Opinion
0600709/2007.
November 30, 2007.
In this action for breach of contract, specific performance, breach of fiduciary duty, injunctive relief, for an accounting, and for defamation, plaintiff Peter Cutler, a former employee of defendant Ensage, Inc. (Ensage), contends that he has the right to exercise his options to purchase 699,469 shares of Ensage common stock.
Defendants Ensage, Donald Scherer, Stephanie Scherer, Joan Scherer, Joseph Mileti (collectively, the Ensage defendants) and the Thomson Corporation (Thomson) now move for an order, pursuant to CPLR 3211 (a) (1) and (7), dismissing plaintiff's amended complaint. Plaintiff opposes the motion, which is granted for the reasons below.
BACKGROUND
Ensage, a privately held tax software company, first hired plaintiff in May 2002 to serve as its Vice President of Sales (Amended Complaint, ¶ 11). Pursuant to Ensage's Stock Incentive Plan, dated September 15, 2000 (the Option Plan), Ensage may offer certain stock options to key employees as delineated in the Option Plan (id., ¶ 10). As evidenced by a letter dated May 1, 2002, Ensage granted plaintiff an option to purchase 699,469 shares of Ensage stock at an exercise price of $.45, for a total exercise price of $314,761.05 (the Stock Option) (id., ¶¶ 12-13; Exh C).
The terms of this option grant were governed by three documents: (1) the Option Plan; (2) a Non-Qualified Stock Option Agreement between Ensage and plaintiff (the Option Agreement); and (3) the Ensage Stock Incentive Plan Committee's Section 11 Tax Withholding Rule referenced in the Option Plan (collectively, the Option Documents).
On July 5, 2006, plaintiff's employment with Ensage was terminated following his alleged violation of the Company's vacation policy for the sales team (id., ¶ 24; Exh D). At the time of his termination, plaintiff had not yet exercised any of his vested stock options. Plaintiff was nonetheless advised that he could still exercise his options, provided he did so before October 5, 2006, when they would otherwise expire (id., Exh J). The rules and requirements for exercising options are set forth in the various Option Documents.
Plaintiff maintains that at the time of his termination there was no policy in place preventing him from taking the vacation and that his termination followed a period of hostility directed against him.
First, the Option Plan provides that:
An option shall be exercised upon written notice to the Company accompanied by payment in full for the shares being acquired. The payment shall be made in cash, by check or, if the option agreement so permits, by delivery of shares of Common Stock of the Company beneficially owned by the participant, duly assigned to the Company with the assignment guaranteed by a bank, trust company or member firm of the New York Stock Exchange or by a combination of the foregoing.
Option Plan, ¶ 5 (f).
The Option Agreement provides that:
Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, or whenever restricted stock vests, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state and/or local income and employment withholding tax requirements prior to the delivery of any certificate or certificates for such shares or take any other appropriate action to satisfy such withholding requirements. Notwithstanding the foregoing, subject to such rules as the Committee may promulgate and compliance with any requirements under Rule 16b-3, the recipient may satisfy such obligation in whole or in part by electing to have the Company withhold shares of Common Stock from the shares to which the recipient is otherwise entitled.
Option Plan, ¶ 11.
The Option Agreement provides that:
On the date of any exercise of this option, the exercise price of the shares as to which this option is being exercised shall be due and payable in full. Payment shall be made in cash or by check or by delivery of shares of the Common Stock of the Company registered in the name of the optionee, duly assigned to the Company. . . . The Option holder shall also remit to the Company the amount needed to satisfy any federal, state or local withholding taxes that may arise or be applicable as the result of the exercise under this option. No certificate will be issued to the Optionholder with respect to the exercised shares until such withholding obligations have been satisfied to the complete satisfaction of the Company.
Option Agreement, ¶ 3.
Finally, the Option Rule provides that:
As provided for in Section 11 of the Ensage, Inc. Stock Incentive Plan, the committee has promulgated the following rule regarding tax withholding obligations for participants in the plan. Optionholders may satisfy their tax withholding obligations by electing to have the Company withhold shares of Common Stock from the shares to which the Optionholder is otherwise entitled in the following two scenarios: 1) the Company has consummated an IPO or has cash reserves greater than $10,000,000 or 2) the tax withholding obligations are under $10,000. In all other scenarios, the Optionholder must remit the Company an amount sufficient to satisfy all tax withholding requirements prior to the delivery of any certificate or certificates for such shares or to take any other appropriate action to satisfy such withholding requirements.
