Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Tri-Star Lighting Corp. v. Goldstein

Supreme Court of New York, Second Department

June 28, 2017

Tri-Star Lighting Corp., appellant,
v.
Evan Goldstein, et al., respondents. Index No. 709186/14

          Certilman Balin Adler & Hyman, LLP, East Meadow, NY (Douglas E. Rowe and Elizabeth E. Schlissel of counsel), for appellant.

          Barket Marion Epstein & Kearon, LLP, Garden City, NY (Donna Aldea and Alexander Klein of counsel), for respondents.

          RANDALL T. ENG, P.J., L. PRISCILLA HALL, SHERI S. ROMAN, SYLVIA O. HINDS-RADIX, JJ.

          DECISION & ORDER

         In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from (1) an order of the Supreme Court, Queens County (Kitzes, J.), entered January 28, 2015, which denied its motion pursuant to CPLR 6301 to preliminarily enjoin the defendant Evan Goldstein from violating a noncompetition clause in its alleged employment agreement with him, and (2) an order of the same court entered May 14, 2015, which denied its motion for leave to reargue its motion pursuant to CPLR 6301 for a preliminary injunction, granted the defendants' cross motion pursuant to CPLR 3211(a) to dismiss the second, third, fourth, sixth, and seventh causes of action asserted in the complaint, and, sua sponte, directed the dismissal of the first and fifth causes of action.

         ORDERED that the appeal from the order entered January 28, 2015, is dismissed as academic, without costs or disbursements; and it is further, ORDERED that the appeal from so much of the order entered May 14, 2015, as denied the plaintiff's motion for leave to reargue is dismissed, without costs or disbursements, as no appeal lies from an order denying reargument; and it is further, ORDERED that on the Court's own motion, the notice of appeal from the order entered May 14, 2015, is deemed to also be an application for leave to appeal from so much of that order as, sua sponte, directed the dismissal of the first and fifth causes of action in the complaint, and leave to appeal is granted (see CPLR 5701[c]); and it is further, ORDERED that the order entered May 14, 2015, is modified, on the law, by deleting the provision thereof which, sua sponte, directed the dismissal of the first and fifth causes of action; as so modified, the order entered May 14, 2015, is affirmed insofar as reviewed, without costs or disbursements.

         The plaintiff is a wholesale lighting distributor located in Woodside, Queens. In December 2014, the plaintiff commenced this action against the defendant Evan Goldstein, a former employee, and the defendant Continental Lighting Corp. (hereinafter Continental), a competitor of the plaintiff, alleging, inter alia, that Goldstein breached provisions of an employment agreement entered into between the plaintiff and Goldstein by accepting a position with Continental within nine months after the termination of his employment with the plaintiff, and by making use of the plaintiff's customer lists during his new employment to unfairly compete against it. The complaint set forth causes of action to recover damages for (1) breach of contract against Goldstein, (2) tortious interference with contract against Continental, (3) misappropriation of trade secrets against both defendants, (4) tortious interference with business relations against both defendants, (5) breach of fiduciary duty against Goldstein, and (6) aiding and abetting breach of fiduciary duty against Continental. The seventh cause of action sought a permanent injunction.

         The plaintiff moved to preliminarily enjoin Goldstein from continuing his employment with Continental and from contacting the plaintiff's customers. By order entered January 28, 2015, the Supreme Court denied the plaintiff's motion for a preliminary injunction. Thereafter, the plaintiff moved for leave to reargue its motion for a preliminary injunction. The defendants opposed the motion and cross-moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the second, third, fourth, sixth, and seventh causes of action. By order entered May 14, 2015, the court denied the plaintiff's motion for leave to reargue its motion for a preliminary injunction, granted the defendants' cross motion, and, sua sponte, directed the dismissal of the first and fifth causes of action.

         The appeal from the order denying the plaintiff's motion for a preliminary injunction has been rendered academic. By its own terms, the competition restrictions contained in the alleged employment agreement expired nine months following Goldstein's termination of employment with the plaintiff, or on or about July 14, 2015. Accordingly, the plaintiff's appeal from that order must be dismissed as academic (see Pescatore v Dune Alpin Farm Prop. Owners Assn., Inc., 120 A.D.3d 785, 785; Aniqa Halal Live Poultry Corp. v Montague-Lee Ltd. Partnership, 110 A.D.3d 934, 934).

         "In considering a motion to dismiss pursuant to CPLR 3211(a)(7), the facts pleaded are presumed to be true, and the court must afford those allegations every favorable inference and determine only whether the facts as alleged fit within any cognizable legal theory" (Sitar v Sitar, 50 A.D.3d 667, 669; see Leon v Martinez, 84 N.Y.2d 83, 87-88). "[T]he sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" (Morad v Morad, 27 A.D.3d 626, 626-627 [internal quotation marks omitted]; see Leon v Martinez, 84 N.Y.2d at 87-88). "Whether a plaintiff can ultimately establish [his or her] allegations is not part of the calculus" (EBC I, Inc. v Goldman, Sachs & Co., 5 N.Y.3d 11, 19).

