Opinion
51034/15
03-29-2016
Brian Egan, Plaintiff, v. Buchanan Ingersoll & Rooney P.C., STUART P. SLOTNICK and CUMBERLAND PACKING CORP., Defendants.
Attorney for the plaintiff Blau Leonard law Group, LLC23 Green Street, Suite 303Huntington, New York 11743Attorney for the DefendantsBuchanan Ingersoll & Rooney, P.C.12900 Avenue of Americas, 30th FloorNew York, NY 10104212-440-4400
Attorney for the plaintiff Blau Leonard law Group, LLC23 Green Street, Suite 303Huntington, New York 11743Attorney for the DefendantsBuchanan Ingersoll & Rooney, P.C.12900 Avenue of Americas, 30th FloorNew York, NY 10104212-440-4400 Francois A. Rivera, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on the joint motion of the defendants Buchanan Ingersoll & Rooney P.C. (hereinafter BIR) and Cumberland Packing Corp. (hereinafter Cumberland)(BIR and Cumberland hereinafter jointly referred to as the movants), filed on November 25, 2015, under motion sequence number one for an order (1) pursuant to CPLR 3211 (a) (1) and (7) dismissing the complaint in its entirety; or in the alternative dismissing the complaint as asserted against the movants. Plaintiff Brian Egan (hereinafter Egan) has opposed the motion. - Notice of motion - Affirmation in support Exhibit 1 - 6 - Memorandum of law in support - Plaintiff's memorandum of law in opposition Movant's reply memorandum of law in further support
BACKGROUND
On February 12, 2014, Egan commenced the instant action for damages for breach of an agreement dated March 19, 2009 (hereinafter the agreement) by filing a summons and complaint with the Kings County Clerk's office. The complaint seeks monetary damages based on the movants' breach of the agreement. Allegedly, the defendants voluntarily disclosed the content of the agreement contrary to its confidentiality provision and failure to pay Egan in accordance with its terms.
The complaint alleges the following salient facts, among others. Pursuant to the agreement, Egan and Corporate Trade Inc. Media Services (hereinafter CTIMS) agreed to provide Cumberland with information and documentation to enable Cumberland to become knowledgeable of improper business practices of a third party vendor resulting in monies being illegally diverted away from Cumberland and used by the third party vendor for its own use and benefit. BIR and Stuart P. Slotnick (hereinafter Slotnick) represented Cumberland in the negotiations and drafting of the agreement.
In consideration of the agreement Cumberland agreed to pay CTIM/Egan a contingency fee of 20% of all monies recovered from the third party vendors and others by Cumberland through suit, settlement, offset remuneration, things of value or otherwise. Cumberland recovered at least $9,100,000.00 from the third party and others as a direct result of the use of the agreement. Cumberland permitted BIR and Slotnick to charge it excessive and fabricated legal services and litigation expenses for the purpose of diverting contingency fee income due and owing to CITM and Egan under the terms of the agreement.
The phrase "CTIM/Egan" appears for the first time in paragraph eleven and the phrase "Egan/CTIM" appears for the first time in paragraph twelve of the instant complaint. There is no explanation for either phrase in the preceding paragraphs of the complaint. The Court presumes that both phrases are a contraction for Egan and CTIMS.
The movants voluntarily annexed a copy of the agreement in two prior actions bearing the following index numbers, 501937/2015 and 508121/2015, as mentioned below. Egan contends that by doing so, the movants made the agreement a document available to the public in breach of its confidentiality provisions.
MOTION PAPERS
The movant's papers consists of an affirmation of their counsel and six annexed exhibits. Exhibit 1 is a copy of the instant complaint. Exhibit 2 is described as a copy of the verified complaint in a action captioned Corporate Trade Inc. Media Services v Cumberland Packing Corp. and bearing Index Number 501937/2015 (hereinafter the first action). Exhibit 3 is described as the articles of incorporation for CTIMS). Exhibit 4 is described as a copy of the complaint in a action captioned Cumberland Packing Corp. v Brian Egan and bearing Index Number 508121/2015 (hereinafter the second action). Exhibit 5 is described as a copy of the amended verified complaint in the first action. Exhibit 6 is described as a copy of Cumberland Packing Corp.'s answer, affirmative defenses and counterclaims to plaintiff's amended verified complaint and interpleader complaint in the first action.
Plaintiff has submitted a memorandum of law in opposition to the motion.
The movants have submitted a memorandum of law in reply to plaintiff's opposition and in further support of their motion.
