Opinion
# 2019-038-565 Claim No. 132590 Motion No. M-93979
07-18-2019
CGI TECHNOLOGIES AND SOLUTIONS, INC. v. THE STATE OF NEW YORK
McNAMEE LOCHNER, P.C. By: Christopher Massaroni, Esq. McDERMOTT WILL & EMERY, LLP Margaret H. Warner, Esq. Lisa M. Richman, Esq. Theodore E. Alexander, Esq. LETITIA JAMES, Attorney General of the State of New York By: Richard C. Maider, Assistant Attorney General Cornelia Mogor, Assistant Attorney General
Synopsis
Case information
| UID: | 2019-038-565 |
| Claimant(s): | CGI TECHNOLOGIES AND SOLUTIONS, INC. |
| Claimant short name: | CGI |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 132590 |
| Motion number(s): | M-93979 |
| Cross-motion number(s): | |
| Judge: | W. BROOKS DeBOW |
| Claimant's attorney: | McNAMEE LOCHNER, P.C. By: Christopher Massaroni, Esq. McDERMOTT WILL & EMERY, LLP Margaret H. Warner, Esq. Lisa M. Richman, Esq. Theodore E. Alexander, Esq. |
| Defendant's attorney: | LETITIA JAMES, Attorney General of the State of New York By: Richard C. Maider, Assistant Attorney General Cornelia Mogor, Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | July 18, 2019 |
| City: | Saratoga Springs |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
This claim arises from a dispute over a State contract between claimant CGI Technologies and Solutions, Inc. (CGI) and the New York State Office of Mental Health (OMH). Defendant moves pursuant to CPLR 3211 (a) (7) to dismiss eight of the ten causes of action asserted in the claim for failure to state a cause of action. CGI opposes the motion. For the reasons that follow, defendant's motion will be granted in part.
CGI is an information technology consulting company that develops and implements software solutions for government and private sector entities. OMH is a State agency that operates 23 mental health facilities and oversees approximately 310 outpatient mental health programs throughout the State. On August 27, 2013, the parties executed a $51 million, four-year contract pursuant to which CGI would provide OMH with an Electronic Medical Record (EMR) system to be used in its facilities and outpatient programs. The claim alleges that CGI had contracted to implement a "new commercial off-the-shelf EMR" (Claim No. 132590, ¶ 31), but that a number of actions on the part of OMH, including a large-scale reorganization, staffing changes, and significant alterations to the project, created "constantly changing parameters and increasing demands [that] fundamentally altered the project from a standard commercial off-the-shelf project . . . to a custom development project that was specifically tailored to OMH's requests" (id. at ¶ 57). The claim further alleges other failures and deficiencies by OMH that contributed to delays and problems with the contract.
The claim alleges that the parties began to negotiate a contract extension when it became apparent that the project would not be completed by the expiration of the original four-year term. The claim alleges that OMH insisted that the parties first agree to a time extension before discussing additional costs caused by the extension and that CGI agreed to a time extension in reliance on OMH's assurances that CGI would be compensated for its additional work. One day prior to the contract's expiration in August 2017, a two-year extension of the agreement was approved that extended the date of performance but did not otherwise alter the contract.
The claim alleges that CGI continued its work under the contract and that Track 1 of the project, which addressed OMH's inpatient facilities, was completed by October 2017, and that OMH had full use of the custom EMR product. The claim alleges that, under the terms of the contract, the intellectual property rights for the custom EMR product would not transfer from CGI to OMH until CGI had been paid in full. The claim alleges that CGI continued to work on Track 2 of the project, which addressed OMH's outpatient facilities, but when CGI requested additional compensation as discussed when the time extension was negotiated, OMH stated that it would consider the request only if CGI continued working on the project and provided documentation. The claim alleges that although CGI supplied OMH with thousands of documents to support its request for additional compensation, OMH suspended the contract on May 18, 2018 without responding to CGI's request.
The claim alleges that CGI suspended its performance under the contract and shut down the project soon after OMH suspended the contract, and the parties attempted to resolve the issues that led to the suspension. The claim alleges that during that period of discussions, CGI reestablished OMH's access to the unfinished work product based on assurances from OMH that the contract would resume. The claim further alleges that after its access to CGI's work product was reestablished, OMH accessed and downloaded content, "includ[ing] critical work product OMH needed in order to operate Track 1 and complete Track 2 implementation of the EMR," before OMH had paid in full for the EMR (id. at ¶ 103). Despite its assurances that the contract would resume, however, OMH invoked the contract's termination "for convenience" clause to terminate the contract in a letter dated August 6, 2018. The claim alleges that OMH has failed to pay sums due on the contract and that it has continued to use the EMR product at the facilities where it was fully implemented by completion of Track 1 of the contract. The claim asserts ten causes of action sounding in breach of contract, unjust enrichment, declaratory judgment, conversion, negligent misrepresentation, and breach of the implied covenant of good faith and fair dealing. It seeks compensatory damages and a declaration that CGI is the owner of all protectable intellectual property relating to the contract.
