City Calibration Centers, Inc. v. Heath Consultants Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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CITY CALIBRATION CENTERS INC, and

PLATSKY COMPANY, INC,

MEMORANDUM & ORDER

Plaintiffs, 22-CV-7845 (JS)(ST)

-against-

HEATH CONSULTANTS INC.,

Defendant.

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APPEARANCES

For Plaintiffs: Steven R. Schlesinger, Esq.

Jillian Lee McNeil, Esq.

Stanley A. Camhi, Esq.

Jaspan, Schlesinger & Hoffman, LLP

300 Garden City Plaza, Fifth Floor

Garden City, New York 11530

For Defendant: Jeremy Evan Deutsch, Esq.

Elliot James Coz, Esq.

Hallie McDonald, Esq.

Cozen O’Connor

3WTC, 175 Greenwich Street, 55th Floor

New York, New York 10007

SEYBERT, District Judge:

Heath Consultants Inc. (“Defendant” or “Heath”) moves,

pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure,

to dismiss the First Amended Complaint (the “FAC”) (ECF No. 27) of

Plaintiffs Plasky Company, Inc. (“Platsky”) and City Calibration

Centers Inc. (“City Calibration” and collectively with Platsky,

“Plaintiffs”) (hereafter, the “Dismissal Motion”). (See Dismissal

Motion, in toto, ECF No. 29.) For the reasons that follow,

Defendant’s Dismissal Motion is GRANTED IN PART AND DENIED IN PART.

BACKGROUND1

I. The Parties

City Calibration “is a New York limited liability

company having its principal place of business at 298 Montrose

Road, Westbury, New York 11590.” (FAC ¶ 17.)

Platsky, “is a New York corporation having its principal

place of business at 298 Montrose Road, Westbury, New York 11590.”

(Id. ¶ 18.) Platsky is the parent company of City Calibration.

(Id. ¶ 34.) Traditionally, Platsky was “a plumbing shelf goods

wholesale representative”; however, “over the years, it has

transitioned to an agency with a diverse product line, working

directly with wholesalers, contractors, architectural designers,

and engineers.” (Id.)

Heath “is a Texas corporation having its principal place

of business at 9030 Monroe Road, Texas 77061.” (Id. ¶ 19.) “Heath

has been doing business since 1933 and specializes in the

development of products and the provision of services for the

detection and prevention of gas leaks.” (Id. ¶ 22.) “These

products and services include the development and manufacturing of

gas detection devices and their related parts and accessories, as

well as the provision of gas leak investigation and inspection

1 The facts set forth herein are taken from the FAC and are accepted

as true for purposes of the instant Motion. See generally Lynch

v. City of N.Y., 952 F.3d 67, 75 (2d Cir. 2020).

services, underground utility damage prevention, and meter/reading

services.” (Id.) Relevant here, Heath also “develops and sells

products and services intended for use by” licensed master plumbers

(“LMPs”) “in the New York City Area.” (Id. ¶ 23.)

II. Local Law 152 and the LMP200

“In 2016, New York City enacted New York City Local Law

152” (“Local Law 152”). (Id. ¶ 24.) Local Law 152 “requires all

buildings in New York City (with some limited exceptions) to have

their gas piping systems inspected by a LMP at least once every

four years, beginning on January 1, 2020.” (Id.) Additionally,

Local Law 152 “requires LMPs to provide each building owner with

a Gas Piping System Periodic Inspection Report and certification.”

(Id. ¶ 25.) “Building owners are required to maintain all reports

and certifications for ten years.” (Id.) LMPs are not subject to

this record retention provision; however, Plaintiffs aver “it is

the best practice for LMPs to maintain their records for the same

period of time for liability purposes in the event something goes

wrong with the gas piping in a given building.” (Id.)

The LMP200 is the central product to Heath’s LMP

business. (Id. ¶ 26.) “The LMP200 is a gas detection tool

intended for use by the plumbing and HVAC communities in the New

York City Area to meet the requirements of Local Law 152.” (Id.)

The LMP200 was “developed collaboratively with Con-Edison,

National Grid and the LMPs and collected additional information

specific to the New York City metropolitan area.” (Id.) LMPs,

and their technicians, use the LMP200 “to conduct regulatory

compliant leak surveys of gas piping inside buildings.” (Id.

¶ 27.) “Heath advertises that the LMP200 can then transfer those

leak surveys, via Bluetooth, to applications running on smart

devices so that the LMP or Utility can visualize the data and then

store it in the cloud for regulatory reporting purposes down the

road.” (Id.) LMPs also use the LMP200 as part of their daily

duties, “including purging of interior piping and providing

atmosphere monitoring for both flammable gas and carbon monoxide.”

(Id. ¶ 28.)

“Heath also sells and distributes” a product known as an

ABC Station, together with the gasses2 required for the ABC

Station’s operation (collectively with the LMP200, the

“Products”). (Id. ¶ 29.) Every 30 days, “[t]he LMP200 requires

calibration on an ABC Station.” (Id.) Failure to do so will

result in the LMP200 becoming disabled. (Id.) “This is a safety

measure to ensure the LMPs are obtaining accurate results during

their gas inspections.” (Id.)

While Heath occasionally “distributes its products and

provides services directly to the consumer”, generally, “it enters

into distribution and/or service agreements with partners having

2 Herein, the Court adopts Plaintiffs’ use of the non-standard

plural form of “gas”.

knowledge and experience in the relevant marketplaces.”

(Id. ¶ 31.) Plaintiffs contend this was also the case with the

LMP200. (Id. ¶¶ 32-33.) Plaintiffs allege sometime “in or around

late 2018, Heath sought out Platsky, which had been recommended to

Heath by several industry insiders, to enter into a potential

supplier/distributor relationship.” (Id. ¶ 33.)

III. The Formation of City Calibration and the 2019 Agreement

A. City Calibration

“From the start of its negotiations with Heath, Platsky

principals knew they would need to create a new entity to enter

into any long-term distribution agreement with Heath” and “to run

the business associated with the distribution and service of

Heath’s LMP200 and its related accessories, including the ABC

Stations, and, eventually, conduct business related to the

technology it intended to create as part of the deal.” (Id. ¶ 37.)

To meet this need, on February 4, 2019, City Calibration was

formed. (Id. ¶ 38.)

B. The 2019 Agreement

On January 28, 2019, prior to City Calibration’s

formation, “Platsky and Heath negotiated and entered into an

exclusive distribution agreement by which Heath engaged Platsky,

‘as the sole distributer’” of the Products, “and associated

accessories for use with the New York City plumbing contractors.”

(Id. ¶ 39; see also 2019 Agreement, Ex. B, ECF No. 27-2, attached

to FAC.) Plaintiffs contend “[e]xclusivity was a material term of

the contract[]”, and, that absent exclusivity, “Platsky would not

have entered into the agreement.” (Id. ¶ 40.) Plaintiffs assert

“[t]he market for the Products was relatively small, such that a

non-exclusive distributorship would . . . not have been worth the

financial investment.” (Id.)

“Platsky and its affiliate, Platsky HVAC-R, were named

as parties to the 2019 Agreement”. (Id. ¶ 41.) While City

Calibration is not a named party to the 2019 Agreement, Platsky

alleges it “made clear to Heath at this time that it would be

forming a third entity through which the business of the 2019

Agreement would be conducted.” (Id.)

Plaintiffs assert that Heath notified them “in the 2019

Agreement that the LMP200 would cease to operate if it was not

timely calibrated”, but that Heath “knowingly omitted that the

LMP200 would also stop working if the data it collected was not

regularly cleared from the device and stored in the Cloud, which,

at the time of the execution of the 2019 Agreement, Heath had no

means to do.” (Id. ¶ 42.) Had Platsky known of these limitations

with the LMP200, Plaintiffs contend Platsky either (1) would “not

have entered into the 2019 Agreement”, or (2) “would have

negotiated different terms.” (Id. ¶ 53.)

While profit margins for sale of the LMP200 were narrow,

Plaintiffs aver “[t]he 2019 Agreement anticipated additional

profits for Platsky in the sale of the accessories, calibration

equipment, installations and replacement gasses themselves[.]”

(Id. ¶ 43.) The 2019 Agreement further “provided for the

opportunity for Platsky to provide the calibration as a service.”

