Opinion
588-, 589 Index No. 652032/21 Case Nos. 2022–03478, 2022–03480
06-29-2023
EPAC TECHNOLOGIES LTD., Plaintiff–Appellant–Respondent, v. INTERFORUM S.A., et al., Defendants–Respondents–Appellants, Vivendi S.E., et al., Defendants-Respondents. John Coyle, William Dodge and Robin Effron, Amici Curiae.
Mauriel Kapouytian Woods, LLP, New York (Sherman W. Kahn of counsel), for appellant-respondent. Holwell, Shuster & Goldberg LLP, New York (Vincent Levy of counsel), for respondents-appellants and Vivendi S.E., respondent. Proskauer Rose LLP, New York (Bradley R. Bobroff of counsel), for Bollore´ S.E., respondent. DGW Kramer LLP, New York (Katherine Burghardt Kramer of counsel), for amici curiae.
Mauriel Kapouytian Woods, LLP, New York (Sherman W. Kahn of counsel), for appellant-respondent.
Holwell, Shuster & Goldberg LLP, New York (Vincent Levy of counsel), for respondents-appellants and Vivendi S.E., respondent.
Proskauer Rose LLP, New York (Bradley R. Bobroff of counsel), for Bollore´ S.E., respondent.
DGW Kramer LLP, New York (Katherine Burghardt Kramer of counsel), for amici curiae.
Kern, J.P., Moulton, Mendez, Shulman, Rodriguez, JJ.
Judgment, Supreme Court, New York County (Jennifer Schecter, J.), entered July 21, 2022, dismissing the complaint as against defendants Bollore´ S.E. and Vivendi S.E. with prejudice, unanimously reversed, on the law, without costs, the judgment vacated, the tortious interference with contract claim against them reinstated, and the matter remanded for further proceedings. Order, same court and Justice, entered June 16, 2022, which, inter alia, granted plaintiff's motion to dismiss defendants Interforum S.A. and Editis S.A.'s fraudulent inducement counterclaim, unanimously affirmed, and the appeal is otherwise dismissed, without costs, as subsumed in the appeal from the judgment.
Plaintiff stated a valid claim against Bollore´ S.E. (Bollore´) and Vivendi S.E. (Vivendi) for tortious interference with a contract between plaintiff and Interforum S.A. (Interforum) and Editis S.A. (Editis and collectively, the Editis Defendants) (see Burrowes v. Combs, 25 A.D.3d 370, 373, 808 N.Y.S.2d 50 [1st Dept. 2006], lv denied 7 N.Y.3d 704, 819 N.Y.S.2d 870, 853 N.E.2d 241 [2006] ). Although plaintiff's own allegations established that Vivendi and Bollore´ "acted to protect [their] own legal or financial stake in the breaching part[ies'] business," thereby invoking the economic interest defense ( White Plains Coat & Apron Co., Inc. v Cintas Corp., 8 N.Y.3d 422, 426, 835 N.Y.S.2d 530, 867 N.E.2d 381 [2007] ), it also alleged facts sufficient to overcome this defense – i.e., that Vivendi and Bollore´ instructed the breaching parties to employ fraudulent or illegal renegotiation tactics – including lying about their desire to acquire additional publishers, fabricating complaints about plaintiff's performance, and feigning concern about inapplicable French tax withholding requirements – and demonstrated malice by instructing nonpayment of monies duly owed (see UMG Recs., Inc. v. Escape Media Group, Inc., 37 Misc.3d 208, 225, 948 N.Y.S.2d 881 [Sup. Ct., N.Y. County 2012], revd on other grounds by 107 A.D.3d 51, 964 N.Y.S.2d 106 [1st Dept. 2013] ; Green Star Energy Solutions, LLC v. Edison Props., LLC, 2022 U.S. Dist LEXIS 196738, 2022 WL 16540835, *16 [S.D.N.Y. Oct. 28, 2022] ). Plaintiff's allegations of interference and causation with respect to Bollore´ were likewise sufficient.
Because we reinstate the tortious interference claim against Vivendi and Bollore´, necessitating an analysis of their personal jurisdiction challenge, we need not address the question of whether the motion court was required to address the jurisdictional issue as a threshold matter.
Plaintiff relies on the "closely related" doctrine – i.e., that "[a] non-signatory may also be bound by a forum selection clause where the non-signatory and a party to the agreement have such a ‘close relationship’ that it is foreseeable that the forum selection clause will be enforced against the non-signatory" ( Highland Crusader Offshore Partners, L.P. v. Targeted Delivery Tech. Holdings, Ltd., 184 A.D.3d 116, 122, 124 N.Y.S.3d 346 [1st Dept. 2020] ). Bollore´, Vivendi, and amici curiae object that wholesale application of this doctrine allows for the circumvention of federal due process requirements insofar as it dispenses with the need to perform an analysis of the defendant's contacts with the forum state. However, this Court has already held that no separate due process analysis is necessary because "the concept of foreseeability is built into the closely-related doctrine, which explicitly requires that the relationship between the parties be such that it is foreseeable that the non-signatory will be bound by the forum selection clause" ( id. at 123, 124 N.Y.S.3d 346 ; see Oberon Sec., LLC v. Titanic Entertainment Holdings LLC, 198 A.D.3d 602, 603, 153 N.Y.S.3d 838 [1st Dept. 2021] ).