In an e-mail dated September 13, 2006, plaintiff informed Ensage that he would be doing a "cashless exercise" using a portion of his Stock Options to pay the exercise price and the associated tax withholding. Specifically, plaintiff notified Ensage of his intention to pay for the exercise his Stock Options as follows: (1) 129,531 shares of Ensage's stock received by plaintiff under the Stock Options would pay the approximate $373,049 exercise price for the Stock Options; and (2) 227,975 shares of Ensage's stock received by plaintiff under the Stock Options would pay the approximate $656,568 of taxes owed to Ensage.
On September 15, 2006, Ensage responded to plaintiff, via e-mail, that cashless exercises were not permitted under the Option Plan or the Option Agreement (id., ¶ 36; Exh G). Ensage informed plaintiff that the stock could not be used either for the payment of the exercise price or for the withholding obligations in connection with the exercise of the Stock Options, and stated that both the exercise price and withholding obligations be paid in cash rather than with shares of Ensage's common stock (id., ¶ 36).
Ensage gave plaintiff an extension, until October 21, 2006, to tender payment for his options (id., Exhs J and K). On September 29, 2006, Ensage also notified plaintiff that the Company anticipated "some type of liquidity event in the near future" (id., Exh K).
Plaintiff later learned that Ensage was to be acquired by Thomson, and one day before the close of the acquisition by Thomson, plaintiff filed an order to show cause seeking a temporary restraining order, and a preliminary injunction seeking to block the transaction.
After oral argument on March 7, 2007, this court denied the temporary restraining order. Subsequently, Ensage entered into and closed upon a contract of sale with Thomson pursuant to which Ensage assigned, contributed or otherwise conveyed 100% of its common shares to Thomson or its affiliate (id., ¶ 58).
Following the March 7, 2007 argument, as directed by the court, Ensage submitted an affirmation attaching the then current draft of the litigation disclosure from the Ensage/Thomson Acquisition documents. In that document, Ensage disclosed all current and potential litigation involving Ensage, including this dispute.
Plaintiff then amended his complaint to add as defendants Thomson, Donald Scherer (Ensage's former CEO), Stephanie Scherer (Ensage's former General Counsel, Director of Human Resources and CFO), Joan Scherer (Ensage's former President and Chief Technology Officer) and Joseph Mileti (COO of Ensage and plaintiff's direct supervisor). Plaintiff also added causes of action for defamation, declaratory judgment, specific performance, breach of contract, breach of fiduciary duty and an accounting.
DISCUSSION
On a motion pursuant to CPLR 3211 (a) (7) for failure to state a cause of action, the complaint must be liberally construed in the light most favorable to the plaintiff, and all factual allegations must be accepted as true ( Guggenheim v. Ginzburg, 43 NY2d 268; Morone v. Morone, 50 NY2d 481). At the same time, "'[i]n those circumstances where the legal conclusions and factual allegations are flatly contradicted by documentary evidence they are not presumed to be true or accorded every favorable inference'" (Morgenthow Latham v. Bank of New York Company, Inc., 305 AD2d 74, 78 [1st Dept 2003], quoting, Biondi v. Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1st Dept 1999], aff'd, 94 NY2d 659). In such cases, "the criterion becomes 'whether the proponent has a cause of action, not whether he has stated one.'" Id., quoting, Guggenheimer v. Ginzburg, 43 NY2d at 275.
Breach of Contract, Declaratory Judgment and Specific Performance
Plaintiff's first three causes of action, which are asserted against Ensage only, seek a declaratory judgment (first cause of action), specific performance (second cause of action) and breach of contract damages (third cause of action). Plaintiff seeks a judgment declaring his entitlement to perform a "cashless exercise" of his options, requiring Ensage to specifically perform the Option Agreement by issuing him shares in that cashless exercise, and awarding him compensatory damages for Ensage's breach of contract.
Plaintiff argues that he had an implied legal right to exercise his options by using a portion of his Stock options, as the Option Documents do not expressly prohibit such an exercise (id., ¶¶ 39, 40) Plaintiff also contends that his right to pay the option exercise price on the "same day" as the exercise itself means that he can exercise the options on "cashless basis," and then later make payment using the stock he receives from the exercise (Opp., at 12-13).
