Viable Marketing Corporation v. Intermark Communications, Inc.
Filing
31
MEMORANDUM & ORDER denying 24 Motion for Summary Judgment. For the foregoing reasons, Plaintiff's partial motion for summary judgment is DENIED, partial summary judgment is GRANTED in favor of Defendants, and Count IX of Plaintiff's Complaint is DISMISSED. So Ordered by Judge Joanna Seybert on 8/25/11. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------X
VIABLE MARKETING CORPORATION,
Plaintiff,
MEMORANDUM & ORDER
09-CV-1500(JS)(WDW)
-againstINTERMARK COMMUNICATIONS, INC.
d/b/a INTERMARK MEDIA, INC. and
COPEAC,
Defendants.
--------------------------------------X
APPEARANCES:
For Plaintiff:
Alain Jeff Ifrah, Esq.
Ifrah PLLC
1627 I Street, N.W., Suite 1100
Washington, DC 20006
For Defendants:
David Scott Greenberg, Esq.
Ina B. Scher, Esq.
Davis & Gilbert
1740 Broadway
New York, NY 10019
SEYBERT, District Judge:
Plaintiff
Viable
Marketing
Corporation
(“Viable”
or
“Plaintiff”) commenced this diversity action against Defendants
Intermark Communications, Inc. d/b/a Intermark Media, Inc. and
Copeac (“Defendants” or “Intermark”) on April 13, 2009 alleging
(I) fraud; (II) negligent misrepresentation; (III) violation of
N.Y. General Obligations Law § 349; (IV) breach of contract; (V)
tortious
interference
interference
with
with
contract;
economic
(VII)
advantage;
unfair
(VI)
tortious
competition;
(VIII)
misappropriation; and (IX) unjust enrichment.1
On January 3,
2011, Plaintiff moved for partial summary judgment on its unjust
enrichment claim.
For the following reasons, Plaintiff’s motion
for summary judgment is DENIED, and summary judgment is hereby
GRANTED in favor of Defendants.
BACKGROUND2
Viable
business
is
opportunity
in
the
business
programs.
(Compl.
of
¶
selling
web-based
9.)
order
In
to
market its programs most effectively on the Internet, Viable
entered into a contract (the “Viable-PartnerWeekly Contract”)
with
PartnerWeekly,
L.L.C.
(“PartnerWeekly”),
a
Nevada-based
Internet marketing agency, on August 15, 2008.
(Compl. ¶ 10;
Scher
Contract
Decl.
Ex.
B.)
The
Viable-PartnerWeekly
gave
PartnerWeekly the exclusive Internet marketing rights to certain
of Viable’s programs, including “Media Mogul Me.”
11.)
(Compl. ¶
Plaintiff does not dispute the existence or validity of
this contract.
(Compl. ¶ 78.)
In October 2008, PartnerWeekly
entered into a contract with Intermark (“PartnerWeekly-Intermark
Contract”) whereby Intermark agreed to use its affiliate network
to drive Internet traffic to a website offering Media Mogul Me
1
Plaintiff incorrectly states that unjust enrichment is Count V
of the Complaint. (Pl. Mem. 1, 8.) Plaintiff’s unjust
enrichment claim is Count IX of the Complaint. (Compl. ¶¶ 8992.)
2
The following facts are drawn from the Complaint, the parties’
Local Civil Rule 56.1 Statements (“56.1 Stmt.”) and their
evidence in support. Any relevant factual disputes are noted.
2
for sale (“Media Mogul Me Campaign”).
Ex. 2; Compl. ¶¶ 22, 62.)
(Def. 56.1 Stmt. ¶ 3 &
Neither party disputes the existence
or validity of this contract.
Pursuant to those contracts,
Viable paid a commission to PartnerWeekly for each valid lead
PartnerWeekly submitted to it, and, in turn, PartnerWeekly paid
a portion of that commission to Intermark for each of those
leads that could be traced back to Intermark and its affiliates.
(Pl. 56.1 Stmt. ¶¶ 7, 10, 28, 34; Compl. ¶¶ 23-24.)
The Media Mogul Me Campaign ran from October 28, 2008
through
January
6,
2009
when
Intermark
advertising due to fraudulent leads.
56.1 Stmt. ¶ 8.)
was
ordered
to
stop
(Pl. 56.1 Stmt. ¶ 8; Def.
Plaintiff claims, and Defendants dispute, that
over 13,000 of the 27,000 leads generated by Intermark were
invalid and that Defendants admitted that 4,800 of the leads
were invalid.
summary
(Pl. 56.1 Stmt. ¶¶ 9, 11.)
judgment
on
its
claim
that
Plaintiff now seeks
Defendants
were
unjustly
enriched in the amount of $158,000 in commissions paid for bad
leads, $504,000 in chargeback fees for those bad leads, and
$4,765 in transaction fees.
