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ECOR Solutions, Inc. v. Malcolm Pirnie

March 24, 2006

ECOR SOLUTIONS, INC. F/K/A ERM C&O SERVICES, INC., PLAINTIFF,
v.
MALCOLM PIRNIE, INC. AND DAVID R. HISS, DEFENDANTS.



The opinion of the court was delivered by: Norman A. Mordue, D. J.

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiff, ECOR Solutions, Inc., moves for reconsideration of the Court's prior Memorandum-Decision and Order, dated July 29, 2005, which dismissed two of its claims against defendants. In the alternative, plaintiff seeks leave to file an amended complaint which amplifies and expands the factual allegations of the original complaint in connection with said two claims.

II. FACTUAL AND PROCEDURAL BACKGROUND

The factual background of the present action was fully set forth in the Court's prior Memorandum-Decision and Order. In short, the case arose in the context of a dispute between plaintiff and the New York State Department of Environmental Conservation ("DEC") which contracted with plaintiff to clean up a hazardous waste site in Greene County, New York, after defendants, in their capacity as design consultants and construction managers for DEC, had scoped out the site and prepared specifications for the contract work. Plaintiff alleges that numerous differences between the actual site conditions and those set forth in the bidding documents were discovered in the course of the project which increased plaintiff's costs on the project and caused time delays. Based thereupon, plaintiff asserts DEC wrongfully terminated its contract and has, to date, failed to pay the change order request submitted by plaintiff for unanticipated site conditions and extra work allegedly caused thereby.

In the original complaint, plaintiff claimed that defendants were liable under New York State law for tortious interference with its contract with DEC. The complaint alleged in conclusory fashion that defendants intentionally interfered with its contract with DEC and that the interference was undertaken with malice and in bad faith toward plaintiff. The Court granted defendants' motion to dismiss the tortious interference claim on the ground that the complaint lacked the specificity required under New York law to establish this claim. To wit, there were no factual allegations detailing how defendants allegedly intentionally procured the breach of plaintiff's contract with DEC.

Plaintiff's original complaint also charged defendants with a prima facie tort under New York law. In the same conclusory terms in which it had asserted the tortious interference with contract claim, plaintiff alleged that defendants' conduct in connection with the project and contract with DEC was without excuse or justification and was intended to inflict harm upon its business. The Court noted in the first instance, that plaintiff had failed to plead requisite special damages in connection with this claim. Indeed, plaintiff recognized this deficiency prior to the Court rendering a decision on the motion and sought leave to amend this aspect of its prima facie tort claim. This Court, however, denied the motion to amend as futile since the underlying tort claim did not include specific factual allegations of defendants' intentional conduct, malice and/or ill will required under New York law. Based thereupon, the Court also granted defendants' motion to dismiss plaintiff's prima facie tort claim.

Plaintiff now moves for reconsideration of the Court's determination to dismiss these two claims under N.D.N.Y. Local Rule 7.1(g) or, in the alternative, to file an amended complaint which more fully amplifies the factual predicate for said claims. Specifically, plaintiff contends that the Court erred when it applied the greater pleading requirements of New York law rather than a less stringent federal standard to the claims for tortious interference with contract and prima facie tort since the present action is premised upon diversity jurisdiction. Plaintiff asserts in the alternative that it is entitled to amend its complaint to provide the required factual predicate for these claims. Defendants oppose plaintiff's motion on various grounds. First, defendants assert that the Court's prior decision herein disposed of plaintiff's claims for tortious interference with contract and prima facie tort on the merits and thus, no amendment is warranted. Second, defendants contend that plaintiff cannot raise both a claim for tortious interference with contract and one for prima facie tort in the same pleading, particularly when both claims are allegedly premised upon the same facts. Finally, defendants argue that plaintiff's amended complaint does not adequately state a claim for either tortious interference with contract or prima facie tort against defendant David Hiss in his individual capacity. Based thereupon, defendants contend that the proposed amended complaint plainly lacks merit and the motion to amend should therefore be denied.

III. DISCUSSION

A. Reconsideration

A court may grant reconsideration of a judgment or interlocutory order to afford such relief as justice requires, based on an intervening change in controlling law, the availability of previously unavailable evidence, or the need to correct a clear error of law or prevent manifest injustice. See Doe v. N.Y. City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir. 1983).Local Rule 7.1 (g) implements this power.

As to plaintiff's argument that reconsideration of the prior decision to dismiss its claims for tortious interference with contract and prima facie tort is warranted based on the Court's misapprehension of federal pleading requirements, plaintiff is mistaken. It is true as plaintiff asserts that the Fed. R. Civ. P. govern the degree of particularity with which its allegations of fraud, bad faith, malice, etc. must be made in a federal complaint. See Stern v. General Elec. Co. 924 F.2d 472, 476 n. 6 (2d Cir. 1991) (citing Hanna v. Plumer, 380 U.S. 460, 473-74 (1965) (suggesting that the Federal Rules of Civil Procedure are procedural rules to which federal courts sitting in diversity must adhere)). However, federal pleading rules, which may lessen the degree of specificity required insofar as factual allegations are concerned, do not by any means eliminate the requirement of specificity altogether.

To wit, in order to maintain a successful cause of action for tortious interference with contract under New York law, a plaintiff must allege and prove: (1) the existence of a contract between plaintiff and a third party; (2) defendant's knowledge of the contract; (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages. Mina Inv. Holdings LTD v. Lefkowitz, 184 F.R.D. 245, 252 (S.D.N.Y. 1999). Importantly, however, a plaintiff must also allege that "but for" the activities of the defendant, there would have been no breach of the contract. Sharma v. Skaarup Ship Mgmt. Corp., 916 F.2d 820, 828 (2d Cir. 1990) (citing Special Event Entertainment v. Rockefeller Center, Inc., 458 F.Supp. 72, 78 (S.D.N.Y. 1978) and Merrill Lynch Futures, Inc. v. Miller, 686 F.Supp. 1033, 1040 (S.D.N.Y. 1988)). While a pleading need not detail the exact circumstances which show that a contract would have been completed, there must be at least an allegation that there would not have been a breach but for the intentional activities of defendants. Special Event Entertainment, 458 F. Supp. at 78. Specifically in this regard, a "plaintiff must plead and prove that 'but for the unlawful actions of defendant, the contract would have been performed.' " Merrill Lynch Futures, Inc., 686 F.Supp. at 1040. And though Rule 8 of the Fed. R. Civ. P. requires only a "short and plain" statement of a claim showing the pleader is entitled to relief, the allegations must give a defendant "fair notice of the plaintiff's claims" and "the grounds upon which they rest." Pelman v. McDonald's Corp, 396 F.3d 508, 511 (2d Cir. 2005).

An example of the "simplified notice pleading" contemplated in Pelman appears in Czech Beer Importers, Inc. v. C. Haven Imports, LLC, 2005 WL 1490097, *7 (S.D.N.Y. June 23, 2005), where the court found the plaintiff had pled the required elements for tortious interference with contract under New York law so as to survive defendant's motion to dismiss. Specifically, the plaintiff alleged that a valid contract existed between it and a third-party, BBNP; that the defendant knew of the contract and an extension option that it contained; that the defendant improperly and intentionally caused BBNP to breach the contract by refusing to accept the plaintiff's extension request; and that the breach resulted in damage to the plaintiff. See id (citing ...


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