(Id.) Since calibration of the LMP200 “needed to be done on a

monthly basis” this “would generate a stream of repeat business

for Platsky.” (Id.) As to calibration, “the 2019 Agreement

provided that Platsky would be responsible for the installation of

the ABC calibration station as well as maintaining the associated

calibration records for the contractor.” (Id. ¶ 44 (internal

quotation marks omitted).) “Platsky was to autonomously run this

portion of the business to”, inter alia, “help maintain consistency

in the market, [and] availability of information for contractors

who need access to calibration reports etc.” (Id. (internal

quotation marks omitted).)

“The term of the 2019 Agreement was through September

20, 2020” (id. ¶ 47) and was “binding upon and inure[d] to the

benefit of [Platsky] and its successors and assigns.” (Id. ¶ 46

(quoting 2019 Agreement § 12(b)).) Plaintiffs allege that “[t]he

2019 Agreement was to be for a limited time period [so as to]

allow[] Platsky to test the market before entering into a longer-

term distribution agreement and to develop the business that would

become City Calibration.” (Id. ¶ 50.) Plaintiffs contend “Heath

and Platsky agreed to evaluate the 2019 Agreement every six months

beginning October 1, 2019.” (Id. ¶ 47.) If Heath chose to

terminate the 2019 Agreement, “it was to be Heath’s sole

responsibility to buy back all approved and agreed upon [LMP200]

devices and ABC calibration stations from Platsky.” (Id.)

Paul D. Wehnert (“Wehnert”), Senior VP of Sales &

Marketing, executed the 2019 Agreement on behalf of Heath.

(Id. ¶ 48.) Jordan Stern (“Stern”), “then VP of Business

Development”, executed the 2019 Agreement on behalf of Platsky.

(Id. ¶ 49.) Plaintiffs allege, “[b]oth Platsky and Heath always

knew and planned for (1) the creation of City Calibration; and

(2) a new, long-term, exclusive distribution agreement.”

(Id. ¶ 51.) Plaintiffs aver:

[W]hen it entered into the 2019 Agreement,

Platsky relied upon Heath’s representations

that (1) Heath had the ability to grant

Plaintiffs an exclusive distributorship of all

of the Products described in the 2019

Agreement, and (2) the LMP200 could connect

via Bluetooth to a service provider’s personal

device to efficiently store and transfer the

data through software applications already

created by the local utility companies.

(Id. ¶ 52.) Plaintiffs assert, “[w]ithout these representations,

Platsky would not have entered into the 2019 Agreement.” (Id.)

Similarly, Plaintiffs aver Platsky would neither “have created

City Calibration nor invested large sums of money into the

development of its calibration business” without Heath’s

representations and omissions. (Id. ¶ 54.)

C. Operation of the Business Under the 2019 Agreement

1. The Calibration as a Service Business

“From January 2019 through March 2021, Heath and Platsky

engaged in the respective supply and distribution of the Products

as per the terms of the 2019 Agreement.” (Id. ¶ 56.) After

formation of City Calibration, “Heath and Platsky jointly drafted

and published a press release regarding the partnership created by

the 2019 Agreement, stating that ‘Platsky Company Inc. will

distribute Heath’s custom portable gas detectors to the

Metropolitan New York area through a newly formed company called

City Calibration Centers.’” (Id. ¶ 58.) “The press release

described City Calibration’s plan to open ‘strategically located

calibration stations at established plumbing supply wholesalers

throughout all five boroughs of New York City, Westchester, Long

Island, and northern New Jersey.’” (Id. ¶ 59.)

In accordance with the 2019 Agreement, “Platsky was

trained on the operation and functionality of the LMP200 and the

operation and installation of the ABC Stations.” (Id. ¶ 60.)

“Platsky then was responsible for the installation of the ABC

Stations as well as for maintaining the associated calibration

records for each contractor.” (Id.)

Since the LMP200 needed to be calibrated every 30 days,

and since this was an area of the business in which City

Calibration envisioned long-term profits, “with Heath’s knowledge,

City Calibration determined that it would not sell the ABC Stations

(which performed the Calibration) directly to the consumer, but,

instead, would create fractional franchises to perform the

calibration services at local wholesale retailers, readily

accessible to the LMPs.” (Id. ¶¶ 64-65.) The announcement of

City Calibration’s business model was part of the joint 2019 Press

Release. (Id. ¶ 65.) Additionally, as part of its calibration

service, “City Calibration also provided the service of extracting

and maintaining the calibration data for its customers.” (Id.

¶ 66.)

2. City Calibration’s Manual Extraction of the

LMP200’s Data

A third, unexpected, area of business arose as the

parties operated under the 2019 Agreement in that “Plaintiffs

quickly learned that the LMP200 device’s memory filled quickly and

needed to be cleared on a regular basis to maintain functionality.”

(Id. ¶ 67.) This created a “business around the collection and

maintenance of the LMP200’s inspection data.” (Id.)

Plaintiffs aver, prior to execution of the 2019

Agreement, Heath represented that the LMP200 device could connect

via Bluetooth “to various handheld devices through an existing

smart app” designed to manage the device’s data. (Id. ¶ 68.)

Specifically, Plaintiffs allege “Heath represented that software

was already in place” from Con-Edison and National Grid, “and that

those companies were either already or would soon be using their

own smart app to access the data from the LMP200 devices.” (Id.)

“Heath represented that this would enable City Calibration to

quickly and efficiently develop its own version of a smart app to

collect data from the LMP200 devices with Heath’s assistance.”

(Id.) Plaintiffs contend Heath’s representations were false.

(Id. ¶ 69.) Specifically, Plaintiffs allege “[n]ot only had the

Utility Companies not yet made available a fully function[al] smart

app,” but LMPs were hesitant to use any app that was developed

because: “(1) they would need to use different apps based on the

Utility company used by each building they inspected, and (2) the

LMPs did not want to share all of their data with the Utility

companies.” (Id.)

Plaintiffs allege Heath also “failed to inform

Plaintiffs that the LMP200s needed to have their data cleared on

a regular basis in order to maintain functionality, and that Heath

had, at the time, no technology in place to clear and store the

data in any manner.” (Id. ¶ 71.) Consequently, City Calibration

had to develop its own software and system “from scratch” “to

manage the data clearing and storage issues.” (Id. ¶ 72.)

Plaintiffs contend Heath was unable to assist City Calibration “in

developing the requisite software because it simply did not have

the experience it claimed it did with transferring the LMP200

data.” (Id. ¶ 73.) In developing its own smart app without

Heath’s assistance, Plaintiffs “expended extensive time and

resources.” (Id. ¶ 74.) Moreover, prior to development of the

smart app, City Calibration “also had to create and utilize a

computer-based software that required a hard-wired computer to

extrapolate the data from the LMP200, convert it to a pdf from a

raw data file, and send it to City Calibration’s cloud and then on

to the customer.” (Id.) This manual extraction was a “tedious

process” and “required the hiring of additional staff and the

purchase of additional vehicles and equipment.” (Id. ¶ 75.)

Plaintiffs maintain that development of the manual data extraction

process, together with its implementation, was not the deal they

had intended to make with Heath since it “was far more expensive

for City Calibration” than anticipated. (Id. ¶ 77.) This added

expense, Plaintiffs allege, flowed directly from Heath’s alleged

misrepresentation of the device’s capabilities. (Id.)

3. City Calibration’s Development of a Smart App

The development of a smart app created the possibility

for a fourth area of business for City Calibration. (Id. ¶ 78.)

Development of the smart app would enable “customer[s] to connect

the LMP200 device to their phone or other personal device

to (1) extract the tool data . . . resolving the data storage

issues and eliminate the need for manual extraction; and

(2) maintain readily accessible records in the Cloud for each of

the customer’s jobs.” (Id.) Plaintiffs assert “Heath was

supportive of Plaintiffs’ pursuit of a new, better functioning

smart app.” (Id. ¶ 79.) To that end, “Heath connected

Plaintiff[s] directly with Heath’s manufacturer, GMI, to obtain

the necessary technical information required for City Calibration

to develop its proposed technology.” (Id.)

“GMI is one of the world’s largest manufacturers of gas

and flame detection products and is located in the United Kingdom.”

(Id. ¶ 80.) “Heath is GMI’s primary distributor in the United

States.” (Id.) Since “neither City Calibration nor Platsky had

a direct relationship with GMI”, Heath’s Vice President of Sales,

Gerald Sims (“Sims”)3, “facilitated the negotiation of a non-

disclosure agreement between City Calibration and Heath.” (Id.

¶ 81.) The GMI non-disclosure agreement (the “GMI NDA”) “was

intended to protect both the technical information provided by GMI

to City Calibration, and the intellectual property developed by

City Calibration.” (Id. ¶ 83.)

