Alessi Equipment, Inc. v. American Piledriving Equipment, Inc.

Filing 31

OPINION AND ORDER re: 22 MOTION to Dismiss filed by American Piledriving Equipment, Inc. The motion to dismiss is GRANTED IN PART and DENIED IN PART. Plaintiff's claims for breach of the implied covenant of good faith and fair dealing, an accounting, and specific performance are dismissed. Plaintiff's claims for breach of contract, and in the alternative, unjust enrichment, may proceed. The Clerk is directed to terminate the motion. (Doc. #22). By March 5, 2019, defendant shall answer the amended complaint. SO ORDERED. American Piledriving Equipment, Inc. answer due 3/5/2019. (Signed by Judge Vincent L. Briccetti on 2/19/2019) (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ALESSI EQUIPMENT, INC.,
:
Plaintiff,
:
v.
:
:
AMERICAN PILEDRIVING EQUIPMENT,
:
INC.,
:
Defendant.
:
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OPINION AND ORDER
18 CV 3976 (VB)

Briccetti, J.:
Plaintiff Alessi Equipment, Inc., brings this action against defendant American
Piledriving Equipment, Inc., asserting state law claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, and unjust enrichment, and seeking an
accounting and specific performance in connection with the sale of heavy construction
equipment.
Before the Court is defendant’s motion to dismiss the amended complaint pursuant to
Rule 12(b)(6). (Doc. #22).
For the reasons set forth below, the motion is GRANTED IN PART and DENIED IN
PART.
The Court has subject matter jurisdiction under 28 U.S.C. § 1332.
BACKGROUND
For the purpose of ruling on the motion to dismiss, the Court accepts as true all wellpleaded factual allegations in the amended complaint and draws all reasonable inferences in
plaintiff’s favor, as summarized below.
This case concerns the sale of heavy construction equipment, specifically hydraulic
attachments for excavators for use in demolition, construction, and recycling projects. Plaintiff

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procures hydraulic attachments from manufacturers, and sells and services the attachments for its
customers. After one of plaintiff’s suppliers ceased operating in the early 1990s, plaintiff
approached defendant about manufacturing excavator-mounted equipment. Although defendant
did not manufacture hydraulic attachments for excavators at that point, defendant began to
develop this equipment with plaintiff’s assistance.
The parties entered into agreements in 1996, 2004, and 2012, concerning the sale of
hydraulic attachments generally and the sale of a specific hydraulic attachment called the
Robovib. 1 The Robovib is an attachment designed to drive and extract sheet piles and beams. It
enables an excavator operator to lift, carry, position, and drive piles in a continuous motion.
In 1996, the parties orally agreed plaintiff would serve as defendant’s exclusive
distributor in the northeast, United States, selling all equipment and replacement parts, regardless
of whether the customer initially contacted plaintiff or defendant to purchase equipment.
In 2004, the parties set forth a written agreement for the sale of the Robovib. The
agreement contained four relevant provisions: (i) plaintiff would be the defendant’s exclusive
Robovib supplier in the “Northeast USA” and a non-exclusive supplier elsewhere; (ii) plaintiff
could purchase the Robovib at a twenty-five percent discount off the list price; (iii) plaintiff
would handle all set up and service for the equipment plaintiff sold, releasing defendant from its
service obligations; and (iv) plaintiff would pay a two percent commission to defendant on all
sales. (Doc. #18 (“Am. Compl.”) Ex. 1 at 1–3). The agreement noted generally that defendant
“wish[ed] to channel the sales through [plaintiff] and in return avoid the service and set up. In
addition, [defendant seeks] a single source to collect our invoices.” (Id. at 2). The parties

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The parties inconsistently refer to the “Robovibe” and the “Robovib.” The Court adopts
the language of the 2004 agreement and refers to the equipment as the Robovib.
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provided the agreement “until written in more detail and signed[,] will act as our only
agreement.” (Id.).
In 2012, the parties entered into a Distributor Agreement and Memorandum of
Understanding governing the Robovib and other excavator-mounted attachments. (See Am.
Comp. Ex. 2). Under the 2012 agreement, plaintiff would be the exclusive distributor for
defendant in the northeast. (See id.). Plaintiff agreed to pay defendant a two percent
commission on equipment sold outside its exclusive territory. Defendant agreed to direct all
sales to plaintiff as a first option. Plaintiff agreed to provide all set up and service for the
equipment it sold or pay defendant directly for its installation and repair services. Defendant
also agreed to buy back any support parts at twenty percent below the initial sales price. The
agreement was “automatically renewable each year unless otherwise cancelled in writing” and
subject “to a two year cancellation period that must be in written form.” (See id.). The 2012
agreement was silent as to price and quantity, but plaintiff alleges the parties agreed the fee
structure in the 2004 agreement would apply.
In May 2017, defendant sold equipment to a company called Moncon, Inc., valued at
$163,000, within the northeast territory without plaintiff’s involvement. (Am. Compl. Ex. 3). In
addition to this sale, plaintiff alleges defendant made other similar sales, thereby breaching all
three agreements by willfully and intentionally selling covered equipment and replacement parts
directly to customers.
DISCUSSION
I.

