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)

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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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