Opinion
No. 650154/2010.
2013-02-8
J.K. DENTAL LAB SERVICES, INC., Oral Design New York, Ltd, and Jason Kim, Plaintiffs, v. Jack MANNO, Vivian Manno, Peter Kouvaris, Craftsman Dental Lab, Inc., Prizm Associates, Inc., All Access Dental, and Peter Kouvaris Dental Studio, Defendants.
Wachtel, Masyr & Missry LLP for the plaintiffs. Guararra & Zaitz for the defendant.
Wachtel, Masyr & Missry LLP for the plaintiffs. Guararra & Zaitz for the defendant.
SHIRLEY WERNER KORNREICH, J.
Motion Sequence Numbers 003 and 004 are consolidated for disposition.
The two remaining defendants, Peter Kouvaris and Peter Kouvaris Dental Studio (PKDS) (collectively, the Kouvaris Defendants), moved for summary judgment pursuant to CPLR 3212. Mot. Seq. No. 003. Plaintiff J.K. Dental Lab Services, Inc. (JK) opposed the Kouvaris Defendants' motion and also filed its own motion for partial summary judgment. Mot. Seq. No. 004. The motions are granted in part and denied in part for the reasons that follow.
Factual Background & Procedural History
The following facts are undisputed.
In 1991, plaintiff Jason Kim founded JK, a dental lab located in Great Neck that produced prosthetic dental products such as crowns and bridges. JK's clients were primarily dentists. In 1996, former defendant Jack Manno was hired by JK to be its Chief Administrative Officer. Manno was responsible for the operations of JK, such as human resources and marketing, but did not engage in the actual business of producing prosthetic dental products-that was Kim's job. In 1998, Kim founded plaintiff Oral Design New York, Ltd. (Oral Design), a separate company that engaged in substantially the same business as JK. As Kim could not manage the labs of both companies, he sought to hire someone to take over his responsibilities at JK so he could focus on running Oral Design. To that effect, Kim and Manno hired Kouvaris.
On August 1, 2000, JK and Kouvaris entered into an Employment Agreement whereby Kouvaris would be paid an annual base salary of $180,000 to run JK's lab for an initial term of four years. Pursuant to Section 1, the Employment Agreement would automatically renew for an additional year unless the parties issued a notice of termination at least 30 days prior to its expiration. Section 4.B provided that Kouvaris would also receive “incentive compensation equal to one percent (1%) of gross annual Group Cosmetic sales with respect to non-metal restorations.” Section 4.C granted Kouvaris the option to purchase up to 1,000 shares of JK for $400 per share. Kouvaris never exercised that option.
Section 8 set forth that theft of company property is grounds for termination for cause. Section 9 indicated that Kouvaris “acknowledges that information regarding the business and affairs of the Company is confidential and/or proprietary.” Section 9(c), titled “Non–Competition” (the Restrictive Covenant), provided that Kouvaris could not do the following while employed with JK and for six months thereafter: (1) induce or solicit JK employees to leave the company; (2) induce or solicit JK's customers to do business with a competitor of JK; and (3) be employed in a competing business in New York and Nassau Counties. Section 10 entitled Kouvaris to a termination payment calculated based on his annual base salary and incentive compensation, but only if Kouvaris was not terminated for cause.
On July 1, 2003, JK's board executed a resolution granting 900 shares to Kouvaris in recognition of his “substantial contribution made to the Company.” As of September 1, 2004, Kim owned 5,100 shares, Manno owned 3,000 shares, and Kouvaris owned 1,900 shares.
In 2005, JK moved its offices from Great Neck to Port Washington. To finance the move, JK borrowed over $1 million from Bank of America (BOA). BOA was granted a security interest in all of JK's assets and the loan was personally guaranteed by Kim, Manno, and Kouvaris.
After the original four year term of the Employment Agreement elapsed, Kouvaris was occasionally given base salary raises. However, no written amendment to the Employment Agreement was ever executed. Kouvaris' base salary increased to $200,000 in 2004, $250,000 in 2005, and $300,000 in 2006. To date, Kouvaris has not received any incentive compensation.
In 2008, as the economy entered a recession, JK's business began to suffer, and the company faced serious cash flow problems. Kim, Manno, and Kouvaris decided that given the company's struggles and their personal guarantee of the BOA loan, they would try to sell JK and use the proceeds to pay off the loan. Their initial efforts to sell JK were unfruitful, and JK defaulted on the loan in April 2009. JK was able to buy itself some more time by negotiating an agreement with BOA to retain a financial consultant.
