Tekdoc Svc LLC et al v. 3i-Infotech Inc
Filing
160
MEMORANDUM OPINION. Signed by Judge Mary L. Cooper on 8/16/2012. (gxh)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TEKDOC SERVICES, LLC, et al.,
CIVIL ACTION NO. 09-6573 (MLC)
MEMORANDUM OPINION
Plaintiffs,
v.
3i-INFOTECH INC., et al.,
Defendants.
COOPER, District Judge
The plaintiffs, Lou Ann Naples (“Naples”) and TekDoc Services,
LLC (“TekDoc”) (collectively, “Plaintiffs”), bring this action
against the defendants, 3i-Infotech Inc. (“Infotech”, formerly
known as Innovative Business Solutions, Inc. (“IBSI”)) and Ranbaxy,
Inc. (“Ranbaxy”).
Compl.)1
(See generally dkt. entry no. 95, 2d Am.
Plaintiffs assert claims against Infotech and Ranbaxy for
breach of contract, breach of the implied covenant of good faith
and fair dealing, unjust enrichment, innocent misrepresentation,
fraud in the inducement, negligent misrepresentation, and negligent
infliction of emotional distress.
(Id. at 1-9, 10-17.)
They also
assert a claim against Infotech for alleged violations of the
Connecticut Unfair Trade Practices Act, C.G.S. § 42-110(a), et seq.
(“CUTPA”).
1
(Id. at 9.)
The Court acknowledges that Plaintiffs initially interacted
and contracted with IBSI rather than Infotech. We will, for ease
of reference, nevertheless refer to that party only as “Infotech”.
Infotech now moves for summary judgment in its favor and
against Plaintiffs on all of the claims asserted against it.
(See
dkt. entry no. 137, Motion; dkt. entry no. 137-1, Infotech Br.)
Plaintiffs oppose the Motion.
Br.)2
(Dkt. entry no. 149, Pls.’ Opp’n
Both Infotech and Plaintiffs have submitted argument
concerning choice of law analysis.
The Court will resolve the Motion without oral argument
pursuant to Local Civil Rule 78.1(b).
I.
BACKGROUND3
A.
The Plaintiffs
Naples is a citizen of Connecticut.
Pls.’ Response to Infotech SOF at ¶ 3.)
(See Infotech SOF at ¶ 3;
She is the sole member and
employee of TekDoc, a limited liability company organized under the
2
Ranbaxy separately moves for summary judgment in its favor
and against Plaintiffs on all counts asserted against it. (Dkt.
entry no. 146, Ranbaxy Motion.) Plaintiffs also oppose that
motion. (Dkt. entry no. 151, Pls.’ Opp’n to Ranbaxy Motion.) The
Court will resolve the Ranbaxy Motion in a separate Memorandum
Opinion.
3
Plaintiffs and Infotech do not dispute the majority of the
facts involved in this action. (Compare dkt. entry no. 137-2,
Infotech Statement of Undisputed Material Facts (“Infotech SOF”)
with dkt. entry no. 150, Pls.’ Response to Infotech SOF; compare
also dkt. entry no. 151, Pls.’ Statement of Disputed Material Facts
(“Pls.’ SOF”) with dkt. entry no. 156-2, Infotech Response to Pls.’
SOF.) The Court thus provides most citations to the parties’
agreed upon statements of fact. The Court, in the few instances
where these parties dispute non-material facts, recites the facts
in the light most favorable to Plaintiffs, draws inferences in
Plaintiffs’ favor, and cites directly to the evidence of record.
See Colgate-Palmolive Co. v. Tandem Indus., No. 10-4163, 2012 WL
1995021, at *1 n.2 (3d Cir. June 5, 2012).
2
laws of that state.
(Infotech SOF at ¶¶ 4-5; Pls.’ Response to
Infotech SOF at ¶¶ 4-5.)
It appears that Naples has worked in and
has experience in the field of information technology (“IT”).
B.
Infotech & Ranbaxy
Infotech is an IT company that, inter alia, contracts with
clients to source independent IT professionals for temporary IT
consulting assignments.
to Infotech SOF at ¶ 9.)
(See Infotech SOF at ¶ 9; Pls.’ Response
Infotech entered into such a contract in
July of 2004 with Ranbaxy, a manufacturer of pharmaceutical
products.
(Infotech SOF at ¶¶ 10-11; Pls.’ Response to Infotech
SOF at ¶¶ 10-11.)
Ranbaxy maintains its corporate headquarters in
India and its administrative offices in Princeton, New Jersey.
(See Infotech SOF at ¶ 2; Pls.’ Response to Infotech SOF at ¶ 2.)
Infotech’s contract with Ranbaxy, the “Master Services
Agreement”, provides in pertinent part that Infotech:
shall provide Consultant(s) as necessary to perform the
services identified in the corresponding Statement of
Work (“Services”). Each Statement of Work (“SOW”) shall
specifically identify this Agreement and will set forth
the project, the Services to be provided, length of
assignment, name of Consultant(s), applicable billing
rate and any other relevant information with regard to
the provision of the Services.
(Dkt. entry no. 149-2, Sabatini Aff., Ex. 7, Master Services
Agreement at ¶ 1.1.)
It also provides that:
Consultant(s) shall not be deemed employees of the
Ranbaxy [sic]. [Infotech] shall remain solely
3
responsible for the Consultant’s work performance,
control and supervision, including matters relating to
the quality and quantity of Consultant’s [work product.]
(Id. at ¶ 2.2.)
C.
Naples’s Initial Interactions with Infotech & Ranbaxy
In January of 2005, Infotech, acting pursuant to the Master
Services Agreement, advertised on the internet that it sought a
“validation specialist, contract to hire, temp to perm”.
(See
Infotech SOF at ¶¶ 10, 12; Pls.’ Response to Infotech SOF at ¶¶ 10,
12.)
Naples saw the advertisement, forwarded her résumé to
Infotech, and was thereafter contacted by Infotech recruiter Sanjay
Bodduluri.
(Infotech SOF at ¶¶ 12-13; Pls.’ Response to Infotech
SOF at ¶¶ 12-13.)
Bodduluri explained that Infotech was recruiting
independent contractors for a “temp to perm position as a
validation manager” for Ranbaxy in Ranbaxy’s Princeton facility.
(See Infotech SOF at ¶¶ 14, 21; Pls.’ Response to Infotech SOF at
¶¶ 14, 21.)
Bodduluri further explained that Ranbaxy both: (1)
preferred applicants who desired permanent employment with Ranbaxy;
and (2) retained final decision-making authority regarding any
potential conversion from temporary consultant to permanent
employee.
(Infotech SOF at ¶ 15; Pls.’ Response to Infotech SOF at
¶ 15; Pls.’ SOF at ¶¶ 2, 87; Infotech Response to Pls.’ SOF at
¶¶ 2, 87.)
4
Naples was thereafter twice interviewed by Ranbaxy personnel.
She first spoke with Ranbaxy’s IT manager, Jeevan Rebba, by
telephone, and she later met with both Rebba and Rebba’s superior,
Suneet Walia, at Ranbaxy’s Princeton facility.
(See Infotech SOF
at ¶¶ 17-19, 22; Pls.’ Response to Infotech SOF at ¶¶ 17-19, 22.)
Rebba, during the phone interview, informed Naples that the
available consulting position was “temp to perm” and that Ranbaxy
would only consider applicants who were interested in permanent
employment.
at ¶ 17.)
(Infotech SOF at ¶ 17; Pls.’ Response to Infotech SOF
Walia reiterated those points during Naples’s in-person
interview, and further informed Naples that Ranbaxy intended to
convert the temporary consultant to a permanent employee after
approximately six months.
(Infotech SOF at ¶ 19; Pls.’ Response to
Infotech SOF at ¶ 19; Pls.’ SOF at ¶¶ 3, 89; Infotech Response to
Pls.’ SOF at ¶¶ 3, 89.)
D.
Naples’s Understanding and Acceptance of the Ranbaxy
Assignment
Bodduluri, following Naples’s interviews with Rebba and Walia,
contacted Naples, offered her a temporary consulting position at
Ranbaxy, and informed her that Ranbaxy wanted her to begin work
immediately.
SOF at ¶ 22.)
(See Infotech SOF at ¶ 22; Pls.’ Response to Infotech
Naples accepted the position by entering into a
written contract, through TekDoc, with Infotech (the “Software
Services Agreement”).
(Infotech SOF at ¶ 24; Pls.’ Response to
5
Infotech SOF at ¶ 24; dkt. entry no. 149-2, Sabatini Aff., Ex. 8,
Software Services Agreement at preface (“This Software Services
Agreement is part of the agreement made . . . by and between
[Infotech] and [TekDoc,] jointly on behalf of itself and its
personnel[.]”).)
The Software Services Agreement provided, inter
alia, that:
COMPENSATION FOR SERVICES
A.
Payment for services actually performed
will be made in [the] corporate or business name of
Contractor from time to time. The payment amount to
Contractor will be as reflected in the Purchase Order,
Exhibit “A”, which when signed by Contractor shall be
incorporated herein in full by this reference thereto,
and no other compensation in any form, including
benefits, will be provided by [Infotech] or anyone else.
B.
If compensation is to be based on an
hourly rate, Contractor shall maintain records of the
hours that services have been performed, have a
[Ranbaxy] representative verify those hours by signing
the records, and submit to [Infotech] those records
along with Contractor’s invoice for the amount due to
Contractor for the hours worked and verified.
(Software Services Agreement at ¶¶ 4(A)-(B).)
