Banks v. Correctional Services Corp.

• Decision Date: 15 February 2007
• Docket Number: No. 06-CV-3414 (SJF)(JMA).,06-CV-3414 (SJF)(JMA).
• Citation: 475 F.Supp.2d 189
• Parties: William K. BANKS, Plaintiff, v. CORRECTIONAL SERVICES CORPORATION, The Geo Group, and James Slattery, Defendants.
• Court: U.S. District Court — Eastern District of New York

475 F.Supp.2d 189

William K. BANKS, Plaintiff, v. CORRECTIONAL SERVICES CORPORATION, The Geo Group, and James Slattery, Defendants.

No. 06-CV-3414 (SJF)(JMA).

United States District Court, E.D. New York.

February 15, 2007.

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Laura M. Dilimetin, Dilimetin & Dilimetin, Manhasset, NY, for Plaintiff.

John Joseph McCarthy, III, McCarthy Law Firm, PLLC, New York City, for Defendants.

OPINION AND ORDER

FEUERSTEIN, District Judge.

I. Introduction

On May 18, 2006, Plaintiff William K. Banks ("Plaintiff" or "Banks") commenced this action against defendants Correctional Services Corporation ("CSC"), The Geo Group ("GEO"), and James Slattery ("Slattery"), in New York State Supreme Court, County of Kings asserting claims of breach of contract, age and race discrimination, unjust enrichment, fraudulent conversion, and accounting. On July 13, 2006, Slattery timely removed the case to this Court pursuant to 28 U.S.C. § 1332. Each defendant (collectively "Defendants") now moves individually for dismissal pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons set forth below, Defendants' motions to dismiss are granted in part and denied in part.

II. Facts

On July 26, 1989, Banks entered into an agreement with Esmore Incorporated ("Esmore"), wherein he would be paid three percent (3%) of the gross revenues from rentals by residents referred by the Bureau of Prisons at 998 Myrtle Avenue in Brooklyn, New York. In addition, Banks was to receive three percent (3%) of gross revenues from all future Bureau of Prisons or state or local correction agency contracts within the State of New York. The contract obligated Banks to act as a liaison between Esmore and local community and civic groups, and government officials at all levels. Banks was to be "actively involved in community relations and use [his] best efforts to promote the establishment of" the facilities.¹ The one (1) page contract, signed by Esmore's president, James Slattery, does not contain any specific provision concerning termination of the contract. See Contact, dated July 26, 1989, attached to Complaint as Exhibit A.

Esmore was purchased by Defendant CSC in 1997 and Defendants Slattery and CSC continued payments to Banks under the contract. Complaint at ¶ 14. Banks contends that some of these were only partial payments. Id. at ¶ 17.

In November 2005, Slattery sold CSC to Defendant GEO for sixty two million dollars ($62,000,000.000). Id. at ¶ 20. CSC is now a wholly owned subsidiary of GEO. See CSC Fed.R.Civ.P. 7.1 Disclosure. By letter dated December 14, 2005, Banks was advised by John J. Bulfin, Vice President and Secretary of CSC, of the purchase of CSC by GEO. See Letter, dated December 14, 2005, attached to Complaint as Exhibit B. The letter also advised Banks that CSC was terminating his contract "effective immediately." Id. Banks was not given prior notice of his termination nor was he offered severance. Complaint at ¶ 18.

Banks is a seventy four (74) year old African-American male. Id. at ¶ 10. According to Banks, Defendants told him that he was too old to continue to be under contract with them and that terminating him would make way for "younger blood." Id. at ¶ 29. Banks claims that he was replaced by a younger white male. Id. at ¶ 30. Banks currently resides in Georgia. Id. at ¶ 1.

III. Standard of Review

A motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6) should be granted where "it appears beyond a doubt that plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir.1998). The Court must liberally construe the claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Koppel v. 4987 Corp., 167 F.3d 125, 128 (2d Cir.1999). The Court's task "is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Levitt v. Bear Stearns & Co., 340 F.3d 94, 101 (2d Cir.2003) (internal citation omitted). The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. See Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir.1995).

