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Atla-Medine v. Crompton Corp.

United States District Court, S.D. New York
Feb 20, 2001
00 Civ. 5901 (HB) (S.D.N.Y. Feb. 20, 2001)


imposing the more lenient pleading standard of CPC in a common law fraud action in federal court

Summary of this case from Astroworks, Inc. v. Astroexhibit, Inc.


00 Civ. 5901 (HB)

February 20, 2001


Plaintiff, a chemical distributor, asserted claims against its former suppliers in connection with the termination of plaintiffs distributorship. Plaintiffs complaint ("complaint") sets forth multiple claims against defendant Crompton Corp. ("Witco"), the last supplier for whom plaintiff distributed certain vinyl grade tin stabilizing chemical products ("VGTS"), and defendant Ciba Speciality Chemical Holding Inc. ("Ciba Holding"), plaintiffs long-time supplier prior to Ciba Holding's sale of its VGTS business to Witco in 1998. The complaint alleges nine claims: attempt to monopolize; conspiracy to monopolize; breach of an implied contract under the Convention on the International Sale of Goods ("CISG"); three claims sounding in breach of contract; fraud; intentional interference with contractual relations; and unjust enrichment. Plaintiff asserted five claims against both defendants, and asserted four claims against Witco only: the fifth and sixth claims for breach of contract; the eighth claim for intentional interference with contractual relations; and the ninth claim for unjust enrichment. Each defendant moved to dismiss all claims asserted against it.

At oral argument, I granted defendants' motions to dismiss the antitrust claims (claims one and two) and certain of the common law claims (claims seven, eight and nine) and denied defendants' motions to dismiss the claims sounding in contract: breach of implied contract under the Convention on the International Sale of Goods ("CISG"); breach of contract based on the parties course of dealing; breach of contract based on Witco's commitment to continue plaintiffs exclusive distributorship; and breach of contract based on Witco's commitment to negotiate in good faith (claims three, four, five and six, respectively).

Because my reasons for dismissing the attempt to monopolize and conspiracy to monopolize claims are set forth in the record, I do not discuss them here. In my ruling, however, I stated my intention to write an opinion that discusses my decision to dismiss plaintiffs claims of fraud, intentional interference with contractual relations, and unjust enrichment, and to provide an opportunity to the plaintiff to replead within the same time frame (12 days) that the court took to issue its opinion.


As I must, I take the facts as pled to be true on this motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). From approximately 1984 to 1998, plaintiff, a New York corporation, was the exclusive distributor in the United States of VGTS manufactured in Europe by a subsidiary of Ciba Holding, Ciba Vinyl Additives GmbH ("Ciba GmbH"). (Compl. ¶¶ 14, 15, 22, 24). VGTS is a vinyl grade tin stabilizer used most often in the production of such products as window profiles, siding and fencing. (Compl. ¶ 16). In 1998, plaintiff distributed 2.5 million pounds of Ciba Holding's VGTS product and represented approximately 20% of the U.S. VGTS market. (Compl. ¶ 18). Between 1984 and 1998, distribution of Ciba Holding's VGTS product represented 99% of plaintiffs business. (Compl. ¶ 23). In a nutshell, plaintiffs entire business was repackaging Ciba Holding's VGTS products and selling them to customers in the U.S. with whom plaintiff had long-standing relationships and who bought VGTS predominantly, if not exclusively, from plaintiff. (Compl. ¶ 31).

Witco, a Delaware corporation, is a manufacturer and distributor of VGTS products. In 1998, Witco accounted for approximately 20% of the sales of VGTS in the U.S. Plaintiff and three other sellers represented the remaining 60% of the U.S. VGTS market. (Compl. ¶ 19). Some time during or before 1997, the complaint alleges that Witco and Ciba Holding hatched a conspiracy through which Ciba Holding could profitably exit the VGTS manufacturing business and Witco could access plaintiffs clients, who at that time did not place any orders with Witco, and take over plaintiffs 20% share of the U.S. VGTS market. The plan was that Witco would buy Ciba Holding's VGTS business through an asset swap; persuade plaintiff, through representations by both Witco and Ciba Holding, that Witco would continue plaintiffs exclusive distributorship; thereby obtain introductions to plaintiffs customers; to whom Witco could then start selling directly.

