Opinion
5402-07.
Decided March 31, 2008.
COUNSEL FOR PLAINTIFF, Pryor Mandelup, Esqs., Westbury, New York.
COUNSEL FOR DEFENDANTS, (for Superformance Standler), Blank and Rome, Esqs.New York, New York, (for 101 East Main Mistlers).
Silverman, Perlstein Acampora, LLP, Jericho, New York, (for Classic Concepts Losurdo).
Chris McDonough, Esq., Melville, New York.
Superformance International, LLC ("SIL") was the importer of full size replicas of classic high performance automobiles; to wit: the MK III, the Shelby Cobra Daytona Coupe and the GT-40 that were manufactured in South Africa. The vehicles, shipped without an engine or transmission, are known as rollers. The rollers are manufactured so that an engine and transmission could be installed. Once the engines and transmissions were installed, the vehicles can be operated on the public highways.
SIL established a network of dealerships in the United States and Canada. Snakepit was one of SIL's dealerships. Snakepit asserts that it acquired the exclusive right to sell and distribute Superformance rollers in the Northeastern United States from SIL in 1997. Snakepit claims its territory extended from Maine to Washington, D.C. and west from the Atlantic Ocean to central Pennsylvania. The territory included all of New York State.
Snakepit operates its business in Freeport.
SIL did not have written dealership agreements with any of its dealerships
In October 2005, Stander formed Superformance, a California limited liability company. Stander was one of SIL's dealers. At that time, Superformance purchases SIL's rights to import and distribute rollers in the United States and Canada.
In November 2005, the dealers met at Superformance's California location. At that time, they executed an Agreement of Understanding ("Understanding"). Snakepit claims the Understanding incorporated the provisions of its previously unwritten agreement with SIL which provided it with an exclusive territory. Based on the Understanding, Snakepit claims it would henceforth be a "Level 1" dealer, formerly an exclusive dealership. Snakepit claims that it retained exclusive rights to the aforementioned territory pursuant to the Understanding.
The Understanding indicated that sales quotas would be established in the formal dealership agreement that was to be agreed upon at a later date. The Understanding further provided that Superformance could place a "Level 2" dealer in a Level 1 dealer's territory, if sales within the territory did not meet expectations. In such a circumstance, the Level 1 dealer would receive a portion of the sales price of each sale made by the Level 2 dealer.
Level 2 dealers were to be selected by joint agreement between Superformance and the Level 1 dealer.
The Understanding was executed by Snakepit and Superformance. However, the parties never subsequently executed a formal dealership agreement.
After the execution of the Understanding, Superformance established Motorsport as a Level 2 dealership in Batavia, New York. Snakepit asserts this location is within its exclusive territory. Snakepit claims that Superformance never consulted with it before establishing this Level 2 dealership and that, in any event, the Batavia location is a sham. It claims Motorsport is actually operating from a location in West Babylon. Kenneth and Andrew are the principals of Motorsports.
The Understanding prohibits dealers from installing engines and transmissions in rollers.
Defendant, Classic Concepts, Ltd. ("Classic"), operates an automobile service business in West Babylon. Defendant, Nicholas Losurdo ("Losurdo"), is the principal of Classic. Classic installs engines and transmissions in Superformance rollers and also services these vehicles.
Snakepit asserts that the Understanding constitutes a dealership agreement that incorporates the course of conduct and oral agreement it had with SIL. Superformance counters that Understanding is an unenforceable "agreement to agree". It asserts that the Understanding is incomplete and lacking in several key provisions of a dealership agreement. Superformance further asserts that any agreement Snakepit has with SIL prior to 2005 is unenforceable under the Statute of Frauds.
Prior to Superformance's purchase the import and distribution rights, SIL had been engaged in negotiations with its dealers to work out the terms of a formal dealership agreement. These negotiations failed to produce an agreement that was acceptable to the dealers except for Macro Autosports, which held the distribution rights for Canada.
