 Del Ch LEXIS 169, *64-65 [Del Ch June 23, 2015]).
As to the second element, fiduciaries may not use their
positions of trust and confidence to further their private
interests (Carsanaro v Bloodhound Techs., Inc., 65 A3d 618, 637
[Del Ch 2013]).

The core of the fiduciary duty is the notion of

loyalty, and a fiduciary must always act in a good faith effort
to advance the interests of those to whom the duty is owed (U.S.
WEST, Inc. v Time Warner Inc., 1996 WL 307445, *21, 1996 Del Ch
LEXIS 55, *64-65 [Del Ch June 6, 1996]).

A breach of the duty

occurs when the fiduciary commits “an unfair, fraudulent, or
14

 wrongful act, including misappropriation of trade secrets, misuse
of confidential information, . . . or usurpation of the
employer’s business opportunity” (Beard Research, 8 A3d at 602).
Judged by these standards, we conclude that the lower court
erred in dismissing the breach of fiduciary duty claim against
Cohen.

The complaint alleges that, as Chairman and Chief

Executive Officer of both Rendezvoo and Skoop Media, Cohen owed
fiduciary duties to both companies and to Schroeder, a fellow
shareholder and member.

Further, the complaint sets forth facts

alleging that Cohen breached those duties by intentionally
deadlocking the Rendezvoo and Skoopwire projects, stealing
confidential and proprietary ideas, technology and business plans
related to the projects, and providing that information to
Pinterest.

These allegations sufficiently state a cause of

action for breach of fiduciary duty under Delaware law (see Beard
Research, 8 A3d at 602).
Cohen argues that the fiduciary duty claim is not viable
because he was no longer affiliated with Rendezvoo or Skoop Media
in 2009, when he allegedly gave Pinterest the confidential
information.

To prevail on a breach of fiduciary duty claim,

plaintiffs must show “an actual, existing fiduciary relationship
between the plaintiff and the defendants at the time of the
alleged breach” (Omnicare, Inc. v NCS Healthcare, Inc., 809 A2d
1163, 1169 [Del Ch 2002], appeal dismissed in part, revd in part

15

 818 A2d 914 [Del 2003]).

Thus, for example, a director who has

resigned or has been terminated no longer owes fiduciary duties
to the company (see Dionisi v DeCampli, 1995 WL 398536, *8-10,
1995 Del Ch LEXIS 88, *21-28 [Del Ch 1995]; In re Walt Disney Co.
Derivative Litig., 907 A2d 693, 758 [Del Ch 2005], affd 906 A2d
27 [Del 2006]).
Viewed in the light most favorable to plaintiffs, and giving
them the benefit of all reasonable inferences, the complaint
sufficiently alleges that Cohen was still an officer of Rendezvoo
and Skoop Media at the time of the alleged breach.

The complaint

specifically states that Cohen took on the positions of Chairman
and Chief Executive Officer of both companies and held himself
out to the public as such.

There is no allegation in the

complaint that Cohen ever resigned his positions, or relinquished
his ownership interests in either entity.

The complaint does

not, as Cohen asserts, state that Rendezvoo and Skoop Media
“ceased functioning.”

To the contrary, the complaint states that

neither company was dissolved, and although the parties
contemplated a dissolution of Skoop Media, a proposed liquidation
agreement was never executed.
In seeking dismissal, Cohen relies on isolated language in
the complaint stating that he “abandoned” Rendezvoo and Skoop
Media in 2008, the year before the alleged breach, and that the
others involved in the project “moved on” with their lives.

16

At

 this early stage of the proceedings, we decline to ascribe the
significance urged by Cohen to the word “abandoned.”

Plaintiffs’

allegation that Cohen “abandoned” the companies does not lead to
the inescapable inference that he resigned from or gave up his
ownership interests in them.

An equally plausible reading is

that Cohen “abandoned” the companies by purposely causing a
deadlock and withdrawing his support from the projects.