The Court previously denied CGI's motion seeking a preliminary injunction to enjoin defendant from continuing to use and share its intellectual property on the ground that the Court lacks jurisdiction to grant the equitable relief sought (see CGI Technologies and Solutions, Inc. v State of New York, UID No. 2019-038-541 [Ct Cl, DeBow, J., May 8, 2019]).
Defendant now moves to dismiss eight of the ten causes of action in the claim for failure to state a cause of action. It is well settled that "[o]n a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction (see, CPLR 3026). [The court] accept[s] the facts as alleged in the complaint as true, accord[s] [claimant] the benefit of every possible favorable inference, and determine[s] only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]). Further, on a motion to dismiss, "a court may freely consider affidavits submitted by the [claimant] to remedy any defects in the [claim] and the criterion is whether the proponent of the pleading has a cause of action, not whether [the proponent] has stated one" (id. at 88 [internal quotation marks and citations omitted]; see IMS Engrs.-Architects, P.C. v State of New York, 51 AD3d 1355, 1356 [3d Dept 2008], lv denied 11 NY3d 706 [2008]).
Defendant's motion does not seek to dismiss the first and second causes of action that allege breach of contract in the failure to make required payments and to make payments for services rendered (see Claim No. 132590, Count I [¶¶ 121-152], Count II [¶¶ 153-162]).
Count Three: Breach of Contract (Misuse of Termination for Convenience)
The claim alleges that OMH breached the contract by terminating it for convenience despite assuring CGI that it would lift the suspension of the contract and make additional payments for work performed pursuant to the timeline extension, thus causing CGI to suffer over $21 million in damages (see Claim No. 132590, ¶¶ 163-170). Defendant moves to dismiss this cause of action on the ground that OMH properly exercised its right to terminate the contract for convenience when CGI and OMH were unable to resolve the issues that led to the suspension of the project (see Defendant's Memorandum of Law, pp. 10-13). CGI argues in opposition that OMH invoked the termination for convenience provision in bad faith after inducing CGI to continue working on the project without paying for the additional work (see Claimant's Memorandum of Law, pp. 9-12).
"A party has an absolute, unqualified right to terminate a contract on notice pursuant to an unconditional termination clause without court inquiry into whether the termination was activated by an ulterior motive" (Big Apple Car v City of New York, 204 AD2d 109, 111 [1st Dept 1994]; see Red Apple Child Dev. Ctr. v Community School Dists. Two, 303 AD2d 156, 157-158 [1st Dept 2003], lv denied 1 NY3d 503 [2003]; A.J. Temple Marble & Tile v Long Is. R.R., 256 AD2d 526, 527 [2d Dept 1998]). "Such a termination is enforceable regardless of the cause of [the] termination" (Red Apple Child Dev. Ctr., 303 AD2d at 158).
As relevant here, the contract's termination for convenience clause provided that "[t]he OMH may terminate this Agreement upon thirty (30) days prior written notice when it determines that such termination is in the best interests of the OMH" (Claim No. 132590, Exhibit 4, pg. 37 [Contract, Appendix D-1 (B) (2) (a) (3)]). Claimant does not dispute the validity of the termination for convenience clause but argues only that it was invoked in bad faith to allow OMH to take advantage of CGI's work product without paying for it. However, this cause of action is "fatally deficient" as a matter of law inasmuch as defendant's motivation for termination of the contract under the "for convenience" clause is impertinent and not subject to court inquiry (Big Apple Car, 204 AD2d at 111). Even if the Court were to " 'look primarily to federal caselaw for guidance on' termination for convenience clauses," as claimant suggests (Claimant's Memorandum of Law, at pg. 10, quoting A.J. Temple Marble & Tile v Long Is. R.R., 172 Misc 2d 422, 424 [Sup Ct, Queens County 1997], affd in part 256 AD2d 526 [2d Dept 1998]), the result would not change. The federal courts permit only limited inquiry into the motivation for terminating a contract under a for convenience clause to those "situations where the Government enters into a contract 'knowing full well that it will not honor the contract' " (A.J. Temple Marble & Tile, 172 Misc 2d at 425, quoting Caldwell & Santmyer, Inc. v Glickman, 55 F3d 1578, 1582 [Fed Cir 1995]). Here, there is no allegation within the claim, nor any evidence offered by claimant on this motion, that OMH had no intention of honoring the contract when it was executed. Accordingly, defendant is entitled to dismissal of the third cause of action.
