449 F.Supp.3d 385
S.D.N.Y.2020Background
- Travelex subcontracted airport currency-exchange operations to Puente Enterprises, Inc. (PEI), an ACDBE, under earlier agreements; Travelex led a 2014 DFW RFP response promising to meet a 35% ACDBE goal and projected PEI to earn a large share of EBITDA.
- Travelex submitted a proposal (with a placeholder instead of a negotiated operating agreement); DFW awarded the concession to Travelex in Feb. 2014 but the parties never finalized a new operating agreement replacing their 2009 terms.
- Disputes arose over ownership of funds in PEI’s Frost bank account, proposed compensation changes, alleged erroneous charges, and Travelex’s failure to hire an auditor; negotiations stalled and DFW suspended PEI from solicitations.
- In early 2018 Travelex terminated its subcontract with PEI, removed PEI employees from airport locations, and Travelex/CEO Hewitt made statements to DFW that PEI alleges were defamatory and caused business harm.
- PEI asserted counterclaims for breach, fraud, tortious interference, and defamation (the latter against Hewitt). The court had earlier dismissed PEI’s fraud and tortious-interference claims without prejudice; PEI sought leave to amend those claims and to add fraudulent-inducement claims.
- The district court denied leave to amend as futile: PEI’s proposed fraud/fraudulent-inducement claims failed to plead a material false statement, fraudulent intent, or reasonable reliance with the particularity required by Rule 9(b); the tortious-interference claim failed because PEI did not plausibly allege wrongful means or direct interference with its independent relations.
Issues
| Issue | Plaintiff's Argument (PEI) | Defendant's Argument (Travelex) | Held |
|---|---|---|---|
| Fraud (amend counterclaim) | Travelex promised PEI a higher concession fee (linked to meeting 35% ACDBE goal) to induce collaboration on the RFP but never intended to honor it; PEI relied and was damaged | PEI’s allegations conflate “ACDBE goal” with a contractual concession fee, lack specificity, fail to show falsity at time of statement, fraudulent intent, or reasonable reliance | Denied — amendment futile: no adequately pleaded material misrepresentation, no strong inference of intent, and no plausible reasonable reliance under Rule 9(b) and New York fraud law |
| Fraudulent inducement (new claim) | Travelex misrepresented present intent to grant a 35% concession fee to induce PEI into the proposal | Same as for fraud: deficient pleadings and duplicative of fraud theory | Denied — duplicative/fails for same reasons as fraud claim |
| Tortious interference with business relations | Travelex’s statements and conduct (including hiring PEI’s employees and communications to DFW) interfered with PEI’s relationships with DFW and PEI’s employees, causing lost contracts | PEI’s Travelex-related DFW work derived from Travelex’s concession rights (not PEI’s independent DFW rights); alleged interference was economic self-interest or tied to defamation claim (already distinct) | Denied — PEI did not allege wrongful means or criminal/independently tortious conduct toward third parties sufficient for a tortious-interference claim; hiring employees was permissible economic conduct |
Key Cases Cited
- Aetna Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566 (2d Cir. 2005) (futility inquiry for amendment assessed under Rule 12(b)(6) standards)
- Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160 (2d Cir. 2015) (Rule 15 and policy favoring resolution on merits)
- McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184 (2d Cir. 2007) (factors permitting denial of leave to amend)
- Crigger v. Fahnestock & Co., Inc., 443 F.3d 230 (2d Cir. 2006) (elements of New York common-law fraud)
- Rombach v. Chang, 355 F.3d 164 (2d Cir. 2004) (Rule 9(b) heightened pleading requirements for fraud)
- Kalnit v. Eichler, 264 F.3d 131 (2d Cir. 2001) (circumstantial proof of fraudulent intent: motive and opportunity)
- Acito v. IMCERA Group, Inc., 47 F.3d 47 (2d Cir. 1995) (strong inference standard for intent under Rule 9(b))
- Murray v. Xerox Corp., 811 F.2d 118 (2d Cir. 1987) (promises of future action are not fraud absent intent not to perform when made)
- 16 Casa Duse, LLC v. Merkin, 791 F.3d 247 (2d Cir. 2015) (tortious-interference requires wrongful means or independent tort; high bar for showing wrongful purpose)
- Pasternack v. Lab. Corp. of Am. Holdings, 59 N.E.3d 485 (N.Y. 2016) (a plaintiff cannot rely on a third party’s reliance to satisfy the reliance element of fraud)