Simply

put, Cohen’s status with the companies at the time of the alleged
breach is a disputed issue of fact that cannot be resolved on
this pleading motion (see Dionisi, 1995 WL 398536 at *8, 1995 Del
Ch LEXIS 88 at *22 [“Determining whether a director or officer
has resigned is a question of fact determined by the
circumstances of each case”]).5
Even if Cohen prevails on his claim that he left the two
companies prior to his allegedly providing the information to
Pinterest, a breach of fiduciary duty claim could still lie under
Delaware law.

“A former director . . . breaches his fiduciary

duty if he engages in transactions that had their inception
before the termination of the fiduciary relationship or were
founded on information acquired during the fiduciary

5

Cohen cites to Dionisi for the proposition that even where
there is no written resignation, fiduciary duties cease when a
director “effectively” resigns. Dionisi, however, was a decision
rendered after trial. Here, any questions as to whether Cohen
“effectively” resigned cannot be resolved on this preanswer
dismissal motion.
17

 relationship” (BelCom, Inc. v Robb, 1998 WL 229527, *3, 1998 Del
Ch LEXIS 58, *9 [Del Ch LEXIS 58 [Del Ch April 28, 1998]
[emphasis in original]).

Here, plaintiffs contend that Cohen’s

breach of fiduciary duties had its inception prior to his alleged
abandonment of the companies.

Specifically, the complaint states

that Cohen intentionally caused the project to deadlock for the
express purpose of stealing confidential information.

According

to the complaint, Cohen acquired this information while he was
unquestionably a fiduciary, and subsequently gave it to
Pinterest, a competitor, to advance his own interests.

These

allegations are sufficient to state a cause of action for breach
of fiduciary duty under Delaware law (see BelCom, 1998 WL 229527
at *3, 1998 Del Ch LEXIS 58 at *8-9).
In the sixth cause of action, plaintiffs allege that
Pinterest aided and abetted Cohen’s breach of fiduciary duty.
prevail on this claim, plaintiffs must allege:

To

“(1) a breach by

a fiduciary of obligations to another, (2) that the defendant
knowingly induced or participated in the breach, and (3) that
plaintiff suffered damage as a result of the breach” (Kaufman v

18

 Cohen, 307 AD2d 113, 125 [1st Dept 2003]).6

A defendant

knowingly participates in the breach of fiduciary duty when he or
she provides “substantial assistance” to the fiduciary, which
occurs “when a defendant affirmatively assists, helps conceal or
fails to act when required to do so, thereby enabling the breach
to occur” (id. at 126).
An essential prerequisite to proving this cause of action is
that the defendant must have known of the fiduciary duty (see
People v Coventry First LLC, 13 NY3d 108, 115 [2009]).

Indeed,

actual knowledge of the breach of the duty is required, and
constructive knowledge will not suffice (Brasseur v Speranza, 21
AD3d 297, 299 [1st Dept 2005]).

Further, a plaintiff must plead

this cause of action with particularity; conclusory allegations
are insufficient (see CPLR 3016[b]; Front, Inc. v Khalil, 103
AD3d 481, 483 [1st Dept 2013], affd 24 NY3d 713 [2015]; Roni LLC
v Arfa, 72 AD3d 413, 413-414 [1st Dept 2010], affd 15 NY2d 826
[2010]).
Applying these principles, we conclude that the claim
against Pinterest for aiding and abetting Cohen’s breach of
fiduciary duty was properly dismissed.

6

Plaintiffs failed to

The parties rely on New York law to resolve the aiding and
abetting cause of action. We need not decide whether New York or
Delaware law governs this claim since the elements, as relevant
to this case, are essentially the same under both states’ laws
(compare Kaufman, 307 AD2d at 125 with In re Rural Metro Corp.
Stockholders Litig., 88 A3d 54, 80 [Del Ch 2014], appeal
dismissed 105 A3d 990 [Del 2014]).
19

 assert with the requisite particularity facts alleging that
Pinterest had actual knowledge of Cohen’s alleged breach and
knowingly participated in it.

The complaint contains no specific

allegation that Pinterest was actually aware of Cohen’s
involvement with Rendezvoo and Skoop Media, let alone that he was
a fiduciary of the companies.

