Rynone Manufacturing Corp. v. HSB Stone Corp. et al

Filing 24

MEMORANDUM-DECISION AND ORDER: The Court hereby ORDERS that Defendants' # 6 and # 9 motions to dismiss Plaintiff's Complaint for failure to state a claim are GRANTED. The Court further ORDERS that the Clerk of the Court shall enter judgment in favor of Defendants and close this case. Signed by Senior Judge Frederick J. Scullin, Jr. on 4/28/2015. (nmk)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
_______________________________________________
RYNONE MANUFACTURING CORP.,
Plaintiff,
v.

3:13-CV-318
(FJS/DEP)

HSB STONE CORP., BARRY ECHTMAN, SYBIL
ECHTMAN, VIRGINIA MARBLE MANUFACTURERS,
INC., NANCY BRIDGFORTH, and WILLIAM
BRIDGFORTH, SR.,
Defendants.
_______________________________________________
APPEARANCES

OF COUNSEL

REIZES LAW FIRM, CHARTERED
1200 South Federal Highway
Suite 301
Boynton Beach, Florida 33435
Attorneys for Plaintiff

LESLIE N. REIZES, ESQ.

HOGAN & ROSSI
3 Starr Ridge Road, Suite 200
Brewster, New York 10509
Attorneys for Defendants HSB Stone Corp.,
Barry Echtman, and Sybil Echtman

DAVID SIMON, ESQ.

MCGUIREWOODS LLP
1345 Avenue of the Americas
7th Floor
New York, New York 10105-0106
Attorneys for Defendants Virginia Marble
Manufacturers, Inc., and Nancy Bridgforth

MICHAEL J. DIMATTIA, ESQ.
PHILIP A. GOLDSTEIN, ESQ.

SCULLIN, Senior Judge

MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
Plaintiff brings this action alleging various claims against Defendants for breach of contract,
breach of fiduciary duty, tortious interference with contract, and theft of trade secrets.
Plaintiff originally filed its Complaint on March, 21, 2013, in this Court. In its Complaint,
Plaintiff asserted five causes of action against Defendants HSB Stone, Inc. (“HSB Stone”), Barry
Echtman, and Sybil Echtman (collectively “the HSB Stone Defendants”), as well as Defendants
Virginia Marble Manufacturers, Inc. (“Virginia Marble”), Nancy Bridgforth, and William
Bridgforth, Sr., (collectively “the Virginia Marble Defendants”), all arising from the HSB Stone
Defendants’ alleged disclosure of Plaintiff’s proprietary information to the Virginia Marble
Defendants.
Specifically, Plaintiff alleged that
HSB [Stone] breached its contract with Plaintiff by inter alia
disclosing information and specification as to finished granite,
marble, and engineered stone tops; pre-sized granite, marble and
engineered stone slabs; granite, marble and engineered stone
polished uncut slabs; undermount vanity bowls; stainless steel and
copper undermount bowls; pedestal sinks; and styrofoam packing
materials which Plaintiff had been purchasing through HSB
[Stone] as its agent together with details of Plaintiff’s product,
sourcing, product ranges and percentage distribution for
importation from China, to Plaintiff's competitor, Virginia Marble,
Inc. (“Virginia Marble”).
See Complaint at ¶ 13. Plaintiff also alleged that, “[a]s a result of the breach of contract,
Virginia Marble was enabled to sell products subject of the agency agreement[] to Plaintiff's
customer, NVR, Inc., which has resulted in a significant loss of revenue to Plaintiff.” See id. at

2

¶ 14. 1 Plaintiff also alleged that it and Defendant HSB Stone shared a fiduciary relationship,
whereby Plaintiff reposed trust and confidence in HSB Stone, and HSB Stone undertook such
trust and assumed a duty to advise, counsel, and/or protect Plaintiff. See id. at ¶ 15. Plaintiff
alleged that Defendants HSB Stone and Virginia Marble acted in a nature that was calculated to
interfere with Plaintiff’s business relationship with NVR, Inc., (“NVR”) and that they did in fact
interfere with that relationship. See id. at ¶ 20. Plaintiff alleged that its “sourcing information,
product specifications, percentage distribution or product mix for importation, and customer list
constitute trade secrets.” See id. at ¶ 23. Plaintiff alleged that Defendants Barry Echtman and
Sybil Echtman authorized and directed Defendant HSB Stone’s breach of fiduciary duty,
“participated in the tortious interference with the relationship between Plaintiff and NVR, and
participated in the theft of and dissemination of Plaintiff’s trade secrets.” See id. at ¶ 30.
Plaintiff asserted that Defendants Nancy Bridgforth and William Bridgforth, Sr., participated in
the use of trade secrets that Defendant HSB Stone stole, and directed and participated in the
interference with the advantageous relationship between Plaintiff and NVR. See id. at ¶ 31.
Plaintiff finally claimed that it had no adequate remedy at law for damages and that Defendants’
acts irreparably harmed Plaintiff because Defendants’ use of Plaintiff’s information could
“destroy Plaintiff’s business and goodwill.” See id. at ¶ 32.
Based upon these allegations, Plaintiff brought the following claims:
(1)
(2)

a breach of fiduciary duty claim against Defendant HSB Stone,

(3)

a tortious interference with contract claim against Defendants HSB
Stone and Virginia Marble,

(4)
1

a breach of contract claim against Defendant HSB Stone,

a theft of trade secrets claim against Defendant HSB

The Complaint contains two paragraphs numbered “14.” This citation refers to the first.
3

Stone, and
(5)

a request for a temporary and permanent injunction restraining the
individual defendants from using or disseminating Plaintiff’s trade
secrets.

