Nationwide CATV Auditing Services, Inc. v. Cablevision Systems Corporation et al

Filing 21

OPINION AND ORDER - For the foregoing reasons, Cablevision's motion to dismiss Nationwide's complaint [Docket Entry No. 13] is GRANTED. Counts II, III, IV, V, VI, VII, VIII, and IX are dismissed in their entirety, and Count I is dismissed insofar as it is based upon the termination of the Agreements and the alleged oral promises by Cablevision to provide Nationwide with more Contract Work.Ordered by Judge Sandra J. Feuerstein on 5/7/2013. (Coleman, Laurie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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NATIONWIDE CATV AUDITING SERVICES, INC.,
Plaintiff,

OPINION AND ORDER
12-CV-3648 (SJF)(ETB)

-againstCABLEVISION SYSTEMS CORPORATION,
CSC HOLDINGS, INC., CSC HOLDINGS, LLC,
Defendants.

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FILED

IN CLERK'S OFFICE
U.S. DISTRICT COURT ED.N.Y.

*

MAY 07 2013

*

LONG ISLAND OFFICE
FEUERSTEIN, J.
On July 24,2012, plaintiffNationwide CATV Auditing Services, Inc. ("plaintiff' or

"Nationwide") commenced this action against Cablevision Systems Corporation, CSC Holdings,
Inc., CSC Holdings, LLC (collectively, "defendants" or "Cablevision"), asserting claims for:
(I) breach of contract; (2) unfair and deceptive trade practices; (3) unfair competition;
(4) violation of the Lanham Act, 15 U.S.C. § 1051 et seq.; (5) negligence; (6) breach of fiduciary
duty; (7) unjust enrichment; (8) civil conspiracy; and (9) prima facie tort. [Docket Entry No. I]
("Compl."). Plaintiff requests: (I) injunctive relief, including (a) an accounting,
(b) disgorgement of profits, and (c) reinstatement; (2) compensatory damages, including for "loss
of goodwill in excess of$3.5 million"; (3) treble damages; (4) punitive damages; and
(5) attorney's fees and costs. Compl. at 34. Now before the Court is Cablevision's motion to
dismiss certain of Nationwide's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. [Docket Entry No. 13] (the "motion"). For the reasons that follow, the motion is
GRANTED.

I.

Background
Cablevision operates cable television systems, and Nationwide provides "installation and

maintenance services to consumers on behalf of cable providers." Compl. at,, 6-8. Nationwide
provided services to Cablevision pursuant to a Standard Installation and Services Agreement (the
"2006 Agreement"), including "all work necessary to install, service, repair or remove as
requested Cablevision's broadband telecommunications system ... within single family
residences, multiple dwelling units, and/or commercial buildings including business
establishments and, if requested, to install, service, repair or remove aerial and underground
plant to such premises" (the "Contract Work"). Compl. at,, 26-28, 38. Nationwide agreed to
several subsequent modifications of the 2006 Agreement and entered a modified Standard
Installation and Services Agreement in November 20I I (the "2011 Agreement," and together
with the 2006 Agreement, the "Agreements"), which governed the relationship between the
parties until January 2012. Compl. at,, 29-36. 1
The Agreements required Nationwide to "conduct a pre-employment Inquiry and
Screening for each individual retained or employed by Nationwide" and provide that Nationwide
may not "permit any individual to perform [Contract] Work ... unless the Inquiry results are
acceptable pursuant to th[e] Agreement[ s], taking into consideration Cablevision' s legitimate
interest in protecting property, and the safety and welfare ofCablevision's customers, employees
and the general public." Compl. at, 44. For each retained employee, Nationwide was required
to "complete and file with Cablevision a Pre-Placement/Vehicle Identification Form
... documenting that the Screening and Inquiry [were] conducted and [were] in full compliance
Cablevision maintains that Nationwide never executed the 2011 Agreement. However,
as discussed in further detail below, Cablevision has stipulated to its execution for purposes of
this motion, and the relevant provisions of the 2006 and 2011 Agreements are substantively
identical.
2

in accordance with the terms ofth[e] Agreement[s]." Compl. at~ 41.
In April2011, Nationwide received an employment application from Francisco Sanchez,
conducted a screening and, "[f]inding nothing in Sanchez's background to raise any concerns,
... accepted his application for employment and assigned him to perform [Contract] Work
pursuant to the Agreement, using the "Optimum Cable" badge, uniform and vehicle signage
required by Cablevision." Compl. at~~ 46-48? In July 2011, law enforcement investigated a
report by a Cablevision customer that Sanchez had stolen jewelry from the customer's home
while performing work on behalf ofCablevision (the "July 20 ll burglary"). Com pl.

at~

49.

Nationwide notified Cablevision of the investigation, stopped Sanchez from performing further
Contract Work, and performed a second background check, which "again raised no concerns."
Compl.

at~~

50-51. "Following discussions between authorized representatives of Cablevision

and Nationwide, Cablevision agreed that Sanchez was acceptable to Cablevision to continue to
perform [Contract] Work under the 2011 ... Agreement, despite the customer's allegations."
Compl.

at~

52.

In December 2011 and January 2012, Nationwide "significantly" increased its workforce
and purchased additional vehicles in response to Cablevision's promise to provide additional
Contract Work in connection with Cablevision's conversion of its customers' equipment from
analog to digital, and Cablevision "did in fact increase the volume of[Contract] Work assigned
to Nationwide." Compl.

at~~

41-42. However, on January 28,2012, police responded to a

reported burglary in East Patchogue, New York and pulled over a van with "Optimum Cable"
signs on the doors, which was occupied by Sanchez and two (2) other individuals. Compl. at

2

According to Nationwide, the Agreements required Nationwide employees performing
Contract Work to wear uniforms and use vehicles featuring Cablevision's "Optimum Cable"
service mark, with no reference to Nationwide. Compl. at~ 39.
3

'1[53. "According to news media reports, Sanchez and his alleged accomplices were arrested and
charged with 2nd Degree Burglary in connection with the East Patchogue burglary, as well as six
other burglaries in neighboring communities in September, December and January 2012[, and]
Sanchez was also charged in connection with the July 2011 burglary." Compl. at '1[54. Various
media reports identified Sanchez as an employee of Nationwide. Compl. at '1['1[55-56.
Nationwide alleges that Cablevision, "[i]n a deliberate, malicious effort to deceive
consumers into concluding that Nationwide, but not Cablevision was somehow responsible for
Sanchez' [sic] criminal conduct, ... publicly announced that it was 'immediately suspending
work with the Nationwide subcontracting company, which provides a limited amount of work,
only in Suffolk County, NY, pending a complete and thorough investigation" (the "Statement").
Compl. at '1[57. According to Nationwide, the Statement failed to disclose that: (I) Cablevision
"specifically authorized Nationwide to permit Sanchez to return to work after Sanchez had been
accused of [the July 2011 burglary]"; (2) Nationwide was Cablevision's "top performing
contractor, according to Cablevision's own metrics"; and (3) Cablevision's employees, not
Nationwide's, had "serviced some of the ... customers who had allegedly been burglarized."
Compl. at '1[58.
Nationwide subsequently provided Cablevision with its "confidential and proprietary
Inquiry and Screening materials for Sanchez and each ofNationwide's other employees
...." Compl. at '1[59. Following Cablevision's review of the materials provided, "authorized
representatives ofCablevision ... assured Nationwide's President that Cablevision's
investigation had confirmed that Nationwide had done nothing wrong with respect to Sanchez
and had no more ability than Cablevision to have anticipated or prevented Sanchez' [sic] alleged
crimes," and that Cablevision's own background check on Sanchez had failed to uncover any
4

