Case Information
*1 R ICHARD J. S ULLIVAN , District Judge:
Plaintiff Oliver Wyman, Inc. brings this media, information services and education sectors.” (FAC ¶ 2.) [1] According to suit against Defendants John Eielson and Alastair Adam, its former partners, alleging Plaintiff, OCC Boston’s success depended claims for fraudulent inducement, fraud, on Defendants’ “personal reputations and breach of contract, violation of Chapter 93A relationships with clients.” ( Id. ) In early of the Massachusetts General Laws, and 2014, Defendants, acting as OCC Boston’s several other common law causes of action. co-CEOs, approached Plaintiff, “a leading (Doc. No. 8 (“FAC” or “First Amended Complaint”).) Now before the Court is *2 global management consulting firm” that is senior executives their client relationships headquartered in New York, about the and their expectations for revenue growth. possibility of acquiring OCC Boston. ( Id. ¶¶ ( Id. ¶¶ 29–32.) At one point, Adam told 3, 9.) According to the Amended Plaintiff’s chief strategy officer that he was Complaint, Plaintiff’s interest stemmed from “excited about the opportunity to work and OCC Boston’s “stable, deep, long-term build together” at Oliver Wyman. ( Id. ¶ 33.) relationships with clients” in both the According to Plaintiff, the revenue “information services and media sectors.”
growth for OCC Boston projected by ( Id. ¶ 3.) Defendants would not have been possible In the months that followed, the parties without Defendants’ continued engagement negotiated a possible acquisition of OCC as its partners. ( Id. ¶¶ 23, 58.) Plaintiff Boston by Plaintiff in face-to-face meetings avers that the “primary selling points” for that took place in New York and Boston and Plaintiff were Defendants’ representations over several telephone calls and emails. ( Id. that they intended to stay with the business ¶ 28.) On March 25, 2014, Defendants sent after the sale and revenue projections Plaintiff a “blind profile” of OCC Boston, in predicated on their continued presence. ( Id. which Defendants projected that OCC ¶ 27.) Plaintiff avers that it was particularly Boston would continue to grow under attracted to Defendants’ “strong presence Plaintiff’s control. ( Id. ¶¶ 15–16.) and enduring relationships” within the According to Plaintiff, the blind profile’s information services industry, in which growth projections were premised on OCC Plaintiff wished to expand its practice and Boston’s strong relationships across the acquire relationships. ( Id. ¶ 30.) information-services industry and the
On October 29, 2014, the parties entered “cumulative relevant experience” of its into an Asset Purchase Agreement, whereby partners, including Defendants. ( Id. ¶ 16 . ) Plaintiff agreed to purchase OCC Boston on After the blind profile “piqued” December 1, 2014, for up to $16,500,000. Plaintiff’s interest in purchasing OCC (APA ¶¶ 3.1(a), 3.2(a).) Plaintiff also Boston, Plaintiff and OCC Boston executed agreed to employ OCC Boston’s former non-disclosure agreements, pursuant to partners, including Defendants, pursuant to a which OCC Boston’s financial advisors sent series of contracts, including the Plaintiff a confidential memorandum about Employment Agreements and Non- the company on April 3, 2014. ( Id. ¶ 19.) Solicitation Agreement. (FAC ¶¶ 4, 41; The confidential memorandum restated APA ¶ 10.6(a).) In the Employment many of the blind profile’s claims regarding Agreement, Defendants agreed to “devote OCC Boston’s growth prospects and future substantially all of” their “professional time, plans, and it similarly underscored OCC attention and energies to” Plaintiff’s Boston’s “stable, deep, long-term business. (EA ¶ 7(a)). Both the Asset relationships” and Defendants’ combined Purchase Agreement and Non-Solicitation forty years’ experience advising companies. Agreement included non-compete and non- ( Id. ¶¶ 19–22.) In fact, the confidential solicitation covenants. (APA ¶¶ 6.5; NSA ¶ memorandum expressly represented that 2.) OCC Boston’s “[p]artners want to stay on,
Although the Employment Agreement within the firm and continue to scale it up.” covered a four-year term, the parties’ ( Id. ¶ 24.) During the parties’ negotiations, agreements also included several provisions Defendants also discussed with Plaintiff’s *3 that addressed the possibility that On April 21, 2015, Defendants notified Defendants would leave Oliver Wyman’s Plaintiff that they were resigning, and on employment prior to the end of their term. May 8, 2015 Defendants left Oliver The Employment Agreement included Wyman’s employment. ( Id. ¶ 5.) Plaintiff remedies in the event of Plaintiffs’ alleges that, in an effort to conceal their resignation without “Good Reason.” (EA ¶¶ scheme, Defendants falsely claimed in their 5(d) 6, 6(a).) Relatedly, the Asset Purchase exit interviews that they had decided to Agreement stipulated that former OCC leave between April 18 through April 20, Partners, including Defendants, would each 2015. ( Id. ¶ 50.) According to Plaintiff, be awarded up to $500,000 in retention Defendants’ departure significantly lowered bonuses at the start of their third and fourth the value of the OCC Boston business that it years if they remained employed by purchased. ( Id. ¶ 62.) Plaintiff. (APA ¶ 10.10.) On the other
B. Procedural History hand, the Asset Purchase Agreement also provided that if any former OCC Boston
On June 16, 2015, Plaintiff, a Delaware Partner left Oliver Wyman before the end of corporation whose principal place of the four-year term, Plaintiff’s obligation to business is New York, filed suit against pay the remainder of that partner’s share of Defendants, who are Massachusetts citizens, the purchase price would be deferred until in the Supreme Court of the State of New December 2024, with interest accruing at a York, New York County. (FAC ¶¶ 9–11; rate of 0.5% per annum. (APA, Ex. E § Doc. No. 1-1.) On July 9, 2015, Defendants 1(a).) removed the case to this Court pursuant to 28 U.S.C. §§ 1332, 1441, 1446. (Doc. No. Plaintiff alleges that both before and 1.) On July 14, 2015, Plaintiff filed the First after joining Oliver Wyman’s employment, Amended Complaint, which Defendants Defendants searched for opportunities to moved to dismiss on September 11, 2015. exit the consulting industry, cash out from (Doc. No. 18.) The motion was fully briefed the sale of their business, and become active
on October 27, 2015. (Doc. No. 24.) investors. (FAC ¶¶ 44–45.) Plaintiff points to a January 25, 2015 email exchange
II. C HOICE OF L AW between Defendants in which they contemplated leaving Plaintiff only weeks
Before addressing the substance of after having consummated the sale of OCC Plaintiff’s claims, the Court must determine Boston. ( Id. ¶ 47.) Plaintiff further alleges whether New York or Massachusetts law that Defendants, having “every intention to applies. Because the Court’s jurisdiction is exit the consulting industry,” “did not work premised on the parties’ diversity, the Court diligently” at Oliver Wyman and “did not “must look to the choice of law rules of the exercise their best efforts” to grow Oliver forum state,” which is New York. Curley v. Wyman’s business. ( Id. ¶ 49.) Specifically, AMR Corp. , 153 F.3d 5, 12 (2d Cir. 1998). Plaintiff asserts that Defendants’ productivity from January through April
With respect to Plaintiff’s third, fourth, 2015 was “dramatically lower” than that of and fifth claims for breach of contract, all other former OCC Boston partners who relevant agreements – the Asset Purchase joined Oliver Wyman. ( Id. ) In an email to a Agreement, the Employment Agreement, third party in February 2015, Defendant and the Non-Solicitation Agreement – John Eielson in fact admitted, “I don’t really contain identical New York choice-of-law work anymore.” ( Id. ) clauses. See APA ¶ 13.10; EA ¶ 12; NSA ¶ *4 9. “New York courts will generally ‘enforce agreements do not purport to govern tort a choice-of-law clause so long as the chosen claims ( see APA ¶ 13.10; EA ¶ 12; NSA ¶ law bears a reasonable relationship to the 9), the Court must engage in a separate parties or the transaction.’” Ergowerx Int’l, choice-of-law analysis for Plaintiff’s fraud LLC v. Maxell Corp. of Am. , 18 F. Supp. 3d claims. See Valley Juice Ltd., Inc. v. Evian 430, 439 n.5 (S.D.N.Y. 2014) (quoting Waters of France, Inc. , 87 F.3d 604, 611 (2d Welsbach Elec. Corp. v. MasTec N. Am., Cir. 1996). Under New York law, “the first Inc. , 7 N.Y.3d 624, 629 (2006)). Since question to resolve in determining whether Plaintiff’s principal place of business is New to undertake a choice of law analysis is York, the parties allegedly held several face- whether there is an actual conflict of laws.” to-face meetings in New York to negotiate Curley , 153 F.3d at 12. A conflict exists their agreements (FAC ¶¶ 7, 28), and neither “[w]here the applicable law from each party disputes application of New York law jurisdiction provides different substantive with respect to the third, fourth, and fifth rules.” Id. Although the elements of fraud causes of action, the Court concludes that are similar under both New York and New York law governs the parties’ contract Massachusetts law, “under New York law claims. the allegations must be proven by clear and
