Woods Agreements. Count 9 contains a demand for specific performance of the Jefferson Woods Agreements.
Defendants moved to dismiss the complaint on the following grounds: (1) plaintiff's claims improperly charge non-parties to the contracts with breach and fail to specify the contractual terms allegedly breached; (2) the claims for breach of fiduciary duty and tortious interference fail to allege facts which would establish the requisite elements of those claims; and (3) the request for punitive damages is improper under New York law. In response, plaintiff has moved pursuant to Rule 15(a) to amend the complaint and offers a Proposed Amended Complaint in an effort to cure the pleading deficiencies asserted in defendants' motion. Defendants oppose granting leave to amend, and argue that the Proposed Amended Complaint also fails to state a claim upon which relief may be granted.
I. AMENDMENT OF THE COMPLAINT
The granting of leave to amend a pleading is within the discretion of the district court, Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962); Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993) (per curiam), and leave "shall be freely given when justice so requires." Rule 15(a). See also Murray v. United States Department of Justice, 821 F. Supp. 94, 101 (E.D.N.Y.), aff'd, 14 F.3d 591 (2d Cir. 1993). Leave to amend may be denied only where the court finds "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Williams v. Brooklyn Union Gas Co., 819 F. Supp. 214, 223 (E.D.N.Y. 1993) (citing Foman v. Davis, 371 U.S. at 182). Here, the court finds no undue delay or bad faith on the part of the plaintiff or any prejudice to defendant that would result from amendment of the complaint. Moreover, leave to replead should generally be permitted upon granting a motion to dismiss, unless it is clear that the plaintiff cannot allege any facts sufficient to support its claims. See, e.g., Cortec Industries, Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991), cert. denied, 112 S. Ct. 1561, 118 L. Ed. 2d 208 (1992); Pompano-Windy City Partners, Ltd. v. Bear Stearns & Co., 794 F. Supp. 1265, 1291 (S.D.N.Y. 1992). Accordingly, plaintiff's motion for leave to amend will be granted if the court determines that the Proposed Amended Complaint states a claim upon which relief may be granted.
II. SUFFICIENCY OF THE AMENDED COMPLAINT
A. Applicable Legal Standards
The court may grant a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) only where it is beyond doubt that the plaintiff cannot prove any set of facts supporting entitlement to relief. H.J. Inc., v. Northwestern Bell Telephone Company, 492 U.S. 229, 249-50, 106 L. Ed. 2d 195, 109 S. Ct. 2893 (1989); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). In deciding the motion, the court must accept as true the material facts alleged in the complaint, LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991), and must construe all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974).
In addition, the court is not permitted to consider factual matters submitted outside of the complaint unless the parties are given notice that the motion to dismiss is being converted to a motion for summary judgment under Rule 56 and are afforded an opportunity to submit additional affidavits. See Festa v. Local 3 International Brotherhood of Electrical Workers, 905 F.2d 35, 38 (2d Cir. 1990) ("this provision . . . is mandatory with respect to motions pursuant to Rule 12(b)(6)"); Wiener v. Napoli, 760 F. Supp. 278, 282 (E.D.N.Y 1991). In this case, both parties have submitted affidavits and exhibits in connection with the motion to dismiss. However, the parties have not had an opportunity to submit all of the pertinent material for a summary judgment motion; moreover, the factual discovery which would make this case ripe for a summary judgment motion has yet to be completed. Therefore, the court will not consider any affidavits or other factual assertions outside of the complaint in assessing the sufficiency of the Proposed Amended Complaint.
B. The Contract Claims
1. Sufficiency of Plaintiff's Allegations Regarding Breaches of the Development Management Agreements
Defendants argue that the breach of contract claims contained in the Proposed Amended Complaint are insufficient to withstand a motion to dismiss because they fail to state with particularity the contractual terms allegedly breached. The essential elements of a claim for breach of contract under New York law are: (1) the existence of a contract; (2) due performance by plaintiff; (3) breach of the contract by defendant; and (4) damage as a result of the breach. See R.H. Damon & Co. v. Softkey Software Products, Inc., 811 F. Supp. 986, 991 (S.D.N.Y. 1993); Stephens v. American Home Assurance Co., 811 F. Supp. 937, 959 (S.D.N.Y. 1993). The plaintiff need not plead each element individually as long as the complaint contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2); Stephens v. American Home Assurance Co., 811 F. Supp. at 958; Posner v. Minnesota Mining and Manufacturing Company, Inc., 713 F. Supp. 562, 563 (E.D.N.Y. 1989).
In this case, plaintiff alleges the existence of fourteen Development Management Agreements, including four Jefferson Woods Agreements, three Tinker Bluff Agreements, and the Hallock Meadows Agreement. In addition, each cause of action for breach of contract pleads due performance of the contracts by plaintiff. Further, plaintiff alleges breaches of several contracts by defendants, including: failing to reimburse plaintiff for general and administrative costs; failing to pay subcontractors for work that was completed; selling several of the lots that were part of the Tinker Bluff Property to another builder without prior notice to plaintiff; contacting individuals who had contracted with plaintiff and advising them to contact another builder regarding the purchase of the lots; ordering plaintiff to stop work without complying with the contracts' specified termination procedures; and preventing the transfer of title to undeveloped lots which plaintiff had acquired the right to purchase from defendants. Finally, plaintiff has alleged damage as a result of defendants' breaches, including lost revenues and profits, unreimbursed administrative and general costs, and the balance due under the September 1991 Stipulation and Order.
In addition, defendants' arguments concerning the merit of these claims are not properly addressed on a motion to dismiss. The validity and substance of plaintiff's contentions "are left to the discovery process and trial." Stephens v. American Home Assurance Co., 811 F. Supp. at 959 (citing 5 Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure, Civil 2d, § 1259 (2d ed. 1998)). Accordingly, the court finds that plaintiff's breach of contract claims adequately plead each of the requisite elements under New York law and are sufficient to give defendants notice of the general nature of the relief sought.
2. Parties Who May properly be Charged with Breach