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holding that, in a motion to dismiss, the court may not rely upon affidavits or other materials addressed to the truth or falsity of plaintiff's factual assertions
Summary of this case from Complete Business Solutions, Inc. v. MauroOpinion
No. 99 C 7599
August 9, 2000
MEMORANDUM OPINION AND ORDER
Plaintiff Automated Concepts Incorporated ("ACI") has sued defendants Ted Weaver ("Weaver") and AnswerThink for breach of contract, breach of the duty of loyalty, tortious interference with contract, and tortious interference with economic advantage. Defendants have moved to dismiss the Complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. ("Rule") 12(b)(6). For the reasons set forth below, the Court grants in part and denies in part the motion.
Facts
ACI operates a computer and information systems and consulting firm that builds high technology business information management systems. (Compl. ¶ 6.) ACI's principal place of business and state of incorporation is New York. (Id. ¶ 4.) ACI operates offices located in New York, New Jersey, and Illinois. (Id. ¶ 1.) In November 1998, ACI hired defendant Weaver as the Practice Manager of ACI's Knowledge Management practice at its Illinois office. (Id. ¶ 7.) When ACI hired Weaver, ACI and Weaver entered into an employment agreement containing restrictive covenant, which included a non-solicitation clause. (Compl., Ex. 1, Agreement ("Agreement") ¶ 7.) The terms of the agreement highlight the confidential nature of ACI's affairs and specifically refer to "confidential information, trade secrets . . . [and] copyright-protected information," (Id. ¶ 6.1.) ACI also alleges that "the goodwill and competitive ability of ACI depends, among other things, upon its keeping such services and information confidential . . . [and that] disclosure of such confidential information would irreparably damage ACI and its Clients." (Id. ¶ 6.2.) The specific provision at issue reads as follows:
RESTRICTIVE COVENANT
7.1 During the term of this Agreement and for one year following termination of EMPLOYEE'S employment for any reason: (i) Employee shall not, directly or indirectly, either as an individual, as an employee or member of a partnership, or as an employee, officer, director or stockholder of any corporation, solicit or accept, or advise anyone else to solicit or accept, any business for data processing services, computer software development, and related activities from any Client of ACI, or from the personnel of any Client of ACI with whom EMPLOYEE transacted any business or from whom EMPLOYEE solicited any business during the term EMPLOYEE was employed by ACI; (ii) EMPLOYEE shall not offer employment to or advise anyone else to offer employment to, any employee of ACI, or any former employee of ACI during such period:
( Id. ¶ 7 (emphasis added).)
As director of ACI's Knowledge Management practice group, thirteen highly-skilled employees directly reported to Weaver. (Compl. ¶¶ 10, 18.) Both Weaver and the members of the Knowledge Management group have and used task-specific expertise in the area of business information management technology. ( Id. ¶¶ 10, 18.) ACI alleges that both during and after his employment with ACI, Weaver solicited the employees of ACI or former employees of ACI, and successfully solicited three key employees — Jon Mika, Ofer Gal, and David Veith — to work for AnswerThink. ( Id. ¶ 15, 16.) Further, ACI claims that AnswerThink urged Weaver's solicitation of ACI employees. ( Id. ¶ 15.)
Subsequent to his resignation in July of 1990, Weaver began working for defendant AnswerThink. ( Id. ¶ 12.) ACI claims that Weaver's solicitation and AnswerThink's inducement of that solicitation was intentional, wrongful, malicious, and intended to destroy the viability of ACI's Knowledge Management practice. ( Id. ¶ 15.) As a result of Weaver and AnswerThink's conduct, ACI's Knowledge Management practice has been deprived of the valuable services of key employees, which in turn has seriously impaired ACI's ability to honor its existing commitments to its clients. ( Id. ¶ 19, 22.)
ACI filed a complaint against defendants on November 22, 1999. In Count I, ACI alleges that Weaver "wrongfully solicited the employment of employees of ACI . . . and/or advised AnswerThink to offer employment to employees of ACI or former employees of ACI." ( Id. ¶ 21). Furthermore, as a result of Weaver's conduct, ACI alleges that it "has been deprived of the valuable services of key employees comprising approximately one-third of ACI's Knowledge Management practice." ( Id. ¶ 22.) ACI asserts that Weaver has accordingly breached the employment agreement. ( Id. ¶ 23.)
