The Pike Company, Inc. v. Universal Concrete Products, Corp.

Filing 96

ORDER denying Motion 65 to Strike Expert Report and Motion for Summary Judgment except as to fifth cause of action; granting 68 Motion for Partial Summary Judgment on fourth and fifth counterclaims. Signed by Hon. Elizabeth A. Wolford on 3/10/21. (MGB)

Case 6:17-cv-06365-EAW-MJP Document 96 Filed 03/10/21 Page 1 of 30

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
___________________________________
THE PIKE COMPANY, INC.,
Plaintiff,
DECISION AND ORDER
v.
6:17-CV-06365 EAW
UNIVERSAL CONCRETE PRODUCTS,
INC.,
Defendant.
___________________________________
MARIST COLLEGE,
Plaintiff-Intervenor,
v.
UNIVERSAL CONCRETE PRODUCTS,
INC.,
Defendant.
___________________________________
INTRODUCTION
This action involves disputes arising out of the construction of dormitory buildings
on the campus of Plaintiff-Intervenor Marist College (“Marist”) in Poughkeepsie, New
York.

Plaintiff The Pike Company, Inc. (“Pike”), the general contractor for the

construction project, claims in its amended complaint that defendant Universal Concrete
Products Corp. (“UCP”), its subcontractor, materially breached the terms of the parties’
subcontract and caused the improper encumbrance of the project property with mechanic’s
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liens. (Dkt. 7). Pike seeks damages for breach of contract, unjust enrichment, and
violations of the New York Lien Law, and a declaration that the lien filed by UCP was
invalid. (Id.). UCP denies Pike’s allegations and asserts counterclaims for breach of
contract (both direct claims and as a third-party beneficiary), unjust enrichment/quantum
meruit, misappropriation of trade secrets in violation of the Pennsylvania Trade Secrets
Act, 12 Pa. Cons. Stat. Ann. § 5301 et seq. (“PUTSA”), and tortious interference with
prospective business relationships. (Dkt. 29).
Presently before the Court are competing summary judgment motions filed by the
parties. UCP seeks summary judgment on its first counterclaim “for the balance due of the
Subcontract price,” it seeks summary judgment dismissing the amended complaint “in its
entirety,” including dismissing the third, fourth, fifth and sixth causes of action “to the
extent that such causes of action seek damages relating to any alleged delay,” and it seeks
to strike as inadmissible Pike’s expert report prepared by Richard Merkhofer. (Dkt. 65).
Pike moves for partial summary judgment seeking dismissal of UCP’s fourth and fifth
counterclaims. (Dkt. 68).
For the reasons set forth below, UCP’s motion to strike Mr. Merkhofer’s expert
report is denied, UCP’s motion for summary judgment is denied except as to Pike’s fifth
cause of action seeking to declare UCP’s mechanic’s lien invalid, and Pike’s motion for
partial summary judgment in its favor on UCP’s fourth and fifth counterclaims is granted.

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BACKGROUND1
Pike entered into an agreement with Marist on May 1, 2015, to become the general
contractor for a two-building residence hall complex located on the Marist College North
Campus in Poughkeepsie, New York. (Dkt. 68-3 at ¶ 6; Dkt. 78 (no response)). The project
was designated as the first phase of a two phase dormitory project (“Phase I” and “Phase
II,” respectively, and collectively the “Project”). (Id.). During the Project, the two
buildings of Phase I were referred to as “Building A” and “Building B.” (Dkt. 68-3 at ¶ 7;

1

The facts set forth in this Background section are undisputed unless otherwise
indicated. Notably, in response to Pike’s Statement of Undisputed Facts in support of its
motion for partial summary judgment dismissing UCP’s fourth and fifth counterclaims
(Dkt. 68-3 (“Pike’s Statement”)), UCP submitted a “counterstatement” of undisputed facts
(Dkt. 78) wherein it contested some of the facts set forth in Pike’s Statement but failed to
respond to a large number of the paragraphs in Pike’s Statement. This District’s Local
Rule 56(a)(2) provides that the “papers opposing a motion for summary judgment shall
include a response to each numbered paragraph in the moving party’s statement, in
correspondingly numbered paragraphs and, if necessary, additional paragraphs containing
a short and concise statement of additional material facts as to which it is contended there
exists a genuine issue to be tried.” See also Fed. R. Civ. P. 56(e)(2) (when a party fails to
properly support an assertion of fact or fails to address another party’s assertion of fact, the
court may consider the fact undisputed for purposes of the motion). UCP failed to comply
with this requirement. As a result, consistent with the Local Rule, and because the
unanswered paragraphs in Pike’s Statement are supported by the record, Holtz v.
Rockefeller & Co., 258 F.3d 62, 73-74 (2d Cir. 2001), the Court deems the facts therein
admitted by UCP. See N.Y. State Teamsters Conference Pension & Ret. Fund v. Express
Servs., Inc., 426 F.3d 640, 648-49 (2d Cir. 2005); Gubitosi v. Kapica, 154 F.3d 30, 31 n. 1
(2d Cir. 1998).
In addition to Pike’s Statement and UCP’s response in connection with Pike’s
partial summary judgment motion, the Court has also considered UCP’s Statement of
Undisputed Facts submitted in support of its motion for summary judgment (“UCP’s
Statement”) (Dkt. 65-1) and Pike’s response thereto and counterstatement (Dkt. 79), as
well as all of the exhibits attached and referenced to the parties’ statements and responses.
The Court notes that UCP’s Statement almost exclusively relies on an affidavit of UCP’s
President, Donald Faust, Jr. (“Faust”) (Dkt. 65-6), as opposed to the deposition testimony
elicited during discovery.
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Dkt. 78 (no response)). Phase II involved the construction of two buildings that were
referred to as “Building C” and “Building D.” (Id.). The Project Architect for both Phase
I and Phase II was Robert A.M. Stern Architects, LLP. (Dkt. 65-1 at ¶ 16; Dkt. 79 at ¶ 16).
The architectural design contemplated using pre-cast concrete wall panels with a natural
stone veneer for the exterior walls, so that the new buildings would blend in with existing
campus buildings. (Dkt. 65-1 at ¶ 17; Dkt. 79 at ¶ 17).
Marist

originally

intended

Kirchhoff-Consigli

Construction

Management

(“Consigli’) to serve as the construction manager for Phase I and Phase II. (Dkt. 68-3 at
¶ 14; Dkt. 78 (no response)). Due to concerns with Consigli’s price and schedule, Marist
decided to accept general contracting bids for Phase I instead. (Dkt. 68-3 at ¶ 15; Dkt. 78
(no response)). While Consigli was negotiating with Marist to be construction manager on
the Project, Marist had begun preliminary work with UCP for Phase I’s precast concrete
wall panels, including the production of shop drawings and mock-ups. (Dkt. 68-3 at ¶ 16;
Dkt. 78 (no response)). UCP specializes in precast concrete exterior wall cladding, and
produces both architectural and structural precast panels. (Dkt. 68-3 at ¶ 8; Dkt. 78 (no
response)). After deciding to solicit bids from general contractors for Phase I of the Project,
Marist issued an invitation to bid specifying that a preconstruction agreement arrangement
existed with UCP for the fabrication and installation of architectural precast panels and the
balance of the contract between UCP and Marist would be assigned to the successful
bidder. (Dkt. 68-3 at ¶ 17; Dkt. 78 (no response)). Four general contractors bid the Project
to serve as general contractor for Phase I, including Consigli and Pike. (Dkt. 68-3 at ¶ 18;