convincing evidence, not merely by a Furthermore, the parties have relied preponderance as under Massachusetts law,” exclusively on New York law in their briefs a difference that is “enough to establish that addressing the sufficiency of Plaintiff’s a conflict exists,” even on a Rule 12(b)(6) sixth, seventh, eighth, ninth, and eleventh motion. Thomas H. Lee Equity Fund V, L.P. claims for breach of fiduciary duty, aiding v. Mayer Brown, Rowe & Maw LLP , 612 F. and abetting a breach of fiduciary duty, Supp. 2d 267, 283 (S.D.N.Y. 2009) (internal tortious interference with existing and quotation marks omitted). Given this prospective contractual and business conflict, the Court must proceed to the relationships, breach of the implied covenant second step in New York’s choice of law of good faith and fair dealing, and unjust analysis for tort cases and apply the law of enrichment. Accordingly, the parties have the jurisdiction that has the greatest interest “impliedly manifested their acquiescence to in the litigation. Curley , 153 F.3d at 12. New York law controlling” those disputes. DER Travel Servs., Inc. v. Dream Tours & “Under the interest analysis test, torts are Adventures, Inc. , No. 99-cv-2231 (HBP), divided into two types, those involving the 2005 WL 2848939, at *6 (S.D.N.Y. Oct. 28, appropriate standards of conduct . . . and 2005) (collecting authorities). And since those that relate to allocating losses that Plaintiff’s tenth cause of action relates to a result from admittedly tortious conduct.” specific provision of the Massachusetts GlobalNet Financial.Com, Inc. v. Frank General Laws, there is no dispute that this Crystal & Co. , 449 F.3d 377, 384 (2d Cir. claim, if it is to proceed at all, would be 2006) (internal quotation marks omitted). governed by Massachusetts law. For conduct-regulating rules, “the law of the
jurisdiction where the tort occurred will What the parties do dispute, however, is generally apply because that jurisdiction has whether New York or Massachusetts law the greatest interest in regulating behavior should govern Plaintiff’s first and second within its borders.” Id. In a fraud claim, causes of action for fraud and fraudulent “the locus of the tort is generally deemed to inducement. ( Compare Def. Br. 8–9, with be the place where the injury was inflicted, Opp’n 16–17.) Because the choice-of-law rather than where the fraudulent act provisions contained in the parties’ *5 originated.” In re Thelen LLP , 736 F.3d 45, 49 (2d Cir. 2013) (“ Licci II ”) for the 213, 220 (2d Cir. 2013); accord Sack v. proposition that the Court should apply the Low , 478 F.2d 360, 366 (2d Cir. 1973) (“[A] law of Massachusetts, since several of the cause of action for fraud arises where the alleged misrepresentations and omissions loss is sustained and that loss from fraud is originated in that state. (Opp’n 16–17.) But deemed to be suffered where its economic Plaintiff’s reliance on the Licci decisions is impact is felt, normally the plaintiff's misplaced. In Licci , the Second Circuit residence.”) (Friendly, J.). Accordingly, applied New York law to a negligence suit “[u]nder New York conflict of law brought against a New York-based bank for principles, fraud claims are governed by the providing wire transfer services to terrorist state in which the injury is deemed to have organizations that caused plaintiffs’ injuries occurred, which is usually where the in Israel, largely because New York was the plaintiff is located.” Nat’l W. Life Ins. Co. v. site of the banks’ allegedly wrongful Merrill Lynch, Pierce, Fenner & Smith, Inc. , conduct. See Licci II , 739 F.3d at 50–51. 89 F. App’x 287, 288 (2d Cir. 2004); Nevertheless, the Second Circuit instructed Odyssey Re (London) Ltd. v. Stirling Cooke courts to take a “‘flexible approach’ that Brown Holdings Ltd. , 85 F. Supp. 2d 282, aims to give effect to the law of the 292 (S.D.N.Y. 2000), aff’d , 2 F. App’x 109 jurisdiction with ‘the greatest concern with (2d Cir. 2001). the specific issue raised in the litigation.’”
Benefield v. Pfizer Inc. , 103 F. Supp. 3d 449, Here, Plaintiff’s principal place of 459 (S.D.N.Y. 2015) (quoting Licci I , 672 business is New York, and the complaint F.3d at 158). alleges that Plaintiff’s injuries occurred in New York. (FAC ¶¶ 7, 13; see also NSA ¶ Here, Plaintiff itself acknowledges that 9 (acknowledging that Plaintiff’s leadership several of the alleged misrepresentations and team is located in New York).) While omissions occurred during face-to-face Plaintiff argues in its opposition brief that it meetings that took place in New York. suffered injury in Massachusetts because (FAC ¶¶ 13, 28.) Moreover, application of OCC Boston’s assets, which Plaintiff now New York law “accords with the reasonable owns, are located there (Opp’n 17), the expectation of both parties.” Benefield , 103 Court finds Plaintiff’s argument to be F. Supp. 3d at 459. Whereas Licci involved unpersuasive, since the relevant inquiry is intervening criminal acts by third parties, where Plaintiff suffered the “most severe who used defendant’s banking services to business injury,” which was in its principal fund illegal terrorist activities in a foreign place of business, New York. See Deere & country, Defendants in this suit allegedly Co. v. MTD Prod., Inc. , No. 00-cv-5936 intended their actions to cause injury to (LMM), 2002 WL 1837402, at *4 (S.D.N.Y. Plaintiff in New York. ( See FAC ¶ 13.) Aug. 12, 2002) (“Plaintiff’s injury occurs Thus, unlike in Licci , “the location of the where its principal place of business is alleged injury here was not a mere fortuity, located because a plaintiff suffers the most but the result of Defendants’ deliberate severe business injury in that state.”). efforts . . . .” Benefield , 103 F. Supp. 3d at
459. Accordingly, the Court applies the law Notwithstanding this clear authority, of New York, the state of Plaintiff’s Plaintiff points to the Second Circuit’s residence, to Plaintiff’s fraud-based claims, decisions in Licci ex rel. Licci v. Lebanese a conclusion that is consistent with the Canadian Bank, SAL , 672 F.3d 155, 158 (2d approach taken by a majority of district Cir. 2012) (“ Licci I ”) and Licci ex rel. Licci courts to have considered this issue after v. Lebanese Canadian Bank, SAL , 739 F.3d *6 Licci . See In re: Petrobras Sec. Litig. , 152 Commc’ns , 493 F.3d at 98. However, that F. Supp. 3d 186, 196–97 (S.D.N.Y. 2016) tenet “is inapplicable to legal conclusions.” (fact that plaintiff suffered loss from Iqbal , 556 U.S. at 678. Thus, a pleading that defendants’ alleged torts in state of offers only “labels and conclusions” or “a plaintiff’s residence “weighs heavily in formulaic recitation of the elements of a favor of applying” that state’s law); Refco cause of action will not do.” Twombly , 550 Grp. Ltd., LLC v. Cantor Fitzgerald, L.P. , U.S. at 555. If the plaintiff “ha[s] not No. 13-cv-1654 (RA), 2014 WL 2610608, at nudged [its] claims across the line from *41 (S.D.N.Y. June 10, 2014) (same); conceivable to plausible, [his] complaint Manney v. Reichert , No. 13-cv-4413 (SJF) must be dismissed.” Id . at 570. (GRB), 2014 WL 1315382, at *8–9
The Court will address each of (E.D.N.Y. Mar. 28, 2014) (same), adhered Plaintiff’s claims in turn. to on reconsideration , No. 13-cv-4413 (SJF) (GRB), 2014 WL 4805046 (E.D.N.Y. Sept.
