The opinion of the court was delivered by: McMAHON, District Judge.
MEMORANDUM DECISION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS
Defendant VSA Arts moves pursuant to Fed.R.Civ.P. 12(b)(6) for an order
dismissing Plaintiff Startech, Inc.'s claims for breach of contract and
wrongful enrichment. For the reasons stated below, the motion is denied.
Plaintiff brings this action for damages in the amount of $500,000
pursuant to 28 U.S.C. § 1332. Startech is a not-for-profit corporation
with its principal place of business in New York, and VSA is a
not-forprofit corporation with its principal place of business in
Washington D.C. Startech is a former affiliate of VSA.
Startech's complaint alleges that VSA wrote a letter promising to pay
Starchtech 50% of the proceeds raised by VSA in "private fundraising
actives" for three concurrents years beginning in FY 1994. (Pl.Exh.
¶ 1.) The agreement was subject to renegotiation. VSA paid nothing in
respect of the agreement to Startech, which argues that VSA breached the
agreement, or in the alternative that Defendant was wrongful enriched.
Except as otherwise indicated, all facts are drawn from Plaintiff's
Plaintiff is a former affiliate of Defendant and a not-for-profit
corporation providing job training and education to the disabled.
Plaintiff was founded in 1977 in part through the efforts of Defendant, a
national organization founded in 1975 for the purpose of fostering
learning opportunities for disabled persons. Plaintiff's success in its
early years led to the Defendant's creation of other local affiliates,
which escalated the growth of Defendant as a national organization.
Between 1977 and 1986, Plaintiff actively sponsored numerous
arts-related events for the benefit of disabled persons in New York. The
parties' relationship was governed by a series of affiliation agreements,
under which Defendant imposed minimum standards and policies upon
Plaintiff in return for Plaintiff's ability to participate in the
national organization. One of Plaintiff's obligations was to raise a
certain percentage of its (i.e., Plaintiff's) funds from businesses and
individuals located within the State of New York. However, as Defendant
grew, its own fund raising activities in New York increased, which
"complicated" Plaintiff's ability to raise money.
Per our discussions, in light of the fact that the
current level of funding support for Very Special Arts
New York will be greatly diminished due to budgetary
constraints, and by way of compensation for national
fundraising activities conducted in the state of New
York, this serves to confirm our agreement that gross
proceeds raised by Very Special Arts in such private
fundraising activities (including the Carey Limousine
Wall Street Rat Race) will be split on an equal
(50/50) basis effective FY 1994. This agreement will
be effective for three concurrent years at which time
the terms may be renegotiated.
Your continued support of Very Special Arts national
fundraising activities in New York state is important
in our efforts to continue to build awareness for Very
Special Arts programs around the country. All national
fundraising activities initiated in New York will be
discussed on a case-by-case basis, and funds will be
divided as mutually deemed appropriate. With regard to
the annual Carey Limousine Rat Race, your continued
assistance in securing necessary permits and related
documentation to support this event is both recognized
and much appreciated.
As discussed, it is agreed that proceeds from that
event will directly support the ongoing activities of
Very Special Arts New York." (Pl.Exh.1).
VSA did not keep its promise to pay plaintiff 50% of its take from fund
raising activities in New York. Indeed, in March 1996, VSA terminated its
affiliation with Plaintiff. Plaintiff claims that it was terminated from
the VSA organization due to its insistence on Defendant's honoring the
terms of the letter. VSA claims Plaintiff ...