That omission is fatal to this

cause of action (see Coventry First, 13 NY3d at 115 [a claim that
the defendants knowingly induced a breach of fiduciary
obligations necessarily fails if defendants did not know of the
duty]).
Plaintiffs rely on a number of statements in the complaint
to support their argument that Pinterest had knowledge of Cohen’s
breach.

For example, the complaint states that Pinterest’s

founders did not come up with the idea behind the Pinterest
website themselves, but received it from Cohen, knowing that the
idea was not Cohen’s own.

The complaint further states that

Cohen and Pinterest’s founders agreed that Cohen would share the
idea with them and provide capital.

Neither of these

allegations, however, fairly suggests that Pinterest’s founders
actually knew that Cohen was a fiduciary or that his passing
along the idea breached a fiduciary obligation.

In sum, the

complaint’s conclusory allegations are insufficient to sustain
the aiding and abetting cause of action (see Roni LLC v Arfa, 72
AD3d at 413-414 [conclusory allegations in complaint do not give

20

 rise to an inference that the defendants had actual knowledge of
the breach]; Brasseur v Speranza, 21 AD3d at 299 [bare
allegations that the defendant knew or should have known of
breach of fiduciary duty insufficient to sustain claim]; Kaufman
v Cohen, 307 AD2d at 125-126 [absence of facts in complaint to
infer that the defendants had actual knowledge of the fiduciary
relationship]).7
The motion court properly dismissed the cause of action for
unjust enrichment as against Pinterest.8

To state a claim for

unjust enrichment, a plaintiff must allege that:

“(1) the

[defendant] was enriched, (2) at [plaintiff’s] expense, and (3)
that it is against equity and good conscience to permit the
[defendant] to retain what is sought to be recovered” (Georgia
Malone & Co., Inc. v Rieder, 19 NY3d 511, 516 [2012] [internal
quotation marks omitted]).

Further, “a plaintiff cannot succeed

7

Although we affirm dismissal of the aiding and abetting
cause of action, we reject Pinterest’s alternative argument that
the complaint does not sufficiently allege that plaintiffs
suffered damages proximately caused by the breach. In general,
issues of proximate cause are for the trier of fact, and
Pinterest’s contention is unavailing at this procedural juncture
(see Overseas Shipholding Group, Inc. v Proskauer Rose, LLP, 130
AD3d 415 [1st Dept 2015]). Both Laub v Faessel (297 AD2d 28 [1st
Dept 2002]) and R.M. Newell Co. v Rice (236 AD2d 843 [4th Dept
1997], lv denied 90 NY2d 807 [1997]), upon which Pinterest
relies, are distinguishable because they decided the proximate
cause issue on summary judgment motions.
8

On appeal, plaintiffs do not challenge the court’s
dismissal of this cause of action as against the Cohen
defendants.
21

 on an unjust enrichment claim unless it has a sufficiently close
relationship with the other party” (id.).

Although contractual

privity is not required, there must be a relationship between the
parties that is not “‘too attenuated’” (id.), and that “could
have caused reliance or inducement” (Mandarin Trading Ltd. v
Wildenstein, 16 NY3d 173, 182 [2011]).
Here, the complaint contains no facts showing that
plaintiffs had any relationship or connection to Pinterest, let
alone the “sufficiently close relationship” necessary to sustain
this claim (Georgia Malone, 19 NY3d at 516, citing Sperry v
Crompton Corp, 8 NY3d 204 [2007]).

Plaintiffs do not allege that

Schroeder, or either of the corporate plaintiffs, had any contact
with Pinterest or its founders (see Boardman v Kennedy, 105 AD3d
1375 [4th Dept 2013] [dismissing unjust enrichment claim where
the plaintiff and the defendant had no dealings with each
other]).

The complaint alleges only a relationship between

plaintiffs and Cohen, and a separate relationship between Cohen
and Pinterest, which is “too attenuated” (Georgia Malone, 19 NY3d
at 516), and insufficient to “have caused reliance or inducement”
(Mandarin Trading, 16 NY3d at 182).
In the second cause of action, plaintiffs allege that Cohen
and Pinterest misappropriated trade secrets related to the
Rendezvoo and Skoopwire projects.

