The opinion of the court was delivered by: Denise Cote, District Judge
Two former employees of Imagemark, Inc. ("Imagemark"), plaintiffs Jeffrey Oh ("Oh") and Dean DaSuta ("DaSuta"), bring claims for fraudulent misrepresentation and promissory estoppel against Imagemark and individuals identified as the company's owner, Bernard Marden; an officer, James Marden; its Chief Financial Officer, Frank Bisconti ("Bisconti"); and Bruce Ross ("Ross") and Thom Dean ("Dean"), both of whom are described as "President" of Imagemark (collectively, the "individual defendants"). Oh also alleges violations of the New York Executive Law, and the Administrative Code and Charter of the City of New York.
On May 15, the defendants filed a motion to dismiss some of the claims in the Amended Complaint*fn1 pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. The motion is granted in part.
The following facts are taken from the Amended Complaint ("Complaint"), unless otherwise noted. In July 2005, Oh earned an annual salary of $120,000 plus a bonus and equity, and was considering offers of employment with starting annual salaries of the same amount. On July 19, Bernard Marden interviewed Oh for the position of Senior Vice President of Imagemark. During the interview, Bernard Marden told Oh that Imagemark was worth $25 million, had been extremely profitable, and was projected to reach $50 million in annual sales by the end of 2007.
DaSuta, who was earning $110,000 per year, applied for the position of Vice President of Sales with Imagemark. In late July 2005, Oh and DaSuta met with Ross and Dean in Imagemark's New York office. Ross and Dean told Oh and DaSuta that Imagemark was a highly profitable, $25 million dollar company that could become a $50 million company with their help.
Sometime thereafter, Bernard Marden offered Oh the position of Senior Vice President, with a base salary of $135,000 and a $30,000 guaranteed annual bonus. He offered DaSuta a base salary of $110,000 and a $20,000 guaranteed annual bonus. Bernard Marden knew that Oh and DaSuta would be leaving highly paid positions and declining other employment opportunities if they accepted Imagemark's offers.
In August 2005, Imagemark presented Oh and DaSuta with employment offer letters. While discussing the terms of these letters, Bisconti told Oh and DaSuta that Imagemark was worth only $17 million. Oh and DaSuta asked Bernard Marden, Ross, Dean, and Bisconti about the discrepancy between this figure and Bernard Marden's representations. Bernard Marden, Ross, Dean, and Bisconti assured Oh and DaSuta that Imagemark was currently worth $25 million, was highly profitable and would reach a projected $50 million in annual sales by the end of 2007.
In August 2005, Oh and DaSuta signed offer letters with the terms that Bernard Marden had verbally conveyed, including an opportunity to own equity. After accepting Imagemark's offers, Oh and DaSuta resigned from their previous jobs and declined other employment opportunities. They began working for Imagemark on August 8.
During their first week of work, they learned that Imagemark was financially vulnerable. Within their first month of employment, they learned that Imagemark had lost some vendors and had strained relationships with other vendors. They also learned that Imagemark was severely underfinanced.
On August 28, 2005, Oh and DaSuta met with Bernard Marden and James Marden. At this meeting, the Mardens gave Oh and DaSuta a document entitled the Business Reorganization and Financial Turn-Around Plan ("Turn-Around Plan"), which analyzed Imagemark's finances from 1998 to July 2004. The Turn-Around Plan revealed that Imagemark had never had a profitable year, had lost $9 million over the preceding three years, and was financially stressed. The document confirmed that the defendants had known that Imagemark was worth less than $17 million at the time they extended employment offers to Oh and DaSuta.
Oh and DaSuta proposed a business strategy, called the "Profit Plan," which was designed to improve Imagemark's business within one year. The individual defendants agreed with this strategy and implemented it in September 2005. Beginning in September 2005, Bernard Marden repeatedly promised equity in Imagemark to Oh and DaSuta. From September to November 2005, the plaintiffs and Bernard Marden negotiated the terms of the equity that the plaintiffs were to receive. On December 2, 2005, Bernard Marden told the plaintiffs that the equity agreement was finalized and would take effect on January 1, 2006. Two days later, Imagemark terminated Oh's and DaSuta's employment without explanation. Oh and DaSuta did not receive equity in Imagemark.
As a preliminary matter, although the defendants style their motion as one to dismiss the entire Complaint, their memorandum of law makes no argument for dismissing Counts IX through XII. ...