VINCENT L. BRICCETTI, District Judge.
Plaintiff Alessi Equipment, Inc., brings this action against defendant American Piledriving Equipment, Inc., asserting state law claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, and seeking an accounting and specific performance in connection with the sale of heavy construction equipment.
Before the Court is defendant's motion to dismiss the amended complaint pursuant to Rule 12(b)(6). (Doc. #22).
For the reasons set forth below, the motion is GRANTED IN PART and DENIED IN PART.
The Court has subject matter jurisdiction under 28 U.S.C. § 1332.
For the purpose of ruling on the motion to dismiss, the Court accepts as true all wellpleaded factual allegations in the amended complaint and draws all reasonable inferences in plaintiff's favor, as summarized below.
This case concerns the sale of heavy construction equipment, specifically hydraulic attachments for excavators for use in demolition, construction, and recycling projects. Plaintiff procures hydraulic attachments from manufacturers, and sells and services the attachments for its customers. After one of plaintiff's suppliers ceased operating in the early 1990s, plaintiff approached defendant about manufacturing excavator-mounted equipment. Although defendant did not manufacture hydraulic attachments for excavators at that point, defendant began to develop this equipment with plaintiff's assistance.
The parties entered into agreements in 1996, 2004, and 2012, concerning the sale of hydraulic attachments generally and the sale of a specific hydraulic attachment called the Robovib.
In 1996, the parties orally agreed plaintiff would serve as defendant's exclusive distributor in the northeast, United States, selling all equipment and replacement parts, regardless of whether the customer initially contacted plaintiff or defendant to purchase equipment.
In 2004, the parties set forth a written agreement for the sale of the Robovib. The agreement contained four relevant provisions: (i) plaintiff would be the defendant's exclusive Robovib supplier in the "Northeast USA" and a non-exclusive supplier elsewhere; (ii) plaintiff could purchase the Robovib at a twenty-five percent discount off the list price; (iii) plaintiff would handle all set up and service for the equipment plaintiff sold, releasing defendant from its service obligations; and (iv) plaintiff would pay a two percent commission to defendant on all sales. (Doc. #18 ("Am. Compl.") Ex. 1 at 1-3). The agreement noted generally that defendant "wish[ed] to channel the sales through [plaintiff] and in return avoid the service and set up. In addition, [defendant seeks] a single source to collect our invoices." (
In 2012, the parties entered into a Distributor Agreement and Memorandum of Understanding governing the Robovib and other excavator-mounted attachments. (
In May 2017, defendant sold equipment to a company called Moncon, Inc., valued at $163,000, within the northeast territory without plaintiff's involvement. (Am. Compl. Ex. 3). In addition to this sale, plaintiff alleges defendant made other similar sales, thereby breaching all three agreements by willfully and intentionally selling covered equipment and replacement parts directly to customers.
In deciding a Rule 12(b)(6) motion, the Court evaluates the sufficiency of the operative complaint under the "two-pronged approach" articulated by the U.S. Supreme Court in
To survive a Rule 12(b)(6) motion, a complaint's allegations must meet a standard of "plausibility."
Plaintiff plausibly states a breach of contract claim based on the 1996, 2004, and 2012 agreements for the sale and distribution of defendant's excavator-mounted equipment.
To state a claim for breach of contract, a plaintiff must allege the existence of an enforceable contract.
Plaintiff plausibly alleges facts concerning the formation and operation of an enforceable contract and a decade of conduct consistent with that contract. The 2004 and 2012 written agreements state the equipment available for sale, an objective method to determine the price of at least one piece of equipment (
Defendant argues the Court cannot consider the terms of the 2004 agreement, because the 2012 agreement was the only agreement in force at the time of the alleged breach.
Even if the 2012 agreement was the only operative agreement, however, plaintiff has plausibly alleged the existence of a contract and all material terms based on the 2012 agreement and the parties' subsequent course of dealing with sufficient specificity to withstand a motion to dismiss. Accordingly, plaintiff's breach of contract claim survives.
Defendant argues plaintiff cannot proceed on theories of breach of contract and unjust enrichment.
The Court disagrees.
To state a claim for unjust enrichment under New York law, a plaintiff must allege that "(1) the defendant was enriched, (2) at the expense of the plaintiff, and (3) that it would be inequitable to permit the defendant to retain that which is claimed by the plaintiff."
Plaintiff alleged defendant sold equipment within plaintiff's sales exclusive territory and defendant benefitted at plaintiff's expense. Accordingly, plaintiff's unjust enrichment claim survives the motion to dismiss.
Plaintiff fails to state a claim for breach of the implied covenant of good faith and fair dealing.
"Under New York law, parties to an express contract are bound by an implied duty of good faith, but breach of that duty is merely a breach of the underlying contract."
Plaintiff's claim for the breach of the implied covenant of good faith and fair dealing merely restates its breach of contract claim. The crux of both claims is that defendant bypassed plaintiff to sell equipment in plaintiff's exclusive territory. Because plaintiff's claim is based upon the same facts and predicated on the same contractual terms as the plaintiff's breach of contract claim, it must be dismissed as duplicative.
Plaintiff also fails to state a claim for an accounting.
"Under New York law, a plaintiff seeking an accounting, which is an equitable remedy, must allege both a fiduciary relationship between the plaintiff and defendant and a breach of that fiduciary duty by the defendant."
Here, plaintiff has not alleged a fiduciary relationship with defendant, and thus, fails to state a claim for accounting. Accordingly, plaintiff's claim for an accounting is dismissed.
Finally, plaintiff fails to state a claim for specific performance.
Before a court may permit the "extraordinary equitable remedy of specific performance," the party seeking relief must demonstrate "that remedies at law are incomplete and inadequate to accomplish substantial justice."
While ordinarily the issue of whether damages would adequately compensate a plaintiff is inappropriate for resolution on a motion to dismiss the complaint,
Accordingly, plaintiff's claim for specific performance is dismissed.
The motion to dismiss is GRANTED IN PART and DENIED IN PART.
Plaintiff's claims for breach of the implied covenant of good faith and fair dealing, an accounting, and specific performance are dismissed. Plaintiff's claims for breach of contract, and in the alternative, unjust enrichment, may proceed.
The Clerk is directed to terminate the motion. (Doc. #22).
By March 5, 2019, defendant shall answer the amended complaint.
SO ORDERED.