Count Four: Breach of Contract Implied-in-Law (Withholding Claimant's Property)
The claim alleges that OMH has been using CGI's EMR system since August 6, 2018 without rendering payment in full and that CGI has suffered over $12 million in damages as a result (see Claim NO. 132590, ¶¶ 171-174). Defendant moves to dismiss this cause of action on the ground that CGI cannot seek to hold OMH liable under a quasi-contract theory while also seeking to enforce the parties' written agreement (see Defendant's Memorandum of Law, pp. 5-6). CGI argues in opposition that this cause of action can co-exist with a breach of contract claim because there is a genuine dispute as to whether the parties' contract covers the damages CGI is seeking for OMH's continued use of its work product (see Claimant's Memorandum of Law, pp. 19-21).
"A contract implied-in-law exists where one party, without any expression of assent from the other, obtains or retains possession of money or other property that actually belongs to the latter, by oppression, extortion, deceit or similar means" (Rosefsky v State of New York, 205 AD2d 120, 123 [3d Dept 1994]; see Parsa v State of New York, 64 NY2d 143, 148 [1984]). A contract implied-in-law "only applies in the absence of an express agreement, and is not really a contract at all, but rather a legal obligation imposed in order to prevent a party's unjust enrichment" (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987]). Thus, where a claimant seeks to enforce a valid written agreement, "the scope of which clearly covers the dispute between the parties," a cause of action for contract implied-in-law cannot lie (id. at 389; see Schwartz v Pierce, 57 AD3d 1348, 1352 [3d Dept 2008], lv denied 12 NY3d 707 [2009]; Hamlin Beach Camping, Catering, & Concessions Corp. v State of New York, 303 AD2d 849, 853 [3d Dept 2003]). A claimant may, however, assert a cause of action for contract implied-in-law in addition to a breach of contract cause of action "[w]here . . . there is a bona fide dispute as to the existence of a contract, or where the contract does not cover the dispute in issue" (Hochman v LaRea, 14 AD3d 653, 654-655 [2d Dept 2005]).
Here, CGI's own submissions belie its argument that "there is a bona fide dispute as to whether the Contract covers some of the damages sought by CGI" (Claimant's Memorandum of Law, p. 20). In an August 15, 2018 letter, CGI "acknowledge[d] [OMH's] right to terminate the Contract for [its] convenience and . . . calculated the compensation due CGI under the Contract" and stated that it was seeking to have "final payments . . . resolved under our Contract" (Claim No. 132590, Exhibit 13, p. 1 [emphasis added]). The amounts sought in the invoices attached to the letter are identical to the damages asserted by CGI with respect to this cause of action (see id., ¶ 174; id., Exhibit 13). It appears, therefore, that this cause of action seeks to enforce CGI's right to payment under the contract, and it must be dismissed.
Count Five: Unjust Enrichment
The claim alleges that OMH has been unjustly enriched as a result of its retention and use of CGI's EMR functionality without paying in full and seeks over $35 million in damages (see Claim No. 132590, ¶¶ 175-182). Defendant moves to dismiss this cause of action on the ground that it is barred by the existence of a valid contract between the parties (see Defendant's Memorandum of Law, pp. 3-4). CGI argues in opposition that it has stated a cause of action for unjust enrichment because it contemplates damages outside the scope of the parties' contract (see Claimant's Memorandum of Law, pp. 16-19).
Similar to contract implied-in-law, "the theory of unjust enrichment lies as a quasi-contract claim and contemplates an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties" (Georgia Malone & Co., Inc. v Rieder, 19 NY3d 511, 516 [2012] [internal quotation marks and alteration omitted] [emphasis added]). "[I]n order to adequately plead such a claim, the [claimant] must allege that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered" (id.). However, "[a]n unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim" (Corsello v Verizon N.Y, Inc., 18 NY3d 777, 790 [2012], rearg denied 19 NY3d 937 [2012]), and "[w]here the parties executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded" (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 [2009], rearg denied 12 NY3d 889 [2009]).
