Benex LC v. First Data Merchant Services Corporation
Filing
24
MEMORANDUM & ORDER granting 14 Motion to Dismiss for Failure to State a Claim; Defendant's motion to dismiss the Complaint (Docket Entry 14) is GRANTED. Plaintiff's conversion and unjust enrichment claims are DISMISSED WITH PREJUDICE. Plaintiff's implied covenant claim, however, is DISMISSED WITHOUT PREJUDICE and with leave to replead. If Plaintiff wishes to file an Amended Complaint, it must do so within thirty (30) days of the date of this Memorandum and Order. If Plaintiff fails to do so, its claims will be dismissed with prejudice and the case will be closed. So Ordered by Judge Joanna Seybert on 3/16/2016. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------X
BENEX LC, on behalf of itself and
all others similarly situated,
Plaintiff,
MEMORANDUM & ORDER
14-CV-6393(JS)(AKT)
-against–
FIRST DATA MERCHANT SERVICES
CORPORATION,
Defendant.
-------------------------------------X
APPEARANCES
For Plaintiff:
Seth Rigrodsky, Esq.
Rigrodsky & Long, P.A.
919 North Market Street, Suite 980
Wilmington, Delaware 19801
Timothy J. MacFall, Esq.
Rigrodsky & Long, P.A.
585 Stewart Avenue, Suite 304
Garden City, New York 11530
For Defendant:
Noah Adam Levine, Esq.
Alan E. Shoenfeld, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
7 World Trade Center
250 Greenwich Street
New York, New York 10007
David C. Marcus, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
350 South Grand Avenue, Suite 2100
Los Angeles, California 90071
SEYBERT, District Judge:
This case arises out of a contract between Benex LC
(“Benex” or “Plaintiff”), a merchant, and First Data Merchant
Services Corporation (“First Data” or “Defendant”), a payment
processor, for processing credit card and debit card transactions.
Currently pending before the Court is First Data’s motion to
dismiss the Complaint for failure to state a claim.
14.)
(Docket Entry
For the following reasons, First Data’s motion is GRANTED.
BACKGROUND1
I.
Factual Background
Benex is a merchant that accepts credit and debit cards,
and First Data is a payment processor that facilitates credit and
debit card transactions.
(Compl., Docket Entry 1, ¶¶ 3, 23.)
In
March 2012, Benex and First Data entered into a contract for
payment processing services, in which First Data would “perform
various processing functions associated with card transactions
such as authorizations, batching, clearing, and settlement” (the
“Contract”).23
(Compl. ¶ 3; see Contract, Compl. Ex. A, Docket
The facts alleged in the Complaint are presumed to be true for
the purposes of this Memorandum and Order. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 572, 127 S. Ct. 1955, 1975, 167 L. Ed. 2d
929 (2007) (“[A] judge ruling on a defendant’s motion to dismiss
a complaint must accept as true all of the factual allegations
contained in the complaint.” (internal quotation marks and
citation omitted)).
1
The Contract incorporates First Data’s Program Terms and
Conditions (the “Program Guide”) by reference. (Contract at 14
(“Client further acknowledges reading and agreeing to all terms
in the Program Guide, which shall be incorporated into Client’s
Agreement.”).) The Program Guide details the parties’
obligations and defines the majority of the Contract terms.
(Program Guide, Section 38, Compl. Ex. B, Docket Entry 1-2, at
29-30; see also Payments Indus. Glossary, Compl. Ex. C, Docket
Entry 1-3 (defining various industry terms).)
2
The Court will use the page numbers given by the Electronic
Case Filing System when referring to the Exhibits.
3
2
Entry 1-1.)
Benex now alleges that First Data has failed “to
refund ‘interchange fees,’ certain markups and surcharges added to
interchange
fees,
‘dues
and
assessments’
and
‘network
access
fees,’ and additional payment processor fees” to merchants such as
Benex.
(Compl. ¶ 1.)
But first, some background.
In most credit or debit card transactions, six parties
are involved: (1) the customer, (2) the issuing bank, (3) the
merchant, (4) the payment processor, (5) the acquiring bank, and
(6) the network--in other words, Visa, MasterCard, or Discover
(collectively, as the “Card Brands”).
The issuing bank issues a
credit or debit card to a customer, who uses it to purchase goods
or services from a merchant like Benex.
(See Compl. ¶¶ 4, 23.)