IV. The Expiration of the 2019 Agreement and the Alleged 2021

Agreement

Plaintiffs allege that while sales in the first year and

a half “were slow”, by the “summer of 2020, sales began to

accelerate, and the Parties determined to continue their exclusive

distributor relationship.” (Id. ¶¶ 84-85.) Consequently, “prior

3 Gerald Sims took over this role from Wehnert. (See FAC ¶ 81.)

to the September 30, 2020 termination date of the 2019 Agreement,”

Plaintiffs allege “Heath and Plaintiffs engaged in active

negotiation[s] [for] the renewal of the 2019 Agreement or the

creation of a new contract.” (Id. ¶ 86.) Plaintiffs assert

“[n]either Sims nor any other representative of Heath ever told

Plaintiffs that Heath intended to allow the agreement to lapse nor

that it had otherwise ended Platsky’s role as a distributor for

Heath.” (Id. ¶ 87.) On the contrary, Plaintiffs allege “[o]n

behalf of Heath, Sims represented on multiple occasions

to . . . Stern . . . that Heath was renewing the agreement.”

(Id. ¶ 88.)

“[O]n July 23, 2020, Sims wrote in an email to Heath’s

‘Manager of Legal,’ Victoria Quinones” (“Quinones”), copying Stern

and Eric Six (“Six”), Heath’s New York sales consultant, “that

‘Platsky is our sole distributor of the . . . LMP200. We have a

current agreement with him. We need to renew this agreement[,] so

I’ve asked [Stern] to red line the current document with changes

he is requesting and email it to you and I [sic] for review.”

(Id. ¶ 89.) Plaintiffs allege “Sims directed Stern to speak

directly with Quinones,” and, further, that “Stern was led to

believe [Quinones] was Heath’s general counsel and was an attorney

with the authority to negotiate contracts on behalf of Heath.”

(Id. ¶ 90; see also id. ¶ 91.)

From July 2020 until March 2021, when Quinones sent Stern

what Plaintiffs allege was the final Agreement, Plaintiffs contend

“Heath and Stern were actively engaged in negotiations regarding

new terms for the Agreement.” (Id. ¶ 92.) “These new terms were

expressly intended to protect the App and other intellectual

property City Calibration was developing and to provide a mechanism

for use of that App on a nationwide scale.” (Id.)

Plaintiffs highlight, “Sims was always involved in the

review of the drafts and was copied on a significant portion of

the correspondence regarding the negotiations.” (Id. ¶ 93.)

Plaintiffs aver “Sims continually directed Stern to Quinones for

redlining or otherwise providing changes to the draft agreements”,

including on August 10, 2020, when Sims inquired whether Stern had

had “a chance to send [Quinones] [his] redlines for contract

changes[.]” (Id.) Plaintiffs estimate “negotiation of the new

Agreement took . . . slightly more than five months [] because the

Agreement covered additional terms and Plaintiffs had to work with

their attorneys to ensure that their intellectual property rights

were protected.” (Id. ¶ 94.) Plaintiffs contend “City

Calibration’s intent to develop the App was therefore necessarily

a large part of the[] discussions.” (Id. ¶ 95.) During the

negotiations, Plaintiffs assert “both Heath and Plaintiffs

continued to operate under the terms of the 2019 Agreement.”

(Id. ¶ 96.)

“On March 2, 2021, at the direction of Sims, Quinones

contacted Stern stating that she had ‘received the redlines from’”

Sims, “and requested a call to discuss the [redlines] with Stern.”

(Id. ¶ 97.) On March 3, 2021, Plaintiffs allege that “Quinones

and Stern negotiated the finalization of the Agreement over the

Phone.” (Id. ¶ 98.) As part of their discussion,

“Stern and Quinones exchanged different versions of the Agreement

for discussion purposes.” (Id.) Plaintiffs contend “[b]y the end

of the call, the Parties agreed upon a version of the Agreement

that built upon Heath’s standard agreement, but contained certain

additional terms required by City Calibration.” (Id. ¶ 99.)

On March 4, 2021, “Quinones emailed Stern, writing ‘I

have reviewed the changes, and the proposed insertions are

acceptable. Please sign and return at your earliest convenience.’”

(Id. ¶ 100.) “Sims was copied on the email” and Plaintiffs aver

Sims “had already approved the terms of the agreement.” (Id.

¶ 101.) On March 9, 2021, at Quinones’ direction, Stern signed

the Agreement “on behalf of City Calibration and Platsky . . . and

returned it to Heath, believing that Heath had already accepted

the terms.” (Id. ¶ 102.) “Plaintiffs never received a

countersigned version of the Agreement.” (Id. ¶ 103.) Rather,

“Plaintiffs believed—and acted in accordance with [this] belief—

that Sims had in fact signed the agreement on behalf of Heath.”

(Id.) Moreover, Plaintiffs allege Sims confirmed their belief

when, days later, Sims called Stern, “to congratulate him on

getting the deal done.” (Id.) Specifically, Plaintiffs aver Sims

called Stern and told him, “I told you I’d get the deal done for

you. Congratulations. When am I going to see you again?”

(Id. ¶ 104.) In addition to Sims’ congratulatory statement,

Plaintiffs emphasize that “Heath’s execution of the Agreement was

further confirmed by its performance under its terms for well over

one year.” (Id. ¶ 105.)

A. The Terms of the 2021 Agreement

Plaintiffs contend, after Stern had signed and returned

the 2021 Agreement to Quinones, “Heath operated under the terms of

the new Agreement.” (Id. ¶ 106.) Plaintiffs highlight, “Heath

confirmed the existence of the Agreement by supplying City

Calibration with the Products, and City Calibration, through its

affiliate Platsky, made payments to Heath for the Products, as per

the terms of the Agreement.” (Id.) Plaintiffs contend “[t]his

was in accordance with the practices established by the Parties

under the 2019 Agreement—to which Platsky HVAC-R was a party,

despite not being the entity billed—and continued during the

negotiation period.” (Id. ¶ 107.)

Under the 2021 Agreement, “Heath appointed City

Calibration as the exclusive distributor of the LMP200, the ABC

Station, and the calibration gasses and associated accessories

within North America.” (Id. ¶ 108.) “In return, City Calibration

agreed to purchase the Products from Heath under the terms and

conditions of the Agreement.” (Id.) Plaintiffs aver that, like

the 2019 Agreement, “[e]xclusivity was an essential term of the

[2021] Agreement for City Calibration and its principals.” (Id.

¶ 109.) “The Agreement is governed by the laws of the State of

New York and provides for arbitration in accordance with the

Commercial Arbitration Rules of the American Arbitration

Association.” (Id. ¶ 121.)

As to the App, “[a]ll customer data was to be owned

solely by City Calibration.” (Id. ¶ 110.) Further, “Heath was

restricted from permitting any third person ‘to develop Software

that is compatible with (or connects to) any Product, including

any Software that transmits or processes any Customer Data to or

from the Product, unless that third person was a utility company,

as defined in the Agreement.’” (Id. ¶ 111 (quoting 2021 Agreement,

Ex. A, ECF No. 27-1, attached to FAC.)) The Agreement described

City Calibration’s App as “Software developed by [City

Calibration] for the purpose[] of integrating Teledyne’s PS200-

LMP portable gas detection instrumentation to an application being

developed by the Company on a handheld mobile device via a

Bluetooth wireless interface.” (Id. ¶ 123.) Based upon the

protections in the 2021 Agreement, City Calibration began working

“with software engineers to develop the App, expending extensive

resources to do so.” (Id. ¶ 125.)

“The term of the Agreement was seven years, followed by

automatic renewal for additional successive periods of two years

each.” (Id. ¶ 114.) “After the initial seven-year term either

Party could decide not to renew the Agreement by providing written

notice either thirty or sixty days prior to the end of the current

term (depending on timing).” (Id.) “Either Party could also

terminate the Agreement upon the breach of the Agreement by the

other Party with ten days written notice.” (Id. ¶ 115.) In such

instances, “[t]he breaching party was given an opportunity to cure

any breach.” (Id.)

Article IV of the 2021 Agreement allegedly contained the

“Price, Payment and Deliver[y] Terms” and states, in pertinent

part:

Distributor shall purchase the Products for

its own account from Heath. Initial prices

for the Products are listed in Exhibit A.

Prices may be changed at any time by

Distributor on ninety (90) days’ prior written

notice to Distributor, provided that prices

shall not increase in any calendar year

occurring during the Term more than five

percent (5%) above the price that was in

effect during the immediately preceding

calendar year occurring during the Term.

Exhibit A may be revised as necessary to

reflect the implementation of mutually agreed

upon price changes.