relevant information. Compl. at ,, 60-61. Representatives of Cablevision nonetheless
informed Nationwide's President that "they had been instructed to terminate Nationwide's
contract as a public relations strategy intended to provide Cablevision's customers with false and
misleading reassurance by implying" (I) that Nationwide, not Cablevision, should have
"anticipated and prevented Sanchez's crimes" and (2) that the "risk of future burglaries of
Cablevision customers had been mitigated by the termination ofNationwide." Compl. at, 62.
With the exception of the July 2011 burglary, "none of the burglaries involved customers
serviced by Nationwide, and all of them therefore involved customers serviced by Cablevision's
own employees and/or employees of other Cablevision contractors." Compl. at , 67.
Representatives ofCablevision and AWS Broadband and Fiber ("A WS"), one of
Nationwide's competitors, later contacted Nationwide's President and told him that "all of
Nationwide's installation technicians were eligible to be rehired by A WS and other cable
contractors to perform work for Cablevision, with the exception of 'one or two' whose
Preplacement Screening and Inquiry information was allegedly 'inadequate."' Compl. at,, 6870. Cablevision "and/or" A WS "conspired and colluded to misappropriate the confidential and
proprietary information Nationwide provided to Cablevision regarding Nationwide's employees,
and used that information to contact ... [the] employees to induce them to leave Nationwide's
employ and work for Cablevision and/or A WS," telling the employees that Nationwide "is no
more" and that they would only be able to continue to perform work for Cablevision if they
accepted employment with AWS. Compl. at,, 72-73.
On February 9, 2012, Nationwide received a notification, postmarked February 6, 2012,
that Cablevision was terminating the 2006 Agreement as of February 10,2012 "due to
Nationwide's failure to conduct adequate background checks on its employees, as well as its
5

failure to provide Certifications as required under the terms of the Agreement." Compl. at~ 75. 3
Nationwide alleges that these grounds for termination were "false and pretextual" and that
Cablevision was engaged in a "scheme to mislead and deceive consumers by creating the false
impression that terminating Nationwide's contract would protect consumers against future
criminal acts by Cablevision installers" and to "misappropriate Nationwide's good will, assets,
and workforce for the benefit of Cablevision and/or ... A WS." Compl.

at~

78.

On February 14,2012, Nationwide collected Cablevision's equipment in its possession
and delivered it to A WS, as instructed by Cablevision. Compl.

at~

82. Nationwide "made a

cursory count" of the equipment because it "assum[ed] that Cablevision's 'equipment charges'
were up to date on the most recent credit memos received from Cablevision." Compl.

at~

82.

Cablevision initially withheld two hundred sixty-one thousand dollars ($261,000.00) in
remittances owed to Nationwide for Contract Work performed "pending reconciliation of assets,
issuance of any credit memos for the month of January, exception processing, and 'possible
litigation."' Compl.

at~~

83, 92. Cablevision later turned over one hundred fifty-four thousand

eight hundred sixty-seven dollars and forty-seven cents ($154,867.47), leaving an outstanding
balance owed to Nationwide of one hundred six thousand one hundred thirty-three dollars
($106,133.00). Compl.

at~

83.

Nationwide alleges that Cablevision's withholding of the remittances violated the terms
of the Agreements and was a "deliberate and malicious effort to further damage" Nationwide.
Compl.

at~~

83-92. Nationwide also alleges that the credits for "equipment charges" assessed

against the remittances owed were revealed to relate to equipment either already returned by
Nationwide or in the possession ofCablevision's customers. Compl. at~~ 94-96. According to
3

Cablevision failed to provide five (5) days' notice as required by the Agreements.
Compl. at~ 76.
6

Nationwide, Cablevision "took these credits based on its own [equipment] tracking system which
it represented to plaintiff to be accurate, but which failed to track equipment installed by
Nationwide for Cablevision customers, for which Cablevision ... charged and received payment
from its customers." Com pl. at 1 101. Nationwide alleges that Cablevision' s conduct
constituted a "'double dipping'" scheme "by which it charge[d] its customer and its installation
contractor for the same item of equipment, and conceal[ ed] the double-charging from both
parties, who have reasonably relied upon the accuracy of invoices and credit memos which
Cablevision kn[ew] to be inaccurate and misleading." Compl. at11 101-02, 105. Nationwide
alleges, "[o]n information and belief," that Cablevision "helped [themselves] to credits for
fraudulent equipment charges to plaintiff totaling over $250,000 in 2006 through January 31,
2012, which Nationwide did not and does not owe." Compl. at 1 106.
II.

Standard
"To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell At!. Com. v. Twombly, 550 U.S. 544, 570 (2007)). The
pleading of specific facts is not required; rather a complaint need only give the defendant "fair
notice of what the ... claim is and the grounds upon which it rests." Erickson v. Pardus, 551
U.S. 89, 127 S.Ct. 2197,2200, 167 L.Ed.2d 1081 (2007). "A pleading that offers 'labels and
conclusions' or 'a formulaic recitation of the elements of a cause of action will not do."' Iqbal,
556 U.S. at 678 (quoting Twombly. 550 U.S. at 555, 127 S.Ct. 1955). "Nor does a complaint
suffice if it tenders 'naked assertion[s]' devoid of'further factual enhancement."' !d. (quoting
Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the allegations in the complaint are true (even if
7

doubtful in fact)." Twombly. 550 U.S. at 555. The plausibility standard requires "more than a
sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678.
In deciding a motion pursuant to Rule 12(b)(6), the Court must liberally construe the
claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences
in favor of the plaintiff. See McGarry v. Pallito, 687 F.3d 505, 510 (2d Cir. 2012); Rescuecom
Coro. v. Google Inc., 562 F.3d 123, 127 (2d Cir. 2009). However, this tenet "is inapplicable to
legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. "While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations." Id. at
679; see also Ruston v. Town Board for Town of Skaneateles, 610 FJd 55, 59 (2d Cir. 2010)
("A court can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.") (quotations and citations omitted).
Nonetheless, a plaintiff is not required to plead "specific evidence or extra facts beyond what is
needed to make the claim plausible." Arista Records, LLC v. Doe 3, 604 F.3d 110, 120-1 (2d
Cir. 2010);

~also

Matson v. Board of Education ofCitv School District ofNew York, 631

FJd 57, 63 (2d Cir. 2011) ("While a complaint need not contain detailed factual allegations, it
requires more than an unadorned, the defendant-unlawfully-harmed-me accusation.") (internal
quotations and citation omitted).
The Court must limit itself to the fucts alleged in the complaint, which are accepted as
true; to any documents attached to the complaint as exhibits or incorporated by reference therein;
to matters of which judicial notice may be taken; or to documents upon the terms and effect of
which the complaint "relies heavily" and which are, thus, rendered "integral" to the complaint.
Chambers v. Time Warner. Inc., 282 FJd 147, 152-53 (2d Cir. 2002) (citing International
8

Audiotex! Network. Inc. v. American Tel. and Tel. Co., 62 F.3d 69,72 (2d Cir. 1995)).
III.

Analysis
A.

Breach of Contract

Nationwide asserts a breach of contract claim for Cablevision's: (I) termination of the
2011 Agreement "based upon false and pretextual grounds"; (2) "breach of its promise, in
December and January 2011-2012 to provide more work to Nationwide in exchange for
Nationwide increasing its work force and purchasing more vehicles"; (3) "fraudulent equipment
charges, which resulted in Nationwide and Cablevision's customers each being charged
separately for the same item of equipment"; and (4) withholding of remittances owed to
Nationwide[] for [Contract] Work performed." [Docket Entry No. 13-5] ("Pl. Memo.") at 4-5;
Compl. at,, 41-42, 83, 100-06.
Nationwide argues that Cablevision 's motion to dismiss the breach of contract claim
should be denied in its entirety because it relies upon the 2006 Agreement, which Nationwide
alleges "was superseded by the 2011 [Agreement]," and Cablevision has failed to "provid[e] any
evidence to substantiate the assertion[] that the terms of the 20 II Agreement, 'as relevant to this
action, are materially the same as the terms of the [2006] Agreement."' Pl. Memo. at 2-3. In
fact, Cablevision has stipulated for purposes of this motion that the 20 II Agreement was
executed,~

[Docket Entry No. 13-1] ("Def. Memo.") at 2 n.l, and a review of the 2011

Agreement demonstrates that it is substantively identical to the 2006 Agreement in all respects
material to this case. 4 Therefore, whether the 20 II Agreement was executed does not constitute

4

In support of its argument that the execution of the 20 II Agreement is material,
Nationwide attached to its response to the motion a single page from the 20 II Agreement,
showing that section 25 of the document is titled "Cablevision's Right to Audit," not
"Termination," as it is titled in the 2006 Agreement. See Pl. Memo. at 3; Declaration of Stephen
D. Ellis, Ex. A. However, Cablevision submitted the entire 2011 Agreement with their reply in
9

a disputed issue of material fact sufficient to defeat Cablevision' s motion.
I.