The first Purchase
Order, dated January 18, 2005 and signed by Naples on January 20,
2005 (“First Purchase Order”), recited that: (1) Naples’s start
date was January 24, 2005; (2) the term of the contract was six
months, with the possibility of further extensions; and (3) Naples
would receive an hourly rate for her services, i.e., eighty-five
dollars per hour.
(Dkt. entry no. 149-2, Sabatini Aff., Ex. 8,
6
First Purchase Order.)
Naples thus understood that she would not
receive payment from Infotech unless she submitted an invoice,
accompanied by Ranbaxy-approved timesheets.
(See Infotech SOF at
¶ 33; Pls.’ Response to Infotech SOF at ¶ 33.)
The Software Services Agreement also provides that:
9.
LIABILITY INDEMNITY
A.
Because of the Independent Status of
Contractor and its personnel, Contractor is solely and
completely accountable for the services it provides to
Client . . . . Contractor hereby releases [Infotech]
from any liability relating to representations about the
task requirements or to conditions under which
Contractor may be performing services; those being
negotiated by Contractor. . . .
B.
Further[,] because of the relationship to
the subject matter of this Agreement, including, but not
by way of limitation [Infotech] has no right to control
any aspect of the project [on] which Contractor will be
performing services, Contractor hereby indemnifies and
holds [Infotech] . . . harmless from any and all
liability, cost, expense, or other financial detriment,
whether incurred or alleged, which Contractor, or its
personnel may . . claim, directly or indirectly, due to
its act or omission during the performance or nonperformance of its services for or on behalf of
[Ranbaxy.]
* * *
14.
TERMS OF AGREEMENT. . .
C.
The agreement . . . may be terminated by
either party at any time without further obligation upon
fourteen (14) days written notice to the other party.
7
15. MISCELLANEOUS: This Agreement represents the
entire Agreement of [Infotech] and Contractor and any
modification thereof shall not be effective unless
contained in a writing signed by both parties. . . .
Contractor and Contractor’s personnel represent that
they and each of them, have read and understand the
terms of this Agreement, have had an opportunity to ask
any questions and to seek the assistance of their legal
counsel, and are not relying upon any advice from
[Infotech] in this regard. This agreement shall be
governed by [the] laws of Pennsylvania. . . .
(Software Services Agreement at ¶¶ 9(A)-(B), 14(C), 15.)
Naples was deposed twice in this action, and she testified at
those depositions that she likely would not have accepted the
temporary consulting assignment had it not been a “temp-to-perm”
position, or if she had known that Ranbaxy had yet to establish the
permanent position.
(Infotech SOF at ¶ 23; Pls.’ Response to
Infotech SOF at ¶ 23; Pls.’ SOF at ¶¶ 3, 6; Infotech Response to
Pls.’ SOF at ¶¶ 3, 6.)
She also testified that, when she accepted
the temporary consulting position, she understood that Ranbaxy
wanted to observe her during the initial six month assignment
(i.e., the term provided in the First Purchase Order) before
deciding whether to hire her as a permanent employee.
(See
Infotech SOF at ¶ 20; Pls.’ Response to Infotech SOF at ¶ 20.)
E.
Naples’s Time at Ranbaxy in New Jersey
Naples, Infotech, and Ranbaxy further extended Naples’s term
as a temporary consultant by “6 months with possible extensions”
through a second Purchase Order, dated July 8, 2005 and signed by
8
Naples on July 27, 2005 (“Second Purchase Order”).
(Dkt. entry no.
149-2, Sabatini Aff., Ex. 8, Second Purchase Order; see also
Infotech SOF at ¶ 30; Pls.’ Response to Infotech SOF at ¶ 30.)
The
Second Purchase Order stated that “Contractor can terminate this
contract with 30 days[’] written notice to the end client (Ranbaxy
Pharmaceutical)/[Infotech].
Where as end Client may terminate the
contract with or with out notice.”
(Second Purchase Order; see
also Infotech SOF at ¶ 30; Pls.’ Response to Infotech SOF at ¶ 30.)
Naples, while working in New Jersey, lived in a hotel in New
Jersey three nights each week.
(Pls.’ SOF at ¶ 14; Infotech
Response to Pls.’ SOF at ¶ 14.)
F.
Naples’s Assignment in India
Rebba approached Naples in October of 2005 and offered her an
assignment at Ranbaxy’s facility in India.
(Infotech SOF at ¶ 34;
Pls.’ Response to Infotech SOF at ¶ 34; see also Pls.’ SOF at ¶ 18
(“Naples was told that she was ‘required’ to go to India for a new
assignment . . .”); Infotech Response to Pls.’ SOF at ¶ 18.)
Rebba
and Naples agreed that Naples, while in India, would work more than
eight hours per day.
(Infotech SOF at ¶ 49; Pls.’ Response to
Infotech SOF at ¶ 49; Pls.’ SOF at ¶¶ 33, 35; Infotech Response to
Pls.’ SOF at ¶¶ 33, 35.)
They agreed that Naples would thus submit
invoices for the first eight hours per day that she worked, accrue
“comp time” for the ninth and tenth hours, and submit invoices for
anything beyond the tenth hour.
(Infotech SOF at ¶ 49; Pls.’
9
Response to Infotech SOF at ¶ 49; Pls.’ SOF at ¶ 33; Infotech
Response to Pls.’ SOF at ¶ 33.)4
Rebba and Naples also discussed
Ranbaxy’s long-term intention to hire Naples as a permanent
validation manager, and they discussed the terms of such
employment.
(Infotech SOF at ¶ 36; Pls.’ Response to Infotech SOF
at ¶ 36; Pls.’ SOF at ¶ 19; Infotech Response to Pls.’ SOF at
¶ 19.)
Naples accepted the assignment in India, partly because she
feared that she would otherwise forfeit her position as a temporary
consultant and the possibility of permanent employment.
(Pls.’ SOF
at ¶ 61; Infotech Response to Pls.’ SOF at ¶ 61; see also dkt.
entry no. 137-5, Toss Aff., Ex. B, 10-27-08 Naples Dep. at 86; dkt.
entry no. 137-6, Toss Aff., Ex. E, 3-8-11 Naples Dep. at 60-62.)5
She did not immediately inform Infotech of the assignment, or of
her decision to accept it; she testified, however, that Infotech
employees told her, in other circumstances, to “do whatever Ranbaxy
told her to do.”
(Infotech SOF at ¶¶ 40-41; Pls.’ Response to
Infotech SOF at ¶¶ 40-41; 10-27-08 Naples Dep. at 84-86.)
Naples
4
Naples described “comp time” as time that she could accrue
and apply toward future timesheets. (See Infotech SOF at ¶ 50;
Pls.’ Response to Infotech SOF at ¶ 50.)
5
Infotech and Plaintiffs separately submitted excerpts from
Naples’s 10-27-08 deposition. The excerpts are not identical.
(Compare 10-27-08 Naples Dep. with dkt. entry no. 149-2, Sabatini
Aff., Ex. 2, 10-27-08 Naples Dep.) Citations to the 10-27-08
Naples Deposition may relate to either of those submissions.
10
nonetheless understood that she could have declined the assignment.
(See 3-8-11 Naples Dep. at 62.)
Ranbaxy’s human resources department formally posted a job
opening for a validation manager on October 27, 2005.
(Infotech
SOF at ¶¶ 38, 42; Pls.’ Response to Infotech SOF at ¶¶ 38, 42;
Pls.’ SOF at ¶¶ 20, 90; Infotech Response to Pls.’ SOF at ¶¶ 20,
90.)
Naples interviewed for the job.
(Pls.’ SOF at ¶ 90; Infotech
Response to Pls.’ SOF at ¶ 90.)
G.
Naples’s Time at Ranbaxy in India
1.
Ranbaxy Assumed Responsibility for Naples’s Travel
and Lodging While in India
Naples arrived in India on October 29, 2005.
at ¶ 44; Pls.’ Response to Infotech SOF at ¶ 44.)
(Infotech SOF
Prior to her
arrival, Naples and Ranbaxy agreed that Ranbaxy would make and pay
for all arrangements related to Naples’s assignment in India,
including housing.
SOF at ¶ 24.)
(Pls.’ SOF at ¶ 24; Infotech Response to Pls.’
Ranbaxy employees thus assisted Naples by selecting
her departure date, helping her to obtain a visa, arranging
transportation from the airport, and making her living
arrangements.
(Infotech SOF at ¶ 43; Pls.’ Response to Infotech
SOF at ¶ 43; Pls.’ SOF at ¶¶ 23-27; Infotech Response to Pls.’ SOF
at ¶¶ 23-27.)
11
2.
Naples’s Living and Working Conditions
Naples claims that she “suffered from deplorable working and
living conditions” while on assignment in India “and wanted to
escape.”
¶ 63.)
(Pls.’ SOF at ¶ 63; Infotech Response to Pls.’ SOF at
Ranbaxy failed, despite its assurances to the contrary, to
have a driver meet Naples at the airport and transport her to her
lodging.
¶ 27.)
(Pls.’ SOF at ¶ 27; Infotech Response to Pls.’ SOF at
Ranbaxy also placed Naples in a guest house, whereas it
placed other employees in hotels.
Response to Pls.’ SOF at ¶ 25.)
(Pls.’ SOF at ¶ 25; Infotech
Naples, while staying at the guest
house, lacked hot water and was unable to shower, suffered from bed
bug attacks, and encountered large lizards.
(Pls.’ SOF at ¶¶ 37,
47; Infotech Response to Pls.’ SOF at ¶¶ 37, 47.)
She was told not
to loiter outside the guest house because it was dangerous.
(Pls.’
SOF at ¶ 40; Infotech Response to Pls.’ SOF at ¶ 40.)
Naples suffered from similar discomfort at work.