Next comes First Data, the payment processor, who “make[s] it
possible for merchants to accept credit and debit card payments
from their customers.”
(Compl. ¶ 3.)
First Data’s job is to
submit the transaction to the network, which routes the transaction
to the issuing bank.
(See Compl. ¶ 3.)
The network then requests
that the issuing bank authorize or decline the transaction.
If
the transaction is approved, the issuing bank transmits the funds
to the acquiring bank, which credits the merchant’s account.4
Ramon P. DeGennaro, 91 Fed. Reserve Bank of Atlanta Econ. Rev.
27 (2006), at 32-33, available at https://www.frbatlanta.org/-/
media/Documents/research/publications/economic-review/
2006/vol91no1_degennaro.pdf?la=en (“The processor’s system reads
the information and sends the authorization request to the
specific issuing bank through the card network. The issuing
4
3
But the merchant does not receive the full amount of the
purchase price because of various fees.
One example is the
interchange fee, which is paid to the issuing bank “to compensate
for transaction-related costs” (the “Interchange Fees”).
(Compl.
¶ 7; Payments Indus. Glossary at 9.) Additional fees include “dues
and assessments” and “network access fees” (the “Card Brand Fees”).
(Compl. ¶ 8.)
First Data, as the payment processor, also receives a
fee for its services.
relevant here.
(Compl. ¶ 9.)
Two pricing options are
The first is a discount rate option (the “Discount
Rate”), which is defined as “[a] percentage and/or amount charged
a merchant for processing its qualifying daily Credit Card and
Non-PIN Debit Card transactions . . . .”
(Program Guide at 29.)
The second is an interchange-plus option,5 in which First Data
charges the merchant for the actual Interchange Fees incurred,
plus a markup.
(Contract at 5.)
Benex selected the Discount Rate, which is 2.69% for
Visa, Mastercard, and Discover.6 (See Contract at 5.) The Discount
bank . . . either grant[s] or den[ies] authorization. The
[acquiring bank] receives the response and relays it to the
merchant.”)
The Contract also refers to this option as the “IC Pass Thru”
option. (Contract at 5.)
5
The Contract includes different columns for each pricing
method. As is evident, the Discount Rate column is the only one
completed. (Contract at 5.)
6
4
Rate is “[b]ased on [G]ross Transaction Volume.”
(Contract at 5.)
“Gross” sales are based on “the total amount of Card sales, without
set-off for any refunds or Credits.”
(Program Guide § 38 at 29
(emphasis added).)
It also bears noting that the Contract contained what
appears to be a “notice of claim” provision.
14.)
(See Contract ¶ 4 at
Under the Contract, Benex agreed to “promptly and carefully
review statements or reports . . . reflecting Card transaction
activity.”
(Program Guide § 18.10 at 16.)
Benex also agreed to
notify First Data of any billing issues “within 60 days of the
date where the charge or funding appears.”
see
also
Program
Guide
§ 18.10
at
16
(Contract ¶ 4 at 14;
(“If
you
believe
any
adjustments should be made . . . you must notify us in writing
within sixty (60) days after any debit or credit is or should have
been effected . . . .”).)
If Benex fails to do so, First Data
“shall not have any obligation to investigate or effect any such
adjustments.”
II.
(Program Guide § 18.10 at 16.)
Procedural History
Benex filed this lawsuit on October 29, 2014.
(Docket
Entry 1.) The Complaint asserts three causes of action: (1) breach
of the implied covenant of good faith and fair dealing (Compl.
¶¶ 67-76),
(2)
conversion
(Compl.
enrichment (Compl. ¶¶ 82-84).
theories.
¶¶
77-81),
and
(3)
unjust
Essentially, Benex offers two
The primary theory is that First Data failed to return
5
Interchange and Card Brand Fees, among others, when Benex provided
refunds
to
chargebacks.7
its
customers
or
when
the
Issuing
(See, e.g., Compl. ¶¶ 1, 72.)
Bank
issued
The secondary theory
is that First Data improperly charged an “additional discount rate
on . . . returned transaction[s].” (Compl. ¶ 1 (internal quotation
marks omitted).)
First Data moves to dismiss the Complaint.
Entry 14.)