(Id. ¶ 116 (quoting 2021 Agreement § 4.2).) Plaintiffs contend

“[t]he actual dollar value of the sales price to be included as

Exhibit A was not material to the contract” because “Heath decided

upon the price of the Products based upon the volume and timing of

the order and included that price within the invoices it sent to

Platsky.” (Id. ¶ 117.) Plaintiffs estimate that “price always

remained around $1000, fluctuating by approximately one to two

hundred dollars on any given order.” (Id.) Plaintiffs state

“[t]his remained the practice of the parties . . . throughout

their relationship” and, moreover, that this “was consistent with

industry standards.” (Id. ¶ 118.)

Regarding insurance terms, the 2021 Agreement stated

that “Distributor . . . agreed to maintain such insurance

acceptable to Heath as set for[th] on Exhibit D, Insurance

Requirements.” (Id. ¶ 119.) Plaintiffs aver, “[a]s City

Calibration already maintained insurance acceptable to Heath and

had already been provided with Heath’s insurance requirements,

Exhibit D was”, “also not material to the Agreement.” (Id. ¶ 120.)

B. The Parties’ Performance Under the 2021 Agreement

During the time under which the Parties allegedly

operated under the 2021 Agreement, City Calibration “believed it

was the sole distributor of the ABC Stations and related [gasses]

and accessories in the New York City Metropolitan Area.”

(Id. ¶ 127.) Additionally, “Heath worked directly with Plaintiffs

to sell, market, and service the Products.” (Id. ¶ 128.) For

example, Six “appeared in a video posted on City Calibration’s

website describing to LMPs how to use the LMP200 and referring the

LMPs directly to Heath’s ‘partner City Calibration.’” (Id.) “Six

closes the video by referring the viewer to City Calibration’s

local calibration centers to conduct the required 30-day

calibrations and tells the viewer to contact City Calibration for

technical support and questions.” (Id. ¶ 129.) “At the time,

Sims was Six’s direct manager.” (Id.)

Following execution of the 2021 Agreement, “Heath

continued to invoice Platsky and ship Products to either Platsky,

or, on at least one occasion, to City Calibration.” (Id. ¶ 131.)

Likewise, “Platsky continued to pay each invoice, as was the

Parties’ practice from the onset of their relationship in 2019.”

(Id.) “Further, Heath continued to charge Plaintiffs at a similar

rate as it did under the 2019 contract.” (Id. ¶ 132.) Plaintiffs

aver this “price fluctuated between approximately $900 and $1200

depending on the volume and timing of the order.” (Id.)

In accordance with Section 5.1 of the 2021 Agreement,

Plaintiffs allege that “Heath also issued Plaintiffs credits and

replacement devices as a result of malfunctioning devices.”

(Id. ¶ 133.)

C. Heath’s Alleged Breach of the 2021 Agreement

In Summer 2022, Heath ceased communications with

Plaintiffs. (Id. ¶ 134.) In approximately July 2022, “Plaintiffs

discovered that Heath was taking steps to advertise and sell the

Products covered by the Agreement directly to consumers in the New

York City Metropolitan Area market.” (Id. ¶ 134-35.) Plaintiffs

discovered Heath’s entrance into the New York City Metropolitan

Area market “when one of City Calibration’s customers sent it a

Heath advertisement it had received through the local plumbers’

union.” (Id. ¶ 138.) “In [the] advertisement, Heath stated that

[it] was ‘pleased to announce that [Heath] will be taking over

direct sales and support of the LMP 200 device designed by the

plumbing community for their use to meet NYC Local Law 152.’”

(Id. (emphasis in original).) As part of its entry into the

market, Heath “also offered its own ‘on-site’ calibration

services.” (Id.)

“[A]s Heath began to move into the market as a

distributor as well as the supplier, Heath [also] began to move

into the calibration business, taking City Calibration’s customers

for itself.” (Id. ¶ 139.) Plaintiffs allege “Heath admits it has

sold multiple ABC stations directly to consumers in” City

Calibration’s market, and, that, since a single ABC station can

service many LMPs, “the sale of only a small number of ABC stations

negatively impacts City Calibration’s calibration business

significantly.” (Id.)

When Stern learned of Heath’s attempted entry into the

New York City Metropolitan Area market, he contacted Sims “to

notify Heath of the suspected breach of the Agreement and to

attempt to resolve the issue.” (Id. ¶ 140.) Sims denied the

existence of the 2021 Agreement. (Id.) On September 21, 2022,

Heath, through legal counsel, sent Plaintiffs “a letter further

denying the existence of the Agreement and directing Plaintiffs to

cease communication with Heath regarding the issue.” (Id. ¶ 141.)

In October, Plaintiffs contend they began to receive

inquiries from customers that “were confused as to who they were

supposed to contact regarding the sale and repair of the Products

and for the provision of the related calibration services.”

(Id. ¶ 142.) Plaintiffs aver “City Calibration is . . . being

closed out of the business they had contracted for and has lost

and continues to lose its customer goodwill, relationships and

sales revenues.” (Id. ¶ 143.)

In or around December 6, 2022, “Heath announced that it

was developing and intended to bring to market its own App that

will directly compete with and replace the App developed by

Plaintiffs.” (Id. ¶ 145.) “Shortly thereafter, Neil Aranoff, a

representative of Plaintiffs,” contacted Six “to inquire about the

fulfillment of an outstanding order of Products” but was informed

by Six that he “was no longer handling Plaintiffs’ account and

that Heath would not be fulfilling Plaintiffs’ outstanding order

or otherwise providing Products to Plaintiffs.” (Id. ¶ 146.) “On

or around February 1, 2023, City Calibration discovered that Heath

had posted a link to free software that allows for the clearing of

data from the LMP200 devices on its website.” (Id. ¶ 147.)

Plaintiffs aver “[t]his further undermines a substantial portion

of City Calibration’s calibration services business[.]” (Id.)

Plaintiffs highlight that Nassau and Suffolk Counties

“have both announced that they are enacting or have already enacted

laws similar to Local Law 152, such that an enormous market in the

New York City Metropolitan Area is about to open for the

distribution and servicing of the Products.” (Id. ¶ 155.)

Plaintiffs speculate that “Heath knew that this expansion was

imminent—and therefore, that the potential for making profits off

of the sale and servicing of the Products was to soon be

multiplied—” when it allegedly breached the 2021 Agreement.

(Id. ¶ 159.)

PROCEDURAL HISTORY

On December 21, 2022, Plaintiffs commenced this case by

way of Complaint, initially filing the Complaint with the Supreme

Court of the State of New York, Nassau County (the “State Court”).

(See Verified Complaint, Ex. A-1, ECF No. 1-1, attached to Notice

of Removal.) On December 23, 2022, Heath removed the case to this

Court. (See Notice of Removal, ECF No. 1.) Prior to removal, on

December 23, 2022, the State Court issued an Order to Show Cause

as to why Plaintiffs should not be granted a Preliminary Injunction

enjoining Defendant from , inter alia, “selling, purchasing,

renting, reselling or otherwise distributing” the Products “within

the North American Territory, as defined in the [Parties’]

Agreement” or “developing and/or distributing software, . . . that

is compatible with or connects to the LMP200 gas detector or the

ABC station.” (Order to Show Cause, Ex. 1, ECF No. 5-1, attached

to Motion for TRO.) On January 11, 2023, in this action,

Plaintiffs filed a motion seeking an order (1) enforcing the Order

to Show Cause entered by the State Court; and (2) extending the

return date of the TRO until a date upon which the Parties could

be heard (hereafter the “TRO Motion”). (See Motion for TRO, ECF

No. 5.)

On January 12, 2023, this case was reassigned to the

undersigned. (See Jan. 12, 2023 Elec. Order Reassigning Case.)

On January 17, 2023, Defendant opposed Plaintiffs’ TRO Motion.

(See Opp’n to TRO, ECF No. 6.) On January 18, 2023, the Court

denied Plaintiffs’ TRO Motion finding the State Court TRO had

expired prior to Plaintiffs’ TRO Motion in the Court, rendering

Plaintiffs’ request moot. (See Jan. 18, 2023 Elec. Order Denying

TRO Motion.)