In June 2009, Kim, Manno, and Kouvaris entered into discussions with a company called Frontier Dental Laboratories (Frontier) regarding the sale of JK. As part of those discussions, the parties contemplated deferring some of their salary payments to allow JK to make its loan payments to BOA. However, only Kim and Manno signed an agreement to defer a portion their salaries, which they executed on August 14, 2009. Nevertheless, as of August 28, 2009, JK began withholding a portion of Kouvaris' salary as well. In September 2009, JK and Frontier terminated their negotiations because Frontier was unwilling to assume JK's debt on the BOA loan. On September 10, 2009, Kim, Manno, and Kouvaris executed a Forbearance Agreement with BOA whereby BOA agreed not to enforce its rights under the loan until November 30, 2009. On November 18, 2009, JK and Frontier resumed negotiations and the companies reached a tentative agreement to sell JK for $1 million in early December 2009. On December 22, 2009, a letter of intent (the LOI) was drafted to reflect the parties' understanding of the terms of sale. Manno refused to sign the LOI because it contained a five-year non-compete/non-solicitation clause. On December 31, 2009, Manno resigned from JK. That same day, BOA commenced an action to enforce its rights under the Forbearance Agreement.
Kouvaris did not have an initial objection to the non-compete/non-solicitation clause because an essential condition of the sale was that Kouvaris would continue to operate JK's lab for Frontier. Kouvaris' only condition was that Frontier give him an employment contract with a salary that he found to be satisfactory. Accordingly, Kouvaris and Frontier entered into negotiations over the terms of Kouvaris' prospective employment. However, by January 15, 2010, the negotiations broke down since Frontier was unwilling to sign Kouvaris to a long term deal and yet still insisted that he sign a non-compete. On January 17, 2010, a Sunday, Kouvaris went to JK's offices and took home laptops, a camera, and various lab equipment. On January 19, 2010, after an employee noticed that the equipment was missing, JK's IT Manager reviewed JK's security tapes and saw that Kouvaris had taken the equipment. Kim was informed of Kouvaris' actions on January 21, 2010. The next day, January 22, Kim confronted Kouvaris and Kouvaris admitted taking the equipment and explained that he did so out of concern that BOA would seize it as part of its lawsuit against JK. Kim told Kouvaris to return the equipment, and Kouvaris agreed to do so.
The parties' dispute as to if and when the equipment was returned is not material because, as discussed infra, part.II.A.1, the relevant question is why Kouvaris was fired. When and if the equipment was returned by Kouvaris sheds no light on this issue. Additionally, the parties dispute whether some of the equipment originally belonged to Kouvaris. This issue also is immaterial because the record establishes that at least some of the equipment belonged to JK, such that Kouvaris' taking of it would be grounds for termination (though JK's actual motive is clearly a disputed fact).
Later that week, Kouvaris and Frontier resumed negotiations. At some point during the prior year, and again on or about January 22, 2010, Kouvaris emailed certain company documents from his JK computer to his personal email accounts. None of these documents included a list of JK's clients. By January 25, 2010, it appeared that Kouvaris and Frontier were close to executing an employment agreement and both Kim and Kouvaris were close to signing the LOI. However, the negotiations broke down for the final time on January 26, 2010. On January 27, 2010, after Kouvaris and Frontier failed to reach an employment agreement, Kouvaris refused to sign the LOI. Later that day, Kouvaris was sent a letter terminating his employment with JK. The letter specifically set forth that the termination was due to Kouvaris' removal of the equipment from JK's lab.
On February 4, 2010, Kouvaris opened up his own dental lab in the offices of Dr. Dean Vafiadis, a former JK client. The lab was incorporated as PKDS on April 6, 2010. Kouvaris hired Gail Broderick, JK's former lab director. Kouvaris also hired other former JK employees, including Sang Lee, Michele Kim, and Luis Navarro. PKDS's clients included former JK clients that Kouvaris had worked with, such as Drs. Ian Buckle, John Heimke, Terry Shapiro, Lori Thornhill, Jackie Rodgers, Vincent Romano, and Brian Kantor. Plaintiffs contend that Kouvaris had under-billed these doctors for work done with JK as part of a purported scheme to retain them as clients when he opened up his own lab.