To prevail on a claim for

misappropriation of trade secrets, a plaintiff must demonstrate:

22

 “(1) that it possessed a trade secret, and (2) that the
defendants used that trade secret in breach of an agreement,
confidential relationship or duty, or as a result of discovery by
improper means” (North Atl. Instruments, Inc. v Haber, 188 F3d
38, 43-44 [2d Cir 1999]).

A trade secret is “any formula,

pattern, device or compilation of information which is used in
one’s business, and which gives him an opportunity to obtain an
advantage over competitors who do not know or use it” (Ashland
Mgt. v Janien, 82 NY2d 395, 407 [1993], quoting Restatement of
Torts § 757, comment b).
In determining whether information constitutes a trade
secret, “several factors should be considered:

(1) the extent to

which the information is known outside of [the] business; (2) the
extent to which it is known by employees and others involved in
[the] business; (3) the extent of measures taken by [the
business] to guard the secrecy of the information; (4) the value
of the information to [the business] and [its] competitors; (5)
the amount of effort or money expended by [the business] in
developing the information; (6) the ease or difficulty with which
the information could be properly acquired or duplicated by
others” (id.).
The complaint, when read in the light most favorable to
plaintiffs, states a claim for trade secret misappropriation
against Cohen.

Plaintiffs allege that while Cohen was an officer

23

 of Rendezvoo and Skoop Media, he was exposed to the companies’
confidential and proprietary technology and business plans.
Plaintiffs further allege that despite being aware that the
information was to be kept confidential, Cohen provided it to
Pinterest.

According to the complaint, Schroeder devoted nearly

four years of his life, and thousands of hours, developing the
technology that ultimately led to the Rendezvoo and Skoopwire
websites.

The complaint alleges that this technology was

valuable to plaintiffs, and was not easily acquired or duplicated
by others.

Further, Schroeder took steps to maintain the secrecy

of all of the technology and business information related to the
projects.
These allegations are sufficient, for pleading purposes, to
satisfy the first element of a misappropriation of trade secrets
claim, namely, that plaintiffs possessed a trade secret (see
Ashland Mgt., 82 NY2d at 407 [whether information constitutes a
trade secret is generally a question of fact]).

Plaintiffs have

also pleaded facts supporting the second element — that Cohen
used the trade secrets in breach of an agreement, confidential
relationship or duty, or as a result of discovery by improper
means (see North Atl. Instruments, 188 F3d at 43-44).

As noted

earlier, plaintiffs allege that Cohen acquired the confidential
information while he was a fiduciary of Rendezvoo and Skoop
Media, and that he purposely caused the project to deadlock so

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 that he could steal that information.
Plaintiffs, however, cannot prevail on their trade secret
claim against Pinterest.

The complaint does not allege that

plaintiffs entered into any agreement with Pinterest or had any
confidential relationship with the company or its founders.
Indeed, as noted earlier, there is no allegation that Schroeder,
or either of the corporate plaintiffs, had any contact whatsoever
with Pinterest.

Nor do plaintiffs allege that Pinterest obtained

the trade secrets by improper means.

In fact, the complaint

states that Cohen voluntarily gave Pinterest the alleged trade
secrets, not that Pinterest employed any improper means to
acquire them.

Plaintiffs point only to the allegation that

Pinterest’s founders knew that the idea given to them by Cohen
was not Cohen’s own.

This allegation, however, does not give

rise to an inference that Pinterest used improper means to obtain
the information.
Although we uphold the misappropriation of trade secrets
cause of action against Cohen, the claim should be limited to the
confidential information referenced in the complaint, and cannot
extend to information in the public domain.

“[A] trade secret

must first of all be secret” (Ashland Mgt., 82 NY2d at 407),
i.e., “somethin[g] known to only one or a few and kept from the
general public” (Leo Silfen, Inc. v Cream, 29 NY2d 387, 394-395
[1972]).

