In a ruling from the bench on July 27, New York state judicial hearing officer Ira Gammerman held that China Grill Management could bar chef Rocco DiSpirito from his namesake restaurant, Rocco's on 22nd Street, and that China Grill was also free to sell or change the format of the eatery.
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According to the New York Times, Justice Gammerman, a retired justice who still hears cases for the Commercial Division of the New York Supreme Court (which is the trial-level court in NY), told China Grill's owner, Jeffrey Chodorow, "I don't think you are obligated to run a restaurant that's losing money the way this one is." Gammerman was sympathetic to Chodorow's repeated claims that he had invested $4 million in starting Rocco's on 22nd Street (an unexplained increase from his previously-stated $3 million) and had since lost another $700,000.
However, Justice Gammerman's ruling evaded the key questions regarding the relationship, partnership or otherwise, between China Grill and DiSpirito's Spirit Media. A trial before Gammerman will be held beginning on August 31 to resolve those issues, including Rocco's entitlement to monetary damages from Chodorow's usurption of control if Rocco is truly a 50% partner in the restaurant, as he claims and Chodorow denies.
Considering the poisoned relationship between Chodorow and DiSpirito, Justice Gammerman's ruling makes perfect sense logically, since further financial losses at Rocco's on 22nd Street are clearly Chodorow's problem, and any harm to Rocco can be resolved with money damages. Whether it makes legal sense is another question ... but that is something that the frequently-reversed judge rarely worries about.
As part of his argument, China Grill's lawyer Lawrence Kaiser claimed that the reason that a partnership agreement was never signed between China Grill and Spirit Media was that Chodorow insisted on full control rights, including the right to sell or close Rocco's on 22nd Street without consulting Rocco, and so he should have that right. Apparently the documents weren't signed in part because Rocco refused to give Chodorow that right.
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We note that Kaiser's argument appears to cut AGAINST his client's claim of sole control, since, in the absence of an agreement between partners, the New York version of partnership law provides that partners have equal control rights. While Kaiser also made the in-court argument that "you can propose to someone all you want and never get married," we note that partnerships in New York state -- and every other state in the union -- are governed by statute in the absence of a written contract, and you don't need a license to be a common-law partner, just a joint venture for profit.
Thus, it seems to us that Chodorow's claim of a "right" to exclude Rocco is without legal foundation, regardless of the ruling on the preliminary injunction. However, we have not had the advantages of reading the arguments, viewing the evidence or listening to the hearings, so we could well be wrong. We will be interested to see how Justice Gammerman deals with this issue in the trial.
However, one thing that probably won't be around for the trial is Rocco's on 22nd Street. After prevailing in the hearing, Kaiser distanced himself from his in-court statement that the restaurant will be sold by China Grill -- a statement that we viewed with extreme skepticism. Instead, he told the NY Times that, while sale is still an option, China Grill may be opened under another concept or "even have guest chefs" -- as per Chodorow's prior plans.
We note that Justice Gammerman is also the hearing officer who heard the dispute between Rosie O'Donnell and Gruner + Jahr USA, a dispute that he dismissed without damages for either side because he said it was only about "bragging rights" after a failed joint venture. We note, though, that in this case, there appears to be an open question as to whether the joint venture would have failed without China Grill's attempts to usurp full control -- attempts well-documented in NBC's second season of The Restaurant -- but we also note that Rocco may have had trouble fitting his head through most normal-sized doors after the success of the first season of The Restaurant, and he created staff issues due to his repeated absenses -- also well-documented in The Restaurant 2.
For our part, we wonder whether Chodorow will really rename the restaurant "Arrivederci" before the trial.