Currently before the Court are the HSB Stone Defendants’ and Virginia Marble
Defendants’ motions to dismiss Plaintiff’s Complaint for failure to state a claim upon which
relief may be granted.

II. DISCUSSION
The Supreme Court has ruled that a pleading’s “factual allegations must be enough to
raise a right to relief above the speculative level[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (citation omitted). This requirement demands “facial plausibility,” that is, “when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citation omitted). The Second Circuit has clarified that, although Twombly has not raised the
standard for pleading specific facts, “it does require enough facts to ‘nudge [plaintiffs’] claims
across the line from conceivable to plausible.’” In re Elevator Antitrust Litig., 502 F.3d 47, 50
(2d Cir. 2007) (quoting Twombly, [550 U.S. at 570,] 127 S. Ct. at 1974) (footnote omitted). As
this Court has ruled, this “unexacting” requirement still “‘demands more than an unadorned, thedefendant-unlawfully-harmed-me accusation’ in order to withstand scrutiny.” Reed v. Doe No.
1, No. 9:11-CV-0250, 2012 WL 4486086, *3 (N.D.N.Y. July 26, 2012) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (citing Bell Atlantic Corp.
v. Twombly, 550 U.S. 554, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929, ----, (2007))).

4

All of the claims in Plaintiff’s Complaint derive from Plaintiff’s unsupported accusation
that Defendant HSB Stone disclosed Plaintiff’s proprietary information to Defendant Virginia
Marble. 2 The Complaint bases Count I for breach of contract upon Plaintiff’s allegation that
Defendant HSB Stone “inter alia disclos[ed] information and specification . . . to Plaintiff’s
competitor” in violation of its contract with Plaintiff. Count II for breach of fiduciary duty rests
upon the allegation that Defendant HSB Stone’s alleged disclosure was also a breach of its
fiduciary duty to Plaintiff. Count III for tortious interference with contract is based upon
Plaintiff’s allegation that Defendant HSB Stone’s alleged disclosure was intended to harm and
did in fact harm Plaintiff’s relationship to NVR. Count IV for theft of trade secrets is founded on
the accusation that Plaintiff’s proprietary information, which Defendant HSB Stone allegedly
disclosed, included trade secrets. Count V, Plaintiff’s request for a temporary and permanent
injunction, is based upon Plaintiff’s contention that the individual Defendants Barry Echtman,
Sybil Echtman, Nancy Bridgforth, and the apparently nonexistent William Bridgforth, Sr., took
part in Defendant HSB Stone’s alleged disclosure to Defendant Virginia Marble.
All of Plaintiff’s claims fail due to their reliance upon the disclosure allegation, which is
impermissibly speculative due to Plaintiff’s lack of facts specific to that allegation. See
Twombly, 550 U.S. at 555. Plaintiff has failed to allege facts sufficient to allow this Court to
draw the reasonable inference that Defendants are liable for any unlawful disclosure of
information. See Iqbal, 556 U.S. at 678. More important than the Complaint’s lack of any
specific detail as to the “who, where, when, or how,” is its lack of facts as to why this Court
should believe that the disclosure ever occurred. At no point in the Complaint does Plaintiff
even explain what facts led Plaintiff itself to believe that the disclosure occurred. Plaintiff
2

For the reasons set forth below, the Court’s analysis of Plaintiff’s claims applies equally to the
HSB Stone Defendants and the Virginia Marble Defendants.
5

alleges that, “as a result of the breach of contract, [Defendant] Virginia Marble was enabled to
sell products subject of the agency agreement[] to Plaintiff’s customer, NVR, Inc., which has
resulted in a significant loss of revenue to Plaintiff.” See Complaint at ¶ 14 (emphasis added). 3
(emphasis added) Nowhere does Plaintiff explain its rationale for its words “as a result.”
Plaintiff does not describe how it made, or why this Court should make, the logical leap from the
loss of its business to the loss of its proprietary information.
It is, of course, conceivable that Plaintiff’s lost business was the result of an unlawful
transfer of proprietary information from Defendant HSB Stone to Defendant Virginia Marble.
However, Plaintiff has not alleged sufficient facts to indicate that this unlawful transfer was
plausible. Nor has Plaintiff alleged facts to indicate that it is not equally conceivable that
Defendant Virginia Marble found a way to serve NVR’s needs more cheaply or conveniently
than Plaintiff by, for instance, communicating directly with NVR and/or engaging in prudent
business practices. The difference between conceivability and plausibility is what distinguishes
Plaintiff’s Complaint from one that would survive a motion to dismiss in light of Twombly and
Iqbal. See In re Elevator Antitrust Litig., 502 F.3d at 50.

III. CONCLUSION
Having reviewed the entire file in this matter, the parties’ submissions, and the applicable
law, and for the above-stated reasons, the Court hereby

3

The Complaint contains two paragraphs numbered “14.” This citation refers to the first.
6

ORDERS that Defendants’ motions to dismiss Plaintiff’s Complaint for failure to state a
claim, see Dkt. Nos. 6, 9, are GRANTED; 4 and the Court further
ORDERS that the Clerk of the Court shall enter judgment in favor of Defendants and
close this case.

IT IS SO ORDERED

Dated: April 28, 2015
Syracuse, New York

4

In light of the Court’s decision to grant Defendants’ motions to dismiss Plaintiff’s Complaint in
its entirety, there is no need for the Court to address the issue of whether Plaintiff incorrectly
named William Bridgforth, Sr. as a Defendant in this case.
7