In Count II, ACI alleges nearly identical facts and adds that Weaver breached a fiduciary duty when he engaged in "intentional, wrongful, and malicious conduct designed to destroy the viability of ACI's Knowledge Management practice." ( Id. ¶ 26.) ACI alleges that Weaver's breach of fiduciary duty deprived ACI of the one-third of its Knowledge Management practice. ( Id. ¶ 28.)
In Count III, ACI alleges AnswerThink tortiously interfered with Weaver's employment agreement. ACI alleges that "while Weaver was still employed by ACI, and at times within a year since his resignation, AnswerThink, required, requested, advised, provided incentives or otherwise encouraged Weaver to wrongfully solicit the employment of employees of ACI or former employees of ACI. . . ." ( Id. ¶ 32.)
In Count IV, ACI brings forth a claim for tortious interference with economic advantage. ACI asserts that "[a]s a result of . . . [the] acts of AnswerThink and Weaver, ACI has been deprived of the valuable services of key employees . . . tortiously interfer[ing] with ACI's ability to conduct its business and honor its commitments to its clients. ( Id. ¶¶ 38, 39.)
Finally, ACI demands relief in the form of punitive damages under each of the four counts and requests attorney's fees. ( Id. ¶ 30, 35, 40 (a)-(d), (f).)
Discussion
In deciding a motion to dismiss, a district court must accept as true all well-pleaded allegations set forth in the complaint. See Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 493 (1986); Marmon Group, Inc. v. Rexnord, Inc., 822 F.2d 31, 34 (7th Cir. 1987). All reasonable inferences to be drawn from those allegations are also accepted as true. See Nelson v. Monroe Regional Med. Ctr., 925 F.2d 1555, 1558 (7th Cir. 1991). Dismissal is only justified when the allegations of the complaint itself clearly indicate that plaintiff does not have a claim upon which relief can be granted. See American Nurses' Ass'n v. Illinois, 783 F.2d 716, 724 (7th Cir. 1986). Furthermore, "a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
Plaintiff submitted an affidavit in support of its memorandum in opposition to defendants' motion to dismiss. When examining pleadings, a court may take into consideration "certain extraneous materials, such as the terms of a written agreement and other exhibits attached to the complaint, Fed.R.Civ.P. 10(c), as well as the memoranda in support of and in opposition to the motion." Three D Depts., Inc. v. K Mart Corp., 670 F. Supp. 1404, 1406 (N.D. Ill. 1987). However, the "court may not . . . rely upon affidavits or other materials addressed to the truth or falsity of plaintiff's factual assertions. Id. Thus, the Court will only consider the Complaint, the employment agreement attached to the Complaint, and the memoranda. The Court excludes from its analysis the affidavit of Gary Markham.
I. Breach of Contract (Count I)
Defendants argue that Count I fails to state a claim for breach of contract because the restrictive covenant in Weaver's employment agreement is unenforceable. Defendants contend that the provision is unenforceable because ACI fails to demonstrate a legitimate interest as required by New York law.
Federal courts exercising diversity jurisdiction employ the conflict of law rules of the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496-97 (1941). When, as here, a contract has a choice of law provision and the cause of action is premised on contract, "Illinois courts look to the law established by that provision unless the chosen state has no substantial relationship to the parties or the transaction, or the public policy of Illinois would be violated." Ludgate v. Becker, 906 F. Supp. 1233, 1240 (N.D. Ill. 1995). In this case the parties executed an agreement with a choice of law clause that provides that New York law would govern the agreement. Further, the Court does not find, and neither party argues, that New York lacks a substantial relationship to the parties or transaction or that an application of New York law would infringe upon Illinois public policy. Thus, New York law applies to the breach of contract claim.