Thus, information that is readily available from public

25

 sources is not entitled to trade secret protection (JAD Corp. of
Am. v Lewis, 305 AD2d 545, 546 [2d Dept 2003]; Newton Garment
Carriers v Consolidated Carriers Corp., 250 AD2d 482, 482 [1st
Dept 1998]).
Here, the complaint identifies a number of similar features
in both Pinterest.com and the second version of Rendezvoo.com.
As noted earlier, this version of the Rendezvoo website was
introduced in August 2006, and had over 5,000 users by January
2007.

The alleged misappropriation of trade secrets took place

in 2009, several years after the Rendezvoo website entered the
public domain.

Thus, to the extent the features identified by

plaintiffs were readily ascertainable from the publicly-available
Rendezvoo website, they are not protectable trade secrets (see
Midsummer Fin. Prods., Inc. v Rapid Filing Servs. LLC, 14 Misc 3d
1209[A] [Sup Ct, NY County 2006] [“online content . . . and . . .
website’s ‘general look and functionality’ are not trade secrets
because they are publicly exhibited on the website”]; PlasmaNet,
Inc. v Apax Partners, Inc., 6 Misc 3d 1011[A] [Sup Ct, NY County
2004] [information about the functionality and appearance of a
website that was already in commercial operation was in the
public domain, and thus, was not a trade secret]).

On the other

hand, trade secret protection can extend to plaintiffs’
confidential technology, not readily ascertainable from the

26

 public Rendezvoo site, that led to the website’s development.9
The complaint also states a claim against Cohen for
misappropriation of ideas.10
of two elements:

This cause of action requires proof

(1) a legal relationship between the parties in

the form of a fiduciary relationship, an express contract,
implied contract, or quasi contract; and (2) an idea that is
novel and concrete (Turner v Temptu Inc., 586 Fed Appx 718, 722
[2d Cir 2014]; see Downey v General Foods Corp., 31 NY2d 56, 6162 [1972]).

Here, the complaint sufficiently alleges both a

fiduciary relationship between Cohen and plaintiffs, and that the
misappropriated ideas were novel.

As with the trade secret

claim, the idea misappropriation claim cannot extend to material
in the public domain (see Marraccini v Bertelsmann Music Group
Inc., 221 AD2d 95, 98 [3d Dept 1996] [affirming dismissal of
misappropriation claim where idea was a “creative variation” on
an idea preexisting in the public domain], lv denied 89 NY2d 809
[1997]; Oasis Music v 900 U.S.A., 161 Misc 2d 627, 631 [Sup Ct,
NY County 1994] [idea that is merely “a variation on a basic

9

We need not, at this stage of the proceedings, define the
precise contours between features that are readily ascertainable
from the Rendezvoo website and confidential technology that is
not. Nevertheless, we note that some of the similarities between
the Pinterest and Rendezvoo websites, such as the color scheme
and use of an infinite scroll, appear to fall into the former
category.
10

Although the misappropriation cause of action does not
specifically allege idea misappropriation, a fair reading of the
complaint’s factual allegations sets forth this claim.
27

 theme” available in the public domain is not novel]).
With respect to Pinterest, the idea misappropriation claim
was properly dismissed.

Although plaintiffs concede that they

have no contractual or fiduciary relationship with Pinterest,
they nevertheless argue that a quasi-contractual relationship
exists as evidenced by their unjust enrichment claim.

However,

as discussed previously, no unjust enrichment claim lies against
Pinterest.

In the absence of the requisite legal relationship

between plaintiffs and Pinterest, the idea misappropriation claim
fails (see Hudson & Broad, Inc. v J.C. Penney Corp., 2013 WL
3203742, *7, 2013 US Dist LEXIS 89207, *20-22 [SD NY Jun 18, 2013
[dismissing idea misappropriation claim because the plaintiff
failed to plausibly plead a legal relationship between the
parties], affd 553 Fed Appx 37 [2d Cir 2014]).
The motion court correctly upheld the misappropriation of
skills and expenditures claim against Cohen.

