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Ortiz v. Todres & Company, LLP

United States District Court, S.D. New York

March 30, 2018

HERMAN ORTIZ, Plaintiff,
v.
TODRES & COMPANY, LLP, Defendant.

          OPINION AND ORDER

          LORNA G. SCHOFIELD UNITED STATES DISTRICT JUDGE.

         Plaintiff Herman Ortiz brings this action under the retaliation provisions of the False Claims Act (“FCA”), 31 U.S.C. § 3730(h). Plaintiff alleges that he was fired by his former employer, Defendant Todres & Company, LLP (“Todres & Co.”), for pursuing a qui tam action against it. Defendant asserts counterclaims for tortious interference with prospective economic advantage, malicious prosecution and prima facie tort. Plaintiff moves to dismiss the counterclaims in the Amended Answer (“Counterclaims”) under Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, Plaintiff's motion to dismiss is granted in part and denied in part.

         I. BACKGROUND

         The following facts are taken from the Counterclaims and assumed to be true for the purposes of this motion. See Trs. of Upstate N.Y. Eng'rs Pension Fund v. Ivy Asset Mgmt, 843 F.3d at 566 (2d Cir. 2016).

         Plaintiff worked for Todres & Co., a public accounting firm, from October 2009 to May 2013. Ortiz was a difficult employee. He repeatedly demanded salary increases, complained that he was not reimbursed for certain incidental costs, violated client confidences, and performed work for his own clients without the permission or knowledge of his employer. Ortiz quit his job in May 2013 when he requested and was denied a salary increase.

         In March 2015, Ortiz filed a qui tam complaint against Todres & Co., its managing partner, Michael Todres (“Todres”) and Todres & Co.'s audit client, the New York College of Health Professions (“NYCHP”), alleging that the three had engaged in financial fraud, made false statements and material misrepresentations, and engaged in other misconduct in order to obtain federal education funds for NYCHP. The qui tam complaint also alleges that Ortiz confronted Todres about anomalies in NYCHP's financial statements in early 2013, and dissociated himself from work with NYCHP when Todres attempted to silence him. Ortiz knew these allegations were false and lacked any evidentiary basis, but made them anyway “for the sole purpose of causing harm, damage and injury to” his former employer. While investigating the allegations, the government served a Civil Investigative Demand (“CID”) on Todres & Co. and NYCHP. NYCHP was forced to retain attorneys and respond to the CID, which caused NYCHP to fire Todres & Co. after a seven-year business relationship.

         In March 2017, the government declined to intervene in the qui tam claims. In July 2017, Ortiz voluntarily dismissed the qui tam claims without prejudice. Ortiz now alleges only that he was wrongfully terminated by Todres & Co. in retaliation for making allegations of misconduct concerning the NYCHP audit.

         Todres & Co. asserts three counterclaims against Ortiz: tortious interference with prospective economic advantage, malicious prosecution and prima facie tort. Ortiz moves to dismiss these counterclaims.

         II. STANDARD

         “A motion to dismiss a counterclaim is evaluated under the same standard as a motion to dismiss a claim in a complaint.” Dentsply Int'l Inc. v. Dental Brands for Less LLC, No. 15 Civ. 8775, 2016 WL 6310777, at *2 (S.D.N.Y. Oct. 27, 2016) (citing Keep on Kicking Music, Ltd. v. Hibbert, No. 15 Civ. 7464, 2016 WL 4386047, at *2 (S.D.N.Y. Aug. 17, 2016)). On a motion to dismiss, a court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the non-moving party, Trs. of Upstate N.Y. Eng'rs Pension Fund, 843 F.3d at 566, but gives “no effect to legal conclusions couched as factual allegations, ” Stadnick v. Vivint Solar, Inc., 861 F.3d 31, 35 (2d Cir. 2017). To withstand a motion to dismiss, a pleading “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

         In deciding a Rule 12(b)(6) motion, the court is limited to reviewing the relevant pleading, any documents attached to that pleading or incorporated in it by reference, any documents heavily relied upon by the pleading as to their “terms and effect” and which are therefore integral to the plaintiffs allegations even if not explicitly incorporated by reference, and facts of which the court may take judicial notice. Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016).

         III. DISCUSSION

         Ortiz's motion to dismiss is denied as to Todres & Co.'s counterclaim for tortious interference with prospective economic advantage and granted as to the company's counterclaims for malicious prosecution and prima facie tort.

         A. ...


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