Plaintiffs commenced this action on March 4, 2010. On March 5, 2010, plaintiffs moved by order to show cause for a preliminary injunction prohibiting, inter alia, Kouvaris from indefinitely competing with JK. The motion was denied in an Order dated March 26, 2010. After discovery began, JK settled with former defendants Jack Manno, Vivian Manno, Craftsman Dental Lab, Inc., Prizm Associates, Inc., and All Access Dental. On October 12, 2010, plaintiffs filed an Amended Complaint, asserting seven causes of action against the Kouvaris Defendants: (1) breach of contract (the Employment Agreement) against Kouvaris; (2) breach of fiduciary duty against Kouvaris; (3) misappropriation of trade secrets against Kouvaris and PKDS; (4) tortious interference with contract against Kouvaris and PKDS; (5) unfair competition against Kouvaris and PKDS; (6) breach of contract against Kouvaris (for failure to pay for his JK shares); and (7) permanent injunctive relief against Kouvaris and PKDS.
On October 14, 2010, the Kouvaris Defendants filed an Answer which contains six counterclaims against JK: (1) violations of §§ 193 & 198(1–a) of the New York Labor Law (for failure to pay portions of Kouvaris' base salary); (2) breach of contract (for failure to pay portions of Kouvaris' base salary); (3) unjust enrichment; (4) breach of contract (for failure to pay incentive compensation and the termination payment); (5) violations of §§ 193 & 198(1–a) of the New York Labor Law (for failure to pay incentive compensation); and (6) violations of §§ 193 & 198(1–a) of the New York Labor Law (for failure to pay the termination payment).
The Kouvaris Defendants' motion seeks summary judgment on all of plaintiffs' causes of actions and on the counterclaims against JK. JK's motion seeks partial summary judgment on Kouvaris' alleged breach of the Restrictive Covenant and the counterclaims.
Motions for Summary Judgment
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists. Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 325 (1986). The burden is upon the moving party to make a prima facie showing of entitlement to summary judgment as a matter of law. Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980); Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 N.Y.2d 1065, 1067 (1979). A failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. Ayotte v. Gervasio, 81 N.Y.2d 1062, 1063 (1993). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact. Alvarez, 68 N.Y.2d at 324;Zuckerman, 49 N.Y.2d at 562. The papers submitted in support of and in opposition to a summary judgment motion are examined in the light most favorable to the party opposing the motion. Martin v. Briggs, 235 A.D.2d 192, 196 (1st Dept 1997). Mere conclusions, unsubstantiated allegations, or expressions of hope are insufficient to defeat a summary judgment motion. Zuckerman, 49 N.Y.2d at 562. Upon the completion of the court's examination of all the documents submitted in connection with a summary judgment motion, the motion must be denied if there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 N.Y.2d 223, 231 (1978). The Kouvaris Defendants' Motion (Seq. No. 003) Breach of the Employment Agreement
Plaintiffs allege that Kouvaris breached the Restrictive Covenant by soliciting and conducting business with JK's customers, inducing JK's employees to leave JK and work for PKDS, and engaging in a similar business as JK in New York County. There is no question that Kouvaris opened up a competing lab in New York County and immediately began doing business with JK's customers. However, Kouvaris argues that the Restrictive Covenant is unenforceable because: (I) it does not involve trade secrets; (ii) JK breached the Employment Agreement; (iii) JK terminated the Employment Agreement by firing Kouvaris without “good cause”; and (iv) judicial estoppel bars its enforcement.
Restrictive covenants that are “temporally and geographically reasonable and necessary to protect plaintiff's legitimate business interests” are enforceable. See Delta Enter. Corp. v. Cohen, 93 AD3d 411, 412 (1st Dept 2012). “The modern, prevailing common-law standard of reasonableness for employee agreements not to compete applies a three-pronged test. A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. A violation of any prong renders the covenant invalid.” BDO Seidman v. Hirshberg, 93 N.Y.2d 382, 388–89 (1999) (emphasis in original; internal citations omitted).
The Restrictive Covenant satisfies these requirements. It is reasonable in that it is limited to a six month period, applies only to JK customers in New York and Nassau Counties, and pertains only to work that is substantially the same as that of JK. The covenant protects a legitimate business interest—the goodwill that JK developed over the years with its customers. An “employer has a legitimate interest in preventing former employees from exploiting or appropriating the goodwill of a client or customer, which had been created and maintained at the employer's expense, to the employer's competitive detriment.' “ Crown IT Servs., Inc. v. Koval–Olsen, 11 AD3d 263, 265 (1st Dept 2004) (quoting BDO Seidman, 93 N.Y.2d at 392).
Moreover, whether JK's customer list is a confidential trade secret is a separate inquiry and has no bearing on the enforceability of the Restrictive Covenant.