In furtherance of the conspiracy, both prior to and after the asset swap, Ciba Holding and Witco represented that plaintiff would continue as Witco's exclusive distributor of the VGTS manufactured by Ciba GmbH, renamed Witco Vinyl Additives GmbH ("Witco GmbH") after the asset swap. Thus, in 1997, after the announcement of the impending asset swap, Gerhart Schlosser of Ciba Holding assured Mr. Erkohen of plaintiff that the relationship between plaintiff and Witco would survive the transaction and would continue on the same terms. (Compl. ¶ 36).

On February 12, 1998, Dr. Lawrence Brecker, a Witco vice-president, gave plaintiff the same assurances and, when asked whether plaintiff needed a formal, written agreement to protect its rights, told Mr. Erkonen that he "didn't have to worry." (Compl. ¶ 37). Dr. Brecker and Ulrich Haring, the Managing Director of Witco's VGTS newly acquired business, sent plaintiff a letter stating that plaintiffs exclusive distributorship would continue as before for the remainder of 1998, and that at some point before the end of 1998 the parties would ink a new exclusive distributorship contract. (Compl. ¶¶ 38, 39). In May, 1998, at a New York hotel, Dr. Brecker and Mr. Haring reiterated Witco's assurances to Mr. Erkohen, and as a gesture of good faith told Mr. Erkohen that Witco would pay for certain "totes," the containers used to transport VGTS. (Compl. ¶ 39).

On May 29, 1998, Witco and Ciba Holding completed the asset swap. (Compl. ¶ 40). Lulled into a false sense of security, plaintiff introduced Witco to its clients. At one such meeting in September 1998, Kevin Grodski stated to plaintiff and to representatives of Crane, plaintiffs best customer, that Witco would continue as plaintiffs exclusive distributorship in the U.S. and that the relationship would be formalized in the very near future. (Compl. ¶¶ 41-46). Shortly thereafter, Witco approached plaintiffs customers, offered to sell them VGTS directly, and stated that plaintiffs customers would soon no longer have access to Witco manufactured VGTS. (Compl. ¶ 47-49). Witco and plaintiff entered into negotiations on the terms of plaintiffs distributorship, but the negotiations never got off the ground. (Compl. ¶¶ 51-54). Following the collapse of the negotiations, in or around October 1998, Witco changed the payment terms available to plaintiff; and, less than a week later, increased the price it was charging plaintiff by almost 15% while offering to sell VGTS directly to plaintiffs former customers at the original price. (Compl. ¶¶ 55-57). By mid-1999, all of plaintiff's former customers had shifted their VGTS orders to Witco.


Motion to Dismiss Standard

In deciding a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief may be granted, the court "must accept the material facts alleged in the compliant as true." Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994). Dismissal is appropriate only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "The task of the court in ruling on a Rule 12(b)(6) motion is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998) (internal quotation marks omitted). Those causes of action dismissed with leave to replead and to which this brief opinion and order are directed include the seventh cause of action for fraud, the eighth cause of action for intentional interference with contractual relations, and the ninth cause of action for unjust enrichment.