When disputes arise over stock option entitlements, courts examine the language of the underlying stock option agreements to give effect to the rights and obligations of the parties (see e.g. Bailey v Gray, Siefert Co., 300 AD2d 258 [1st Dept 2002] [dismissing employee's claim for stock options on ground that the terms of the employee's stock option agreement provided that such options would expire after termination];Tauber v Bankers Trust Co., 230 AD2d 312 [1st Dept 1997], lv dismissed 91 NY2d 887 [options must be strictly performed in accordance with option agreement]).
Where the terms of a contract are "clear, unequivocal and unambiguous, the contract is to be interpreted by its own language" (R/S Associates v. New York Job Development Authority, 98 NY2d 29, 32). And, in the absence of ambiguity, "the intention of the parties may be gathered from the four comers of the instrument and should be enforced according to its terms." Beal Sav. Bank v. Sommer, 8 NY3d 318, 324 (2007); see Vermont Teddy Bear Co., Inc. v. 538 Madison Realty Co., 1 NY3d 470, 475; see also, Lutzker v Walter E. Heller Co., 172 F Supp 77, 83 [SD NY 1959] [dismissing claims for specific performance of stock option agreement on grounds that the "option agreement is clear and unambiguous. Plaintiff's contention that it is ambiguous does not make it so"]).
Under these principles, plaintiff's position that he had an implied legal right to exercise his options on a cashless basis is unavailing. The Option Documents that govern here unambiguously require option holders seeking to exercise their stock options to pay the option exercise price either in cash, by check or by delivery of Ensage shares already held outright (Option Agreement, ¶ 3; Option Plan, ¶¶ 5 [f]). Here, it is undisputed that plaintiff failed to proffer cash, a check or Ensage stock, and plaintiff alleges that he lacked the capital required to exercise the Stock Options.
Moreover, plaintiff's contention that his right to pay the option exercise price on the "same day" as the exercise itself means that he can exercise the options on "cashless basis," and then later make payment using the stock he receives from the exercise ignores the unambiguous language of the Option Agreement requiring that payment be made "in cash or by check or by delivery of shares of Common Stock of the Company registered in the name of the optionee." Notably, when the drafters of the Option Agreement wanted to include language permitting exercise of an option using withheld shares of Common Stock, they inserted such language. For example, the drafters inserted language addressing the tax withholding obligation in the Option Documents permitting option holders to "satisfy such obligation in whole or in part by electing to have the Company withhold shares of Common Stock from the shares to which the recipient is otherwise entitled" — i.e., in some circumstances to satisfy the tax withholding requirement on a cashless basis (Option Plan, ¶ 3). Such language is absent from paragraph 3 of the Option Agreement which expressly requires payment of the exercise price with cash, check or by delivery of shares already held outright.
Finally, the Company's intent to require payment of the exercise price either in cash, by check or by delivery of Ensage shares already held outright is confirmed by evidence submitted by the Company that it consistently required employees seeking to exercise their stock options to make such payment.
Stephanie Scherer, Ensage's former CFO and General Counsel, and a member of the Company's Stock Incentive Plan Committee, stated in her affidavit that the company never permitted employees to exercise options on a "cashless basis" without tendering cash or stock held outright to pay for the exercise or tax withholding since there was no public market for Ensage stock, and that allowing cashless exercises would put Ensage at risk of being undercapitalized. According to Scherer, as a result of this rule, close to fifty employees "walked away from their Ensage options because they could not pay for them." (Stephanie Scherer Aff., ¶¶ 9, 10, 11). She also stated that only one employee in the history of the company exercised his options and he did so by paying the exercise price and tax withholding obligations by check.
Plaintiff also contends that Ensage wrongfully prevented him from using the Stock Options to satisfy his tax withholding obligations at the time of his purported option exercise. The Option Agreement requires an option holder to remit payment, at the time of exercise, in the "amount needed to satisfy any federal, state or local withholding taxes that may arise or be applicable as the result of an exercise under this option" (Option Agreement, ¶ 3). Plaintiff asserts that such withholding may be paid with Stock Options. In support of his position, he relies on Section 11 of the Option Plan provides that, "subject to such rules as the [Stock Incentive Plan] Committee may promulgate . . . the recipient may satisfy such [tax withholding] obligation in whole or in part by electing to have the Company withhold shares of Common Stock from the shares to which the recipient is otherwise entitled." (Option Plan, ¶ 11).