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Dkt. 78 (no response)). The bid process resulted in Marist selecting Pike to be the general
contractor for Phase I. (Id.).
Pike entered into a Master Subcontract Agreement with UCP on May 29, 2015 (“the
MSA”). (Dkt. 68-3 at ¶ 9; Dkt. 78 (no response); see Dkt. 69-2 (copy of the MSA)). The
parties also entered into an Exhibit AA, Work Order, which incorporated the terms and
conditions of the MSA and provided the specific terms and conditions by which UCP
would produce and install precast concrete wall panels with brick and stone veneer for
Phase I of the Project. (Dkt. 68-3 at ¶ 12; Dkt. 78 at ¶ 3; see Dkt. 69-3; Dkt. 69-4).
The parties dispute the sufficiency of each other’s performance with respect to the
Project, as well as the performance of others. (Dkt. 65-1 at ¶¶ 50-82; Dkt. 79 at ¶¶ 50-82).
It is undisputed that during the construction, Pike sent its employee Thomas Scheg
(“Scheg”) to observe the UCP facility and report back on the status and quality of the panel
production. (Dkt. 68-3 at ¶ 40; Dkt. 78 at ¶ 18). Pike did this because it was concerned
that UCP was unable to meet the agreed-upon panel production schedule and the thencurrent temperatures were too cold to properly carry out the process of affixing stone
veneer to the pre-cast panels. (Dkt. 68-3 at ¶ 41; Dkt. 78 (no response)). Scheg visited the
UCP facility for multiple days at a time for six to eight weeks in March and April of 2016.
(Dkt. 68-3 at ¶ 43; Dkt. 78 (no response)). During his visits, Scheg took digital photographs
with his camera and uploaded them to a Pike project folder. (Dkt. 68-3 at ¶ 44; Dkt. 78
(no response)). He did not take any videos of the UCP production facility or the panels.
(Id.). UCP representatives permitted Scheg to take his own photographs of the production
process, including the stoning process. (Dkt. 68-3 at ¶ 47; Dkt. 78 (no response)). UCP’s
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project manager from January 2016 through December 2017, Gary Reed, escorted Scheg
on several of his visits, and did not voice any concern about Scheg’s photography. (Dkt.
68-3 at ¶¶ 27, 47; Dkt. 78 at ¶ 6 (responding to Pike Statement ¶ 27) and no response to
Pike Statement ¶ 47)). In fact, at one point in April 2016, UCP’s then-chief operating
officer, Joseph O’Brien, offered to take photographs of the production facility and provide
them to Pike. (Dkt. 68-3 at ¶ 48; Dkt. 78 (no response)).2
Pike also served as the construction manager for Phase II of the Project involving
the construction of Buildings C and D, and solicited bids for the subcontract work
necessary. (Dkt. 68-3 at ¶ 52; Dkt. 78 (no response)). UCP’s bid for Phase II was higher
than the bid of Tri-Krete Limited (“Tri-Krete”). (Dkt. 69-15 at 7).3 Pike subcontracted

2

Faust claims in an affidavit submitted in opposition to Pike’s motion for partial
summary judgment that Scheg was eventually banned from visiting UCP’s facility. (Dkt.
78-1 at ¶ 14). However, a review of the documentation attached to the affidavit reveals
that this action had nothing to do with the taking of photographs, and appears driven at
least in part by a personality conflict with Scheg. (See Dkt. 78-2). In other words, there is
no evidence in the record that UCP voiced any concerns about Scheg taking photographs;
instead, the record establishes that UCP was fully aware of the photographing by Scheg
and voiced no concerns or opposition. Counsel for UCP conceded this point during oral
argument.
3

UCP makes the unsupported statement in its memorandum of law in opposition to
Pike’s partial summary judgment motion that UCP “had the lowest bid for Phase 2.” (Dkt.
78-7 at 17). However, UCP failed to sufficiently controvert Pike’s statement of undisputed
fact that “Pike subcontracted with Tri-Krete Limited for the construction of the necessary
precast concrete panels because Tri-Krete was the low bidder and represented it could meet
the schedule necessary to complete the Project.” (Dkt. 68-3 at ¶ 53). In support of that
statement, Pike relies on the deposition testimony of Justin Butwell (Marist’s Director of
Physical Plant) and Gloria Ciminelli (senior project manager at Pike). (Id.). In response
to that statement, UCP simply states that Butwell did not testify from personal knowledge.
(Dkt. 78 at ¶ 22). However, it fails to address Ciminelli’s testimony which was plainly
based on personal knowledge. (See Dkt. 69-15 at 7-8 (Ciminelli testifying that she saw
both bids and that Tri-Krete’s was lower when comparing “apples to apples.”)). The
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with Tri-Krete for construction of the necessary precast concrete panels for Phase II. (Dkt.
68-3 at ¶ 53; Dkt. 78 (no response)). UCP, by separate contract with Marist, assisted TriKrete in its production of the panels necessary for Phase II. (Dkt. 68-3 at ¶ 54; Dkt. 78 (no
response)). Pike’s decision to subcontract with Tri-Krete occurred prior to 2017.4
In late winter or early spring of 2017, Scheg shared approximately thirty
photographs of the UCP facility with Tri-Krete at its offices in Canada. (Dkt. 68-3 at ¶ 55;
Dkt. 78 at ¶ 23). Pike contends that the reason for this was that it was a “necessary effort
to ensure that the facades of the Phase 2 buildings would exactly match the Phase I

conclusory statement in the affidavit Faust’s affidavit that “[w]e initially had a lower bid
than Tri-Krete” (Dkt. 78-1 at ¶ 21) does not sufficiently controvert Ciminelli’s testimony,
particularly when considering UCP’s failure to dispute Pike’s statement of undisputed fact
in this regard.
4