The Seventh Cause of Action For Fraud

1. Co-Existence With Contract Claims

It is well settled that a plaintiff cannot convert a contract action into one for fraud merely by alleging that the contracting party did not intend to meet its contractual obligations. Mobile Data Shred, Inc. v. United Bank of Switzerland, 2000 WL 351516 (S.D.N.Y. 2000). When a fraud claim is based on an alleged false promise to perform a contract, the claim will only be sustained if the plaintiff can demonstrate one of the following: (1) a legal duty, such as a fiduciary duty, that is separate and distinct from the defendant's obligations under the contract; (2) a fraudulent misrepresentation that is collateral or extraneous to the contract; or (3) special damages caused by the misrepresentation and unrecoverable as contract damages. See Bridgestone/Firestone Inc., v. Recovery Credit Services, Inc., 98 F.3d 13, 20 (2nd Cir. 1996); Advanced Marine Techs., Inc., v. Burnham Sec., Inc., 16 F. Supp.2d 375, 382 (S.D.N.Y. 1998); Papa's-June Music, Inc., v. McLean, 921 F. Supp. 1154, 1160-61 (S.D.N.Y. 1996) (collecting cases); Krantz v. Chateau Stores of Can. Ltd. 256 A.D.2d 186, 187 (1st Dep't 1998).

The only misrepresentations alleged here are defendants' statements that Witco intended to retain plaintiff as Witco GmbH's exclusive distributor. The alleged damages caused by the misrepresentations are identical to the damages caused by the alleged breach of contract, and arise from Witco's failure to honor the terms of plaintiffs alleged distribution contract. Thus, the fraud claim "is based on an alleged false promise to perform a contract," and does not survive unless one of the three Bridgestone/Firestone exceptions applies.Bridgestone/Firestone, 98 F.3d at 20. The complaint does not allege, however, any facts to bring the claim within any of the exceptions outlined above. First, to the extent that either defendant had a duty to plaintiff, that duty is not distinguishable from the contractual duty of good faith and fair dealing. See Saleemi v. Pencom Systems Incorp., 2000 WL 640647, *4 (S.D.N.Y. 2000) ("[n]or can a defendant's failure to perform promises which would be encompassed by the covenant of good faith and fair dealing implicit in every contract constitute fraud") (citingNew York University v. Continental Ins. Co., 639 N.Y.S.2d 283, 288 (N.Y. 1995)); Geler v. Nat'l Westminster Bank, USA, 770 F. Supp. 201, 214 (S.D.N.Y. 1991). Neither Ciba Holding nor Witco had a fiduciary duty to plaintiff independent of Ciba Holding's long standing distribution contract with plaintiff or Witco's alleged distribution contract with plaintiff. Second, the allegedly false promise cannot be classified as "extraneous" or "collateral" to the distributorship contract since the promise was the essence of the defendants' undertaking under the agreement. See Bridgestone/Firestone 98 F.3d at 20. Third, plaintiff has not alleged any special damages proximately caused by the false representation that are not recoverable under the contract measure of damages. See id.; Krantz, 256 A.D.2d at 187. Indeed, plaintiff alleges the same $4,000,0000 damages for its contract and fraud claims.

In defense of its fraud claim, plaintiffs brief cites without discussion two cases, Stewart v. Jackson Nasb, 976 F.2d 86 (2nd Cir. 1992) and Deerfield Communications Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 956 (1986), for the proposition that "promissory statements, if made with the intention of not being honored, are actionable in fraud." (Pl. Br. at 26). Neither Stewart nor Deerfield Communications is of any help here.

In Stewart, the Court refused to dismiss plaintiffs fraud claim because, inter alia, the plaintiff, an attorney, was induced to quit her job and join defendant, a law firm, by defendant's promise that plaintiff would be promoted to head of the environmental law department when, in fact, the law firm knew that there was not, and would not be, such a department. Similarly, in Deerfield Communications the court upheld plaintiffs claim that it was induced to contract by a representation that the defendant knew to be untrue when made. Deerfield Communications, 68 N Y2d at 956 (N.Y. 1986) ("[plaintiff] alleged . . . a representation of present fact, not of future intent collateral to, but which was the inducement for the contract") (quotation marks and citations omitted).

