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Modular Devices, Inc. v. Espana

March 16, 2009

MODULAR DEVICES, INC., PLAINTIFF,
v.
ALCATEL ALENIA SPACE ESPANA AND SPACE SYSTEMS/LORAL, INC., DEFENDANTS.



The opinion of the court was delivered by: Seybert, District Judge

MEMORANDUM AND ORDER

INTRODUCTION

Plaintiff Modular Devices, Inc. ("MDI" or "Plaintiff") filed this action on March 12, 2008 in the Supreme Court of the State of New York, County of Suffolk. On April 4, 2008, Defendant Space Systems/Loral, Inc. ("SS/L") removed the action to this Court. Pending before the Court is Defendants', Alcatel Alenia Space Espana ("Alcatel")*fn1 and SS/L (collectively, the "Defendants") motion to dismiss pursuant to Federal Rule of Civil Procedure 12(c). For the reasons set forth herein, Defendants' motion to dismiss is DENIED.

BACKGROUND

The facts of this case are taken from the Plaintiff's Complaint and are presumed true for purposes of deciding this motion. MDI is a corporation with its principal place of business located in Shirley, New York. (Compl. ¶ 1). Alcatel is a corporation with its principal place of business located in Madrid, Spain. (Compl. ¶ 2). SS/L is a corporation with its principal place of business located in Palo Alto, California. (Compl. ¶ 3). This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332, as there is complete diversity between the parties and the matter in controversy exceeds the sum of $75,000. 28 U.S.C. § 1332.

This case involves contracts entered into by MDI, Alcatel, SS/L, and Mier, a non-party, for the manufacture of electronic modules for ultimate use by SS/L. MDI contracted separately with both Alcatel and Mier, each of which contracted with SS/L.

On or about July 1, 2005, MDI submitted to Alcatel a proposal of the cost to "engineer and manufacture certain electronic modules" in accordance with Alcatel's specifications. (Compl. ¶¶ 4-5). MDI later received Alcatel's purchase order indicating a contract price of $597,319.65 and began production. (Compl. ¶¶ 6-8). The equipment Alcatel contracted with MDI to produce would be used by SS/L on a project known as TERRESTAR. (Compl. ¶ 17). SS/L became aware of Alcatel's contract with Plaintiff and informed Alcatel that its contract with MDI "would have increased Alcatel's costs and reduced its profits." (Compl. ¶¶ 18-19). Prior to April 20, 2006, Alcatel approved the services provided by MDI and never indicated that the products delivered by MDI were substandard to those in the contract. (Compl. ¶¶ 9-10). After MDI had performed a "substantial" portion of the contract, Alcatel directed Plaintiff to cease production. (Compl. ¶ 11). At that time, $131,591.10 was due and owing to Plaintiff for products and services already delivered, and MDI valued the work in progress at $280,231.90. (Compl. ¶ 12). Alcatel already tendered payment in the amount of $191,427.56, and Plaintiff demanded payment of an additional $411,823.00. (Compl. ¶¶ 13-14). On or about Apri1 24, 2006, Alcatel communicated to MDI its "final termination charge" offer of $173,000. (Compl. ¶¶ 20-21). Plaintiff refused to accept this payment.

Plaintiff claims SS/L knew of Alcatel's contract with MDI and "intentionally procured . . . breach" by giving MDI's work to another vendor chosen by SS/L. (Compl. ¶¶ 22-23). Plaintiff claims this act by SS/L and the resultant actions by Alcatel in canceling the contract with MDI constituted a wrongful interference with the contract between Alcatel and MDI. (Compl. ¶¶ 24-29). MDI also claims SS/L interfered with MDI's contract with Mier Comunicaciones, S.A. ("Mier") to engineer and manufacture electronic modules. (Compl. ¶¶ 31, 35-40). MDI alleges SS/L instructed Mier to terminate its contract with MDI and contract with another vendor of SS/L's choosing after MDI performed a substantial amount of work for Mier. (Compl. ¶¶ 33-35). MDI claims it suffered damages as a result of SS/L's "interference with the contract between MDI and Mier, in the amount of $164,290.00, or alternatively, in an amount to be determined at trial." (Compl. ¶ 40).

At issue in the motion before the Court is the effect of the settlement of a prior action between MDI and Mier. In 2006, MDI commenced an action against Mier in the Supreme Court of the State of New York, County of Suffolk, for breach of contract and tortious interference with Alcatel's contract. Mier removed the action to the Eastern District of New York on August 22, 2006. Mier counterclaimed against MDI alleging breach of contract, breach of warranty and unjust enrichment. The action was settled by stipulation on August 2, 2007, which discontinued the action ("2007 Settlement"). The settlement stated, "[i]t is hereby stipulated and agreed . . . that the above captioned matter be and hereby is dismissed, with prejudice." (Defs.' Mot. to Dismiss, Ex. E) (emphasis omitted).

Plaintiff commenced the instant action in the Supreme Court of the State of New York, County of Suffolk, on March 12, 2008. SS/L filed a Notice of Removal on April 4, 2008.

DISCUSSION

I. Standard of Review

On a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must satisfy a "flexible 'plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007). The Complaint "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed. 2d 1965 (2007). To be clear, on a motion to dismiss, the Court does not require "heightened fact pleading of specifics, but only enough facts to state a claim for relief that is plausible on its face." Id. at 1974.

In applying this standard, the district court must accept the factual allegations set forth in the Complaint as true and draw all reasonable inferences in favor of Plaintiff. See Cleveland v. Caplaw Enter., 448 F.3d 518, 521 (2d Cir. 2006); Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005). Generally, the scope of the Court's inquiry is confined to "the allegations contained within the four corners of the complaint[,]" Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 71 (2d Cir. 1998), but the Court may also examine "any written instrument attached to [the complaint] or any statements or documents incorporated in it by reference" as well as any document on which the complaint relies heavily. Chambers v. Time Warner, Inc., 282 F.3d 147, 152-153 (2d Cir. 2002). "Of course, it may also consider a matter of which judicial notice may be taken under Fed. R. Evid. ...


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