On January 30, 2023, in accordance with a briefing

schedule set by the Court, Plaintiffs filed a Motion for a

Preliminary Injunction (hereafter the “PI Motion”). (See PI

Motion, ECF No. 13.) On March 13, 2023, Defendant opposed

Plaintiffs’ PI Motion. (See Opp’n to PI Motion.) In the interim,

the parties engaged in mediation which returned unsettled. (See

Mar. 7, 2023 Elec. Report of Mediation Unsettled.) A hearing on

Plaintiffs’ PI Motion was held on March 24, 2023 with the only

witness to testify being Stern. (See Min. Order for Proceedings,

ECF No. 24.) Ultimately, the Court denied Plaintiffs’ PI Motion

finding, inter alia, Plaintiffs had not demonstrated irreparable

harm, or harm that could not be appropriately compensated for with

an award of monetary damages. (See Min. Order for Proceedings,

ECF No. 25.) Upon the denial of Plaintiffs’ PI Motion, the Court

set a briefing schedule on Defendant’s anticipated Dismissal

Motion.

On April 17, 2023, Defendant filed its initial dismissal

motion in this case. (See ECF No. 26.) In response, Plaintiffs

filed the FAC. The FAC pleads five causes of action:

(1) Breach of Contract as to the 2021 Agreement (Count One)

(FAC ¶¶ 160-64);

(2) Promissory Estoppel (Count Two) (id. ¶¶ 165-70);

(3) Common Law Unfair Competition (Count Three) (id.

¶¶ 171-78);

(4) Fraudulent Inducement as to the 2019 Agreement (Count Four)

(id. ¶¶ 179-88); and

(5) Tortious Interference with respective Economic Advantage

(Count Five) (id. ¶¶ 189-202.)

In response, Defendant filed the present Dismissal

Motion on May 26, 2023. (See generally Dismissal Motion; see also

Support Memo, ECF No. 31.) Plaintiffs filed their Opposition on

June 15, 2023 (Opp’n, ECF No. 32), to which Defendant replied on

June 29, 2023. (Reply, ECF No. 33.)

DISCUSSION

I. Legal Standard

When considering a motion to dismiss under Rule

12(b)(6), the court must “accept as true all factual statements

alleged in the complaint and draw all reasonable inferences in

favor of the non-moving party.” McCarthy v. Dun & Bradstreet

Corp., 482 F.3d 184, 191 (2d Cir. 2007). To survive a motion to

dismiss under Rule 12(b)(6), a complaint must state “enough facts

to state a claim to relief that is plausible on its face.” Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

A claim is plausible “when the plaintiff pleads factual

content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged.” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009). Consequently, a complaint is

properly dismissed where, as a matter of law, “the allegations in

a complaint, however true, could not raise a claim of entitlement

to relief.” Twombly, 550 U.S. at 558. Similarly, a complaint is

also properly dismissed “where the well-pleaded facts do not permit

the court to infer more than the mere possibility of misconduct.”

Iqbal, 556 U.S. at 679. “Although all allegations contained in

the complaint are presumed true” at the motion to dismiss stage,

“this principle is ‘inapplicable to legal conclusions’ or

‘[t]hreadbare recitals of the elements of a cause of action,

supported by mere conclusory statements.’” Szewczyk v. City of

N.Y., No. 15-CV-0918, 2016 WL 3920216, at *2 (E.D.N.Y. July 14,

2016) (alteration in original) (quoting Iqbal, 556 U.S. at 678).

II. Analysis

A. Documents the Court will Consider in Deciding

Defendant’s Dismissal Motion

As an initial matter, the Court must determine which

documents, extraneous to the FAC, it may consider in deciding

Defendant’s Dismissal Motion.

“If, on a motion under Rule 12(b)(6) . . . matters

outside the pleadings are presented to and not excluded by the

court, the motion must be treated as one for summary judgment under

Rule 56 [and] [a]ll parties must be given a reasonable opportunity

to present all the material that is pertinent to the motion.” FED.

R. CIV. P. 12(d). “For purposes of this rule, ‘the complaint is

deemed to include any written instrument attached to it as an

exhibit or any statements or documents incorporated in it by

reference.’” Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d

Cir. 2002) (quoting Int’l Audiotext Network, Inc. v. Am. Tel. &

Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)). When a “document is not

incorporated by reference, the court may nevertheless consider it

where the complaint ‘relies heavily upon its terms and effect,’

which renders the document ‘integral’ to the complaint.” Id. at

153 (quoting Int’l Audiotext, 62 F.3d at 72). “However, ‘even if

a document is “integral” to the complaint, it must be clear on the

record that no dispute exists regarding the authenticity or

accuracy of the document.’” DiFolco v. MSNBC Cable L.L.C., 622

F.3d 104, 111 (2d Cir. 2010) (quoting Faulkner v. Beer, 463 F.3d

130, 134 (2d Cir. 2006)).

“Whether a document is attached to a complaint is [self-

evident].” DeLuca v. AccessIT Grp., Inc., 695 F. Supp. 2d 54, 60

(S.D.N.Y. 2010) (citing Cortec Indus., Inc. v. Sum Holding L.P.,

949 F.2d 42, 47 (2d Cir. 1991) (stating any written instrument

attached as an exhibit to a complaint is deemed part of the

pleadings)). “To be incorporated by reference, the complaint must

make ‘a clear, definite and substantial reference to the

documents.’” Id. (quoting Helprin v. Harcourt, Inc., 227 F. Supp.

2d 327, 330-31 (S.D.N.Y. 2003)). However, “[l]imited quotation

does not constitute incorporation by reference.” McLennon v. City

of N.Y., 171 F. Supp. 3d 69, 88-89 (E.D.N.Y. 2016) (quoting Looney

v. Black, 702 F.3d 701, 716 n.2 (2d Cir. 2012)). Rather, to be

integral to the complaint, a plaintiff must have: (1) “actual

notice” of the extrinsic information; and (2) have “relied upon

[the] documents in framing the complaint.” Chambers, 282 F.3d at

153 (quoting Cortec Indus., 949 F.2d at 48). Indeed, “a

plaintiff’s reliance on the terms and effect of a document in

drafting the complaint is a necessary prerequisite to the court’s

consideration of the document on a dismissal motion.” Id. (quoting

Cortec, 949 F.2d at 47-48 (emphasis in original)).

Applying the aforementioned standard, in connection with

the Dismissal Motion the Court finds it may consider the 2019

Agreement, and the 2021 Agreement, both of which are attached to

the FAC. Furthermore, the Complaint incorporates by reference the

March 4, 2021 email from Quinones to Stern in which Quinones

allegedly accepted the terms of the 2021 Agreement on behalf of

Heath (hereafter the “Quinones Email”). (See Quinones Email, Ex.

D, ECF No. 30-4, attached to Deutsch Decl.) Given the FAC’s

reliance upon the Quinones Email in framing Count One of the FAC,

together with the fact Plaintiffs clearly had notice of its

contents due to their quotation of same, the Court will also

consider said Email in connection with the Dismissal Motion.4

Defendant contends this Court may also consider Stern’s

testimony given during the Parties’ contested preliminary

injunction hearing, without converting the Dismissal Motion into

one for summary judgment (see Support Memo, in toto (citing Stern’s

Hr’g Testimony in passim)), the Court declines to do so.5 See

4 Plaintiffs, likewise, do not dispute the authenticity of the

Quinones Email. (See Opp’n at 1 n.2.)

5 Likewise, the Court declines to consider the remainder of the

evidence submitted as part of the parties’ preliminary injunction

Carter v. Fagin, 363 F. Supp. 2d 661, 664 n.1 (S.D.N.Y. 2005)

(declining to consider witness testimony presented as part of a

preliminary injunction hearing on a motion to dismiss); but see

Signorelli v. N.Y.S. Bd. of Elections, No. 95-CV-1026, 1995 WL

548712, at *5 (N.D.N.Y. Sept. 11, 1995) (converting defendants’

motions to dismiss into motions for summary judgment where “[b]oth

plaintiffs and defendants submitted affidavits and offered

testimony at [a] preliminary injunction hearing” and the court

opted to consider this evidence in resolving the motions); Calo v.

Paine, 385 F. Supp. 1198, 1200 (S.D.N.Y. 1974) (finding where

“testimony was presented at the hearing on plaintiff’s motion for

a preliminary injunction and other materials, including affidavits

of the defendants, were submitted by the defendants and not

objected to by the plaintiff, the motion [would] be treated as one

for summary judgment.”), vacated and remanded on other grounds,

521 F.2d 411 (2d Cir. 1975).

B. Breach of the 2021 Agreement (Count One)

“To prevail on a breach-of-contract claim in New York,

a plaintiff must prove: ‘(1) the existence of a contract,

(2) performance by the party seeking recovery, (3) nonperformance

by the other party, and (4) damages attributable to the breach.’”

