United States District Court, E.D. New York
MEMORANDUM AND ORDER
LEONARD D. WEXLER UNITED STATES DISTRICT JUDGE
Franklin Technologies, Inc. (“Franklin”) asserts
various claims against defendant Encite, Inc.
(“Encite”) stemming from Encite's alleged
disclosure of confidential information to All Island
Dermatology and Laser Center (“All Island”) and
All Island's termination of a contractual relationship
with Franklin. Encite moves to dismiss pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure
(“FRCP”). Franklin opposes the motion.
purposes of this decision, the complaint can be summarized as
follows. Franklin is a New York corporation with its
principal place of business in Franklin Square, New York.
Complaint ¶ 1. Encite is a North Carolina corporation
with its principal place of business in Charlotte, North
Carolina. Id. ¶ 2. Encite is a developer of
medical software, and Franklin is a value-added reseller of
such software. Id. ¶ 4. Pursuant to “one
or more written documents . . . and/or email communications
and/or other written correspondence between Encite and
Franklin”-which Franklin refers to as the
“Reseller Agreement”- it was agreed that Franklin
was permitted to resell Encite's software, with markups
of 30% to 35%, as set by Encite. Id. ¶¶
on the Reseller Agreement and a “Confidentiality and
Non-Disclosure Agreement” (the “NDA”), the
parties agreed that the existence and amount of such markups
were confidential and considered trade secrets of both
parties, and were to remain confidential as to third parties.
Id. ¶ 7.
to the NDA, from approximately March 22, 2013 to April 1,
2013, Franklin disclosed to Encite that Franklin had a
longstanding business relationship with All Island, one of
Franklin's largest customers, with billings totaling $1,
260, 000 in software, hardware, and computer services during
the prior 15 years. Id. ¶¶ 9-10. Franklin
also disclosed to Encite details of ongoing negotiations with
All Island, in an effort to enlist Encite's cooperation
and assistance in preparing proposals and invoices pursuant
to the Reseller Agreement. Id. ¶¶ 9, 12.
Ultimately, on or about April 1, 2013, Franklin disclosed to
Encite that Franklin had executed a written agreement with
All Island, dated April 1, 2013, to provide various computer
services, software, hardware, integration, maintenance, and
repairs. Id. ¶¶ 11-12.
April 1, 2013 and April 20, 2013, Encite provided Franklin
with Encite-prepared “resellers invoices, ”
including prices, made for All Island, as well as billing
“invoices” for Franklin's direct purchases of
Encite's software that Franklin was to resell to All
Island. Id. ¶¶ 14-15. One set of such
invoices showed that Franklin was to receive a 35% markup on
sales to All Island. Id. ¶ 16. Encite also
provided Franklin with Encite-prepared invoices for service
and maintenance that showed that Encite billed Franklin $2,
000 per month for such services and that were left blank as
to the amount to be charged to All Island. Id.
¶ 17. Encite periodically represented to Franklin that a
100% markup for such services was usual and customary
practice. Id. ¶ 18. At Encite's request,
Franklin periodically disclosed to Encite the markup and
charges to All Island for such services. Id.
¶¶ 19-20. These invoices and the information shared
confidentially between the parties showed that Franklin would
be making a total gross profit of approximately $90, 000 per
year, in addition to charging All Island separately for
additional services “not specifically mentioned in the
invoices.” Id. ¶ 22.
on or about March 1, 2015, Encite disclosed to All Island
Franklin's confidential information, documents, and
invoices concerning Franklin's “mark-ups of
resales” of Encite's products and services to All
Island. Id. ¶ 23. Franklin maintains that
Encite made these disclosures “wrongfully, willfully
and maliciously” for the purpose of causing detriment
to Franklin and Franklin's relationship with All Island.
Id. ¶ 26. Franklin further maintains that
Encite made these disclosures with an intent to deceive All
Island into believing that Franklin was acting
“illegally” in making a profit on such resales
and that Encite had no knowledge of the markups. Id.
¶ 28. Franklin claims that these disclosures and denials
resulted in All Island's termination of its contractual
relationship with Franklin. Id. ¶ 27.
brought this action in Supreme Court, Nassau County,
asserting claims for (1) tortious interference with contract;
(2) breach of the NDA; and (3) breach of the Reseller
Agreement. Id. ¶¶ 24-39. Encite removed
the action, and now moves to dismiss, arguing that Franklin
fails to state a claim upon which relief can be granted.
Motion to Dismiss Standard
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007),
the Supreme Court held that to avoid dismissal a plaintiff is
required to plead enough facts “to state a claim for
relief that is plausible on its face.” Id. at
570; see also Ashcroft v. Iqbal, 556 U.S. 662,
678-80 (2009). While heightened factual pleading is not
required, Twombly holds that a “formulaic
recitation of the elements of a cause of action will not
do.” Twombly, 550 U.S. at 555. On a motion to
dismiss, the court must, as always, assume that all
allegations in the complaint are true and draw all reasonable
inferences in favor of the nonmoving party. Plair v. City
of New York, 789 F.Supp.2d 459, 463 (S.D.N.Y. 2011).
However, the court must ensure that the complaint sets forth
“enough facts to state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at
570; see Ruston v. Town Bd. for Town of Skaneateles,
610 F.3d 55, 57 (2d Cir. 2010). A pleading that does nothing
more than recite the elements of a claim, supported by mere
conclusory statements, is insufficient to “unlock the
doors of discovery.” Iqbal, 556 U.S. at 678.
Rather, “only a complaint that states a plausible claim
for relief survives a motion to dismiss.” Id.
at 679. Although a motion under FRCP 12(b)(6) is directed
only to the sufficiency of the pleading, the court may
consider written documents attached to the complaint as well
as documents incorporated therein by reference and those of
which plaintiff had knowledge and relied upon in commencing
the action. See Brass v. Amer. Film Techn., Inc.,
987 F.2d 142, 150 (2d Cir. 1993).
Analysis of Claims
Tortious Interference ...