A. Fraud and Fraudulent Inducement 26, 2014); but see Lyman Commerce Sols., Inc. v. Lung , No. 12-cv-4398, 2014 WL
To state a claim for fraud under New 476307 (TPG), at *3 (S.D.N.Y. Feb. 6, York Law, a plaintiff must sufficiently plead 2014). the following elements: “(1) a material misrepresentation or omission of fact (2)
III. S UFFICIENCY OF THE P LEADINGS made by defendant with knowledge of its falsity (3) and intent to defraud; (4)
Having resolved the necessary choice of reasonable reliance on the part of the law issues, the Court now addresses the plaintiff; and (5) resulting damage to the sufficiency of Plaintiff’s pleadings. To plaintiff.” Crigger v. Fahnestock & Co. , survive a motion to dismiss pursuant to Rule 443 F.3d 230, 234 (2d Cir. 2006). 12(b)(6) of the Federal Rules of Civil Fraudulent inducement is a “type of fraud,” Procedure, a complaint must “provide the which “‘arises from a promisor’s successful grounds upon which [the] claim rests.” attempts to induce a promisee to enter into a ATSI Commc’ns, Inc. v. Shaar Fund, Ltd. , contractual relationship despite the fact that 493 F.3d 87, 98 (2d Cir. 2007); see also Fed. the promisor harbored an undisclosed R. Civ. P. 8(a)(2) (“A pleading that states a intention not to perform under the claim for relief must contain . . . a short and contract.’” Barrie House Coffee Co. v. plain statement of the claim showing that the Teampac, LLC , No. 13-cv-8230 (VB), 2016 pleader is entitled to relief . . . .”). To meet WL 3645199, at *7 (S.D.N.Y. June 30, this standard, plaintiff must allege “enough 2016) (quoting Neckles Builders, Inc. v. facts to state a claim to relief that is Turner , 117 A.D.3d 923, 925, (2d Dep’t plausible on its face.” Bell Atl. Corp. v. 2014)). A cause of action for fraudulent Twombly , 550 U.S. 544, 570 (2007). “A inducement must therefore “satisfy the same claim has facial plausibility when the elements” as a claim for fraud. Comolli v. plaintiff pleads factual content that allows Huntington Learning Ctrs., Inc. , 117 F. the court to draw the reasonable inference Supp. 3d 343, 349 (S.D.N.Y. 2015). Claims that the defendant is liable for the for fraud and fraudulent inducement are misconduct alleged.” Ashcroft v. Iqbal , 556 subject to the heightened pleading standards U.S. 662, 678 (2009). In reviewing a Rule of Rule 9(b) of the Federal Rules of Civil 12(b)(6) motion to dismiss, a court must Procedure, which requires “a party [to] state accept as true all factual allegations in the with particularity the circumstances complaint and draw all reasonable constituting fraud or mistake.” Fed. R. Civ. inferences in favor of the plaintiff. ATSI *7 P. 9(b); see also Lerner v. Fleet Bank, N.A. , contract damages,” Bridgestone/Firestone , 459 F.3d 273, 290 (2d Cir. 2006) (“[T]he 98 F.3d at 20 (internal citations omitted). complaint must: (1) specify the statements
While Plaintiff alleges that Defendants that the plaintiff contends were fraudulent, acted as their fiduciaries after starting (2) identify the speaker, (3) state where and employment (FAC ¶¶ 92–94), Plaintiff has when the statements were made, and (4) not plausibly alleged that any separate legal explain why the statements were duty existed at the time the parties were fraudulent.”).
negotiating the purchase of OCC Boston. Here, Plaintiff alleges that Defendants Furthermore, although Plaintiff requests induced Plaintiff to purchase OCC Boston punitive damages in its Prayer for Relief, by misrepresenting their intention to work “[a] general request for punitive damages is for Plaintiff for at least four years not enough to differentiate the damages throughout the negotiation process. (FAC recoverable for fraud from those sought for ¶¶ 16–18, 20–26, 29–33, 64–65, 70.) breach of contract.” Sekisui Am. Corp. v. Among other things, Plaintiff points to Hart , No. 12-cv-3479 (SAS), 2012 WL Defendants’ written statements in the blind 5039682, at *3 (S.D.N.Y. Oct. 17, 2012). profile, dated March 25, 2014, and Accordingly, neither the first nor the third confidential memorandum, dated April 3, conditions of the Bridgestone/Firestone test 2014, which provided growth projections are met. premised on Defendants’ remaining with the
Nevertheless, Plaintiff maintains that company. ( Id. ¶¶ 15–17, 19, 22–23.) Defendants’ alleged promises to remain at Plaintiff also alleges that Adam emailed a the firm for at least four years were senior Oliver Wyman executive on August
collateral and extraneous to the parties’ 1, 2014 to indicate that he was “excited contracts, which did not guarantee that about the opportunity to work and build Defendants would remain at the firm and in together” at Oliver Wyman. ( Id. ¶ 33.) fact permitted Defendants to leave at any However, it is well-settled law that time. (Opp’n 8–10; see also EA ¶ 6.) Thus, allegations “amount[ing] to little more than Plaintiff argues that Defendants’ intentionally-false statements” indicating misrepresentations regarding their intent to intent to perform under a contract do not stay at the firm “had nothing to do with their state a claim for fraud. intent to comply with their contractual obligations because they never had any such Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc. , 98 F.3d 13, 19 (2d Cir. contractual obligations.” (Opp’n 10 1996). Although “not every fraud claim is (internal quotation marks omitted).) foreclosed in an action also involving a
But this argument, while accurate in its contract,” Wall v. CSX Transp., Inc. , 471 characterization of the contracts, does not F.3d 410, 416 (2d Cir. 2006), a fraud claim
support the viability of Plaintiff’s fraud must still adequately allege one of the claims. To the contrary, as several judges in following conditions to withstand dismissal: this district have recognized, “[w]here courts “[1] a legal duty separate from the duty to have found viable fraud claims based on perform under the contract,” “[2] a fraudulent misrepresentation, the statements fraudulent misrepresentation collateral or
concerned matters separate and distinct from extraneous to the contract,” or “[3] special the subject matter of the contract .” E. damages that are caused by the Cont’l Min. & Dev. Ltd. v. Signet Grp. LLC , misrepresentation and unrecoverable as *8 No. 13-cv-1930 (KBF), 2013 WL 6503526, (JSM), 2002 WL 1585550, at *3–4 at *6 (S.D.N.Y. Dec. 9, 2013) (emphasis (S.D.N.Y. July 16, 2002) (because contract added) (quoting MCI Worldcom Commc’ns, at issue “expressly acknowledge[d] the Inc. v. N. Am. Commc’ns Control, Inc. , No. possibility of acquiring the funding” but also 98-cv-6818 (LTS), 2003 WL 21279446, at “specifically deal[t] with the possibility that *9 (S.D.N.Y. June 4, 2003)). Here, the there will not be financing,” defendant’s allegedly false statements made by alleged extraneous promise to obtain a Defendants involved the duration and terms $3,000,000 financing commitment was not of Defendants’ continued employment at “‘extraneous’ to the contract”). Therefore, Oliver Wyman, subjects that were expressly Plaintiff’s fraud and fraudulent inducement covered by the Asset Purchase, Non- claims, which are premised on Defendants’ Solicitation, and Employment Agreements. implicit and explicit promises to remain at As noted above, these documents expressly Plaintiff for four years, fail as a matter of defined the scope of the parties’ rights and law. obligations in the sale of OCC Boston and