Pike states in its memorandum of law in support of partial summary judgment that
Pike’s act of sharing the photographs with Tri-Krete in early spring 2017 occurred after
Tri-Krete already won the bid for the Phase II precast panels, but there is no record cite for
that statement. (See Dkt. 68-4 at 30). However, it seems evident from a review of the
record that the decision to award Tri-Krete the subcontract occurred prior to the sharing of
photographs with Tri-Krete in 2017. Among other reasons, Butwell testified that the
decision had to be before the winter or spring of 2017, although he did not recall the exact
date. (Dkt. 69-8 at 25). In addition, Faust states in an affidavit submitted in opposition to
Pike’s partial summary judgment motion that UCP submitted bids for Phase II to Pike on
October 26, 2015, and again on March 10, 2016. (Dkt. 78-1 at ¶ 21). Also, in an email
between Faust and Scheg from April 2017, it is evident that Tri-Krete is already involved
in the project. (Dkt. 69-6). And, although not expressly relied on in this Decision and
Order, the Court notes that it has issued a Decision and Order in connection with litigation
between Tri-Krete and Pike recognizing that their relationship was governed by “a Master
Subcontract Agreement and a Work Order, dated October 2, 2015, and June 14, 2016. . . .”
Pike Co., Inc. v. Tri-Krete Ltd., 349 F. Supp. 3d 265, 268 (W.D.N.Y. 2018). Finally, at
oral argument counsel for Pike stated that a letter of intent was signed between Pike and
Tri-Krete with respect to Phase II at least one year before Scheg shared the photos with
Tri-Krete and when the photos were shared, Phase II was well underway. UCP’s counsel
did not dispute these points.
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buildings.” (Id.). UCP contends that Scheg had neither the education nor experience to be
able to determine what information reflected in the photographs was proprietary. 5 (Id.).
UCP’s President (Faust), when learning that the photographs had been shared with TriKrete, did not ask Tri-Krete to destroy the photographs. (Dkt. 68-3 at ¶ 59; Dkt. 78 at
¶ 25).
Also, on April 5, 2017, Tri-Krete, Marist, UCP, and Pike held a “Panel Coordination
Meeting” to discuss the panel production and erection for Phase II. (Dkt. 68-3 at ¶ 60; Dkt.
78 (no response)). During the meeting, it was decided that Pike would provide “pictures
of Phase I and Phase II for UCP to reference.” (Id.). After the meeting, Scheg forwarded
Pike’s photographs to Faust, who responded by thanking Scheg for forwarding the
photographs. (Dkt. 68-3 at ¶ 61; Dkt. 78 at ¶ 26; see Dkt. 69-6). Tri-Krete’s vice president
was copied on the email, although it does not appear that he received the photographs
through that email because of their size. (Dkt. 69-6; see Dkt. 84 at 10).
The MSA provides for mediation through the American Arbitration Association
(“AAA”) “before recourse to any other form of binding dispute resolution.” (Dkt. 69-2 at
§ 11.1 (also providing that “[e]ngaging in mediation is a condition precedent to any other
form of binding dispute resolution”)). However, UCP initiated litigation of this matter in
the Court of Common Pleas of Montgomery County, Pennsylvania, on December 22, 2016
(Dkt. 81-19), and refused to participate in the AAA mediation (Dkt. 81-21). The parties

5

This argument by UCP actually seems to undermine its allegations that Scheg
intentionally went into the facility to misappropriate UCP’s trade secrets. In other words,
if he was not even able to gauge what constituted a trade secret, it is difficult to understand
how he could have intentionally misappropriated UCP’s proprietary information.
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ultimately participated in this District’s mediation program after commencement of the
present action, but it was unsuccessful. (Dkt. 81 at ¶ 24; see also Dkt. 43).
UCP filed a mechanic’s lien on Marist’s property on November 7, 2016 (Dkt. 8111), and several of UCP’s subcontractors filed mechanic’s liens on Marist’s property (Dkt.
81-12; Dkt. 81-13; Dkt. 81-14; Dkt. 81-15; Dkt. 81-16). One of those subcontractors
(Diener Brick Company) filed an action in New York State Supreme Court, Dutchess
County, against Pike, Marist, UCP, and Fidelity and Deposit Company of Maryland,
seeking to foreclose on its mechanic’s lien. (Dkt. 81-17). In answering that complaint,
UCP asserted a counterclaim seeking to foreclose on its mechanic’s lien. (Dkt. 81-18 at
¶¶ 13-36).
An amended scheduling order in this case required the production of Pike’s expert
report by June 22, 2018. (Dkt. 44). Pike first submitted a report from Mr. Merkhofer on
or about June 21, 2018. (Dkt. 65-1 at ¶ 6; Dkt. 79 at ¶ 6; see Dkt. 65-3, Dkt. 81-9).
Thereafter, on December 30, 2019, Pike submitted a supplemental report from Mr.
Merkhofer. (Dkt. 65-1 at ¶ 8; Dkt. 79 at ¶ 8; see Dkt. 65-4, Dkt. 81-10). Mr. Merkhofer’s
deposition was conducted on January 7, 2020. (Dkt. 65-1 at ¶ 9; Dkt. 79 at ¶ 9; see Dkt.
65-5). Mr. Merkhofer testified that the June 2018 report was not an “expert” report but
rather a “mediation” report, although he acknowledged that he never communicated to
anyone that the initial report was not an “expert” report. (Dkt. 65-5 at 31). There were
two basic differences between Mr. Merkhofer’s June 2018 report and December 2019
report: (1) he removed the damages calculations from the December 2019 report because
the figures were simply included in the June 2018 report for purposes of mediation—he
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had not verified the damages, only included the figures as provided by Pike, and was not
intending to offer an opinion on damages (Dkt. 65-5 at 32-33); and (2) when he prepared
the June 2018 report, he did not have the panel production logs and therefore updated the
report with that information once it was provided by UCP (id. at 32). These logs had been
requested from UCP by Pike’s counsel since as early as June 2018, but after initially
denying that any such reports existed, UCP produced the reports on August 21, 2019, on
the evening of Faust’s scheduled deposition. (See Dkt. 81 at ¶¶ 3-9).6
PROCEDURAL HISTORY
On May 4, 2017, Pike commenced this action against UCP in New York State
Supreme Court, Monroe County. (Dkt. 1-1). UCP removed the case on June 9, 2017, on
the basis of diversity jurisdiction. (Dkt. 1). Pike subsequently filed an amended complaint
(Dkt. 7), UCP filed a motion to dismiss that complaint or transfer the action (Dkt. 8), and
Marist filed a motion to intervene (Dkt. 18). On January 8, 2018, the Court issued a
Decision and Order denying UCP’s motion and granting Marist’s motion to intervene.
(Dkt. 25). Discovery subsequently ensued with sixteen depositions conducted and 220
exhibits introduced (Dkt. 81 at ¶ 43), and the motions for summary judgment were filed on
March 16, 2020 (Dkt. 65; Dkt. 68). Oral argument was held before the undersigned on
February 2, 2021, at which time the Court reserved decision.