5

Termination

The Agreements provide that "upon five (5) days prior written notice, [Cablevision] may
terminate th[ e] Agreement, in whole or in part, when it is in the interest of Cablevision." 2006
Agreement§ 25(a)(2); 2011 Agreement§ 26(a)(2). Cablevision argues that "the plain terms of
the Agreement make clear that Nationwide has no claim for breach," since (I) "the Agreement
gives Cablevision the absolute right to terminate the Agreement on five days written notice,"
(2) Cablevision's right to terminate the Agreement was unconditional, and (3) Nationwide has
failed to allege that Cablevision's failure to comply with the five (5) days' notice requirement
was the proximate cause of damages to Nationwide. De f. Memo. at 6-7. Nationwide asserts that
"Cablevision did not purport to terminate the 2006 Agreement 'in the interests of Cablevision"
pursuant to [section]25(a)(2)," but rather terminated it "due to [Nationwide's] failure to conduct
adequate background checks on its employees, as well as its failure to provide Certifications as
required under the terms of the Agreement," and that this basis for termination is a "pretext," and
"constitutes a breach of the express terms of the 20 II Agreement .... " Pl. Memo. at 4.
support of the motion, and it is clear that the relevant provisions of the 20 II Agreement are
substantively identical to those in the 2006 Agreement. The Court does not appreciate plaintiff's
disingenuous attempt to create the appearance of a material difference between the Agreements.
5

Cablevision submitted an unexecuted version of the Standard Installation and Services
Agreement that it used with its contractors in November 20 II. Although Nationwide asserts that
a version of this agreement was executed, it has not submitted it to the Court, and there is no
reason for the Court to believe that the executed version (if it exists) is substantively different
from the version submitted by Cablevision. Nationwide relies upon the provisions of both the
2006 and 20 II Agreements throughout its complaint, and therefore both may be considered by
the Court. See Chambers, 282 F .3d at 152-53 ("[T]he complaint is deemed to include any
... documents incorporated in it by reference[, and e]ven where a document is not incorporated
by reference, the court may nevertheless consider it where the complaint relies heavily upon its
terms and effect, which renders the document integral to the complaint.") (internal quotation
marks and citations omitted).
10

'"A party has an absolute, unqualified right to terminate a contract on notice pursuant to
an unconditional termination clause without court inquiry into whether the termination was
activated by an ulterior motive."' Red Apple Child Dev. Ctr. v. Cmtv. Sch. Dists. Two, 756
N.Y.S.2d 527, 529 (App. Div. 2003) (quoting Big Aoole Car. v. Citv ofN.Y., 611 N.Y.S.2d 533,
534 (App. Div. 1994)). The clause allowing termination "in the interest ofCablevision" is such
an unconditional termination clause, and therefore Cablevision's stated reason for terminating
the Agreement and whether that reason was pretextual is irrelevant and cannot support a breach
of contract claim. Furthermore, Nationwide does not dispute that the complaint fails to allege
prejudice or damages caused by Cablevision having provided four {4) days' notice of termination
rather than five (5). Accordingly, Nationwide's breach of contract claim is dismissed insofar as
it is based upon the termination of the Agreements. 6
2.

Promise to Provide Additional Contract Work

According to Cablevision, Nationwide's breach of contract claim related to Cablevision's
alleged promise in "December and January 2011-2012 to provide more work to Nationwide in
exchange for Nationwide increasing its work force and purchasing more vehicles," Pl. Memo. at
5, must be dismissed because: (I) the Agreements provide that Nationwide "agrees and
understands that Cablevision makes no guarantee ... to provide [Nationwide] with any certain
amount of [Contract] Work," Agreements§ 5(g), and contain an integration clause stating that
the agreement "constitutes the entire understanding between the parties ... [and] cannot be

6

According to Nationwide, "Cablevision's letter of February 3, 2012 only purported to
terminate the 2006 agreement, which, according to the Verified Complaint, was no longer
operative, having been superseded by the 2011 Agreement," and "[d]efendants do not appear to
contend that they ever attempted or purported to terminate the operative 2011 Agreement." Pl.
Memo. at 3. The issue is irrelevant, since it is clear that Cablevision intended to terminate the
agreement governing the parties' relationship and, as discussed above, the Agreements are
substantively identical with respect to the issues presented in this case.
II

changed . . . except by a writing signed by an officer of each party hereto," 2006 Agreement
§ 31; 2011 Agreement§ 32; and (2) the complaint itself contradicts the basis of the claim,
alleging that "Cablevision did in fact increase the volume of[Contract] Work assigned to
Nationwide," Compl. at~ 42. Nationwide argues that "even ifCablevision was not obligated
under the 2011 Agreement to provide 'any specific amount of work' ... , this does not
necessarily mean that Cablevision had the right to provide Nationwide with no work at all,
especially given the allegations that Cablevision deliberately induced Nationwide to increase its
work force and purchase multiple vehicles." Pl. Memo. at 7.
"According to well-established rules of contract interpretation, when parties set down
their agreement in a clear, complete document, their writing should as a rule be enforced
according to its terms," and this rule is applied "with even greater force in commercial contracts
negotiated at arm's length by sophisticated counseled businesspeople." Ashwood Cap .. Inc. v.
OTD Mgmt.. Inc., 99 A.D.3d I, 7 (N.Y. App. Div. 2012). Therefore, "[a] broad merger clause"
stating that the "agreement 'constitutes the full and entire understanding and agreement among
the Parties,'" "as a matter of law bars any claim based on an alleged intent that the parties failed
to express in writing." Id. at 9 (alterations omitted). The Agreements unambiguously state that
Cablevision was not obligated to provide any particular amount of Contract Work to Nationwide
and, contrary to Nationwide's assertion that Cablevision did not "ha[ve] the right to provide
Nationwide with no work at all," Cablevision had the unconditional right to terminate the
Agreements at any time. In light of the broad merger clause included in the Agreements, the
plain meaning of the foregoing terms cannot be altered by the allegation that Cablevision
encouraged Nationwide to hire more employees and purchase more vehicles with the promise of
more Contract Work. See Daiichi Seihan USA v. Infinitv USA. Inc., 625 N.Y.S.2d 527, 528
12

(App. Div. 1995) ("In light of the unambiguous contract[,] ... [a]ny attempt by defendant to
alter the plain meaning of the contract by alleged oral modifications fails as a result of the
contract's integration clause.") (citation omitted). Accordingly, Nationwide's breach of contract
claim is dismissed insofar as it is based upon Cablevision's alleged oral promise to provide
Nationwide with more Contract Work.
3.

Implied Covenant of Good Faith and Fair Dealing

Nationwide argues that Cablevision also breached the implied covenant of good faith and
fair dealing implicit in the Agreements. Pl. Memo. at 6-7; Compl. at~ 114; see also Transeo
S.A.R.L. v. Bessemer Venture Partners VI L.P., ---F. Supp.2d ---, 2013 WL 1285453, at *20
(S.D.N.Y. Mar. 29, 2013) ("Under New York law, implicit in all contracts is a covenant of good
faith and fair dealing in the course of contract performance.") (internal quotation marks and
alteration omitted). "New York considers breach of the implied duty of good faith merely a
breach of the underlying contract," and "[u]nless the claim for breach of the implied covenant is
based on allegations different than those underlying the accompanying breach of contract claim,
two distinct causes of action cannot be maintained." Hallmark Aviation Ltd. v. AWAS Aviation
Servs .. Inc., No. 12 Civ. 7688,2013 WL 1809721, at *4 (S.D.N.Y. Apr. 30, 2013) (internal
quotation marks and citation omitted); see also Harris v. Provident Life and Accident Ins. Co.,
310 F.3d 73,81 (2d Cir. 2002) ("New York law ... does not recognize a separate cause of action
for breach of the implied covenant of good faith and fair dealing when a breach of contract
claim, based upon the same facts, is also pled."); Transeo, 2013 WL 1285453, at *20 ("[A] claim
alleging a breach of this covenant will not stand if it is duplicative of a breach of contract
claim."). Therefore, "a cause of action for breach of the implied covenant should be dismissed
as duplicative if it arises from the same facts and seeks the same damages as a breach of contract
13

claim." Hallmark, 2013 WL 1809721, at *4; see also Gun Hill Road Serv. Station. Inc. v.
ExxonMobil Oil Corn., No. 08 Civ. 7956,2013 WL 395096, at *8 (S.D.N.Y. Feb. I, 2013) ("The
implied covenant of good faith and fair dealing does not modify the[] express terms of the
contract.").
Here, Nationwide has failed to allege facts in support of the breach ofimplied covenant
claim that are distinct from the allegations underlying the breach of contract claim, and the
damages sought for both claims are the same. Moreover, as discussed in further detail below,
infra § ILL, Nationwide has failed to allege facts showing that in terminating the Agreements
Cablevision acted '"arbitrarily, irrationally or in bad faith,"' rather than in its own self-interest.
Gun Hill, 2013 WL 395096, at *8 (quoting Sveaas v. Christie's Inc., 452 F. App'x 63, 66 (2d
Cir. 2011)); see also Suthers v. Amgen Inc., 441 F. Supp.2d 478, 485 (S.D.N.Y. 2006)
("Plaintiffs have no support for the broad proposition that an entity violates the implied covenant
of good faith and fair dealing by acting in its own self-interest consistent with its rights under a
contract."). Therefore, Nationwide's claim of breach of the implied covenant of good faith and
fair dealing is duplicative of the breach of contract claim and is dismissed.
4.