Moreno-Godoy v. Kartagener, 7 F.4th 78, 85 (2d Cir. 2021) (quoting

hearing since, to do so, the Court would be required to convert

the present motion into a motion for summary judgment.

RCN Telecom Servs., Inc. v. 202 Ctr. St. Realty LLC., 156 F. App’x

349, 350-51 (2d Cir. 2005)); see also Empire Fire and Marine Ins.

Co. v. Edge Auto, Inc., No. 21-CV-5413, 2022 WL 17779117, at *4

(E.D.N.Y. Sept. 15, 2022) (same). A valid contract requires “a

manifestation of mutual assent sufficiently definite to assure

that the parties are truly in agreement with respect to all

material terms.” Cohen v. Avanade, Inc., 874 F. Supp. 2d 315, 320

(S.D.N.Y. 2012) (quoting Express Indus. and Terminal Corp. v. N.Y.S

Dep’t of Transp., 93 N.Y.2d 584, 589 (1999)).

Defendant argues the 2021 Agreement is not an

enforceable contract; Defendant’s argument in this regard is

threefold. First, Defendant contends the 2021 Agreement was not

signed by Heath, the party against whom enforcement is sought,

thus, the Agreement violates the Statute of Frauds contained in

New York’s Uniform Commercial Code (the “UCC”). Next, Defendant

argues since the 2021 Agreement is for a term lasting longer than

one year, it is violative of the Statute of Frauds contained in

the General Obligations Law (the “GOL”). (See Support Memo at 5.)

Finally, Defendant avers even if the unsigned 2021 Agreement were

not violative of the Statute of Frauds, it would still not be an

enforceable contract as it lacks material terms. (Id. at 9.) The

Court addresses each argument in turn.

1. The 2021 Agreement is a Contract for the Sale of

Goods; therefore, the U.C.C. Applies to its Terms6

As an initial matter, both parties agree the UCC applies

to the 2021 Agreement since, if it is a contract at all, it is a

contract that is predominantly for the sale of goods for more than

$500.7 (See Support Memo at 4 n.2 (“The U.C.C. is applicable

here”); see also Opp’n at 6 n.4.) See E. Mishan & Sons, Inc. v.

Homeland Housewares, LLC, No. 10-CV-4931, 2012 WL 2952901, at *4

(S.D.N.Y. July 16, 2012) (“Even where the contract at issue is a

distributorship agreement, it is governed by the UCC if it is

predominantly for the sale of goods.”) (citing Marbelite Co. v.

Nat’l Sign and Signal Co., 2 F. App’x 118, 120 (2d Cir. 2001));

see also Alessi Equip., Inc. v. Am. Piledriving Equip., Inc., 578

F. Supp. 3d 467 (S.D.N.Y. 2022) (“[N]umerous courts within this

Circuit have determined that ‘exclusive dealership or

6 To the extent Defendant argues the 2021 Agreement is also for a

term lasting longer than one year and, consequently, is also

violative of GOL Section 5-701, the Court agrees with Plaintiffs

that the FAC adequately pleads facts plausibly alleging that Heath

may have signed the Agreement and, likewise, it is reasonable to

infer Heath has said Agreement in its possession. (See FAC ¶¶

100-05.) Additionally, as discussed infra, the FAC plausibly

alleges that the Quinones Email is a signed writing that is

sufficient to satisfy the Statute of Frauds. Therefore, the Court

declines to dismiss Plaintiffs’ breach of contract claim on this

basis. This does not preclude Defendant from arguing why the GOL

should apply to Plaintiffs’ claims at a subsequent stage of this

litigation.

7 The FAC pleads facts which, accepted as true, establish that the

2021 Agreement contemplated the sale of goods worth more than $500.

(See e.g., ¶¶ 116-18, 131-32.)

distributorship arrangements’ involving the sale of complex

equipment in specific geographic territories . . . are

‘predominantly for the sale of goods’ and thus, subject to the

U.C.C.”) (collecting Cases)). Consequently, the Court applies the

UCC to the parties’ claims. See ABA Refinery Corp. v. Republic

Metals Refin. Corp., No. 15-CV-8731, 2017 WL 4481170, at *4 n.3

(S.D.N.Y. Oct. 5, 2017) (Applying the UCC to the parties’ claims

where their briefs cited to the UCC as the controlling body of law

and noting that “the Second Circuit has explained, where ‘[t]he

parties’ briefs assume’ that a certain body of law controls, ‘such

implied consent is sufficient to establish choice of law.’”

(quoting Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 138 (2d

Cir. 2000))).

2. Application of the Statute of Frauds

The UCC Statute of Frauds is contained in Section

2-201(1) of the N.Y. UCC and states:

Except as otherwise provided in this

section[,] a contract for the sale of goods

for the price of $500 or more is not

enforceable by way of action or defense unless

there is some writing sufficient to indicate

that a contract for sale has been made between

the parties and signed by the party against

whom enforcement is sought or by his

authorized agent or broker.

“This provision ‘simply requir[es] “that the writing afford a basis

for believing that the offered oral evidence rests on a real

transaction.”’” Rienzi & Sons, Inc. v. I Buonatavola Sini S.R.L.,

No. 20-CV-5704, 2021 WL 5013795, at *3 (E.D.N.Y. Oct. 28, 2021)

(quoting Bazak Int’l Corp. v. Mast. Indus., Inc., 73 N.Y.2d 113,

120 (1989)).

i. The Confirmatory Writings Exception to the

Statute of Frauds

The UCC Statute of Frauds contains certain exceptions by

which an unsigned contract may, nevertheless, be enforceable.

First, the Merchant’s Exception contained in Section 2-201(2).

The Merchant’s Exception provides:

Between merchants if within a reasonable time

a writing in confirmation of the contract and

sufficient against the sender is received and

the party receiving it has reason to know its

contents, it satisfies the requirements of

subsection (1) against such party unless

written notice of objection to its contents is

given within 10 days after it is received.

“There are no rigid requirements as to the form or content of a

confirmatory writing.” Antifun Ltd. T/A Premium Vape v. Wayne

Indus. LLC, 616 F. Supp. 3d 291, 307-08 (S.D.N.Y. July 22, 2022)

(quoting Hilord Chem. Corp. v. Ricoh Elecs., Inc., 875 F.2d 32, 37

(2d Cir. 1989)). Indeed, “[a] writing is sufficient so long as it

affords a basis for believing that it reflects a real transaction

between the parties.” Id.

Plaintiffs contend the Merchant’s Exception applies in

this case (opp’n at 2-3), specifically, that their “return to Heath

of the signed Agreement, and the March 4, 2021 emails, sent by”

Quinones “constitute Heath’s confirmation of the terms of the

Agreement, thereby creating an enforceable agreement between the

parties.” (Id. at 3.) Defendant refutes Plaintiffs’ contentions

and argues Plaintiffs have failed to “plausibly allege that the

2021 Draft” was signed by Heath as required by N.Y. UCC

Section 2-201(1). (Support Memo at 4.)

Courts in this circuit have found that “[e]lectronic

communications between merchants—provided that they are

sufficiently precise—can . . . serve as writings confirming an

agreement.” Antifun Ltd. T/A Premium Vape, 616 F. Supp. 3d at 308

(citing E. Mishan & Sons, Inc., 2012 WL 2952901, at *5); see also

Bazak Intern. Corp., 378 F. Supp. 2d at 383-86; Henry Avocado Corp.

v. Z.J.D. Brother, LLC, No. 17-CV-4559, 2019 WL 1586865, at *11

n.10 (E.D.N.Y. Apr. 12, 2019) (noting an email containing an

“electronic signature[] . . . satisf[ies] the merchant’s

exception to the statute of frauds”).

Here, on March 3, 2021, Stern emailed Quinones a copy of

the 2021 Agreement. On March 4, 2021, Quinones replied “it was a

pleasure talking to you yesterday. I have reviewed the changes,

and the proposed insertions are acceptable. Please sign and return

at your earliest convenience.” (Quinones Email (emphasis added).)

