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Eastman Kodak Co. v. Teletech Services Corp.

July 11, 2007


The opinion of the court was delivered by: Michael A. Telesca United States District Judge



Plaintiff Eastman Kodak Company ("Kodak") brings this action pursuant to diversity jurisdiction against Defendant TeleTech Services Corporation ("TeleTech"), seeking injunctive and declaratory relief, and damages arising out of TeleTech's failure to perform its obligation under a Master Professional Services Agreement ("MPSA"). Specifically, Kodak contends that TeleTech breached its contractual obligation to provide Termination Assistance Services upon Kodak's request.

TeleTech denies Kodak's allegations and asserts affirmative defenses including failure to state a claim, contractual excuse and "unclean hands." Teletech also alleges seven counterclaims against Kodak for damages arising out of: a) Kodak's failure to make timely payment of certain costs and other charges billed by TeleTech in accordance with the terms of the MPSA; and b) Kodak's representations and commitment at the inception of the MPSA upon which TeleTech reasonably relied to its substantial detriment.*fn1

Kodak moves to dismiss TeleTech's fifth counterclaim for detrimental reliance/promissory estoppel, on grounds that the counterclaim was legally insufficient and TeleTech's detrimental reliance/promissory estoppel theory was defeated by the express terms of the MPSA.*fn2 TeleTech opposes Kodak's motion to dismiss the fifth counterclaim. For the reasons set forth below, I grant Kodak's motion to dismiss TeleTech's fifth counterclaim.


On September 20, 2004, Kodak and TeleTech entered into a MPSA agreement for TeleTech to provide Kodak with comprehensive services for contact centers. In the agreement TeleTech agreed that, upon termination, TeleTech would provide certain Services, defined as Termination Assistance Services, on the terms and conditions set forth in the MPSA. Under Sections 4.3(a)(3) and 19.4(b) of the MPSA, TeleTech was obligated to provide Termination Assistance Services upon Kodak's request, regardless of the reason for the termination and regardless of any dispute or controversy.

On October 24, 2006, Kodak notified TeleTech by letter that the MPSA was being terminated. Kodak intended to meet with TeleTech to plan the provisions of the Termination Assistance Services, pursuant to Section 4.3 of the Agreement. In reply TeleTech delivered written notice of Kodak's failure to make Minimum Revenue payments for the 2005 and 2006 contract years. Kodak disputed these Minimum Revenue Charges. TeleTech sent another letter to Kodak on November 17, 2006, discussing the effect of Kodak's non-payment of the Disputed Minimum Revenue Charges under Sections 4.3(a)(3) and 20.1 (b) of the MPSA. Further, TeleTech also stated that if the Disputed Minimum Revenue Charges were not paid, TeleTech had a right to terminate the provision of Termination Assistance Services.

Kodak claims that TeleTech's termination notice was in clear violation of the express provisions of the Agreement, which permit TeleTech to terminate the Agreement only for failure to pay undisputed charges, and require TeleTech to provide Services, including Termination Assistance Services, even when a dispute is pending. Accordingly, Kodak filed an action on November 29, 2006, alleging money damages in excess of $75,000 and requested the Court to grant declaratory and injunctive relief, as well as any further damages to be ascertained at trial.


I. Kodak's Motion to Dismiss

Rule 12(b) of the Federal Rules of Civil Procedure provides that every defense, in law or fact, to a claim of relief in any pleading, whether a claim or counterclaim can be asserted in a responsive pleading. Rule 12(b)(6) provides that a pleader can make a defensive motion for failure to state a claim upon which relief can be granted, in place of a responsive pleading. When evaluating a Rule 12(b)(6) motion, the court must presume all factual allegations in the pleading to be true and view them in the light most favorable to the non-pleading party. See Ferran v. Town of Nassau, 11 F.3d 21, 22 (2d Cir. 1993), cert. denied, 513 U.S. 1014 (1994).

The court may grant a Rule 12(b)(6) motion only where, it appears beyond doubt that the non-pleading party can prove no set of facts in support of his claim which would entitle him to relief. See Allen v. Westpoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991). For the reasons set forth ...

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