Defendants counter on September 12, 2000, the Stock Incentive Plan Committee ("the Committee") promulgated the Option Rule, which permits the use of Stock Options to pay the tax withholding obligation, applies only where (1) that withholding obligation was under $10,000 or (2) Ensage had consummated an IPO or had cash reserves greater than $10 million. Defendants argue that since it is undisputed that plaintiff's withholding obligation was not less then $10,000, and that Ensage did not consummate an IPO in accordance with the second condition, neither of these two exceptions apply here.
In response, plaintiff contends that the Option Rule may have been "fabricated by the defendants after this dispute arose in 2006" (Opp., at 10-11). In support of this contention, plaintiff asserts that: (1) he never saw the Option Rule, and never heard of it until this motion to dismiss was served, and (2) the date on the Option Rule pre-dates the Option Plan by a few days. He also submits an affidavit from Daniel Falk, who was employed as a Senior Manager for Professional Services Group with Ensage from July 2001 to December 31, 2005. Mr. Falk who was granted options while employed at Ensage stated that until he received the Options Rule from plaintiff's attorney in June, 2007, he had "never seen, heard of, or been made aware of its contents." (Falk Aff., ¶ 8). He also states that "[t]o my knowledge the Section 11 Rule was never promulgated while I was employed at Ensage" (id).
Defendants deny that the Option Rule was fabricated and submit the affidavit of Stephanie Scherer, Ensage's former CFO and General Counsel, and a member of the Company's Committee, who states that the Option Rule was promulgated in September 2000, and is an authentic document (Stephanie Scherer Aff., ¶ 6; Exh A). Ms. Scherer also states that, in July 2000, she sent an e-mail to the Company's outside directors attaching a summary of the stock incentive program. As that summary explained, option holders were required to "remit to the Company the amount needed to satisfy any federal, state or local withholding taxes that may arise . . . as the result of the exercise of an option" (id., ¶ 12; Exh D). Ms. Sherer further states that the Company sent numerous e-mails to other employees, long before plaintiff's employment was terminated, memorializing the requirement that they pay both the exercise and withholding obligations in connection with any stock option exercise (Stephanie Scherer Aff., ¶¶ 10, 11; Exhs B, C). She also explained that the Company never permitted employees to exercise cashless options since there was no public market for Ensage stock and if the Company were to use a significant portion of its cash to pay tax obligations, it would risk being undercapitalized (Id., ¶ 9).
Donald Scherer, the Company's CEO, and also a member of the Committee, states in his affidavit that he had a number of conversations with plaintiff in which he explained that he had to pay the exercise price and tax withholding obligations to exercise his stock options. According to Mr. Scherer, when plaintiff resigned from the Company in April 2006, he personally gave plaintiff a memo explaining the tax implications of exercising non-qualified stock options, and that plaintiff subsequently informed Ensage that he did not have the cash to exercise his options and to pay the tax obligations, and therefore wished to retain his options. Plaintiff also asked for his job back and Ensage rehired him.
In light of this evidence, plaintiff's assertions with respect to a "recent fabrication" of the Option Rule are insufficient to support his argument that Option Documents permitting him to use Stock Options to pay withholding taxes (see e.g. Burrowes v Combs, 25 AD3d 370, 373 [1st Dept], lv denied 7 NY3d 704 [upholding dismissal where plaintiff provided "scant speculation without the support of relevant facts"];Martian Entertainment, LLC v Harris, 12 Misc 3d 1190 (A), * 7 [Sup Ct, NY County 2006] ["plaintiff must support its claim with more than mere speculation"]).
In reaching this conclusion, the court notes that no inference can be drawn that the Option Rule has been fabricated from Falk's affidavit in which he states he never heard of the rule. The only inference that can be drawn is that he was not aware of any rule. The statement neither proves nor disproves the validity of the rule.
In any event, even assuming arguendo, that plaintiff has raised an issue regarding the validity of the Option Rule, plaintiff has not stated a cause of action since he did not offer to purchase the shares with cash, check or already acquired Common Stock as required by the unambiguous terms of the Option Agreement, nor has he shown that he possessed the capital to do so.
