Opinion
107847/09.
Decided May 28, 2010.
Balestriere Lanza PLLC, Attorneys for Plaintiff.
Sullivan Cromwell, LLP, Attorneys for Defendants.
Defendants Kasowitz, Benson, Torres Friedman, LLP ("KBT F" or the "firm") and Aaron Marks ("Marks") move, pursuant to CPLR 3211(a)(5) and (a)(7), to dismiss plaintiff Jeremy S. Pitcock's ("Pitcock" or "plaintiff") amended complaint in this action. Plaintiff opposes the motion.
Pitcock is an attorney specializing in intellectual property ("IP") and a former partner of KBT F. This is the third action plaintiff has commenced against KBT F arising from the firm's termination of his employment based upon his allegedly engaging in inappropriate and unwelcome conduct with several of the firm's female employees.
A summary of the factual and procedural history of this action and other litigation between the parties is warranted. As this court previously stated in earlier litigation between the parties, the firm terminated plaintiff's employment in or about December 2007. In January 2008, Pitcock joined another law firm, Morgan Finnegan LLP ("M F"), as a partner in its IP department. After approximately one month, M F terminated plaintiff, who attributes his termination and subsequent inability to find suitable legal employment in his chosen field to KBT F's alleged improper acts.
In or about June 2008, Pitcock commenced a federal action against KBT F which he voluntarily discontinued. On July 3, 2008, plaintiff commenced the action entitled Jeremy S. Pitcock v. Kasowitz, Benson, Torres Friedman LLP, et al., New York County Index No. 601984/08 (the "2008 action") against the firm, one of its partners and the public relations firm it employed. Plaintiff amended the complaint in the 2008 action on July 25, 2008 alleging fourteen causes of action for inter alia defamation and various business torts. By decision and order dated September 29, 2009 (the "dismissal order"), this court inter alia dismissed the 2008 action.
The amended complaint in the 2008 action focused on two statements the firm issued publicly in January, 2008 (the "January 2008 statements"). Pitcock took issue with KBT F's statements that: 1) he "was terminated for cause by our firm in December, 2007, because of extremely inappropriate personal conduct"; and 2) he was terminated following a thorough week long investigation into reported inappropriate conduct. Central to the dismissal order's analysis and determination was Pitcock's following pre-termination e-mail (the "e-mail" or "admission") to a KBT F partner stating:
I wanted to have a chance to apologize to you for my recent behavior. It is far from the standard that others expect of me, and that I expect for myself. I am truly sorry for the effect of that behavior on others at the firm, and I am willing to make amends however possible. After talking matters over with my wife, I am committed to remaining at the firm if possible and proving that I will never again engage in any even arguably inappropriate behavior. To that end, I will accept whatever appropriate discipline you decide upon.
On June 2, 2009, while the motion to dismiss in the 2008 action was pending, plaintiff commenced this action by filing a summons with notice. The initial complaint was filed on or about June 26, 2009; however, plaintiff did not serve the complaint until after this court dismissed the 2008 action.
Defendants moved to dismiss the complaint and in response, Pitcock served the amended complaint which is the subject of this motion. The amended complaint alleges six causes of action. As against the firm, Pitcock alleges the following: (1) tortious interference with contract; (2) tortious interference with prospective employment or advantage; (3) tortious interference with business relationships; and (4) unjust enrichment. As against KBT F and Marks, a KBT F partner not previously named in the 2008 action, Pitcock alleges causes of action for: (5) defamation and defamation per se; and (6) injurious falsehood.
This motion apparently was served but not filed and calendared with the court.
The amended complaint in the 2008 action alleged fourteen causes of action.
All six causes of action in this action were asserted in the 2008 action. Further, as defendants note in their motion papers, the amended complaint in this action includes a copy of the amended complaint in the 2008 action as an exhibit and, a comparison of the two pleadings reveals that a majority of the allegations in the amended complaint here repeat verbatim the allegations in the amended complaint in the 2008 action.
