ALBANY, N.Y. (CN) – Tossing out fraud claims against Chipotle, the New York Court of Appeals said Tuesday that celebrity chef Kyle Connaughton failed to quantify the cost of his lost ramen-restaurant concept.
A onetime contestant on Food Network’s “Iron Chef,” Connaughton says his diligence brought the burrito chain to the brink of launching a ramen restaurant in New York City in 2013. The deal fell apart, however, when Connaughton learned that Chipotle was already bound by a nondisclosure agreement after working on a similar concept with chef David Chang.
Connaughton says he was warned that Chang, who runs ramen franchise Momofuku, would file suit if Chipotle’s ramen restaurant ever got off the ground.
With Connaughton refusing to do further work with Chipotle CEO Steve Ells on the ramen restaurant, Ells fired Connaughton, and Connaughton sued.
On Tuesday, just over a month after hearing oral argument in Albany, New York’s highest court affirmed dismissal of Connaughton’s suit.
“The complaint alleges that in reliance on defendants’ fraudulent omissions, plaintiff stopped soliciting potential buyers,” Judge Jenny Rivera wrote for unanimous Court of Appeals . “However, the complaint fails to allege that, in doing so, he rejected another prospective buyer’s offer to purchase the concept. Instead, plaintiff avers that once Ells showed an interest in his ramen restaurant idea, plaintiff turned to selling the concept to Chipotle. These are factual assertions of the quintessential lost opportunity, which are not a recoverable out-of-pocket loss.”
The court scoffed at Connaughton’s claim that he could better assess damages if the case were revived.
“To the extent plaintiff claims that discovery will provide proof that defendants’ fraud caused him to forgo offers from other potential purchasers of his ramen restaurant concept, no amount of discovery will transform these ‘undeterminable and speculative’ lost opportunities from noncompensable damages to out-of-pocket losses,” Rivera wrote.