Unlike some states, New York has not enacted statutes to govern the enforceability of restrictive covenants in the employment context. Instead, New York relies upon a developing body of case law to determine the enforceability of each covenant. New York courts consider the interests of the employer, the employee, and the public. See, e.g., Karpinski v. Ingraci, 28 N.Y.2d 45, 48, 268 N.E.2d 751, 752, 320 N.Y.S.2d 1, 3, (N.Y. 1971); Services Sys. Corp. v. Harris, 41 A.D.2d 20, 22-24, 341 N.Y.S.2d 702, 704-05 (N.Y.App.Div. 197 3). In Service Systems v. Harris, the New York Appellate court intimated five factors necessary to determine the enforceability of a restrictive covenant within an employment contract:
(1) the time of the restriction must be reasonable;
(2) the geographical restraint must be reasonable;
(3) the burden on the employee must not be unreasonable;
(4) the general public must not incur harm as a result of enforcement; and
(5) the restriction must be necessary for the employer's protection.Service Sys., 41 A.D.2d at 23, 341 N.Y.S.2d at 705-06. When considering these five elements, New York courts have consistently noted that rather than applying a fixed test, that "[e]ach case must, of course, depend, to a great extent, upon its own facts." Karpinski, 28 N.Y.2d at 49, 268 N.E.2d at 753, 320 N YS.2d at 4; see also Lynch v. Bailey, 275 A.D. 527, 530-531, 90 N.Y.S.2d 359, 362, aff'd, 300 N.Y. 615, 90 N.E.2d 484 (1949) (noting that the crux of the problem is "whether . . . [a] particular agreement in light of its extent, scope and purpose and all the facts and circumstances presented, is invalid and void.")
With regard to the time and geographic constraints, the Agreement does not restrict Weaver from seeking employment anywhere he may wish to work, and it only restricts him from soliciting associates during his employment and one year thereafter. Thus, the Court finds these aspects of the restrictive covenant are reasonable. See Innovative Net-works, Inc. v. Satellite Airlines Ticketing Ctrs., Inc., 871 F. Supp. 709, 728 (S.D.N.Y. 1995) (holding restrictive covenant enforceable where provision placed a twelve-month time restraint on former employee); Ecolab, Inc. v. K.P. Laundry Mach., Inc., 656 F. Supp. 894, 898-99 (S.D.N.Y. 1984) (finding restrictive covenant reasonable where former employees were able to pursue livelihood, and were not subjected to geographic limitations). In addition, the restrictive covenant not to solicit employees does not place an unreasonable burden on Weaver's capacity to make full use of his talents and abilities and to pursue his livelihood. Because the restrictive covenant is narrowly drawn, it has only a de minimis effect on the public. Here, the public's right to utilize the talents and abilities of Weaver is hardly burdened — Weaver is only prohibited from raiding ACI and taking its employees. Thus, ACI's restrictive covenant is reasonable with respect to the scope of the time and geographic restriction and the burden on Weaver and the public.
Defendants argue that ACI's non-solicitation provision is merely an attempt to insulate itself from fair competition rather than protecting a legitimate interest. The cases on which defendants rely with regard to legitimate interests are inapposite because they concern covenants not to compete, not covenants not to solicit employees of a former employer. Unlike a covenant not to compete, which has the potential of threatening a person's livelihood, a covenant not to solicit employees merely prohibits a person from pirating employees of the former employer and inducing them to work for another entity. Contrary to defendants' contention, a covenant not to solicit employees does not prevent any employee from seeking better work opportunities because he or she is free to find another job on his or her own. Thus, the Court finds that an employer's interest in preventing a current or former employee from raiding its employee rosters is reasonable. Moreover, it is clear that New York law recognizes the enforceability of covenants not to solicit employees. Veraldi v. American Analytical Labs., Inc., 706 N.Y.S.2d 158, 159-60 (N.Y.App.Div. 2000). As with all restrictive covenants, the overarching concern is that an employer "is entitled to protection from unfair or illegal conduct that causes economic injury." American Broad. Cos., Inc. v. Wolf, 52 N.Y.2d 394, 403-04, 420 N.E.2d 363, 366-68, 438 N.Y.S.2d 482, 486-87 (N Y 1981). ACI has alleged that Weaver raided its Knowledge Management practice by successfully soliciting several key employees, including Jon Mika, Ofer Gal, and David Veith, with the intent to destroy its practice's viability. (Compl. ¶ 16.) ACI further alleges that Weaver's solicitation of these employees, in essence, gutted its Knowledge Management practice and seriously impaired its ability to service its existing clients. ( Id. ¶¶ 15, 19.) Therefore, ACI has alleged a legitimate interest in preventing unfair competition that resulted in economic injury. Because the Court finds that, as alleged, the covenant not to solicit employees is reasonable in all aspects and furthers a legitimate interest. Thus, the Court denies defendants' motion to dismiss Count I.