In contrast to Stewart and Deerfield Communications, plaintiff here does not allege that defendants' statements induced plaintiff to contract with Witco. Indeed, defendants' promises were concerned only with Witco's future intent to contract with plaintiff, and could not, as a matter of logic, also be the inducement to contract. At oral argument, plaintiff essentially conceded that neither Witco nor Ciba Holding induced plaintiff to contract with Witco. (Hearing Trans. 73:15-18 ("we're not alleging that they induced us to make a contract necessarily")).

Instead, plaintiff attempts to rescue its fraud claim by arguing that Witco and Ciba Holding induced plaintiff to introduce Witco to plaintiffs customers with the promise, false when made, that Witco would continue plaintiffs distributorship. But for these false promises, plaintiff would have procured an alternative source of VGTS and never given Witco the benefit of the client introductions. That argument, however, may state a contract or quasi-contract claim, but it does not state a fraud claim. Plaintiffs introductions to its clients were part and parcel of its obligations under the alleged distribution contract. See McKernin v. Fanny Farmer Candy Shops, Inc., 176 A.D.2d 233, 234 (N.Y.App.Div. 1991) (false promise of future employment that induced plaintiff to perform services on behalf of defendant does not form the basis of a separate claim separate from plaintiffs contract claim). Therefore, plaintiff has not stated a claim for common law fraud against either Witco or Ciba Holding. Or, as Lord MacNaughten said in Reddaway v. Banham, [1896] A.C. 199, 211, "fraud is infinite in variety . . ." but it's not a contract.

2. Elements of Fraud

Although the foregoing requires dismissal of plaintiffs fraud claim at this juncture, the following may be helpful should the plaintiff choose to replead this cause of action.

"The essential elements of a cause of action for fraud are representation of a material existing fact, falsity, scienter, deception and injury." New York University v. Continental Ins. Co., 87 N.Y.2d 308, 318 (1995); see Gordon Co. v. Ross, 84 F.3d 542, 545 (2nd Cir. 1996) ("liability is determined by whether the plaintiff justifiably relied upon the defendant's misrepresentations and suffered a loss that reasonably might have been anticipated to result from the reliance").

a. scienter

To plead scienter in a common law fraud case, "it is sufficient for plaintiff to allege that defendant knowingly uttered a falsehood intending to deprive the plaintiff of a benefit and that the plaintiff was thereby deceived and damaged." CPC Int'l v. McKesson Corp., 70 N.Y.2d 268, 285 (1987). Plaintiff alleges that the purpose of the asset swap was to provide Witco access to plaintiffs clients. Although Ciba Holding would not have a continuing interest in Witco's appropriation of plaintiffs clients after the consummation of the asset swap, Ciba Holding had an interest in lulling plaintiff into a false sense of security through promises of a continuing distributorship. Ciba Holding's value to Witco depended upon Atla-Medine introducing Witco to plaintiffs clients.

Although plaintiffs allegations concerning Ciba Holding are sparse, the complaint leaves little doubt as to the nature and purpose of Witco's misstatements. Ciba Holding's argument, that none of the statements attributed to it are untrue and therefore cannot establish scienter, does not succeed because what the statements meant and how Ciba Holding intended plaintiff to interpret the alleged statements is contested, and for purposes of this motion plaintiffs version controls. Thus, plaintiff adequately pleaded scienter.

Witco does not challenge plaintiffs scienter pleading language.

b. reliance

To state a claim for fraud, plaintiff must allege that it justifiably relied on the alleged misrepresentations. Lama Holding Co. v. Smith Barney Inc., 668 N.E.2d 1370, 1373 (N Y 1996). Whether or not reliance on alleged misrepresentations is reasonable is intensely fact-specific and generally considered inappropriate for determination on a motion to dismiss. See Doehla v. Wathne Limited, Inc., No. 98-cv-6087, 1999 WL 566311, at *10 (S.D.N.Y. 1999) (citing cases).