In deciding the motion, the Court may consider documents referred to in the complaint, documents that the plaintiff relied upon in bringing suit and that are either in the plaintiffs possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002). If the interpretation of a contract is at issue, a court is "not constrained to accept the allegations of the complaint in respect of the construction of the Agreement," although all contractual ambiguities must be resolved in the plaintiffs favor. Int'l Audiotext Network, Inc. v. Am. Tel. and Tel. Co., 62 F.3d 69, 72 (2d Cir.1995).

IV. Analysis

A. Breach of Contract

"To make out a viable claim for breach of contract a `complaint need only allege (1) the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages.'" Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir.2004) (quoting Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir.1996)). The statute of limitations for a breach of contract action in New York is six (6) years. N.Y.C.P.L.R. § 213(2) (McKinney 2004).

A court should construe a contract as a matter of law only if the contract is unambiguous on its face. See Metro. Life Ins. Co. v. RJR Nabisco Inc., 906 F.2d 884, 889 (2d Cir.1990). A contract is unambiguous if it "has `a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion.'" Sayers v. Rochester Tel. Corp. Supplemental Mgmt. Plan, 7 F.3d 1091, 1095 (2d Cir.1993) (quoting Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280 (1978)). If a contract is unambiguous, a court is "required to give effect to the contract as written and may not consider extrinsic evidence to alter or interpret its meaning." Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 573 (2d Cir.1993). Contractual language "whose meaning is otherwise plain is not ambiguous merely because the parties urge different interpretations in the litigation." Metro. Life Ins. Co. v.RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir.1990). However, where the contractual language is subject to more than one reasonable interpretation or construction and where extrinsic evidence of the parties' intent exists, the question of the proper interpretation is factual. Consarc Corp., 996 F.2d at 573.

Plaintiff contends that Defendants breached the contract by not making full payments, by assigning the contract without his written consent, and by terminating him. Plaintiff contends that the parties intended the term of the contract be coextensive with the facility's occupation by former prisoners. To support his contention, he cites to the following language: "During the period of occupancy of 988 Myrtle Avenue by residents referred by the United States Bureau of Prisons (BOP), you will be entitled to receive ..." Plaintiff argues that since the facility is occupied to this date, the contract requires his continued employment.

1. Defendant CSC

CSC contends that there are no specific allegations in the Complaint as to what payments were not made to Plaintiff and no allegations of demands by Plaintiff for additional payment. CSC also argues that there is no language in the contract requiring Plaintiff's written consent prior to assignment. Further, CSC contends that language of the contract does not support Plaintiff's contention that it would be in effect until the facility was no longer occupied or in existence. CSC notes that the contract does not state a term or the manner and circumstances under which the parties may terminate the agreement.

To the extent Plaintiff alleges that he was not fully paid under the contract, Plaintiff has adequately plead a breach of contract claim. Therefore, CSC's motion to dismiss is granted as to those claims barred by the six (6) year statute of limitations but denied as to those claims not barred by the statute of limitations. To the extent Plaintiff alleges that the contract was assigned without his written consent, CSC's motion to dismiss is granted because the contract is unambiguous and does not require the written consent of Plaintiff prior to assignment.

However, the intent of the parties regarding termination is subject to more than one (1) reasonable interpretation and in the context of a Rule 12(b)(6) motion, the Court is required resolve all contractual ambiguities in favor of Plaintiff. See Int'l Audiotext Network, Inc. v. Am. Tel. and Tel. Co., 62 F.3d 69, 72 (2d Cir.1995). See also Lipsky v. Commonwealth United Corp., 551 F.2d 887, 897 (2d Cir.1976) ("Unless the intent is unambiguous from the four corners of the documents, extrinsic evidence of the parties' intent should be received."). Therefore, CSC's motion to dismiss Plaintiffs breach of contract claim involving Plaintiff's termination is denied.

2. Defendant GEO

Defendant GEO contends that it did not enter into a contract with Plaintiff, never breached any contract or terms of a contract, and did not terminate Plaintiff's contract. GEO contends that these actions were taken by its subsidiary CSC.

Generally, parent and subsidiary corporations are treated as separate legal entities, and a contract by one does not legally bind the other. See Carte Blanche (Singapore), Pte, Ltd. v. Diners Club Int'l, 2 F.3d 24, 26 (2d Cir.1993). See also ...