Ranbaxy
required Naples to work seven days per week and as many as twenty
hours per day, barred her from taking breaks for either lunch or
dinner, and did not allow her to make outgoing phone calls.
(Pls.’
SOF at ¶¶ 35, 50, 58; Infotech Response to Pls.’ SOF at ¶¶ 35, 50,
58.)
12
3.
Naples Complained to Ranbaxy about Her Living and
Working Conditions
Naples complained to several Ranbaxy employees, including
Rebba and Walia, about her working and living conditions.
(Pls.’
SOF at ¶¶ 41, 43-46, 49-52, 57-59; Infotech Response to Pls.’ SOF
at ¶¶ 41, 43-46, 49-52, 57-59.)
Naples alleges that Ranbaxy, upon
receiving her complaints, placed further controls on her and took
her passport from her.
(Pls.’ SOF at ¶¶ 51, 53.; Infotech Response
to Pls.’ SOF at ¶¶ 51, 53.)
Ranbaxy did move Naples from the guest
house to a hotel, but Naples alleges that the hotel still
constituted “dirty and substandard living conditions”.
(Pls.’ SOF
at ¶ 48; Infotech Response to Pls.’ SOF at ¶ 48.)
4.
Naples’s Communications with Infotech
Naples, before leaving for India, did not advise Infotech
either that Ranbaxy had asked her to go to India or that she had
accepted Ranbaxy’s assignment in India.
(Infotech SOF at ¶ 41;
Pls.’ Response to Infotech SOF at ¶ 41.)
Infotech did not, in
fact, learn that Naples was in India until Naples responded to an
Infotech e-mail regarding Naples’s timesheets.
(Infotech SOF at ¶
42; Pls.’ Response to Infotech SOF at ¶ 42.)
Naples alleges that Infotech was aware, based on her
timesheets, that she was “working around the clock”, but
acknowledges that she did not notify Infotech of her other living
and working conditions.
(10-27-08 Naples Dep. at 158.)
13
She
nonetheless infers that Infotech representatives were aware of
those conditions because, as she alleges, Infotech representatives
periodically met with Rebba.
Naples Aff. at ¶¶ 59, 62).)
(See, e.g., Pls.’ SOF at ¶ 60 (citing
When Naples attempted to raise and
discuss the issues relating to her working and living conditions
with Infotech, Infotech representatives told Naples that she could
discuss pay-related issues with Infotech but should direct all
other issues to Ranbaxy.
(Pls.’ SOF at ¶ 55; Infotech Response to
Pls.’ SOF at ¶ 55; dkt. entry no. 149-2, Sabatini Aff., Ex. 5,
Naples Aff. at ¶ 59.)
5.
Naples Extended her Stay in India
Ranbaxy employees asked Naples to extend her stay in India and
indicated that refusing would result in forfeiture of both the
temporary consulting position and the possibility of permanent
employment.
at ¶ 61.)
(See Pls.’ SOF at ¶ 61; Infotech Response to Pls.’ SOF
Naples, who still desired permanent employment, thus
agreed to remain in India and stayed for a total of approximately
seven weeks.
(Infotech SOF at ¶¶ 48, 51; Pls.’ Response to
Infotech SOF at ¶¶ 48, 51; Pls.’ SOF at ¶¶ 62, 67; Infotech
Response to Pls.’ SOF at ¶¶ 62, 67.)
Naples neither informed
Infotech of the extension nor sought Infotech’s consult before
agreeing to it.
(See Infotech SOF at ¶ 48; Pls.’ Response to
Infotech SOF at ¶ 48; 10-27-08 Naples Dep. at 125-26.)
14
H.
Events Following Naples’s Return to New Jersey
Naples returned to New Jersey in late 2005.
(See Infotech SOF
at ¶ 44 (establishing that Naples arrived in India on October 29,
2005); Pls.’ Response to Infotech SOF at ¶ 44 (same); Pls.’ SOF at
¶ 67 (establishing that Naples remained in India for approximately
seven weeks); Infotech Response to Pls.’ SOF at ¶ 67 (same).)
She
learned, shortly after her return, that Ranbaxy had placed the
permanent validation manager position “on hold”.
Dep. at 127.)
(3-8-11 Naples
Rebba informed her on January 6, 2006 that the
position “would open up again in two weeks”.
(Id.)
Rebba, per
Naples, continually reassured Naples by telling her that the
permanent validation manager position would open soon, and that she
should not worry.
(Pls.’ SOF at ¶ 74; Infotech Response to Pls.’
SOF at ¶ 74.)
Naples did not, however, receive an offer for permanent
employment at Ranbaxy.
Infotech contacted Naples by e-mail on
January 16, 2006 and informed her both that: (1) Ranbaxy “can only
provide” a third Purchase Order for “6 months . . . with good
possibility of extension after 6 months”; and (2) “[a]bout joining
them full time, at this stage they have ruled out that
possibility.”
(Dkt. entry no. 149-3, Sabatini Aff., Ex. 23,
1-16-06 E-mail Chain Between Naples and Infotech.)
Naples
testified that Bidlur Shivaprakash, Infotech’s president,
15
thereafter told her that she should accept the third Purchase Order
because “the permanent position [would] open up again and [Naples
would] be hired”.
(Pls.’ SOF at ¶ 72; Infotech Response to Pls.’
SOF at ¶ 72.)
Naples informed Shivaprakash in a January 18, 2006 e-mail that
she would “go ahead and sign the six month contract.
I’m enjoying
the work, so I guess the other things will eventually fall in
place.”
(1-16-06 E-mail Chain Between Naples and Infotech.)
She
signed the third Purchase Order (“Third Purchase Order”) on January
24, 2006.
(Infotech SOF at ¶ 31; Pls.’ Response to Infotech SOF at
¶ 31; dkt. entry no. 137-6, Toss Aff., Ex. D, Third Purchase
Order.)
The Third Purchase Order, like the Second Purchase Order,
stated that TekDoc could terminate the Software Services Agreement
with thirty days’ written notice to Ranbaxy, and that Ranbaxy could
terminate the contract with or without written notice.
I.
(See id.)
Ranbaxy Terminated Naples’s Employment as an Independent
Consultant
Rebba contacted Naples on March 28, 2006, to inform her that
April 21, 2006 would be her “roll-off” date, i.e., the last day
that Ranbaxy would require her services as an independent
consultant.
(Dkt. entry no. 137-5, Toss Aff., Ex. F, 3-28-06
E-Mail from Rebba to Naples.)
Rebba, in effect, informed Naples
that Ranbaxy was terminating the Software Services Agreement.
(See Pls.’ SOF at ¶ 77; Infotech Response to Pls.’ SOF at ¶ 77.)
16
Rebba cited, as reasons supporting the termination, “the projects
on hand and also the project budget.”
(3-28-06 E-Mail from Rebba
to Naples.)
Naples was not, however, permitted to work at any Ranbaxy
facility after Friday, March 31, 2006.
(Pls.’ SOF at ¶ 78;
Infotech Response to Pls.’ SOF at ¶ 78.)
Shivaprakash of Infotech
contacted Naples after she left work that day and informed her that
it had been her last day with Ranbaxy.
(Pls.’ SOF at ¶ 78;
Infotech Response to Pls.’ SOF at ¶ 78.)6
Naples, who of course
had not until then been informed that it was her last day at
Ranbaxy, had not submitted her final timesheets for approval and
signature by Ranbaxy employees.
(Pls.’ SOF at ¶ 79; Infotech
Response to Pls.’ SOF at ¶ 79.)
J.
Naples’s Unpaid Invoices
Naples, through TekDoc, submitted two invoices that are now at
issue.
The first of these invoices, Invoice IBSI 1015 (“Invoice
1015”), claims $3,480.00 in wages for the week ending on April 2,
2006, i.e., the last week that Naples worked as an independent
consultant at Ranbaxy.
(Infotech SOF at ¶ 57; Pls.’ Response to
Infotech SOF at ¶ 57.)
Naples submitted Invoice 1015 with an
unsigned timesheet that set forth the hours that she allegedly
worked and for which she sought payment.
6
(See Infotech SOF at
Naples asserts that Shivaprakash informed her that Ranbaxy
terminated her contract because, inter alia, Naples complained
about her living conditions in India. (Naples Aff. at ¶ 60.)
17
¶¶ 57-58; Pls.’ Response to Infotech SOF at ¶¶ 57-58.)
She has
testified that Shivaprakash stated that he would meet with Rebba
and have Rebba sign and approve that timesheet.
(10-27-08 Naples
Dep. at 236.)
The second invoice at issue, Invoice IBSI 1017 (“Invoice
1017”), claims $17,400 “plus mileage reimbursement” over an
unspecified period of time.
to Infotech SOF at ¶ 60.)
(Infotech SOF at ¶ 60; Pls.’ Response
The claim for $17,400 represents eighty
hours of “Comp time for work in US”, eighty hours of “Comp time for
work in India”, twenty-four hours of “Comp time for travel from US
to India”, and sixteen hours for “Comp time for Travel from India
to US”.
60.)
(Infotech SOF at ¶ 60; Pls.’ Response to Infotech SOF at ¶
Invoice 1017, like Invoice 1015, was accompanied by unsigned
timesheets setting forth the hours that Naples allegedly worked and
for which she sought payment.
(Infotech SOF at ¶ 61; Pls.’
Response to Infotech SOF at ¶ 61.)
II.
DISCUSSION
Infotech now moves for summary judgment in its favor and
against Plaintiffs with respect to all of the claims asserted
against it, i.e., Plaintiffs’ claims for: (1) breach of contract;
(2) breach of the implied covenant of good faith and fair dealing;
(3) unjust enrichment; (4) innocent misrepresentation; (5) fraud in
the inducement; (6) negligent misrepresentation; (7) negligent
18
infliction of emotional distress; and (8) violations of CUTPA.