(Pl. Mem. 2.)
DISCUSSION
I.
Standard of Review
“Summary judgment is appropriate where there are no
genuine disputes concerning any material facts, and where the
moving
party
is
entitled
to
judgment
3
as
a
matter
of
law.”
Harvis Trien & Beck, P.C. v. Fed. Home Loan Mortgage Corp. (In
re Blackwood Assocs., L.P.), 153 F.3d 61, 67 (2d Cir. 1998)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct.
2548, 91 L. Ed. 2d 265 (1986)); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247, 106 S. Ct. 2505, 91 L. Ed. 2d
202 (1986).
“the
In considering this question, the Court considers
pleadings,
admissions
on
depositions,
file,
together
answers
any
to
other
including but not limited to affidavits.”
interrogatories
firsthand
and
information
Nnebe v. Daus, 644
F.3d 147 (2d Cir. 2011); see also Celotex, 477 U.S. at 322;
McLee v. Chrysler Corp., 109 F.3d 130, 134 (2d Cir. 1997); FED.
R. CIV. P. 56(c).
“In assessing the record to determine whether
there is a genuine issue to be tried as to any material fact,
the court is required to resolve all ambiguities and draw all
permissible factual inferences in favor of the party against
whom summary judgment is sought.”
“The
burden
of
showing
McLee, 109 F.3d at 134.
the
absence
of
any
genuine
dispute as to a material fact rests on the party seeking summary
judgment.”
Id.; see also Adickes v. S.H. Kress & Co., 398 U.S.
144, 157, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970).
“[O]nce such
a showing is made, the non-movant must ‘set forth specific facts
showing that there is a genuine issue for trial.’”
Columbia
Univ.,
224
F.3d
Anderson, 477 U.S. at 256).
33,
41
(2d
Cir.
Weinstock v.
2000)
(quoting
“Mere conclusory allegations or
4
William v. Smith, 781 F.2d 319, 323
denials will not suffice.”
(2d
Cir.
1986).
Similarly,
“unsupported
create a material issue of fact.”
allegations
do
not
Weinstock, 224 F.3d at 41
(citing Goenaga v. March of Dimes Birth Defects Found., 51 F.3d
14, 18 (2d Cir. 1995).
“[I]f a motion for summary judgment has been made, a
district
court
including
Interior
a
may
grant
non-movant,”
Demolition
summary
First
Corp., 193
judgment
Fin.
F.3d
109,
any
party--
Co.
Ins.
to
v.
Allstate
115 (2d
Cir.
1999),
provided that “all of the evidentiary materials that a party
might submit in response to a motion for summary judgment are
before
the
court, . . . no
material
dispute
of
fact
exists
and . . . the [non-moving] party is entitled to judgment as a
matter of law.”
Ramsey v. Coughlin, 94 F.3d 71, 74 (2d Cir.
1996).
II.
Unjust Enrichment
Plaintiff
judgment
on
uncontroverted
its
asserts
that
unjust
material
facts
it
is
enrichment
of
this
entitled
claim
case
to
summary
because
clearly
“the
establish
that [Intermark] has been unjustly enriched at the expense of
Viable,
which
has
paid
[Intermark]
commission
payments
and
incurred numerous chargeback fees and bank fines as a result of
the invalid leads generated by [Intermark].”
5
(Pl. Reply 1.)
To state a claim for unjust enrichment under New York
law, a plaintiff must allege that “(1) defendant was enriched,
(2) at plaintiff’s expense, and (3) equity and good conscience
militate against permitting defendant to retain what plaintiff
is
seeking
to
recover.”
Pictures,
Inc.,
omitted);
see
373
also
F.3d
Briarpatch,
296
Mandarin
306
Trading
Ltd.,
(2d
Cir.
Ltd.
v.
L.P.
2004)
v.
Pheonix
(citation
Wildenstein,
16
N.Y.3d 173, 182, 944 N.E.2d 1104, 1110, 919 N.Y.S.2d 465, 471
(2011) (citing Citibank, N.A. v. Walker, 12 A.D.3d 480, 481, 787
N.Y.S.2d 48 (2d Dep’t 2004); Baron v. Pfizer, Inc., 42 A.D.3d
627, 629-630, 840 N.Y.S.2d 445 (3d Dep’t 2007)).
However, “[t]he existence of a valid and enforceable
written
contract
governing
a
particular
subject
matter
ordinarily precludes recovery [for unjust enrichment] for events
arising out of the same subject matter.”
Am. Med. Assoc. v.
United Healthcare Corp., No. 00-CV-2800, 2007 WL 683974, at *9
(S.D.N.Y. Mar. 5. 2007) (alterations in original) (quoting U.S.