After Superformance purchased the import rights and after the parties executed the Understanding, Superformance entered into negotiations with its dealers to create a formal dealership agreement. While the parties exchanged drafts and comments, they never entered into a formal dealership agreement.
The complaint alleges ten causes of action as follows:
bullet; First cause of action — breach of contract against Superformance;
bullet; Second cause of action — declaratory judgment against Superformance;
bullet; Third cause of action — Fraud against all Defendants;
bullet; Fourth cause of action — Unfair competition against all Defendants; bullet; Fifth cause of action — Misappropriation of business opportunity against all Defendants; bullet; Sixth cause of action — Misappropriation of proprietary business information against all Defendants; bullet; Seventh cause of action — Tortious interference with contract against Motorsports, Kenneth, Andrew, Classic and Losurdo; bullet; Eight cause of action — Unjust enrichment against Motorsports, Kenneth, Andrew Classic and Losurdo; bullet; Ninth cause of action — Accounting against all Defendants; and
bullet; Tenth cause of action — Defamation against Superformance and Stander.
DISCUSSION
A. Standard — Dismissal CPLR 3211(a)(7)
When deciding such a motion, the court must accept as true all of the facts alleged in the complaint and any evidentiary submissions made in opposition to the motion. 511 West 232rd Street Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002); and Sokoloff v. Harriman Estates Development Corp., 96 NY2d 409 (2001). The Court must also give the pleader the benefit of every inference which may be drawn from the pleadings. Leon v. Martinez, 84 NY2d 83 (1994). See also, Dye v. Catholic Medical Center of Brooklyn Queens, Inc., 273 AD2d 193 (2nd Dept. 2000).
When deciding a motion made pursuant to CPLR 3211(a)(7), the court must read the pleading to determine if the pleader has a cause of action and not whether the cause of action has been properly plead. Guggenheimer v. Ginzburg, 43 NY2d 268 (1977); and Rovello v. Orofino Realty Co., 40 NY2d 633 (1976). See also, Kenneth R. v. Roman Catholic Diocese of Brooklyn, 229 AD2d 159 (2nd Dept. 1997); and Goldman v. Goldman, 118 AD2d 498 (1st Dept. 1986). The court must determine from the facts as plead and the inferences which can be drawn from those facts whether the pleader has any legally cognizable cause of action. Frank v. DaimlerChrysler Corp., 292 AD2d 118 (1st Dept. 2002).
The factual allegations contained in the complaint are deemed true and afforded every favorable inference, legal conclusions or facts contradicted on the record are not entitled to such a presumption. In re Loukoumi, 285 AD2d 595 (2nd Dept. 2001); and Doria v. Masucci, 230 AD2d 764 (2nd Dept. 1996). When the movant offers evidentiary material, the court must determine whether the pleader has a cause of action, not whether one has been properly plead. Morris v. Morris, 306 AD2d 449 (2nd Dept. 2003); and Meyer v. Guinta, 262 AD2d 463 (2nd Dept. 1999).
B. Standard — Summary Judgment
Summary judgment is a drastic remedy which will be granted only when the movant established that there are no triable issues of fact. Andre v. Pomeroy, 35 NY2d 361 (1974).
The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); and Zuckerman v. City of New York 49 NY2d 557 (1980).
Once the movant has established a prima facie entitlement to judgment as a matter of law, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or must demonstrate an acceptable excuse for its failure to do so. Zuckerman v. City of New York, supra; and Davenport v. County of Nassau, 279 AD2d 497 (2nd Dept. 2001); and Bras v. Atlas Construction Corp., 166 AD2d 401 (2nd Dept. 1991).
The function of the court in deciding a motion for summary judgment is to determine if triable issues of fact exist. Matter of Suffolk County Dept. of Social Services v. James M., 83 NY2d 178 (1994); and Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957). A motion for summary judgment should be denied if the court has any doubt as to the existence of a triable issue of fact. Freese v. Schwartz, 203 AD2d 513 (2nd Dept., 1994); and Miceli v. Purex Corp., 84 AD2d 562 (2nd Dept. 1984).