         Applying those principles here, the complaint adequately pleaded the first cause of action, which sought to recover damages for breach of contract against Goldstein. "The essential elements for pleading a cause of action to recover damages for beach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach" (Dee v Rakower, 112 A.D.3d 204, 208; see 143 Bergen St., LLC v Ruderman, 144 A.D.3d 1002, 1003; Hampshire Props. v BTA Bldg. & Developing, Inc., 122 A.D.3d 573, 573). Here, the complaint alleged the existence of an employment agreement between the plaintiff and Goldstein, the plaintiff's performance of its obligations under the agreement, Goldstein's breach of the agreement, and damages resulting therefrom. The determination of the Supreme Court that the contract was unenforceable may involve triable issues of fact which should be resolved upon a formal motion with adequate notice to the plaintiff of the court's intention to summarily resolve the issue (see Loft Rest. Assoc. v McDonagh, 187 A.D.2d 643, 644; see generally BDO Seidman v Hirshberg, 93 N.Y.2d 382). Accordingly, the court should not have, sua sponte, directed the dismissal of the first cause of action.

         Similarly, the Supreme Court should not have, sua sponte, directed the dismissal of the fifth cause of action, which sought to recover damages for breach of fiduciary duty against Goldstein, for failure to state a cause of action, in the absence of notice to the parties and an application by the defendants for such relief (see During v City of New Rochelle, N.Y., 55 A.D.3d 533; Jacobs v Mostow, 23 A.D.3d 623, 624).

         The Supreme Court properly granted that branch of the defendants' cross motion which was to dismiss the second cause of action, which sought to recover damages for tortious interference with contract against Continental. "The elements of a cause of action alleging tortious interference with contract are: (1) the existence of a valid contract between the plaintiff and a third party, (2) the defendant's knowledge of that contract, (3) the defendant's intentional procurement of a third-party's breach of that contract without justification, and (4) damages" (Nagan Constr., Inc. v Monsignor McClancy Mem. High Sch., 117 A.D.3d 1005, 1006). Here, the complaint does not allege that Continental took action intended to procure Goldstein's alleged breach of an employment agreement between the plaintiff and Goldstein (see Twin City Fire Ins. Co. v Arch Ins. Group, Inc., 143 A.D.3d 533; Cantor Fitzgerald Assoc. v Tradition N. Am., 299 A.D.2d 204).

         The Supreme Court properly granted that branch of the defendants' cross motion which was to dismiss the third cause of action, which sought to recover damages for misappropriation of trade secrets against the defendants. The elements of a cause of action to recover damages for misappropriation of trade secrets are: (1) possession of a trade secret; and (2) use of that trade secret by the defendant "in breach of an agreement, confidential relationship or duty, or as a result of discovery by improper means" (Schroeder v Pinterest, Inc., 133 A.D.3d 12, 27 [internal quotation marks omitted]). "An essential prerequisite to legal protection against the misappropriation of a trade secret is the element of secrecy" (Atmospherics, Ltd. v Hansen, 269 A.D.2d 343, 343; see Leo Silfen, Inc. v Cream, 29 N.Y.2d 387, 392). "Generally, where the customers are readily ascertainable outside the employer's business as prospective users or consumers of the employer's services of products, trade secret protection will not attach and courts will not enjoin the employee from soliciting his employer's customers" (Leo Silfen, Inc. v Cream, 29 N.Y.2d at 392). Here, the complaint stated that "other companies provide similar services." Although the plaintiff described its customer lists, prices, and profit margins as "distinctive, " the complaint contains no allegations that the plaintiff employed measures to keep its customer lists and pricing information confidential, or that this information was not generally known outside of its business, so as to actually render its customer information a trade secret (see Precision Concepts v Bonsanti, 172 A.D.2d 737, 738).

         The Supreme Court properly granted that branch of the defendants' cross motion which was to dismiss the fourth cause of action asserted against the defendants, which sought to recover damages for tortious interference with business relations. To set forth a cause of action sounding in tortious interference with business relations, a plaintiff is required to plead " that the defendant interfered with the plaintiff's business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper'" (Qosina Corp. v C & N Packaging, Inc.,96 A.D.3d 1032, 1034, quoting Nassau Diagnostic Imaging & Radiation Oncology Assoc. v Winthrop-University Hosp.,197 A.D.2d 563, 563-564). An allegation that the defendant "was motivated solely by malice or intended to inflict injury by unlawful means" is required (Kenneth H. Brown & Co. Inc. v Dutchess Works One-Stop Empl. & Training Ctr., Inc.,73 A.D.3d 984, 985; see Alexander & Alexander of N.Y. v Fritzen,68 N.Y.2d 968, 969). Here, the complaint alleged that the defendants were aware of the relationship between the plaintiff and its customers, and that, with Goldstein's assistance, Continental diverted sales from the plaintiff to itself and caused the plaintiff's customers to terminate their relationship with the plaintiff. However, the complaint did not allege that the defendants were motivated ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.