United States District Court, D. Nevada
BOARD OF TRUSTEES OF THE SOUTHERN NEVADA JOINT MANAGEMENT AND CULINARY AND BARTENDERS TRAINING FUND, Plaintiffs,
CHRISTOPHER FAVA, et al., Defendants.
before the court is defendants' Eclipse Theater LLC,
Eclipse Theater Las Vegas, Limited Partnership, and 21 Greens
Inc.'s (together, the “Eclipse defendants”)
motion to dismiss. (ECF No. 12). Plaintiff Culinary Academy
of Las Vegas (“CALV”) filed a response (ECF No.
22), to which defendants replied (ECF No. 25).
case involves two former CALV employees' alleged breaches
of their fiduciary duty in negotiating and executing a
contract with the Eclipse defendants.
January of 2012, CALV hired Christopher Fava as vice
president of food and beverage and chief operating officer,
and later as its chief executive officer. (ECF No. 1). CALV
is a Nevada nonprofit employee benefit trust fund and is a
provider of training for entry-level and incumbent workers in
the Las Vegas hospitality industry. Id. Fava's
position involved overseeing and managing CALV's assets
and expenditures. Id.
April of 2015, Jaime Monardes joined CALV as vice president
of finance and accounting. Id. Monardes was
responsible for oversight of program operations, including
the expenditure and use of CALV's assets. Id.
December of 2015, Fava notified the CALV trustees of a new
training and investment opportunity with the Eclipse Theater
LLC (“Eclipse Theater”) entertainment complex.
Id. Fava represented that the opportunity would
generate $10 million in income over five years and create
over 100 employment opportunities for CALV students. See
Id. Based on Fava's representations, the CALV
trustees delegated authority to Fava and Monardes to pursue
the Eclipse Theater opportunity. Id.
January 19, 2016, Fava entered into a concession agreement
with the Eclipse Theater (“Eclipse agreement”) on
behalf of CALV. Id. CALV's capital investment,
as represented by Fava, was not to exceed $500, 000.
12, 2016, Fava, acting on behalf of CALV, amended the Eclipse
agreement without notifying the CALV trustees. Id.
The amended agreement included terms requiring CALV to staff
positions outside of the organization's training scope.
Id. The amended agreement also extended CALV's
staffing responsibilities to 21 Greens Inc. (“21
Greens”), an in-house restaurant within the Eclipse
Theater. Id. CALV promised to purchase supplies and
equipment not to exceed $250, 000 for 21 Greens that was
guaranteed to be repaid within the first year of operation.
Id. The agreement further stated that CALV would
receive the greater of two percent of gross ticket revenues
or $100, 000 per year. Id.
October 21, 2016, the Eclipse agreement was amended a second
time. Id. The amended agreement was signed without
the CALV's trustees consent by Fava on behalf of CALV and
by Nicolas Steele on behalf of the Eclipse Theater and
Eclipse Theater Las Vegas, Limited Partnership. Id.
November of 2016, CALV discovered that Fava and Monardes
amended the Eclipse agreement without notifying the CALV
trustees. Id. Fava and Monardes subsequently ended
their employment with CALV. Id.
November 30, 2016, the Eclipse Theater and 21 Greens opened.
Id. After opening, CALV sustained losses related to
its staffing of the Eclipse Theater and 21 Greens.
Id. CALV also did not recover its initial $500, 000
investment in the Eclipse Theater or its $250, 000 investment
in 21 Greens. Id.
December 23, 2016, CALV notified the Eclipse defendants that
it was invoking its 90-day right to terminate the agreement.
Id. On January 9, 2017, the parties unsuccessfully
attempted to renegotiate the agreement. Id.
letter dated January 13, 2017, CALV confirmed to the Eclipse
defendants that the agreement would terminate on January 23,
2017, as a result of the defendants' refusal to
renegotiate or modify the agreement. Id.
January 20, 2017, the Eclipse defendants wrote to CALV
disputing whether CALV had property terminated the agreement.
Id. The Eclipse agreement terminated on January 23,
2017. Id. CALV contends that it sustained
substantial losses due to the Eclipse defendants' failure
return its ...