Opinion
Index No. 653775/2023 Motion Seq. No. 001
01-26-2024
PROSIGHT SPECIALTY MANAGEMENT COMPANY, INC., NEW YORK MARINE AND GENERAL INSURANCE COMPANY, GOTHAM INSURANCE COMPANY Plaintiff, v. ALTRUIS GROUP, LLC, Defendant.
Unpublished Opinion
MOTION DATE 09/27/2023
DECISION + ORDER ON MOTION
HON. ANDREW BORROK, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23, 24 were read on this motion to/for DISMISS
Upon the foregoing documents, Prosight Specialty Management Company, Inc., New York Marine and General Insurance Company, and Gotham Insurance Company (collectively, the Plaintiffs)'s motion (Mtn. Seq. No. 001) is granted and Altruis Group, LLC (the Defendant)'s counterclaims for breach of the implied covenant of good faith and fair dealing and the declaratory judgment counterclaims are dismissed.
Much of what is at issue in this motion was addressed by the court (Vyskocil, J.) in a prior decision (the SDNY Decision; NYSCEF Doc. No. 14) issued in a related action (the SDNY Action) captioned Altruis Grp. v. Prosight Specialty Mgmt. Co., 1:21-cv-10757 (SD NY Feb. 27, 2023). Reference is made to a certain Niche Management Agreement (the Original Agreement; NYSCEF Doc. No. 9), dated February 4, 2020, as amended by a certain Amendment to Niche Management Agreement (the Amendment; the Original Agreement together with the Amendment, hereinafter, collectively, the Agreement; NYSCEF Doc. No. 10), dated May 4, 2020, by and among the Defendant, ProSight Specialty Management Company, Inc., and New York Marine and General Insurance Company, pursuant to which the Defendant agreed to provide certain insurance-related services to the Plaintiffs. When the Defendant allegedly failed to provide the agreed upon services, the Plaintiffs terminated the Agreement and sued in this court. In response in this action, the Defendant asserts three counterclaims - all of which amount to claiming that in fact it was the Plaintiffs who breached by improperly terminating the Agreement. Separately, in the United States District Court for the Southern District of New York, the Defendant in this case brought suit - the SDNY Action. That case is now dismissed for lack of subject matter jurisdiction.
The Defendant's counterclaim (the Counterclaim; NYSCEF Doc. No. 4) for breach of the covenant of good faith and fair dealing is dismissed. It is entirely duplicative of the breach of contract counterclaim (Amcan Holdings, Inc. v Can. Imperial Bank of Commerce, 70 A.D.3d 423, 426 [1st Dept 2010]). For example, (i) Counterclaim paragraphs 68 &77 allege improper termination and improper invocation of Agreement Section 21(B)(3), (ii) paragraph 78 alleges failure to pay commissions due under the Agreement, (iii) paragraph 80 alleges improper early termination of the Agreement, (iv) paragraphs 81-82 allege refusal to pay monies due under the Agreement, and (v) paragraph 87 alleges deprivation of benefits the Defendant is "entitled to under the Agreement." Thus, it is dismissed. The additional allegation before this Court that one of the Plaintiffs' representatives admitted in his deposition that the Defendant may be entitled to some money for services rendered amounts to nothing more than a potential admission that Plaintiffs breached the Agreement, not a separate cause of action. As discussed (1.26.24), this is manifestly different than allegations of a course of dealings involving inconsistent communications as to the basis for certain denials (cf. Truetox Laboratories, LLC v. Healthfirst PHSP. Inc., 68 Misc.3d 1209(A) [Sup Ct 2020]). As such, and as the SDNY court held (see NYSCEF Doc. No. 14 at 3-4), the breach of the covenant of good faith and fair dealing counterclaim is dismissed as duplicative.
The Defendant's counterclaim for a declaratory judgment is also dismissed. In case of an improper termination (one that does not fall under any of the specific categories enumerated in Section 22[A]-[D]), the Agreement provides that the non-terminating party retains all rights in the relevant intellectual property:
In the event of any other termination by either party, such termination shall be deemed an abandonment by the terminating party and transfer to the non-terminating party of the terminating party's rights, title to and interest in the Captive Capabilities Niche Intellectual Property and the non-terminating party shall retain the sole undivided interest in the Captive Capabilities Niche Intellectual Property.(NYSCEF Doc. No. 9 § 22[E].) Thus, as the SDNY court held (NYSCEF Doc. No. 14 at 6-7), this claim too is dismissed as duplicative and the Defendant has an adequate, alternative remedy if it proves its breach of contract counterclaim (Ithilien Realty Corp. v 180 Ludlow Dev. LLC, 140 A.D.3d 621, 622 [1st Dept 2016]).
The Court has considered the Defendant's other argument and finds them unavailing.
Accordingly, it is hereby
ORDERED that the counterclaims for breach of the covenant of good faith and fair dealing and for declaratory judgment are dismissed; and it is further
ORDERED that the parties are directed to meet and confer as to what remains to be done in the way of discovery and to provide a proposed schedule no later than February 19, 2024.