For similar reasons, Plaintiff also fails to set forth the conditions of Defendants’ sufficiently allege justifiable reliance on employment by Plaintiff. Significantly, the Defendants’ alleged misstatements and agreements did not guarantee or require that
omissions. In assessing allegations of Defendants would remain employees of justifiable reliance, “New York takes a Plaintiff for their entire four-year term. In contextual view, focusing on the level of fact, these agreements contemplated the very sophistication of the parties, the relationship possibility that Defendants would leave between them, and the information available Oliver Wyman’s employment before the end
at the time of the operative decision.” JP of their terms. Under Section 6 of the Morgan Chase Bank v. Winnick , 350 F. Employment Agreement, Defendants could Supp. 2d 393, 406 (S.D.N.Y. 2004). resign, with or without “Good Reason,” and Because justifiable reliance is “a fact- Sections 6(a) and 6(b) outlined the various
specific inquiry,” it is “generally considered rights and obligations each Defendant would inappropriate for determination on a motion have in the event of his resignation from to dismiss.” Glidepath Holding B.V. v. Plaintiff. (EA ¶¶ 6, 6(a), 6(b).) Spherion Corp. , 590 F. Supp. 2d 435, 459 Furthermore, the Asset Purchase Agreement (S.D.N.Y. 2007) (quoting Allied Irish Banks, included retention bonuses that each
P.L.C. v. Bank of Am., N.A. , No. 03-cv-3748 Defendant would earn on his third and (DAB), 2006 WL 278138, at *8 (S.D.N.Y. fourth anniversaries of employment in the Feb. 2, 2006)). Even so, “whether a plaintiff event that he stayed at the company (APA ¶ has adequately pleaded justifiable reliance 10.10), but also provided for deferral of can be a proper subject for a motion to payment of each Defendant’s share of the
dismiss” under certain circumstances. See, purchase price in the event that he left prior e.g. , Granite Partners, L.P. v. Bear, Stearns to the end of the four-year term (APA, Ex. E & Co. Inc. , 58 F. Supp. 2d 228, 259 § 1(a).) Because the parties’ agreements (S.D.N.Y. 1999). Specifically, where specifically addressed the duration and sophisticated parties rely on “representations terms of Defendants’ employment,
contrary to the plain language of the Defendants’ alleged misrepresentations agreements” they enter, courts have found regarding their intent to remain at Oliver such reliance to be “patently unreasonable.” Wyman were not “collateral to the subject Republic Nat. Bank v. Hales , 75 F. Supp. 2d matter of the contract.” See Clifton v. Vista 300, 315 (S.D.N.Y. 1999), aff’d sub nom. , Computer Servs., LLC , No. 01-cv-10206 *9 HSBC Bank USA v. Hales , 4 F. App’x 15 event of a separation from Plaintiff, he (2d Cir. 2001); see also Lam v. Am. Exp. would not “solicit or hire, or assist in the Co. , 265 F. Supp. 2d 225, 230–31, 239 solicitation or hiring of, or otherwise engage (S.D.N.Y. 2003) (finding that plaintiff’s or assist in engaging any employee of Oliver reliance on employer’s promise that he Wyman or its Affiliates who performs would receive incentives was unreasonable consulting services.” (APA ¶ 6.5(a)(vi).) as a matter of law, since defendant could The critical question on this motion is the terminate plaintiff at any time before the meaning of the term “solicit.” The Court incentive plan vested); Clifton , 2002 WL begins this inquiry by considering the plain 1585550, at *4 (“When a promise is not meaning of that term. See Bank of N.Y. extraneous to the terms of the contract, a Trust Co. v. Franklin Advs., Inc. , 726 F.3d plaintiff with this level of business 269, 280 (2d Cir. 2013) (“We are bound, sophistication cannot make out a claim that first and foremost, by the terms’ plain he reasonably relied on those promises.”). meaning.”). The ordinary meaning of the
verb “solicit” is “to ask or seek earnestly or As already discussed, the plain language pleadingly.” United States v. Friedenthal , of the agreements made clear that No. 97-CrMisc.-1 (THK), 1997 WL 786371, Defendants did not guarantee that they at *3 (S.D.N.Y. Dec. 19, 1997). The would remain in Oliver Wyman’s
meaning of the word “solicit” is further employment for four years. To the contrary, illuminated by its context. See 242-44 E. the contracts contemplated the possibility 77th St., LLC v. Greater N.Y. Mut. Ins. Co. , that Defendants would leave early. It 31 A.D.3d 100, 103–04 (1st Dep’t 2006) follows, a fortiori , that any reliance by (noting that “the meaning of a word in a Plaintiff, a highly sophisticated
series of words is determined by the multinational consulting firm, on company it keeps” (internal quotation marks Defendants’ extra-contractual promises to omitted)). The Asset Purchase Agreement stay for at least four years was patently prohibits “solicit[ing],” “hir[ing],” or unreasonable. Thus, Plaintiff’s claims for
“ otherwise engag[ing] ” another employee fraudulent inducement and fraud fail for this “who performs consulting services” independent reason. (emphasis added). Here, the term “solicitation” must relate to the term
B Breach of the Non-Solicitation Provision “engagement,” i.e. , the act of employing a of the Asset Purchase Agreement person. See Trachtenberg v. Rosenblum , 24 A.D.2d 1062, 1063 (3d Dep’t 1965)
Next, the Court considers Count Three, (“‘Employ’ and ‘hire’ are often Plaintiff’s claim for breach of the non- synonymous, as ‘to employ’ is, by solicitation covenant under the Asset dictionary definition, to ‘engage the services Purchase Agreement. Specifically, Plaintiff of’ or ‘to provide with a job that pays alleges that Defendants violated this wages’; and ‘to hire’ is to ‘employ for provision by “endeavoring to cause each wages.’” (citation omitted)). In light of this other to separate from their employment” context, the Court concludes that the with Plaintiff. (FAC ¶ 80.) Significantly, provision prohibits solicitation of Plaintiff’s Plaintiff makes no allegation that either other consultants for the purpose of Defendant employed the other to work in employing them outside of the firm. competition with Plaintiff. Here, Plaintiff alleges that Defendants Under the Asset Purchase Agreement, violated this provision by “endeavoring to Defendants each covenanted that, in the *10 cause each other to separate from their whom Employee, during the last two (2) years of Employee’s employment employment with [Plaintiff], and with the Company, came into contact coordinating their resignations to take place
