e.g., Sudul v. Computer Outsourcing Services, 868 F. Supp. 59, 62 (S.D.N.Y.1994).
The Court of Appeals for the Second Circuit recently reiterated the requirements under New York law for maintaining a distinct fraud claim that arises from the same transaction that created the breach of contract claim. The plaintiff must either (1) demonstrate a legal duty separate from the duty to perform under the contract; (2) demonstrate a fraudulent misrepresentation collateral or extraneous to the contract; or (3) seek special damages that are caused by the misrepresentation and unrecoverable as contract damages. Bridgestone/Firestone, Inc., v. Recovery Credit Services, Inc., 98 F.3d 13, 20 (2d Cir.1996). A fraud claim therefore may survive a motion to dismiss where "the allegations contained [in the fraud claim] are separate and distinct from those giving rise to the breach of contract claim." Oei v. Citibank, 957 F. Supp. 492, 520 (S.D.N.Y.1997) (internal quotations omitted).
Here, the fraud claim sets forth an alternative claim independent of the contract. A fair reading of the complaint reveals plaintiff's allegation that defendant "never intended to appoint plaintiff as its exclusive sales agent or deliver Corvette motor vehicles for sale, or enter into any agreement with plaintiff." Complaint P25. It alleges that defendants fraudulently induced plaintiff to incur significant expenses in anticipation of becoming defendants' sales agent to sell its used Corvettes when defendants had no intention of entering into any agreement with plaintiff and that plaintiff was induced to incur significant expenses in order to afford defendants the expertise of marketing its cars in plaintiff's geographical area. Id. Plaintiff's fraud claim does not simply reiterate the breach of contract claim because it does not allege the existence of the contract. Rather, it is defendants' inducement of the plaintiff to incur significant expenses, in anticipation of a contract that defendants had no intention of entering into, that constitutes the fraud claim. As it involves a promise that is extraneous or collateral to the terms of the alleged contract, plaintiff's fraud claim states a valid alternative claim to the breach of contract claim.
Defendants also move to dismiss plaintiff's fraud claim on the ground that it was not pled with the particularity required by Federal Rule of Civil Procedure 9(b). In order to satisfy Rule 9(b), allegations of fraud "must be specific enough to give the defendants 'a reasonable opportunity to answer the complaint' and must give defendants 'adequate information' to allow defendants to frame a response." Bharucha v. Reuters Holdings PLC, 810 F. Supp. 37, 41 (E.D.N.Y.1993) (quoting Ross v. A.H. Robins Co., 607 F.2d 545, 557 (2d Cir.1979), cert. denied, 446 U.S. 946, 64 L. Ed. 2d 802, 100 S. Ct. 2175 (1980)). A complaint should allege the time, place, speaker and content of alleged misrepresentations. See Ouaknine v. MacFarlane, 897 F.2d 75, 79 (2d Cir.1990). However, "the complaint need not specify the time, place and content of each mail communication where the nature and mechanics of the underlying scheme is sufficiently detailed, and it is enough to plead the general content of the misrepresentation without stating the exact words." Center Cadillac, Inc. v. Bank Leumi Trust Co. Of New York, 808 F. Supp. 213, 229 (S.D.N.Y.1992).
Here, the complaint is particular. The complaint alleges that from August 1995 to June 1996, in each of its statements by phone or mail, the defendants continuously misrepresented their intent to enter into a joint strategic alliance with Champion to market and sell used Corvettes. It alleges that defendants purposely misrepresented their commitment to appoint plaintiff as its exclusive sales agent, or enter into any agreement with plaintiff at all, in order to gain "expertise of marketing its products in the geographical area and customer market of plaintiffs." The complaint sufficiently identifies Tony Visone and other representatives of VCM as the source of the misrepresentations and alleges that the misrepresentations were made in the course of negotiations between the parties from August 1995 to June 1996.
While the complaint does not specify the exact date and place of each alleged misrepresentation, it is sufficient to place defendants on notice so that they may frame a responsive pleading. See Giuliano v. Everything Yogurt, Inc., 819 F. Supp. 240, 245 (E.D.N.Y.1993). Because the complaint, viewed in the light most favorable to the plaintiff, alleges fraudulent acts with sufficient particularity, defendant's motion to dismiss under Rule 9(b) must be denied.
The plaintiff's third claim demands specific performance of the alleged contract between Champion and VCM, claiming that there is no adequate remedy at law. However, as plaintiff itself recognizes in its brief in opposition to this motion, specific performance is a remedy for breach of contract. It is not a distinct claim. Thus, although it was pled separately, defendants' arguments opposing specific performance are premature.
The motion to dismiss the complaint is denied.
United States District Judge
Dated: Brooklyn, New York
January 29, 1998