E. Materials Corp. v. Mitsubishi Plastics Composites Am., Inc.

• Citation: 307 F.Supp.3d 52
• Decision Date: 04 April 2018
• Docket Number: 2:17–cv–01034 (ADS)(AYS)
• Parties: EASTERN MATERIALS CORPORATION and Island Exterior Fabricators, LLC, Plaintiffs, v. MITSUBISHI PLASTICS COMPOSITES AMERICA, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

307 F.Supp.3d 52

EASTERN MATERIALS CORPORATION and Island Exterior Fabricators, LLC, Plaintiffs,

v.MITSUBISHI PLASTICS COMPOSITES AMERICA, INC., Defendant.

2:17–cv–01034 (ADS)(AYS)

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

Signed April 4, 2018

Lewis Johs Avallone Aviles LLP, Attorneys for the Plaintiffs, One CA Plaza, Suite 225, Islandia, NY 11749, By: Bryan F. Lewis, Esq., Tara M. Darling, Esq., Of Counsel

White & Case LLP, Attorneys for the Defendant, 1221 Avenue of the Americas, New York, NY 10020, By: Joshua A. Berman, Esq., Brendan Woodward, Esq., Susan L. Grace, Esq., Of Counsel

MEMORANDUM OF DECISION & ORDER

SPATT, District Judge:

The Plaintiffs Eastern Materials Corporation ("Eastern"), and Island Exterior Fabricators, LLC ("Island") (together, the "Plaintiffs") commenced this action against the Defendant, Mitsubishi Plastics Composites America, Inc. (the "Defendant" or "Mitsubishi") alleging claims of breach of contract, breach of warranty and negligence regarding materials supplied for a construction project in New York City.

Presently before the Court is a motion by the Plaintiffs, pursuant to Federal Rule of Civil Procedure (" FED. R. CIV. P. " or "Rule") 15 to amend the Plaintiffs' claims for breach of contract and breach of warranty, in accordance with this Court's Memorandum and Order dated September 19, 2017 (the "Order"). For the following reasons, the Plaintiffs' motion to amend is granted with respect to the breach of contract claim and denied with respect to the breach of warranty claim. As such, the Plaintiffs may only proceed with the breach of contract claim against Mitsubishi.

I. BACKGROUND

A. The Factual Background

As the Court has already detailed the factual allegations at issue in this motion in its Order, and the parties are familiar with the facts of this case, they will not be repeated here.

B. The Relevant Procedural History

On January 27, 2017, the Plaintiffs commenced this action by filing the complaint in the Supreme Court of the State of New York, Suffolk County. The complaint set forth three causes of action: breach of contract, negligence and breach of warranty.

On February 23, 2017, the Defendant filed a Notice of Removal, removing the action to this Court.

On March 20, 2017, the Defendant filed a motion to dismiss all of the Plaintiffs' claims pursuant to Rule 12(b)(6). In the Plaintiffs' opposition memorandum, the Plaintiffs agreed to withdraw their negligence claim.

In the Court's Order, dated September 19, 2017, the Court dismissed the Plaintiffs' First Amended Complaint ("FAC") without prejudice, finding both the breach of contract and breach of warranty claim insufficient. Specifically, the Court found that the breach of contract claim "failed to properly specify what the agreement ... consisted of and which provisions of any such agreement were violated." Order at 11–12. Further, the Court concluded that the Plaintiffs' consequential damages claim was conclusory. Id. at 12–15. With respect to the breach of warranty claim, the Plaintiffs failed to "provid[e] allegations as to the existence of an express promise or representation." Id. at 15–16. The Plaintiffs were granted leave to file a motion to amend the FAC in a manner consistent with FED. R. CIV. P. 15 within thirty days of the Order. Id. at 20.

On October 18, 2017, the Plaintiffs filed a motion to amend the FAC. Attached to the motion was a proposed Second Amended Complaint ("SAC"). As this motion was filed within thirty days of the Order, the Court deems it timely. The Plaintiffs claim that the breach of contract claim is addressed by identifying the contract, the terms at issue, and the nature of the breaches. Allegedly, the SAC "specifically pleads that consequential damages were both reasonably foreseeable and specifically contemplated by the parties at the time of contracting." Docket Entry ("DE") 15–1 at 5. The SAC also purportedly includes the warranty, the terms at issue, as well as the nature of the breaches. See id. at 4–5. The Defendant maintains that the Plaintiffs fail to correct the deficiencies of the FAC.

