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Coyne International Enterprises Corp. v. Mylan Pharmaceuticals, Inc.

United States District Court, N.D. New York

June 18, 2014

COYNE INTERNATIONAL ENTERPRISES CORP. d/b/a COYNE TEXTILE SERVICES, Plaintiff,
v.
MYLAN PHARMACEUTICALS, INC., Defendant.

THE WOLFORD LAW FIRM, LLP, MICHAEL R. WOLFORD, ESQ., VICTORIA S. GLEASON, ESQ., LAURA A. MYERS, ESQ., Rochester, New York, Attorneys for Plaintiff.

GOLDBERG SEGALLA LLP, LATHA RAGHAVAN, ESQ., Albany, New York, Attorneys for Defendant.

PIETRAGALLO GORDON ALFANO BOSICK & RASPANTI, LLP, PETER S. WOLFF, ESQ., WILLIAM A. PIETRAGALLO, ESQ., Pittsburgh, Pennsylvania, Attorneys for Defendant.

MEMORANDUM-DECISION AND ORDER

MAE A. D'AGOSTINO, District Judge.

I. INTRODUCTION

Plaintiff commenced this action on July 11, 2013. See Dkt. No. 1. On December 11, 2013, Plaintiff filed an amended complaint alleging causes of action for breach of contract, conversion, unjust enrichment, and damages under the Uniform Commercial Code ("UCC"). See Dkt. No. 28 ("Amended Complaint"). Currently before the Court is Defendant's motion to dismiss Plaintiff's conversion, unjust enrichment, and UCC claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Dkt. No. 33.

II. BACKGROUND[1]

Plaintiff Coyne International Enterprises Corp. is a privately-owned uniform rental company which rents, leases, sells, and launders textile products. See Amended Complaint ¶ 2. In September 2004, Plaintiff entered into a written service agreement with Defendant Mylan Pharmaceuticals, Inc. pursuant to which Plaintiff would provide Defendant with various items. See id. ¶ 8. Several addendums were added to the agreement in 2007, and the parties subsequently amended the agreement several times in 2011 and 2012. See id. ¶¶ 11, 13. The original agreement together with the addendums and amendments constitutes the final agreement between the parties. See id. ¶ 13; see also Dkt. No. 39 at 7.[2]

In or about November 2012, Defendant issued a solicitation of bids for the provision of the services Plaintiff had been and still was providing pursuant to their agreement. See Amended Complaint ¶ 16. Plaintiff later learned from a third party in April 2013 that Defendant had chosen to hire another company to replace Plaintiff. See id. ¶ 18. When Plaintiff confronted two of Defendant's employees, they denied that any change in service providers had occurred. See id. ¶ 19. In response, Plaintiff decided to terminate the parties' agreement in accordance with the most recent amendment, which required Plaintiff to provide Defendant with thirty days' notice of its intent to terminate the contract. See id. ¶ 20. Plaintiff provided written notice and the contract was terminated on May 19, 2013. See id.

Upon termination of the contract, Plaintiff attempted to deliver various "buyout items" that Defendant was required to purchase under the terms of the agreement. See id. ¶¶ 21-30. According to the provision regarding buyout items, customers are required to purchase any specialty items that Plaintiff had in its inventory when the agreement was terminated. See id. ¶ 21. Defendant had previously requested changes in clothing items and had ordered special logo mats that were considered buyout items, and Plaintiff had these items in its inventory at the time that the contract was terminated. See id. ¶¶ 22-23. Plaintiff provided Defendant with an invoice for all these items that amounted to $564, 868.86, and Plaintiff attempted to deliver the items on May 22, 2013, but Defendant refused to accept them. See id. ¶¶ 27-28. Defendant has not paid for or accepted these speciality items, and a one and one half percent per month late payment charge is applied for the amounts owed on these past due invoices according to the terms of the contract. See id. ¶ 30.

Plaintiff also alleges that Defendant is still in possession of various "non-buyout" items that belong to Plaintiff, pursuant to the terms of the contract. See id. ¶ 36. Specifically, Defendant is still in possession of garments, service equipment, and flat goods ( e.g., mats, mops, and other similar items) that would cost Plaintiff $349, 758.68 to replace. See id. ¶ 39. Plaintiff has requested the return of these non-buyout items on two separate occasions, and despite assurances from one of Defendant's employees that arrangements for returning the items would be made, Defendant has not returned them. See id. ¶ 36. Since Defendant is still in possession of these items, Plaintiff provided Defendant with an invoice in the amount of $9, 641.96 which represents the rental value of the items for a two-week period in May 2013, and Plaintiff alleges that Defendant is incurring a weekly rental charge of $4, 820.98 for every week thereafter until the items are returned. See id. ¶¶ 40-41.

Finally, Plaintiff alleges that it provided services to Defendants in May 2013 that Defendant has not paid for. See id. ¶ 32-34. Plaintiff provided Defendant with an invoice on May 16, 2013 for $26, 690.63 that remains unpaid, and there is a one and one half percent per month late payment charge that is applied to these past due payments according to the contract. See id. ¶¶ 34-35.

Along with its breach of contract claim, Plaintiff also alleges causes of action for conversion, unjust enrichment, and damages for price and for non-acceptance of conforming goods under the UCC. See id. ¶¶ 64-80. Plaintiff seeks compensatory damages, as well as weekly rental charges, late payment fees, interest, incidental damages, and attorneys' fees. See id. at 15. In its motion to dismiss, Defendant argues that (1) Plaintiff's conversion and unjust enrichment claims should be dismissed because they are duplicative of its breach of contract claims; (2) Plaintiff's claim for damages under the UCC should be dismissed because the contract is not subject to the UCC; and ...


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