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Patton v. Egan

United States District Court, S.D. New York

September 18, 2014

NOEL THOMAS PATTON, et al., Plaintiffs,
BRIAN EGAN, et al., Defendants.


LORNA G. SCHOFIELD, District Judge.

Defendant and Counterclaimant, Brian Egan, was fired from his employment with Plaintiff TA Sciences Inc. ("TAS") on September 15, 2011. This dispute arises out of that termination. Plaintiffs Asia Biotech Corp., TAS, and Noel Patton initiated this lawsuit in New York County Supreme Court, alleging that Egan breached the parties' Confidential Disclosure Agreement (the "CDA"), defamed Plaintiffs, and tortiously interfered with their prospective business advantage. Egan asserts counterclaims against Plaintiffs and third-party claims against Weiman Liu, an employee of TAS. The counterclaims allege that Plaintiffs - Patton, TAS and Asia Biotech - violated the New York State Human Rights Law and the New York City Human Rights Law, and that Plaintiffs and Weiman Liu defamed Egan. The case was removed to federal court based on diversity jurisdiction.

Plaintiffs and Third Party Defendant Liu move for partial summary judgment on Egan's defamation claim and seek to limit Egan's damages for his discrimination claims. Egan moves for summary judgment on all of Plaintiffs' claims. For the reasons stated below, Egan's motion for summary judgment is granted in part and denied in part. Liu and Plaintiffs' motion for partial summary judgment is granted in part and denied in part.


A. Timeline

Plaintiff Patton has been the Chairman of TAS since 2002. From October 2007 to January 2012, Liu was the Vice President of Operations for TAS. TAS arranges for the manufacture of and distributes in the United States a dietary supplement called TA 65. On May 16, 2011, Egan began employment with TAS as Vice President of Global Business Development, primarily tasked with increasing international sales.

At that time, he signed the CDA with TAS and Asia Biotech, an affiliate of TAS, of which Mr. Patton was also chairman. The nondisclosure agreement stated, in relevant part:

The Recipient [Egan] desires, as part of its evaluation... concerning the possible rendering of services... to become familiarized with... certain information regarding the business and potential business of the Disclosing Party [Asia Biotech Corp. and TA Sciences Inc.], and [i]n consideration of [this] premise... the parties hereto do hereby agree [to the CDA]....
"Confidential Information" shall mean any and all data and information furnished by the Disclosing Party or its representatives to the Recipient or its representatives including, but not limited to:
(iii) Any information relating to the actual or potential... customers, suppliers, ... research, ... or marketing of the Disclosing Party....

Confidential Information shall not include any data or information that:

... (ii) has been independently developed and disclosed by parties other than the parties hereto... to the Recipient without a breach by any such parties of any obligation of confidentiality running directly or indirectly to the Disclosing Party.
... Within twenty (20) days following the receipt of a written request from the Disclosing Party, the Recipient will deliver to the Disclosing Party all tangible materials containing or embodying the Proprietary Information [defined earlier in the contract as Trade Secrets and Confidential Information] received by it from the Disclosing Party, including all copies thereof....

On September 15, 2011, after four months of employment, TAS fired Egan. The parties present conflicting versions of Egan's termination.

According to Egan, on September 13, 2011, he was diagnosed with prostate cancer. Egan's physician told Egan, who had been taking TA 65, to stop taking it immediately. Egan called Patton and informed him of the diagnosis. According to Egan, Patton responded angrily and informed him that he could not work at TAS anymore, as a cancer scare could hurt the company. According to Egan, on September 15, Patton came to Egan's office, alone, and fired him because he had cancer.

Patton and TAS claim that Egan was fired for performance reasons and that Patton was unaware at the time that Egan had cancer. According to Plaintiffs, on September 14, 2011, Patton determined that Egan did not understand the company's business, had achieved no sales and was not meeting Patton's expectations. Patton and Liu together went to Egan's office at around 4:30 p.m. on September 15, 2011. Patton informed Egan that he was being fired for performance reasons. According to Patton and Liu, Egan argued with Patton about his termination, cursed angrily at Patton, pushed the heavy glass tabletop at him, hit Patton's hand, and challenged Patton to fight. Egan then packed his bag, allegedly saying "You haven't heard the last of me."

Patton and Liu claim that when Egan left the office, he grabbed a piece of paper that contained the names of potential customers or people that Egan had developed with Dr. Javier Moran. Moran was a potential TAS business associate, whom Egan had met in June 2011 at a conference in Belgium shortly after Egan began his employment with TAS. Plaintiffs assert that they demanded that Egan return the document, but he failed to do so. Egan denies that he took any documents when he was terminated, and states that the document with potential customer names was an email from Moran, which Plaintiffs continued to possess after Egan's termination and which they produced to Egan in discovery.

After he was terminated by TAS, Egan did not seek any employment between September 15 and December 31, 2011. Beginning in January 2012, Egan became employed by Corporate Trade Inc. Media Services, a company that he owned, and did not seek outside employment.

B. Allegedly Defamatory Emails

Egan sent an email to two coworkers at TAS, Dean Miller and Marty Chio, on September 15, 2011, the day he was terminated, which states:

... I never realized just how much of a first class scumbag this guy is, plain and simple. From his infidelities, to his discriminatory actions against me today. I hope you and Marty leave this scumbag, you can do much better than working for this clown'.
Yesterday I advised Noel that i just found out tuesday from my urologist that I have prostate cancer. My doctor advised me to immediately stop taking TA 65.
He freaked out' telling me I had to keep this confidential from TA Sciences employees and customers, and was very concerned about the fact I am taking TA 65, and any association between my cancer and TA 65. He said a cancer scare' could close the company.
The piece of shit had no concern whatsoever for my health just any negatives for TA 65. I am convinced there is a connection, and he knows there is a connection based on his comments and actions. Plus the comments he made to us previously about closing the business if patients got cancer.
Today at 4:30 pm he meet with me and advised me he had to sever any business relationship with me because of my cancer, and offered me $50, 000 if I would sign a confidentiality agreement about this matter.
I refused and advised him I would be speaking with a lawyer, because I do think there is a connection....

On September 16, 2011, Patton and Liu each sent an email to the employees of TAS, as well as Edwin Dean and Joe Ferreira regarding the events of the previous day. Dean acted as a recruiter for TAS and introduced Egan to the company. Ferreira is a 2% owner of TAS and ...

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