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

May 23, 2012

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 their initial complaint in this breach of contract action. On February 28, 2011, Defendants filed a motion for judgment on the pleadings. On May 11, 2011, the Court issued a Memorandum-Decision and Order directing Plaintiffs to file an amended complaint within twenty (20) days, providing "enough facts to state a claim to relief that is plausible on its face." See Dkt. No. 16 at 7 (citation omitted).

Currently before the Court is Defendants' motion for judgment on the pleadings as to Plaintiffs' amended complaint.

II. BACKGROUND

Plaintiff Micromat Company, Inc. ("Micromat") is a New Jersey corporation and Plaintiff Erwin Eibert is a New Jersey resident. See Dkt. No. 17 at ¶ 1. Plaintiff Eibert is the principal owner and chief operating officer of Plaintiff Micromat. See id. 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 brewing beer, and Defendants own and operate a restaurant in New Paltz, New York. See id. at ¶ 5. Defendants produce and sell beer in their restaurant using brewery equipment provided by Plaintiffs. See id.

In 1997, Defendants solicited Plaintiffs' assistance in developing their restaurant and subsequently agreed to purchase equipment from Plaintiffs for the production 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 $310,000. See id. at ¶¶ 7, 11. Plaintiffs provided the equipment and Defendants continue to use this equipment in their restaurant. See id. at ¶ 8. Defendants orally agreed to provide fair market value for the equipment provided by Plaintiffs. See id. at ¶ 9. Plaintiffs claim that, despite their demands, "Defendants have provided only $160,000 and a shareholder interest in their company for the purchase and use of the equipment provided by the Plaintiffs." See id. at ¶ 10.

In 2008, Plaintiffs determined that the "shares in the [D]efendant corporation had no present real value to support the value provided to the Defendants by the Plaintiffs." See id. at ¶ 12. Plaintiffs claim that Defendants did not provide them with any Certificates of Shares or any benefit of share ownership, such as dividends. See id. at ¶ 13. Therefore, Plaintiffs allege that they began to have discussions with Defendants to "recover the balance due of approximately $140,000 on the original agreement." See id. at ¶ 12.

Plaintiffs further allege that Defendant Rauch, acting for Defendant Catskill and its officers and principal owners, orally agreed with Plaintiff Eibert "to pay the balance due of $150,000 plus interest for a total of $175,000" to Plaintiffs. See id. at ¶ 14. In return, Plaintiffs allegedly agreed to "forfeit their interest in the Defendant corporation and all other claims against the Defendants." See id. at ¶ 15. Plaintiffs allege that Defendants have failed to perform, and have thereby breached their oral agreement to provide Plaintiffs with $175,000 to satisfy the balance of the purchase price for the brewery equipment. See id. at ¶ 16.

In their amended complaint, Plaintiffs allege a breach of contract and a conversion cause of action. See id. at ¶¶ 12-20.

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). A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the party's claim for relief. See Patane v. Clark, 508 F.3d 106, 111-12 (2d Cir. 2007). In considering the legal sufficiency, a court must accept as true all well-pleaded facts in the pleading and draw all reasonable inferences in the pleader's favor. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (citation omitted). This presumption of truth, however, does not extend to legal conclusions. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (citation omitted). Although a court's review of a motion to dismiss is generally limited to the facts presented in the pleading, the court may consider documents that are ...


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