Thus, plaintiff's causes of action for declaratory judgment, specific performance and breach of contract must all be dismissed.
Breach of Fiduciary Duty and an Accounting
Plaintiff's fourth and fifth causes of action are for breach of fiduciary duty and an accounting against the Ensage defendants. Plaintiff claims that the Ensage defendants breached their fiduciary duties by "wrongfully and intentionally delaying and refusing to allow plaintiff's exercise of his Stock Options" (Amended Complaint, ¶ 95), by failing to notify him of plans to sell Ensage common stock to Thomson (id., ¶ 96), by terminating his employment to preclude him from exercising his stock options (id., ¶ 97), and by not allowing him to exercise his options on a cashless basis (id., ¶ 98). Plaintiff also seeks an accounting by the Ensage defendants (id., ¶ 102).
To state a cause of action for breach of fiduciary duty claim, a plaintiff must establish the existence of a fiduciary relationship, and a breach of the fiduciary duty (Chasanoff v Perlberg, 19 AD3d 635 [2nd Dept 2005]; Wilhelmina Artist Mgt., LLC v Knowles, 8 Misc 3d 1012 (A) [Sup Ct, NY County 2005]). The existence of a fiduciary relationship is also essential to state a claim for an accounting (see Moscatelli v Nordstrom, 40 AD2d 903 [3rd Dept 1972]; Harle v Haggin, 131 App Div 742 [1st Dept 1909]).
"A fiduciary relationship arises when one has reposed trust and confidence in the integrity and fidelity of another who thereby gains influence or assumes control and responsibility" (Laiken v Vaid, 2001 WL 1682873 [Sup Ct, NY County 2001], citing Board of Managers of Fairways at North Hills Condominium v Fairway at North Hills, 193 AD2d 322 [2nd Dept 1993]). In the absence of an allegations sufficient to demonstrate a fiduciary relationship or any relationship approaching privity between the parties, no claim of fiduciary duty will arise (see Columbia Memorial Hosp. v Barley, 16 AD3d 748 [3rd Dept 2005].
In this case, there was no fiduciary relationship between the parties based on plaintiff's status as an employee or option holder (see e.g. Kinsey v Cendant Corp., 2005 WL 1907678 [SD NY 2005] [neither status as employee nor as option holder suffices to create a fiduciary relationship]; Bell v Leakas, 1993 WL 77320 [SD NY 1993] [corporate officers owe no fiduciary duty to stock optionees]; Budet v Tiffany Co., 155 AD2d 408 [2nd Dept 1989] [affirming lower court grant of motion to dismiss because employers owe employees no fiduciary duty]; Serow v Xerox Corp., 166 AD2d 917 [4th Dept 1990] [affirming dismissal of action because employer did not owe at-will employee a fiduciary duty]; Harle v Haggin, 131 App Div 742, supra [cause of action for accounting dismissed because there is no fiduciary relationship between the parties to an option to purchase stock]).
Furthermore, as plaintiff's attempt to exercise his options was unsuccessful, he cannot claim that he is owed a fiduciary duty as a shareholder of Ensage.
Thus, plaintiff's causes of action for breach of fiduciary duty and an accounting must be dismissed.
Preliminary and Permanent Injunctive Relief
Plaintiff's seventh cause of action against all defendants seeks a preliminary and permanent injunction preventing defendants from "redeeming, surrendering, canceling, pledging, assigning, conveying or otherwise transferring" the 699,469 shares over which plaintiff claims ownership (Amended Complaint, ¶ 116).
A preliminary injunction is "is appropriate only where a party has established (1) a likelihood of success on the merits of the pending action, (2) irreparable injury absent such relief, and (3) a balancing of equities in favor of the relief sought" (The New York Auto. Ins. Plan v. New York Schools Ins. Reciprocal, 241 AD2d 313, 314 [1st Dept 1997] [citations omitted]; see also, Aetna Ins. Co. v Capasso, 75 NY2d 860). If any one of these three requirements is not satisfied, the application must be denied (Faberge Intl. v De Pino, 109 AD2d 235 [1st Dept 1985]). A party seeking a permanent injunction must similarly demonstrate that it will suffer irreparable harm absent the injunction(Icy Splash Food Beverage, Inc. v Henckel, 14 AD3d 595 [2nd Dept 2005]).