for the purpose of selling or providing on the same date.” (FAC ¶ 80.) Plaintiff Consulting Services or soliciting does not, however, allege that either Clients and Prospects for the purpose Defendant employed or attempted to employ of selling or providing Consulting the other to perform consulting services Services or about whom Employee elsewhere. Because Plaintiff’s allegations, obtained Confidential Information, to which focus exclusively on Defendants’ separate from employment by the separation from Oliver Wyman without Company. reference to other employment, fall outside the ambit of the Asset Purchase
The Court again starts its analysis with the Agreement’s non-solicitation provision, the premise that the Non-Solicitation Court grants Defendants’ motion to dismiss Agreement, “like any contract, must be Count Three of the Complaint. See construed to effectuate the intent of the Oppenheimer & Co. v. Trans Energy, Inc. , parties as derived from the plain meaning” 946 F. Supp. 2d 343, 349 (S.D.N.Y. 2013) of its terms. Andy Warhol Found. for Visual (“Where a contract’s language is clear and Arts, Inc. v. Fed. Ins. Co. , 189 F.3d 208, 215 unambiguous, a court may dismiss a breach (2d Cir. 1999). The Non-Solicitation of contract claim on a Rule 12(b)(6) motion Agreement, by its plain language, prohibits to dismiss.”). any effort to “endeavor to cause” any Oliver Wyman employee with whom Defendant
C. Breach of the Non-Solicitation “came into contact for the purpose of . . . Agreement providing Consulting Services” to leave the Plaintiff’s fifth cause of action raises company. Thus, it is at least plausible that this includes efforts to encourage a identical allegations under the Non- consultant to leave Plaintiff, which is Solicitation Agreement. ( See FAC ¶ 90 precisely what Plaintiff alleges here. (alleging that Defendants violated the Non- Solicitation Agreement “by soliciting each
Defendants argue that “the most other and otherwise endeavoring to cause reasonable interpretation of this provision” each other to separate from employment is that, like the Asset Purchase Agreement’s from [Plaintiff], and coordinating their non-solicitation provision, it “prevents resignations to take place on the same poaching of employees” to join a competing date”).) Nonetheless, the Court reaches a business. (Def. Br. 20.) Defendants different conclusion because of that underscore the fact that the provision provision’s distinct wording. implicates only employees with whom In the Non-Solicitation Agreement, each Defendants came into contact for the Defendant agreed that during his purpose of providing “Consulting Services” employment at Plaintiff, and during the year or about whom the employee obtained following, he: confidential information, and that this limitation “would not make sense if the
shall not, either on [his] own account purpose of the provision was merely to or on behalf of any person, company,
promote general retention of employees,” corporation, or other entity, directly or since it permits solicitation of other indirectly, solicit, or endeavor to cause employees whom Defendants only knew any employee of the Company with socially. ( Id. ) *11 The Court finds Defendants’ argument Supp. 2d 439, 443 (S.D.N.Y. 2011) unpersuasive. In their attempt to conflate (suspicious timing of defendants’ the two agreements’ respective non- resignations “support[s] a plausible claim solicitation provisions, Defendants elide the that [defendants] violated the terms of their linguistic differences between them. See employment contracts” by soliciting Paneccasio v. Unisource Worldwide, Inc. , employees with whom they worked to 532 F.3d 101, 111 (2d Cir. 2008) (“The leave). And it is clearly plausible that rules of contract construction require us to Defendants, both high-level consultants who adopt an interpretation which gives meaning were employed to further develop their to every provision of the contract.”). As former OCC Boston business within Oliver already stated, the Non-Solicitation Wyman, “came into contact for the purpose Agreement provision applies more broadly, of . . . providing Consulting Services,” and to any “endeavor to cause” certain therefore, were both within the class of employees to depart Plaintiff. And while it employees who could not be encouraged to is true, as Defendants note, that restrictive leave. (NSA ¶ 2.) Consequently, the Court covenants “are not favored and will only be finds that Plaintiff states a plausible claim enforced to the extent reasonable and for breach of the Non-Solicitation necessary to protect valid business interests” Agreement, and declines Defendants’ (Reply 8 (quoting Morris v. Schroder invitation to dismiss this claim at this early Capital Mgmt. Int’l , 7 N.Y.3d 616, 620 stage of the proceedings. (2006)), “[t]he question the Court must
D. Breach of Employment Agreement resolve with regard to [Defendants’] motion is not whether [the] restrictive covenant is
The Court next turns to Plaintiff’s cause reasonable, but rather whether [Plaintiff] has of action for breach of the Employment stated a plausible breach of contract claim.” Agreement, in which Defendants agreed to Bernato v. Arthur J. Gallagher & Co. , No. “devote substantially all of” their 15-cv-1544 (KBF), 2015 WL 4643165, at *6 “professional time, attention and energies (S.D.N.Y. Aug. 5, 2015). to” Oliver Wyman. (EA ¶ 7(a); see also FAC ¶¶ 84-85.) Plaintiff alleges that
Here, Plaintiff alleges that Defendants Defendants “did not work diligently” during encouraged each other to leave the firm and their short time at the firm, and “did not hatched a “joint plan to exit the consulting exercise their best efforts to sell and deliver industry.” (FAC ¶¶ 47, 80.) Plaintiff points
client projects, [and] to grow [Plaintiff’s] to several contemporaneous emails in which business.” (FAC ¶ 49.) In fact, Plaintiff Defendants discuss their contemplated alleges that Defendants’ productivity during resignations from Plaintiff. For example, the period between January and April 2015 Plaintiff points to a January 25, 2015 email “lagged significantly behind every other in which Eielson indicated to Adam that he
OCC Boston partner who came to [Plaintiff] was “not sure [that he was] going to make it as of December 1, 2014,” and that the to June,” which prompted a response from revenues generated by Defendants during Adam that he “[did not] think about much that time period were “dramatically lower” else these days.” ( Id. ¶ 47.) Defendants’ than the revenue estimates per partner that alleged lack of productivity, and their
