Cohen v. Avanade, Inc.
2012 U.S. Dist. LEXIS 83619
S.D.N.Y.2012Background
- Avanade is a Washington corporation; Cohen joined as Business Development Executive in Application Management in Feb 2009 based on recruiter representations by McCafferty and Virani.
- Offer Letter May 5, 2009 set base salary $120,000 and eligibility for incentive/pay under the Plan, which was described as subject to change and not a contract of employment.
- The Plan expressly reserves Avanade’s right to modify/suspend/terminate the Plan at its sole discretion; the Plan and its acknowledgement state they are not contracts and do not promise specific treatment.
- Cohen allegedly relied on representations about Avanade’s application management capabilities; he sought and pursued two multi-million dollar deals Group M and Mediabrands.
- Cohen’s employment ended September 16, 2010.
- Cohen filed suit in 2011 (state court, later removed); Defendants moved to dismiss under Rule 12(b)(6); Judge Furman granted dismissal, finding the claims fail as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of contract is cognizable given Plan is not a contract | Cohen argues the Plan is an express contract. | Plan is not a contract; offer letter says no contract; discretionary language defeats enforceability. | Breach of contract claim dismissed. |
| Whether Cohen pleads fraudulent inducement with Rule 9(b) specificity | Statements about Avanade's capabilities induced Cohen to join. | Statements were opinions/subjective; no knowledge of falsity at recruitment; lacks 9(b) specifics. | Fraudulent inducement claim dismissed. |
| Whether a non-recognized tort can support a claim of malicious conduct | Defendants acted maliciously in breaching contract. | Bad faith tort not recognized; contract claim cannot be transformed into tort. | Dismissed; no independent tort recognized. |
| Whether harm to professional reputation states a standalone claim | Avanade’s failures harmed Cohen’s reputation. | Reputation injury cannot be an independent tort without defamation; Singer inapplicable here. | Dismissed; not actionable as standalone injury. |
| Whether negligence and negligent misrepresentation survive given contract and workers’ comp exclusivity | Defendants owed duty of accurate information. | No independent duty; workers’ compensation exclusivity bars tort claims arising from employment. | Both negligence and negligent misrepresentation claims dismissed. |
Key Cases Cited
- Express Indus., and Terminal Corp. v. N.Y. State Dep’t of Transp., 93 N.Y.2d 584 (N.Y. 1999) (formation of contract; mutual assent must be definite)
- Terwilliger v. Terwilliger, 206 F.3d 243 (2d Cir. 2000) (contract interpretation: intent and unequivocal language govern)
- Broder v. Cablevision Sys. Corp., 418 F.3d 187 (2d Cir. 2005) (contract terms and integration; obligations limited to stated terms)
- Nechis v. Oxford Health Plans, Inc., 421 F.3d 96 (2d Cir. 2005) (incorporation by reference; contract integration in discovery)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (claims must be plausible, not merely possible)
- Iqbal v. Ashcroft, 556 U.S. 662 (U.S. 2009) (pleading standard requires plausible entitlement to relief)
- Acito v. IMCERA Grp., Inc., 47 F.3d 47 (2d Cir. 1995) (fraud pleading requires strong inference of intent)
- Lerner v. Fleet Bank, N.A., 459 F.3d 273 (2d Cir. 2006) (Rule 9(b) requires specificity: who, what, where, when, and why)
- Johnson v. Nextel Commc’ns, Inc., 660 F.3d 131 (2d Cir. 2011) (NY law contract remedies; failure to meet conditions defeats claim)
- Rombach v. Chang, 355 F.3d 164 (2d Cir. 2004) (Rule 9(b) specificity requirement for fraud claims)
- Wall v. CSX Transp., Inc., 471 F.3d 410 (2d Cir. 2006) (fraud-like inducement collateral to contract valid)
- Kwon v. Yun, 606 F.Supp.2d 344 (S.D.N.Y. 2009) (negligent misrepresentation requires special relationship)
- Hydro Investors, Inc. v. Trafalgar Power Inc., 227 F.3d 8 (2d Cir. 2000) (negligent misrepresentation requires duty from special relationship)
- Stewart v. Jackson & Nash, 976 F.2d 86 (2d Cir. 1992) (fiduciary duty prerequisite for negligent misrepresentation)
- Namad v. Salomon Inc., 74 N.Y.2d 751 (N.Y. 1989) (NY law: discretionary bonus not contractual entitlement)
- Singer v. Jefferies & Co., Inc., 160 A.D.2d 216 (App.Div. 1st Dep’t 1990) (Singer discussed recovery for reputation-related injury but not as catchall)