Plaintiff, however, points to the following distinctions between the pleadings in the two actions. Unlike the 2008 amended complaint, the amended complaint in this action alleges for the first time that: 1) the firm told a specific client (referred to in the amended complaint and motion papers by the uppercase designation "Client") that Pitcock was fired for "sexual harassment", his behavior was very serious, he harassed multiple women and his actions involved multiple types of non-consensual physical contact; 2) the Client advised plaintiff that KBT F threatened to cease representing the Client if Pitcock remained involved in the Client's matters in any way; 3) in January 2008 the firm sent letters to M F threatening disqualification due to a purported conflict of interest arising from M F's employment of plaintiff (the "conflict letters"); and 4) Marks made alleged false statements which The New York Times published on June 9, 2008 claiming that plaintiff "was justifiably terminated for a pattern of sexual harassment" (the "NY Times article").
As defendants note, the Client is unnamed. Pitcock explains that he has not revealed the Client's identity in order to protect its interests since KBT F still represents it.
Pitcock claims that, due to CPLR 3214(b)'s stay of discovery while the motions to dismiss were pending in the 2008 action, he only recently learned that KBT F made disparaging statements about him to the Client and pressured the Client not to work with him. Pitcock also claims not to have had access to the conflict letters between M F and the firm until recently.
Defendants' reply argues that plaintiff improperly obtained such correspondence by serving a subpoena upon M F while discovery was stayed in the 2008 action, and without serving a copy of the subpoena upon the firm in violation of CPLR § 2303(a) and 3120(3).
DISCUSSION
Defendants move to dismiss pursuant to CPLR 3211(a)(5) claiming res judicata bars this action and CPLR 3211(a)(7) for failure to state a cause of action. CPLR 3211(a)(5) provides for dismissal where a cause of action cannot be maintained inter alia because of res judicata. As stated in In re Hunter, 4 NY3d 260, 269-270 (2005):
Under the doctrine of res judicata, a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. The rule applies not only to claims actually litigated but also to claims that could have been raised in the prior litigation. The rationale underlying this principle is that a party who has been given a full and fair opportunity to litigate a claim should not be allowed to do so again ( see O'Connell v Corcoran , 1 NY3d 179 , 184-185; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 485). Additionally, under New York's transactional analysis approach to res judicata, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" ( O'Brien v City of Syracuse, 54 NY2d 353, 357, citing Matter of Reilly v Reid, 45 NY2d 24, 29-30). " Res judicata is designed to provide finality in the resolution of disputes," recognizing that "[c]onsiderations of judicial economy as well as fairness to the parties mandate, at some point, an end to litigation" ( Reilly, 45 NY2d at 28).
Defendants argue that res judicata bars this action because: 1) this court's dismissal order dismissed nearly identical claims arising from the same transaction, to wit, Pitcock's termination from KBT F and the firm's and its partners' statements regarding his termination; 2) Marks, as a KBT F partner, is in privity with the firm and the court's decision in the 2008 action is binding on plaintiff vis a vis Marks even though he was not a party to the prior action; and 3) the new factual allegations in this action relate to the claims that were actually litigated in the 2008 action or could have been raised then.
Defendants further argue in a footnote to their memorandum of law that collateral estoppel applies with respect to this court's determination that certain complained of statements were truthful.
Plaintiff argues in opposition that res judicata does not apply because: 1) the 2008 decision and order was not a final determination on the merits; 2) the newly alleged facts arise from new transactions and require different proof; and 3) he could not have alleged the new facts in the 2008 complaint because, even though they existed at the time he commenced the 2008 action, he had no way of knowing such facts in light of the discovery stay.
CPLR 3211(a), "Motion to dismiss cause of action,"states that:
"[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that:
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(7) the pleading fails to state a cause of action. . . ."
As stated in Ladenburg Thalmann Co., Inc. v. Tim's Amusements, Inc., 275 AD2d 243, 246 (1st Dept. 2000):
the court's task is to determine only whether the facts as alleged, accepting them as true and according plaintiff every possible favorable inference, fit within any cognizable legal theory ( Leon v Martinez, 84 NY2d 83, 87-88).