Witco argues that once plaintiff received the March 25, 1998 letter — in which Witco allegedly conveyed its intent to continue the existing distributorship for the remainder of 1998 and to negotiate the terms and conditions of the relationship going forward — plaintiffs reliance on any of Witco's prior statements would not have been justifiable. While this argument may have merit, it is not compelling on a motion to dismiss. The complaint alleges subsequent communications by Witco that purportedly clarified the meaning of the March 25 letter (¶ 39, 44), and which were allegedly designed to convince plaintiff that Witco intended to continue the distributorship for the foreseeable future, when in fact it did not. These allegations are sufficient against Witco to show reliance.

Ciba Holding makes a slightly different argument and argues that it is not justifiable for a sophisticated distributor to rely on the assurances of a supplier that is about to be sold to another entity. In the abstract, this argument does have some common sense appeal, even on a motion to dismiss. However, here plaintiff alleges that Ciba Holding represented that it had discussed plaintiffs continued relationship with Witco (¶¶ 35-36) and that plaintiff credited Ciba Holding's representations because of the fourteen year relationship between the companies. On a motion to dismiss, that is enough to plead reliance.

c. damages

In a fraud case a plaintiff may recover only actual, pecuniary losses — so-called "out of pocket" losses. Kregos v. Assoc. Press, 3 F.3d 656, 665 (2nd Cir. 1993). Expectancy damages are not compensable in action for fraud. Id. Here, the complaint alleged damages of $4,000,000, the same amount alleged with respect to each of the other causes of action. In its papers, plaintiff amplified its damages claim by arguing that "the request for damages approximates the value of plaintiffs company at the time it was destroyed." (Pl.'s Brief at 28). However, plaintiff cannot recast expectancy damages as out-of-pocket damages so facilely. Presumably, at "the time it was destroyed," plaintiffs value was the value of its outstanding contracts or the market value of its business. But, there is no allegation that Witco caused clients to break their contracts with plaintiff, and out-of-pocket value does not encompass what a hypothetical buyer would pay for a one man distributorship whose alleged assets are limited to non-contractual client relationships. See generally Kregos, 3 F.3d 656, Rappaport v. Blake, 2000 U.S. Dist. LEXIS 12325, at * 27-28 (S.D.N.Y. 2000). Plaintiff cannot recover the anticipated profits of sales contracts it never made.See Lama Holding Co. v. Smith Barney, Inc., 668 N.Y.2d 1370, 1374 (N.Y. 1996) ("[u]nder the out-of-pocket rule, there can be no recovery of profits which would have been realized in the absence of fraud"). Notably, plaintiff has not alleged that the client relationships were under contract, or that its clients weren't free to use another distributor, or that plaintiff had reason to believe that its client relationships would continue. 3. Pleading Fraud with Specificity: Rule 9(b)

The closest the complaint comes to alleging that plaintiff had reason to believe that its client relationships would continue was the allegation that "Atla-Medine cultivated valuable business relationships with its United States VGTS customers." (Compl. ¶ 23).

Fed.R.Civ.P. 9(b) requires a plaintiff to plead fraud with particularity. To do so, the plaintiff must identify the fraudulent statement, the time and place of the statement, and the content of the allegedly fraudulent statement. See Simon v. Castello, 172 F.R.D. 103, 105 (S.D.N.Y. 1997). In applying Rule 9(b), the court reads the complaint generously and draws all inferences in favor of the pleader.See Cosmas v. Hassett, 886 F.2d 8, 11 (2nd Cir. 1989). The primary purpose of Rule 9(b) is to afford defendant fair notice of the plaintiffs claim and the factual ground upon which it is based. See Novak v. Kasaks, 216 F.3d 300 (2nd Cir. 1999); Trustees of the Plumbers v. De-Con Mech. Contractors, Inc., 896 F. Supp. 342, 346 (S.D.N Y 1995).