When deciding a motion for summary judgment, the court must view the evidence in a light most favorable to the non-moving party and must give the non-moving party the benefit of all reasonable inferences which can be drawn from the evidence. Negri v. Stop Shop, Inc., 65 NY2d 625 (1985); and Louniakov v. M.R.O.D. Realty Corp., 282 AD2d 657 (2nd Dept. 2001). However, mere conclusions of law or fact are insufficient to defeat a motion for summary judgment. Banco Popular North America v. Victory Tax Mgt., Inc., 1 NY3d 381 (2004).
C. Superformance — Dismissal/Summary Judgment
First and Second Causes of Action
Superformance asserts it does not have a written contract with Snakepit because the Understanding lacks four essential terms; to wit: (1) territory; (2) term; (3) sales quotas; and (4) pricing. Superformance points to the prolonged negotiations with the dealers regarding a dealership agreement as evidence that the Understanding was not intended to be an enforceable formal agreement. Snakepit asserts that the Understanding, when coupled with the prior usage, custom and practice relating to SIL, create a binding and enforceable contract.
There are two types of binding preliminary agreements. The first is one in which the parties have reached agreement on all terms requiring negotiation but intend to memorialize their agreement in formally in writing. Adjustrite Systems, Inc. v. GAB Business Services, Inc., 145 F.3d 543 (2nd Cir. 1998); and Teachers Ins. and Annuity Assoc. of America v. Tribune Co., 670 F.Supp 491 (S.D.NY 1987). With such an agreement, the parties are fully bound and may demand performance even though the parties do not memorialize the agreement in writing. Id.; and Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69 (2nd Cir. 1989).
The second type is a "preliminary agreement" which is binding to a certain degree. Under such an agreement, the parties have agreed on certain terms but have left others open for subsequent negotiation. In such circumstances, the parties have no right to demand performance if they do not reach a final agreement so long as a good faith effort to negotiate the remaining terms is made and the parties do not insist on terms or conditions that were not part of the original preliminary agreement. Id.
In making the determination of whether the agreement was fully or partially binding, the court in Adjustrite Systems, Inc. v. GAB Business Services Inc., supra, considered the following factors:
". . . (1) whether there has been an express reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract that is usually committed to writing." Id. at 549.
An alternative test is set forth in Arcadian Phosphates, Inc. v. Arcadian Corp.,
supra. In this test, the court considered:
". . . (1) the language of the agreement; (2) the context of the negotiations; (3) the existence of open terms; (4) partial performance; and (5) the necessity of putting the agreement in final form, as indicated by the customary form of such transactions." Id. at 72.
The Understanding does not expressly reserve enforcement pending the negotiation and execution of a final, formal dealership agreement. Snakepit appears to have operated as a Superformance dealership after the execution of the Understanding. The record does not establish whether the Superformance and Snakepit conducted their business thereafter in accordance with the Understanding or whether they continued to operate under the oral agreement or custom and practice as existed with SIL. The record also does not discuss in any detail whether or how the Understanding changed the relationship between the importer and the dealers.
The Understanding has open terms. The duration of the dealership agreement is not contained in the Understanding. The Understanding does not specify the territory assigned to each Level 1 dealer and it leaves open the sales quotas of the dealerships. The Understanding specifically states "Quotas as laid out in the dealer agreement (to be agreed upon)."
While Superformance asserts that the Understanding leaves pricing open, pricing is set in the Understanding which sets the MSRP for each type of vehicle, the deposit due on order and when the balance is due.
The context of the negotiations also indicates an intent to enter into a more formal dealer agreement. The Understanding appears to be the first stage in the process of formalizing and structuring or restructuring the relationship between the importer and the retail dealers of rollers. It appears that such process had begun in the final year in which SIL imported rollers. During that period, SIL was attempting to negotiate formal dealership agreements with its retail dealers.
