North America Tech. Servs. Inc. v. V. J. Techs. Inc.

• Decision Date: 29 September 2011
• Docket Number: Civil Action No. 10 CV 1384 (AWT)
• Parties: NORTH AMERICAN TECHNICAL SERVICES, INC., Plaintiff, v. v. J. TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — District of Connecticut

NORTH AMERICAN TECHNICAL SERVICES, INC., Plaintiff,

v.v.J. TECHNOLOGIES, INC., Defendant.

Civil Action No. 10 CV 1384 (AWT)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

Signed: September 29, 2011

ORDER RE MOTION TO DISMISS

The plaintiff, North American Technical Services, Inc., has brought this action against V.J. Technologies, Inc., setting forth claims for breach of contract (First Count), breach of the covenant of good faith and fair dealing (Second Count), unjust enrichment (Third Count), quantum meruit (Fourth Count), promissory estoppel (Fifth Count), fraudulent misrepresentation (Sixth Count), negligent misrepresentation (Seventh Count), violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. ("CUTPA") (Eighth Count), and unfair competition (Ninth Count). The defendant has moved to dismiss the plaintiff's Complaint pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b). For the reasons set forth below, the motion is being granted as to the Third and Fourth Counts, with leave to replead, and denied as to the remaining counts.

I. LEGAL STANDARD

When deciding a motion to dismiss under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint and must draw inferences in a light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Although a complaint "does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 550, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986))(on a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation"). "Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all allegations in the complaint are true (even if doubtful in fact)." Id. (internal citations omitted). However, the plaintiff must plead "only enough facts to state a claim to relief that is plausible on its face." Id. at 1974. "The function of a motion to dismiss is 'merely to assess the legal feasibility of the complaint, not to assay the weight of theevidence which might be offered in support thereof.'" Mytych v. May Dept. Store Co., 34 F. Supp. 2d 130, 131 (D. Conn. 1999) (quoting Ryder Energy Distribution v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984)). "The issue on a motion to dismiss is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his claims." United States v. Yale New Haven Hosp., 727 F. Supp. 784, 786 (D. Conn. 1990) (citing Scheuer, 416 U.S. at 232).

In its review of a motion to dismiss for failure to state a claim, the court may consider "only the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the pleadings and matters of which judicial notice may be taken." Samuels v. Air Transp. Local 504, 992 F.2d 12, 15 (2d Cir. 1993).

When alleging fraud or mistake, a plaintiff bears the additional burden of stating "with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The plaintiff must "(1) detail the statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) state where and when the statements (or omissions) were made, and (4) explain why the statements (or omissions) are fraudulent." Harsco Corp. v. Segui, 91 F.3d 337, 347 (2d Cir. 1996). "Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R.Civ. P. 9(b).

II. DISCUSSION

A. Choice-of-Law

The defendant argues that New York law should be applied to the plaintiff's contracts and torts claims. Because many of the defendant's arguments in support of its motion to dismiss rely on New York law, the court addresses the choice-of-law analysis as an initial matter.

In a diversity action, a federal court applies the choice-of-law rules of the forum state. Greystone Comty. Reinvestment Ass'n, Inc. v. Berean Capital, Inc., 638 F. Supp. 2d 278, 286 (D. Conn. 2009). "In Connecticut, the Court must select the local law of the state having 'the most significant relationship' to the occurrence and the parties to the dispute." Id. Connecticut follows the Restatement (Second) of Conflicts of Laws in making this determination. Reichhold Chemicals, Inc. v. Hartford Accident And Indemn. Co., 243 Conn. 401, 413 (1997). The Restatement (Second) articulates "seven overarching considerations in determining which state has the 'most significant relationship."¹ Id. at 409. There are "fivecontacts to be considered in applying the [factors] . . . to a contract dispute."² Id. There are four contacts to be considered in applying the factors to a torts dispute, which "are to be evaluated according to their relative importance with respect to the particular issue."³ O'Connor v. O'Connor, 101 Conn. 632, 652 (1986). Application of these factors requires a court to make a fact intensive inquiry regarding the circumstances of the individual case.