To defeat a pre-answer motion to dismiss pursuant to CPLR 3211, the opposing party need only assert facts of an evidentiary nature which fit within anycognizable legal theory. Bonnie Co. Fashions, Inc. v. Bankers Trust Co., 262 AD2d 188 (1st Dept. 1999).
Defamation and Defamation Per Se
The court first addresses Pitcock's fifth cause of action for defamation and defamation per se. The elements of a prima facie cause of action for defamation are: "a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se (citations omitted)." Dillon v. City of New York, 261 AD2d 34, 37-38 (1st Dept. 1999). Defamation per se is applicable in situations in which, among other things, the statements tend to injure another in his trade, business or profession. Epifani v Johnson , 65 AD3d 224 (2d Dept. 2009).
CPLR 3016(a) mandates that "the particular words complained of shall be set forth in the complaint . . ." Plaintiff must also clearly allege the time, place and manner in which the words were stated. Rosenberg v. Home Box Office, Inc. , 33 AD3d 550 (1st Dept. 2006). These requirements are strictly construed. Ma as v. VMS Assocs., LLC, 53 AD3d 451 (1st Dept. 2008).
Here, Pitcock bases his fifth cause of action upon defendants' alleged misrepresentations to Pitcock's former clients and to the press concerning his departure from KBT F. However, with respect to alleged disparaging statements to clients, plaintiff fails to set forth the exact words complained of as well as specific factual details such as who made the alleged defamatory statements, to whom they were made and when they were made. Further, according to the amended complaint, the alleged defamatory statements to clients appear to have been made in or before early February 2008 (see Exh. A to motion at ¶ 50). As plaintiff commenced this action by filing a summons with notice on June 2, 2009, the one year statute of limitations for defamation bars any claims based on these statements. See CPLR § 215. Notably, Pitcock's opposition to this motion fails to address this point or offer further details regarding the statements in question.
To the extent this cause of action is based upon alleged false statements to the press, as held in the dismissal order and reiterated herein, KBT F's January 2008 statements to the press are not actionable in light of plaintiff's admission that he engaged in inappropriate behavior which warranted discipline. In any event, any action based upon the January 2008 statements is clearly time barred.
Plaintiff's defamation cause of action is timely only to the extent that it is based upon the NY Times article. However, for the reasons that follow, the claim is not viable because it is barred by res judicata.
As set forth above, Marks claimed in the NY Times article that Pitcock "was justifiably terminated for a pattern of sexual harassment." Plaintiff denies any such pattern of conduct and denies admitting to sexual harassment. Rather, Pitcock explains that the reference in his e-mailed admission to "inappropriate behavior" was limited to a single incident involving a consensual kiss between him and a firm associate. As this was allegedly a consensual act, plaintiff denies that it constituted sexual harassment.
At the outset, the court rejects plaintiff's argument that the dismissal order did not determine the defamation cause of action on the merits. Given Pitcock's admission, under no circumstances would he be able to establish the element of falsity necessary to maintain the defamation cause of action alleged in the 2008 complaint.
Claims regarding the NY Times article and any other allegations of a "pattern of sexual harassment" could and should have been raised in the 2008 action since they arise "from the same factual grouping, transaction or series of transactions. Harley v. Hawkins, 281 AD2d 593, 594 (2d Dept. 2001). Specifically, the allegations in the NY Times article are part of the same series of events involving Pitcock's termination and KBT F's statements regarding his departure from the firm. In this sense, the instant action is similar to Harley, supra, wherein the First Department upheld the dismissal of the plaintiff's second complaint for legal malpractice on the grounds of res judicata. There, the first legal malpractice action was predicated upon defendant's actions occurring between September 1994 and January 1995 and the claim was dismissed as time barred. The second action for legal malpractice added a claim based upon the defendant's actions in December 1998 which were timely. Despite the timeliness of the new allegations, the court dismissed the second action because the plaintiff could have and should have pleaded the new allegations in the first action.