Defendants themselves projected in the lead- departure on the same day, certainly support up to the transaction. ( Id. ) Plaintiff also the inference that Defendants coordinated points to an email from Defendant John and encouraged each other to leave Plaintiff. Eielson, composed in February 2015, in See Speedmark Transp., Inc. v. Mui , 778 F. *12 which he admitted, “I don’t really work Plaintiff must have been aware of anymore.” ( Id. ) The Court concludes that Defendants’ lack of productivity during their these allegations state a viable claim for time at the firm, and therefore had “ample breach of the Employment Agreement. opportunity to provide Defendants notice of
its dissatisfaction prior to Defendants’ Defendants argue that dismissal is departure.” (Reply 9.) But Defendants’ nonetheless appropriate because Plaintiff did arguments regarding when Plaintiff might not comply with the Employment have “reasonably believed” that Defendants Agreement’s notice-and-cure provision, were in breach and the promptness of which required Plaintiff to “provide prompt Plaintiff’s response are better addressed by written notice” to an employee breaching the the trier of fact, not by the Court on a agreement, “specifying in reasonable detail motion to dismiss. See Bank of N.Y. Mellon the conduct or act constituting such violation Trust Co. v. Morgan Stanley Mortg. Cap., and the method(s), if any, by which Inc. , 821 F.3d 297, 310 (2d Cir. 2016) Employee may cure such violation.” (EA ¶ (“Where the promptness of breach discovery 7(b); see also Def. Br. 22; Reply 9.) As is questioned, resolution depends on an Defendants underscore, the Amended assessment of the totality of circumstances,” Complaint does not allege that Plaintiff which are “generally determined by the trier provided Defendants with any notice of their of fact rather than the court, particularly breach. (Def. Br. 23.) when the ultimate question is reasonableness.”). For these reasons, the
Nevertheless, while it is true that a party Court denies Defendants’ motion to dismiss generally may not recover under a contract Count Four. if it has failed to fulfill a condition precedent, such as a notice-and-cure
E. Breach of Fiduciary Duty and Aiding provision, see Unloading Corp. v. State of and Abetting Breach of Fiduciary Duty N.Y. , 132 A.D.2d 543, 543 (2d Dep’t 1987), “New York common law will not require The Court next turns to Plaintiff’s sixth strict compliance with a contractual notice- claim alleging breach of fiduciary duty and and-cure provision if providing an seventh claim for aiding and abetting a opportunity to cure would be useless,” breach of fiduciary duty. Defendant urges Giuffre Hyundai, Ltd. v. Hyundai Motor the Court to dismiss these claims because Am. , 756 F.3d 204, 209 (2d Cir. 2014); see they impermissibly duplicate Plaintiff’s also Miller v. Wells Fargo Bank, N.A. , 994 claims for breach of contract. The Court F. Supp. 2d 542, 552 n.6 (S.D.N.Y. 2014) agrees. (noting that under New York law, “a party
A claim for breach of fiduciary duty need not provide notice of and an under New York law requires: “[1] the opportunity to cure a breach when doing so existence of a fiduciary duty; [2] a knowing would be futile”). Here, in light of the fact breach of that duty; and [3] damages that Defendants resigned within a few resulting therefrom.” Johnson v. Nextel months of joining Plaintiff, it is plausible Commc’ns, Inc. , 660 F.3d 131, 138 (2d Cir. that Plaintiff was not fully aware of 2011). However, “a cause of action for Defendants’ breach at the time of their breach of fiduciary duty [that] is merely departure or that Defendants left before they duplicative of a breach of contract claim could have cured their breach, and, cannot stand.” Ellington Credit Fund, Ltd. therefore, Plaintiff’s compliance with the v. Select Portfolio Servicing, Inc. , 837 F. condition precedent would have been futile. Supp. 2d 162, 196 (S.D.N.Y. 2011). Here, In their reply, Defendants surmise that *13 Plaintiff alleges that Defendants, by virtue F. Tortious Interference of their employment, owed fiduciary duties The Court next considers Plaintiff’s to Plaintiff, which they breached by: (1)
eighth cause of action, which alleges misrepresenting their reasons for resigning, “tortious interference with existing and (2) “encouraging each other to resign,” and prospective contractual and business (3) “devoting their time during their relationships.” (FAC at 29.) Plaintiff avers employment to planning their departure.” that Defendants “engaged in enticement, (FAC ¶ 93–94.) However, these allegations
solicitation and inducement of each other to are wholly duplicative of Plaintiff’s cease performing services for [Plaintiff], and allegations for breach of contract. ( See id. to cease delivering their best efforts to grow ¶¶ 80 (alleging that Defendants breached the business of [Plaintiff].” ( Id. ¶ 102.) their non-solicitation covenants “by Though its pleading is imprecise, Plaintiff endeavoring to cause each other to separate
appears to bring claims for both tortious from” Plaintiff), 85 (alleging that interference with contract and, in the Defendants breached the Employment alternative, tortious interference with Agreement “by using company resources prospective business advantage. ( See Opp’n and devoting their time during their 24 (citing G-I Holdings, Inc. v. Baron & employment to planning their departure
Budd , 238 F. Supp. 2d 521 (S.D.N.Y. from [Plaintiff]”), 90 (alleging that 2002)).) Once again, the Court concludes Defendants violated the Non-Solicitation that both claims fail as a matter of law. Agreement by “endeavoring to cause each other” to leave Plaintiff).) Plaintiff’s claim
In order to prevail on a claim for tortious for breach of fiduciary duty thus duplicates interference with contract under New York its claims for breach of contract and must be law, a plaintiff must plausibly allege: “[1] dismissed. the existence of a valid contract between the plaintiff and a third party, [2] defendant’s
It inexorably follows that where a knowledge of that contract, [3] defendant’s “breach of fiduciary duty claim fails” intentional procurement of the third-party’s because it is duplicative of a breach of breach of the contract without justification, contract claim, “there can be no cause of [4] actual breach of the contract, and [5] action for aiding and abetting breach of that damages resulting therefrom.” Lama fiduciary duty.” Kassover v. Prism Venture Holding Co. v. Smith Barney Inc. , 88 Partners, LLC , 53 A.D.3d 444, 449 (1st
N.Y.2d 413, 424 (1996). Significantly, a Dep’t 2008); accord Fesseha v. TD claim for tortious interference with contract Waterhouse Inv’r Servs., Inc. , 305 A.D.2d that “does no more than restate” a plaintiff’s 268, 269 (1st Dep’t 2003). Here, Plaintiff breach of contract claim will not suffice. alleges that each Defendant aided and Allerand LLC v. 233 E. 18th St. Co. , 19 abetted the other’s breach of fiduciary duty.
