International Technologies Marketing, Inc. v. Verint Systems, Ltd.
157 F. Supp. 3d 352
| S.D.N.Y. | 2016Background
- ITM (consultant) and Verint (buyer) executed an Initial Agreement (Feb 22, 2006) and two one‑page amendments (Sept 11, 2006; Dec 20, 2006) whereby ITM agreed to assist Verint with Digitro and Suntech; compensation was limited to specified commissions and the Initial Agreement expired after 12 months (Feb 21, 2007).
- The December Amendment added obligations for ITM to use “best commercial efforts” to assist Verint in a Suntech purchase and promised 4% at closing / 3% post‑closing “in the event” Verint completed the purchase; it also stated that all prior terms continued to apply.
- Negotiations between Verint and Suntech proceeded in late 2006 into 2007; Verint publicly pursued and closed a different acquisition in Feb 2007 and told ITM the Suntech deal was "off" in Sept 2007; ITM continued some limited contact through Sept 2007 but alleged significant earlier performance and expenses (~$350,000).
- Verint later acquired Suntech in August 2011 (about four years after the contract expired). ITM sued (diversity) for breach of contract, breach of implied contract, breach of implied covenant, unjust enrichment/quantum meruit, and procuring‑cause theories.
- The district court considered the written contracts and dismissed all claims under Rule 12(b)(6): it held the December Amendment unambiguously incorporated the Initial Agreement’s Feb 21, 2007 expiration, so no express contractual obligation to pay for a 2011 acquisition; related quasi‑contract and implied‑duty claims failed for lack of plausible post‑expiration facts or were duplicative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of express contract — does the December Amendment obligate Verint to pay for a 2011 purchase? | Dec. Amendment’s conditional payment language (“in the event [Verint] completes the Purchase”) shows parties intended payment upon any future purchase, regardless of Initial Agreement expiration. | December Amendment expressly incorporates “all terms and conditions” of the Initial Agreement, including the Feb 21, 2007 expiration; therefore no contractual duty in 2011. | Court: contract is unambiguous; expiration applies; dismissal of express breach claim without leave to replead. |
| Implied‑in‑fact contract — did post‑expiration conduct create a continuing contract through 2011? | Parties’ continued dealings and ITM’s continued services after Feb–Sept 2007 imply a renewed contract on the same terms that lasted through the 2011 closing. | The alleged post‑expiration conduct ended by Sept 2007; no plausible facts show a contract continuing to 2011. | Court: allegations do not plausibly show an implied contract surviving to 2011; claim dismissed with leave to replead. |
| Prevention/bad‑faith delay (prevention doctrine & procuring cause) — did Verint delay to avoid paying commission? | Verint intentionally delayed or abandoned the transaction in 2007 to escape payment and later completed the deal in 2011 without ITM to avoid commissions. | No plausible factual allegations of bad faith—Verint pursued other acquisitions and negotiations ceased by Sept 2007; delay alone is insufficient. | Court: plaintiff’s allegations are conclusory; fails to show bad‑faith prevention; claim dismissed with leave to replead. |
| Quasi‑contract / unjust enrichment and implied covenant — can ITM recover despite an express contract that covers the subject? | Even if written contract limits recovery, equity requires compensation for benefits Verint later obtained from ITM’s work. | The express contract (and its risk allocation clauses) governs and precludes quasi‑contract recovery; implied covenant claims duplicate contract claims or fail absent a contract in effect. | Court: unjust enrichment and quantum meruit barred by the written contract; implied covenant claim duplicative or unavailing post‑expiration — unjust enrichment dismissed with leave to replead limited aspects; implied covenant dismissed without leave. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard—legal conclusions insufficient)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Greenfield v. Philles Records, Inc., 98 N.Y.2d 562 (2002) (written agreement is best evidence of parties’ intent)
- W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157 (1991) (ambiguity is a question of law; extrinsic evidence only where ambiguous)
- Sibbald v. Bethlehem Iron Co., 83 N.Y. 378 (1881) (broker earns commission only if bringing parties to agreement within employment term)
- EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11 (2005) (existence of express contract generally precludes quasi‑contract recovery)