Here, CGI seeks over $35 million in damages as a result of OMH's alleged unjust enrichment (see Claim No. 132590, ¶ 182). In an April 25, 2018 letter, prior to OMH's termination for convenience, CGI explained that it had requested these additional measures of compensation in a proposed Change Request (see id., Exhibit 7), a procedure that was laid out in the parties' contract (see id., Exhibit 4, p. 29 [Contract, Appendix D (IV)]). Moreover, CGI seeks to recover the identical damages in its second cause of action for breach of contract (see Claim No. 132590, ¶¶ 153-162). Because CGI's unjust enrichment claim duplicates its second breach of contract cause of action and arises out of the parties' contract, this cause of action must be dismissed (see Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572 [2005] ["there was no unjust enrichment because the matter is controlled by contract"]).
Count Six: Declaratory Judgment of Intellectual Property and Trade-Secret Ownership
The claim seeks a declaratory judgment that "all protectable intellectual property and trade secrets belong to CGI" because OMH did not fulfill the contractual condition precedent of paying CGI in full for its custom work (see Claim No. 132590, ¶¶ 183-192). Defendant moves to dismiss this cause of action on the ground that the Court of Claims lacks jurisdiction to grant purely equitable relief (see Defendant's Memorandum of Law, pp. 6-7). CGI asks the Court to hold the motion for dismissal of this cause of action in abeyance because CGI has initiated a declaratory judgment action in New York State Supreme Court (see Claimant's Memorandum of Law, p. 25).
"As a court of limited jurisdiction, the Court of Claims has no jurisdiction to grant strictly equitable relief" (Madura v State of New York, 12 AD3d 759, 760 [3d Dept 2004], lv denied 4 NY3d 704 [2005]; see Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671 [3d Dept 1997]). In general, this Court lacks jurisdictional authority to grant a declaratory judgment (see e.g. Seeley v State of New York, UID No. 2017-041-025 [Ct Cl, Milano, J., Apr. 4, 2017]; Alyas v State of New York, UID No. 2017-045-003 [Ct Cl, Lopez-Summa, J., Jan. 9, 2017]), except in limited circumstances inapplicable to this claim (see Court of Claims Act § 9 [9-a]). As this Court previously noted in its decision denying CGI's motion for a preliminary injunction, the question of ownership of the intellectual property at issue here is certainly related to CGI's breach of contract claims; nevertheless, this cause of action seeks only declaratory judgment relief, and this Court lacks jurisdiction over such a claim, regardless of the outcome of the declaratory action in Supreme Court (see CGI Technologies and Solutions, Inc. v State of New York, UID No. 2019-038-541 [Ct Cl, DeBow, J., May 8, 2019). Accordingly, this cause of action must be dismissed.
Count Seven: Conversion
The claim alleges that OMH improperly accessed and downloaded CGI's intellectual property and remains in possession of it without paying CGI in full and that CGI was damaged in an amount over $21 million as a result (see Claim No. 132590, ¶¶ 193-202). Defendant moves to dismiss this cause of action on the ground that under the terms of the contract, OMH has a right to possess CGI's custom work (see Defendant's Memorandum of Law, pp. 7-10). CGI argues in opposition that the terms of the contract provide that ownership in CGI's custom work would not transfer to OMH until CGI had been paid in full (see Claimant's Memorandum of Law, pp. 6-9).
"To establish a cause of action in conversion the [claimant] must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question . . . to the exclusion of the [claimant's] rights" (Castaldi v 39 Winfield Assoc., 30 AD3d 458, 458 [2d Dept 2006] [internal quotation marks omitted]; see Meese v Miller, 79 AD2d 237, 243-244 [4th Dept 1981]). Under these circumstances, in order to state a cause of action for conversion, CGI must allege malfeasance on the part of OMH beyond the alleged breach of contract (see Matzan v Eastman Kodak, Co., 134 AD2d 863, 863 [4th Dept 1987] ["A breach of contract does not give rise to a tort action in the absence of additional allegations of wrongdoing"]). The terms of a valid written agreement between the parties, however, can be dispositive (see e.g. J Squared Software, LLC v Bernette Knitware Corp., 48 AD3d 351, 351 [1st Dept 2008] [valid contract between the parties showed that the defendant properly retained the plaintiff's computer software]).