A.D.3d 275, 278 (1st Dep’t 2005); accord In (FAC ¶¶ 97–98.) However, since Plaintiff re Musicland Holding Corp. , 386 B.R. 428, fails to sufficiently allege a breach of 441 (S.D.N.Y. 2008), aff’d , 318 F. App’x 36 fiduciary duty by either principal, Plaintiff’s (2d Cir. 2009). Here, the same acts that aiding and abetting fiduciary duty cause of Plaintiff claims violated the Asset Purchase action also fails and, therefore, must be
Agreement and Non-Solicitation Agreement dismissed. – namely, each Defendant’s “enticement, solicitation and inducement of each other” to leave Plaintiff and “cease delivering their best efforts to grow” the company – form
*14 the basis for Plaintiff’s tortious interference degrees of economic pressure,” but not with contract claim. (FAC ¶ 102.) Because “persuasion” designed to interfere with a these allegations merely restate Plaintiff’s prospective contract. Id. at 216; see also breach of contract claim, the tortious Enzo Biochem, Inc. v. Molecular Probes, interference with contract claim cannot Inc. , No. 03-cv-3816 (RJS), 2013 WL stand. 6987615, at *3 (S.D.N.Y. Dec. 6, 2013)
(underscoring that this element “represents a Nor does Plaintiff fare any better with its particularly high hurdle, for it requires a claim for tortious interference with plaintiff to show that the defendant prospective business advantage. In order to committed a crime or an independent tort plead such a claim under New York law, a [such as fraud], or [acted] for the sole plaintiff must allege that: “(1) the plaintiff purpose of inflicting intentional harm on the had business relations with a third party; (2) plaintiff” (internal quotation marks the defendant interfered with those business omitted)). Here, Plaintiff tepidly asserts that relations; (3) the defendant acted for a Defendants encouraged each other to wrongful purpose or used dishonest, unfair, abandon their consulting practice at Oliver or improper means; and (4) the defendant’s Wyman and to leave the firm. (FAC ¶ 102.) acts injured the relationship.” Catskill Dev., These bland attempts at persuasion do not L.L.C. v. Park Place Entm’t Corp. , 547 F.3d come close to satisfying the conduct 115, 132 (2d Cir. 2008). However, because actionable under a tortious interference with Plaintiff’s cause of action for tortious prospective business advantage claim. interference with prospective business advantage, like Plaintiff’s claim for tortious Accordingly, Plaintiff’s claims for interference with contract, is premised on tortious interference with contract and the very same allegations that form the tortious interference with prospective breach of contract claims ( see FAC ¶ 102), it business advantage are dismissed. also must fail, see Susman v. Commerzbank
G. Implied Covenant of Good Faith and Capital Mkts. Corp. , 95 A.D.3d 589, 590 Fair Dealing (1st Dep’t. 2012) (claim for tortious interference with prospective business
Plaintiff’s ninth cause of action alleges advantage that simply duplicated breach of that Defendants breached the implied contract claim “properly dismissed”); covenant of good faith and fair dealing by Boscorale Operating, LLC. v. Nautica resigning, and thus depriving Plaintiff of Apparel, Inc. , 298 A.D.2d 330, 332 (1st “the benefits of the [Asset Purchase Dep’t 2002) (same). Agreement], namely the client relationships, goodwill and increased business” that
The claim also fails because of hinged on Defendants’ continued presence Plaintiff’s failure to adequately allege the at the company. (FAC ¶ 107.) Plaintiff also third element – that “defendants acted for a alleges that Defendants breached the implied wrongful purpose or used dishonest, unfair,
covenant by “intentionally and deliberately or improper means.” Scutti Enterprises, conceal[ing]” their plan to resign. ( Id. ¶ LLC. v. Park Place Entm’t Corp. , 322 F.3d 108.) 211, 215 (2d Cir. 2003). Under New York law, “wrongful purpose” and “dishonest,
“Under New York law, parties to an unfair, or improper means” have been express contract are bound by an implied narrowly construed to include “physical duty of good faith, but breach of that duty is violence, fraud or misrepresentation, civil merely a breach of the underlying contract.” suits and criminal prosecutions, and some *15 Harris v. Provident Life & Accident Ins. party to bring an unjust enrichment claim Co. , 310 F.3d 73, 80 (2d Cir. 2002). It when that party “has fully performed on a follows, therefore, that “[n]o implied valid written agreement, the existence of covenant may conflict with the express which is undisputed, and the scope of which terms of a contract.” Red Rock clearly covers the dispute between the Commodities, Ltd. v. ABN-AMRO Bank, parties.” Ellington Credit Fund, Ltd. , 837 F. N.A. , No. 94-cv-8390 (SAS), 1995 WL Supp. 2d at 202 (quoting Clark-Fitzpatrick, 714349, at *3 (S.D.N.Y. Dec. 5, 1995), Inc. v. Long Island R. Co. , 70 N.Y.2d 382, aff’d , 101 F.3d 1394 (2d Cir. 1996). The 389 (1987)). While Defendants dispute the agreements here expressly provided for the enforceability of certain non-solicitation conditions and terms of Defendants’ covenants, the parties otherwise do not employment, and as noted above, nowhere contest that the Asset Purchase Agreement, did they require Defendants to stay for four the Non-Solicitation Agreement, and the years or prohibit Defendants from resigning Employment Agreement are enforceable prior to the completion of a four-year term. contracts that govern the subject matter of Plaintiff could have insisted on Defendants this dispute – namely, the rights and remaining with the company as a condition obligations of the parties in connection with of the agreement; it could also have the sale of OCC Boston. Furthermore, while structured more draconian clawback Plaintiff is correct that an unjust enrichment provisions or deferred compensation claim “is not duplicative of a breach of consequences in the event of an early contract claim where the plaintiff alleges departure. For whatever reasons, it did not that the contracts were induced by fraud” do so, and instead entered into employment (Opp’n 24 (quoting Tropical Sails Corp. v. agreements that expressly allowed Yext, Inc ., No. 14-cv-7582 (JFK), 2015 WL Defendants to leave at any time – albeit with 2359098, at *7 (S.D.N.Y. May 18, 2015)), significant consequences in the event of an the Court has already concluded that early departure. In light of these explicit Plaintiff’s fraud and fraudulent inducement terms of the contract, Defendants cannot claims fail as a matter of law. Therefore, the possibly have been bound by a separate Court dismisses Plaintiff’s claim for unjust implied covenant that obligated them to a enrichment, which is duplicative of, and conflicting duty to remain with Plaintiff for wholly subsumed by, Plaintiff’s primary at least four years. For these reasons, breach of contract claim. Plaintiff’s claim for breach of the implied
I. Chapter 93A Claim covenant likewise fails to state a claim. H. Unjust Enrichment Although the Court has now disposed of Plaintiff’s fraud and fraudulent inducement The Court next turns to Plaintiff’s claims under New York law, Plaintiff eleventh cause of action for unjust nevertheless insists that it is entitled to enrichment. A plaintiff alleging unjust pursue a separate claim against Defendants enrichment under New York law must pursuant to Section 11 of Chapter 93A of the adequately plead that: “(1) defendant was Massachusetts General Laws ( see Opp’n enriched, (2) at plaintiff’s expense, and (3) 17–18), which grants “a person who is equity and good conscience militate against engaged in business” the right to sue when it permitting defendant to retain what plaintiff suffers damages resulting from “an unfair or is seeking to recover.” Briarpatch Ltd., L.P deceptive act or practice by another person v. Phoenix Pictures, Inc. , 373 F.3d 296, 306 also engaged in business,” Manning v. (2d Cir. 2004). It is “impermissible” for a *16 Zuckerman , 444 N.E.2d 1262, 1264 (Mass. primarily and substantially within” 1983). Plaintiff’s Chapter 93A claim is Massachusetts. Kuwaiti Danish Computer predicated on the same allegations as its Co. v. Digital Equip. Corp. , 781 N.E.2d 787, fraud and fraudulent inducement claim – 799 (Mass. 2003). Although this inquiry is namely, Defendants’ “fraudulent and “fact intensive” and “[cannot] be reduced to material misrepresentations” regarding their any precise formula,” id. at 798, courts plans to remain employed with Oliver applying Massachusetts law often consider Wyman, their plans to exert their best efforts three factors, including: “(1) where to grow Oliver Wyman’s business, and defendant committed the deception; (2) “their submission of flawed, misleading and where plaintiff was deceived and acted upon false financial projections during the deception; and (3) the situs of plaintiff’s negotiations with Plaintiff.” (FAC ¶¶ 112.) losses due to the deception,” Roche v. Royal