In
doing
so,
First
Data
makes
three
(Docket
principal
arguments: (1) the Contract’s plain terms bar Benex’s recovery
because the parties chose the Discount Rate, which is not set-off
by refunds (Def.’s Br., Docket Entry 15, at 10-17); (2) the
conversion claim is duplicative of the implied covenant claim
because they are based upon the same theories (Def.’s Br. at 1819); and (3) the unjust enrichment claim, a quasi-contract remedy,
is barred by the existence of the Contract (Def.’s Br. at 19-20).
Rejecting these arguments, Benex asserts that First Data
breached the implied covenant of good faith and fair dealing by
unlawfully retaining certain Interchange and Card Brand Fees.
(Pl.’s Br., Docket Entry 22, at 12-20.)
Also, Benex denies that
the conversion claim is duplicative, arguing that it contains
allegations that extend beyond the implied covenant claim.
(Pl.’s
A “chargeback” is a “transaction that is challenged by a
cardholder or card issuing bank and is sent back through
interchange to the merchant bank for resolution.” (Payments
Indus. Glossary at 5.)
7
6
Br. at 20-21.)
Finally, Benex argues that although the Contract
controlled the parties’ relationship, the scope of the Contract is
in dispute and thus, Benex can plead an unjust enrichment claim in
the alternative.
(Pl.’s Br. at 21-22.)
DISCUSSION8
I.
Legal Standard
To survive a motion to dismiss, a complaint must plead
“enough facts to state a claim to relief that is plausible on its
face.”
Twombly, 550 U.S. at 570, 127 S. Ct. at 1974.
A claim is
plausible “when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S.
662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). Although
the Court must accept all allegations in the Amended Complaint as
true, this tenet is “inapplicable to legal conclusions.”
Id.
Thus, “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”
(citation
omitted).
determination
is
a
Ultimately,
the
“context-specific
Court’s
task
that
Id.
plausibility
requires
the
Under the Contract’s choice of law provision, New York law
controls. (Program Guide § 36.1 at 28.) Although “the choice
of law provision does not apply to tort claims” such as the
conversion claim, see, e.g., Taberna Preferred Funding II, Ltd.
v. Advance Realty Grp. LLC, 45 Misc. 3d 1204(A) at *9 n.6 (N.Y.
Cty. 2014), the parties agree that this claim is governed by New
York law, too. (Compl. ¶¶ 28(e)(C); Def.’s Br. at 8 n.7.)
8
7
reviewing court to draw on its judicial experience and common
sense.”
Id. at 679, 129 S. Ct. at 1950.
In deciding a motion to dismiss, the Court is generally
confined to “the allegations contained within the four corners of
[the] complaint.”
Pani v. Empire Blue Cross Blue Shield, 152 F.3d
67, 71 (2d Cir. 1998).
However, the Court may consider “any
written instrument attached to [the complaint] as an exhibit,
materials incorporated in it by reference, and documents that,
although
not
complaint.”
incorporated
by
reference,
are
integral
to
the
Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004)
(internal quotation marks and citation omitted); see also Chambers
v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (observing
that a document is “integral” if the complaint “relies heavily
upon its terms and effect”) (internal quotation marks and citation
omitted).
II.
Implied Covenant of Good Faith and Fair Dealing
Benex argues that the Contract is silent “as to the
disposition of any refunded Interchange and Card Brand Fees.”
(Pl.’s Br. at 14.)
Benex further argues that although First Data
did not breach the Contract by allegedly retaining those fees,
First Data’s actions undermined the purpose of the Contract and
thus violated the implied covenant of good faith and fair dealing.
(Pl.’s Br. at 12-13.)
In opposition, First Data argues that the
Contract unequivocally states that the Discount Rate is not “set8
off for any refunds or Credits.” (Def.’s Br. at 13 (citing Program
Guide § 38 at 29).)
In every contract, parties have an implicit duty of good
faith and fair dealing.
Creative Waste Mgmt., Inc. v. Capitol
Envtl. Servs., Inc., 429 F. Supp. 2d 582, 609 (S.D.N.Y. 2006).
Under this implied covenant, “neither party to a contract shall do
anything which has the effect of destroying or injuring the right
of the other party to receive the fruits of the contract.”
M/A-
COM Sec. Corp. v. Galesi, 904 F.2d 134, 136 (2d Cir. 1990).
Thus,
one party may invoke the implied covenant of good faith and fair
dealing where the other party “complied with the literal terms of
the contract” but did “so in a way that undermines the purpose of
the contract.”