Under the terms of the contract, CGI "retain[ed] all ownership rights in and to Proprietary Software and Proprietary Derivatives, whether or not any are contained in the Custom Work" (Claim No. 132590, Exhibit 4, p. 40 [Contract, Appendix D-1 (F) (2) (a)]). Custom work containing Proprietary Software and/or Proprietary Derivatives that was "deemed to be a work made for hire" created by CGI "shall belong exclusively to OMH, with OMH having the sole right to obtain, hold and renew in its name, all copyrights or other appropriate protection upon payment in full for such Custom Work or portion thereof" (id., Exhibit 4, p. 40 [Contract, Appendix D-1 (F) (3)] [emphasis added]). As to custom work that was not "deemed to be a work made for hire," CGI "agree[d] and hereby irrevocably assign[ed] to OMH all[] right, title and interest in the Custom Work, whether preliminary, final or otherwise, including all trademark and copyrights upon payment in full for such Custom Work (or portion thereof)" (id. [emphasis added]). CGI also submitted the affidavit of James Titus, Vice President of Consulting Services for the U.S. East Public Sector at CGI, in which he stated that when OMH suspended the parties' contract in May 2018, "CGI personnel were given three hours to remove all equipment from OMH facilities and to vacate the premises" and, as a result, "CGI did not have the opportunity to download from the OMH servers any of its intellectual property or custom code created under the Contract" (Massaroni Affirmation, Exhibit C, Titus Affidavit, ¶ 6).
According CGI every favorable inference, the Court concludes that CGI has sufficiently stated a cause of action for conversion. The terms of the contract indicate that CGI intended to retain ownership of its intellectual property until OMH had paid CGI in full, and CGI sufficiently alleges that it provided custom work to OMH, that OMH exercised dominion over CGI's intellectual property by downloading and using it without having paid fully, and that OMH has cut off CGI's access to its own intellectual property. Therefore, defendant's motion to dismiss the cause of action for conversion will be denied.
Counts Eight & Nine: Negligent Misrepresentation (Contract Extension & Suspension Revocation)
In count eight, the claim alleges that CGI sustained over $21 million in damages as a result of OMH's termination of the contract after assuring CGI that if it agreed to a time extension, the parties would later come to an agreement regarding additional costs (see Claim No. 132590, ¶¶ 203-212). In count nine, the claim further alleges that CGI sustained over $35 million in damages as a result of OMH's termination of the contract after assuring CGI that the suspension of the contract would be lifted (see id. at ¶¶ 213-221). Defendant moves to dismiss these causes of action on the grounds that CGI has failed to plead a special relationship between the parties and, in any event, CGI's damages spring directly from the contract (see Defendant's Memorandum of Law, pp. 13-17). CGI argues in opposition that it has sufficiently pled the existence of a special relationship based on its long-term business relationship with OMH (see Claimant's Memorandum of Law, pp. 21-24).
It is well settled that "[a] claim for negligent misrepresentation requires the [claimant] to demonstrate (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information" (J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 [2007], rearg denied 8 NY3d 939 [2007]). "As a general rule, a claim for negligent misrepresentation is precluded in a breach of contract action absent a violation of a legal duty independent of that created by the contract" (Fleet Bank v Pine Knoll Corp., 290 AD2d 792, 795 [3d Dept 2002] [internal quotation marks omitted]). As relevant here, "[a] special relationship may be established by persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified" (RKA Film Fin., LLC v Kavanaugh, 171 AD3d 678, 679 [1st Dept 2019] [internal quotation marks omitted]). "An arm's length business relationship . . . is not generally considered to be the sort of confidential or fiduciary relationship that would support a cause of action for negligent misrepresentation" (Greentech Research LLC v Wissman, 104 AD3d 540, 540 [1st Dept 2013]).
Here, the claim alleges merely that CGI and OMH "have a years-long business relationship, which involved and required extensive good-faith negotiations" and that "[s]uch relationship imposed a duty on [OMH] to impart correct information to [CGI]" (Claim No. 132590, ¶¶ 204-205). CGI has failed to allege anything more than an ordinary, arm's length business relationship between itself and OMH or the existence of a legal duty independent of the contract, and defendant is entitled to dismissal of the two causes of action for negligent misrepresentation (see Wright v Selle, 27 AD3d 1065, 1067 [4th Dept 2006]; Fleet Bank, 290 AD2d at 795; RKB Enters. v Ernst & Young, 182 AD2d 971, 972 [3d Dept 1992]).
CGI contends that, even if its first cause of action for negligent misrepresentation (Count Eight) fails, it has sufficiently pled a cause of action sounding in fraudulent misrepresentation. However, CGI has not asserted a cause of action for fraudulent misrepresentation in the claim, and thus this argument is insufficient to defeat the motion to dismiss.