(See Motion; see also 2d Am. Compl. at 1-17 (setting forth claims
against Infotech).)
The Court, before addressing the merits of
those claims, will address the parties’ choice of law analysis.
A.
Choice of Law Analysis
The Court has jurisdiction over this action pursuant to 28
U.S.C. § 1332 (“Section 1332”).
(See 2d Am. Compl. at ¶¶ 1, 6
(demonstrating that the Court should deem both Naples and TekDoc to
be citizens of Connecticut and asserting jurisdiction pursuant to
Section 1332); Infotech SOF at ¶ 1 (demonstrating that the Court
should deem Infotech to be a citizen of both Delaware and New
Jersey); Pls.’ Response to Infotech SOF at ¶ 2 (demonstrating that
the Court should deem Ranbaxy to be a citizen of both Delaware and
New Jersey).)
See also Zambelli Fireworks Mfg. Co., Inc. v. Wood,
592 F.3d 412, 418 (3d Cir. 2010) (stating that a “corporation is a
citizen both of the state where it is incorporated and of the state
where it has its principal place of business” and that “the
citizenship of a limited liability company . . . is determined by
the citizenship of each of its members.”).
We recognize that the
United States District Court for the District of Connecticut
transferred the action to this Court pursuant to 28 U.S.C.
§ 1404(a) (“Section 1404(a)”).
(See dkt. entry no. 74, Receipt of
Transfer Order; dkt. entry no. 71, 12-15-09 Order at 1, 14.)
19
“In an action based on diversity of citizenship, a federal
court generally applies the choice-of-law rules of the jurisdiction
in which it sits.”
Amica Mut. Ins. Co. v. Fogel, 656 F.3d 167, 170
(3d Cir. 2011) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941)).
A federal court receiving a case by
transfer under Section 1404(a) must, however, apply the same choice
of law analysis that the transferor court would apply.
Ferens v.
John Deere Co., 494 U.S. 516, 524-31; Amica, 656 F.3d at 171.
The
Court will thus apply Connecticut’s choice of law rules, the same
rules that the United States District Court for the District of
Connecticut would have applied had it retained this action.
See
Amica, 656 F.3d at 171.
Connecticut courts “apply an individualized choice of law
analysis” to each of the litigants’ claims.
Macomber v. Travelers
Prop. & Cas. Corp., 894 A.2d 240, 256 (Conn. 2006).
“The threshold
choice of law issue in Connecticut, as it is elsewhere, is whether
there is an outcome determinative conflict between applicable laws
of the states with a potential interest in the case.
If not, there
is no need to perform a choice of law analysis, and the law common
to the jurisdiction should be applied.”
Cohen v. Roll-A-Cover,
LLC, 27 A.3d 1, 16 (Conn. App.), certification denied, 33 A.3d 739
(Conn. 2011) (citation omitted).
20
1.
Choice of Law Relating to Plaintiffs’ Claims for
Breach of Contract and Breach of the Implied
Covenant of Good Faith and Fair Dealing
Connecticut courts have adopted Section 187 of the Restatement
(Second) of Conflicts of Law, and recognize that parties to a
contract generally are allowed to select the law that will govern
their contract.
See Elgar v. Elgar, 679 A.2d 937, 943-44 (Conn.
1996); see also Zenon v. R.E. Yeagher Mgmt. Corp., 748 A.2d 900,
903 (Conn. App. 2000) (“Contract[] clauses which require the
application of laws of other states upon breach or dispute are
recognized as proper in Connecticut.”).
A valid choice of law
clause will thus bind the parties unless: (1) “the chosen state has
no substantial relationship to the parties or the transaction and
there is no other reasonable basis for the parties’ choice”; or
(2) “application of the law of the chosen state would be contrary
to a fundamental policy of a state” that (a) in the absence of the
parties’ choice of law clause and pursuant to Section 188 of the
Restatement (Second) of Conflicts of Law, would be the state of the
applicable law, and (b) “has a materially greater interest than the
chosen state in the determination of the particular issue”.
Elgar,
679 A.2d at 943; Restatement (Second) of Conflicts of Law § 187
(1988).
Both Plaintiffs and Infotech recognize that they selected
Pennsylvania law as the law that governs the Software Services
21
Agreement.
(Infotech Br. at 5, 7-8; dkt. entry no. 149, Pls.’
Opp’n Br. at 13-14; see Software Services Agreement at ¶ 15 (“This
agreement shall be governed by [the] laws of Pennsylvania.”).)
They thus agree that Pennsylvania law controls Plaintiffs’ claim
for breach of the Software Services Agreement.
5, 7-8; Pls.’ Opp’n Br. at 13-14.)
(Infotech Br. at
See also Elgar, 679 A.2d at
943-44; Zenon, 748 A.2d at 903.7
They disagree, however, as to the law that controls
Plaintiffs’ claim for breach of the implied covenant of good faith
and fair dealing (“the Implied Covenant Claim”).
Infotech asserts
without citation to legal authority that Pennsylvania law governs
the Implied Covenant Claim because that claim rises from the
Software Services Agreement.
(Infotech Br. at 5, 8.)
Plaintiffs,
by contrast, assert that Connecticut law governs the Implied
Covenant Claim because it “is a contract claim arising out of an
agreement separate and apart from the Software Services Agreement.”
(Pls.’ Opp’n Br. at 14.)
Plaintiffs fail, however, to support their argument because
they fail to demonstrate the relationship between the Implied
7
Plaintiffs assert, however, that some aspects of the breach
of contract claim arise not from the Software Services Agreement
but, instead, from the Master Services Agreement. The Master
Services Agreement “is governed by the laws of New Jersey without
regard to conflict of laws.” (Master Services Agreement at 2.)
The Court will accordingly apply New Jersey law to the aspects of
the breach of contract claim arising from the Master Services
Agreement.
22
Covenant Claim and any agreements that exist “separate and apart
from the Software Services Agreement.”
They have to the contrary
relied upon evidence and argument that demonstrate that the Implied
Covenant Claim is inexorably related to the Software Services
Agreement.
(See id. at 15 (analyzing choice of law based upon
Plaintiffs’ state contacts while negotiating, contracting, and
performing services pursuant to the Software Services Agreement).)
It appears, as discussed in detail below, that a “breach of
the covenant of good faith . . . is a breach of contract action,
not an independent action for a breach of a duty of good faith and
fair dealing.”
McHolme/Waynesburg LLC v. Wal-Mart Real Estate Bus.
Trust, No. 08-961, 2009 WL 1292808, at *2 (W.D. Pa. May 7, 2009).
As it appears both as a matter of law and, as the parties
demonstrate, as a matter of fact that the Implied Covenant Claim
arises from and relates directly to the Software Services
Agreement, the Court concludes that Pennsylvania law governs that
claim.
2.
Choice of Law Relating to Plaintiffs’ Unjust
Enrichment Claim
It appears, for the reasons set forth below in Section
II.B.2.c of this Memorandum Opinion, that Plaintiffs have withdrawn
the unjust enrichment claim asserted against Infotech.
The Court,
accordingly, need not expound upon choice of law issues relating to
that claim.
23
3.
Choice of Law Relating to Plaintiffs’ Tort Claims
Connecticut courts, when analyzing choice of law relating to
tort claims, generally apply “the law of the state in which the
plaintiff was injured, unless to do so would produce an arbitrary
or irrational result.”
Macomber, 894 A.2d at 257.
Plaintiffs here
allege that their injuries occurred in New Jersey or were otherwise
directly caused by their continued business relationship with
Ranbaxy in Princeton, New Jersey.
(See Pls.’ Opp’n Br. at 16.)
Plaintiffs thus argue that their tort claims -- that is, their
claims for innocent misrepresentation, fraud in the inducement,
negligent misrepresentation, and negligent infliction of emotional
distress -- should be resolved under New Jersey law.
(Id.)
Infotech argues that Connecticut law should apply to each of these
claims, but acknowledges that no outcome determinative difference
exists between applicable New Jersey and Connecticut law.
(Infotech Br. at 8-12.)
a.
Plaintiffs’ Innocent Misrepresentation Claim
The Court has carefully considered the parties’ choice of law
arguments as they pertain to Plaintiffs’ claim for innocent
misrepresentation, and has conducted its own research of New Jersey
and Connecticut law pertaining to such claims.
We now conclude,
for the reasons that follow, that neither state recognizes an
independent claim of innocent misrepresentation.
24
The parties have not cited and the Court has been unable to
find any Connecticut cases that recognize an independent claim of
“innocent misrepresentation”.
Connecticut courts instead allow
plaintiffs to premise negligent misrepresentation claims upon
innocent misrepresentations, i.e., upon innocently uttered but
nonetheless false statements.
See, e.g., Barton v. City of
Bristol, 967 A.2d 482, 493 (Conn. 2009) (stating, during analysis
of negligent misrepresentation claim, “that even an innocent
misrepresentation of fact may be actionable if the declarant has
the means of knowing, or ought to know, or has the duty of knowing
the truth.”)
The Court would thus, if applying Connecticut law
to the innocent misrepresentation claim, grant judgment in
Infotech’s favor as it is duplicative of Plaintiffs’ separately
raised claim for negligent misrepresentation.
The parties similarly failed to cite and the Court has been
unable to find any New Jersey cases that recognize an independent
claim or cause of action for “innocent misrepresentation”.
Plaintiffs assert, by reference to TIG Ins. Co. v. Privilege Care
Mktg., Inc., No. 03-3747, 2005 WL 994581 (D.N.J. Apr. 27, 2005) and
Ledley v. William Penn Life Ins. Co., 651 A.2d 92 (N.J. 1995), that
New Jersey courts recognize such claims under the theory of
equitable fraud.