We find that plaintiff alleged a sufficiently close relationship between Vivendi and the Editis Defendants to justify subjecting it to personal jurisdiction in New York and that its allegations with respect to Bollore´ were sufficient to warrant jurisdictional discovery (see Highland, 184 A.D.3d at 124–125, 124 N.Y.S.3d 346 ; Universal Inv. Advisory SA v. Bakrie Telecom Pte., Ltd., 154 A.D.3d 171, 179–180, 62 N.Y.S.3d 1 [1st Dept. 2017] ). Plaintiff alleged that Editis (which owned Interforum) was a wholly-owned subsidiary of Vivendi, that Vivendi's CEO was also the Chairman of Editis, and that Vivendi managed the Editis Defendants' performance of the subject agreement (see Tate & Lyle Ingredients Ams., Inc. v. Whitefox Tech. USA, Inc., 98 A.D.3d 401, 402–403, 949 N.Y.S.2d 375 [1st Dept. 2012] ). It is not dispositive that Vivendi did not acquire Editis until after the agreement was executed (see Metro–Goldwyn–Mayer Studios Inc. v. Canal+ Distrib. S.A.S., 2010 U.S. Dist LEXIS 12765, 2010 WL 537583, *5 [S.D.N.Y. Feb. 5, 2010] ). Although Bollore´ had only a 27% minority stake in Vivendi, including 30% of its voting shares, an indirect controlling interest may be sufficient to establish a close relationship, as may a minority stake – at least where, as here, the plaintiff alleged effective control over the signatories (the Editis Defendants) via the parent (Vivendi), citing an overlap in management, directors, and officers (see Universal, 154 A.D.3d at 179, 62 N.Y.S.3d 1 ; Power Up Lending Group, Ltd. v. Nugene Int'l., Inc., 2019 U.S. Dist LEXIS 5720, 2019 WL 2119844, *8–10 [E.D.N.Y. Jan. 10, 2019], adopted by 2019 U.S. LEXIS 33094, 2019 WL 989750 [E.D.N.Y. Mar. 1, 2019] ; LaRoss Partners, LLC v. Contact 911 Inc., 874 F.Supp.2d 147, 161 [E.D.N.Y.2012] ; Firefly Equities LLC v. Ultimate Combustion Co., 736 F.Supp.2d 797, 800 [S.D.N.Y.2010] ; Metro–Goldwyn–Mayer, 2010 U.S. Dist LEXIS 12765 at *15, 2010 WL 537583, at *5 ).
Determination of Bollore´'s forum non conveniens argument must await completion of jurisdictional discovery because, if Bollore´ is found to be bound by the forum selection clause, then dismissal would not be proper on forum non conveniens grounds (see General Obligations Law § 5–1402 ; AIG Fin. Prods. Corp. v. Penncara Energy, LLC, 83 A.D.3d 495, 496–497, 922 N.Y.S.2d 288 [1st Dept. 2011] ; Sebastian Holdings, Inc. v. Deutsche Bank AG, 78 A.D.3d 446, 447, 912 N.Y.S.2d 13 [1st Dept. 2010] ).
The fraudulent inducement counterclaim was properly dismissed for failure to sufficiently allege facts from which it may be reasonably inferred that plaintiff knew its representations regarding its projected costs were inaccurate when made (see generally Cronos Group Ltd. v. XComIP, LLC, 156 A.D.3d 54, 71–72, 64 N.Y.S.3d 180 [1st Dept. 2017] ). The Editis Defendants' argument that these facts are peculiarly within the knowledge of plaintiff is unavailing in view of the absence of any allegations that they undertook any due diligence to verify the cost projections (or took other steps to protect themselves) – thereby negating any claim of justifiable reliance (see MMCT, LLC v. JTR Coll. Point, LLC, 122 A.D.3d 497, 498, 997 N.Y.S.2d 374 [1st Dept. 2014] ; Abrahami v. UPC Constr. Co., 224 A.D.2d 231, 234, 638 N.Y.S.2d 11 [1st Dept. 1996] ).
In view of the foregoing, we need not reach the parties' arguments with respect to whether the fraudulent inducement counterclaim was duplicative of the breach of contract counterclaim and/or was barred by the agreement's merger clause.