In various places the complaint refers to the defendants' conspiracy to defraud plaintiff through false statements, but only two paragraphs (¶¶ 36, 119) in the lengthy complaint describe individual communications from Ciba Holding about the status of plaintiff's distributorship following the asset swap. In paragraph 36 of the complaint, plaintiff alleges a 1997 communication between Mr. Gerhart Schlosser of Ciba Holding ("Schlosser") and Mr. Erkohen of Atla-Medine in which Schlosser gave his assurances that the relationship between plaintiff and Witco would "survive the transaction and would continue on the same terms." Paragraph 119 appears to refer to the same 1997 communication and adds no additional details. The complaint does not include any other Ciba Holding statements to plaintiff about Witco.

The complaint refers to several communications from Ciba Holding employees to the effect that plaintiff was Ciba Holding's exclusive distributor and would remain so for the long term, but these communications well predated the 1998 asset swap and concerned only Ciba Holding's intentions. (Comp. ¶¶ 25-30).

Witco does not challenge plaintiffs pleading under Rule 9(b).

Ciba Holding's argument that plaintiffs statements are insufficiently particular overstates the demands of Rule 9(b). Rule 9(b) does not require that plaintiff allege in detail each of Ciba Holding's alleged statements. See Trustees of the Plumbers, 896 F. Supp. at 346 ("court must deny a motion to dismiss under Rule 9(b) as long as some of the allegations of fraud are adequate"). As against Ciba Holding, the complaint does skate close to the line of insufficient particularity, but paragraph 36 does set forth in enough detail Ciba Holding's allegedly fraudulent statements and their context, even if it omits the exact date of Schlosser's representations. Moreover, the complaint gives Ciba Holding fair notice of plaintiffs claim and the factual grounds upon which it is based. Thus, upon reflection, plaintiff satisfies the requirements of Rule 9(b).

The Eighth Cause of Action For Intentional Interference With Contract

There are two causes of action that arise from interference with contractual relations in New York, tortious interference with existing contractual relations, and tortious interference with prospective contractual relations. Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 406 N.E.2d 445, 448 (N.Y. 1980) (distinguishing between the two claims).

To state a claim for tortious interference with contractual relations, a plaintiff must plead that the defendant intentionally procured a third-party's breach of an existing contract with the plaintiff. See Lama Holding Co., v. Smith Barney Inc., 88 N.Y.2d 413, 424 (N.Y. 1996); Nifty Foods Corp., v. Great Atlantic Pacific Tea Co., 614 F.2d 832, 837 (2nd Cir. 1980) ("[am essential element of the tort of inducement of breach of contract is the existence of a valid contract"); NBT Bancorp Inc., v. Fleet/Norstar Financial Group, Inc., 664 N.E.2d 492, 495 (N.Y. 1996). Plaintiff alleges that it enjoyed "valuable ongoing contractual relationships with its United States customers," but it does not allege that Witco caused plaintiffs customers to breach their contracts. (Compl. ¶ 127). The allegation that plaintiff was deprived of the "benefits of its existing contractual relationships" is not sufficient. (Compl. ¶ 129). Therefore, as presently plead, the plaintiff has not stated a claim for tortious interference with contractual relations.