To properly assert

this claim, which is a subset of New York’s unfair competition
law, a plaintiff must allege that a defendant misappropriated
plaintiff’s labor, skills, expenditures or good will, and
displayed some element of bad faith in doing so (see Macy’s Inc.
v Martha Stewart Living Omnimedia, Inc., 127 AD3d 48, 57 [1st
Dept 2015]; Abe’s Rooms, Inc. v Space Hunters, Inc., 38 AD3d 690,
692 [2d Dept 2007]).

In this context, bad faith can be

established by a showing of fraud, deception, or an abuse of a

28

 fiduciary or confidential relationship (Big Vision Private, Ltd.
v E.I. DuPont de Nemours & Co., 610 Fed Appx 69, 70 [2d Cir
2015]).
Plaintiffs adequately allege that Schroeder invested labor,
skill and expenditures, having spent nearly four years of his
life, and thousands of working hours, on performing the technical
requirements to develop the Rendezvoo and Skoopwire websites.
Further, sufficient facts are alleged showing that Cohen
misappropriated the fruits of Schroeder’s investment by giving
the ideas and technology to Pinterest in bad faith.

As discussed

previously, the complaint asserts that Cohen acquired the
confidential information while he was a fiduciary of Rendezvoo
and Skoop Media.

The complaint also alleges that Cohen knew that

the proprietary information he obtained should be kept
confidential, and that Cohen agreed to be bound by the
restrictive covenants in the Rendezvoo operating agreement, which
included not taking Schroeder’s ideas or using any of Rendezvoo’s
work product for his own benefit.11
The misappropriation of skills and expenditures claim was
properly dismissed against Pinterest.

Although plaintiffs argue

that Pinterest exhibited bad faith by aiding and abetting Cohen’s

11

Like the other misappropriation causes of action, this
claim cannot be premised upon misappropriation of publiclyavailable information (see e.g. Demetriades v Kaufmann, 698 F
Supp 521, 526-527 [SD NY 1988]).
29

 breach of fiduciary duty, we have already rejected that claim.
Likewise, we have rejected the claim that bad faith is
established merely because Pinterest may have known that the
ideas given to them by Cohen were not his own.

Because the

complaint fails to sufficiently allege the existence of a
fiduciary or confidential relationship, or that Pinterest
otherwise obtained the information in bad faith, the
misappropriation of skills and expenditures claim cannot stand.
The misappropriation causes of action are sufficiently
stated against NY Angels under the theory of respondeat superior.
“An employer may be vicariously liable for its employees’
tortious acts on a theory of respondeat superior only if they
were committed in furtherance of the employer's business and
within the scope of employment” (Bowman v State of New York, 10
AD3d 315, 316 [1st Dept 2004]).

The complaint alleges that Cohen

was acting at all times in furtherance of NY Angels’ business and
within the scope of his authority as an NY Angels officer.

At

this preanswer stage of the proceedings, these allegations are
sufficient to state a claim against NY Angels under respondeat
superior (see Riviello v Waldron, 47 NY2d 297, 303 [1979]
[“because the determination of whether a particular act was
within the scope of the servant’s employment is so heavily
dependent on factual considerations, the question is ordinarily
one for the jury”]).

30

 Finally, the motion court should have dismissed the
promissory estoppel cause of action against Cohen.
of a claim for promissory estoppel are:

“The elements

(1) a promise that is

sufficiently clear and unambiguous; (2) reasonable reliance on
the promise by a party; and (3) injury caused by the reliance”
(MatlinPatterson ATA Holdings LLC v Federal Express Corp., 87
AD3d 836, 841-842 [1st Dept 2011], lv denied 21 NY3d 853 [2013]).
Detrimental reliance is an indispensable element of a promissory
estoppel claim (Thome v Alexander & Louisa Calder Found., 70 AD3d
88, 104-105 [1st Dept 2009], lv denied 15 NY3d 703 [2010]), and a
failure to adequately plead that element requires dismissal (see
Rosenberg v Home Box Off., Inc., 33 AD3d 550, 550 [1st Dept
2006], lv denied 8 NY3d 804 [2007]).
Plaintiffs’ promissory estoppel claim is based on the July
1, 2008 email from Cohen to Schroeder wherein Cohen stated that
he had “absolutely NO interest in PROFITING from [Schroeder’s]
specific design work on Skoopwire.”

