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Bayit Care Corp v. Tender Loving Care Health Care Services of Nassau Suffolk

February 17, 2012

BAYIT CARE CORP., PLAINTIFF,
v.
TENDER LOVING CARE HEALTH CARE SERVICES OF NASSAU SUFFOLK, LLC, SUCCESSOR IN INTEREST TO STAFF BUILDERS INTERNATIONAL, INC.,
DEFENDANT.
TENDER LOVING CARE HEALTH CARE SERVICES OF NASSAU SUFFOLK, LLC, AND AMEDISYS, INC., PLAINTIFFS,
v.
BAYIT CARE CORPORATION DEFENDANT.



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

MEMORANDUM & ORDER

Plaintiff Bayit Care Corp. ("plaintiff" or "Bayit") commenced this diversity action against defendant Tender Loving Care Health Care Services of Nassau Suffolk, LLC ("defendant" or "Tender Loving") asserting three causes of action for breach of contract based upon defendant's alleged breach of the parties' franchise agreement. In its Fourth Cause of Action, Bayit seeks damages for Tender Loving's alleged failure to provide Bayit with certain disclosure documentation as required by New York General Business Law § 683. Presently before the Court is Tender Loving's motion pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Bayit's Fourth Cause of Action as time-barred.*fn1 For the reasons discussed below, Tender Loving's motion is granted.

BACKGROUND

The following factual recitation is drawn from the allegations contained in the Complaint as well as documents referenced therein, which are integral to Bayit's allegations.*fn2

I. The Parties

Bayit is a New York corporation with its principal place of business in Huntington, New York. (Compl. ¶ 1.) On or about April 1, 1992, Bayit entered into a franchise agreement ("Franchise Agreement") with Staff Builders International, Inc. ("Staff Builders"). On or about February 14, 2005, defendant succeeded to the interests of Staff Builders; the two merged and Tender Loving is the surviving entity.*fn3 (Id. ¶ 3.) Pursuant to the Franchise Agreement, Bayit was granted the right to operate a franchised health center and to offer health care personnel services, programs, products, and activities. (Id. ¶ 6.) At the outset of their relationship, the parties recognized that "due to changes in competitive circumstances . . . [Tender Loving] must not remain static." (Id. ¶ 8.) Accordingly, the parties agreed that Tender Loving may modify its practices or services, and Bayit would abide by those modifications to the extent that they did not "unreasonably and materially increase [Bayit's] obligations" under the Franchise Agreement. (Id.)

II. The Management Fee Amendments

On November 4, 2004, the parties entered into a management fee amendment to the Franchise Agreement, which was effective February 14, 2005.*fn4 (Id. ¶ 9). The parties entered into four subsequent management fee amendments for each of the years between 2006 and 2009. (Id. ¶ 10) The sixth management fee amendment ("Sixth Fee Amendment") was executed on June 14, 2010. According to Bayit, the Sixth Fee Amendment "fundamentally altered the financial structure" of the Franchise Agreement, and "created a completely different contractual relationship between the parties, which was tantamount to an offer of a new franchise." (Id.)

III. The Complaint

In its first three causes of action, Bayit asserts that Tender Loving committed various breaches of the Franchise Agreement. (Id. ¶¶ 18-20.) In the Fourth Cause of Action, which is at issue in the present motion, Bayit alleges that Tender Loving violated New York's Franchise Sales Act, N.Y. General Business Law § 680 et. seq. ("FSA"), by failing to provide Bayit with a "Franchise Disclosure Document" or "Uniform Franchise Offering Circular" prior to entering into the Sixth Fee Amendment. (Compl. ¶ 32.)

DISCUSSION

I. Legal Standard

Federal Rule of Civil Procedure 8(a)(2) provides that a pleading shall contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The Supreme Court has recently clarified the pleading standard applicable in evaluating a motion to dismiss under Rule 12(b)(6).

First, in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the Court disavowed the well-known statement in Conley v. Gibson, 355 U.S. 41, 45-46 (1957) that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Twombly, 550 U.S. at 561 (quoting Conley, 355 U.S. at 45-46). Instead, to survive a motion to dismiss ...


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