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Micromat Co., Inc. and Erwin Eibert v. Catskill Mountain Brewing Co.

May 11, 2011

MICROMAT CO., INC. AND ERWIN EIBERT, PLAINTIFFS,
v.
CATSKILL MOUNTAIN BREWING CO., INC., RICHARD RAUCH, HARRY RHULEN AND JOHN BORWICK, DEFENDANTS.



The opinion of the court was delivered by: Mae A. D'Agostino, U.S. District Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

On April 29, 2010, plaintiffs filed this breach of contract action. Currently before the Court is defendants' motion to dismiss*fn1 or, in the alternative, for summary judgment.

II. BACKGROUND

Plaintiff Micromat Company ("Micromat") is a New Jersey corporation and plaintiff Erwin Eibert is a New Jersey resident. See Dkt. No. 1 at ¶ 1. Plaintiff Micromat is the successor in interest of the Pub Brewing Company, a New Jersey corporation. See id. Defendant Catskill Mountain Brewing Company ("Catskill") is a New York corporation and defendants Richard Rauch, Harry Rhulen, and John Borwick are residents of New York, Colorado, and Minnesota, respectively. See id. at ¶ 2.

Plaintiffs manufacture and sell equipment for the brewing of beer, and defendants own and operate a restaurant in New Paltz, New York. See id. at ¶ 5. Defendants produce beer in their restaurant using brewery equipment provided by plaintiffs. See id.

Defendants solicited plaintiffs' assistance in developing their restaurant and agreed to purchase equipment from plaintiffs for the preparation of beer. See id. at ¶ 6. Through an oral agreement, defendants agreed to purchase and plaintiffs agreed to provide brewery equipment with a fair market value of $150,000. See id. at ¶¶ 7, 11. Plaintiffs provided the equipment and defendants continue to use this equipment in their restaurant. See id. at ¶ 8. Plaintiffs claim that, despite their demands, "defendants have provided nothing of value for the purchase and use of the equipment provided by the Plaintiffs." See id. at ¶ 10.*fn2

Plaintiffs allege three causes of action. Specifically, plaintiffs allege (1) "a total failure of consideration from the Defendants to the Plaintiffs for the purchase by the Defendants of the brewing equipment;" (2) unconscionability; and (3) a breach of the implied covenant of good faith. See id. at ¶¶ 12-17.

III. DISCUSSION

A. Standard of review

The Rule 12(c) standard for judgment on the pleadings is essentially the same as the standard that courts apply to a motion to dismiss under Rule 12(b)(6). See Johnson v. Rowley, 569 F.3d 40, 43-44 (2d Cir. 2009) (quotation omitted). The court must accept as true all of the factual allegations in the complaint, which is deemed to include any written instrument attached to the complaint as an exhibit, any materials incorporated into it by reference, and any other documents that are integral to it. See Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004) (citations omitted). Moreover, the court must draw all reasonable inferences from those factual allegations in the plaintiff's favor. See Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010) (quotation omitted).

So read, the complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim to relief is plausible on its face "when the plaintiff pleads fact[s] . . . that allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949 (2009) (citation omitted).

In general, a court may only consider the pleadings when ruling on a motion to dismiss. See Newman & Schwartz v. Asplundh Tree Expert Co., 102 F.3d 660, 662 (2d Cir. 1996) (holding that, "[i]n considering a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b) (6), a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference" (quoting Kramer v. Time Warner, Inc., 937 F.2d 767, 773 (2d Cir. 1991)). If a court considers materials outside of the pleadings, however, then it must convert the motion to dismiss or motion for judgment on the pleadings to a motion for summary judgment. See Sahu v. Union Carbide Corp., 548 F.3d 59, 66 n.1 (2d Cir. 2008); see also Fed. R. Civ. P. 12(d) (providing that "[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion").

"[A] district court ordinarily must give notice to the parties before converting a motion to dismiss pursuant to Rule 12(b)(6) into one for summary judgment and considering matters outside the pleading." Gurary v. Winehouse, 190 F.3d 37, 43 (2d Cir. 1999) (citing Kopec v. Coughlin, 922 F.2d 152, 154-55 (2d Cir. 1991)). "This is simply an application, however, of the principle that parties are entitled to a reasonable opportunity to present material pertinent to a summary judgment motion." Id. "Hence, '[c]compliance . . . is not an end in itself.'" Id. (quoting In re G. & A. Books, Inc., 770 F.2d 288, 295 (2d Cir. 1985), cert. denied sub nom. M.J.M. Exhibitors, Inc. v. Stern, 475 U.S. 1015, 106 S. Ct. 1195, 89 L. Ed. 2d 310 (1986)). "'The essential inquiry is whether the [plaintiff] should reasonably have recognized ...


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