Defendant's Motion for a More Definitive Statement

Cablevision has not moved to dismiss Nationwide's breach of contract claim as it relates
to the equipment charges and the withholding of remittances owed for Contract Work performed.
[Docket Entry No. 13-8] at 4. However, Cablevision has requested a more definite statement
pursuant to Rule 12(e) of the Federal Rules of Civil Procedure with respect to the allegedly
fraudulent equipment charges.

.!fl

Rule 12(e) allows a party to move for a more definite statement of a pleading "which is
so vague or ambiguous that the party cannot reasonably prepare a response" and requires the
14

moving party to "point out the defects complained of and the details desired." FED. R. Civ. P.
J2(e). Motions for a more definite statement "should not be granted unless the complaint is so
excessively vague and ambiguous as to be unintelligible and as to prejudice the defendant
seriously in attempting to answer it. The Rule is designed to remedy unintelligible pleadings, not
to correct for lack of detail." Leviton Mfg. Co .. Inc. v. Reeve, --- F. Supp.2d --- , 2013 WL
504020, at *21 (E.D.N.Y. Feb. 7, 2013) (internal quotation marks omitted). Nationwide's
allegations with respect to the equipment charges are intelligible, and Cablevision has not
specified the clarification desired or the prejudice that would result from responding to the
allegations. Therefore, Cablevision's motion for a more definite statement pursuant to Rule
12(e) is denied.
B.

Unfair and Deceptive Trade Practices

Sections 349 and 350 of the New York General Business Law prohibit "[d)eceptive acts
or practices" and "[f]alse advertising" "in the conduct of any business." N.Y. GEN. Bus. LAW
§§ 349(a), 350. To state a cause of action under either section, '"a plaintiff must allege that a
defendant has engaged in (I) consumer-oriented conduct that is (2) materially misleading and
that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice."' Koch v.
Acker. Merrall & Condit Co., 18 N.Y.3d 940, 941 (2012) (quoting City ofN.Y. v. SmokesSpirits. Com. Inc., 12 N.Y.3d 616, 621 (2009)). 7 To be actionable, "[w)hether a representation or
an omission, the deceptive practice must be likely to mislead a reasonable consumer acting
reasonably under the circumstances." Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000)

7

"[Section]350 [also) requires-unlike§ 349-that the plaintiff must demonstrate
reliance on the allegedly false advertising." Leider v. Ralfe, 387 F. Supp.2d 283, 292 (S.D.N.Y.
2005) (citing Small v. Lorillard Tobacco Co .. Inc., 679 N.Y.S.2d 593, 599 (App. Div. 1998),
aff'd, 698 N.Y.S.2d 615 (1999)).
15

(internal quotation marks omitted); see also Oswego Laborers' Local 214 Pension Fund v.
Marine Midland Bank, 85 N .Y .2d 20, 26 ( 1995) (applying an "objective definition of deceptive
acts and practices, whether representations or omissions, limited to those likely to mislead a
reasonable consumer acting reasonably under the circumstances ... , which may be determined
as a matter of law or fact (as individual cases require)"); Leider v. Ralfe, 387 F. Supp.2d 283,
292 (S.D.N.Y. 2005) ("[A] violation of either section [349 or 350] requires that the defendant's
conduct deceive a reasonable consumer in a material respect, work a harm to the public at large,
and directly cause the plaintiffs injury.").
Nationwide asserts that Cablevision "mislead [sic] the consuming public by issuing a
public statement that [Cablevision] was 'immediately suspending work with the Nationwide
subcontracting company, which provides a limited amount of work, only in Suffolk County, NY,
pending a complete and thorough investigation;• without also disclosing" that: (1) Nationwide
was Cablevision's "top-performing contractor"; (2) Cablevision "had specifically authorized
Nationwide to permit Sanchez to perform [Contract] Work even after Sanchez had been accused
of stealing from a Cablevision customer"; (3) "Cablevision's own background check of Sanchez
even after his arrest was benign"; and (4) "some of the alleged burglaries occurred in homes
serviced by Cab levis ion employees." Com pl.

at~

118. Although Nationwide acknowledges that

the Statement is not false or misleading on its face, as Cablevision did in fact suspend its
relationship with Nationwide pending an investigation following Sanchez's arrest, it argues that
the Statement "impl[ied] that Cablevision 'had effectively eliminated the risk of burglaries by
8

Nationwide omitted the first clause of the statement from its complaint. Cablevision' s
full statement was: "We are cooperating fully with the police and are immediately suspending
work with the Nationwide subcontracting company, which provides a limited amount of work
only in Suffolk County, New York, pending a complete review and th[o]rough investigation."
Declaration of Sean Thomas Keely in Support of Defendants' Motion to Dismiss ("Keely Aff.")
Ex. B.
16

cable technicians bearing its marks and logos on their vehicles and uniforms by terminating its
contract with Nationwide,' when in fact Nationwide had nothing to do with the thefts and the
termination of Nationwide did nothing to protect the consumers who were the intended audience
for Cablevision's false claim." Pl. Memo. at 9.
The Court agrees with Cablevision that Nationwide's "speculation about what consumers
inferred from what the Statement did not say is mere conjecture, insufficient to survive a motion
to dismiss." Def. Memo. at 9-10. Cablevision made clear clear that it was C()nducting an
investigation and did not claim to have provided all relevant information concerning the
burglaries. See Gomez-Jimenez v. N.Y. Law School, 956 N.Y.S.2d 54, 59 (App. Div. 2012)
("[A] party does not violate [section 349] by simply publishing truthful information and allowing
consumers to make their own assumptions about the nature of the information."); Andre Strishak
& Assocs .. P.C. v. Hewlett Packard Co., 752 N.Y.S.2d 400,403 (App. Div. 2002) (holding that

the section 349 claim was properly dismissed where the defendant represented that ink cartridges
were included with the purchase of its printers but did not disclose that the cartridges were
economy-size). "In the case of omissions ... [section 349] does not require businesses to
ascertain consumers' individual needs and guarantee that each consumer has all relevant
information specific to its situation," but omissions may be actionable "where the business alone
possesses material information that is relevant to the consumer and fails to provide this
information." Oswego, 85 N.Y.2d at 26. The information that allegedly should have been
included in the Statement was known to Nationwide, and Nationwide was free to publicize that
information if it believed that it was relevant to consumers or would mitigate the damage to its
reputation. 9 Cf. Bildstein v. MasterCard Int'l, Inc., No. 03 Civ. 98261, 2005 WL 1324972, at *4

9

Nationwide's assertion that "Cablevision was in fact in exclusive possession of the
17

(S.D.N.Y. June 6, 2005) (holding that the plaintiff sufficiently pleaded deception by omission
where the defendant allegedly "went to great efforts to conceal" the existence of a consumeer
fee) (internal quotation marks omitted). Therefore, the alleged omissions cannot form the basis
for a deceptive practices claim.
Moreover, even if the Statement was misleading, Nationwide has failed to allege that it
harmed consumers or the public interest in any way. "[T]he gravamen of the [section349]
complaint must be consumer injury or harm to the public interest[,] ... whether the suit is
brought by a consumer or a competitor." Securitron Magnalock Cor:p. v. Schnabolk, 65 F .3d
256,264 (2d Cir. 1995) (internal quotation marks omitted); see also Gucci Am .. Inc. v. Duty
Free Apparel. Ltd., 277 F. Supp.2d 269,273 (S.D.N.Y. 2003) ("Commercial claimants under
§ 349 must allege conduct that has significant ramifications for the public at large in order to
properly state a claim.") (internal quotation marks omitted). Here, although Nationwide asserts
that consumers were harmed by the Statement's false implication that Cablevision had
"eliminated the risk of burglaries by cable technicians bearing its marks and logos," Pl. Memo. at
9, "allegations of consumer confusion are generally not sufficient consumer harm to state a
section 349 claim," Stadt v. Fox News Network LLC, 719 F. Supp.2d 312, 323-24 (S.D.N.Y.
2010) (holding that the plaintiffs allegation that the defendant's false representation regarding
the origin of a video failed to adequately allege harm to consumers or the public interest), and
Nationwide has failed to allege how the purportedly false implications of the Statement caused
any actual injury to consumers. See Levine v. Landy, 832 F. Supp.2d 176, 192 (N.D.N.Y. 2011)

information that all but one of the allegedly burglarized customers had not been serviced by
Nationwide" is without merit, since Nationwide was clearly able to determine whether its
employees had serviced certain customers. Moreover, whether or not the customers were in fact
serviced by Nationwide is irrelevant given that Sanchez, an employee of Nationwide, was
charged with the burglaries.
18