Here, there are factual disputes with respect to issues material to the choice of law analysis. The defendant, for example, argues that the letter acknowledging the parties' agreement was signed in New York because the letterhead lists the defendant's New York address. The plaintiff, however, alleges that the letter was signed at the defendant's office inConnecticut. Because of the "fact-intensive and context specific" nature of the choice of law analysis and the complexity of the instant case, it is premature to address choice of law at the motion to dismiss stage. Graboff v. The Collern Firm, No. 10-1710, 2010 WL 4456923 at *8 (E.D. Pa. Nov 8, 2010) ("[C]onducting a . . . choice of law analysis is fact-intensive and context specific. Due to the complexity of this analysis when confronted with a choice of law issue at the motion to dismiss stage, courts . . . have concluded that it is more appropriate to address the issue at a later stage in the proceedings."); see also Speedmark Transp., Inc. v. Mui, No. 11 Civ. 0722 (AJP), 2011 WL 1533042 at *4 (S.D.N.Y. Apr. 21, 2011) ("[A] choice-of-law determination is premature on this motion to dismiss, since the record lacks facts necessary to conduct the context-specific . . . analysis required."); Arroyo v. Milton Acad., No. 5:10-cv-117, 2011 WL 65938 at *3 (D. Vt. Jan. 10, 2011) (finding that the Restatement (Second) of Conflicts, employs "a fact intensive inquiry into the interests of the various fora and their relationships with the parties involved, as well as assessments of the policy implications of applying the law of one jurisdiction over another" and therefore "it would be premature to resolve these complex questions before the completion of discovery.").

B. First Count - Breach of Contract

The defendant argues that the plaintiff's breach of contract claim should be dismissed for three reasons: first, that the parties had no contract; second, that even if there was a contract, the New York Statute of Frauds applies and makes the contract unenforceable; and third, that even if the parties had an enforceable contract, there was no breach because the defendant submitted its final bid to the plaintiff's agent, Sung Woo. Because the allegations in the Complaint are sufficient, viewed in the light most favorable to the plaintiff, to support a breach of contract claim, the motion to dismiss the First Count is being denied.

The defendant argues that the alleged contract between the parties fails for lack of definiteness because it does not identify the parties' respective obligations, omits essential terms, such as compensation, and is so vague and indefinite that its terms cannot be discerned. In Connecticut,

[t]o be enforceable, an agreement must be definite and certain as to its terms and requirements. Whether and on what terms a contractual commitment has been undertaken are ultimately questions of fact for the trier of facts. A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined.

Presidential Capital Corp. v. Reale, 231 Conn. 500, 506-07 (1994) (internal citations and quotation marks omitted). "Moreover, the defendant's promise to pay a commission is not made unenforceablemerely because he did not include the amount of the commission. We have long held that an agreement will not be rejected if the missing terms can be ascertained, either from its express terms or by fair implication." Id. at 507-08.

Here, the plaintiff has alleged that it had an oral agreement with the defendant which was later confirmed in a letter dated August 20, 2007. The letter "appoints [the plaintiff] as the lead team with exclusivity in the sales process for the project," and further states that the plaintiff "will take the lead" on all sales and pricing issues. Furthermore, the Complaint alleges that the plaintiff and the defendant have had prior agreements, which could establish a course of dealing between the parties. So long as a trier of fact can ascertain missing terms, including the amount of the plaintiff's commission, the agreement will not be rejected for lack of definiteness.

The defendant argues that the alleged contract between the parties is unenforceable because it does not comply with the New York Statute of Frauds. New York Gen. Obl. Law § 5-701(10) requires that commission agreements concerning the finding and brokerage of business opportunities and inventory sales be in writing. In contrast, the Connecticut Statute of Frauds has no such requirement....