Even assuming that this

statement constitutes a clear and unambiguous promise, the
promissory estoppel claim fails because it does not sufficiently
allege detrimental reliance.

The complaint merely states, in

conclusory fashion, that plaintiffs “reasonably relied on Cohen’s
promise,” but does not explain how they purportedly relied.
Indeed, there are no facts pleaded showing that plaintiffs did
something, or refrained from doing something, in reliance on

31

 Cohen’s email.

Thus, the promissory estoppel claim should have

been dismissed (see Knight Sec., L.P. v Fiduciary Trust Co., 5
AD3d 172 [1st Dept 2004] [promissory estoppel claim dismissed
where the complaint failed to allege that the plaintiff was
injured by reason of its reliance on the promise]; Tierney v
Capricorn Invs., L.P., 189 AD2d 629, 632 [1st Dept 1993]
[dismissing promissory estoppel claim where there were only
conclusory allegations of reliance], lv denied 81 NY2d 710
[1993]).
Plaintiffs argue on appeal that they sufficiently alleged
detrimental reliance because Schroeder “did not further implement
his own ideas” as a result of Cohen’s email.
is contained in the complaint.

No such allegation

To the contrary, the complaint

alleges that after the email was sent, Schroeder “continually
contemplated how he could make use of his ideas and work
product,” a claim that is inconsistent with plaintiffs’ current
position that Schroeder held off pursuing his ideas in reliance
on Cohen’s email.

Plaintiffs also contend, in their appellate

brief, that they never would have granted Cohen access to their
confidential information absent the promise contained in the July
1, 2008 email.
complaint.

Again, this allegation is found nowhere in the

Nor does it make any sense since, according to the

complaint, the confidential information was shared with Cohen
long before he sent the email.

32

 On appeal, plaintiffs maintain that the promissory estoppel
claim is also based on assurances given by Cohen in the Rendezvoo
operating agreement.

However, the promissory estoppel claim set

forth in the complaint is premised solely on the July 1, 2008
email, and makes no reference to the operating agreement.

In any

event, such a claim would fail because no facts are pleaded
showing detrimental reliance on any covenants contained in the
agreement.

Further, a promissory estoppel claim is not viable

where the conduct underlying the claim is governed by contract,
and where the plaintiff fails to allege a duty independent of the
contract (see Coleman & Assoc. Enters., Inc. v Verizon Corporate
Servs. Group, Inc., 125 AD3d 520, 521 [1st Dept 2015]).
We have considered the parties’ remaining contentions,
including plaintiffs’ request on appeal for leave to amend their
complaint, and find them unavailing.
Accordingly, the judgment of the Supreme Court, New York
County (Melvin L. Schweitzer, J.), entered July 29, 2014,
bringing up for review orders, same court and Justice, entered
July 11, 2014 and July 25, 2014, which, to the extent appealed
from as limited by the briefs, granted defendant Pinterest’s
motion to dismiss the complaint as against it, and granted the
Cohen defendants’ motion to dismiss the complaint to the extent
of dismissing the causes of action for misappropriation of trade
secrets/ideas and breach of fiduciary duty, and denied the motion

33

 as to the causes of action for misappropriation of skills and
expenditures, and promissory estoppel, should be modified, on the
law, to grant the Cohen defendants’ motion as to the promissory
estoppel claim, to deny the Cohen defendants’ motion as to the
misappropriation of trade secrets/ideas and breach of fiduciary
duty claims, to reinstate those claims, and otherwise affirmed,
without costs.

The appeals from the aforesaid orders should be

dismissed, without costs, as subsumed in the appeals from the
judgment.
All concur
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED:

OCTOBER 6, 2015

_______________________
CLERK

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