The “covenant is, on its face, reasonably limited, both temporally and geographically, and not unduly burdensome, and therefore prima facie enforceable,” and it protects JK's goodwill even in the absence of trade secrets. DS Courier Servs., Inc. v. Seebarran, 40 AD3d 271, 272 (1st Dept 2007) (internal quotation marks and citation omitted).
The court will not address this question because, as discussed infra, part II.A.4, JK has abandoned its causes of action based on its client list being a trade secret.
Furthermore, when JK moved for a preliminary injunction, the court was not made aware of the Employment Agreement. This circumstance is the basis for the judicial estoppel defense. The Kouvaris Defendants contend that in March 2010, when JK sought a preliminary injunction, it failed to mention the Employment Agreement, which would otherwise require it to acknowledge that the injunction that it sought could last for only a six month period, and not indefinitely. Kim explains that he did not possess a copy of the Employment Agreement because he did not sign it; rather, Manno signed it on JK's behalf.
Remarkably, JK itself is seeking to assert judicial estoppel against the Kouvaris Defendants based on the very same circumstance of failure to acknowledge the existence of the Employment Agreement. JK argues that Kouvaris falsely informed the court that he never entered into an employment agreement with JK that contained a restrictive covenant. Kouvaris explains that, at the time that he started his business, he had forgotten that he had ever had an employment agreement containing a restrictive covenant, which was entered into 10 years earlier. It was only when he was shown a copy of it during the pendency of this action (through documents that JK produced in discovery) that he recalled it. Neither explanation by Kim or Kouvaris is entirely satisfactory, but both are sufficient to nullify each side's attempt to rely on judicial estoppel to achieve their ends in this action. The court is not persuaded that adequate evidence has been propounded showing a knowing misrepresentation by either party. See Frank Crystal & Co., Inc. v. Dillmann, 84 AD3d 704 (1st Dept 2011).
Nevertheless, though the Restrictive Covenant is valid on its face, the inquiry does not end here. There are questions of fact as to whether JK breached the Employment Agreement. Such alleged breaches, if established at trial, would preclude JK from enforcing the Restrictive Covenant. See DeCapua v. Dine–A–Mate, Inc., 292 A.D.2d 489, 491 (2d Dept 2002) (“[W]hen a party benefitting from a restrictive covenant in a contract breaches that contract, the covenant is not valid and enforceable against the other party, because the benefitting party was responsible for the breach.”).
The record establishes that Kouvaris was JK's most valuable employee. He was so essential to JK's business that Frontier viewed his continued employment as essential to acquiring JK. While Kouvaris admitted to taking certain equipment from JK's lab on January 17, 2010, he did so in the presence of the security camera that he installed and made no attempt to deny his actions when confronted. Moreover, he provided an explanation for his reasons for removing the equipment. Yet, despite his importance to JK and notwithstanding Kouvaris' explanation, Kim fired him—purportedly for stealing, not for refusing to sign the LOI—though Kouvaris was only fired after the negotiations with Frontier failed approximately a week after Kouvaris took the equipment. Nevertheless, on this motion for summary judgment, the court cannot assess the parties' credibility as to whether Kouvaris was fired for stealing or whether such grounds were pretextual. However, even if Kouvaris was actually fired for cause, summary judgment still cannot be granted on the enforceability of the restrictive covenant because, as discussed infra, part II.A.5, there are question of fact as to whether JK breached the Employment Agreement by improperly withholding base salary payments and failing to pay Kouvaris his incentive compensation and termination payment. Finally, there are questions of fact as towhether Kouvaris wrongly solicited JK's employees to work for PKDS.
Breach of Fiduciary Duty
A fiduciary duty is a relationship of higher trust that arises out of an obligation to act for or give advice to another upon matters within the scope of the relation. EBCI, Inc. v. Goldman Sachs, 5 NY3d 11, 31 (2005). The “relationship between shareholders in a close corporation, vis-à-vis each other, is akin to that between partners and imposes a high degree of fidelity and good faith.” Brunetti v. Musallam, 11 AD3d 280, 281 (1st Dept 2004) (internal quotation marks and citation omitted).
Plaintiffs allege that, as a shareholder, director, officer and employee of JK, Kouvaris owed JK a duty of loyalty, honesty, good faith and fair dealing, which he breached by: (I) stealing JK's confidential information; (ii) stealing JK's property; (iii) using the stolen confidential information and property to solicit JK's customers and unfairly compete against JK; (iv) inducing employees of JK to leave JK's employment; and (v) under billing JK's customers with whom he subsequently did business.