The Understanding is the outgrowth of a meeting attended by the dealers and Stander shortly after Stander formed Superformance and purchased the import rights from SIL. The fact that essential terms were left for future negotiations indicates that the Understanding was intended only to be an interim step on the road to a formal dealer agreement.
This is confirmed by the subsequent efforts by Superformance and Snakepit to negotiate a dealer agreement.
This appears to be the type of relationship in which the parties rights and obligations need to be incorporated into a written agreement. By analogy, automobile dealership agreements are required to be in writing. See, Country-Wide Leasing Corp. v. Subaru of America, Inc., 133 AD2d 735 (2nd Dept. 1987); and Crabtree Automotive, Inc. v. BMW of North America, 105 AD2d 825 (2nd Dept. 1984). In view of all the missing terms, the Court concludes the Understanding is an incomplete agreement subject to further negotiations. An incomplete agreement imposes upon the parties the obligation ". . . to negotiate together in good faith in an effort to reach final agreement within the scope that has been settled in the preliminary agreement." Teachers Ins. and Annuity Assoc. of America v. Tribune Co., supra at 498.
The parties have negotiated in good faith. Snakepit received several drafts of the proposed dealership agreement. It commented on the agreement. Despite these negotiations, Snakepit and Superformance were unable to reach an agreement.
The Stature of Frauds bars enforcement of a dealership agreement that is of indeterminate length. D N Boening, Inc. v. Kirsch Beverages, Inc., 63 NY2d 449 (1984); and Manhattan Motorcars, Inc. v. Automobil Lamborghini, S.p.A., 244 F.R.D. 204 (S.D.N.Y.2007). The agreement between Snakepit and SIL was oral. Thus, it was not enforceable. Snakepit cannot rely upon its preliminary agreement with SIL to support its claim that it has an exclusive territory.
The Understanding does not have a duration. It, too, is of indeterminate length. Thus, it too is unenforceable.
Therefore, summary judgment dismissing the first cause of action must be granted.
In the second cause of action, Snakepit seeks a declaration of its rights pursuant to the Understanding. Inasmuch as the Understanding was an incomplete agreement, it is not enforceable. Since neither party could compel enforcement, the Court cannot declare the parties rights thereunder. Accordingly, Superformance must be granted summary judgment dismissing the second cause of action.
D. East Main Street, Kenneth Mistler and Andy Mistler
1. Third Cause of Action — Fraud
The gravamen of this cause of action is that Snakepit was defrauded into permitting the establishment of a Level 2 dealership, Motorsports, in its territory. Plaintiff alleges that Stander misrepresented that Motorsport was located in Batavia, New York over 350 miles from Snakepit's location in Freeport while, in fact, Motorsport was operating in West Babylon only 10 miles away from Snakepit's place of business.
The elements of common law fraud are "misrepresentation of a material existing fact, falsity, scienter, deception and injury." Channel Master Corp. v. Aluminum Limited Sales, Inc., 4 NY2d 403, 407 (1958); and Dalessio v. Kressler , 6 AD3d 57 (2nd Dept. 2004). Reasonable reliance is an element of a cause of action for fraud. KNK Enterprises, Inc. v. Harriman Enterprises, Inc. , 33 AD3d 872 (2nd Dept. 2006); and Harris v. Camilleri, 77 AD2d 861 (2nd Dept. 1980).
Snakepit does not allege in the complaint that Motorsport or Mistler made any representations to it. The complaint specifically alleges that Stander informed Snakepit that Superformance was establishing a Level 2 dealership in Batavia.
Snakepit has not submitted any evidentiary material indicating that Motorsport, Mistler or anyone acting of their behalf made any misleading or false statements to Snakepit.
While Snakepit may have a valid cause of action for fraud against Stander and Superformance, it does not have a such a cause of action against Motorsport or the Mistler. Therefore, the third cause of action must be dismissed as to these Defendants.
2. Unfair Competition
The complaint alleges that these Defendants misappropriated Snakepit's exclusive territorial rights, customer base, marketing strategy and goodwill for the purposes of undercutting and competing with Snakepit.