East Telecomms., Inc. v. U.S. W. Commc’ns Servs., Inc., 38 F.3d
1289, 1296 (2d Cir. 1994)); accord Clark-Fitzpatrick, Inc. v.
Long Island R.R. Co., 70 N.Y.2d 382, 388, 516 N.E.2d 190, 193,
521
N.Y.S.2d
653,
656
(1987).
“This
doctrine
clearly
bars
unjust enrichment claims when both parties to the lawsuit are
also parties to the contract itself.”
Am. Med. Assoc., 2007 WL
683974, at *9 (citing Chadirjian v. Kanian, 123 A.D. 2d 596,
6
598, 506 N.Y.S.2d 880, 880 (2d Dep’t 1986)).
The issue in this
case is whether this doctrine bars an unjust enrichment claim
when Plaintiff is a party to the contract but the Defendants are
not, or vice versa.
Plaintiff
argues
that
New
York
law
bars
unjust
enrichment claims only when both parties to the lawsuit are also
parties
to
Assocs.,
Inc.
(S.D.N.Y.
written
the
contract.
v.
1991),
contract
preclude
ANC
where
Holdings,
the
governing
[quasi-contract]
contract.
They
rely
Inc.,
court
the
held
same
recovery
exclusively
754
that
subject
from
F.
on
Supp.
Seiden
37,
“existence
matter
non-parties”
40
of
a
does
not
to
the
Plaintiff’s reliance, however, is misplaced, as the
rule pronounced in Seiden “has decidedly fallen out of favor in
New York courts.”
Air Atlanta Aero Eng’g Ltd. v. SP Aircraft
Owner I, L.L.C., 637 F. Supp. 2d 185, 196 (S.D.N.Y. 2009); see
also Law Debenture v. Maverick Tube Corp., No. 06-CV-14320, 2008
WL 4615896, at *13 (S.D.N.Y. Oct. 15, 2008) (“Subsequent to the
decision in Seiden, many courts in New York state and in this
District have found that the existence of a valid and binding
contract governing the subject matter at issue in a particular
case does act to preclude a claim for unjust enrichment even
against
a
third
party
non-signatory
to
the
agreement.”
(collecting cases)); Am. Med. Ass’n, 2007 WL 683974, at *10
(“Despite the Seiden court’s reasoning, subsequent decisions in
7
both
New
York
consistently
state
courts
that
claims
held
and
for
in
this
unjust
district
enrichment
have
may
be
precluded by the existence of a contract governing the subject
matter of the dispute even if one of the parties to the lawsuit
is not a party to the contract.” (collecting cases)).
The Court
finds the trend of recent New York state and federal decisions
to
be
persuasive
enrichment,
even
and
concludes
against
a
third
that
a
party,
claim
cannot
for
unjust
proceed
when
there is a valid, written agreement governing the subject matter
of the dispute.
In the present case, there are two express agreements
governing the subject matter of the dispute:
PartnerWeekly
Contract
PartnerWeekly-Intermark
2).
(Scher
Decl.
Contract
(Def.
Ex.
(1) the Viable-
B),
56.1
and
(2)
the
Counter-Stmt.
Ex.
Plaintiff does not dispute the existence or validity of
either contract, and, in fact, brings two claims arising out of
those contracts:
(1) a claim as a third-party beneficiary for
the breach of the PartnerWeekly-Intermark Contract (Compl. Count
IV); and (2) a claim for tortious interference with the ViablePartnerWeekly Contract.
Plaintiff’s unjust enrichment claim,
therefore, is precluded by these existing contracts which govern
the exact subject matter of the unjust enrichment claim.
this
reason,
Plaintiff’s
partial
DENIED.
8
summary
judgment
motion
For
is
Although Defendants made no formal motion for summary
judgment, “it is most desirable that the court cut through mere
outworn procedural niceties and make the same decision as would
have been made had defendant made a cross-motion for summary
judgment.”
Local
33,
Int'l
Hod
Carriers
Bldg.
&
Common
Laborers' Union of Am. v. Mason Tenders Dist. Council of Greater
N.Y., 291 F.2d 496, 505 (2d Cir. 1961).
Since it is undisputed
that there are two contracts governing the subject matter of the
dispute,
respect
there
to
the
are
no
genuine
unjust
issues
enrichment
of
claim
entitled to judgment as a matter of law.
GRANTS
summary
judgment
for
Defendants
material
and
fact
with
Defendants
are
Therefore, the Court
as
to
the
unjust
enrichment claim and Count IX of the Complaint is DISMISSED.
CONCLUSION
For the foregoing reasons, Plaintiff’s partial motion
for
summary
judgment
is
DENIED,
partial
summary
judgment
is
GRANTED in favor of Defendants, and Count IX of Plaintiff’s
Complaint is DISMISSED.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:
August
25 , 2011
Central Islip, New York
9
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