The same is true here. The NY Times article was part of what plaintiff has defined in both actions as the firm's "smear campaign." It is undisputed that the NY Times article had been published at the time plaintiff commenced the 2008 action. Indeed, the amended complaint in the earlier action more than once cites, in quotation marks, the phrase "pattern of sexual harassment", without identifying the source of the quote. See Exh. I to motion at ¶¶ 5, 57 and 59. Thus, Pitcock was aware of the NY Times article not only when he commenced the 2008 action, but also when he amended that complaint. Plaintiff offers no explanation for the failure to raise these claims in the 2008 action or to seek leave to amend the earlier complaint. Accordingly, the fifth cause of action is dismissed pursuant to CPLR 3211(a)(5) and (7).
Tortious Interference with Contract
The elements of a tortious interference with contract cause of action are: (1) the existence of a contract between plaintiff and a third party; (2) defendant's knowledge of the contract; (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff. Kronos, Inc. v. AVX Corp., 81 NY2d 90, 94 (1993).
In the 2008 action, Pitcock claimed KBT F tortiously interfered with his partnership contract with M F, inducing M F to breach same by terminating plaintiff. This prior cause of action was predicated solely upon KBT F's alleged malicious and false January 2008 statements. This court dismissed this cause of action inter alia because Pitcock's e-mail admission negated his contention that the January 2008 statements were false.
In this action, plaintiff's first cause of action again alleges the firm tortiously interfered with his partnership agreement with M F by virtue of the January 2008 statements and adds that the firm sent the conflict letters baselessly threatening M F with disqualification as a result of Pitcock joining that firm. At the outset, to the extent the first cause of action is based upon KBT F's January 2008 statements, this court has already determined that the subject statements were not actionable. Accordingly, defendants' motion is granted pursuant to CPLR 3211(a)(5) and the first cause of action is dismissed to the extent it is based upon the firm's January 2008 statements.
As to the conflict letters KBT F sent to M F, Pitcock alleges that no conflict of interest actually existed and the firm used the appearance of a potential conflict as a pretext to pressure M F to terminate him. The firm argues that res judicata applies because: (1) its statements in the conflict letters to M F arise from the same transactions as the 2008 action; and (2) claims regarding the conflict letters were litigated in the 2008 action or could have been since the conflict letters were dated between January 7, 2008 and February 1, 2008, prior to the 2008 action's commencement. In response, plaintiff vaguely alleges he had not seen copies of the conflict letters until "only recently" and contends a former unidentified M F partner recently told him his employment was terminated due to both KBT F's public statements and the conflict letters.
The court agrees that the claims regarding the conflict letters could and should have been made in the 2008 action. See In re Hunter, supra. Despite Pitcock's claim that he only recently obtained copies of the conflict letters, he nonetheless knew during the brief period of his employment with M F that KBT F had contacted M F to bring the potential conflict of interest to M F's attention. At all times plaintiff knew the factual underpinnings of the litigation involving the firm's client and M F's client and was in a position to assess whether any conflict of interest concerns were legitimate. Here, Pitcock merely attempts to allege the same cause of action based upon a new theory. Having had the opportunity to litigate this claim, the interests of judicial economy and fairness to the parties mandate an end to litigation of this cause of action. Id. For the foregoing reasons, the first cause of action for interference with contractual relations is dismissed pursuant to CPLR 3211(a)(5).
Tortious Interference with Prospective Employment or Advantage
Plaintiff's second cause of action alleges KBT F tortiously interfered with his prospective employment or advantage with both M F and at least one of the clients Pitcock brought with him to the firm (to wit, the Client) and is based upon: 1) the January 2008 statements; 2) the statement Pitcock had engaged in a "pattern of sexual harassment"; 3) the firm's alleged malicious and baseless threats to M F of disqualification; and 4) KBT F forcing the Client to discontinue its relationship with Pitcock and disparaging Pitcock to the Client.
By contrast, the 2008 complaint's cause of action for tortious interference with prospective employment or advantage alleged only interference with plaintiff's client relationships as a result of the January 2008 statements.