The Quinones Email contains an electronic signature block stating

her name, title, and contact information. (Id.) The Court finds

that, considering the above-mentioned case law, Quinones’

electronic signature suffices to qualify as a signed writing as it

is arguably a manifestation of Quinones’ intent to authenticate

the email transmission. Cf. Kokirtsev v. Wells Fargo Nat’l Ass’n,

No. 12-CV-6056, 2014 WL 3888301, at *3 n.2 (E.D.N.Y. Feb. 3, 2014)

(stating, under the GOL “[a] name or other symbol attached to a

piece of paper with an intent to authenticate it creates a valid

signature”, and that “[t]he use of an electronic signature shall

have the same validity and effect as the use of a signature affixed

by hand.”); see also In re 4Kids Ent., Inc., 463 B.R. 610, 693

(S.D.N.Y. Bankr. 2011) (stating an “[e]mail communication

evidencing an agreement to modify the terms of an agreement

constitutes a ‘signed writing’ as per the statute of frauds, where

(1) the terms of the proposed modification are set forth in the

email; (2) a reply email evidences acceptance of the proposed

modification; and (3) the emails include signature blocks, which

signify an intent to authenticate”); R.D. Weis & Co., Inc. v. The

Children’s Place Retail Stores, Inc., No. 08-CV-4245, 2008 WL

4950962, at *4 n.2 (S.D.N.Y. Nov. 19, 2008) (“[T]he electronic

signatures at the bottom of the e-mails may qualify as signed

writings by [defendant] [since] Courts have held that a typed

signature in an e-mail can qualify as a signed writing.”). In

view of the foregoing, the FAC plausibly alleges that the Quinones

Email was a confirmatory writing and that the Merchant’s Exception

to the statute of frauds applies in Plaintiffs’ case. The Court

next turns to whether the FAC alleges facts sufficient to allege

that Quinones had the apparent authority to bind Heath to the 2021

Agreement.

ii. Quinones’ Apparent Authority to Bind Heath to

Terms of 2021 Agreement

“An agent can bind a principal by virtue of the agent’s

actual or apparent authority to act on the principal’s behalf.”

Richmond v. Montefiore Med. Ctr., No. 21-CV-8700, 2023 WL 6216271,

at *15 (S.D.N.Y. Sept. 25, 2023.) Apparent authority exists when

“from the ‘written or spoken words or any other conduct of the

principal which, reasonably interpreted, causes [a] third person

to believe that the principal consents to have [an] act done on

his behalf by the person purporting to act for him.” Minskoff v.

Am. Exp. Travel Related Servs. Co., 98 F.3d 703, 708 (2d Cir. 1996)

(quoting RESTATEMENT (SECOND) OF AGENCY 27 (1958)). “An employee’s

title alone can indicate [apparent] authority.” Merrill Lynch

Cap. Servs., Inc. v. UISA Fin., No. 09-CV-2324, 2012 WL 1202034,

at *18 (S.D.N.Y. Apr. 10, 2012) (citing Goldston v. Bandwidth Tech.

Corp., 52 A.D.3d 360 (1st Dep’t 2008)). “‘[T]he existence of

“apparent authority” depends upon a factual showing that the third

party relied upon the misrepresentations of the agent because of

some misleading conduct on the part of the principal - not the

agent.’” Montefiore Med. Ctr., 2023 WL 6216271, at *16 (quoting

Hallock v. State, 64 N.Y.2d 224, 231 (1984)). “[A] third party

with whom the agent deals may rely on an appearance of authority

only to the extent that such reliance is reasonable.” Id.

Consequently, “[t]o survive a motion to dismiss, a plaintiff must

allege facts, which, if proved, would show that the plaintiff

‘reasonably believed that [the agent] entered into the agreement

with [the plaintiff] on behalf of [the principal].” Buffalo

Xerographix, Inc. v. Hartford Ins. Grp., 540 F. Supp. 3d 382, 392

(W.D.N.Y. 2021) (alterations in original). “The existence of

apparent authority is normally a question of fact.” Id.

To the extent Plaintiffs argue the Quinones Email

suffices to bind Heath to the terms of the 2021 Agreement,

Defendant demurs. (Support Memo, at 7-9.) Defendant asserts

Plaintiffs cannot plausibly argue that Quinones had the authority

to bind Heath to the contract because Plaintiffs were on notice

“from the 2019 Agreement that a ‘duly authorized’ Heath

representative countersigns distribution agreements that Heath

enters into.” (Id. at 7.) Defendant highlights that the 2019

Agreement was signed by Wehnert “on February 1, 2019”, and returned

to Plaintiffs “after . . . Stern first executed it on January 29,

2019.” (Id.) Moreover, Defendant emphasizes Plaintiffs’

concession that Stern was never affirmatively told that Quinones

was either an attorney or had the authority to bind Heath to the

2021 Agreement.8 (Id.) Defendant points to Stern’s sworn

8 The Court has already determined that it will not consider the

Preliminary Injunction Hearing testimony in deciding the Dismissal

testimony that he assumed Quinones had authority. (Id.) Defendant

avers further that Quinones’ email to Plaintiffs during the

contract negotiations “do no more than indicate that she was aiding

[] Sims in the review process.” (Id. at 8.)

Here, the FAC pleads that Sims held Quinones out to have

the apparent authority to accept and finalize the 2021 Agreement

based upon her involved role in negotiating and reviewing

Plaintiffs’ redlines of the 2021 Agreement. (FAC ¶ 101.)

Specifically, the FAC alleges, inter alia, Sims “directed Stern to

speak directly with Quinones” regarding the 2021 Agreement and

proposed revisions, and that Sims had held Quinones “out as the

individual in charge of negotiating and finalizing Heath’s

contracts.” (Id. ¶¶ 90-91.) The FAC further alleges that Stern

believed Quinones was Heath’s General Counsel based upon her title

of “Manager of Legal” and that, at Sims’ direction, Stern and

Quinones engaged in telephone discussions in March of 2023, in

which they, negotiated and finalized the 2021 Agreement. (Id.)

Drawing all reasonable inferences in Plaintiffs’ favor, the Court

finds Sims’ representations to Stern that revisions to the 2021

Agreement should be sent to both Sims and Quinones “to review”,

Motion. Nevertheless, even if it were to consider the testimony,

Stern’s admission that nobody affirmatively told him Quinones was

an attorney does not automatically foreclose the possibility that

the FAC cannot plausibly allege Heath held Quinones out to have

apparent authority through other acts.

together with Quinones’ title, and her central role in reviewing

and negotiating the 2021 Agreement, suffices at this stage to

plausibly plead the existence of apparent authority. Moreover,

given that the reasonableness of Sterns’ reliance is likely a

question of fact, at the motion to dismiss stage the Court cannot

find that Stern’s reliance was unreasonable as a matter of law.

In sum, the Court finds the Quinones Email replying to

Stern’s email which attached the 2021 Agreement, and which affirmed

Quinones’ review and acceptance of Stern’s revisions, plausibly

suffices as a confirmatory writing based upon the electronic

signature block (see supra Part II.B.2.i.). The Court also finds

the FAC pleads sufficient facts to allege that Quinones had the

apparent authority to enter into the 2021 Agreement on Heath’s

behalf. “However, although the merchant exception allows

[plaintiffs] to proceed with their breach of contract claim despite

the Statute of Frauds, it does not establish that there was mutual

assent to the terms [of the 2021 Agreement], as a matter of law.”

See Atronic Int’l., GmbH v. SAI Semispecialists of Am., Inc.,

No. 03-CV-4892, 2006 WL 2654827, at *5 (E.D.N.Y. Sept. 15, 2006).

Consequently, the Court turns to the parties’ mutual assent

arguments next.

3. Whether the 2021 Agreement is Missing Essential

Terms

“To create a binding contract, ‘there must be a

manifestation of mutual assent sufficiently definite to assure

that the parties are truly in agreement with respect to all

material terms.’” Demand Elec., Inc. v. Innovative Tech. Holdings,

LLC, 665 F. Supp. 3d 498, 504 (S.D.N.Y. 2023) (quoting Express

Indus. & Terminal Corp. v. N.Y.S Dep’t of Transp., 93 N.Y.2d 584,

589 (1999)). Under the UCC, “[a] contract for [the] sale of goods

may be made in any manner sufficient to show agreement, including

conduct by both parties which recognizes the existence of such a

contract.” Id. at 505 (citing N.Y. UCC § 2-204(1) (alteration in

original)). This is a relatively liberal standard “and does not

require every contractual term to be spelled out in detail.” Id.

(quoting Dell’s Maraschino Cherries Co., Inc. v. Shoreline Fruit

Growers, Inc., 887 F. Supp. 2d 459, 471 (E.D.N.Y. 2012)). Where

a contract is for the sale of goods, “the essential terms are

quantity, price, and time and manner of delivery.” Alessi Equip.,

Inc., 578 F. Supp. 3d at 495 (quoting Fakhoury Enters., Inc. v.

J.T. Distrib., No. 94-CV-2729, 1997 WL 291961, at *3 (S.D.N.Y.