First, the confidential information that Kouvaris is alleged to have stolen was contained in attachments to emails that Kouvaris forwarded to his personal email accounts on or before January 22, 2010. Kouvaris had the authority to possess these documents by virtue of being an employee and officer of JK. The mere act of forwarding the documents to his personal email accounts before he was terminated by JK is not a breach of fiduciary duty.
Second, as JK correctly contends, stealing company property is a violation of the Employment Agreement and grounds for termination. Thus, JK cannot maintain a breach of fiduciary duty claim for such theft because it is improperly duplicative of its breach of contract claim.
Third, the manner in which Kouvaris could complete with JK after his termination is governed by the Restrictive Covenant and a violation of that covenant is a breach of contract, not a breach of fiduciary duty. That being said, JK cannot otherwise maintain a breach of fiduciary duty claim for unfair competition because Kouvaris did not misappropriate any of JK's trade secrets.
Fourth, Kouvaris' ability to induce JK's employees to leave and work for PKDS is also governed by the Employment Agreement, rendering a claim for breach of fiduciary duty duplicative.
Fifth, there are questions of fact that preclude summary judgment on Kouvaris' alleged under-billing of JK's clients, which was purportedly done to induce them to become clients of PKDS. Kouvaris contests this allegation. This is the sole issue on which plaintiffs' breach of fiduciary claim may proceed.
Tortious Interference With Contract
“The elements of a tortious interference with contract claim are well established—the existence of a valid contract, the tortfeasor's knowledge of the contract and intentional interference with it, the resulting breach and damages.” Hoag v. Chancellor, Inc., 246 A.D.2d 224, 228 (1st Dept 1998).
JK appears to have abandoned this cause of action and, instead, seeks to recast this claim as a cause of action for tortious interference with business relations, which is a distinct cause of action with different elements. See Carvel Corp. v. Noonan, 3 NY3d 182, 189 (2004). Nonetheless, the court finds that the Amended Complaint properly pleads the elements of this cause of action and will consider JK's arguments as to the merits of this claim. “To prevail on a claim for tortious interference with business relations in New York, a party must prove (1) that it had a business relationship with a third party; (2) that the defendant knew of that relationship and intentionally interfered with it; (3) that the defendant acted solely out of malice or used improper or illegal means that amounted to a crime or independent tort; and (4) that the defendant's interference caused injury to the relationship with the third party.” Amaranth LLC v. J.P. Morgan Chase & Co., 71 AD3d 40, 47 (1st Dept 2009).
The question of whether the Kouvaris Defendants' solicitation of JK's clients was improper is governed by the Employment Agreement. Thus, even if such solicitation was a breach of contract, it was not an independent tort. Ergo, summary judgment is granted and this cause of action is dismissed.
Misappropriation of Trade Secrets, Unfair Competition, Breach of Contract (for failure to pay for the JK shares), and Permanent Injunctive Relief
JK did not oppose the branches of the Kouvaris Defendants' motion on these causes of action. Therefore, summary judgment is granted, and these claims are dismissed. Additionally, permanent injunctive relief is a remedy, not a cause of action, and can only be granted after a final adjudication on the merits.
Kouvaris' Counterclaims
All of Kouvaris' counterclaims relate to alleged unpaid compensation under the Employment Agreement. Kouvaris pleads these claims under three legal theories: (1) breach of the Employment Agreement; (2) violations of the New York Labor Law; and (3) unjust enrichment. At the outset, the court grants JK summary judgment and dismisses the quasi-contract claim for unjust enrichment counterclaim because Kouvaris' entitlement to the subject compensation is governed by contract.
As for the breach of contract claim, the analysis differs for the three categories of compensation sought by Kouvaris: (I) the withheld base salary; (ii) the unpaid incentive compensation; and (iii) the unpaid termination payment.
A portion of Kouvaris' base salary (approximately $75,000) was withheld between August 28, 2009 and his termination on January 27, 2010. JK has not alleged a viable breach against Kouvaris for this time period that impacts Kouvaris' entitlement to his entire base salary. Moreover, the record establishes that only Kim and Manno agreed to salary deferrals, not Kouvaris. The court grants summary judgment on Kouvaris' withheld base salary payments as there is no question of fact about liability. However, summary judgment is denied on damages as Kouvaris' entitlement to money is subject to set-offs on JK's surviving causes of action.