New York recognizes seven bases for a claim of unfair competition. They are: (1) monopoly; (2) restraint of trade; (3) trade secrets; (4) trademark or trade name infringement; (5) palming off; (6) misappropriation; and (7) false labeling or advertising. 2 NY PJI3d 3:58, p. 535 (2008). Snakepit does not allege that Motorsport or the Mistler engaged in monopolistic practices or practices that were in restraint of trade. They also failed to provide any evidence that Motorsport or the Mistler engaged in such practices.
Snakepit does not allege it has any trademarks or a trade name or that Motorsport misappropriated them.
This action does not involve false advertising, labeling or palming off. Snakepit alleges that Motorsport misappropriated its territory. To assert such a claim, Snakepit would have to establish that it had an exclusive right to a territory. However, Snakepit did not have any contractual rights that made it an exclusive, Level 1 dealership in this territory.
Snakepit offers no evidence that it has any information that should be accorded any trade secret protection [See, Ashland Mgt. Inc. v. Janien, 82 NY2d 395 (1993); and Beverage Marketing USA, Inc. v. South Beach Beverage Co., Inc. , 20 AD3d 439 (2nd Dept. 2005); and Eagle Comtronics, Inc. v. Pico, Inc., 89 AD2d 803, (4th Dept. 1982)] or that Motorsport or Mistler misappropriated any trade secrets.
3. Misappropriation of Business Opportunity
The elements of a cause of action for intentional interference with prospective business relations are that (1) the defendant knew of the proposed business relations between the plaintiff and a third party; (2) the defendant intentionally interfered with the proposed business relations; (3) the parties would have entered into the proposed business relations but for defendant's interference; (4) the defendant's interference was done in a wrongful manner; and (5) plaintiff sustained damages. NBT Bancorp v. Fleet/Norstar Financial Group, Inc., 87 NY2d 614 (1996); and Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 NY2d 183 (1980).
Wrongful conduct for this purpose requires that the interference with the proposed business relationship be caused by physical violence, fraud, misrepresentation, civil suit or criminal prosecution. Guard-Life Corp. v. S. Parker Hardware Manufacturing Corp., supra; and BGW Development Corp. v. Mount Kisco Lodge No. 1552 of the Benevolent and Protective Order of Elks of the United States of America, Inc., 247 AD2d 565 (2nd Dept. 1998). Alternatively, wrongful conduct involves interfering with a contractual or prospective business relationship in breach of a fiduciary duty such as that owed by an employee to an employer. Hayes v. Case-Hoyt Corp., 262 AD2d 1018 (4th Dept. 1999). Snakepit's complaint does not contain any of the allegations necessary to establish such a cause of action. Furthermore, Snakepit fails to place before the Court any evidence that Motorsport engaged in any improper or prohibited conduct. Snakepit and Motorsport did not have a fiduciary relationship. Therefore, the cause of action for misappropriation of business opportunity must be dismissed.
4. Misappropriation of Proprietary Information
Snakepit alleges these Defendants misappropriated its customer list and marketing strategy.
A customer list will be treated as a trade secret where the names and addresses of the customer are not known in the trade or can be obtained only through extraordinary effort. Stanley Tulchin Assoc., Inc. v. Vignola, 186 AD2d 183 (2nd Dept.1992); and Greenwich Mills Co. Inc. v. Barrie House Coffee Co., 91 AD2d 398 (2nd Dept. 1983). This is especially true where the customers' patronage has been secured through years of effort and advertising involving a substantial expenditure of time and money. Leo Silfen, Inc. v. Cream, 29 NY2d 387 (1972); and WMW Machinery Co. Inc. v. Koerber AG, 240 AD2d 400 (2nd Dept. 1997).
However, trade secret protection will not be accorded to customer lists where the names and addresses of the customers are readily ascertainable. Leo Silfen, Inc. v. Cream, supra; and Atmospherics Ltd. v. Hansen, 269 AD2d 497 (2nd Dept. 2000).