In re HSBC Bank, USA, N.A., 1 F. Supp. 3d 34, 51
(E.D.N.Y. 2014) (internal quotation marks and citation omitted).
Yet it bears emphasizing that “[t]he implied covenant ‘can only
impose an obligation consistent with other mutually agreed upon
terms in the contract.’”
Broder v. Cablevision Sys. Corp., 418
F.3d 187, 198-99 (2d Cir. 2005) (quoting Geren v. Quantum Chem.
Corp., 832 F. Supp. 728, 732 (S.D.N.Y. 1993)). Nor can the implied
covenant impose new duties outside the scope of the contract.
Id.
at 199; see also Reiss v. Fin. Performance Corp., 97 N.Y.2d 195,
199, 764 N.E.2d 958, 961, 738 N.Y.S.2d 658 (2001) (declining to
“imply a term where the circumstances surrounding the formation of
9
the contract indicate that the parties, when the contract was made,
must have foreseen the contingency at issue”).
Here, the Contract’s plain terms bars Benex’s recovery.
Benex agreed to pay the Discount Rate, which is “[b]ased on [G]ross
Transaction Volume.”
(Contract at 5.)
“Gross” sales “refer[] to
the total amount of Card sales, without set-off for any refunds or
Credits.”
(Program Guide § 38 at 29 (emphasis added).)
That
argument gains traction when reviewing the purpose of the Discount
Rate--to compensate First Data for its services.
Benex contends
that First Data is “merely a conduit” for collecting Interchange
Fees and Card Brand Fees.
(Compl. ¶ 14.)
But the Court is
persuaded by First Data’s counterargument--the Contract “is not an
agreement to vest temporary possession of [these fees].”
Reply
Br.,
Docket
Entry
23,
at
2.)
Instead,
determined a price for First Data’s services.
would jettison the terms of the Contract.
the
(Def.’s
Contract
To hold otherwise
See Oppenheimer & Co.,
Inc. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 695, 660
N.E.2d 415, 421, 636 N.Y.S.2d 734 (1995) (“Freedom of contract
prevails in an arm’s length transaction between sophisticated
parties such as these . . . .”).
Benex’s reliance on four Contract provisions does not
change this result.
(Pl.’s Br. at 13 (citing Contract at 8 and
Program Guide §§ 1.9.3 at 8, 6.2 at 12, 18.4 at 16).)
with,
two
Contract
provisions--Program
10
Guide
To begin
Sections
6.2
and 18.4--only discuss the potential for increased fees.
(See
Program Guide § 6.2 at 12 (“Late Submission . . . may result in
increased interchange rates or fees or in a Chargeback to you.”)
(emphasis deleted); Program Guide § 18.4 at 16 (“[F]ees for
Services . . . may be adjusted to reflect increases, or new fees
. . . or to pass through increases or new fees.”).)
Similarly,
the other two provisions--Program Guide Section 1.9.3 and page 10
of the Contract--involve the imposition of additional fees.
(See
Program Guide § 1.9.3 at 8 (“To the extent that you inadvertently
or
intentionally
accept
a
transaction
other
than
the
type
anticipated for your account, such transaction will downgrade to
a higher cost . . . .”); Contract at 8 (“For processing each NonQualified Transaction, you will be assessed the Qualified Discount
Rate and an additional fee.”) (emphasis deleted).)
But under the
primary theory, Benex only contests that First Data withheld fees
“comprising the [D]iscount [R]ate”--and the Discount Rate alone.9
(Compl. ¶ 20.)
Separately,
Benex’s
failure
to
comply
Contract’s notice provision also bars its recovery.
Br.
at
15-16.)
As
this
Circuit
has
recognized,
with
the
(See Def.’s
“[e]xpress
conditions must be literally performed; substantial performance
The Complaint also asserts that First Data “improperly
assess[ed] an additional discount rate on returned
transactions,” which is discussed below. (See Compl. ¶ 20.)
9
11
will not suffice.”
Travelers Cas. and Sur. Co. v. Dormitory
Authority-State of N.Y., 735 F. Supp. 2d 42, 73 (S.D.N.Y. 2010)
(internal quotation marks and citation omitted); D.C.R. Trucking
& Excavation, Inc. v. Aetna Cas. and Sur. Co., No. 96-CV-3995,
2002 WL 32096594, at *6 (E.D.N.Y. Oct. 31, 2002) (“Failure to
strictly
comply
with
contractual
notice
and
documentation
provisions has been held to constitute a waiver of any claim for
damages.”).
