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Tierney v. Omnicom Group

December 20, 2007


The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge


In this action brought against Defendant Omnicom Group Inc. ("Defendant" or "Omnicom"), Plaintiff Michael P. Tierney ("Plaintiff" or "Tierney"), in his Second Amended Complaint, raises several causes of action under New York common law concerning stock options that Omnicom allegedly promised to him. The Court has diversity jurisdiction of this action pursuant to 28 U.S.C. § 1332.

On July 11, 2007, the Court granted in part and denied in part Defendant's motion to dismiss Plaintiff's Amended Complaint. The Court also granted Plaintiff leave to replead two causes of action: his breach of contract claim in connection with an executed employment term sheet as orally modified by both parties, and his breach of contract claim(s) in connection with three separate stock option agreements. Tierney v. Omnicom Group, Inc., No. 06 Civ. 14302(LTS)(THK), 2007 WL 2012412 (S.D.N.Y. July 11, 2007) ("Tierney I").

Plaintiff filed his Second Amended Complaint (the "SAC") on July 20, 2007. Defendant moves pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss Plaintiff's SAC in its entirety. In addition, Defendant moves to strike portions of Plaintiff's pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. The Court has thoroughly considered all of the parties' submissions and arguments. For the following reasons, Defendant's motion to dismiss is denied, and Defendant's motion to strike is granted in part and denied in part.


The Court presumes familiarity with the facts alleged in Plaintiff's Amended Complaint, which were summarized by the Court in Tierney I. This section highlights only the allegations of the SAC that are materially different from those of the Amended Complaint. The following alleged facts are taken as true for the purposes of the instant motion practice. Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996).

In early 2001, Omnicom orally assured Tierney that stock options previously granted to him by Omnicom would remain exercisable by Tierney upon his transfer to Seneca or that Omnicom would "pay to Plaintiff at any time on or after the date of his transfer to Seneca ("Seneca Transfer Date") cash equal to the value of the Options calculated as of the Seneca Transfer Date." (SAC ¶ 30.) In exchange, Tierney agreed to be transferred to Seneca and continue his responsibilities there. (Id. ¶¶ 32-38.) The Seneca Transfer Date was May 1, 2001. (Id. ¶ 39.) (The Court will refer to this alleged set of terms and conditions as the "Modified Agreement.")

In late March 2004, Omnicom unilaterally informed Tierney that it would terminate the employment relationship between Omnicom and Tierney on March 31, 2004. Accordingly, Omnicom "involuntarily terminated [Tierney] as a reported employee of Omnicom and Seneca" on March 31, 2004. (SAC ¶¶ 82-84.) Omnicom did not terminate Tierney for cause or for reasons of disability or retirement, and Omnicom reported to the IRS and other third parties that Tierney's employment had been involuntarily terminated. (Id. ¶¶ 85-86.)

The SAC asserts five causes of action: breach of the Modified Agreement, breach of the Stock Option Agreements, quantum meruit, unjust enrichment and promissory estoppel. Tierney also alleges breaches of the implied covenant of good faith and fair dealing. (SAC ¶¶ 265, 274.)


In evaluating a motion to dismiss a pleading pursuant to Rule 12(b)(6), the Court must take as true the facts alleged in the claimant's pleading and draw all reasonable inferences in his favor. W. Mohegan Tribe & Nation v. Orange County, 395 F.3d 18, 20 (2d Cir. 2004); Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir. 1994).

In the following sections of this Memorandum Order, the Court considers, in turn, Defendant's arguments for the dismissal of each cause of action asserted in the SAC, with the exception of the good faith and fair dealing claims. Those claims will be addressed in the section concerning Defendant's motion to strike.

First Cause of Action: Breach of the Modified Agreement Defendant argues that the Modified Agreement, which was not memorialized in writing, is unenforceable because it runs afoul of the New York Statute of Frauds. However, under to the Statute of Frauds, see N.Y. Gen. Oblig. Law § 5-701(a) (McKinney 2001 & Supp. 2007), if there is any possibility that an oral agreement, according to the parties' terms, can be performed within one year, the oral agreement need not be memorialized in writing to be enforceable. D & N Boening, Inc. v. Kirsch Beverages, Inc., 63 N.Y.2d 449, 455 (N.Y. 1984). As pled in the SAC, the Modified Agreement could have been performed within one year. In exchange for Plaintiff's services, Omnicom promised that it would ensure the viability of his stock options or that it would pay to Plaintiff the cash value equivalent of the stock options calculated as of May 1, 2001, at any time after May 1, 2001. (SAC ¶ 30.) Since the Modified Agreement was allegedly formed in early 2001, Omnicom could have performed it within one year by choosing to give Plaintiff the cash value equivalent at any time in 2001. Therefore, the alleged Modified Agreement did not have to be in writing and Defendant's Statute of Frauds argument fails.*fn1

Defendant further argues that the Modified Agreement is unenforceable for lack of definiteness -- specifically, Defendant argues that the Modified Agreement lacks a price term with regard to the stock options. However, the SAC does plead a specific price term in connection with the Modified Agreement. Plaintiff alleges that Omnicom promised that it would ensure the continued viability of the stock options in Paragraph 30; the specific strike prices of the stock options ...

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