LAW AND APPLICATION
The movants contend that Egan waived any protection of the confidentiality agreement by commencing the first action. They also jointly allege that plaintiff's identity and connection with CTIMS is publically known such that as a matter of law Egan can not be damaged by the movants disclosure of that information. The BIR defendant specifically alleges that the complaint fails to state a breach of contract claim because it contains no allegation of fact that an agreement existed between the plaintiff and BIR.
A motion to dismiss the complaint on the ground that the action is barred by documentary evidence may be granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law (Stathakos v Metropolitan Transit Authority Long Island R.R., 109 AD3d 979, 980 [2nd Dept 2013] citing Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002]). To qualify as documentary evidence, for the purpose of a motion to dismiss, the evidence must be unambiguous and of undisputed authenticity (Pasquaretto v Long Island University, 106 AD3d 794, 795 [2nd Dept 2013] citing Fontanetta v John Doe 1, 73 AD3d 78, 86 [2nd Dept 2010]). Neither affidavits, deposition testimony, nor letters are considered documentary evidence within the intendment of CPLR 3211 (a) (1) (Granada Condominium III Assn. v Palomino, 78 AD3d 996, 997 [2nd Dept 2010]).
"On a motion to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (see Stucklen v Kabro Assocs., 18 AD3d 461, 462 [2nd Dept 2005]). Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate ( see Guggenheimer v Ginzburg, 43 NY2d 268, 274—275 [1977]; Norment v Interfaith Ctr. of NY, 98 AD3d 955 [2nd Dept 2012]). Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss ( EBC I, Inc. v Goldman Sachs & Co ., 5 NY3d 11, 19 [2005]). However, bare legal conclusions are not entitled to the benefit of the presumption of truth and are not accorded every favorable inference ( see Doria v Masucci, 230 AD2d 764 [2nd Dept 1996]).
A court is, of course, permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211 (a) (7) (Sokol v Leader, 74 AD3d 1180, 1181—1182 [2nd Dept 2010] citing Rovello v Orofino Realty Co., 40 NY2d 633, 636—638 [1976]). If the court considers evidentiary material, the criterion then becomes whether the proponent of the pleading has a cause of action, not whether he has stated one (Id.). Yet, affidavits submitted by a defendant will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that the plaintiff has no cause of action (Id.). Indeed, a motion to dismiss pursuant to CPLR 3211 (a) (7) must be denied unless it has been shown that a material fact as claimed by the pleader is not a fact at all or unless it can be said that no significant dispute exists regarding it (Id.).
The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach (Meyer v North Shore—long Island Jewish Health System, Inc. —- NYS3d ——, 2016 WL 886206, 2016 NY Slip Op. 01651 [2nd Dept 2016]).
Egan's opposition is limited to legal arguments and does not include any evidentiary submission. After affording a liberal construction to the amended complaint, accepting all facts as alleged to be true and according the plaintiff the benefit of every possible inference, the Court agrees with BIR that it does not state a claim against it for breach of the agreement. In particular there is no allegation of fact that the BIR defendants entered into an agreement with the plaintiff. Rather, the complaint alleges that BIR acting in its capacity as counsel to Cumberland breached the agreement.
"When an agent acts on behalf of a disclosed principal, the agent will not be personally liable for a breach of contract unless there is clear and explicit evidence of the agent's intention to be personally bound" (Lido Beach Towers v Denis A. Miller Ins. Agency, 128 AD3d 1025, 1026 [2nd Dept 2015] citing Weinreb v. Stinchfield, 19 AD3d 482, 483 [2nd Dept 2005]). The complaint contains no allegation of fact that BIR intended to be personally bound for its action as counsel to Cumberland.
Furthermore, Egan does not have a claim against BIR based on Cumberland's alleged conduct in permitting BIR and Slotnick to charge it excessive and fabricated legal services and litigation expenses for the purpose of diverting contingency fee income due and owing to CITM and Egan. First, the complaint does not allege that Egan is a party to any contract for legal services between Cumberland and BIR. Second, the complaint does not allege any facts showing that Egan is in privity with either Cumberland or BIR with regard to their arrangement with each other for legal services. Third, the complaint does not allege any facts showing that Egan is an intended third party beneficiary of any legal services provided by BIR to Cumberland. In order to state a cause of action for breach of contract by BIR, Egan was required to plead facts sufficient, if proved, to establish that Egan was the intended beneficiary of Cumberland's legal service agreement with BIR ( see Lasalle Nat. Bank V Ernst & Young LLP , 285 AD2d 101 [1st Dept 2002]). A non-party may sue for breach of contract only if it is an intended, and not a mere incidental, beneficiary ( Id. at 108 citing Alicea v City of New York, 145 AD2d 315, 317 [1st Dept 1988]) and even then the parties' intent to benefit the third party must be apparent from the face of the contract.