(holding that allegation that the defendants confused consumers regarding the authorship of the
plaintiff's photographs failed to adequately allege consumer harm); LBB Corp. v. Lucas Distrib.,
Inc., No. 08 Civ. 4320,2008 WL 2743751, at *3 (S.D.N.Y. July 14, 2008) (holding that
allegation of"actual confusion amongst consumers whereby the public is deceived and confused
into believing that the Defendants' film is produced, provided, endorsed or authorized by
Plaintiff'' failed to adequately allege harm to consumers or the public interest).
For the foregoing reasons, Nationwide's claim asserted pursuant to New York General
Business Law §§ 349 and 350 (Count II) is dismissed.
C.

10

Unfair Competition

"The essence of an unfair competition claim under New York law is that the defendant
misappropriated the fruit of [the1 plaintiff's labors and expenditures by obtaining access to [the 1
plaintiff's business idea either through fraud or deception, or an abuse of a fiduciary or
confidential relationship .... [U1nfair competition is a broad and flexible doctrine that depends
more upon the facts set forth than in most causes of action. It has been broadly described as
encompassing any form of commercial immorality, or simply as endeavoring to reap where one
has not sown; it is taking the skill, expenditures and labors of a competitor, and misappropriating
for the commercial advantage of one person a benefit or property right belonging to another."
Telecom Int'l Am., Ltd. v. AT&T Corn., 280 F.3d 175, 197-98 (2d Cir. 2001) (internal quotation
marks and alterations omitted); see also Coca-Cola N. Am. v. Crawley Juice, Inc., No. 09-CV3259,2011 WL 1882845, at *6 (E.D.N.Y. May 17, 2011). "While there is no complete list of

10

Given the disposition of this claim, it is not necessary for the Court to determine whether
Nationwide adequately alleged "consumer-oriented" conduct by Cablevision. See Koch, 18
N.Y.3d at 941; Sheth v. N.Y. Life Ins. Co., 709 N.Y.S.2d 74, 75 (App. Div. 2000) ("[T1he
requirement that the challenged conduct be 'consumer-oriented' may be met by a showing that
the practice has a broader impact on the consumer at large.").
19

activities which constitute unfair competition under New York law," Bongo Apparel, Inc. v.
leo nix Brand Gro .. Inc., No. 601903/06, 2008 WL 41341 (N.Y. Sup. Ct. Jan. 2, 2008), "[t]he tort
is not all-encompassing," and "[t]he New York Court of Appeals in rejecting the notion that
unfair competition is equivalent to the amorphous term 'commercial unfairness' has stated that
misappropriation of another's commercial advantage is a cornerstone of the tort." CA. Inc. v.
Simple.com. Inc., 621 F. Supp.2d 45, 53 (E.D.N.Y. 2009) (internal quotation marks omitted);
MiniFrame Ltd. v. Microsoft Corp., No. Jl Civ. 7419, 2013 WL 1385704, at *8 (S.D.N.Y. Mar.
28, 2013) ("Under New York law, the gravamen of an unfair competition claim is the bad faith
misappropriation of a competitor's commercial advantage.").
Nationwide alleges that Cablevision engaged in unfair competition by:
(I) misappropriating Nationwide's "confidential and proprietary information regarding its

employees for the undisclosed purpose of soliciting those employees to work for Cablevision
and/or A WS" and "contact[ing] Nationwide's employees and inform[ing] them that Nationwide
'is no more,' and that their only option for continuing to perform work for Cablevision in Suffolk
County would be to accept employment with AWS," Compl.

at~~

73, 127; and (2) requiring,

"[p]ursuant to [the Agreements]," Nationwide employees performing Contract Work to "wear
uniforms and badges and to affix magnetic signs to their vehicles prominently featuring
Cablevision's 'Optimum' service mark, with no reference to ... Nationwide," Compl.

at~~

39,

125. 11
"[L]egal conclusions ... must be supported by factual allegations," Iqbal, 556 U.S. at

II

Nationwide also alleges that the Statement constituted unfair competition, as it "caused or
is likely to cause Cablevision's own activities to be mistaken for Nationwide's activities in the
mind of the public." Compl. at~ 126. As discussed with respect to plaintiffs deceptive trade
practices claim, supr!!, § III.B., the Statement was not false or misleading and therefore cannot
support a claim of unfair competition.
20

678, and therefore Nationwide's unsupported conclusion that the identities of its employees were
"confidential and proprietary" is not sufficient to withstand a motion to dismiss. See Def.
Memo. at 17 ("Nationwide cannot rely on the conclusory allegation that 'confidential and
proprietary information' was 'misappropriated.'"). Nationwide's argument, relying upon
Astroworks. Inc. v. Astroexhibit Inc., 257 F. Supp.2d 609, 619 (S.D.N.Y. 2003), that a "bare
allegation that defendant exploited 'confidential and proprietary' information sufficiently pled a
claim of unfair competition, even where defendant disputed that such information was
proprietary," is without merit. Pl. Memo. at 16. In Astroworks, the plaintiff alleged that he
approached the defendant with his idea for a "virtual exhibit hall and online database that would
sell space-related products and services" and that after joint efforts to develop the venture the
defendant "obtain[ed] a copyright on the website, effectively co-opting [the plaintiffs] idea."
257 F. Supp.2d at 612-13. Such allegations clearly state a plausible claim that "the defendant
misappropriated the fruit of plaintiff's labors and expenditures by obtaining access to plaintiff's
business idea either through fraud or deception, or an abuse of a fiduciary or confidential
relationship." Telecom, 280 F.3d at 197. Here, the allegation that Cablevision induced
Nationwide's employees to work for A WS alone does not state a plausible claim of unfair
competition, since "the mere inducement of an at-will employee to join a competitor [is not]
actionable, unless dishonest means are employed, or the solicitation is part of a scheme designed
solely to produce damage." Headquarters Buick-Nissan v. Michael Oldsmobile, 539 N.Y.S.2d
355,355 (App. Div. 1989) (citing Coleman & Morris v. Pisciotta, 107 N.Y.S.2d 716 (N.Y. App.
Div. 1951) ("We may not assume that the employment relationships were other than at will and,
in our opinion, mere inducement to an employee at will to discontinue such employment is not
actionable[,] at least unless the purpose of the actor was solely to produce damage, or unless the
21

means employed were dishonest or unfair.")). As discussed below, Nationwide's allegations do
not support the conclusion that Cablevision was motivated "solely to produce damage,"
Coleman, 107 N.Y.S.2d at 716, and Nationwide has failed to allege how Cablevision's
solicitation of its employees was otherwise dishonest or unfair. Cablevision's statement to the
employees that "their only option for continuing to perform work for Cablevision in Suffolk.
County would be to accept employment with A WS" was not false given Cablevision's
termination of its relationship with Nationwide. Moreover, the section of the Agreements
addressing confidentiality of proprietary information does not include the identities of
Nationwide's employees,~ 2011 Agreement§ 7; 2006 Agreement§ 7, and Nationwide has
offered no other reason that the information should be considered proprietary.
The Court also agrees with Cablevision that the allegations regarding Nationwide's
required use of the Optimum service mark "cannot support a claim because they are contrary to
the very Agreement on which Nationwide relies." Def. Memo. at 13 n.2. The Agreements
provided that "[a]ll Contractor vehicles shall prominently display a Cablevision sign which sign
will be provided by Cablevision," and that "[a]ll Contractor vehicles must also have Contractor's
name and address prominently displayed." Agreements § 4(1). Nationwide cannot complain of
confusion caused by its failure to prominently display its name on its vehicles. See Def. Memo.
at 13 n.2.