In this case, plaintiff's claim for a permanent injunction is without merit since, as indicated herein, plaintiff cannot establish that he was entitled to perform a cashless exercise, and thus his claims relating to his alleged ownership of the shares at issue have been dismissed. Thus, the seventh cause of action which seeks injunctive relief with respect to these shares must be dismissed as well.
Defamation
In his sixth cause of action, plaintiff alleges that the Ensage defendants defamed him by making an acquisition-related disclosure to Thomson concerning this dispute (Amended Complaint, ¶¶ 64-70). Specifically, plaintiff contends that Ensage's disclosure of this litigation contained a defamatory statement — that "Plaintiff violated Ensage's policy against taking vacations during a specific time" (id., ¶ 64). Plaintiff alleges that "Ensage had no such policy," that "Plaintiff had no knowledge of such policy," and, therefore, that the statement was false (id., ¶¶ 65-68). Plaintiff also contends that the statement was "meant and intended to mean that plaintiff was guilty of insubordination" and that its imputation was that "Plaintiff was properly terminated because he violated Ensage's vacation policy" (id., ¶ 108).
The elements for a claim 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." Dillon v. City of New York, 261 AD2d 34, 38 (1st Dept 1999) (citation omitted).
Defamation arises from "making a false statement which tends to 'expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of [him] in the minds of right-thinking persons, and to deprive [him] of [his] friendly intercourse in society.'" Foster v. Churchill, 87 NY2d 744, 751 (1996) (citations omitted). In determining whether a claim for defamation has been adequately pleaded "the words must be construed in the context of the entire statement or publication as a whole, tested against the understanding of the average reader, and if not reasonably susceptible of a defamatory meaning, they are not actionable and cannot be made so by a strained or artificial construction." Dillon v. City of New York, 261 AD2d at 38 (citation omitted).
Here, Ensage's statement was that "[Plaintiff] was terminated for violating the company's vacation policy for the sales team" (Amended Complaint, ¶ 64). This statement was made in the litigation disclosure portion of Ensage Stock Purchase and Sales Agreement with Thomson and is followed by a description of this action, and a statement of Ensage's belief that the action is without merit (see Taber Aff., Exh B]). When viewed in the context of the Purchase and Sale Agreement containing the litigation disclosure, it is clear that this statement does not defame plaintiff. That context was a pre-acquisition due-diligence litigation disclosure from Ensage to Thomson, a potential purchaser of Ensage stock which was required to set forth Ensage's assessment of all current and potential litigation pending against Ensage. Thus, the statement merely discloses the grounds for plaintiff's termination, in the context of disclosing his potential litigation claims here (see Pisani v Westchester County Health Care Corp., 424 F Supp 2d 710, supra [declining to attach a defamatory meaning to a simple and truthful statement of plaintiff's termination]); Serratore v. American Port Services. Inc., 293 AD2d 464 [2nd Dept 2002] [when considered in the context in which they were made, true statements in posting by plaintiff's former employer to other employees that plaintiff had been discharged and would not be permitted on the property were not defamatory]).
Notably, plaintiff does not dispute that the violation of Ensage's vacation policy was the stated ground for his termination. Rather, he takes issue with the validity of the termination based on the existence or non-existence of the described vacation policy (Amended Complaint, ¶¶ 64-68; Opp, at 17 ["Cutler disputes that the purported vacation policy ever existed and that he violated such policy"]). However, plaintiff's belief that he was wrongfully terminated, or his challenge as to whether the vacation policy actually existed, does not render false Ensage's statement about the reasons then articulated for his termination, and does not give rise to a cause of action sounding in defamation (Slade v Metropolitan Life Ins. Co., 255 AD2d 130, 131 [1st Dept 1998] [finding that "to the extent plaintiff argues that real reason he was terminated was not because of his failure to attend a meeting [as stated by his employer] but because he was being used as a scapegoat . . . plaintiff's cause of action, if any, would not be for defamation"]).
Accordingly, as the statement issue was not defamatory the cause of action for defamation must be dismissed, and the court need not reach whether plaintiff adequately alleged special damages or whether the statement is protected by the common interest privilege.
CONCLUSION
In view of the above, it is
ORDERED that the motion to dismiss is granted and the complaint is dismissed with costs and disbursements to defendants as taxed by the Clerk of the Court; and it further
ORDERED that the Clerk is directed to enter judgment accordingly.