But these and related cases merely recognize
innocent misrepresentations as a basis for equitable rescission of
25
contracts (most commonly, contracts for life insurance or transfers
of interest in real property).
See, e.g., Ledley, 651 A.2d at 635.
New Jersey courts do not recognize innocent misrepresentation as an
independent cause of action.
Commercial Cas. Ins. Co. v. S. Sur.
Co. of Des Moines, Iowa, 100 N.J. Eq. 92, 96, 135 A. 511 (Ch. 1926)
(“misrepresentation without intent to deceive will not sustain an
action at law”).
b.
Choice of Law Relating to Plaintiffs’ Claims
for Fraud in the Inducement, Negligent
Misrepresentation, and Negligent Infliction of
Emotional Distress
The Court has examined the parties’ choice of law arguments
pertaining to Plaintiffs’ claims for fraud in the inducement,
negligent misrepresentation, and negligent infliction of emotional
distress.
(See Infotech Br. at 8-12; Pls.’ Opp’n Br. at 15-17.)
The parties have respectively stated and we agree that the laws of
New Jersey and Connecticut do not present an outcome determinative
conflict.
We will accordingly apply New Jersey law -- the law of
the state where Plaintiffs claim injury, and the law common to both
states -- to each of these claims.
See Macomber, 894 A.2d at 257;
Cohen, 27 A.3d at 16.
4.
Choice of Law Relating to Plaintiffs’ CUTPA Claim
Infotech and Plaintiffs agree that Connecticut law necessarily
governs Plaintiffs’ CUTPA claim.
Because CUTPA is a Connecticut
statute, we agree and will apply Connecticut law to that claim.
26
B.
The Motion
1.
Standard of Review
Summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a).
The Court will thus grant a motion for summary judgment when the
non-moving party “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.”
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Celotex
A dispute is “genuine”
if “the evidence is such that a reasonable jury could return a
verdict for the non-moving party”, and a fact is “material” if it
might affect the outcome of the suit under the applicable rule of
law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court will not deny a motion for summary judgment based
upon mere allegations or denials in the pleadings; the parties
must, instead, produce some evidence to support each material
fact.
Fed.R.Civ.P. 56(c)(1)(A); United States v. Premises Known as
717 S. Woodward Street, 2 F.3d 529, 533 (3d Cir. 1993).
The non-
moving party must “do more than simply show that there is some
metaphysical doubt as to the material facts.”
Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).
The non-
moving party’s speculation and conjecture will not defeat a motion
27
for summary judgment.
See Kovalev v. City of Phila., 362 Fed.Appx.
330, 331 (3d Cir. 2010).
2.
Discussion
a.
Breach of Contract
Plaintiffs premise their breach of contract claim on
Infotech’s failure to remit payment upon Invoice 1015, failure to
remit payment upon Invoice 1017, failure to timely pay TekDoc for
services rendered between October 2005 and December 2005, and
“failure to assist Naples when she was treated poorly in India.”
(See Pls.’ Opp’n Br. at 18, 21.)
They also allege that Infotech
breached the Software Services Agreement by failing “to provide
permanent employment”.
(2d Am. Compl. at ¶ 19(c).)
“Pennsylvania law requires that a plaintiff seeking to proceed
with a breach of contract action . . . establish ‘(1) the existence
of a contract, including its essential terms, (2) a breach of a
duty imposed by the contract[,] and (3) resultant damages.’”
Ware
v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting
CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super.
1999)).
A plaintiff must, to prove damages, provide sufficient
evidence from which damages may be calculated “to a reasonable
certainty”.
Ware, 322 F.3d at 226-27 (internal quotation marks and
citation omitted).
“At a minimum, reasonable certainty embraces a
rough calculation that is not too speculative, vague or contingent
28
upon some unknown factor.”
Id. at 227 (internal quotation marks
and citation omitted).
Infotech argues, as a preliminary matter, that Naples cannot
properly raise a breach of contract claim against it because Naples
was not a party to the Software Services Agreement.
at 12.)
(Infotech Br.
The Pennsylvania Supreme Court looks to Section 302 of the
Restatement (Second) of Contracts when analyzing third party
beneficiary claims.
1992).
Scarpitti v. Weborg, 609 A.2d 147, 150 (Pa.
That court has thus held that “a party becomes a third
party beneficiary only where both parties to the contract express
an intention to benefit the third party in the contract itself,”
unless: (1) “the circumstances are so compelling that recognition
of the beneficiary’s right is appropriate to effectuate the
intention of the parties”; and (2) “performance satisfies an
obligation of the promisee to pay money to the beneficiary or the
circumstances indicate that the promisee intends to give the
beneficiary the benefit of the promised performance.”
Id. at
150-51.
The Court, upon consideration of the Software Services
Agreement, has thus concluded that Naples has standing to pursue a
breach of contract claim against Infotech because she is a third
party beneficiary to the Software Services Agreement.
That
agreement expressly evinces Infotech’s and TekDoc’s intent to
29
benefit Naples.
(See generally Software Services Agreement.)
also Scarpitti, 609 A.2d at 150.
See
TekDoc entered into that
agreement “jointly on behalf of itself and its personnel”, i.e.,
its sole member and employee, Naples.
at preface (emphasis added).)
(Software Services Agreement
The several purchase orders appended
to the Software Services Agreement specify that Naples is the
“Personnel contracted for this Task”.
(See, e.g., Third Purchase
Order.)
We will now address the several bases for Plaintiffs’ breach
of contract claim.
i.
Invoice 1015 & Invoice 1017
Plaintiffs argue that Infotech breached the Software Services
Agreement by failing to remit payment upon Invoice 1015 and Invoice
1017.
Infotech argues in response that Plaintiffs failed to meet a
condition precedent to payment because Plaintiffs failed to submit
a properly signed and verified timesheet with either of those
invoices.
(Infotech Br. at 16.)
It appears, however, that the Court need not resolve the
Motion insofar as it concerns Invoice 1015 and Invoice 1017.
Plaintiffs, while the Motion was pending, withdrew claims asserted
against Infotech and Ranbaxy that related to Invoice 1015.
(See
dkt. entry no. 159, 8-15-12 Stipulation & Order at ¶¶ 2, 4
(acknowledging settlement of claims related to “payment of the
30
. . . unpaid amount of . . . Invoice IBSI 1015” and withdrawing
those claims from the Second Amended Complaint).)
They also
seemingly withdrew claims asserted against Infotech and Ranbaxy
that related to Invoice 1017.
(See id. at ¶¶ 1, 4 (acknowledging
settlement of claims related to pay for, inter alia, “comp time”
and travel time to and from India, and withdrawing those claims
from the Second Amended Complaint).)
Because the 8-15-12 Stipulation & Order effectively renders
the Motion moot insofar as the Motion concerns Invoice 1015 and
Invoice 1017, the Court will not further comment on it.
ii.
Payment for Services Rendered Between
October 2005 and December 2005
Plaintiffs also allege that Infotech is liable to Plaintiffs
for its alleged failure to remit timely payment to TekDoc for
services that Naples provided to Ranbaxy between October 2005 and
December 2005.
(Pls.’ Opp’n Br. at 20.)
They assert that
Infotech, pursuant to each of the three Purchase Orders, was
obliged to remit payment upon valid invoices in “net 40 days”.
(See, e.g., Third Purchase Order.)
Infotech, however, now moves
for summary judgment in its favor and against Plaintiffs on this
aspect of the breach of contract claim.
(See Motion at 1.)8
It
appears that Infotech is entitled to summary judgment in its favor
8
Plaintiffs earlier received notice that Infotech moves for
summary judgment “on all claims”, including this aspect of the
breach of contract claim. (See Motion at 1.)
31
on this aspect of the breach of contract claim because Plaintiffs
have failed to produce some evidence to support each material fact
that supports this claim, including “(1) the existence of a
contract, including its essential terms, (2) a breach of a duty
imposed by the contract[,] and (3) resultant damages.”
Premises
Known as 717 S. Woodward Street, 2 F.3d at 533 (non-movant must
produce some evidence to support each material fact); Ware, 322
F.3d at 225 (reciting elements of breach of contract claim under
Pennsylvania law).
Plaintiffs have failed to introduce evidence demonstrating
that Infotech breached the parties’ contract by failing to remit
timely payment.
They contend that Naples provided services between
October of 2005 and December of 2005, and further contend that they
did not receive payment from Infotech until March of 2006.
Opp’n Br. at 20.)
(Pls.’
These contentions, however, do not demonstrate
that Infotech breached its contract with Plaintiffs.
Intotech’s
duty to remit payment did not arise until Infotech received a
“valid invoice” from TekDoc.
(See, e.g., Third Purchase Order.)
Plaintiffs, by failing to produce evidence demonstrating: (1) when
Infotech received such invoices, and (2) that Infotech failed to
remit payment within forty days of receipt, have failed to support
this aspect of the breach of contract claim.
32
Plaintiffs have also failed to introduce evidence
demonstrating that they suffered damage as a result of Infotech’s
alleged failure to remit timely payment to TekDoc for services that
Naples provided to Ranbaxy between October 2005 and December 2005.
We acknowledge that Plaintiffs have summarized their purported
damages, and included this summary as an exhibit in their
opposition to the Motion.
(See generally dkt. entry no. 149-3,
Sabatini Aff., Ex. 24, Pls.’ Summary of Alleged Damages.)
