Payrolls & Tabulating, Inc. v. Sperry Rand Corp.

• Decision Date: 30 March 1965
• Citation: 257 N.Y.S.2d 884,22 A.D.2d 595
• Court: New York Supreme Court — Appellate Division
• Parties: PAYROLLS & TABULATING, INC., Plaintiff-Appellant-Respondent, v. SPERRY RAND CORPORATION, Defendant-Respondent-Appellant.

Page 884

257 N.Y.S.2d 884

22 A.D.2d 595

PAYROLLS & TABULATING, INC., Plaintiff-Appellant-Respondent, v. SPERRY RAND CORPORATION, Defendant-Respondent-Appellant.

Supreme Court, Appellate Division, First Department.

March 30, 1965.

Michael A. Bamberger, New York City, of counsel (George G. Gallantz, New York City, with him on the brief; Proskauer Rose Goetz & Mendelsohn, New York City, attorneys), for plaintiff-appellant-respondent.

Melvin D. Goodman, New York City, of counsel (Lino A. Graglia, New York City, with him on the brief; Chadbourne, Parke, Whiteside & Wolff, New York City, attorneys), for defendant-respondent-appellant.

Before BREITEL, J. P., and VALENTE, STEVENS and STEUER, JJ.

STEVENS, Justice.

These are cross-appeals from an order entered November 26, 1963, granting in part and denying in part defendant's motion to strike portions of the amended complaint. The order directed dismissal of the third, fourth, fifth and sixth causes of plaintiff's amended complaint for insufficiency. The complaint consists of six causes of action. Broadly speaking, they may be classified as follows: the first cause for breach of contract; the second cause for breach of warranty; the third cause unfair competition by disparagement for which an injunction is sought; the fourth cause unfair competition by disparagement for which money damages are sought; the fifth cause an alleged breach of a fiduciary relationship, and seeking an injunction; the sixth cause alleging a breach of a fiduciary relationship for which money damages are sought.

'Every pleading shall consist of plain and concise statements in consecutively numbered paragraphs. Each paragraph shall contain, as far as practicable, a single allegation. * * * Separate causes of action * * * shall be separately stated and numbered and may be stated regardless of consistency' (CPLR 3014). 'Statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense' (CPLR 3013). Grene v. Bailey, 282 App.Div. 856, 124 N.Y.S.2d 739; Kramer v. Carl M. Loeb, Rhoades & Co., 20 A.D.2d 634, 246 N.Y.S.2d 243; Foley v. D'Agostino, 21 A.D.2d 60, 248 N.Y.S.2d 121.

Tested by the standards enumerated, the first cause of action is deficient. The second cause repeating the allegations of the first and adding an entirely separate cause of action and espousing a different theory, suffers from a like infirmity. The complaint as a whole is unnecessarily complicated.

In the first cause plaintiff joins a cause, or causes, of action for alleged breach of contract, or contracts, with the charge of a business tort of disparagement and unfair competition. If the alleged breaches stem from a single source contract, the fact should appear clearly. If based upon several contracts the pleading should, to that extent, be separate causes.

The third and fourth causes of action seek to allege unfair competition by disparagement. Here again the reallegation of the first cause of action results in the joining of several causes of action in a single cause. In the third cause plaintiff seeks an injunction, the fourth cause money damages.

Disparagement has been defined as '[m]atter which is intended by its publisher to be understood or which is reasonably understood to cast doubt upon the existence or extent of another's property in land, chattels or intangible things, or upon their quality, is disparaging thereto, if the matter is so understood by its recipient.' Restatement, Torts, § 629. Generally there must be intentional communication to a third person, without privilege, resulting in direct financial loss to the party whose interest is disparaged. Restatement, Torts, §§ 630 et seq. Actually the cause seems to have developed from the old action on the case. (See, Benton v. Pratt, 2 Wend. 385.) There it was held sufficient to sustain the action that 'there is the assertion, on the part of the defendant, of an unqualified falsehood, with a fraudulent intent as to a present or existing fact, and a direct, positive and material injury resulting therefrom to the plaintiff' (p. 390). Recovery was allowed in the case cited even though the contract plaintiff had with third parties and with which defendants interfered might not have been enforceable by plaintiff against such other parties where the evidence showed such parties would have performed. It seems, though the contract interfered with was not binding under the statute of frauds, if it would have been performed, recovery is allowed (Rice v. Manley, 66 N.Y. 82). Nor is it necessary to plead in haec verba. 'Falsehoods can be communicated as well by acts as by words. Whether by language or not, they involve conduct which deceives third persons and thereby induces them to act in...