Jurlique, Inc. v. Austral Biolab Pty., Ltd.

• Decision Date: 23 November 1992
• Citation: Jurlique, Inc. v. Austral Biolab Pty., Ltd., 590 N.Y.S.2d 235, 187 A.D.2d 637 (N.Y. App. Div. 1992)
• Parties: JURLIQUE, INC., Respondent-Appellant, v. AUSTRAL BIOLAB PTY., LTD., et al., Appellants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 235

590 N.Y.S.2d 235

187 A.D.2d 637

JURLIQUE, INC., Respondent-Appellant, v. AUSTRAL BIOLAB PTY., LTD., et al., Appellants-Respondents.

Supreme Court, Appellate Division Second Department.

Nov. 23, 1992.

Speno Goldman Goldberg Steingart & Penn, P.C., Mineola (Peter Sullivan, of counsel), for appellant-respondent D'Namis, Ltd.

James H. Gianninoto, New York City, for appellant-respondent Austral Biolab Pty., Ltd.

Peirez, Ackerman & Levine, Great Neck (John M. Brickman and I. Andrew

Goldberg, of counsel), for respondent-appellant.

Before MANGANO, P.J., and SULLIVAN, BALLETTA and O'BRIEN, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to recover damages for tortious interference with contract and trade defamation, (1) the defendants appeal from an order of the Supreme Court, Suffolk County (Cannavo, J.), entered June 20, 1990, which granted the plaintiff's motion for a preliminary injunction enjoining them from interfering with the operation of the plaintiff's business, and (2) the defendant D'Namis, Ltd., appeals from so much of an order of the same court, dated January 17, 1991, as (a) denied its motion, pursuant to CPLR 3211(a)(7), to dismiss the complaint insofar as it is asserted against it for failure to state a cause of action, (b) granted the motion of the plaintiff to extend its time within which to post an undertaking, (c) denied its cross motion to vacate the preliminary injunction, and (d) continued the preliminary injunction "in full force and effect pending further order of the Court", and (3) the plaintiff cross-appeals from so much of the order dated January 17, 1991, as granted the motion of the defendant Austral Biolab Pty., Ltd., pursuant to CPLR 3211(a)(8), to dismiss the complaint insofar as it is asserted against it for lack of personal jurisdiction.

ORDERED that the order dated January 17, 1991, is modified, on the law, by (a) deleting the provision thereof which granted the plaintiff's motion to extend its time in which to file an undertaking, and by substituting therefor a provision denying that motion, (b) deleting the provision thereof which denied the cross motion of the defendant D'Namis, Ltd. to vacate the preliminary injunction and continued it in full force and effect, and by substituting therefor a provision granting the cross motion, and vacating the order entered June 20, 1990, (c) deleting the provision thereof which denied that branch of the motion of the defendant D'Namis, Ltd., which was to dismiss the second cause of action, and by substituting therefor a provision granting that branch of the motion; as so modified, the order dated January 17, 1991, is affirmed; and it is further,

ORDERED the appeal from the order entered June 20, 1990, is dismissed as academic, in light of the determination on the appeal from the order dated January 17, 1991; and it is further,

ORDERED that the defendants are awarded one bill of costs.

In the second cause of action asserted in its complaint, the plaintiff alleges that the defendant D'Namis, Ltd. (hereinafter D'Namis) tortiously interfered with its prospective contracts with its customers, or committed trade defamation. It is well settled that the culpable conduct necessary to state a cause of action to recover damages for interference with future contractual relations or contracts terminable at will is significantly higher than the conduct necessary for interference with present contracts (see, Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 428 N.Y.S.2d 628, 406 N.E.2d 445). In order to demonstrate interference with future contracts or contracts terminable at will, a showing of "wrongful" conduct, defined as fraudulent representations, threats, or a violation of a duty of fidelity owed to the plaintiff by reason of a confidential relationship between the parties, is required (see, Guard-Life Corp. v. Parker Hardware Mfg. Corp., supra, at 194, 428 N.Y.S.2d 628, 406 N.E.2d 445; see also, Lerman v. Medical Assocs. of Woodhull, 160 A.D.2d 838, 554 N.Y.S.2d 272; Slifer-Weickel, Inc. v. Meteor Skelly, 140 A.D.2d 320, 527 N.Y.S.2d 553). In the case at bar, the second cause of action in the complaint does not allege that D'Namis committed any "wrongful" acts. Further, the tort of trade defamation is the knowing publication of a false matter derogatory to the plaintiff's business calculated to prevent or interfere with relationships between the plaintiff and others to its detriment (see, Waste Distillation Technology v. Blasland & Bouck Engs., 136 A.D.2d 633, 523 N.Y.S.2d 875). The communication must play a material and substantial part in inducing others not to deal with the plaintiff (Waste Distillation Technology v. Blasland & Bouck Engs., supra, at 634, 523 N.Y.S.2d 875). In the case at bar, the plaintiff alleges that the defendants contacted its customers and told them that if they were unhappy with the plaintiff's prices that D'Namis could provide the product cheaper, a fact that the plaintiff concedes is true. Therefore, the second cause of action in the complaint, whether...