We note,
however, that none of the categories of damages set forth in that
document relate to this aspect of the breach of contract claim.
iii. Infotech’s Alleged “Failure to Assist
Naples When She Was Treated Poorly in
India”
Plaintiffs allege that Infotech is liable for breach of
contract because it failed to inform Naples of, warn Naples of,
respond to Naples’s complaints about, and assist Naples’s efforts
to improve her living and working conditions in India.
Compl. at ¶ 19(a)-(q).)
(2d Am.
Infotech now argues in support of the
Motion that, pursuant to the Software Services Agreement, it was
not responsible for either Naples’s day-to-day working conditions
or her travel and living arrangements.
(See Infotech Br. at 13-15;
Infotech Reply Br. at 4.)
Plaintiffs do not directly dispute Infotech’s argument.
generally Pls.’ Opp’n Br. at 22-24.)
33
(See
They contend, however, that
Plaintiffs were third party beneficiaries to the contract between
Infotech and Ranbaxy, the Master Services Agreement.
They further
contend that the Master Services Agreement established Infotech’s
relevant duties because Infotech therein agreed to “remain solely
responsible for the Consultant’s work performance, control and
supervision, including matters relating to the quality and quantity
of the Consultant’s” work product.
(Id. at 22 (quoting Master
Services Agreement at ¶ 2.2).)
The Court has reviewed the record and now concludes that
Plaintiffs cannot assert a breach of contract claim against
Infotech for the alleged wrongs relating to Naples’s living and
working conditions in India.
Our decision rests on four bases.
First, the Court concludes that Plaintiffs are not third party
beneficiaries to the Master Services Agreement and, thus, lack
standing to pursue this aspect of the breach of contract claim.
The parties to the Master Services Agreement, Infotech and Ranbaxy,
explicitly disclaimed any intent to confer third party beneficiary
status on Plaintiffs by stating that “[n]o provision of [the Master
Services Agreement] shall be deemed to confer upon a third party
any remedy, claim, liability, reimbursement, cause of action, or
other right whatsoever.”
(Master Services Agreement at 2.)
See
also Werrmann v. Aratusa, Ltd., 630 A.2d 302, 305 (N.J. App. Div.
1993) (“To determine whether a person qualifies as a third-party
34
beneficiary, the test is whether the contracting parties intended
that a third party should receive a benefit which might be enforced
in the courts[.]”).
The contract between Infotech and Ranbaxy
similarly fails to confer third party beneficiary status on
Plaintiffs because (1) Infotech’s performance under that contract
would not satisfy “an obligation of [Ranbaxy] to pay money to
[Plaintiffs]”, and (2) neither that contract nor the evidence
produced in response to the Motion evinces Ranbaxy’s intent to give
Plaintiffs the benefit of Infotech’s performance thereunder.
Master Services Agreement at 2.)
(See
Werrman, 630 A.2d at 305.9
Second, even assuming that the Master Services Agreement
confers third party beneficiary status on Plaintiffs, the Court
finds that the cited portion of the Master Services Agreement does
not relate to and thus does not create a contractual duty relating
to Naples’s living and working conditions in India.
Services Agreement at ¶ 2.2.)
(See Master
Paragraph 2.2 of the Master Services
Agreement merely requires Infotech to assume responsibility for
each consultant’s “work performance, control and supervision” and
“the quality and quantity of” their work product.
(See id.)
See
also Karl’s Sales & Serv., Inc. v. Gimbel Bros., Inc., 592 A.2d
9
Plaintiffs’ argument for third party beneficiary status
rests solely on the plain language of the Master Services
Agreement. (See Pls.’ Opp’n Br. at 22-24.) They have not cited or
referenced other evidence of record that tends to show that Ranbaxy
intended to give Plaintiffs the benefit of Infotech’s performance
under Paragraph 2.2 of the Master Services Agreement.
35
647, 650 (N.J. App. Div.) (“[W]here the terms of a contract are
clear and unambiguous there is no room for interpretation or
construction and the courts must enforce those terms as written.”).
The Court may not interpret the plain meaning of the words in that
paragraph to create duties that did not previously exist; the Court
has no right to rewrite the parties’ contract.
See id.
Third, it appears that Plaintiffs, through the Software
Services Agreement, expressly disclaimed any liability that
Infotech might have had for Naples’s living and working conditions
in India.
Plaintiffs and Infotech agreed to release Infotech “from
any liability relating to representations about the task
requirements or to conditions under which Contractor may be
performing services; those being negotiated by Contractor.”
(Software Services Agreement at ¶ 9(A) (emphasis added).)
Fourth, even assuming that Plaintiffs had standing to pursue
this claim, that the Master Services Contract supported this claim,
and that Plaintiffs had not absolved Infotech of liability, the
Court would find that this claim nonetheless fails as a matter of
law.
Plaintiffs have not provided sufficient evidence from which
damages relating to this aspect of the breach of contract claim
could be proven “to a reasonable certainty”.
See Totaro, Duffy,
Cannova & Co., L.L.C. v. Lane, Middleton & Co., L.L.C., 921 A.2d
1100, 1105, 1108 (N.J. 2007).
36
iv.
Infotech’s Alleged Failure to Provide
Permanent Employment
Plaintiffs allege in the Second Amended Complaint that
Infotech breached its agreement with Plaintiffs by “fail[ing] to
provide permanent employment”.
(2d Am. Compl. at ¶ 19(c).)
Infotech argues that it did not, through the Software Services
Agreement or elsewhere, promise to provide permanent employment.
(See Infotech Br. at 15-16.)
argument.
Plaintiffs did not respond to this
(See generally Pls.’ Opp’n Br.)
Infotech has thus made
a showing of entitlement to summary judgment in its favor, because
Plaintiffs have not demonstrated that a contract exists that
entitles Plaintiffs to permanent employment.
See Ware, 322 F.3d at
225 (setting forth elements of breach of contract claims under
Pennsylvania law).
b.
Breach of Implied Covenant of Good Faith and
Fair Dealing
Plaintiffs allege in the Second Amended Complaint that
Infotech breached the implied covenant of good faith and fair
dealing by failing to meet its “obligation to treat the plaintiff
fairly and to perform [its] contractual duties in good faith”, and
by “engag[ing] in a design to mislead or to deceive” Plaintiffs by
“neglect[ing] or refus[ing] to perform [its] duties.”
This claim,
as explained in Plaintiffs’ opposition to the Motion, is premised
on five factual bases, i.e., Infotech’s: (1) failure to timely
37
remit payment for Naples’s work between October 2005 and December
2005; (2) failure to remit payment on Invoice 1015 and Invoice
1017; (3) failure to address Naples’s living and working conditions
in India; (4) termination of the Software Services Agreement; and
(5) representations that Naples would, if she signed the Second
Purchase Order and Third Purchase Order, become a permanent Ranbaxy
employee.
(Pls.’ Opp’n Br. at 29-30.)
Infotech argues that Pennsylvania does not recognize a cause
of action, separate and apart from breach of contract, for breach
of an implied covenant of good faith and fair dealing.
Br. at 20-21; Infotech Reply Br. at 7-9.)
(Infotech
The Court agrees.
“The
majority of Pennsylvania cases through the 1990s to today . . .
have refused to permit independent claims for breach of the
covenant of good faith outside of an insurer-insured relationship.
Thus, in general, a breach of such covenant is a breach of contract
action, not an independent action for a breach of a duty of good
faith and fair dealing.”
McHolme/Waynesburg, 2009 WL 1292808, at
*2 (quoting Seth William Goren, Looking for Law in all the Wrong
Places: Problems in Applying the Implied Covenant of Good Faith
Performance, 37 U.S.F. L. Rev. 257, 303 (2003)); see also Seiple v.
Cmty. Hosp. of Lancaster, No. 97-8107, 1998 WL 175593, at *2 (E.D.
Pa. Apr. 4, 1998) (“Pennsylvania does not recognize a claim for
breach of covenant of good faith and fair dealing as an independent
38
cause of action.”); LSI Title Agency, Inc. v. Evaluation Servs.,
Inc., 951 A.2d 384, 391-92 (Pa. Super. 2008) (holding that claims
for breach of implied covenant and fair dealing are subsumed by
concurrently raised claims for breach of contract); JHE, Inc. v.
Se. Pa. Transp. Auth., No. 1790 NOV.TERM 2001, 2002 WL 1018941, at
*5 (Pa. Ct. Com. Pl. May 17, 2002) (“[T]he implied covenant of good
faith does not allow for a claim separate and distinct from a
breach of contract claim.
Rather, a claim arising from a breach of
the covenant of good faith must be prosecuted as a breach of
contract claim, as the covenant does nothing more than imply
certain obligations into the contract itself.”).
c.
Unjust Enrichment
Plaintiffs also “seek[] to recover the value of services
performed for and on behalf of [Infotech] for which [Plaintiffs]
ha[ve] not been compensated” under a theory of unjust enrichment.
(2d Am. Compl. at ¶ 28.)
It appears that Plaintiffs seek recovery
for the services related to and billed under Invoice 1015 and
Invoice 1017.10
It thus appears that the unjust enrichment claim,
like the breach of contract claim (insofar as that claim related to
10
The basis of Plaintiffs’ unjust enrichment claim is, at
best, ambiguous. Plaintiffs have not further defined the factual
basis of this claim in either the Second Amended Complaint or their
opposition to the Motion. The Court has, however, conducted a
thorough review of the record and has not identified any “services
. . . for which [Plaintiffs] ha[ve] not been compensated” other
than those related to Invoice 1015 and Invoice 1017.
39
Invoice 1015 and Invoice 1017), has been mooted by the 8-15-12
Stipulation & Order.
The Court, in light of the 8-15-12 Stipulation & Order, will
accordingly consider the unjust enrichment claim withdrawn and the
Motion, insofar as it concerns that claim, moot.