Count Ten: Breach of Implied Covenant of Good Faith and Fair Dealing
The claim alleges that OMH breached the implied covenant of good faith and fair dealing when it terminated the contract for convenience in order to avoid paying CGI under the contract and that CGI sustained over $12 million in damages as a result (see Claim No. 132590, ¶¶ 222-231). Defendant moves to dismiss this cause of action on the ground that it is duplicative of CGI's first breach of contract cause of action (see Defendant's Memorandum of Law, pp. 4-5). CGI argues in opposition that this claim is distinct from its breach of contract claims because it is based on OMH's actions in coercing CGI into agreeing to a timeline extension and renewing OMH's access to CGI's intellectual property and then terminating the contract for convenience in bad faith without paying CGI for its work (see Claimant's Memorandum of Law, pp. 12-16).
It is well settled that "[i]mplicit in all contracts is a covenant of good faith and fair dealing in the course of contract performance" (Dalton v Educational Testing Serv., 87 NY2d 384, 389 [1995]). The covenant "embraces a pledge that 'neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract' " (id., quoting Kirke La Shelle Co. v Armstrong Co., 263 NY 79, 87 [1933]). A defendant is entitled to dismissal of a cause of action for breach of the implied covenant of good faith and fair dealing where it is "duplicative of [the claimant's] contract claims" (Netologic, Inc. v Goldman Sachs Group, Inc., 110 AD3d 433, 434 [1st Dept 2013]). Such a cause of action is duplicative when "both claims arise from the same facts and seek the identical damages for each alleged breach" (Amcan Holdings, Inc. v Canadian Imperial Bank of Commerce, 70 AD3d 423, 426 [1st Dept 2010] [internal citation omitted], lv denied 15 NY3d 704 [2010]).
Here, in its first cause of action for breach of contract, CGI asserts that OMH breached the parties' contract by using CGI's custom work without fully paying for it after terminating the contract for convenience (see Claim No. 132590, ¶¶ 121-151). CGI seeks to recover as damages a surety amount in excess of $3 million, compensation for completed deliverables received and work in process deliverables, and wind down costs (see id. at ¶ 152; id., Exhibit 13). In its tenth cause of action for breach of the covenant of good faith and fair dealing, CGI similarly alleges that OMH terminated the contract for convenience in order to avoid paying CGI in full and seeks to collect damages for the same surety, completed deliverables, and work in progress deliverables it seeks to recover in connection with its first breach of contract action (see id., ¶ 231; id., Exhibit 13). Inasmuch as CGI's cause of action for breach of the implied covenant of good faith and fair dealing is grounded in the same facts as and seeks to recover damages identical to those asserted in the first breach of contract claim, it will be dismissed (see e.g. Mill Financial, LLC v Gillett, 122 AD3d 98, 104 [1st Dept 2014]; Barker v Time Warner Cable, Inc., 83 AD3d 750, 752 [2d Dept 2011]).
With respect to the breach of contract claim contained in the first cause of action, CGI also seeks wind-down costs of $641,086.61, which it does not seek with respect to its breach of the implied covenant of good faith and fair dealing claim (see Claim No, 132590, ¶ 152). Nevertheless, inasmuch as all of the damages sought for the good faith claim are encompassed in the breach of contract claim, defendant is entitled to dismissal of this cause of action.
Accordingly, for the foregoing reasons, it is
ORDERED, that defendant's Motion No. M-93979 is GRANTED IN PART, and claimant's third, fourth, fifth, sixth, eighth, ninth, and tenth causes of action are hereby DISMISSED; and it is further
ORDERED, that defendant's Motion No. M-93979 for partial dismissal of the claim is DENIED in all other respects.
July 18, 2019
Saratoga Springs, New York
W. BROOKS DeBOW
Judge of the Court of Claims
Papers Considered:
1. Claim Number 132590, filed January 31, 2019, with Exhibits 1-20; 2. Verified Answer, filed April 5, 2019 3. Notice of Motion, dated May 15, 2019; 4. Affirmation of Richard C. Maider, AAG, dated May 15, 2019, with Exhibits A-C; 5. Defendant's Memorandum of Law in Support of Partial Motion to Dismiss, dated May 15, 2019; 6. Affirmation of Christopher Massaroni, Esq. in Opposition to Partial Motion to Dismiss, dated June 12, 2019, with Exhibits A-E; 7. Claimant's Memorandum of Law in Opposition to Partial Motion to Dismiss, dated June 12, 2019; 8. Defendant's Reply Memorandum of Law, dated June 18, 2019.