Here, the Program Guide clearly requires Benex to
notify First Data of any billing issues “within 60 days of the
date of the statement where the charge or funding appears.”
(Contract ¶ 4 at 14; see also Program Guide § 18.10 at 16 (“If you
believe any adjustments should be made . . . you must notify us in
writing within sixty (60) days after any debit or credit is or
should have been effected . . . .”).) The failure to do so relieves
First Data of any liability. (Program Guide § 18.10 at 16 (stating
that if Benex fails to notify First Data within the applicable
time
period,
First
Data
“shall
not
have
any
obligation
to
investigate or effect any such adjustments”).)
Although Benex argues that it “had no way of knowing
that [certain] refunds were being improperly retained by [First
Data],” (Pl.’s Br. at 18), that argument is belied by the Complaint
(Compl. ¶¶ 64-66).
Benex’s Card Processing Statement for February
2013, for example, shows a credit reversal of $35.24, and Benex
alleges that First Data “improperly retained the Interchange Fee,
12
Card Brand Fee and other processing fees associated with [the]
$35.24 transaction.” (Compl. ¶¶ 64-66 (depicting images of the
Card Processing Statement for February 2013).)
This example alone
should have triggered the notice of claim provisions.
Moreover,
“improperly
and
Benex’s
without
secondary
any
theory--that
authority
charges
First
its
Data
merchant-
customers as additional ‘discount rate’ on the amount of the
return transaction”--offers no support.
Br. at 19-20.)
(See Compl. ¶ 1); Pl.’s
Benex has failed to provide First Data “with
sufficient notice of the claims against it.”
See Paulstich v.
Merrick Post Office, No. 14-CV-2169, 2014 WL 1411758, at *3
(E.D.N.Y. Apr. 11, 2014); FED R. CIV. P. 8(a)(2).
The Complaint
does not define what the additional discount rate is, nor does
Benex allege that it paid this additional discount rate.
In fact,
Benex concedes that it “did not expressly allege that it was
charged an additional fee or the discount rate upon issuance of
the refund.”
(Pl.’s Br. at 20 n.11.)
Even still, the Court will grant Plaintiff leave to
replead to cure any deficiencies with an amended complaint.
Thus,
Benex’s implied covenant claim is DISMISSED WITHOUT PREJUDICE.
III. Conversion
Next, First Data asserts that Benex’s conversion claim
must be dismissed because it is duplicative of its implied covenant
claim.
(Def.’s Br. at 18-19.)
Particularly, First Data argues
13
that Benex’s “conversion allegations are substantively identical
to
its
implied-covenant
allegations--i.e.,
without authority, failed to refund fees.”
Under
New
York
Law,
that
First
Data,
(Def.’s Br. at 18-19.)
“[c]onversion
occurs
when
a
defendant exercises unauthorized dominion over personal property
in interference with a plaintiff’s legal title or superior right
of possession.”
LoPresti v. Terwilliger, 126 F.3d 34, 41 (2d
Cir. 1997) (internal quotation marks and citation omitted).
To
plausibly allege a conversion claim, a plaintiff must show: “(1)
the property subject to conversion is a specific identifiable
thing; (2) plaintiff had ownership, possession or control over the
property before its conversion; and (3) defendant exercised an
unauthorized dominion over the thing in question, to the alteration
of its condition or to the exclusion of the plaintiff’s rights.”
Moses v. Martin, 360 F. Supp. 2d 533, 541 (S.D.N.Y. 2004) (internal
quotation marks and citation omitted).
Yet “a claim to recover
damages for conversion cannot be predicated on a mere breach of
contract.”
Wolf v. Nat’l Council of Young Israel, 264 A.D.2d 416,
417, 694 N.Y.S.2d 424, 425 (2d Dep’t 1999).
Put differently, “a
plaintiff must allege acts that are unlawful or wrongful as
distinguished from acts that are a mere violation of contractual
rights.”