6

UCP made no effort in its reply papers or at oral argument to refute Pike’s counsel’s
description of the late production of the reports. (See generally Dkt. 83).
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DISCUSSION
I.

UCP’s MOTION TO STRIKE MR. MERKHOFER’S REPORT
UCP’s motion to strike is based on two separate theories: (1) Pike failed to timely

submit Mr. Merkhofer’s report, because the report submitted by the June 22, 2018, deadline
was characterized by Mr. Merkhofer at his deposition as a “mediation report” and it was
not until December 30, 2019, that a report was produced that Mr. Merkhofer characterized
as an “expert report” (Dkt. 65-15 at 18-19); and (2) Mr. Merkhofer’s report is inadmissible
under the standard set forth at Federal Rule of Evidence 702 (id. at 19-22). The Court
addresses each argument in turn.
A.

UCP’s Argument that the Report is Untimely

Under Federal Rule of Civil Procedure 26(a)(2)(D), a party must disclose expert
witness reports in accordance with a court’s scheduling order, and Rules 26(a)(2)(E) and
26(e)(2) impose a duty to supplement the information as necessary. A party who fails to
comply with Rule 26 is not allowed to present that witness at trial unless the failure “was
substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). “Substantial justification
may be demonstrated where there is justification to a degree that could satisfy a reasonable
person that parties could differ as to whether the party was required to comply with the
disclosure request, or if there exists a genuine dispute concerning compliance.” Ritchie
Risk-Linked Strategies Trading (Ireland), Ltd. v. Coventry First LLC, 280 F.R.D. 147, 159
(S.D.N.Y. 2012) (internal quotations omitted). “‘Harmless[ness]’ means an absence of
prejudice.” Id. (alteration in original). “The party that failed to comply with its discovery

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obligations bears the burden of proving that its failure was both substantially justified and
harmless.” Coene v. 3M Co., 303 F.R.D. 32, 44 (W.D.N.Y. 2014).
When evaluating whether preclusion of an expert witness is appropriate, a court
considers the following factors: “(1) the party’s explanation for the failure to comply with
the discovery order; (2) the importance of the testimony of the precluded witness; (3) the
prejudice suffered by the opposing party as a result of having to prepare to meet the new
testimony; and (4) the possibility of a continuance.” Softel, Inc. v. Dragon Med. & Sci.
Commn’s, Inc., 118 F.3d 955, 961 (2d Cir.1997). The Second Circuit has counseled that
district courts should consider “lesser sanctions prior to precluding evidence as a sanction
for discovery violations.” Coene, 303 F.R.D. at 42 (citing Outley v. City of New York, 837
F.2d 587, 591 (2d Cir.1988)).
Here, there is no dispute that a report from Mr. Merkhofer was produced by the
court-ordered deadline. There is also no dispute that the only differences between that
report and the report produced in December 2019, was that Mr. Merkhofer removed the
damages calculations from the report and he added information based upon documents
produced in an untimely fashion by UCP. Furthermore, there is no dispute that the
December 2019 report was produced in advance of Mr. Merkhofer’s deposition.
Under the circumstances, UCP’s argument that the report should be stricken as
untimely borders on frivolous. It is irrelevant whether Mr. Merkhofer characterized his
report as a “mediation” report or “expert” report—the relevant inquiry is whether the report
provided the information required by Rule 26, and UCP has advanced no argument that
either report failed to comply with those requirements. In terms of the removal of the
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damages information, the Court is not persuaded that this somehow prejudiced UCP in its
examination of fact witnesses in this case, who were apparently questioned about issues of
damages. Even if there was some prejudice, this certainly would not justify striking the
report under the circumstances, as opposed to some less drastic remedy (such as permitting
a further deposition or depositions). Furthermore, UCP cannot in good faith argue that its
own dilatory discovery tactics should result in the preclusion of Mr. Merkhofer’s opinion
based upon the untimely produced production logs. Accordingly, the Court denies UCP’s
motion to strike Mr. Merkhofer’s report on the grounds of timeliness.
B.

The Admissibility of Mr. Merkhofer’s Opinion

UCP argues that Mr. Merkhofer’s opinion is inadmissible because he “simply
compared the ‘as planned’ vs. ‘as built’ calendar dates on Pike’s ‘Baseline Schedule’” and
in a conclusory manner attributed the entirety of the delay to UCP. (Dkt. 65-15 at 19-20).
UCP complains that Mr. Merkhofer did not perform an “entitlements” analysis by
analyzing the nexus between any alleged delays and the damages claimed by Pike, and
instead only employed an “As Planned/As Built” analysis “which is little more than a
comparison of calendar dates.” (Id. at 21). UCP equates this to the “Total Cost method”
which compares “the as-bid price to the as-incurred cost to perform,” and is not favored,
citing Servidone Constr. Corp. v. United States, 931 F.2d 860, 861-62 (Fed. Cir. 1991)7.
(Id. at 21-22). In its reply papers, UCP cites to Mr. Merkhofer’s opinion in another case

7

Servidone actually affirmed the trial court’s award of damages based upon the total
cost method, although it explained that it is a rule of last resort and not favored. 931 F.2d
at 861. Cf. Thalle Const. Co. v. Whiting-Turner Contracting Co., 39 F.3d 412, 417 (2d Cir.
1994) (explaining correct application of total cost method under New York law).
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where he purportedly “criticized the opposing expert for, among other things, failing to
show cause and effect between the alleged damages and delays, failing to use the reliable
‘measured mile’ analysis, and for simply doing a mathematical calculation.” (Dkt. 83 at
6).
Pike responds that Mr. Merkhofer’s opinion is based on the reasonable assumption
that “UCP’s failure to produce a sufficient number of panels prior to commencement of
erection (despite having an extra 44 days to do so) was the sole cause of UCP’s delays”
and “[h]aving a reasonable factual basis upon which to explain the cause of the subject
delay, it is well within the realm of Mr. Merkhofer’s considerable experience and expertise
to render an opinion as to the scheduling consequences of UCP’s delay,” and that this
opinion “requires much more than ‘a comparison of calendar dates,’ as argued by UCP.”
(Dkt. 80 at 26-28).
Federal Rule of Evidence 702 provides as follows:
A witness who is qualified as an expert by knowledge, skill, experience,
training, or education may testify in the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge will help
the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of
the case.
“As the Second Circuit has noted, district courts should presume expert evidence is
reliable.” UMG Recordings, Inc. v. Lindor, 531 F. Supp. 2d 453, 456 (E.D.N.Y. 2007). In
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), the Supreme Court explained
that a trial court has a “gatekeeping” duty under Rule 702, and must make sure that
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proposed expert testimony “both rests on a reliable foundation and is relevant to the task
at hand.” Id. at 597; see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999)
(“In Daubert, this Court held that Federal Rule of Evidence 702 imposes a special
obligation upon a trial judge to ensure that any and all scientific testimony is not only
relevant, but reliable.”) (quotation and alteration omitted).
“Per Daubert and its progeny, a court’s Rule 702 inquiry involves the assessment
of three issues: (1) the qualifications of the expert, (2) the reliability of the methodology
and underlying data employed by the expert, and (3) the relevance of that about which the
expert intends to testify.” Washington v. Kellwood Co., 105 F. Supp. 3d 293, 304
(S.D.N.Y. 2015).

