The opinion of the court was delivered by: Go, United States Magistrate Judge
Plaintiff Jacqueline Reddy ("plaintiff") brings this diversity action against defendant David Mangino ("Mangino") asserting claims for breach of contract, conversion, breach of fiduciary duty and unjust enrichment. Mangino filed a third-party complaint against Jacqueline Reddy's husband, Stephen Reddy, alleging breach of contract, unjust enrichment, conversion and fraud. Third-party defendant Stephen Reddy now moves to dismiss the third-party complaint for failure to plead with particularity and for failure to state a claim*fn1 and to strike portions of the third-party complaint. See ct. doc. 16. The parties consented to my hearing and deciding the instant motion. See ct. doc. 21.
The following facts are drawn from the allegations set forth in Mangino's third-party complaint, which are assumed to be true for the purposes of this motion.
Stephen Reddy owned a membership or "seat" on the New York Cotton Exchange, Inc. (the "Seat") which permitted him to trade commodities as a floor broker and/or floor trader on the trading floor of the New York Cotton Exchange (the "Exchange"). Third-party Complaint ("Third-party Compl.") at ¶ 4. Plaintiff alleges that in 1996, her husband transferred ownership of the Seat to her. Id. at ¶ 5. Plaintiff further alleges that she entered into a lease agreement with Mangino and the commodity trading company for which he worked, Citrus Trading Associates ("CTA"), whereby plaintiff leased the Seat to CTA and the Seat was placed in Mangino's name with the Exchange. Id. at ¶ 5, 22. Mangino denies that he entered into any such agreement with plaintiff. Id. at ¶ 6. Rather, Mangino alleges that in October 1996, Stephen Reddy transferred ownership of the Seat to him. Id. at ¶ 15.
In 1998, the Exchange merged with the Coffee, Sugar and Cocoa Exchange to form the Board of Trade of the City of New York (the "NYBOT"). Id. at ¶ 4 n.1. The Seat then became a seat on the NYBOT. Id.
On January 12, 2007, the InterContinental Exchange ("ICE") acquired the NYBOT by offering each member of the NYBOT 11,067 shares of ICE and $380,000 in cash for tender of each membership. Id. at ¶ 26. At that time, ICE shares were valued at $133.37 per share. Id. at ¶ 27. Since the Exchange's records listed Mangino as the owner of the Seat, the ICE shares and cash were distributed to him, the total value of which was approximately $1,856,000. Id.
Following the NYBOT acquisition, Stephen Reddy approached Mangino and demanded compensation as a result of the distribution he received. Id. at ¶ 28. Mangino transferred 7,905 ICE shares and $30,000 in cash to plaintiff based on Stephen Reddy's representation that Mangino could retain the remaining 3,162 ICE shares and $350,000 in cash. Id. at ¶ 29.
Mangino alleges in his Second Cause of Action that by plaintiff's filing of the complaint, Stephen Reddy breached their agreement that Mangino would transfer shares and cash to plaintiff if Mangino could retain the remainder of the proceeds of the acquisition. Id. at ¶ 30. In his Fourth Cause of Action for fraud, Mangino contends that Stephen Reddy's representation that he would honor Mangino's ownership of the Seat was false when made and induced Mangino to transfer shares and cash to plaintiff. Id. at ¶¶ 55-61. Stephen Reddy contends that the fraud claim should be dismissed because it is duplicative of the breach of contract claim.
A motion to dismiss may be granted for a plaintiff's "failure to state a claim upon which relief can be granted."
Fed. R. Civ. P. 12(b)(6). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds, Harlow v. Fitzgerald, 457 U.S. 800, 815 (1982); see Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 476 (2d Cir. 2006). A complaint may be dismissed only where the complaint fails to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007); see Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949; see Twombly, 550 U.S. at 556. "[D]etailed factual allegations" are not required; the complaint need only "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Iqbal, 129 S.Ct. at 1949; Twombly, 550 U.S. at 555; Erickson v. Pardus, 551 U.S. 89, 93 (2007). All reasonable inferences must be drawn in the plaintiff's favor. See Spagnola v. Chubb Corp., 574 F.3d 64, 67 (2d Cir. 2009).
"A cause of action for fraud does not generally lie where the plaintiff alleges only that the defendant entered into a contract with no intention of performing." Grappo v. Alitalia Linee Aeree Italiane, S.p.A, 56 F.3d 427, 434 (2d Cir. 1995); see TVT Records v. Island Def Jam Music Group, 412 F.3d 82, 91 (2d Cir. 2005). In order to sustain a fraud claim, a plaintiff must demonstrate a legal duty separate from the duty to perform under the contract, demonstrate a fraudulent misrepresentation collateral or extraneous to the contract or seek special damages that are caused by the misrepresentation but are ...