Standard of Review
In deciding a Rule 12(b)(6) motion, the Court evaluates the sufficiency of the operative

complaint under the “two-pronged approach” articulated by the U.S. Supreme Court in Ashcroft

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v. Iqbal, 556 U.S. 662, 679 (2009). First, a plaintiff’s legal conclusions and “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements,” are not
entitled to the assumption of truth and thus are not sufficient to withstand a motion to dismiss.
Id. at 678; Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). Second, “[w]hen there are
well-pleaded factual allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. at 679.
To survive a Rule 12(b)(6) motion, a complaint’s allegations must meet a standard of
“plausibility.” Ashcroft v. Iqbal, 556 U.S. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544,
564 (2007). A claim is facially 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. at 678. “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 556).
II.

Breach of Contract
Plaintiff plausibly states a breach of contract claim based on the 1996, 2004, and 2012

agreements for the sale and distribution of defendant’s excavator-mounted equipment. 2
To state a claim for breach of contract, a plaintiff must allege the existence of an
enforceable contract. Berman v. Sugo LLC, 580 F. Supp. 2d 191, 202 (S.D.N.Y. 2008). 3 At the

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Plaintiff attached the 2004 and 2012 agreements to the complaint as Exhibits 1 and 2,
respectively. The Court properly considers these agreements. See DiFolco v. MSNBC Cable
L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).
Given that both parties rely on New York law in their submissions, the Court applies
New York law to plaintiff’s claims. Clarex Ltd. v. Natixis Sec. Am. LLC, 2013 WL 2631043, at
*2 (S.D.N.Y. June 11, 2013) (noting the parties’ assumption that New York law controls is
implied consent to choice of law).
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pleading stage, this requires a plaintiff to allege facts “relating to the formation of the contract,
the date it took place, the contract’s major terms, the parties to the contract, or [defendant’s]
assent to its terms.” Id.; see also Valley Lane Indus. Co. v. Victoria’s Secret Direct Brand
Mgmt., L.L.C., 455 F. App’x 102, 104 (2d Cir. 2012) (summary order). “The existence of a
contract may also be established through the conduct of the parties recognizing the contract.”
Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 97 (2d Cir. 2007) (quoting
Apex Oil Co. v. Vanguard Oil & Serv. Co., 760 F.2d 417, 422 (2d Cir. 1985)). “In determining
whether the parties’ conduct is consistent with the existence of a binding contract, it is necessary
that the totality of all acts of the parties, their relationship and their objectives be considered.”
Id.
Plaintiff plausibly alleges facts concerning the formation and operation of an enforceable
contract and a decade of conduct consistent with that contract. The 2004 and 2012 written
agreements state the equipment available for sale, an objective method to determine the price of
at least one piece of equipment (i.e., Robovib was sold to plaintiff for seventy-five percent of the
list price), the discernible territory in which plaintiff would act as the exclusive distributor for the
equipment, a definite commission paid by plaintiff to defendant for sales outside the exclusive
territory, an agreement on installation and servicing, a contract renewal clause, and a contract
termination procedure. Plaintiff also alleges ten years of the parties’ conduct recognizing and
abiding by the ongoing sales agreement, namely, in an affidavit by defendant’s former president
John White, who negotiated and signed both the 2004 and 2012 agreements. (Am. Compl. Ex.
4).
Defendant argues the Court cannot consider the terms of the 2004 agreement, because the
2012 agreement was the only agreement in force at the time of the alleged breach.

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Even if the 2012 agreement was the only operative agreement, however, plaintiff has
plausibly alleged the existence of a contract and all material terms based on the 2012 agreement
and the parties’ subsequent course of dealing with sufficient specificity to withstand a motion to
dismiss. Accordingly, plaintiff’s breach of contract claim survives.
III.