As compared to tortious interference with an existing contract, more culpable conduct must be alleged to maintain a cause of action for tortious interference with prospective rights. Carvel Corp. v. Noonan , 3 NY3d 182 , 190 (2004). Citing its holding in NBT Bancorp Inc. v. Fleet/Norstar Fin. Group, Inc., 87 NY2d 614 (1996), the Court of Appeals in Carvel reiterated that "defendant's conduct must amount to a crime or an independent tort". Id. An exception to this rule is recognized where the "defendant engages in conduct for the sole purpose of inflicting intentional harm on plaintiffs' (citation omitted)." Id. Thus, if the defendant shows that the interference is intended, at least in part, to advance its own interests, then it was not acting solely to harm plaintiff. Id.
Pitcock's second cause of action must be dismissed for the following reasons. First, none of the firm's alleged conduct was criminal. To the extent that KBT F's alleged conduct could be deemed tortious, it primarily sounds in defamation. However, as stated above and as this court previously found in dismissing the 2008 action, the statements that the firm terminated Pitcock for cause in December 2007 after a week long investigation are neither false nor defamatory. As to the NY Times article's reference to a "pattern of sexual harassment" and other alleged disparaging statements to the Client, these claims are duplicative of the defamation cause of action. See Deutsche Bank Securities Inc. v. Kong, N.Y.L.J. 4/18/08, p. 26, col. 1 (Sup. Ct. NY Cty., Friedman, J.), citing Ramsay v. Mary Imogene Bassett Hosp., 113 AD2d 149, 151 (3d Dept. 1985), lv dism 67 NY2d 608 (1986).
Similarly, sending the conflict letters to M F was neither a crime nor an independent tort. Nor can plaintiff establish that the conflict letters were sent solely for the purpose of intentionally harming him. On their faces, these letters served the legitimate purpose of bringing a potential conflict to M F's attention. It is apparent that this alleged interference was intended to advance KBT F's and its client's own interests, rather than solely to harm Pitcock.
Finally, plaintiff's claim that the firm used wrongful means by depriving clients of their choice of counsel was alleged in the 2008 complaint (Exh. I to motion at ¶ 168) and, though not specifically addressed in this court's dismissal order, was considered therein and implicitly rejected. For the foregoing reasons, the second cause of action is dismissed pursuant to both CPLR 3211(a)(5) and (7).
Tortious Interference with Business Relationships
The third cause of action for tortious interference with business relationships is predicated upon the firm's alleged interference with plaintiff's relationship with the Client, again by means of disparaging statements and forcing the Client to discontinue its business relationship with Pitcock. See Exh. A to motion at ¶ 78. Pitcock summarily alleges KBT F acted for the sole purpose of harming him and used wrongful means by placing economic pressure on the Client and depriving the Client of its choice of counsel.
The amended complaint in the 2008 action alleged interference with Pitcock's business relationships with M F and unnamed clients.
As this court's dismissal order noted, tortious interference with business relations "applies to those situations where the third party would have entered into or extended a contractual relationship with plaintiff but for the intentional and wrongful acts of the defendant (citations omitted)." M.J. K. Co., Inc. v. Matthew Bender Co., Inc., 220 AD2d 488, 490 (2d Dept. 1995). To make out such a claim requires a showing "that the defendant interfered with the plaintiff's business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper [internal quotation marks and citation omitted]." 71 Pierrepont Assocs. v. 71 Pierrepont Corp., 243 AD2d 625, 625-626 (2d Dept. 1997).
At the outset, Pitcock does not identify any specific contractual relationship with the Client that he would have entered into or extended but for the firm's alleged interference. Plaintiff speaks only in vague and general terms of the Client wanting his "help and involvement in its cases on an ongoing basis." Exh. I at ¶ 77. However, he fails to delineate any specific case or other legal matter on which the Client expressly requested him to render legal services.
Further, to the extent the third cause of action is based upon alleged disparaging statements to the Client, it must be dismissed, like the second cause of action, as duplicative of the defamation claim. Similarly, the remaining allegation that KBT F improperly pressured the Client economically and deprived the Client of its choice of counsel fails since it was previously considered in the 2008 action. For the above reasons, the third cause of action is dismissed pursuant to CPLR 3211(a)(5) and (7).
