United States District Court, S.D. New York
OPINION AND ORDER
EDGARDO RAMOS, U.S.D.J.
Tours, Inc. (“Mill-Run” or
“Plaintiff”) brought this action against
Windstream Corporation (“Windstream”) and Paetec
Communications LLC (“Paetec”), alleging breach of
contract and breach of warranty and seeking damages. Before
the Court is Defendants' motion to dismiss the Amended
Complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure (Doc. 23). For the reasons stated below,
Defendants' motion is GRANTED.
is a consolidator of airline tickets for different airlines
and supplies tickets to travel agents in the industry. Am.
Compl. ¶ 3. Windstream is a provider of voice and data
network communications, including cloud computing and managed
services to businesses in the United States. Id. at
¶ 5. Paetec is a subsidiary of Windstream. Id.
at ¶ 7.
2011, Plaintiff was in the market for a new voice and data
communications provider. Am. Compl. ¶ 11. After being
introduced to Windstream and Paetec by a communications
broker, Plaintiff explained that it was having quality
problems with its current provider and could not afford to
have this continue. Id. at ¶¶ 12‒13.
According to Plaintiff, Windstream made it clear that its
product was superior and more technologically advanced than
what Plaintiff was using at the time. Id. at ¶
14. Windstream assured Plaintiff that it understood the
reputational and financial damages Plaintiff would suffer if
there was an interruption of service, and that it would never
happen with Windstream as the provider. Id. at
¶¶ 15‒16, 38.
on these assurances, Plaintiff decided to engage Windstream
as its service provider. Id. at ¶ 17. On
September 15, 2011, Plaintiff and Paetec entered into a
Service Agreement under which Paetec agreed to provide
Plaintiff with voice and communications services at
Plaintiffs main office in New York City and ten other offices
in the United States. Id. at ¶ 18. Plaintiff
agreed to pay a monthly fee for the service. Id.
Service Agreement, on its first page, expressly incorporated
by reference the Standard Terms and Conditions of Service
(“Standard Terms”) on Paetec's website, and
provides the website address with a direct
link. Fellner Decl. Ex. A, at 1. The Standard
Terms state that they apply to “the provisions of all
telecommunications and related services . . . by PAETEC . . .
to Customers under the service agreement . . . to which this
schedule is a part.” Fellner Decl. Ex. B, at 1. The
Standard Terms contain a “Limitation of
Liability” provision that expressly bars any party from
claiming “indirect, special, incidental, consequential
or exemplary damages, including . . . damages for loss of
revenue, loss of profits, or loss of customers, clients or
goodwill . . .” for nonperformance. Id. at 3.
The Standard Terms further provides that remedy for a service
interruption is limited to an outage credit. Id. at
were Plaintiffs voice and data communications service
provider from 2012 to 2015. Am. Compl. at ¶ 19. Although
there were a few glitches over those four years such as power
interruptions, Plaintiff did not complain about these
interruptions during this period. Id. at ¶ 20.
However, On May 7, 2015, the telephone and data services at
Plaintiffs office completely failed. Id. at ¶
21. According to Plaintiff, Defendants failed to respond to
its numerous calls and emails and did not provide any updates
for a period of days. Defendants also gave Plaintiff the
“runaround” with auto replies stating that repair
tickets had been issued and that the system was running when
in reality it was not functioning. Id. at
¶¶ 22‒23. The service interruption lasted for
a total of six days (144 hours). Id. at ¶ 28.
Plaintiff alleges that Defendants never provided an
explanation regarding the cause of the service disruption.
Id. at ¶ 29.
13, 2015, Plaintiff sent a letter to Windstream terminating
the Service Agreement with Windstream and Paetec.
Id. According to Plaintiff, as a result of the
extended disruption of service, customers were unable to
reach Plaintiff, and Plaintiff suffered reputational damages,
loss of sales, and loss of existing and new clients
calculated to be in the millions of dollars. Id. at
12, 2016, Plaintiff filed an action against Defendants in New
York County Supreme Court, alleging breach of contract,
negligence, and punitive damages. Doc. 1, Ex. A. On September
9, 2016, Defendants removed the action to this Court. Doc. 1.
Plaintiff filed an Amended Complaint on December 8, 2016,
alleging breach of contract and breach of warranty and
seeking consequential damages. Am. Compl., Doc. 18.
Defendants filed the instant motion to dismiss
Plaintiff's Amended Complaint on February 3, 2017. Doc.
Rule 12(b)(6), a complaint may be dismissed for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). When ruling on a
motion to dismiss pursuant to Rule 12(b)(6), the Court must
accept all factual allegations in the complaint as true and
draw all reasonable inferences in the plaintiff's favor.
Koch v. Christie's Int'l PLC, 699 F.3d 141,
145 (2d Cir. 2012). However, the Court is not required to
credit “mere conclusory statements” or
“threadbare recitals of the elements of a cause of
action.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)); see also Id. at 681 (citing
Twombly, 550 U.S. at 551). “To survive a
motion to dismiss, a complaint must contain sufficient
factual matter . . . to ‘state a claim to relief that
is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible “when the plaintiff pleads factual
content that allows the court to draw the ...