12

Nationwide argues that even if the Agreements preclude an unfair competition claim
related to the vehicle signage, the claim should nonetheless survive upon the basis of the
allegation that Nationwide employees were forced to wear badges and uniforms displaying the
12

Nationwide's argument in response, that "Cablevision provides no evidence that this
requirement was retained in the 2011 Agreement," Pl. Memo. at 14 n.5, is rejected for the same
reasons discussed supra § III.B.
22

Optimum sign without mention of Nationwide. See Pl. Memo. at 14 n.5. However, Nationwide
fails to explain how the alleged consumer confusion caused by the Optimum service mark on the
employees' badges and uniforms caused the injuries complained of here. Nationwide states in
conclusory fashion that Cablevision's "deceptive acts and practices" caused Nationwide to
"sustain[] economic losses." Compl. at~ 130. Insofar as Nationwide is alleging injuries separate
and apart from the injuries sustained as a result of the burglaries and Cablevision 's termination
of the Agreement, this conclusory allegation is insufficient to survive a motion to dismiss.
Although the issue was not raised by Cablevision, the Court also notes that the
Agreements provided that Nationwide employees must wear uniforms and badges approved by
Cablevision, ~ 2006 Agreement§ 120); 2011 Agreement§ 13{i), and it is not clear how
conduct by Cablevision permitted under the contract can constitute "fraud or deception, or an
abuse of a fiduciary or confidential relationship." Telecom, 280 F.3d at 197.
For the foregoing reasons, Nationwide's unfair competition claim (Count III) is
dismissed. 13
D.

Lanham Act

Nationwide alleges that the Statement violated section 43(a) of the Lanham Act, Compl.
at~~

134-136, which '"proscribes false designations of origin or false or misleading descriptions

of fact in connection with any goods in commerce that are likely to cause confusion or that
misrepresent the nature, characteristics, qualities, or geographic origin of the goods."' S.C.
Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232,238 (2d Cir. 2001) (quoting Groden v.

13

Given the disposition of this claim, it is not necessary for the Court to address
Cablevision's argument that it and Nationwide are not competitors. Def. Memo. at 14-15. See
EMI Music Mktg. v. Avatar Records. Inc., 317 F. Supp.2d 412, 423 (S.D.N.Y. 2004) ("[B]y
definition, competition is fundamental to any unfair competition claim. Where there is no
competition, there can be no unfair competition.").
23

Random House. Inc., 61 F.3d 1045, 1051 (2d Cir. 1995)); 15 U.S.C. § 1125(a)(1)(B). In order to
prevail on such a false advertising claim, '"a plaintiff must prove the following elements: 1) the
defendant has made a false or misleading statement; 2) the false or misleading statement has
actually deceived or has the capacity to deceive a substantial portion of the intended audience;
3) the deception is material in that it is likely to influence purchasing decisions; 4) there is a
likelihood of injury to plaintiff, such as declining sales or loss of goodwill; and 5) the goods
traveled in interstate commerce."' Conte v. Newsday, Inc., No. 06-CV-4859, 2013 WL 978711,
at *10 (E.D.N.Y. Mar. 13, 2013) (quoting Johnson & Johnson Vision Care. Inc. v. Ciba Vision
Com., 348 F. Supp.2d 165, 177-78 (S.D.N.Y. 2004)); see also S.C. Johnson, 241 F.3d at 238
('"The Lanham Act does not prohibit false statements generally. It prohibits only false or
misleading descriptions or false or misleading representations of fact made about one's own or
another's goods or services."') (quoting Groden, 61 F.3d at 1052). To demonstrate that the
challenged statement is false, a plaintiff may show that (I) "the challenged advertisement is
literally false, i.e., false on its face," in which case "consumer deception is presumed, and the
court may grant relief without reference to the advertisement's actual impact on the buying
public," or (2) the challenged "advertisement, while not literally false, is nevertheless likely to
mislead or confuse consumers." Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, I 53
(2d Cir. 2007) (internal quotation marks and alterations omitted).
As explained above,~ supra § III.B., the Statement was not literally false and was not
otherwise likely to materially mislead or confuse customers. Nationwide's speculation as to
consumers' possible interpretation of the Statement also fails to adequately allege that the
Statement was likely to affect consumers' purchasing decisions or to cause actual consumer
harm. See S.C. Johnson, 241 F.3d at 238 ("[I]n addition to proving falsity, the plaintiff must also
24

show that the defendants misrepresented an inherent quality or characteristic of the product.
This requirement is essentially one of materiality .... ")(internal quotation marks omitted).
Moreover, even if the Statement was false or materially misleading, it is not "commercial
advertising or promotion" addressed by the Lanham Act. 15 U.S.C. § Jl25{a)(J)(B). In order to
quality as "commercial advertising or promotion," the Second Circuit requires that the
representation be (I) commercial speech, (2) for the purpose of influencing consumers to buy
defendant's goods or services, and (3) disseminated sufficiently to the relevant purchasing
public. Fashion Boutique of Short Hills. Inc. v. Fendi USA, 314 F.3d 48, 57-58 {2d Cir. 2002)
(adopting, in part, the test prescribed in Gordon & Breach Science Publishers S.A. v. Am.
Institute of Physics, 859 F. Supp. 1521, 1535-36 (S.D.N.Y. 1994)). 14 The Second Circuit further
stated that "the touchstone of whether a defendant's actions may be considered 'commercial
advertising or promotion' under the Lanham Act is that the contested representations are part of
an organized campaign to penetrate the relevant market. Proof of widespread dissemination .
within the relevant industry is a normal concomitant of meeting this requirement. Thus,
businesses harmed by isolated disparaging statements do not have redress under the Lanham Act;
they must seek redress under state-law causes of action." Id. at 57.
Nationwide relies upon Fashion Boutique in arguing that the Statement, although not
"traditional advertising," is nonetheless subject to the Lanham Act because it was '"disseminated
sufficiently to the relevant purchasing public."' Pl. Memo. at 17-18 (quoting Fashion Boutique,
314 F .3d at 56). While the public dissemination of a statement is a "normal concomitant" of
commercial advertising and promotion, it is not sufficient to support a determination that the
14

The Second Circuit declined to determine whether it is necessary that the representation

be made by a defendant who is in commercial competition with the plaintiff, a fourth
requirement imposed in Gordon & Breach. See Fashion Boutique, 314 F.3d at 58.

25

Lanham Act applies. The Lanham Act "does not have boundless application as a remedy for
unfair trade practices but is limited to false advertising as that term is generally understood."
Alfred Dunhill Ltd. v. Interstate Cigar Co., Inc., 499 F.2d 232,237 (2d Cir. 1974). The
Statement was "not part of an organized campaign to penetrate the relevant market" but was
rather, at most, an "isolated disparaging statement[]," id. at 57, and therefore did not constitute
commercial advertising and promotion actionable under the Lanham Act.
For the foregoing reasons, Nationwide's Lanham Act claim (Count IV) is dismissed.
E.

Negligence

"To establish a prima facie case of negligence under New York law, 'a plaintiff must
demonstrate (I) a duty owed by the defendant to the plaintiff, (2) a breach thereof, and (3) injury
proximately resulting therefrom."' Lerner v. Fleet Bank, N.A., 459 F.3d 273, 286 (2d Cir. 2006)
(quoting Solomon v. Citv ofN.Y., 66 N.Y.2d 1026, 1027 (1985)). Nationwide asserts that
Cablevision was negligent in (I) "fail[ing] to exercise reasonable care in its public statements
about Nationwide relating to the alleged thefts of Cablevision customers' property," and
(2) "charging Nationwide for assets which Cablevision knew, or should have known, were not
missing, and were not Nationwide's responsibility." Compl. at 11 144, 146. Cablevision argues
that Nationwide has failed to state a negligence cause of action because, inter alia, it has failed to
allege the existence of a duty of care owed by Cablevision to Nationwide with respect to either
the Statement or the equipment charges. De f. Memo. at 18-19.
The complaint makes the conclusory allegation that Cablevision "undertook a duty to
exercise reasonable care in its public statements about Nationwide relating to the alleged thefts
of Cablevision customers' property." Com pl. at 'If 143. According to Nationwide, "[a]!though
defendants may dispute that they undertook such a duty, the Verified Complaint claims that they
26