Unjust Enrichment
A cause of action for unjust enrichment is stated when a party asserts that a benefit was bestowed upon another party which obtained such benefit without adequately compensating them. Sergeants Benevolent Assn. Annuity Fund v. Renck , 19 AD3d 107 (1st Dept. 2005). The existence of a written contract governing the subject matter in dispute precludes recovery on a theory of unjust enrichment for events which stem from it. Unjust enrichment applies only when there is not an express written agreement between the parties, imposing a legal obligation where one is not already expressed. Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 NY2d 382 (1987). It has been deemed impermissible to seek damages for unjust enrichment where "the suing party has fully performed on a valid written agreement, the existence of which is undisputed, and the scope of which clearly covers the dispute between the parties." Id. at 389. The only exception to this rule is when there is a bona fide dispute between the parties that is not covered by a provision in the contract, then a party may sue for both breach of contract and in quantum meruit. Joseph Sternberg, Inc. v. Walber 36th St. Assocs., 187 AD2d 225 (1st Dept. 1993).
This court dismissed Pitcock's cause of action for unjust enrichment in the 2008 action, finding that the partnership agreement precluded such a claim. See MT Property, Inc. v Ira Weinstein Larry Weinstein, LLC , 50 AD3d 751 (2d Dept. 2008). Thereafter, Pitcock moved to reargue the decision as it pertained to this claim's dismissal. This court granted the motion to reargue and, upon granting same, adhered to its prior determination dismissing the unjust enrichment cause of action because the parties' partnership agreement addressed the rights and obligations of expelled partners and provided no basis for compensation for transition work.
The same result must be reached in this action. Plaintiff's fourth cause of action for unjust enrichment fails to state a cause of action for the same reasons his prior unjust enrichment cause of action failed. As such, this cause of action must be dismissed pursuant to both CPLR 3211(a)(5) and (7).
Injurious Falsehood
Plaintiff's sixth cause of action for injurious falsehood is based upon the NY Times article's claim that Pitcock was terminated due to a "pattern of sexual harassment." Plaintiff denies any such pattern of conduct and denies admitting he engaged in such conduct.
In the 2008 action, this court previously dismissed plaintiff's injurious falsehood claim because Pitcock failed to allege special damages by itemizing specific business lost. See Squire Records, Inc. v Vanguard Recording Soc'y, Inc., 19 NY2d 797 (1967) (special damages sufficiently alleged where plaintiff named specific customers lost). The court did not address defendants' argument that this cause of action cannot be maintained because defendants' alleged false statements do not disparage Pitcock's legal abilities or the quality of his legal services, but rather his personal conduct.
Defendants contend, and plaintiff denies, that the amended complaint herein continues to omit such an itemization. Pitcock cites the amended complaint's reference to the loss of his salary at M F as sufficiently itemizing his special damages. However, the court need not address these contentions because this claim fails to state a cause of action for the reasons more fully set forth above.
Defendants correctly argue that false statements made to third parties concerning the quality of a party's goods or services, which give rise to a cause of action for injurious falsehood, are distinct from those concerning a party's integrity or business methods, which give rise to a defamation cause of action. See, generally, Henneberry v. Sumitomo Corp. of Am., 415 F.Supp.2d 423, 470-471 (S.D.NY 2006), citing Ruder Finn Inc. v. Seaboard Sur. Co., 52 NY2d 663 (1981) and Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 59 (2d Cir. 2002). While plaintiff counters that the statement he engaged in a pattern of sexual harassment impugns his integrity and ability to engage in the practice of law, this court disagrees. The subject statements sound in defamation rather than injurious falsehood, and the sixth cause of action must be dismissed pursuant to CPLR 3211(a)(7).
The court has considered the parties' remaining arguments and finds them lacking in merit. For all of the above reasons, it is hereby
ORDERED that defendants Kasowitz, Benson, Torres Friedman, LLP's and Aaron Marks' motion to dismiss Pitcock's complaint is granted and the complaint is dismissed as against them with costs and disbursements to Kasowitz, Benson, Torres Friedman, LLP and Aaron Marks as taxed by the Clerk of the Court.
The Clerk is directed to enter judgment accordingly.
This constitutes this court's Decision and Order. Courtesy copies of this Decision and Order have been provided to counsel for the parties.