Bank of Canada , 109 F.3d 820, 829 (1st Cir. However, courts have held that where, as 1997); accord Uncle Henry’s Inc. v. Plaut here, the claim and requested remedy under Consulting Co. , 399 F.3d 33, 45 (1st Cir. Chapter 93A are “highly analogous to a tort 2005. Of these factors, “the critical factor is claim and remedy,” and where, as here, the the locus of the recipient of the deception at tortious conduct at issue is actionable under the time of reliance.” Roche , 109 F.3d at the laws of a state other than Massachusetts, 830; see also Bruno Int’l Ltd. v. Vicor Corp. , a Chapter 93A claim cannot be sustained as No. 14-cv-10037 (DPW), 2015 WL a matter of law. See Crellin Techs., Inc. v. 5447652, at *19 (D. Mass. Sept. 16, 2015) Equipmentlease Corp. , 18 F.3d 1, 13 (1st (“It is the location of the person to whom the Cir. 1994) (“[Because] the claim is governed deceptive statements are made rather than by the substantive law of Rhode Island . . . the location of the person who uttered the appellant’s claim under Chapter 93A is not deceptive or unfair statements that is actionable.”); Fed. Home Loan Bank of significant.”) (quoting Workgroup Tech. Boston v. Ally Fin., Inc. , No. 11-cv-10952 Corp . v. MGM Grand Hotel, LLC , 246 F. (GAO), 2013 WL 5466628, at *3 (D. Mass. Supp. 2d 102, 117 (D. Mass. 2003)). Sept. 30, 2013) (“Because New York law Although Massachusetts law places the applies to [plaintiff’s tort] claims against burden on the defendant to prevail on this [defendants], the Bank has no claim under element, see Mass. Gen. Laws ch. 93A, § Massachusetts General Laws, Chapter 11, the First Circuit has nonetheless 93A.”); Plymack v. Copley Pharm., Inc. , No. instructed that “if the significant contacts of 93-cv-2655 (KMW), 1995 WL 606272, at the competing jurisdictions are *5 (S.D.N.Y. Oct. 12, 1995) approximately in the balance, the conduct in (“Massachusetts law does not apply to this question cannot be said to have occurred action, and, consequently, summary primarily and substantially in judgment for defendants on plaintiffs’ Massachusetts,” Fishman Transducers, Inc. Chapter 93A claim is warranted.”). Because v. Paul , 684 F.3d 187, 197 (1st Cir. 2012) Plaintiff’s fraud claims are actionable under (quoting Uncle Henry’s Inc. , 399 F.3d at New York law, Plaintiff’s Chapter 93A 45). claim must be dismissed. Due to the fact sensitivity of the Plaintiff’s claim also fails for the related “primarily and substantially” test, federal reason that a cause of action under Section courts applying Chapter 93A have generally 11 of Chapter 93A may be sustained only rejected motions to dismiss on this ground, when “the center of gravity of the “so long as the complaint alleges that the circumstances that give rise to the claim is *17 plaintiff is located, and claims an injury in words, according to the Amended Massachusetts.” Whitman & Co., Inc. v. Complaint, the “locus of the recipient of the Longview Partners (Guernsey) Ltd. , No. 14- deception at the time of reliance” was New cv-12047 (ADB), 2015 WL 4467064, at *11 York. See Roche , 109 F.3d at 830. (D. Mass. July 20, 2015) (quoting Guest-Tek
The Court therefore concludes, as a Interactive Entm’t, Inc. v. Pullen, 731 F. matter of law, that the center of gravity of Supp. 2d 80, 92 (D. Mass. 2010)). the circumstances that gave rise to Plaintiff’s Nevertheless, “whether a defendant’s Chapter 93A claim is not primarily and actions and transactions occurred primarily substantially within Massachusetts. See and substantially in Massachusetts for Bushkin Assoc., Inc. v. Raytheon Co. , 473 purposes of Chapter 93A jurisdiction is N.E.2d 662, 672 (1985) (requirement was unquestionably a matter of law,” Evergreen not met where defendants made allegedly Partnering Grp., Inc. v. Pactiv Corp. , No. deceptive phone calls from Massachusetts 11-cv-10807 (RGS), 2014 WL 304070, at *5 that were received and acted upon in New (D. Mass. Jan. 28, 2014), and therefore, York, and plaintiffs’ losses were incurred in courts have not hesitated to dismiss Chapter New York); see also Fishman Transducers, 93A claims at the 12(b)(6) stage where a Inc. , 684 F.3d at 197 (requirement “cannot plaintiff fails to allege that it suffered be satisfied” when “wrongdoing is not sufficient injuries within Massachusetts, focused on Massachusetts but has relevant Bruno Int’l Ltd. v. Vicor Corp. , No. 14-cv- and substantial impact across the country”); 10037 (DPW), 2015 WL 5447652, at *19 Compagnie De Reassurance D’Ile de (D. Mass. Sept. 16, 2015); see also Pine France v. New England Reinsurance Corp. , Polly, Inc. v. Integrated Packaging Films 57 F.3d 56, 90 (1st Cir. 1995) (requirement IPF, Inc. , No. 13-cv-11302 (NMG), 2014 was not met where “the allegedly deceptive” WL 1203106, at *8–9 (D. Mass. Mar. 19, document “originated in Massachusetts, 2014); Travelers Supply, Inc. v. Hilton Head but . . . was intended to be, and was, Labs. , Inc. , No. 07-cv-30175 (KPN), 2008 circulated abroad, and plaintiffs received WL 5533434, at *8 (D. Mass. Dec. 23, and acted upon it there”); Softub, Inc. v. 2008); Weber v. Sanborn , 502 F. Supp. 2d Mundial, Inc. , 53 F. Supp. 3d 235, 258 (D. 197, 200 (D. Mass. 2007). Mass. 2014) (granting summary judgment Here, Plaintiff conclusorily avers that dismissing Chapter 93A claim where Defendants’ “acts and omissions took place majority of plaintiff’s decisionmakers primarily and substantially within” worked and received the alleged Massachusetts and further asserts that some misrepresentations in California, even of the alleged misrepresentations occurred in though defendant was headquartered in face-to-face meetings in Boston. (FAC ¶¶ Massachusetts, “the majority of the 28, 113.) Even so, Plaintiff also alleges that misrepresentations alleged” were made by many of the alleged misrepresentations and defendant’s agents based in Massachusetts, omissions occurred during face-to-face and the defective products were shipped to meetings in New York. ( Id. ¶¶ 13, 28.) And plaintiff’s facility in Massachusetts); Bruno most importantly, Plaintiff’s principal place Int’l Ltd. , 2015 WL 5447652, at *19 of business is in New York, where the (dismissing claim where plaintiff failed to complaint itself alleges that Plaintiff’s plead any injury in Massachusetts, injuries occurred. (FAC ¶¶ 7, 13; see also notwithstanding fact that defendant was NSA ¶ 9 (acknowledging that Plaintiff’s headquartered in Massachusetts and its leadership is based in New York).) In other executives met with plaintiff in
NOTES
[1] The following facts are taken from the First Defendants’ motion to dismiss the First Amended Complaint and the parties’ Asset Purchase Amended Complaint for failure to state a Agreement (Doc. No. 20-4 (“APA”)), Non- claim. (Doc. No. 18.) For the reasons set Solicitation Agreement (Doc. No. 20-4, Ex. L forth, Defendants’ motion is granted in part (“NSA”)), and Employment Agreement (Doc. No. 20-6 (“EA”)). See Halebian v. Berv , 644 F.3d 122, and denied in part. 131 n.7 (2d Cir. 2011) (recognizing that a court may consider documents integral to the complaint on I. B ACKGROUND whose “terms and effect” plaintiff relied “in drafting the complaint”). The Court also considers the A. Facts arguments raised in Defendants’ memorandum of law (Doc. No. 19 (“Def. Br.”)), Plaintiff’s opposition In 2002, Defendants co-founded OCC (Doc. No. 23 (“Opp’n”)), Defendants’ reply (Doc. No. 24 (“Reply”)), and the accompanying Boston, “a boutique strategy consulting declarations and exhibits (Doc. Nos. 20, 25). firm” that specialized in “the business