“Ultimately, the party proffering the expert has the burden to

demonstrate by a preponderance of the evidence that its expert witness satisfies these
criteria.” Id. (quotation and alteration omitted). However, “[a]s the courts and Advisory
Committee have made clear, ‘the rejection of expert testimony is the exception rather than
the rule.’” M.B. ex rel. Scott v. CSX Transp., Inc., 130 F. Supp. 3d 654, 665 (N.D.N.Y.
2015) (quoting Fed. R. Evid. 702, Advisory Committee’s Note).
“Disputes as to the strength of an expert’s credentials, faults in the use of a
methodology, or lack of textual authority for an opinion go to ‘the weight, and not the
admissibility’ of an expert’s testimony.” United States v. American Exp. Co., No. 10-CV4496(NGG)(RER), 2014 WL 2879811, at *2 (E.D.N.Y. June 24, 2014). Further,
“[a]rguments about the assumptions and data underlying an expert’s testimony go to the
weight, rather than the admissibility, of that testimony.” Arista Records LLC v. Lime Grp.
LLC, No. 06 CV 5936(KMW), 2011 WL 1674796, at *7 (S.D.N.Y. May 2, 2011). “Unless
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the information or assumptions that plaintiff’s expert [ ] relied on were ‘so unrealistic and
contradictory as to suggest bad faith,’ inaccuracies in the underlying assumptions or facts
do not generally render an expert’s testimony inadmissible.” Washington, 105 F. Supp. 3d
at 306 (quoting R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244, 269 (S.D.N.Y. 2010))
(alteration in original). “Expert testimony should not be rejected simply because the
conclusions reached by the witness seem subjectively improbable. . . . It is [v]igorous
cross-examination, presentation of contrary evidence, and careful instruction on the burden
of proof [that] are the traditional and appropriate means of attacking shaky but admissible
evidence.” Id. at 306-07 (internal quotations and citations omitted) (alteration in original).
However, “[a]n expert opinion requires some explanation as to how the expert came to his
conclusion and what methodologies or evidence substantiate that conclusion.” Riegel v.
Medtronic, Inc., 451 F.3d 104, 127 (2d Cir. 2006), aff’d, 552 U.S. 312 (2008).
Here, the Court easily concludes that Mr. Merkhofer’s proposed opinion satisfies
the requirements of Rule 702 and Daubert. UCP has cited no case that supports its position
that Mr. Merkhofer’s opinion should be excluded under the circumstances here, and instead
its attacks on Mr. Merkhofer’s opinion are fair grounds for cross-examination at trial, but
not a basis to declare the opinion inadmissible. The Court notes that it disagrees with
UCP’s argument in its reply memorandum that an expert is “required to calculate delay
damages.” (Dkt. 83 at 8). The cases cited by UCP simply do not stand for that broad
proposition and do not support the conclusion that Mr. Merkhofer’s opinion is inadmissible
because he did not quantify delay damages. In fact, there is support in the caselaw that
Pike does not even need expert testimony on critical path analysis to successfully recover
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delay damages in a construction project, as offered by Mr. Merkhofer in this case. See The
Helena Assoc. LLC v. EFCO Corp., No. 06 Civ. 0861(PKL), 2008 WL 2117621, at *4
(S.D.N.Y. May 15, 2008). Certainly, Pike must prove its claim of damages, but there is
nothing in the case law suggesting that it cannot attempt to prove its damages through the
testimony of fact witnesses or that it must rely on expert testimony to prove those damages.
Accordingly, UCP’s motion to strike Mr. Merkhofer’s report is denied.
II.

UCP’s Motion for Summary Judgment
UCP makes the following arguments in support of its motion for summary

judgment:8 (1) because there is no dispute that UCP performed under the terms of the
subcontract by manufacturing and installing “404 wall pre-cast concrete wall panels on
Building A” and “206 wall pre-cast concrete wall panels on Building B”, it is entitled to
the balance due of not less than $1.4 million “subject to any damages which Plaintiff Pike
can establish in this action, if any” (Dkt. 65-15 at 22-23); (2) because the case was mediated
as part of the District’s mediation program, Pike’s claims for damages based upon the
failure to mediate must be dismissed (id. at 28-30); and (3) Pike’s claims under the fifth
and sixth causes of action based upon the lien filed by UCP in state court in Dutchess
County must be litigated in that action, and not in this federal court proceeding (id. at 3031). Each of UCP’s arguments is addressed in turn. To the extent UCP based its motion

8

UCP’s summary judgment motion is based, in part, on the argument that delay
damages must be established by expert testimony and Mr. Merkhofer’s report is
inadmissible. (See Dkt. 65-15 at 24-28). As discussed at Point I(B) of this Decision and
Order, the Court disagrees with UCP’s arguments in this regard, and therefore, it similarly
rejects UCP’s motion based on that argument.
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for summary judgment on any other argument not expressly addressed herein, those
arguments are rejected as UCP failed to sufficiently develop the argument in its motion
papers.
A.

UCP’s Claim for Amounts Due Under the Subcontract

UCP contends that it is entitled to this Court’s “determination that it has earned the
Subcontract balance, subject to damages Pike may prove, if any.” (Dkt. 83 at 10). UCP
clarified at oral argument that it was not seeking a declaratory judgment from the Court on
this point, but rather partial summary judgment on liability. In opposition to UCP’s motion,
Pike has raised material issues of fact concerning UCP’s performance under the terms of
the parties’ contractual agreements, including whether UCP fabricated panels incorrectly,
failed to make necessary repairs, and failed to timely perform. (See Dkt. 80 at 17). UCP
has failed to establish its entitlement to partial summary judgment on this claim, and
therefore the motion is denied.
B.