Trade secrets are a formula, pattern, device or compilation of information which gives the possessor of the information an advantage over a competitor who does not possess the information. Ashland Mgt. Inc. v. Janien, supra; and Beverage Marketing USA, Inc. v. South Beach Beverage Co., Inc., supra; and Eagle Comtronics, Inc. v. Pico, Inc., supra.
Snakepit has failed to establish that it has a customer list. It also has failed to establish that even if it did, its customer list could be considered a trade secret.
Superformance rollers are high-end luxury items purchased by classic sports car enthusiasts. The price paid is fixed by Superformance. Even under the Understanding, dealers are not permitted to sell vehicles for less than the MSRP This appears to be a business in which the customer finds the dealer.
Snakepit also offers no evidence that it has a marketing strategy that would be a trade secret.
Therefore, this cause of action must be dismissed.
5. Tortious Interference with contract
Tortious interference with contract involves an existing contract between plaintiff and a third party, defendant's knowledge of the contract, defendant intentionally procuring the breach of that contract and damages. Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413 (1996); Kronos, Inc. v. AVX Corp., 81 NY2d 90 (1993); and Bernberg v. Health Management Systems, Inc., 303 AD2d 348 (2nd Dept. 2003).
Since Snakepit did not have a contract with Superformance, Motorsport and the Mistler cannot have induced its breach. Therefore, this cause of action must be dismissed.
6. Unjust Enrichment
To establish a claim for unjust enrichment, plaintiff must establish that plaintiff performed services for the defendant which resulted in the defendant being unjustly enriched. Clark v. Daby, 300 AD2d 732 (3rd Dept. 2002); and Kagan v. K-Tel Entertainment, Inc., 172 AD2d 375 (1st Dept., 1991). Plaintiff must establish that the services were performed at the request or behest of the defendant. Clark v. Daby, id.; Prestige Caterers v. Kaufman, 290 AD2d 295 (1st Dept. 2002); and Lakeville Pace Mechanical, Inc. v. Elmar Realty Corp., 276 AD2d 673 (2nd Dept. 2000).
Such proof is lacking in this case. Therefore, this cause of action must be dismissed as to Motorsport and the Mistler.
7. Accounting
In order to maintain an action for an accounting, the party seeking the accounting must establish that a fiduciary or trust relationship exists. Schantz v. Oakman, 163 NY 148 (1900); Akkaya v. Prime Time Transport, 45 AD3d 616 (2nd Dept. 2007); and Darlagiannis v. Darlagiannis, 48 AD2d 875 (2nd Dept. 1975).
Snakepit has failed to establish that a fiduciary relationship existed between Motorsport and Mistler and itself. Thus, this cause of action must be dismissed.
D. Classic Concepts, Inc. and Nicholas Losurdo
Superformance rollers are sold without an engine or transmission. The dealers are not permitted to install the engine or transmission. In order to make the vehicles operable, the purchaser must have a mechanic install and engine and transmission.
Classic operates an auto service business in West Babylon. Losurdo is the principal of that business. Classic installs engines an transmissions in Superformance rollers. They also service the vehicles.
Snakepit offers no evidence to support any of the causes of action plead against these Defendants.
Neither Classic nor Losurdo were involved in the sale or marketing of Superformance rollers. The only relationship Classic and Losurdo had with Snakepit is that they installed engines and transmissions in rollers and serviced such vehicles. However, Losurdo and Classic performed these services pursuant to separate agreements with the customers. Classic and Losurdo did not have a contract with Snakepit or any of the other parties to this action in regard to these activities.
Simply stated, Classic and Losurdo were not involved in any of the transactions which give rise to this action. Therefore, they should be granted summary judgment dismissing the complaint as to them.
E. Plaintiff's Motion to Amend
Plaintiff misnamed Superformance International, LLC as the Defendant in this action. The proper name of the defendant is Superformance, LLC.