did and defendants provide no legal authority for the proposition that they could not have
undertaken such a duty as a matter oflaw." Pl. Memo. at 18. Therefore "[a] question of fact
... exists as to whether defendants undertook the duty of care alleged in the complaint, thereby
precluding dismissal of the claim on the pleadings." Id.
Nationwide may not rely upon an unsupported legal conclusion in asserting the existence
of a duty of care; rather, it must make factual allegation which, if true, demonstrate the existence
of such a duty. See In re Lehman Bros. Sec. & ERISA Litig., No. 09 MD 2017, 2012 WL
6000575, at *4 (S.D.N.Y. Dec. 3, 2012) ("[T]he complaint fails to allege facts which, if true,
would demonstrate the existence of a legal duty on the part of [the defendant] ...."); Iqbal, 556
U.S. at 678 ("[L]egal conclusions ... must be supported by factual allegations."). Nationwide
has failed to allege any facts that support the assertion that Cablevision undertook a duty related
to its public statements. Furthermore, even ifCablevision did owe Nationwide a duty of care
with respect to its public statements, plaintiff has failed to allege that the Statement breached that
duty because, as discussed above, the Statement was not misleading. Therefore, Nationwide has
failed to state a cognizable negligence claim upon the basis of the Statement.
Nationwide argues that Cablevision may be subject to tort liability for negligent
performance of its contractual obligations related to the equipment charges and relies upon
Anunziatta v. Orkin Exterminating Co .. Inc., where the court held that a pest control company
servicing a homeowner "has a duty to use reasonable care sounding in tort" independent of its
contractual duties. 180 F. Supp.2d 353, 359 (N.D.N.Y. 2001).
A duty of care independent of the defendant's contractual obligations has been applied to
"[p]rofessionals, common carriers and bailees" where there is a significant "public interest" in
the defendant's adequate performance under the contract and the defendant's failure to act with
27

due care could have "catastrophic consequences." Sommer v. Fed. Signal Com., 583 N.Y.S.2d
957, 961-62 ( !992) (holding that a fire alarm company owed a duty of care upon the basis that,
inter alia, its services implicated a significant public interest and the injury complained of was an
"abrupt, cataclysmic occurrence"). However, where "sophisticated parties" have "entered into a
commercial contract defining their respective duties" and there is no implications for "'the
protection of the personal safety of citizens,"' there is no basis to impose a duty of care on the
defendant independent of its contractual obligations. THC Holdings Com. v. Tishman, Nos. 93
Civ. 5393,95 Civ. 4422, 1998 WL 305639, at *4 (S.D.N.Y. June 9, 1998) (quoting N.Y. Univ. v.
Continental Ins. Co., 639 N.Y.S.2d 283, 288 (1995)). Here, Nationwide and Cablevision are
sophisticated parties that entered into an arm's-length commercial contract, the adequacy of
Cablevision' s performance of its obligations with respect to the equipment charges does not
substantially implicate the public interest, and the injury attributed to Cablevision's negligence is
identical to the injury caused by the alleged breach of the Agreements. See Millennium Partners.
L.P. v. U.S. BankNat'l Ass'n, No. 12 Civ. 7581,2013 WL 1655990, at *5 (S.D.N.Y. Apr. 17,
2013) ("Since the nature of Plaintiffs' injury and the resulting harm caused by the alleged breach
of Defendants' tort duty are identical to the injury and harm caused by the alleged breach of
contract, the negligence claim must be dismissed as duplicative of the contract claim.") (internal
quotation marks and alterations omitted). "(M]erely alleging that the breach of contract duty
arose from a lack of due care will not transform a simple breach of contract into a tort."
Sommer, 583 N.Y.S.2d at 961. Therefore, plaintiff's negligence claim based upon the
equipment charges is duplicative of the breach of contract claim and must be dismissed.
For the foregoing reasons, Nationwide's negligence claim (Count V) is dismissed.

28

F.

Breach of Fiduciary Duty

To establish a breach of fiduciary duty under New York law, a plaintiff must show:
(I) the existence of a fiduciary duty; (2) a knowing breach of that duty; and (3) damages

resulting therefrom. Johnson v. Nextel Commc'ns. Inc., 660 F.3d 131, 138 (2d Cir. 2011).
Nationwide alleges that the relationship between it and Cablevision went "beyond a
'conventional business relationship,"' Pl. Memo. at 20, because Nationwide was "required ... to
place its trust and confidence in Cablevision with respect to the accuracy and reliability of
Cablevision's internal systems for tracking and locating the serialized and non-serialized assets
for which Cablevision took deductions against Nationwide's invoices." Compl. at 1 150 (citing
Daly v. Metro. Life Ins. Co., 782 N.Y.S.2d 530, 530 (N.Y. Sup. Ct. 1992) ("[A] fiduciary duty
arises, even in a commercial transaction, where one party reposed trust and confidence in another
who exercises discretionary functions for the party's benefit or possesses superior expertise on
which the party relied.") (internal quotation marks omitted)). According to Nationwide,
Cablevision "breached its fiduciary duties ... by charging Nationwide for assets which
Cablevision knew or should have known were not being accurately or reliably tracked by
Cablevision's internal systems." Compl. at 1 152. Cablevision argues that Nationwide has failed
to allege facts demonstrating the existence of a fiduciary relationship and that the breach of
fiduciary duty claim is duplicative of plaintiff's breach of contract claim. Def. Memo. at 20-21.
Nationwide's conclusory allegation that it placed its trust and confidence in Cablevision
is insufficient to survive a motion to dismiss the breach of fiduciary duty claim. Nationwide has
offered no factual or legal justification for its purported reliance upon Cablevision in keeping
track ofCablevision's equipment in Nationwide's possession and has failed to allege facts
showing that its relationship with Cablevision was anything more than a conventional business
29

relationship. LaRoss Partners. LLC v. Contact 911 Inc., 874 F. Supp.2d 147, 167 (E.D.N.Y.
20 12) ("A conventional business relationship, without more, does not become a fiduciary
relationship by mere allegation.") (internal quotation marks omitted); KSW Mech. Servs .. Inc. v.
Mech. Contractors Ass'n ofN.Y .. Inc., No. II Civ. 5100,2012 WL 1027354, at *6 (S.D.N.Y.
Mar. 27, 2012) (same). Moreover, Cablevision has demonstrated that the parties' duties with
respect to the equipment were governed by the Agreements, see Def. Rep. at 16, and therefore
the allegations forming the basis for plaintiff's fiduciary duty claim are duplicative of those
forming the basis for the breach of contract claim. See. e.g., Barbagallo v. Marcum LLP, No.
11-CV-1358, 2012 WL 1664238, at *10 (E.D.N.Y. May II, 2012) ("[E]ven if[the defendant]
owed [the plaintifl] a fiduciary duty of good faith and loyalty, [the plaintifl] has failed to allege
sufficient facts to show that he did more than violate the duties he owed under the contract.");
Robin Bay Assocs .. LLC v. Merrill Lynch & Co., No. 07 Civ. 376,2008 WL 2275902, at *3
(S.D.N.Y. June 3, 2008) (holding that it "is sufficient to dismiss [the p]laintiff's claim for
fiduciary duty" where "there is almost total overlap between [the p]laintiff's claims for breach of
contract and fiduciary duty"). Accordingly, Nationwide's breach of fiduciary duty claim (Count
VI) is dismissed.
G.

Unjust Enrichment

"Under New York law, for a plaintiff to prevail on a claim of unjust enrichment, he [or
she] must establish (I) that the defendant was enriched; (2) that the enrichment was at the
plaintiff's expense; and (3) that the circumstances are such that in equity and good conscience
the defendant should return the money or property to the plaintiff." Golden Pacific Bancorn v.
F.D.I.C., 273 F.3d 509, 519 (2d Cir. 2001). "The 'essence' of such a claim 'is that one party has
received money or a benefit at the expense of another."' Kaye v. Grossman, 202 F.3d 611,616
30

(2d Cir. 2000) (quoting City of Syracuse v. R.A.C. Holding. Inc., 685 N.Y.S.2d 381,381 (App.
Div. 1999)). "The term 'unjust enrichment' does not signify a single well-defined cause of
action. An action for unjust enrichment is a claim in equity that the result or effect of a failure to
make restitution of or for benefits received under the circumstances give rise to a legal or
equitable obligation to account for the benefits." Mitchell v. Faulkner, No. I 0-CV -8173, 2013
WL 150254, at *7 (S.D.N.Y. Jan. 15, 2013).
Cablevision argues that Nationwide's unjust enrichment claim is precluded by the
existence of a valid and enforceable contract between the parties. Def. Memo. at 22; see IDT
Com. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 142 (2009) ("Where the parties
executed a valid and enforceable written contract governing a particular subject matter, recovery
on a theory of unjust enrichment for events arising out of that subject matter is ordinarily
precluded."). Nationwide does not dispute that an enforceable contract precludes a claim of
unjust enrichment but asserts that unjust enrichment may be raised as an alternative theory of
recovery because Cablevision is contesting the validity of the 20 II Agreement. However,
Cablevision has conceded for purposes of the motion that the 20 II Agreement was in effect, and
even if the 2011 Agreement was never executed, the 2006 Agreement would have remained in
effect. Accordingly, Nationwide's unjust enrichment claim (Count VII) is dismissed.
H.

