Summary
referring to "misappropriation of a commercial advantage belonging to another by infringement or dilution of a trademark or trade name . . ."
Summary of this case from Mueller v. US Pipe FoundryOpinion
December 31, 1998
Appeal from Order of Supreme Court, Onondaga County, Nicholson, J. — Dismiss Pleading.
Order unanimously modified on the law and as modified affirmed with costs to plaintiff in accordance with the following Memorandum: This action arises out of a patent licensing agreement entered into between plaintiff as licensee and defendant as licensor; plaintiff alleges causes of action for breach of contract, fraud, unjust enrichment and unfair competition. Defendant appeals from an order denying its motion to dismiss or, in the alternative, for summary judgment. Defendant contends that the breach of contract cause of action is time-barred; that the unjust enrichment cause of action is barred by the existence of an express written contract governing the same subject matter; that the fraud cause of action is time-barred and merely restates the breach of contract cause of action; that the unfair competition cause of action is time-barred and fails to state a cause of action; that defendant is not estopped from raising the Statute of Limitations as a defense; and that the action is barred by laches.
The cause of action for unjust enrichment must be dismissed as duplicative of the breach of contract cause of action (see, Clark-Fitzpatrick, Inc. v. Long Is. R. R. Co., 70 N.Y.2d 382, 388-389; Julien J. Studley, Inc. v. New York News, 70 N.Y.2d 628, 629-630, rearg denied 70 N.Y.2d 748). The existence of a valid and enforceable written contract governing a particular subject matter precludes recovery in quasi-contract or unjust enrichment for occurrences or transactions arising out of the same matter (see, Clark-Fitzpatrick, Inc. v. Long Is. R. R. Co., supra, at 388-389).
The unfair competition cause of action must be dismissed. Under Federal or State law, the gravamen of a claim of unfair competition is the bad faith misappropriation of a commercial advantage belonging to another by infringement or dilution of a trademark or trade name or by exploitation of proprietary information or trade secrets (see, Allied Maintenance Corp. v. Allied Mech. Trades, 42 N.Y.2d 538, 541-543; Comprehensive Community Dev. Corp. v. Lehach, 223 A.D.2d 399; Advanced Magnification Instruments v. Minuteman Opt. Corp., 135 A.D.2d 889, 891; Forschner Group v. Arrow Trading Co., 124 F.3d 402, 407-408; Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 149). The complaint fails to allege those essential elements. The complaint states a viable cause of action for fraud. Plaintiff does not allege merely that defendant entered into the contract while misrepresenting its intent to perform as agreed (see, Citibank v. Plapinger, 66 N.Y.2d 90, 94, rearg denied 67 N.Y.2d 647, citing Sabo v. Delman, 3 N.Y.2d 155), but alleges that, after the contract was entered into, defendant repeatedly misrepresented or concealed existing facts. The fraud cause of action thus alleges wrongful conduct and injurious consequences discrete from those underlying the breach of contract cause of action (see, Deerfield Communications Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 956; Board of Mgrs. v. Dylan Carpet, 182 A.D.2d 551).
Concerning the timeliness of the remaining causes of action, we conclude that the complaint is not barred by laches. Defendant has failed to show that it suffered a detriment as a result of plaintiffs failure to bring the lawsuit sooner (see, Dwyer v. Mazzola, 171 A.D.2d 726, 727; Matter of Taylor v. Vassar Coll., 138 A.D.2d 70, 73). With respect to the fraud cause of action, defendant has not sustained its burden of demonstrating that plaintiff either discovered or could have discovered the fraud more than two years prior to commencement of the action (see, Podraza v. Carriero, 212 A.D.2d 331, 340, lv dismissed 86 N.Y.2d 885). Defendant's most recent misrepresentation occurred in August 1996, and there is no basis on this record for imputing actual or constructive notice of the fraud to plaintiff at any earlier time. The fraud cause of action thus is timely (see, Emord v. Emord, 193 A.D.2d 775, 776; see also, Hoffman v. Cannone, 206 A.D.2d 740, 740-741).
Finally, plaintiff has established that defendant's conduct and misrepresentations caused plaintiff to fail to interpose its breach of contract cause of action in a timely fashion. Defendant thus is estopped from asserting the Statute of Limitations as a defense to the breach of contract cause of action (see, Simcuski v. Saeli, 44 N.Y.2d 442, 448-449; General Stencils v. Chiappa, 18 N.Y.2d 125, 127-128).
We modify the order, therefore, by granting in part defendant's motion and dismissing the causes of action for unjust enrichment and unfair competition.
Present — Denman, P. J., Hayes, Pigott, Jr., Callahan and Fallon, JJ.