II. Breach of Duty of Loyalty (Count II)
As an initial matter, ACI entitled Count II as "Breach of Contract and Duty of Loyalty by Weaver." Defendants argue, and the Court agrees, that the breach of contract claim in Count II is the same as that in Count I. Thus, to the extent that the breach of contract claim in Count II is redundant, defendants' motion to dismiss is granted.
Next, defendants argue that ACI's breach of duty of loyalty claim in Count II must be dismissed because ACI fails to state a claim under New York law. ACI argues that Illinois law applies and that it has pleaded its claim sufficiently.
Illinois has adopted the internal affairs doctrine, which provides that "[w]hen the subject is liability of officers and directors for their stewardship of the corporation, the law presumptively applicable is the law of the place of incorporation." Resolution Trust Corp. v. Chapman, 29 F.3d 1120, 1122 (7th Cir. 1994). This doctrine "recognizes the benefits of using one rule of law to determine the duties and liabilities of directors and officers whose firm may do business in many states." Id. "[O]therwise a corporation could be faced with conflicting demands." Edgar v. MITE Corp., 457 U.S. 624, 645 (1982).
At least one court has applied the doctrine to an employer's breach of fiduciary duty claims against employees regardless of whether they hold a director or officer position. Regal-Beloit Corp. v. Drecoll, 955 F. Supp. 849, 857-58 (N.D. Ill. 1996). The Court finds no plausible reason for distinguishing between an officer or director and an employee, and ACI provides none. After all, the application of a predictable rule of law with regard to mid-level employees is equally beneficial — especially where, as here, the employer does business in different states, i.e., Illinois, New Jersey, and New York. Thus, the Court applies the internal affairs doctrine, and finds that the law of incorporation, New York, governs.
"Fundamental to . . . [the employer-employee] relationship is the proposition that an employee is to be loyal to his employer and is `prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.'" Western Elec. Co. v. Brenner, 41 N.Y.2d 291, 295, 360 N.E.2d 1091, 1094, 392 N.Y.S.2d 409, 411 (N.Y.App.Div. 1977) (quoting Lamdin v. Broadway Surface Adver. Corp., 272 N.Y. 133, 138, 5 N.E.2d 66, 67 (N.Y. 1936)). An employee breaches his duty of loyalty where he induces other employees to join a competitor by using dishonest means or by designing a scheme with the sole purpose of causing damage. Headquarters Buick-Nissan, Inc. v. Michael Oldsmobile, 149 A.D.2d 302, 304, 539 N.Y.S.2d 355, 355 (N.Y.App.Div. 1989).
ACI alleges that Weaver solicited the employment of employees or former ACI employees with the purpose of destroying ACI's Knowledge Management unit's viability. (Compl. ¶ 15.) ACI contends that Weaver's conduct was intentional, wrongful, and malicious. ( Id. ¶ 26.) Further, ACI maintains that, Weaver deprived ACI of three of its key employees, or one third of the employees in its practice, and as a result, ACI is unable to honor its commitments to existing clients. ( Id. ¶¶ 19, 28.) Accordingly, ACI states a claim for breach of the duty of loyalty.
III. Tortious Interference with Contract (Count III)
Defendants next argue that in Count III, ACI fails to state a claim that AnswerThink tortiously interfered with ACI's employment agreement with Weaver. ACI disagrees.
Conforming with Illinois' choice-of-law rules, the court must employ the substantive law of the state with the most significant relationship to the tort at issue. See Ingersoll v. Klein, 46 Ill.2d 42, 44, 262 N.E.2d 593, 595 (1970). "This test requires us to consider: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the parties' domiciles and places of business; and (d) the place where the parties' relationship is centered." Rohlfing v. Manor Care, Inc., 172 F.R.D. 330, 340-41 (N.D. Ill. 1997).
Given the facts of this case, Illinois has the most significant relationship to the tort alleged in Count III (tortious interference with contract against AnswerThink), as well as that alleged in Count TV (tortious interference with economic advantage against AnswerThink and Weaver) despite the fact that ACI is incorporated in New York. The injury — or interference with the contract or economic advantage — occurred in Illinois; the conduct causing the injury — AnswerThink's inducing Weaver to breach his contract and Weaver and AnswerThink's interference with ACI's ability to serve its clients — occurred in Illinois; and the parties' relationship is centered in Illinois. Therefore, the Court applies Illinois law to ACI's tort claims.