Mediation through the Court’s Mediation Program

Pike has based its claims for damages, in part, on UCP’s initiation of a lawsuit in
Pennsylvania and its initial refusal to engage in mediation, which Pike alleges breached
UCP’s contractual obligations. (See Dkt. 7 at ¶¶ 1, 10, 35, 37). The fact that the parties
unsuccessfully mediated their disputes as part of the Court’s automatic mediation program
after the commencement of this litigation, does not resolve Pike’s claims of a breach by
failing to engage in mediation before the commencement of litigation. Likewise, based on
the record before the Court, UCP has not established its entitlement to summary judgment
on this claim based on the doctrine of waiver. Finally, to the extent UCP claims for the
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first time in its reply brief that Pike’s claims in this regard are barred under the doctrine of
collateral estoppel or because of the general legal principle that a successful party in
litigation must bear its own attorneys’ fees (see Dkt. 83 at 12), not only is it inappropriate
to raise these arguments for the first time in a reply brief, see Jiles v. Rochester Genesee
Reg’l Transp. Auth., 317 F. Supp. 3d 695, 701 (W.D.N.Y. 2018), but UCP’s arguments
lack merit. Indeed, the caselaw relied upon by UCP does not stand for the proposition that
a damages claim for breach of contract cannot include damages in the form of attorneys’
fees. Thus, UCP’s motion for summary judgment on this claim is denied.
C.

Pike’s Claims Based on the Lien

Pike’s fifth cause of action alleges that “UCP inappropriately filed a lien on the
Property even though it had not performed under the subcontract” and that Pike is “entitled
to a declaration that the lien filed by UCP in Dutchess County, New York is not valid and
the lien and bond filed to discharge it should be vacated.” (Dkt. 7 at ¶¶ 46-47). At oral
argument, counsel for Pike conceded that this claim should be litigated in the context of
the state court action pending in Dutchess County, and therefore UCP’s motion for
summary judgment on this claim is granted.
By contrast, the sixth cause of action alleges that UCP violated New York’s lien law
by failing to pay its subcontractors, who then filed liens on the Property resulting in
damages to Pike which was required to bond or negotiate those liens on behalf of Marist.
(Id. at ¶¶ 48-50; see also Dkt. 80 at 22). The Court agrees with Pike that its “expenses
related to UCP’s violation of New York’s trust fund lien law is not related to the Dutchess
County action” (Dkt. 80 at 22), and therefore this claim may be properly pursued in this
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federal court litigation.

To the extent UCP argues for the first time in its reply

memorandum about Pike’s alleged failure to comply with certain procedural requirements
of New York’s Lien Law, these arguments are not appropriately presented on reply (and
the Court disagrees that Pike’s theory of recovery under the New York Lien Law should
have come as some sort of surprise to UCP, as it is clearly pleaded as the basis for Pike’s
claims in the sixth cause of action).
Accordingly, summary judgment is granted in favor of UCP on the fifth cause of
action, but denied on the sixth cause of action.
III.

PIKE’S MOTION FOR SUMMARY JUDGMENT
Pike seeks summary judgment as to UCP’s fourth and fifth counterclaims. The

fourth counterclaim asserts a claim under PUTSA based upon Scheg’s visits to UCP’s
facility during the construction process and his taking of “photographs and/or videos.”
(Dkt. 29 at ¶¶ 188-208).

The fifth counterclaim alleges tortious interference with

prospective business relationships based upon the same underlying site visits by Scheg and
the sharing of photographs from those visits with UCP’s competitor. (Id. at ¶¶ 209-225).
A.

The MSA’s Choice of New York Law

Pike first argues that New York, not Pennsylvania law, applies to the fourth and
fifth counterclaims because of language in the MSA. (Dkt. 68-4 at 15-21). “A federal
district court sitting in diversity jurisdiction must apply the choice-of-law principles of the
forum state, in this case New York.” Fargas v. Cincinnati Mach., LLC, 986 F. Supp. 2d
420, 423 (S.D.N.Y. 2013) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 49697 (1941)). “New York law is clear in cases involving a contract with an express choice- 20 - 

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of-law provision: Absent fraud or violation of public policy, a court is to apply the law
selected in the contract as long as the state selected has sufficient contacts with the
transaction.” Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230
F.3d 549, 556 (2d Cir. 2000). Pike relies on section 13.3 of the MSA for the proposition
that the parties contractually agreed to have New York law apply, and accordingly the
fourth and fifth counterclaims are governed by New York law. (Dkt. 68-4 at 16-17).
Section 13.3 of the MSA, entitled “Governing Law”, states as follows:
All matters relating to the validity, performance, interpretation or
construction of this [MSA] . . . or the breach of this [MSA], shall be governed
by the law in effect at the location of the Project.
(Dkt. 69-2 at 26). UCP does not dispute the validity of this provision, or that under the
terms of the MSA that New York law is the governing law. However, UCP contends that
its fourth and fifth counterclaims do not “relate to the validity, performance, interpretation
or construction of the MSA, and thus, are not covered by the MSA choice of law
provision.” (Dkt. 78-7 at 10).
The Second Circuit has explained that under New York law, “tort claims are outside
the scope of contractual choice-of-law provisions that specify what law governs
construction of the terms of the contract, even when the contract also includes a broader
forum-selection clause.” Fin. One Pub. Co. v. Lehman Bros. Special Fin., 414 F.3d 325,
335 (2d Cir. 2005) (concluding that extra-contractual setoff rights fell outside the scope of
the choice-of-law clause that provided the agreement was to “be governed by and construed
in accordance with the laws of the State of New York”). “Under New York law, in order
for a choice-of-law provision to apply to claims for tort arising incident to the contract, the
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express language of the provision must be ‘sufficiently broad’ as to encompass the entire
relationship between the contracting parties.” Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir.
1996) (quoting Turtur v. Rothschild Registry Int’l, Inc., 26 F.3d 304, 309-10 (2d Cir.1994)).
“As a general rule of thumb, ‘provisions applying to disputes “arising out of” or
“relating to” a contract are capacious enough to reach related tort claims, while provisions
stating that a contract will be “governed by” or “construed in accordance with” the law of
a state are not.’” Ramiro Aviles v. S & P Glob., Inc., 380 F. Supp. 3d 221, 270-71 (S.D.N.Y.
2019) (quotation and citation omitted). The MSA language is broader than simply stating
that the agreement is governed by New York law. On other hand, it does not go so far as
to state that the entire relationship between parties is governed by New York law, and while
it does state that “[a]ll matters relating to the validity, performance, interpretation or
construction” of the MSA are governed by New York law, it does not state that all matters
arising out of the MSA are governed by New York law.
While the parties did not exhaustively brief the issue, the Court’s own survey of
district courts’ interpretations of similar contractual choice-of-law provisions reveals some
inconsistent results. Compare Frontline Processing Corp. v. Merrick Bank Corp., No. 13
CIV. 3956, 2014 WL 837050, at *8 n. 4 (S.D.N.Y. Mar. 3, 2014) (finding that fraud claim
did not fall within scope of contractual choice-of-law provision providing “this Agreement
and all rights and obligations hereunder, including but not limited to matters of
construction, validity and performance, are governed by and construed in accordance with
the laws of the State of New York.”); J&R Multifamily Grp., Ltd. v. U.S. Bank Nat’l Ass’n
as Tr. for Registered Holders of UBS-Barclays Commercial Mortg. Tr. 2012-C4,
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Commercial Mortg. Pass-Through Certificates, Series 2012-C4, No. 19-CV-1878 (PKC),
2019 WL 6619329, at *4 (S.D.N.Y. Dec. 5, 2019) (agreement was not sufficiently broad
as to encompass tort claims where it encompassed “matters of construction, validity, and
performance” of the agreement), with Bausch & Lomb Inc. v. Mimetogen Pharm., Inc., No.
14-CV-6640-FPG, 2016 WL 2622013, at *8 (W.D.N.Y. May 5, 2016) (concluding that
contract choice-of-law provision was sufficiently broad to include tort claims where it
provided that “[t]his Agreement and all claims related to it, its execution or the performance
of the parties under it, shall be construed and governed in all respects according to the laws
of the State of New York”); see also Capital Z Fin. Servs. Fund II, L.P. v. Health Net, Inc.,
43 A.D.3d 100, 109-10 (2007) (tort claims fell within scope of choice-of-law provision in
agreements which stated that “Delaware Law governs ‘all issues’ concerning ‘enforcement
of the rights and duties of the parties.’”).
The Court believes that it is a close question as to whether the fourth and fifth
counterclaims are governed by New York law based upon the choice-of-law provision in
the MSA. There is no question that both of the counterclaims arise from Scheg’s visits to
UCP’s production facility, and those visits plainly related to performance of the MSA.
However, UCP’s counterclaims are only partially related to Scheg’s conduct during those
visits—the crux of UCP’s allegations relates to the sharing of photographs taken during
those visits with Tri-Krete at some point after the visits. While those claims may arise
from performance of the MSA, the Court is not convinced that they “relate” to performance
of the MSA.

