Corning Incorporated v. Freight Revenue Recovery of Miami, Inc.
ORDER granting 18 Motion for Judgment on the Pleadings. Defendant's second counterclaim for defamation is dismissed with prejudice. Signed by Hon. Michael A. Telesca on May 17, 2012. (MES)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
DECISION AND ORDER
FREIGHT REVENUE RECOVERY OF MIAMI, INC.
(“Corning”), brings this action for, inter alia, breach of contract
against defendant and counter claimant Freight Revenue Recovery of
Miami, Inc. (“FRRM”), alleging that FRRM failed to remit amounts
owed to Corning under a Post-Audit Agreement (the “Agreement”)
entered into by the parties in 2004. The Complaint also alleges
that FRRM continued to act as an agent of Corning after Corning
amended the Agreement to revoke such authority.
FRRM answered the
complaint and asserted two counterclaims.
Corning now moves to dismiss FRRM’s second counterclaim for
defamation, contending that this claim is barred by the applicable
statute of limitations.
FRRM opposes the motion, contending that
the defamation claim is timely pursuant to Civil Practice Law and
Rules (“CPLR”) Section 203(d), which states that an otherwise
untimely counterclaim is not barred by the applicable statute of
limitations where it “arose from the transactions, occurrences, or
series of transactions or occurrences, upon which a claim asserted
in the complaint depends.”
For the reasons discussed herein, the Court finds that FRRM’s
transaction or occurrence asserted in the complaint.
The Complaint1 (Docket No. 1) alleges that the parties entered
into the Agreement in January 2004.
Under the Agreement, FRRM was
engaged to conduct post-audit reviews of transportation invoices
paid by Corning to determine whether Corning was overcharged by its
The Agreement authorized FRRM to file claims on behalf
of Corning to recover any overcharges, and obligated FRRM to remit
fifty percent of any monies received from such claims to Corning.
FRRM remitted two payments (one in 2004 and one in 2005) to Corning
under this Agreement.
overcharges and received payments on such claims, but it failed to
For the purpose of this decision, the Court accepts as true all of the factual allegations in
the pleadings. Vietnam Ass’n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104,
115 (2d Cir.2008).
remit fifty percent of the monies to Corning, as required under the
In 2007, Corning wrote a letter to FRRM instructing
them to cease and desist acting as Corning’s Agent under the
Agreement, as it had learned of several instances in which FRRM did
not remit the required amounts to Corning.
Corning alleges, in the alternative, that it amended the
Agreement in 2004, revoking FRRM’s authority to act on its behalf
FRRM, however, continued to access such
databases and to represent to Corning’s shippers that it was
authorized to act on Corning’s behalf.
For its part, FRRM alleges that Corning failed to provide
adequate information and cooperate with FRRM, frustrating FRRM’s
efforts to perform its obligations under the Agreement.
alleges that Corning failed to remit commissions and other payments
owed to FRRM under the Agreement.
(Docket No. 9 and exhibits.)
In its second counterclaim, which is the subject of this
Decision and Order, FRRM alleges that Corning wrote a letter to
FRRM’s bank, Wachovia, dated March 20, 2008, in which Corning made
a statement that it suspected FRRM was engaging in fraudulent
banking activity. In the letter, Corning states that FRRM deposited
checks into its account at Wachovia which were issued to “Corning
c/o Freight Revenue Recovery of Miami,” but had not been endorsed
The letter does not mention the Agreement, but
identifies several checks that were deposited in this manner and
states that “FRRM is not authorized to act as Corning’s agent in
The letter requests that Wachovia “refrain from
negotiating any similar checks in the future and notify Corning in
the event that it receives any such checks.”
A motion for judgment on the pleadings pursuant to Rule 12(c)
of the Federal Rules of Civil Procedure (“Rule 12(c)”) is analyzed
under the same standards applicable to motions to dismiss pursuant
to Fed. R. Civ. P.12(b)(6). Hayden v. Paterson, 594 F.3d 150, 160
(2d Cir. 2010). To survive a motion to dismiss, a complaint must
plead “enough facts to state a claim to relief that is plausible on
its face.” See Ruotolo v. City of New York, 514 F.3d 184, 188 (2d
Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
Corning moves for judgment on the pleadings on the grounds
that FRRM’s counterclaim for defamation is barred by the applicable
statute of limitations.2
For the purpose of this motion, FRRM does
Corning asserts that the claim is untimely under New York, North Carolina and Florida
Law, which require that a claim for defamation be brought within one year (New York and North
Carolina) or two years (Florida). See Corning’s Mem. of Law in Support of Motion for
Judgment on the Pleadings, (Docket No. 18-1), at 3-4. Corning thus raises the issue of choice of
law. But, the parties do not disagree that the statute of limitations has expired regardless of
which state’s law is applied, and they appear to agree that New York Law should be applied to
this claim, as both parties ultimately confine their arguments to whether the claim is timely
pursuant to CPLR 203(d). Accordingly, for the purpose of this motion, as the parties do not raise
arguments to the contrary, the Court will apply New York law.
not contend that its claim for defamation, accruing in 2008, is
timely per se, rather, it contends that New York’s revival statute,
CPLR 203(d), applies to this case, making its defamation claim
Under CPLR 203(d), an otherwise untimely counterclaim will not
be barred by the statute of limitations if it “arose from the
occurrences, upon which a claim asserted in the complaint depends.”
The circumstances alleged in the counterclaim must not only be
related to those alleged in the complaint, or simply the result of
the events alleged in the complaint, but there must exist a “common
thread” connecting the events. Messinger v. Mount Sinai Med. Ctr.,
279 A.D.2d 344 (1st Dept. 2001)(citing Levy v. Kendricks, 170 AD2d
387 (1st Dept. 1991)); see also Estate of Mantle v. Rothgeb. 537
F.Supp.2d 533, 544 (S.D.N.Y. 2008)(“New York courts have generally
required a tight nexus between claim and counterclaim before
otherwise-applicable statute of limitations.”).
Here, the counterclaim is based on a letter sent to Wachovia
bank after Corning learned that FRRM allegedly deposited checks
issued to “Corning c/o Freight Revenue Recovery of Miami.” Corning
informed the bank that it believed this practice was fraudulent,
because it had not authorized FRRM to act on its behalf.
letter did not refer to the Agreement between the parties and it
did not indicate that the parties had a relationship prior to the
checks being deposited.
The letter was sent as a result of FRRM’s
alleged breach of the underlying Agreement.
The Court finds that
this relationship is too attenuated for CPLR 203(d) to apply. See
Messenger, 279 A.D. 2d at 345 (an event which is the result of an
event alleged in the complaint not sufficiently related for CPLR
203(d) to apply); see also Estate of Mantle, 537 F.Supp.2d at 545.
dismissed with prejudice.
For the reasons set forth herein, the Court finds that FRRM’s
counterclaim for defamation is barred by the applicable statute of
FRRM’s second counterclaim is therefore dismissed
ALL OF THE ABOVE IS SO ORDERED.
s/ Michael A. Telesca
MICHAEL A. TELESCA
United States District Judge
Rochester, New York
May 17, 2012
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