Unjust Enrichment Claim
Defendant argues plaintiff cannot proceed on theories of breach of contract and unjust

enrichment.
The Court disagrees.
To state a claim for unjust enrichment under New York law, a plaintiff must allege that
“(1) the defendant was enriched, (2) at the expense of the plaintiff, and (3) that it would be
inequitable to permit the defendant to retain that which is claimed by the plaintiff.” Agerbrink v.
Model Serv. LLC, 155 F. Supp. 3d 448, 458 (S.D.N.Y. 2016). While the existence of a contract
generally bars recovery on the theory of unjust enrichment, see IDT Corp. v. Morgan Stanley
Dean Witter & Co., 12 N.Y.3d 132, 142 (2009), courts in this district have routinely allowed
plaintiffs to advance past the pleading stage on an alternative theory of unjust enrichment, Next
Commc’ns, Inc. v. Viber Media, Inc., 2016 WL 1275659, at *8 (S.D.N.Y. Mar. 30, 2016).
Plaintiff alleged defendant sold equipment within plaintiff’s sales exclusive territory and
defendant benefitted at plaintiff’s expense. Accordingly, plaintiff’s unjust enrichment claim
survives the motion to dismiss.
IV.

Breach of the Implied Covenant of Good Faith and Fair Dealing
Plaintiff fails to state a claim for breach of the implied covenant of good faith and fair

dealing.

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“Under New York law, parties to an express contract are bound by an implied duty of
good faith, but breach of that duty is merely a breach of the underlying contract.” Cruz v.
FXDirectDealer, LLC, 720 F.3d 115, 125 (2d Cir. 2013) (internal quotation omitted). “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.” Id. (internal quotation omitted) (alteration in original). A court parsing a complaint that
alleges both a breach of contract and a breach of implied covenant of good faith and fair dealing
on the same facts should dismiss the claim for breach of implied covenant of good faith and fair
dealing as redundant. Id.
Plaintiff’s claim for the breach of the implied covenant of good faith and fair dealing
merely restates its breach of contract claim. The crux of both claims is that defendant bypassed
plaintiff to sell equipment in plaintiff’s exclusive territory. Because plaintiff’s claim is based
upon the same facts and predicated on the same contractual terms as the plaintiff’s breach of
contract claim, it must be dismissed as duplicative.
V.

Accounting
Plaintiff also fails to state a claim for an accounting.
“Under New York law, a plaintiff seeking an accounting, which is an equitable remedy,

must allege both a fiduciary relationship between the plaintiff and defendant and a breach of that
fiduciary duty by the defendant.” Soley v. Wasserman, 823 F. Supp. 2d 221, 237 (S.D.N.Y.
2011) (quoting Bezuszka v. L.A. Models Inc., 2006 WL 770526, at *17 (S.D.N.Y. Mar. 24,
2006)). New York courts have generally described a fiduciary relationship “as one in which a
party reposes confidence in another and reasonably relies on the other’s superior expertise or
knowledge.” NEM Re Receivables, LLC v. Fortress Re, Inc., 173 F. Supp. 3d 1, 6 (S.D.N.Y.

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2016). “[P]arties in a contractual relationship do not ordinarily bear a fiduciary relationship to
one another unless they specifically so agree.” Id.
Here, plaintiff has not alleged a fiduciary relationship with defendant, and thus, fails to
state a claim for accounting. Accordingly, plaintiff’s claim for an accounting is dismissed.
VI.

Specific Performance
Finally, plaintiff fails to state a claim for specific performance.
Before a court may permit the “extraordinary equitable remedy of specific performance,”

the party seeking relief must demonstrate “that remedies at law are incomplete and inadequate to
accomplish substantial justice.” Lucente v. Int’l Bus. Mach. Corp., 310 F.3d 243, 262 (2d Cir.
2002). “In general, specific performance will not be ordered where money damages ‘would be
adequate to protect the expectation interest of the injured party.’” Aristocrat Leisure Ltd. v.
Deutsche Bank Tr. Co. Americas, 2006 WL 1493132, at *8 (S.D.N.Y. May 31, 2006) (quoting
Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 415 (2001)).
While ordinarily the issue of whether damages would adequately compensate a plaintiff
is inappropriate for resolution on a motion to dismiss the complaint, see Lia v. Saporito, 909 F.
Supp. 2d 149, 169 (E.D.N.Y. 2012), aff’d, 541 F. App’x 71 (2d Cir. 2013), plaintiff has not
alleged any reason why it should be entitled to specific performance or why money damages
would be an inadequate remedy.
Accordingly, plaintiff’s claim for specific performance is dismissed.

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CONCLUSION
The motion to dismiss is GRANTED IN PART and DENIED IN PART.
Plaintiff’s claims for breach of the implied covenant of good faith and fair dealing, an
accounting, and specific performance are dismissed. Plaintiff’s claims for breach of contract,
and in the alternative, unjust enrichment, may proceed.
The Clerk is directed to terminate the motion. (Doc. #22).
By March 5, 2019, defendant shall answer the amended complaint.
Dated: February 19, 2019
White Plains, NY
SO ORDERED:

____________________________
Vincent L. Briccetti
United States District Judge

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