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Nonetheless, the Court does not need to resolve this difficult question. As discussed
below, there is no meaningful difference between New York and Pennsylvania law on the
key points at issue with the pending motions relevant to these counterclaims. As a result,
the Court does not resolve the issue of whether the MSA’s language mandates application
of New York law.
B.

The Fourth Counterclaim—Misappropriation of Trade Secrets

“‘In New York, the forum state in this case, the first question to resolve in
determining whether to undertake a choice of law analysis is whether there is an actual
conflict of laws.’” Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir. 2001)
(quotation and citations omitted). “An actual conflict exists where the applicable law from
each jurisdiction provides differing rules that have the potential to affect the outcome of
the case significantly.” Hatteras Enters. Inc. v. Forsythe Cosmetic Grp., Ltd., No. 2:15CV-05887(ADS)(ARL), 2018 WL 1935984, at *6 (E.D.N.Y. Apr. 23, 2018) (quoting
Horton v. Greenwich Hosp., No. 12-CV-4436, 2014 WL 956468, at *2 n.1 (S.D.N.Y. Mar.
10, 2014)).

“If no actual conflict exists, and if New York is among the relevant

jurisdictions, the court may simply apply New York law.” Id. (quoting Licci ex rel. Licci
v. Lebanese Canadian Bank, SAL, 672 F.3d 155, 157 (2d Cir. 2012)).
Here, Pike contends that there is no actual conflict between New York and
Pennsylvania law that would impact the outcome of the fourth counterclaim. (Dkt. 68-4 at
19-21). Pike contends that the two main differences between a claim under PUTSA and
New York common law trade secret misappropriation, are the continuous use requirement
under New York law and the fact that misappropriation under PUTSA merely requires
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acquisition of the trade secret, whereas New York law requires use. (Dkt. 68-4 at 19-21).
Pike argues that neither of those aspects of a trade secret misappropriation claim are at
issue—in other words, there is no dispute that UCP continuously used the alleged trade
secrets and there is no dispute that Pike’s employee sent photographs to Tri-Krete that UCP
contends reflected trade secrets. (Id.). Thus, with no conflict that impacts the outcome of
the matter, New York law applies to the trade secret misappropriation claim, according to
Pike.
In response, UCP contends that Pike’s argument that the difference between
Pennsylvania and New York law regarding trade secret misappropriation claims are not
germane, is incorrect, but then it fails to meaningfully articulate how any difference
impacts the outcome here. (Dkt. 78-7 at 10-11). Pike is not disputing that under
Pennsylvania law the mere acquisition of a trade secret can constitute misappropriation—
its point is that here, there is no dispute that its employee not only took the subject
photographs, but it also shared the photographs with Tri-Krete—so if the photographs
reflected trade secret information that Pike wrongfully acquired, it would be liable under
either Pennsylvania or New York law.
Although Pike makes several arguments in support of its motion for summary
judgment as to the fourth counterclaim, the Court views the pivotal issue that resolves this
motion to be whether the alleged trade secret information claimed by UCP was, in fact,
secret. The law on this issue is the same under both Pennsylvania and New York law.
Specifically, under New York law, a trade secret is “any formula, pattern, device or
compilation of information which is used in one’s business, and which gives him an
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opportunity to obtain an advantage over competitors who do not know or use it.” Ashland
Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 407 (1993) (quotation and citation omitted). In
deciding whether that definition is satisfied, the following factors should be considered:
(1) the extent to which the information is known outside of [the] business;
(2) the extent to which it is known by employees and others involved in [the]
business; (3) the extent of measures taken by [the business] to guard the
secrecy of the information; (4) the value of the information to [the business]
and [its] competitors; (5) the amount of effort or money expended by [the
business] in developing the information; (6) the ease or difficulty with which
the information could be properly acquired or duplicated by others.
Id. (quoting Restatement of Torts § 757, comment b). Under Pennsylvania law, a trade
secret is defined as follows:
Information, including a formula, drawing, pattern, compilation including a
customer list, program, device, method, technique or process that:
(1) Derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use.
(2) Is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
12 Pa. Cons. Stat. Ann. § 5302. Thus, under the law of either jurisdiction, there must be
proof that steps are taken to keep the information secret.
Based on the undisputed facts, the Court concludes that no reasonable jury could
conclude that UCP took steps to maintain the secrecy of the information at issue so that
Scheg’s disclosure of photographs to Tri-Krete constituted a misappropriation.