To state a claim for tortious interference with contract, a plaintiff must plead: (1) the existence of a valid contract, (2) defendant's knowledge of the existence of the contract, (3) defendant's intentional and malicious inducement of the breach of the contract, (4) breach of the contract caused by defendant's wrongful conduct and resultant damage to the plaintiff. See Fieldcrest Builders, Inc. v. Antonucci, 34 Ill. App.3d 597, 611, 724 N.E.2d 49, 61, 243 Ill. Dec. 740, 752 (1st Dist. 1999); Swager v. Couri, 60 Ill. App. 192, 193-94, 376 N.E.2d 456, 459, 17 Ill. Dec. 457, 459 (3rd Dist. 1978), aff'd, 77 Ill.2d 173, 395 N.E.2d 921, 32 Ill. Dec. 540 (1979).
ACI alleges that AnswerThink "required, requested advised, provided incentives or otherwise encouraged Weaver to wrongfully solicit the employment of employees of ACI or former employees of ACI" (Compl. ¶ 32.) ACI submits that AnswerThink engaged in this conduct "while Weaver was still employed by ACI, and at times within a year since his resignation." ( Id. ¶ 32.) Furthermore, ACI alleges that the acts of both AnswerThink and Weaver "were intentional, wrongful, malicious and intended to destroy the viability of ACI's Knowledge Management practice." ( Id. ¶ 15.) Finally, ACI alleges that Weaver's breach of the contract caused by AnswerThink's wrongful conduct, resulted in damage to ACI. ( Id. ¶¶ 15, 32-35.)
Defendants mainly argue that because no valid contract exists between ACI and Weaver, there can be no tortious interference with an unenforceable contract. However, as discussed above, the Court has already determined that ACI states a claim for breach of contract because as alleged, the restrictive covenant is enforceable.
Defendants further argue that even if the covenant is enforceable, ACI's tortious interference with contract claim fails because ACI alleges that AnswerThink induced Weaver to breach his contract in a "conclusory and generic fashion." (Defs.' Reply at 11.) Contrary to defendants' argument, a plaintiff need not allege elaborate factual allegations.
Federal courts require notice pleading, which provides a short plain statement of the claim upon which plaintiff rests its cause of action. See Perkins v. Silverstein, 939 F.2d 463, 467 (7th Cir. 1991). Moreover, in addition to the allegations supporting its breach of contract claim discussed above, ACI alleges that "while Weaver was still employed by ACI, and at times within a year since his resignation, AnswerThink, required, requested, advised, provided incentives or otherwise encouraged Weaver to wrongfully solicit the employment of employees of ACI or former employees of ACI and/or offer employment to employees of ACI or former employees of ACI." (Compl. ¶ 37.) This is sufficient to provide AnswerThink with notice of the claims against it. Accordingly, the Court denies defendants' motion to dismiss ACI's tortious interference with contract claim.
IV. Tortious Interference with Prospective Economic Advantage
Defendants argue that ACI's allegations in Count TV fail to state a claim for tortious interference with prospective economic advantage. The Court agrees. To state a claim for tortious interference with economic advantage plaintiff must demonstrate: (1) "plaintiffs reasonable expectancy of entering into a valid business relationship"; (2) "the defendant's knowledge of this expectancy"; (3) "an intentional interference by the defendant which prevents the expectancy from ripening into a valid business relationship"; and "damages to the plaintiff from such interference." Crinkley v. Dow Jones Co., 67 Ill. App.3d 869, 878, 385 N.E.2d 714, 720, 24 Ill. Dec. 573, 579 (1st Dist. 1979). Under Illinois law, "[t]he tort requires that the defendant have taken some action toward a third party which caused the third party not to do business with the plaintiff." Young v. Connecticut Mut. Life Ins. Co., No. 90 C 254, 1990 WL 125496, at *4 (N.D. Ill. Aug. 17, 1990). "The action toward the third party must be some sort of direct interference with the relationship between the plaintiff and the third party, such as disparagement or other wrongful conduct." Id.
ACI alleges that because defendants deprived ACI of the services of key employees, defendants interfered with ACI's ability to conduct its business and honor its commitments to its clients. (Compl. ¶¶ 38-39.) Plainly ACI has not alleged and cannot allege that defendants took direct action toward ACI's clients. Further, ACI clearly fails to allege that the defendants' conduct caused ACI's clients not to do business with ACI.