As for the incentive compensation, JK admits that Kouvaris was not paid any of it over the course of his ten year employment with JK. Kouvaris calculates that such compensation totals approximately $460,000. JK contends that Kouvaris is not entitled to the incentive compensation because he waived his right to it by not asserting a claim for over a decade. JK further contends that the doctrine of latches and the statue of limitations also preclude JK from collecting the incentive compensation. The court agrees with JK that the statute of limitations for a breach of contract claim (six years) prohibits Kouvaris from maintaining a claim for incentive compensation for all years prior to 2004 (six years before the action was commenced in 2010). Kouvaris' claims for unpaid annual incentive compensation accrued when he was not paid at the end of each year. Thus, summary judgment is granted to JK on Kouvaris' claims for incentive compensation for the period between 2000 and 2003. Kouvaris' incentive compensation claims for the period of 2004 through 2010 remain and shall be considered at trial.
As for the termination payment, Kouvaris was only entitled to it if he was not terminated for cause. As discussed supra, part II .A.1, there are questions of fact as to whether Kouvaris was terminated for cause. Ergo, summary judgment must be denied on whether he is entitled to a termination payment.
Finally, the Court of Appeals has conclusively held that all employees, including executives, are not generally exempt from the protections of the Labor Law. See Pachter v. Bernard Hodes Group, Inc., 10 NY3d 609 (2008). Consequently, Kouvaris may maintain a claim for liquidated damages and reasonable attorneys' fees for his unpaid base salary pursuant Labor Law § 198(1–a). Nonetheless, pursuant to § 198–c(3), Kouvaris cannot maintain a Labor Law Claim for JK's failure to pay him incentive compensation and a termination payment because Kouvaris worked “in a bona fide executive, administrative, or professional capacity” and earned more than $900 per week. See Romanello v. Intesa Sanpaolo S.p.A., 97 AD3d 449, 455 (1st Dept 2012); Fraiberg v. 4Kids Entertainment, Inc., 75 AD3d 580 (2d Dept 2010).
JK's Motion (Seq. No. 004)
JK moves for partial summary judgment on liability for Kouvaris' alleged breach of the Restrictive Covenant and for dismissal of the counterclaims. For the reasons discussed supra, part II.A.1, the court grants JK partial summary judgment on the Restrictive Covenant as valid on its face and denies summary judgment on its enforceability. For the reasons discussed supra, part II.A.5, the court grants JK partial summary judgment and dismisses the counterclaims for unjust enrichment and Labor Law claims related to incentive compensation and the termination payment. JK's motion for summary judgment is denied as to the balance of the counterclaims. Accordingly, it is
ORDERED that the motion by defendants Peter Kouvaris and Peter Kouvaris Dental Studio for summary judgment against plaintiff J.K. Dental Lab Services, Inc. (JK) is granted in part as follows: (1) JK's cause of action for breach of fiduciary duty is dismissed except for the claim that Kouvaris allegedly under-billed JK's clients; (2) JK's causes of action for tortious interference with contract and tortious interference with business relations are dismissed; (3) JK's causes of action for misappropriation of trade secrets, unfair competition, and breach of contract (for Kouvaris' alleged failure to pay for his JK shares) are dismissed; and (4) Kouvaris is granted summary judgment on liability for his for breach of contract counterclaim for JK's withholding portions of his base salary and incentive compensation from 2004 to 2010, which shall be determined at trial to account for any set-offs; the Kouvaris Defendants' motion for summary judgment is otherwise denied; and it is further
ORDERED that the motion by plaintiff J.K. Dental Lab Services, Inc. (JK) for partial summary judgment against defend ants Peter Kouvaris and Peter Kouvaris Dental Studio is granted in part as follows: (1) JK is granted partial summary judgment on the fact that the Restrictive Covenant in the Employment Agreement is valid on its face (but summary judgment is denied on its enforceability due to questions of fact about plaintiffs' alleged breaches); (2) Kouvaris' counterclaim for unjust enrichment is dismissed; (3) Kouvaris' counterclaim for incentive compensation for the period between 2000 and 2003 is dismissed on statute of limitations grounds; and (4) Kouvaris' Labor Law counterclaim relating to unpaid incentive compensation and the termination payment is dismissed; plaintiff's motion for partial summary judgment is otherwise denied; and it is further
ORDERED that the parties are to appear in Part 54, Supreme Court, New York County, 60 Centre St., rm. 228, New York, NY, for a pre-trial conference on March 19, 2013 at 11:00 in the forenoon.