In sum, the complaint alleges no facts which support a claim that BIR has a contractual obligation or duty to Egan for which it can held liable. Consequently, BIR's motion to dismiss the complaint as asserted against it must be granted.
The instant complaint alleges the existence of an agreement between Egan and Cumberland, Egan's performance pursuant to the agreement, Cumberland's breach of its agreement by violating the confidentiality provisions and by failing to pay Egan according to its terms and damages resulting from the breach. Affording a liberal construction to the instant complaint, accepting all facts as alleged to be true and according Egan the benefit of every possible inference, the complaint does set forth a cognizable claim against Cumberland for breach of the agreement (see Stucklen v Kabro Assocs., 18 AD3d 461, 462 [2nd Dept 2005]).
Cumberland's motion papers contain the following annexed exhibits: the instant complaint, a copy of the verified complaint in the first action, a copy of the complaint in the second action, a copy of the amended verified complaint in the first action, a copy of Cumberland's answer and interpleader complaint in the first action, and a copy of the articles of incorporation for CTIMS.
All of the annexed pleadings constitute documentary evidence within the intendment of CPLR 3211 (a) (1). However, neither the pleadings nor the article of incorporation either individually or collectively demonstrate that Egan does not have a cause of action. None of them demonstrate that a material fact claimed by Egan is not a fact at all (see Guggenheimer v Ginzburg, 43 NY2d 268, 274—275 [1977]).
Cumberland seeks dismissal of the complaint pursuant to CPLR 3211 (a) (1) and (7) on the basis that Egan waived any protection of the confidentiality agreement by commencing the first action. Cumberland further claims that Egan's identity and connection with CTIMS was publically known such that as a matter of law plaintiff could not be damaged by disclosure of that information. Both arguments constitute, at best, potential affirmative defenses to Egan's sufficiently plead cause of action. It is not a plaintiff's burden in drafting a complaint to allege facts demonstrating the inapplicability of all potential affirmative defenses. Rather, it is the defendants burden to conclusively establish the applicability and merits of the affirmative defenses it is claiming. Here, Cumberland is claiming Egan's waiver of confidentiality by the commencement of the first action and Egan's lack of damages by the breach of confidentiality because of the listing of his name as a director of CTIMS in its articles of incorporation. Neither argument is conclusively established by the evidence Cumberland submitted.
CTIMS is the plaintiff in the verified complaint of the first action. Brian Egan's name is not contained anywhere in the pleading. The verified complaint of the first action was amended. Brian Egan's name is not contained anywhere in the amended verified complaint. The annexed articles of incorporation of CTIMS, names Corporate Services Group, LLC as CTIMS's commercial registered agent for service of process, Catherine Egan and Amanda Egan as its Board of Directors/Trustee, Dioselina Corza as its incorporator, and Brian Egan as an additional director. The Court disagrees with Cumberland's contention that the naming of Brian Egan as an additional director of CTIMS in the articles of incorporation renders him incapable of sustaining damage as a matter of law when Cumberland voluntary disclosed that he was the individual who executed the agreement. There is nothing about the article of incorporation which proves the identity of the individual who executed the agreement.
Furthermore, Egan's complaint alleges that Cumberland breached the agreement by failing to provide him with a properly computed contingent fee. This properly plead claim is not addressed by any aspect of Cumberland's motion and therefore prevents dismissal of the complaint regardless of the success of failure of the other aspects of Cumberland's motion.
In sum, Cumberland has failed to establish that Egan does not have a cause of action. Furthermore, Cumberland has failed to establish that, as a matter of law, Egan can not be damaged by Cumberland's alleged breach of the confidentiality provision of the agreement. Cumberland is directed to serve and file its answer to the instant complaint by April 29, 2016.
CONCLUSION
Buchanan Ingersoll & Rooney P.C.'s motion to dismiss the complaint as asserted against them pursuant to CPLR 3211 (a) (7) is granted.
Cumberland Packing Corp's motion to dismiss the complaint as asserted against them pursuant to CPLR 3211 (a) (1) and (7) is denied.
The foregoing constitutes the decision and order of this Court. ENTER_______________________________X
J.S.C.