The Court will
not further comment on the unjust enrichment claim.
d.
Fraud in the Inducement
Plaintiffs aver in the Second Amended Complaint that Infotech
fraudulently induced Plaintiffs to enter into the Software Services
Agreement, enter into subsequent Purchase Orders, and accept
Ranbaxy’s assignment in India by promising: (1) timely payment for
work performed; (2) a permanent position with Ranbaxy; and (3) that
Naples would, while in India, receive treatment comparable to that
received by other Ranbaxy employees.
(2d Am. Compl. at ¶ 26.)
Infotech now moves for summary judgment in its favor with respect
to each of these alleged promises.
(See Infotech Br. at 18-20.)
A claim for fraud in the inducement that seeks legal relief,
under New Jersey law, sounds in common-law fraud.
See Microbilt
Corp. v. L2C, Inc., No. A-3141-09T3, 2011 WL 3667645, at *3 (N.J.
App. Div. Aug. 23, 2011).11
The elements of common-law fraud are:
“(1) a material misrepresentation” of fact; “(2) knowledge or
11
New Jersey courts also recognize fraud in the inducement
as an equitable remedy that may serve as the basis for rescission
of a contract. See, e.g., Merchs. Indem. Corp. v. Eggleston, 179
A.2d 505, 513 (N.J. 1962). Here, however, Plaintiffs seek only
legal relief.
40
belief by the defendant of its falsity; (3) an intention that the
other person rely on it; (4) reasonable reliance thereon by the
other person”; and (5) damages.
691 A.2d 350, 367 (N.J. 1997).
Gennari v. Weichert Co. Realtors,
“A misrepresentation amounting to
actual legal fraud” will generally “consist[] of a material
representation of a presently existing or past fact”.
Jewish Ctr.
of Sussex Cnty. v. Whale, 432 A.2d 521, 524 (N.J. 1981) (emphasis
added).
It may also consist of a material misrepresentation that
concerns future intent or events, if the statement is made with the
intent to deceive.
See Notch View Assocs. v. Smith, 615 A.2d 676,
682 (N.J. Super. 1992) (statement as to future event has been held
to constitute actionable misrepresentation when “the defendant
[has] ... no intention at the time he makes the statement of
fulfilling the promise.”).
“However, predictions of the future,
which were believed when made, cannot serve as a basis for a fraud
claim just because they subsequently turn out not to be true.”
Alexander v. CIGNA Corp., 991 F.Supp. 427, 435 (D.N.J.), aff’d, 172
F.3d 859 (3d Cir. 1998).
This is particularly so where a
“contractual provision flatly contradictory to prior oral
assurances”, because it would be “manifestly unreasonable” for
“most people -- and particularly experienced, knowledgeable
business people --” to rely on oral assurances when confronted by a
contradictory written contract.
Id. at 436.
41
The Court, upon consideration of the Motion, concludes that
Infotech is entitled to summary judgment with respect to the first
and third of the alleged promises at issue.
Infotech argues that
it did not, acting through Shivaprakash or other employees, make
any misrepresentations about its contractual duty to remit payment
to Plaintiffs.
(Infotech Br. at 19.)
Infotech also argues that it
did not learn of Naples’s assignment in India until Naples had
traveled to India, and thus could not and did not make any material
misrepresentations relating to her living and working conditions in
that country.
Id.
(See also Infotech SOF at ¶¶ 41-42; Pls.’
Response to Infotech SOF at ¶¶ 41-42.)
Plaintiffs have not
responded to these arguments, have failed to point the Court to
evidence of record to support those aspects of the fraud claim,
and, thus, seemingly abandon those aspects of the fraud claim.
(See generally Pls.’ Opp’n Br.)
See also Premises Known as 717 S.
Woodward Street, 2 F.3d at 533 (non-movant must produce some
evidence to support each material fact).
The Court also concludes that Infotech is entitled to summary
judgment in its favor and against Plaintiffs with respect to the
second of the alleged promises at issue, i.e., the alleged promise
of permanent employment with Ranbaxy.
Plaintiffs have not provided
the Court with competent evidence of material misrepresentations of
fact.
See Gennari, 691 A.2d at 367; see also Premises Known as 717
42
S. Woodward Street, 2 F.3d at 533.
Plaintiffs argue that Infotech
fraudulently induced Naples to sign the Software Services Agreement
by describing the temporary consulting position as “temp to perm”,
and similarly argue that Infotech fraudulently induced Naples to
sign the Third Purchase Order by telling her that Ranbaxy would
soon make her a permanent employee.
(Pls.’ Opp’n Br. at 24.)
Plaintiffs further argue that Infotech made such statements with
knowledge that those statements were false.
(Id.)
They support
these arguments, however, only by reference to Naples’s selfserving speculation and conjecture.
(Id. (citing various portions
of Naples’s deposition testimony and her affidavit).)
Such
speculation and conjecture are not sufficient to defeat the Motion.
See Kovalev, 362 Fed.Appx. at 331.
Plaintiffs, further, have failed to produce evidence to
support the fourth element of the fraud in the inducement claim,
i.e., that she reasonably relied on Infotech’s statements.
Gennari, 691 A.2d at 367.
See
Naples initially learned from Bodduluri,
an Infotech employee, that the temporary consulting position was
“temp to perm” and that Ranbaxy retained final decision-making
authority regarding any possibility of permanent employment.
(Infotech SOF at ¶ 15; Pls.’ Response to Infotech SOF at ¶ 15;
Pls.’ SOF at ¶¶ 2, 87; Infotech Response to Pls.’ SOF at ¶¶ 2, 87.)
She thereafter signed the Software Services Agreement and the First
43
Purchase Order, which specified that her “period of performance”
was merely “6 month[s] with possible extensions”.
Order (emphasis added).)
(First Purchase
It would thus be, as noted above,
“manifestly unreasonable” for Naples -- a sophisticated IT
professional who operated and managed a limited liability company - to rely on Infotech’s alleged promises of permanent employment.
See Alexander, 991 F.Supp. at 435.
It would similarly be “manifestly unreasonable” for Naples to
rely on any statements concerning permanent employment made before
she signed the Third Purchase Order.
See id.
Naples, before
signing the Third Purchase Order, learned from Shivaprakash of
Infotech both that: (1) the Third Purchase Order would provide only
for “6 months . . . with good possibility of extension after 6
months”; and (2) “[a]bout joining them full time, at this stage
they have ruled out that possibility.”
Between Naples and Infotech.)12
(1-16-06 E-mail Chain
Naples testified that Shivaprakash
thereafter told her that she should accept the Third Purchase Order
because “the permanent position [would] open up again and [she
12
Naples, during this exchange, asked Shivaprakash about
Ranbaxy’s intention to hire her as a permanent employee. (1-16-06
E-mail Between Naples and Infotech.) Shivaprakash responded that
Ranbaxy had not foreclosed the possibility of hiring Naples as a
permanent employee. (Id.) He also stated, however, that Ranbaxy
wanted only “to give a 6 month contract at this point as discussed
with the current terms.” (Id.) Those terms, of course, included
Ranbaxy’s right to terminate Naples’s employment at any time,
without notice. (Third Purchase Order.)
44
would] be hired”.
SOF at ¶ 72.)
(Pls.’ SOF at ¶ 72; Infotech Response to Pls.’
But Naples had the opportunity to read the plain
text of the Third Purchase Order, which stated that the period of
performance, as before, was “6 months with possible extensions”.
(Third Purchase Order (emphasis added).)
The Third Purchase Order
also plainly stated that the “end Client”, Ranbaxy, could
“terminate the contract with or with out [sic] notice.”
Naples,
given her general experience as a sophisticated businessperson, her
knowledge that Ranbaxy had “ruled out [the] possibility” of
permanent employment, and her specific experience as a contractor
for Ranbaxy, could not reasonably have relied on any of the oral
assurances of permanent employment here at issue.
See Alexander,
991 F.Supp. at 435.
e.
Negligent Misrepresentation
Plaintiffs raise a negligent misrepresentation claim against
Infotech, which arises from the same facts as the fraud in the
inducement claim.
(See 2d Am. Compl. at ¶ 33; see also Pls.’ Opp’n
Br. at 26 (demonstrating that factual basis of claim is Infotech’s
statements regarding both the “temp to perm” nature of the
temporary consulting position and Naples’s opportunities for
permanent employment at Ranbaxy).)
Negligent misrepresentation
claims are quite similar to common-law fraud claims.
Dayrit v.
Mem’l Hosp. of Salem, No. A-0232-10T4, 2012 WL 1987096, at *7 (N.J.
45
App. Div. June 5, 2012).
A plaintiff stating a claim under New
Jersey law for negligent misrepresentation must demonstrate that:
(1) the defendant negligently made an incorrect statement; (2) the
plaintiff justifiably relied on that statement; and (3) the
plaintiff, as a consequence of that reliance, suffered damages.
Kaufman v. i-Stat Corp., 754 A.2d 1188, 1195 (N.J. 2000); see also
Indian Brand Farms, Inc. v. Novartis Crop Prot. Inc., 617 F.3d 207,
218 (3d Cir. 2010).
In a negligent misrepresentation claim, as in
a fraud claim, “[r]eliance is not reasonable where the substance of
the alleged misstatement is contradictory of the undertakings
expressly dealt with by the written contract.”
Luso Fuel Inc. v.
BP Prods. N. Am., Inc., No. 08-3947, 2009 WL 1873583, at *5 (D.N.J.
June 29, 2009).
The Court has considered the evidence offered by Plaintiffs in
support of the negligent misrepresentation claim, and now concludes
that such evidence is insufficient to support the claim.
We
accordingly conclude that Infotech is entitled to judgment in its
favor and against Plaintiffs on the negligent misrepresentation
claim.