Fraser v. Doubleday & Co., 587 F. Supp. 1284, 1288
(S.D.N.Y. 1984); AD Rendon Commc’ns, Inc. v. Lumina Americas, Inc.,
No. 04-CV-8832, 2006 WL 1593884, at *4 (S.D.N.Y. June 7, 2006)
14
(finding a conversion claim to be duplicative of a breach of
contract claim when the defendant merely “transferred and retained
monies that contractually belonged to [the p]laintiff”).
Benex’s conversion claim is based upon the same theory
of
the
implied
covenant
collected certain funds.
claim--that
First
Data
wrongfully
(Compare Compl. ¶ 72 (asserting a breach
of implied covenant claim because “Interchange Fees and Card Brand
Fees are not collected for the benefit of [First Data], and it has
no claim to such amounts”) with Compl. ¶ 79 (asserting a conversion
claim because First Data “has wrongfully collected and retained
refunded Interchange Fees” and “Card Brand Fees”).)
In other
words, the conversion claim does not addresses a wrong separate
and
apart
from
the
implied
covenant
claim.
Piven
v.
Wolf
Haldenstein Adler Freeman & Herz L.L.P., No. 08-CV-10578, 2010 WL
1257326, at *10 (S.D.N.Y. Mar. 12, 2010) (dismissing a conversion
claim because it was “entirely predicated on [a] breach of contract
claim”).
Thus,
Benex’s
conversion
claim
is
DISMISSED
WITH
PREJUDICE.
IV.
Unjust Enrichment
Finally,
First
Data
contends
that
Benex’s
unjust
enrichment claim is barred by the existence of the Contract.
(Def.’s Br. at 19-20.)
The Court agrees.
To establish unjust enrichment in New York, a plaintiff
must
prove
“‘(1) that
the
defendant
15
benefitted;
(2)
at
the
plaintiff’s
expense;
and
(3) that
equity
and
good
conscience
require restitution.’” Beth Israel Med. Ctr. v. Horizon Blue Cross
& Blue Shield of N.J., Inc., 448 F.3d 573, 586 (2d Cir. 2006)
(quoting Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000)).
As
a quasi-contract remedy, unjust enrichment is “an obligation the
law creates in the absence of any agreement.”
(internal
quotation
marks
and
citation
omitted)
Id. at 586-87
(emphasis
in
original). Generally, a party cannot maintain an unjust enrichment
claim when a valid and enforceable contract governs the dispute at
issue.
See 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 (1987).
Sure enough, a party may only proceed under “both breach of
contract and quasi-contract theories where there is a bona fide
dispute as to the existence of a contract.”
Curtis Props. Corp.
v. Greif Cos., 236 A.D.2d 237, 239, 653 N.Y.S.2d 569, 571 (1st
Dep’t 1997); see Nakamura v. Fujii, 253 A.D.2d 387, 390, 677
N.Y.S.2d 113, 116 (1st Dep’t 1998).
Here,
there
is
no
bona
governed the parties’ relationship.
23.)
fide
dispute:
The
Contract
(See, e.g., Compl. ¶¶ 18,
And, as stated above, the scope of the Contract is not in
dispute because Benex agreed to pay the Discount Rate for First
Data’s payment processing services.
(See Pl.’s Br. at 21-22.)
Thus, Benex’s unjust enrichment claim is DISMISSED WITH PREJUDICE.
16
VI.
Leave to Amend
The Second Circuit has stated that “[w]hen a motion to
dismiss is granted, the usual practice is to grant leave to amend
the complaint.”
Hayden v. Cnty. of Nassau, 180 F.3d 42, 53 (2d
Cir. 1999) (citing Ronzani v. Sanofi S.A., 889 F.2d 195, 198 (2d
Cir. 1990)); see also FED. R. CIV. P. 15(a)(2) (“The court should
freely give leave [to amend] when justice so requires.”).
For the
reasons discussed above, Benex is granted leave to replead only
its implied covenant claim.
CONCLUSION
Defendant’s motion to dismiss the Complaint (Docket
Entry 14) is GRANTED. Plaintiff’s conversion and unjust enrichment
claims are DISMISSED WITH PREJUDICE.
Plaintiff’s implied covenant
claim, however, is DISMISSED WITHOUT PREJUDICE and with leave to
replead.
If Plaintiff wishes to file an Amended Complaint, it
must do so within thirty (30) days of the date of this Memorandum
and Order.
If Plaintiff fails to do so, its claims will be
dismissed with prejudice and the case will be closed.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:
March
16 , 2016
Central Islip, New York
17
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