II. DISCUSSION

A. Standard of Review

FED. R. CIV. P. 15(a), which typically governs a motion to amend a complaint, states, in relevant part, "A party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." FED. R. CIV. P. 15(a)(2). Unless there is a showing of bad faith, undue delay, futility or undue prejudice to the non-moving parties, the district court should grant leave to amend. Foman v. Davis , 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed. 2d 222 (1962) ; Burch v. Pioneer Credit Recovery, Inc. , 551 F.3d 122, 126 (2d Cir. 2008) (per curiam) (stating that leave to amend "should generally be denied in instances of futility, undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, or undue prejudice to the non-moving party."); Milanese v. Rust–Oleum Corp. , 244 F.3d 104, 110 (2d Cir. 2001) (internal citations omitted); Hemphill v. Schott , 141 F.3d 412, 420 (2d Cir. 1998).

The decision on whether to grant a motion to amend rests within the sound discretion of the district court. Aetna Cas. & Sur. Co. v. Aniero Concrete Co. , 404 F.3d 566, 603–04 (2d Cir. 2005) ; Hemphill , 141 F.3d at 420. In deciding whether to grant leave to amend, prejudice to the opposing party is one of the "most important" issues to consider. AEP Energy Servs. Gas Holding Co. v. Bank of America, N.A. , 626 F.3d 699, 725 (2d Cir. 2010) (internal quotations omitted).

In considering whether a proposed amendment is futile, the Court must determine whether it could withstand a Rule 12(b)(6) motion to dismiss. Lucente v. IBM Corp. , 310 F.3d 243, 258 (2d Cir. 2002). When reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the Plaintiff. See, e.g., Walker v. Schult , 717 F.3d 119, 124 (2d Cir. 2013) ; Cleveland v. Caplaw Enters. , 448 F.3d 518, 521 (2d Cir. 2006) ; Bolt Elec., Inc. v. City of N.Y. , 53 F.3d 465, 469 (2d Cir. 1995) ; Reed v. Garden City Union Free Sch. Dist. , 987 F.Supp.2d 260, 263 (E.D.N.Y. 2013).

Under the now well-established Twombly standard, the Court may only dismiss a complaint if it does not contain enough allegations of fact to state a claim for relief that is "plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed. 2d 929 (2007). The Second Circuit has expounded that, after Twombly, the Court's inquiry under Rule 12(b)(6) is guided by two principles:

First, although a court must accept as true all of the allegations contained in a complaint, that tenet is inapplicable to legal conclusions, and [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss and [d]etermining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.

Harris v. Mills , 572 F.3d 66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 664, 129 S.Ct. 1937, 1940, 173 L.Ed. 2d 868 (2009) ).

A complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to survive a motion to dismiss. FED. R. CIV. P. 8(a)(2). Under Rule 8, a complaint is not required to allege "detailed factual allegations." Kendall v. Caliber Home Loans, Inc. , 198 F.Supp.3d 168, 170 (E.D.N.Y. 2016) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). "In ruling on a motion pursuant to FED. R. CIV. P. 12(b)(6), the duty of a court ‘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.’ " DiFolco v. MSNBC Cable L.L.C. , 622 F.3d 104, 113 (2d Cir. 2010) (quoting Cooper v. Parsky , 140 F.3d 433, 440 (2d Cir. 1998) ). The Court "[is] not bound to accept as true a legal conclusion couched as a factual allegation." Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

B. Evidence Outside the Pleading

Before turning to the substantive issues, the Court notes that the Plaintiffs submitted extensive documentary evidence in support of its SAC. The Court will consider the attached documents in adjudicating this motion.

"[F]ederal courts have complete discretion to determine whether or not to accept the submission of any material beyond the pleadings offered in conjunction with a Rule 12(b)(6) motion." Giugliano v. F3² Capital Partners, LLC, No. 14-cv-7240, 2015 WL 5124796 (E.D.N.Y. Sept. 1, 2015) (Spatt, J.) (citation and quotation marks omitted). In adjudicating this motion, the Court is permitted to consider:

(1) facts alleged in the complaint and documents attached to it or incorporated in it by reference , (2) documents "integral" to the complaint and relied upon in it, even if not attached or incorporated by reference, (3) documents or information contained in [the] defendant's motion papers if plaintiff has knowledge or possession of the material and relied on it in framing the complaint, (4) public disclosure documents required by law to be, and that have been, filed with the Securities and Exchange Commission, and (5) facts of which judicial notice may properly be taken under Rule 201 of the Federal Rules of Evidence.

Env't Servs. v.Recycle Green Servs. , 7 F.Supp.3d 260, 270 (E.D.N.Y. 2014) (Spatt, J.) (emphasis added) (quoting In re Merrill Lynch & Co. , 273 F.Supp.2d 351, 356–57 (S.D.N.Y. 2003), aff'd in part and vacated in part on other grounds sub nom. Dabit v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 395 F.3d 25 (2d Cir. 2005), vacated on other grounds , 547 U.S. 71, 126 S.Ct. 1503, 164 L.Ed. 2d 179 (2006) ); accord Oberstein v....