Moreover, ACI has not alleged a reasonable business expectancy. The fact that ACI has a "track record" of receiving work from a particular customer in the past, in and of itself, does not establish a reasonable expectation of ACI's entering into any particular future business relationship with such a customer. See International Serv. Assocs., Inc. v. Arco Management, No. 94 C 1807, 1994 WL 583302, at *7 (N.D. Ill. Oct. 21, 1994).
In sum, ACI has not alleged the elements to state a claim for tortious interference with prospective economic advantage. Accordingly, the Court dismisses Count TV with prejudice.
V. Punitive Damages
Defendants have moved to strike plaintiff's request for punitive damages and attorney's fees. ACI has failed to respond to defendants' argument regarding attorney's fees and therefore it does not dispute that it has not stated a claim for such fees. Thus, the Court grants defendants' motion to dismiss ACI's request for attorney's fees in each count of the Complaint.
With regard to ACI's request for punitive damages in its breach of contract claim, under New York law, punitive damages have been awarded in breach of contract cases where plaintiffs claim satisfies a two part test: (1) the conduct constituting, accompanying, or associated with the breach contract must be actionable as an independent tort for which compensatory damages are ordinarily available; and (2) the conduct must be sufficiently egregious — tortious conduct aimed at the public in general — to warrant the additional imposition of exemplary damages. Rocanova v. Equitable Life Assurance Soc'y, 83 N.Y.2d 603, 613, 634 N.E.2d 940, 943-44, 612 N.Y.S.2d 339, 342-43 (N.Y. 1994). "Punitive or exemplary damages have been allowed in cases where the wrong complained of is morally culpable, or is actuated by evil and reprehensible motives, not only to punish the defendant but to deter him, as well as others who might otherwise be so prompted, from indulging in similar conduct in the future." Walker v. Sheldon, 10 N.Y.2d 401, 404, 179 N.E.2d 497, 497, 223 N.Y.S.2d 488, 488 (N.Y. 1961).
With regard to the first prong of the test, as discussed above, ACI's breach of contract claim does not support an independent tort claim against Weaver for tortious interference with economic advantage. Because New York law requires that a plaintiff satisfy both prongs of the punitive damages test for contract claims, it is clear that the Court must strike ACI's request for punitive damages in Count I.
Next, defendants argue that ACI cannot recover punitive damages for its breach of fiduciary duty and remaining tort claims because it has failed to allege that defendants' conduct warranted punitive damages. With regard to ACI's remaining tort claims, Illinois courts will allow punitive damages in the presence of aggravated circumstances, i.e., fraud, willfulness, wantonness, or malice appearing with a wrongful act. See Beaton Assocs., Ltd. v. Joslyn Mfg. Supply Co., 159 Ill. App.3d 834, 845-47, 512 N.E.2d 1286, 1293, 111 Ill. Dec. 649, 656 (1st Dist. 1987). With regard to ACI's breach of duty of loyalty claim, under New York law, punitive damages are available for a breach of fiduciary duty where there is evidence of malicious or reckless misconduct on the part of the defendant. See Guardian Mortgage Acceptance Corp. v. Bankers Trust Co., 259 A.D.2d 358, 359, 687 N.Y.S.2d 56, 56 (N.Y.App.Div. 199 9).
In this case, plaintiff alleges that Weaver willfully breached his employment agreement and that Weaver and ACI willfully interfered with employment agreements between ACI and its employees. (Compl. ¶¶ 15, 20, 23, 26, 27, 29, 32, 34.) ACI's complaint further suggests the presence of aggravated circumstances in the form of wrongful conduct and a malicious motive. ACI alleges that the "acts were intentional, wrongful, malicious, and intended to destroy the viability of ACI's Knowledge Management practice." ( Id. ¶ 15.) If, as plaintiff alleges, defendants acted with malicious intent to destroy its Knowledge Management practice, such a motive would support a claim for punitive damages for ACI's remaining tort claims and breach of duty claim.
Conclusion
For the foregoing reasons, defendants' motion to dismiss is granted as to ACI's: (1) request for punitive damages for breach of contract in Count I; (2) breach of contract claim in Count II because that claim is redundant; (3) tortious interference with prospective economic advantage claim (Count IV); and (4) request for attorney's fees in all counts. In all other respects, defendants' motion is denied.