Civil Conspiracy

Nationwide alleges that "Cablevision conspired with Nationwide's competitor, A WS, to
commit torts against Nationwide .... " Compl.

at~

163. To plead a claim for civil conspiracy, a

party must allege an underlying tort, plus: "(I) an agreement between two or more parties; (2) an
overt act in furtherance of the agreement; (3) the parties' intentional participation in the
furtherance of a plan or purpose; and (4) resulting damage or injury." Ebusinessware. Inc. v.
31

Tech. Servs. Gro., No. 08 Civ. 9101,2009 WL 5179535, at *15 (S.D.N.Y. Dec. 29, 2009)
(internal quotation marks omitted); see also Cofacredit v. Windsor Plumbing Supply Co .. Inc.,
187 F.3d 229,240 (2d Cir. 1999) ("To prove a conspiracy, a plaintiff must show a corrupt
agreement, an overt act in furtherance of that agreement, and membership in the conspiracy by
·each defendant."). The purpose of a civil conspiracy claim is to "connect the actions of separate
defendants with an otherwise actionable tort." Alexander & Alexander ofN.Y .. Inc. v. Fritzen,
68 N.Y.2d 968,969 (1986).
A WS is not a defendant in this action, and Nationwide has asserted the underlying tort
claims against Cablevision directly. Therefore, Nationwide is asserting an independent
conspiracy cause of action, which is not permitted under New York law. Steier v. Schreiber, 810
N.Y.S.2d 431, 434 (App. Div. 2006) ("New York does not recognize civil conspiracy to commit
a tort as an independent cause of action."); see also Danahy v. Meese, 84 A.D.2d 670, 672 (N.Y.
App. Div. 1981) ("[I]fthe conspiracy causes of action are allowed, plaintiff, having recovered on
the substantive tort, would then be permitted a duplicative recovery on the conspiracy causes of
action with the proof of nothing additional other than the agreement."). Accordingly,
Nationwide's civil conspiracy claim (Count VIII) is dismissed.
I.

Prima Facie Tort

"A cause of action of prima facie tort consists of four elements: (I) intentional infliction
of harm, (2) causing special damages, (3) without excuse or justification, (4) by an act or series
of acts that would otherwise be lawful." Garrison v. Toshiba Bus. Solutions (USA). Inc., No.
11-CV-2214, 2012 WL 6025745, at *6 (E.D.N.Y. Dec. 3, 2012) (internal quotation marks
omitted). "The touchstone [of a prima facie tort claim] is 'disinterested malevolence,' meaning
that the plaintiff cannot recover unless the defendant's conduct was not only harmful, but done

32

with the sole intent to harm." Twin Labs .. Inc. v. Weider Health & Fitness. 900 F.2d 566, 571
(2d Cir. 1990); see also, e.g., Jewel Source, Inc. v. Primus Jewels, LLC, No. II Civ. 3941,2011
WL 4634019, at *3 (S.D.N.Y. Oct. 3, 2011) ("To prevail on [a prima facie tort] claim, (the

plaintift] must allege that [the defendant] acted solely from disinterested malevolence.") (internal
quotation marks omitted). Cablevision argues that the prima facie tort claim must be dismissed
because, inter alia, Nationwide "cannot and does not plead that Cablevision acted solely to harm
Nationwide." Def. Memo. at 24. According to Nationwide, "(a]lthough Cablevision may have
had commercial reasons for seeking to minimize the public relations fallout from the burglaries
of Cablevision customers by Cablevision installers, there can be no justification for
Cablevision's malicious actions, and questions of'mixed motives' are not fatal to a cause of
action for prima facie tort in any event." Pl. Memo. at 23-24.
Nationwide's argument relies upon Burns. Jackson. Miller. Summit & Spitzer v. Lindner,
in which the trial court stated that "[t]he critical issue concerning the intent element is not
whether the harmful act was solely malicious, to the exclusion of any other purpose, but rather
whether it was justified by any legal or social purpose." 437 N.Y.S.2d 895,902 (N.Y. Sup. Ct.
1981). However, plaintiff failed to recognize and/or point out to the Court that the New York
Court of Appeals reversed the trial court's decision, holding that "there is no recovery in prima
facie tort unless malevolence is the sole motive for [the] defendant's otherwise lawful act ... , by
which is meant that the genesis which will make a lawful act unlawful must be a malicious one
unmixed with any other and exclusively directed to injury and damage of another," and
dismissed the prima facie tort claim "because, although [the plaintiffs] allege[d] intentional and
malicious action, they [did] not allege that [the] defendants' sole motivation was 'disinterested
malevolence."' 59 N.Y.2d 314, 333 (1983) (emphasis added).
33

Nationwide's own allegations demonstrate that Cablevision had "motives other than
disinterested malevolence, such as profit, self-interest, or business advantage." Twin Labs., 900
F.2d at 571 (internal quotation marks omitted). Nationwide alleges that Cablevision's public
termination of Nationwide as a contractor was motivated by its desire to protect its reputation by
distancing itself from the burglaries, see Compl.

at~

57 ("In a deliberate, malicious effort to

deceive consumers into concluding that [plaintiff], but not [defendants] was somehow
responsible for Sanchez' [sic] criminal conduct, ... publicly announced that it was 'immediately
suspending work with [plaintiffs] subcontracting company ...."),and that the inaccurate
equipment charges stemmed from a "double dipping" scheme whereby Cablevision sought to
charge its customers and its contractors for the same equipment, see Com pl.

at~

I 05

("[Cablevision] charges its customer and its installation contractor for the same item of
equipment, and conceals the double-charging from both parties .... "). Such self-interested
motivations on behalf ofCablevision are fatal to a prima facie tort claim. See. e.g., Jewel
Source, 2011 WL 4634019, at *3 (dismissing the plaintiffs prima facie tort claim where the
plaintiff"provided no basis for believing that [the defendant] had a motive specifically to cause
[the plaintiff] injury rather than, for example, to turn a profit"). 15 Accordingly, Nationwide's

15

Nationwide also relies upon LIM Ninetv CM Corn. v. 2431 Broadway Realty Co., in
which the Appellate Division reversed the trial court's dismissal of a prima facie tort claim,
holding that "[w]hile [the counterclaim defendants] claim that the conduct complained of could
not have arisen solely out of disinterested malevolence since the action arose out of a
commercial controversy, the alleged acts in question seem to have been motivated solely by a
desire to injure [the counterclaim plaintiffs]," and that the "motivation behind the acts in
question is a factual issue for trial precluding the dismissal of the counterclaim." 566 N.Y.S.2d
277 (App. Div. 1991). This case does not support Nationwide's argument that a prima facie tort
claim is not precluded by commercial motivations for Cablevision' s actions, since the LIM
Ninety court held that the counterclaim defendants' alleged actions in that case "seem[ed] to
have been motivated solely by a desire to injure [the counterclaim plaintiffs]." Id. (emphasis
added). As discussed above, Nationwide's own allegations attribute motivations to Cablevision
other than a desire to injure Nationwide.
34

prima facie tort claim (Count IX) is dismissed.
IV.

Conclusion
For the foregoing reasons, Cablevision's motion to dismiss Nationwide's complaint

[Docket Entry No. 13] is GRANTED. Counts II, III, IV, V, VI, VII, VIII, and IX are dismissed

in their entirety, and Count I is dismissed insofar as it is based upon the termination of the
Agreements and the alleged oral promises by Cablevision to provide Nationwide with more
Contract Work.

SO ORDERED.

/s/ Sandra J. Feuerstein
SANDRA J. FEUERSTEIN
United States District Judge
Dated: May '1._, 2013
Central Islip, New York

35