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Currier, McCabe & Associates, Inc. v. Public Consulting Group, Inc.

United States District Court, N.D. New York

March 7, 2014

CURRIER, McCABE & ASSOCIATES, INC. d/b/a CMA Consulting Services, Plaintiff,
v.
PUBLIC CONSULTING GROUP, INC., Defendant.

Mills Law Firm, CHRISTOPHER K. MILLS, ESQ., Clifton Park, NY, For the Plaintiff.

Wiltshire, Grannis Law Firm, CHARLES T. KIMMETT, ESQ., N.W. MARK D. DAVIS, ESQ., MICHAEL J. CARLSON, ESQ., Washington, DC, For the Defendant.

MEMORANDUM-DECISION AND ORDER

GARY L. SHARPE, Chief Judge.

I. Introduction

Plaintiff Currier, McCabe & Associates, Inc. d/b/a CMA Consulting Services (CMA), commenced this diversity action against defendant Public Consulting Group, Inc. (PCG), alleging breach of contract and related claims, and seeking not less than $1.2 million in damages. (Compl. ¶¶ 12-34, Dkt. No. 1.) Pending is PCG's motion to dismiss for failure to state a claim. (Dkt. No. 9.) For the reasons that follow, PCG's motion is granted in part and denied in part.

II. Background[1]

On March 5, 2013, CMA, a minority or women-owned business enterprise (MWBE) and New York corporation, entered into a "Teaming and Confidentiality Agreement" (TCA) with PCG, a Massachusetts corporation. (Compl. ¶¶ 3, 4, 6, 19.) The purpose of the TCA was to "establish a working relationship between PCG and CMA in order to develop, submit[, ] and support a proposal in response to the" request for proposals (RFP) by New York State Department of Health, Division of Family Health, Bureau of Early Intervention (DOH) "for certain services, " "under which PCG will be proposed as the prime contractor and CMA[]will be proposed as a subcontractor." (Dkt. No. 9, Attach. 2 at 2, 7; Compl. ¶ 7.) The TCA further provides, among other things, "PCG will exercise commercially reasonable efforts to secure CMA as a subcontractor, consistent with the Proposal, " "CMA acknowledges that PCG cannot make any guarantee or give any assurance that a subcontract will be entered into between PCG and CMA, " but "[i]f a contract is awarded to PCG, and if CMA can meet all necessary requirements for a subcontract, including but not limited to satisfying PCG's standard requirements for subcontractors and obtaining any necessary approval by [DOH], then PCG will enter into a subcontract with CMA." (Dkt. No. 9, Attach. 2 at 3.)

The terms and conditions of the subcontract were to be "negotiated in good faith by the parties" if the preconditions were met for entering into one, but, among other things, "[t]he subcontract [was to] specify a minimum CMA project participation rate of twenty percent (20%) of the total contract value." ( Id. ) While CMA met its obligations under the TCA, PCG refused to "honor its obligations" under the TCA or "submit a proposal to DOH including CMA as a subcontractor." (Compl. ¶¶ 14, 15.)

CMA commenced this action in June 2013, alleging claims of breach of contract, fraudulent inducement, breach of the implied warranty of good faith and fair dealing, and unjust enrichment. (Compl. ¶¶ 12-34.) Prior to any discovery or joinder of issue, PCG moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 9.)

III. Standard of Review

The standard of review under Fed.R.Civ.P. 12(b)(6) is well settled and will not be repeated here. For a full discussion of the standard, the court refers the parties to its prior decision in Ellis v. Cohen & Slamowitz, LLP, 701 F.Supp.2d 215, 218 (N.D.N.Y. 2010).

IV. Discussion

Before delving into the arguments raised in the pending motion to dismiss, it is helpful to outline CMA's claims and their factual predicates. In the complaint, CMA alleges that, despite its full performance and its willingness to perform subcontractor services as detailed in the TCA, PCG breached the TCA "by explicitly stating that it does not intend to honor its obligations under the [TCA], and has otherwise breached the [TCA] by refusing to submit a proposal to DOH including CMA as a subcontractor." (Compl. ¶¶ 14, 15.) CMA further alleges that "PCG's failure to honor its obligations under the [TCA]" caused it to sustain money damages. ( Id. ¶ 16.)

With respect to its claim of fraudulent inducement, CMA alleges that, during the time that the parties were negotiating the TCA, "PCG made certain factual representations to CMA in an effort to secure CMA's participation in PCG's proposal." ( Id. ¶ 18.) "PCG represented that CMA's status as a [MWBE] would assist PCG in obtaining the subject contract as part of the State of New York's effort to encourage and assist state agencies that are engaged in contracting activities to award a fair share of state contracts to [MWBEs]." ( Id. ¶ 19.) PCG made other "representations" to CMA regarding the ability of it and other prospective bidders to secure the contract with DOH, ( id. ¶ 20), and "additional representations [and] omissions" and engaged in conduct prior to execution of the TCA "in an effort to induce CMA to enter into" it, ( id. ¶¶ 21, 22). The TCA prohibited CMA from submitting a proposal in response to the RFP that competed with PCG's, or from assisting any other party in obtaining the DOH contract. ( Id. ¶ 23.) CMA alleges that PCG made fraudulent representations to induce it to enter the TCA, prevent it from submitting its own proposal, and prohibit it from assisting other companies in obtaining the DOH contract. ( Id. ¶ 24.) The foregoing caused damage to CMA. ( Id. ¶ 25.)

As for CMA's claim of breach of the implied warranty of good faith and fair dealing, it alleges that PCG failed to act in good faith, preventing CMA from submitting its own proposal or entering into teaming agreements with other entities, and inhibited CMA from enjoying the benefits and privileges of its subcontract agreement with PCG. ( Id. ¶¶ 28-29.) PCG's breach caused damage to CMA. ( Id. ¶ 30.)

Finally, CMA alleges that PCG was unjustly enriched by its provision of proprietary and confidential information in preparing PCG's proposal, which ...


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