To state a claim for tortious interference with prospective contractual relations, plaintiff must show (1) business relations with a third party; (2) defendants' interference with those business relations; (3) defendants acted with the sole purpose of harming the plaintiff or used dishonest, unfair or improper means; and (4) injury to the relationship.See Purgess v. Sharrock, 33 F.3d 134, 142 (2d Cir. 1994); Sepenuk v. Marshall, 2000 U.S. Dist. LEXIS 17823, at * 11 (S.D.N.Y. 2000). Atla-Medine alleges that Witco deliberately mislead customers about plaintiffs ability to sell VGTS, disparaged plaintiffs business, and charged plaintiff higher prices than other customers for the purpose of destroying plaintiffs business relations with its customers. (Compl. ¶ 128). Witco argues that plaintiff fails to meet its pleading burden because plaintiff cannot allege that Witco's "sole motive" was to inflict injury on the plaintiff. However, to satisfy the third element of the tort, plaintiff need only allege that Witco used "dishonest, unfair or improper means" to obtain the business of plaintiffs former clients. See Hannex Corp. v. GMI. Inc., 140 F.3d 194, 206 (2nd Cir. 1998). "The definition of wrongful means under New York law includes "physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure." Id.; see NBT Bancorp Inc., 664 N.E.2d at 621. Plaintiffs allegations that Witco misrepresented its intentions concerning plaintiffs distributorship in order to obtain introductions to plaintiffs customers clearly meets the definition of "unfair or improper means."

Therefore, plaintiffs eighth claim at present survives only insofar as it states a claim for tortious interference with prospective economic advantage against Witco.

The Ninth Cause of Action For Unjust Enrichment

In order to make out a claim for unjust enrichment, a claimant must establish (1) the performance of the services in good faith; (2) the acceptance of the services by the person to whom they are rendered; (3) an expectation of compensation therefor; and (4) the reasonable value of the services. See Martin H. Bauman Assocs. v. H M Intl. Transp., Inc., 171 A.D.2d 479, 484 (N.Y.App.Div. 1991).

The complaint does address each element of the claim. Plaintiff introduced Witco to its customers, Witco enjoyed the benefits of these introductions, plaintiff expected compensation in the form of an extension of its exclusive distributorship, and Witco was enriched by not less than $4,000,000. (Compl. ¶¶ 131-135). However, plaintiffs conclusory damages allegation is not sufficient. Martin H. Bauman Assoc., 171 A.D.2d at 484. As alleged, it is impossible to distinguish between contract claims, each of which asserts damages of $4,000,000, and the claim for unjust enrichment See id. (Dismissing a quantum meruit claim because "quantum meruit is intended to avoid a party's unjust enrichment; it is certainly not a device wherein a plaintiff may enforce a purported agreement which might ultimately be found not to be viable. Here, plaintiffs second cause of action is, in effect, indistinguishable from its first claim for breach of contract."); Fallon v. McKeon., 230 A.D.2d 629, 630 (N.Y.App.Div. 1996) (dismissing a claim for unjust enrichment because the plaintiff failed to identify the reasonable value of the services performed by plaintiff, and because the plaintiff "simply claim[ed] damages identical to the other four causes of action"). Plaintiff has merely restated its $4 million in contractual damages as the reasonable value of the introductions to its clients. Consequently, plaintiff has not stated a claim for unjust enrichment against Witco.


For the reasons set forth above, Witco's and Ciba Holding's motions to dismiss are granted in part and denied in part. As against Witco, the seventh, eighth and ninth claims are dismissed, as against Ciba Holding, the seventh claim is dismissed. To complete the record it is worth repeating here that at the oral argument I granted both defendants' motions to dismiss claims one and two, denied Witco's motion with respect to claims three, four, five and six, and denied Ciba Holding's motion with respect to claims three and four. Plaintiff may replead within 12 days of the date of this opinion.


Summaries of

Atla-Medine v. Crompton Corp.

United States District Court, S.D. New York
Feb 20, 2001
00 Civ. 5901 (HB) (S.D.N.Y. Feb. 20, 2001)

imposing the more lenient pleading standard of CPC in a common law fraud action in federal court

Summary of this case from Astroworks, Inc. v. Astroexhibit, Inc.
Case details for

Atla-Medine v. Crompton Corp.

Case Details

Full title:ATLA-MEDINE, plaintiff, v. CROMPTON CORP. f/k/a CK WITCO CORPORATION f/k/a…

Court:United States District Court, S.D. New York

Date published: Feb 20, 2001


00 Civ. 5901 (HB) (S.D.N.Y. Feb. 20, 2001)

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