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Andrew S. Cohen v. Avanade

June 15, 2012

ANDREW S. COHEN,
PLAINTIFF,
v.
AVANADE, INC., MATTHEW MCCAFFERTY,
AND AZIZ VIRANI,
DEFENDANTS.



The opinion of the court was delivered by: Jesse M. Furman, District Judge:

OPINION AND ORDER

This action, initially filed in New York State Supreme Court, and removed here pursuant to Title 28, United States Code, Sections 1332 and 1441, arises out of claims by Plaintiff Andrew S. Cohen against his former employer, Avanade Inc., and two Avanade employees, Matthew McCafferty and Aziz Virani. In particular, in his amended complaint (the "complaint"), filed on May 17, 2011, Plaintiff asserts claims for breach of contract; fraudulent inducement; malicious, fraudulent, oppressive and/or reckless conduct; harm to professional reputation; negligence; and negligent misrepresentation. Defendants now move, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for dismissal of the complaint in its entirety. For the reasons stated below, Defendants' motion to dismiss is GRANTED and the complaint is dismissed.

BACKGROUND

On a motion to dismiss, a court may consider facts stated in the complaint, any documents attached to the complaint, and any documents incorporated by reference into the complaint. See, e.g., Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2nd Cir. 2005). Where the claim is for breach of contract, as is the case here, the complaint is deemed to incorporate the alleged contract by reference because the alleged contract is integral to the claim.

See, e.g., Broder v. Cablevision Sys. Corp., 418 F.3d 187, 196 (2d Cir. 2005). Accordingly, the following facts are taken from the complaint and from documents referenced therein, and are assumed to be true for purposes of this motion. See, e.g., LaFaro v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009).

Defendant Avanade Inc. ("Avanade" or "the company") is a Washington state corporation. At all times relevant to this action, Defendant McCafferty was a vice president and Defendant Virani was an executive vice president of Avanade. (Compl. ¶¶ 3-4). In February 2009, McCafferty and Virani began recruiting Cohen for a position as a Business Development Executive in Application Management at Avanade. (Id. ¶ 5). During the recruitment process, McCafferty and Virani made various representations to Cohen regarding Avanade's application management capabilities. Specifically, the complaint alleges that McCafferty and Virani told Cohen that Avanade possessed a "true, well-established, fully capable, and experienced Application Management delivery system," with deal pricing, legal, and delivery teams that could "deliver complex, multi-year, multi-million dollar application management deals to its customers." (Id. ¶¶ 6, 41). Relying on these representations, Cohen accepted employment as a Business Development Executive in Application Management. (Id. ¶ 7).

Avanade formally offered Cohen the position of Business Development Executive by letter dated May 5, 2009 (the "Offer Letter"). (Maatman Decl. Ex. A). To the extent relevant here, the Offer Letter provided that Cohen would be paid a base salary of $120,000 per year and that, "based upon the terms and conditions" of the Avanade Sales Compensation Plan (the "Plan"), he would be "eligible" to earn incentive pay - that is, a bonus - if he met certain annual sales goals. (Id.). The letter emphasized, however, that the Plan was "not a contract of employment" and was "subject to change." (Id.). Further, the Plan itself (formally titled the "Total Rewards Sales Compensation Plan") expressly provided that Avanade "reserve[d] the right to modify, suspend or terminate" the Plan "without notice" and "at its sole and absolute discretion." (Maatman Decl. Ex. B at 2, 8). With his signature, Cohen indicated his acceptance of the offer on May 8, 2009. (Maatman Decl. Ex. A).

According to the complaint, within weeks of starting at Avanade, Cohen discovered that the company did not have the application management capacities that McCafferty and Virani had represented. (Compl. ¶ 41). These shortcomings became more apparent to Cohen in late 2009 and the first half of 2010, when he sought to develop two potential multi-million dollar deals for the company: one with a company named Group M and the other with a company named Mediabrands. (Id. ¶¶ 15-27). Cohen alleges that these deals fell through because Avanade "lack[ed] . . . experience and capability in the Application Management service delivery space." (Id. ¶¶ 26, 51). If Avanade had possessed a "true, well-established, fully capable, and experienced Application Management delivery capability," the complaint asserts, the deals would have closed and, under the terms of the Plan, Cohen would have received a bonus of $180,000. (Id. ¶¶ 15-16, 28, 51). Cohen's employment with Avanade ended on September 16, 2010. (Id. ¶ 30).*fn1

On March 4, 2011, Plaintiff filed a complaint in New York Supreme Court, County of New York, against Defendants Avanade, McCafferty, and Virani. Cohen never served this complaint on Defendants, but instead filed an amended complaint with the same court on May 17, 2011, which he subsequently served on Defendants. On June 24, 2011, Defendants removed the case from state court to this Court. (Dkt. No. 1). On September 9, 2012, the parties appeared at a pretrial conference before the Honorable Richard J. Holwell, United States District Judge, who was then presiding over this matter. (Dkt. No. 10). At the conference, Judge Holwell gave Plaintiff until September 30, 2011, to amend his complaint, but Plaintiff elected not to do so. On October 31, 2012, Defendants filed this motion to dismiss the complaint for failure to state a claim upon which relief can be granted.

DISCUSSION

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See, e.g., Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009). To survive a Rule 12(b)(6) motion, however, the plaintiff must plead sufficient facts "to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant acted unlawfully." Id. A complaint that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Further, if the plaintiff has not "nudged [his or her] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Id. at 570.

With respect to claims alleging fraud, Rule 9(b) of the Federal Rules of Civil Procedure imposes a heightened pleading standard. Such claims must "state with particularity the circumstances constituting fraud . . . ." Fed. R. Civ. P. 9(b). To satisfy that standard, a complaint must "allege facts that give rise to a strong inference of fraudulent intent." Acito v. IMCERA Grp., Inc., 47 F.3d 47, 52 (2d Cir. 1995). In particular, "the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (internal quotation marks omitted). Failure to satisfy the Rule 9(b) standard is grounds for dismissal. See, e.g., id. at 293; Slayton v. Am. Exp. Co., 604 F.3d 758, 766 (2d Cir. 2010).

In the present case, Cohen alleges six causes of action: (1) breach of contract; (2) fraudulent inducement; (3) malicious fraudulent, oppressive and/or reckless conduct; (4) harm to professional reputation; (5) negligence; and (6) negligent ...


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