The misnaming of a defendant is a non-prejudicial mistake which it should be permitted to correct. Cutting Edge, Inc. v. Santora , 4 AD3d 867 (4th Dept. 2004); and Covino v. Alside Aluminum Supply Co., 42 AD2d 77 (4th Dept. 1973); and CPLR 2001. Such an application is one to correct the error (CPLR 2001) and for leave to serve an amended complaint (CPLR 3025[b]). Frankart Furniture Staten Island, Inc. v. Forest Mall Assocs., 159 AD2d 322 (1st Dept. 1990). Thus, to the extent Plaintiff seeks to amend the caption of this action, the motion must be granted.
Plaintiff seeks add Superformance as a defendant in the unjust enrichment cause of action.
"Leave to serve amended pleadings shall be freely given' absent prejudice and surprise resulting from the delay. (CPLR 3025[b]; see Fahey v. County of Ontario, 44 NY2d 934; Faracy v. McGraw Edison Corp., 229 AD2d 463)" Northbay Construction Co., Inc. v. Bauco Construction Corp., 275 AD2d 310, 311 (2nd Dept. 2000). See also, Nikac v. Rujak, 276 AD2d 443 (2nd Dept. 2000) and Goldstein v. St. John's Episcopal Hosp., 267 AD2d 426 (2nd Dept. 1999).
The determination of whether to deny or permit an amendment is entrusted to the sound discretion of the court. See, Liendo v. Long Island Jewish Med. Ctr., 273 AD2d 445 (2nd Dept. 2000); and Henderson v. Gulati, 270 AD2d 308 (2nd Dept. 2000)
The party seeking leave to serve an amended pleading must make an evidentiary showing that the proposed amendment has merit. Ruffing v. Union Carbide Corp., 308 AD2d 526 (2nd Dept. 2003); Mohan v. Hollander, 303 AD2d 473 (2nd Dept. 2003); and Curran v. Auto Lab Service Center, Inc., 280 AD2d 636 (2nd Dept. 2001).
The court will not consider the merits of the proposed amendment unless the proposed amendment is insufficient as a matter of law or totally devoid of merit. Sunrise Plaza Associates, L.P. v. International Summit Equities Corp., 288 AD2d 300 (2nd Dept., 2001); and Norman v. Ferrara, 107 AD2d 739 (2nd Dept., 1985).
In this case, the proposed amendment is totally devoid of merit. The essence of a cause of action for unjust enrichment is that one party benefitted at the other's expense. Conlon v. Teicher , 8 AD3d 606 (2nd Dept. 2004); and Waldman v. Englishtown Sportswear, Ltd., 92 AD2d 833 (1st Dept. 1983). In this circumstance, Snakepit offers no evidence that Superformance benefitted at Snakepit's expense. In the absence of a written contract, Snakepit was a distributor of Superformance rollers which could be terminated at any time, with or without cause. Since the proposed amendment is devoid of merit, the leave to amend must be denied.
Accordingly, it is,
ORDERED, that Plaintiff's motion to correct the caption to reflect the proper name of the Defendant as Superformance, LLC is granted and the caption of the action is deemed amended to reflect such correction; and it is further,
ORDERED, that the motion of Defendants Superformance, LLC and Stander for summary judgment dismissing the first and second causes of action is granted. The first and second causes of action are hereby dismissed; and it is further,
ORDERED, that the motion of Defendants East Main Street, Inc. d/b/a 101 Motorsports, Kenneth Mistler and Andrew Mistler for summary judgment dismissing the complaint as to them is granted; and it is further,
ORDERED, that the motion of the Defendants Classic Concepts, Ltd. and Nicholas Losurdo for summary judgment dismissing the complaint as to them is granted; and it is further,
ORDERED, that Plaintiff's motion for leave to serve an amended complaint alleging a cause of action for unjust enrichment against Superformance is denied; and it is further,
ORDERED, that the remaining causes of action against Defendant Superformance LLC and Stander are hereby severed and continued. Counsel for the remaining parties shall appear for a conference on May 9, 2008 at 9:30 a.m.
This constitutes the decision and Order of the Court.