The opinion of the court was delivered by: Chin, D.J.
In this diversity case, plaintiff George P. Neumann sues defendants Thomas Iovino ("Iovino"), Judlau Contracting Inc. ("Judlau"), and Spearin Preston & Burrows, Inc. ("Spearin") (collectively, "defendants") for breach of contract and unjust enrichment. Neumann alleges that defendants agreed to make five annual payments to him of $54,968.20. He alleges further that defendants failed to make the first payment and then expressly repudiated the agreement, causing the four remaining payments to become immediately due. Neumann seeks to recover all five payments, which total well more than the $75,000 amount in controversy necessary for diversity jurisdiction. Defendants move to dismiss the complaint, arguing that Neumann can recover only the first of the five annual payments and that, as a consequence, the Court lacks subject matter jurisdiction because the amount in controversy is less than $75,000. For the reasons set forth below, the motion is denied.
For purposes of this motion, the facts in the complaint are assumed to be true and are construed in the light most favorable to plaintiff.
On February 29, 2000, Neumann entered into a stock purchase agreement (the "Agreement") selling his shares of Spearin stock to various entities, including Modern Continental Construction Company ("Modern"). (Compl. ¶¶ 8-9). Pursuant to the Agreement, Neumann was to receive a payment every September from 2001 through 2005 of 15% of Spearin's pre-tax earnings for the fiscal years ending June 2001, 2002, 2003, 2004, and 2005, respectively. (Id. ¶ 10).
In November 2005, Judlau and Iovino entered into an agreement to purchase the shares of Spearin stock from Modern.
The agreement required approval of defendants' banks and surety companies and was contingent upon Neumann's signing a release agreement (the "Release"). (Id. ¶¶ 11-13). In November 2005, Neumann signed the Release, which provided that Spearin was obligated to pay Neumann 15% of its pre-tax earnings for the fiscal year ending June 30, 2005, estimated in the Release to be $474,841. (Id. ¶ 14). Spearin was to pay Neumann $200,000 upon the closing of the purchase agreement between Modern and Judlau/Iovino and the remaining balance, together with interest, in five annual payments due June 2006, 2007, 2008, 2009, and 2010, respectively, which were estimated in the Release to be $54,968.20 each. (Id. ¶ 15). Judlau and Iovino, jointly and severally, guaranteed these payments. (Id. ¶ 16).
Neumann received the initial payment of $200,000 in accordance with the Release. (Id. ¶ 18). The first annual payment, due in June 2006, was never made. (Id. ¶ 19). Neumann alleges that defendants repudiated the Release in July 2006, when, in response to Neumann's inquiry regarding the missing payment, Iovino stated that defendants had no intention of paying Neumann the amount past due or any amount due in the future. (Id. ¶¶ 21-22).
Jurisdiction is based solely on diversity of citizenship. (Id. ¶¶ 6-7). Neumann is a citizen of New Jersey. (Id. ¶ 2). Iovino is a citizen of New York. (Id. ¶ 3). Judlau is incorporated in New York and has its principal place of business in New York. (Id. ¶ 4). Spearin is incorporated in Massachusetts and has its principal place of business in New York. (Id. ¶ 5).
Neumann commenced this action on October 25, 2006 asserting causes of action for breach of contract and unjust enrichment. Neumann sues defendants' failure to make the June 2006 payment and its purported repudiation of its obligation to make the June 2007, 2008, 2009, and 2010 payments. (Id. ¶¶ 24-39). Neumann brings further breach of contract claims against Iovino and Judlau based on the provision in the Release whereby they guaranteed all the payments. (Id. ¶¶ 40-48, 49-57). Neumann asserts the unjust enrichment claim against all defendants, alleging that they have not paid for the benefits that they received under the Release. (Id. ¶¶ 58-62). Neumann seeks to recover $274,841, the total of the five payments as estimated in the Release, together with interest, any other damages proven at trial, and the costs of the action. (Id. ¶ 63(a)).