In

evaluating whether a viable trade secret misappropriation claim has been stated, “[t]he most
important consideration is whether the information was kept secret. This requires that the
owner of a trade secret take reasonable measures to protect its secrecy.” EarthWeb, Inc. v.
Schlack, 71 F. Supp. 2d 299, 314 (S.D.N.Y. 1999) (citation omitted)
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acknowledges that it is “generally a question of fact” whether a trade secret is, in fact,
secret. Ashland, 82 N.Y.2d at 407. However, here, the undisputed facts establish that UCP
knew Scheg took photographs during his visits to the facility (Dkt. 68-3 at ¶¶ 44 & 47; Dkt.
78 (no response)); UCP took no steps to restrict Scheg’s access or use of those photographs
(see Dkt. 68-1 at ¶ 5); and in fact a year after his visits Faust thanked Scheg for forwarding
photographs that he had taken during his visits (in an email that was copied to Tri-Krete)
(Dkt. 69-6).9 In fact, UCP cites to no language in the MSA or any other document that
restricted Scheg’s disclosure of the photographs that it knew he was creating during his
visits, and UCP’s counsel acknowledged during oral argument that there was no fiduciary
relationship between the parties nor any contractual restrictions on Pike’s disclosure of the
information.
UCP argues that while it knew Scheg took the photographs, it did not consent to
their disclosure to Tri-Krete. (Dkt. 78-7 at 14). But this misses the relevant point—because
UCP indisputably failed to maintain the secrecy of its alleged trade secrets by permitting
Scheg access with no restrictions on his subsequent dissemination of the information, UCP
cannot maintain a claim for misappropriation of trade secrets—even if the photographs
reflected trade secret information, which the Court does not resolve for purposes of this
motion. See Broker Genius, Inc. v. Zalta, 280 F. Supp. 3d 495, 514 (S.D.N.Y. 2017) (“[i]f
an individual discloses his trade secret to others who are under no obligation to protect the
confidentiality of the information, or otherwise publicly discloses the secret, his property

9

Despite the submission of two affidavits from Faust in connection with the pending
motions, nowhere does he address this email. (See Dkt. 65-6; Dkt. 78-1).
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right is extinguished.” (quotation and citation omitted)).

Under the circumstances,

summary judgment is warranted in favor of Pike on the fourth counterclaim.
C.

The Fifth Counterclaim

UCP’s fifth counterclaim alleges tortious interference with prospective contractual
relationship.

Specifically, UCP alleges that Pike and Scheg “intentionally used the

photographs and/or videos taken of [UCP’s] process to interfere with [UCP’s] continued
work on the Project for Buildings ‘C’ and ‘D’” by providing the photographs to UCP’s
competitor which “frustrated [UCP’s] business relationship with Marist and terminated
[UCP’s] continued status on the Project, which resulted in substantial economic harm to
[UCP] and the loss of work for Buildings ‘C’ and ‘D’. . . .” (Dkt. 29 at ¶¶ 222-224).
As an initial matter, Pike contends that there is no meaningful difference between
New York and Pennsylvania law with respect to a claim for tortious interference with
prospective contractual relationship (Dkt. 68-4 at 27), and UCP does not dispute that point
(see Dkt. 78-7 at 11, 15-17). Indeed, the law is the same in both jurisdictions with respect
to this claim, see Brotech Corp. v. White Eagle Int’l Techs. Grp., Inc., No. CIV.A. 03-232,
2003 WL 22797730, at *8 n. 1 (E.D. Pa. Nov. 18, 2003), and accordingly New York law
will be utilized to evaluate UCP’s fifth counterclaim.
Under New York law, “[t]he four elements of this cause of action are ‘(1) a
prospective contractual relation or business with a third party; (2) defendants’ interference
with that relation; (3) [that] defendant acted with the sole purpose of harming plaintiff or
used dishonest, unfair or improper means; and (4) injury to the plaintiff.’” FaZe Clan Inc.
v. Tenney, 467 F. Supp. 3d 180, 193 (S.D.N.Y. 2020) (quotation and citation omitted).
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“Tortious interference with business relations also ‘requires an allegation that plaintiff
would have entered into an economic relationship but for the defendant’s wrongful
conduct.” Downtown Music Publ’g LLC v. Peloton Interactive, Inc., 436 F. Supp. 3d 754,
766 (S.D.N.Y. 2020) (quoting Premium Mortg. Corp. v. Equifax, Inc., 583 F.3d 103, 107
(2d Cir. 2009)). “To demonstrate ‘but for’ causation, a plaintiff must show that any breach
would not have occurred but for the activities of the defendant.” Actava TV, Inc. v. Joint
Stock Co. “Channel One Russia Worldwide”, 412 F. Supp. 3d 338, 351 (S.D.N.Y. 2019).
For the same reasons the Court concluded that summary judgment is warranted in
favor of Pike on the misappropriation counterclaim, it similarly concludes that no
reasonable jury could find that UCP had satisfied the third element of a tortious interference
with prospective economic advantage claim—requiring “a plaintiff to show, ‘as a general
rule,’ that ‘the defendant’s conduct . . . amount[ed] to a crime or an independent tort.’”
Republic of Turkey v. Christie’s Inc., 425 F. Supp. 3d 204, 220 (S.D.N.Y. 2019) (quoting
16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 262 (2d Cir. 2015)). “‘When a defendant has
acted with a permissible purpose, such as ‘normal economic self-interest,’ wrongful means
have not been shown, even if the defendant was ‘indifferent to the [plaintiff’s] fate.’” Id.
(quoting 16 Case Duse, 791 F.3d at 262).
In addition, UCP’s fifth counterclaim fails due to a lack of causal connection
between the alleged interference and the alleged injury. Pike argues in its motion that TriKrete won the bid for Phase II before Pike shared the photographs with it, and thus there
is no issue of fact that Pike’s sharing of the photographs did not result in UCP’s failure to
successfully bid on Phase II. (Dkt. 68-4 at 30). In response to this argument, which appears
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supported by the undisputed facts in the record, UCP argues in a conclusory manner that it
can be reasonably inferred that Pike’s actions damaged UCP. (Dkt. 78-7 at 17). UCP cites
no evidence in support of this argument, and indeed, the undisputed facts establish
otherwise. UCP cannot survive summary judgment based on conjecture and speculation.
Under the circumstances, summary judgment is warranted in favor of Pike on the fifth
counterclaim.
CONCLUSION
For the foregoing reasons, UCP’s motion to strike Mr. Merkhofer’s expert report is
denied, UCP’s motion for summary judgment is denied except as to Pike’s fifth cause of
action seeking to declare UCP’s mechanic’s lien invalid which is dismissed because of the
pending state court action on the same issue, and Pike’s motion for partial summary
judgment in its favor on UCP’s fourth and fifth counterclaims is granted.
SO ORDERED.

_____________________________
ELIZABETH A. WOLFORD
United States District Judge
DATED:

March 10, 2021
Rochester, New York

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