Our conclusion rests on two bases.
First, Plaintiffs have
failed to produce competent evidence to demonstrate that Infotech
negligently made the statements at issue.
Plaintiffs assert that
Infotech either knew or should have known when making such
46
statements that they were false.
(Pls.’ Opp’n Br. at 26.)
They
have failed, however, to offer any evidence beyond Naples’s selfserving speculation and conjecture to support such claims.
Such
speculation and conjecture, as noted above, cannot save Plaintiffs’
claims from summary judgment.
See Kovalev, 362 Fed.Appx. at 331.
Second, we conclude that Plaintiffs have failed to demonstrate
that Naples justifiably relied on Infotech’s alleged statements.
As discussion in Section II.B.2.d of this Memorandum Opinion,
Naples could not reasonably or justifiably rely on Infotech’s
statements because the terms of the Purchase Orders dealt with and
contradicted those statements.
*5.
Luso Fuel Inc., 2009 WL 1873583, at
Those Purchase Orders clearly stated that Plaintiffs’ terms of
employment were limited (1) to terms of “6 months with possible
extensions”, and (2) by Ranbaxy’s power to terminate her employment
at any time, with or without notice.
Order.)
(See, e.g., Third Purchase
Naples, in light of these contractual limitations, could
not as a matter of law reasonably have relied on the alleged
promise of continued employment, whether temporary or permanent.
(See id.)
See also Luso Fuel Inc., 2009 WL 1873583, at *5.
f.
Negligent Infliction of Emotional Distress
Plaintiffs next raise a negligent infliction of emotional
distress claim against Infotech, stating that Infotech:
a. . . . knew or should have known that Naples had
to work and live under substandard conditions and knew
47
or should have known about the dangerous conditions
existing in India;
b. . . . knew or should have known that Naples was
not being treated in the same manner as Ranbaxy
employees;
c. . . . ignored complaints made by Naples;
d. . . . allowed the conditions to continue
without taking any action to correct the same;
e. . . . failed to pay her what she was due;
(2d Am. Compl. at ¶ 42.)
They also allege that Infotech caused
Plaintiffs to suffer emotional distress by terminating the Software
Services Agreement in a manner “which created an unreasonable and
foreseeable risk of causing Naples emotional distress likely to
lead to illness or bodily harm.”
(Id. at ¶ 43.)13
Negligent infliction of emotional distress “can be understood
as negligent conduct that is the proximate cause of emotional
distress in a person to whom the actor owes a legal duty to
exercise reasonable care.”
Decker v. Princeton Packet, Inc., 561
A.2d 1122, 1128 (N.J. 1989).
A plaintiff, to properly raise a
claim for this tort, must accordingly demonstrate that: (1) the
defendant owed a duty of reasonable care to plaintiff;
(2) the defendant breached that duty; (3) the plaintiff suffered
severe emotional distress; and (4) the defendant’s breach of duty
was the proximate cause of the plaintiff’s severe emotional
13
Plaintiffs allege for the first time in their opposition to
the Motion that Infotech negligently inflicted emotional distress
upon Plaintiffs by “breaching a contract in bad faith, fraudulently
inducing the plaintiffs to rely upon negligent misrepresentations
and violating CUTPA”. Because these claims do not appear in the
Second Amended Complaint, we will not now address them.
48
distress.
2003).
Dello Russo v. Nagel, 817 A.2d 426, 435 (N.J. App. Div.
“[R]ecovery for negligent infliction of emotional harm
requires that it must be reasonably foreseeable that the tortious
conduct will cause genuine and substantial emotional distress or
mental harm to average persons.”
Decker, 561 A.2d at 430; see also
Dello Russo, 817 A.2d at 435 (“Whether the defendant has a duty of
care to the plaintiff depends on whether it was foreseeable that
the plaintiff would be seriously, mentally distressed.”).
We initially conclude that this claim must fail as a matter of
law inasmuch as it is raised by TekDoc.
Business organizations
cannot experience emotions and, as such, cannot experience
emotional distress.
Dynamic Image Techs., Inc. v. United States,
221 F.3d 34, 37 n.2 (1st Cir. 2000) (“Because corporations, unlike
natural persons, have no emotions, they cannot press claims for
intentional infliction of emotional distress.”); F.D.I.C. v.
Hulsey, 22 F.3d 1472, 1489 (10th Cir. 1994) (“Since a corporation
lacks the cognizant ability to experience emotions, a corporation
cannot suffer emotional distress.”); Lampliter Dinner Theater, Inc.
v. Liberty Mut. Ins. Co., 792 F.2d 1036, 1039 n.2 (11th Cir. 1986)
(“corporations cannot experience emotional distress”); HM Hotel
Props. v. Peerless Indem. Ins. Co., No. 12-548, 2012 WL 2300615, at
*3 (D. Ariz. June 18, 2012) (“a corporate plaintiff cannot suffer
49
emotional distress because ‘a corporation lacks the cognizant
ability to experience emotions.’”).14
This claim also fails inasmuch as it is raised by Naples.
Naples claims that Infotech caused her severe emotional distress by
failing to act upon her complaints regarding her living and working
conditions in India.
(2d Am. Compl. at ¶ 42(a)-(d).)
We conclude,
however, that Infotech did not owe Naples a duty to provide or
address those conditions.
Naples has admitted that she accepted
the assignment in India from Ranbaxy, without discussing the
opportunity with or otherwise notifying Infotech.
(Infotech SOF at
¶¶ 34, 40-41; Pls.’ Response to Infotech SOF at ¶¶ 34, 40-41; 1027-08 Naples Dep. at 84-86.)
Naples has further admitted that she
and Ranbaxy reached a separate agreement -- that is, separate from
the Software Services Agreement -- under which Ranbaxy agreed to
provide transportation and accommodations for Naples.
(Infotech
SOF at ¶ 43; Pls.’ Response to Infotech SOF at ¶ 43; Pls.’ SOF at
¶¶ 23-27; Infotech Response to Pls.’ SOF at ¶¶ 23-27.)
Infotech,
based on these facts, did not owe Naples a duty to receive or act
on her complaints about the same.
14
We recognize that these cases resolved issues concerning
corporations and that TekDoc is, by contrast, a limited liability
company. We see no reason, however, to differentiate between
corporations and limited liability companies in this respect.
50
Naples also alleges that Infotech negligently caused her to
suffer emotional distress because Infotech failed to remit payments
and terminated her employment in the manner described in Sections
I.I and II.B.2.a of this Memorandum Opinion.
¶¶ 42(e), 43.)
(See 2d Am. Compl. at
Neither allegation properly supports this claim
because neither of the actions at issue demonstrate that Infotech
breached a duty to Naples and thus caused her emotional distress.
See Decker, 561 A.2d at 1128.
The mere failure to remit payment
upon either Invoice 1015 or Invoice 1017 cannot “cause genuine and
substantial emotional distress or mental harm to average persons.”
See Decker, 561 A.2d at 430; see also Picogna v. Bd. of Educ., 671
A.2d 1035, 1036 (N.J. 1996) (recognizing that breach of contract
may cause emotional distress only where such breach is sufficiently
“outrageous”, and citing cases involving outrageous behavior).
It
also appears that mere communication of termination of employment
cannot support a claim for emotional distress.15
15
It appears that New Jersey courts have not addressed
negligent infliction of emotional distress claims arising from
termination of employment. The majority of courts that have
addressed the issue, however, disfavor such claims. See Conaway v.
Control Data Corp., 955 F.2d 358, 360 (5th Cir. 1992) (applying
Texas law); Gill v. Trans World Airlines, Inc., No. 88-894, 1988
WL 62517, at *3 (D.N.J. June 14, 1988) (applying New York law);
Parsons v. United Techs. Corp., Sikorsky Aircraft Div., 700 A.2d
655, 667 (Conn. 1997); Hanly v. Riverside Methodist Hosp., 603
N.E.2d 1126, 1133 (Ohio App. 1991); but see Shoen v. Amerco, Inc.,
896 P.2d 469, 477 (Nev. 1995).
51
g.
CUTPA
Plaintiffs allege that Infotech violated CUTPA.
Compl. at ¶¶ 35-40; Pls.’ Opp’n Br. at 30-31.)
(See 2d Am.
CUTPA provides that
“[n]o person shall engage in unfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade
or commerce.”
C.G.S. § 42-110b(a).
A finding of unfairness
depends on “(1) whether the practice, without necessarily having
been previously considered unlawful, offends public policy as it
has been established by statutes, the common law, or otherwise-whether, in other words, it is within at least the penumbra of some
common law, statutory, or other established concept of unfairness;
(2) whether it is immoral, unethical, oppressive, or unscrupulous;
[or] (3) whether it causes substantial injury to consumers”.
Conaway v. Prestia, 464 A.2d 847, 852 (Conn. 1983) (citation and
quotation marks omitted) (interpreting CUTPA by reference to
interpretation of Section 5(a)(1) of the Federal Trade Commission
Act, 15 U.S.C. § 41, et seq.).
Plaintiffs premise the CUTPA claim on the breach of contract,
breach of the implied covenant of good faith and fair dealing,
unjust enrichment, and tort claims discussed above.
Br. at 30-31.)
(Pls.’ Opp’n
Plaintiffs, by failing to carry their burden with
respect to those claims, also fail to carry their burden with
respect to the CUTPA claim.
52
III. CONCLUSION
The Court, for the reasons detailed above, will grant the
parts of the Motion that are not moot.
The Court will issue an
appropriate Order and Judgment.
s/ Mary L. Cooper
.
MARY L. COOPER
United States District Judge
Dated:
August 16, 2012
53
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