CBS CORPORATION v. Dumsday

• Decision Date: 25 January 2000
• Citation: CBS CORPORATION v. Dumsday, 268 AD2d 350, 702 N.Y.S.2d 248 (N.Y. App. Div. 2000)
• Parties: CBS CORPORATION, Doing Business as WESTINGHOUSE ELECTRIC COMPANY, Respondent,<BR>v.<BR>CARL DUMSDAY, Defendant, and MARK J. PROVIANO et al., Appellants.<BR>CBS CORPORATION, Doing Business as WESTINGHOUSE ELECTRIC COMPANY, Appellant,<BR>v.<BR>CARL DUMSDAY, Defendant, and MARK J. PROVIANO et al., Respondents.
• Court: New York Supreme Court — Appellate Division

268 A.D.2d 350

702 N.Y.S.2d 248

CBS CORPORATION, Doing Business as WESTINGHOUSE ELECTRIC COMPANY, Respondent,

v.CARL DUMSDAY, Defendant, and MARK J. PROVIANO et al., Appellants.

CBS CORPORATION, Doing Business as WESTINGHOUSE ELECTRIC COMPANY, Appellant,

v.CARL DUMSDAY, Defendant, and MARK J. PROVIANO et al., Respondents.

Decided January 25, 2000.

Concur — Sullivan, J. P., Nardelli, Wallach, Saxe and Friedman, JJ.

In 1996, the United States Nuclear Regulatory Commission (NRC) requested all nuclear-operated power plants to provide information concerning design and licensing requirements, with the result that many plants had to formulate plans to comply with NRC requirements. Plaintiff successfully bid to perform design and licensing work at the Indian Point 2 nuclear plant owned by Consolidated Edison (Con Edison).

In order to enhance its competitive position with Con Edison, plaintiff offered to provide the services of one of its key employees, defendant Dumsday. Ultimately, in a contract dated May 30, 1997, plaintiff and Con Edison agreed that for a period extending through one year after the contract terminated Con Edison would not, without plaintiff's permission, employ "or otherwise engage" employees of plaintiff who performed services under the agreement. Besides Dumsday, other employees of plaintiff that were involved in the project were defendants Proviano and Van Buren. Each of these defendants, as a condition of their employment, signed agreements prohibiting them from disclosing confidential information relating to plaintiff's business.

In October 1997, plaintiff submitted a proposal to Con Edison to provide a team of its employees that would, among other things, revise design documents and review certain reports for accuracy. The proposal also recited that it contained information that was confidential and proprietary to plaintiff. Dumsday was the primary draftsman of the proposal, Proviano created the commercial strategy, and Van Buren worked up the costs and pricing. After Con Edison requested changes, plaintiff submitted a revised proposal at a reduced price, which also contained the restrictive proprietary language. Plaintiff claims that it was led to believe that it was the only qualified bidder, and that it would be awarded the project after agreement upon price.

Beginning the next month, however, a number of significant events unfolded. Specifically, in the four-month period from November 1997 through February 1998, Van Buren resigned effective December 1, 1997, Van Buren and Proviano incorporated a business named Preferred Licensing Services, Inc. (PLS) on December 23, 1997, Proviano resigned effective December 31, 1997, Con Edison advised plaintiff in January 1998 that it would not be hiring plaintiff and would complete the project itself, and Dumsday resigned effective February 6, 1998. Just three days after the culmination of this string of events, Dumsday, on February 9, 1998, appeared at the Con Edison Indian Point 2 site to perform the same work he had been doing as plaintiff's employee, except that now, he was an employee of PLS, which, as noted, was incorporated by Proviano and Van Buren.

Purportedly, Con Edison hired PLS to provide it with Dumsday's services as Project Manager, along with the services of other former employees of plaintiff. It is asserted by plaintiff that the services being provided by PLS were the same services that plaintiff sought to provide, and that it would have been able to supply if not for the competing offer made by PLS. It is against this factual backdrop that plaintiff commenced this action asserting seven different causes of action. The nature of each cause of action that is in issue on this appeal is detailed below.

At or about the time of commencement of the action, plaintiff moved for injunctive relief. Defendants (except for Dumsday, who settled plaintiff's action against him) cross-moved to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state a cause of action, and pursuant to CPLR 1003 for failure to join a necessary party, namely, Con Edison. Defendants alternatively sought summary judgment on the merits.

Supreme Court dismissed plaintiff's first and third through sixth causes of action. The court also determined that Con Edison was not a necessary party to this action and denied defendants' summary judgment motion.

In evaluating a motion to dismiss pursuant to CPLR 3211 (a) (7), the court is required to accept the allegations of the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (Leon v Martinez, 84 NY2d 83, 87-88). Viewed against this standard, Supreme Court improperly dismissed plaintiff's first and third through sixth causes of action.

As to the first cause of action, plaintiff alleged...