June 2, 1997)). However, where the parties to a contract fail to

specify either a time, price, and/or manner-of-delivery term, a

contract is not necessarily unenforceable since “the U.C.C.’s ‘gap

filling’ provisions supply ‘a reasonable time’ for shipment or

delivery; ‘a reasonable price at the time of delivery;’ and ‘the

seller’s place of business . . . [,] [the seller’s] residence’ or

any other location of the goods known by the parties” for the

manner-of-delivery. Id. (citing N.Y. UCC §§ 2-305(1); 2-308; 2-

309(1)). Additionally, “[a] lawful agreement . . . for exclusive

dealing in the kind of goods concerned imposes[,] unless otherwise

agreed[,] an obligation by the seller to use best efforts to supply

the goods and by the buyer to use best efforts to promote their

sale.” Id. (quoting N.Y. UCC § 2-306 & cmt.5) (alteration in

original). “Thus, the absence of a quantity term in an alleged

exclusive distributorship contract . . . does not make an

otherwise valid contract invalid.” Id. (citing Mega Tech Int’l

Corp. v. Miller Elec. Mfg. Co., No. 97-CV-1085, 1997 WL 790750, at

*3 (S.D.N.Y. Dec. 23, 1997)); cf Chartwell Therapeutics Licensing

LLC v. Citron Pharma LLC, No. 16-CV-3181, 2019 WL 12518722, at *5

(E.D.N.Y. Sept. 4, 2019) (“New York law recognizes a[n] ‘exclusive

dealing’ exception to the quantity rule.”).

Defendant highlights that the 2021 Agreement lacks

certain “material terms” including price, delivery terms, and

insurance terms. (See Support Memo at 9-10.) However, despite

confirming that the UCC was applicable to the 2021 Agreement it

has failed to address the applicability of the UCC’s gap filling

provisions to the 2021 Agreement.9

Plaintiffs highlight that the UCC’s gap filling

provisions supply many of the terms which Defendant highlights are

missing, including price; time and place of delivery; and quantity.

(Opp’n at 6.) Plaintiffs state that the inquiry the Court should

engage in is to “determine whether the parties intended to make a

contract despite leaving these terms open, and whether any dispute

over any of the terms undermines such an intent to be bound.” (Id.

(quotation marks and citation omitted).). Plaintiffs maintain an

examination of the Parties’ conduct highlights “there was

absolutely no dispute with regards to the price, insurance, and

time and place of delivery.” (Id. at 7.) Plaintiffs emphasize

that operation under the 2021 Agreement was consistent with the

Parties’ conduct under the 2019 agreement in that price fluctuated

and was based upon volume and timing of orders, and that City

Calibration “maintained insurance acceptable to Heath and had

already been provided with Heath’s insurance requirements.” (Id.

at 7-8.)

Here, contrary to Defendant’s contentions, the 2021

Agreement is not unenforceable for want of price, time, delivery,

9 Indeed, Defendant’s Reply on this issue focuses primarily on

caselaw applying the GOL, despite Defendant’s previous

acknowledgment that the UCC also applies to the 2021 Agreement.

or quantity terms because the UCC’s gap filling provisions can

provide them. Plaintiffs are correct in their assertion that the

issue for the Court to determine is the extent to which the

omission of these terms reflects that the parties did not intend

to be bound.

In determining whether two parties have formed a

contract, the court looks “not to the[] [parties’] ‘after-the-fact

professed subjective intent, but their objective intent as

manifested by their expressed words and deeds at the time’” of

contracting. Blake v. Fiit Int’l., Inc., No. 05-CV-6150, 2007 WL

980362, at *6 (S.D.N.Y. Mar. 30, 2007) (quoting Stetson v. Duncan,

707 F. Supp. 657, 666 (S.D.N.Y. 1988)); see also Antifun Ltd. T/A

Premium Vape, 616 F. Supp. 3d at 305 (“In determining whether the

parties entered into a contractual agreement . . . , it is

necessary to look . . . to the objective manifestations of the

intent of the parties as gathered by their expressed words and

deeds.”) (citation omitted); Asesores y Consejeros Aconsec CIA,

S.A. v. Glob. Emerging Mkts. N.A., Inc., 841 F. Supp. 2d 762, 767

(S.D.N.Y. 2012) (“[I]f a party’s objective actions support the

conclusion that he accepted an agreement, he will be bound to it

even if he never subjectively assented to the terms of the

agreement.”). Where the parties’ “expressions and conduct would

lead a reasonable person to conclude that they intended to reach

a binding agreement, the agreement is enforceable.” Kaplan v.

Vincent, 937 F. Supp. 307, 312 (S.D.N.Y. 1996).

Here, the FAC plausibly pleads facts sufficient to

survive Defendant’s Dismissal Motion. Specifically, the Court

finds the Quinones Email in which Quinones informed Plaintiffs

their revisions were “acceptable” and asked them to sign and return

the Agreement, together with the FAC’s allegation that Sims

contacted Stern to congratulate him on closing the deal,

cumulatively reflect an outward manifestation of intent by Heath

to be bound by the terms of the 2021 Agreement.10 Likewise, the

allegations in the FAC that the parties performed under the 2021

Agreement for a year, and that Heath held itself out to be City

Calibration’s partner lends further credence to Heath’s intent to

be bound. As to the open terms, Plaintiffs’ FAC plausibly alleges

that there was no dispute as to what these terms would be because

the Parties’ intention was to continue adhering to the practices

that they had developed under the 2019 Agreement. See Vinifera

Imps. Ltd. v. Societa Agricola Castello Romitorio SRL, No.

16-CV-0103, 2020 WL 1184962, at *5 (E.D.N.Y. Mar. 12, 2020) (“In

determining the intention of the contracting parties, it is proper

10 The Court also agrees with Plaintiffs insofar as the FAC also

pleads facts sufficient to plausibly allege that Sims had actual

authority to bind Heath to the 2021 Agreement. Likewise, the FAC

plausibly alleges facts sufficient to allege Sims’ outward

manifestations of intent indicated his acceptance of the 2021

Agreement.

to consider matters outside the writings, including the previous

dealings between the parties and the practices of the trade.”

(quoting Paper Corp. of U.S. v. Schoeller Tech. Papers, Inc., 807

F. Supp. 337, 347 (S.D.N.Y. 1992) (internal quotations omitted))).

Thus, Defendant’s motion to dismiss Plaintiffs’ Breach

of Contract Claim is denied.

C. Promissory Estoppel As to 2021 Agreement (Count Two)

In order to plead a promissory estoppel claim under New

York law, a plaintiff must prove three elements: (1) “a clear and

unambiguous promise”; (2) “reasonable and foreseeable reliance on

that promise”; and (3) “injury to the relying party as a result of

the reliance.” Lamda Sols. Corp. v. HSBC Bank USA, N.A., 574 F.

Supp. 3d 205, 214 (S.D.N.Y. 2021) (quoting Kaye v. Grossman, 202

F.3d 611, 615 (2d Cir. 2000)). “The existence of a valid and

enforceable written contract governing a particular subject matter

ordinarily precludes recovery in quasi-contract for events arising

out of the same subject matter.” Dart Brokerage Corp. v. Am. Com.

Ins. Co., No. 13-CV-4014, 2013 WL 5966901, at *2 (S.D.N.Y. Nov. 7,

2013) (quoting Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70

N.Y.2d 382, 388 (1987) (alteration omitted)). However, “it is

also well-established that plaintiffs who allege the existence of

a valid contract may nonetheless plead the alternative theories of

promissory estoppel and breach of contract when the defendant does

not concede the enforceability of such contract.” Lamda Sols.,

Corp., 574 F. Supp. 3d at 214 (quoting Pers. Watercraft Prod. SARL

v. Robinson, No. 16-CV-9771, 2017 WL 4329790, at *11 (S.D.N.Y.

Sept. 1, 2017)).

“A claim for promissory estoppel may not be maintained

under New York law where the alternative claim for breach of

contract is barred by the Statute of Frauds, unless the

circumstances make it unconscionable to deny the promise upon which

the plaintiff relied.” United Mag. Co. v. Murdoch Mag. Distrib.,

Inc., 146 F. Supp. 2d 385, 405 (S.D.N.Y. 2001). “To satisfy the

‘unconscionable injury’ threshold, Plaintiff ‘must demonstrate

injuries beyond those that flow naturally from the defendant’s

non-performance or from the plaintiff’s continuing performance of

the unenforceable agreement.’” Darby Trading, Inc. v. Shell

Intern. Trading and Shipping Co. Ltd., 568 F. Supp. 2d 329, 341

(S.D.N.Y. 2008) (quoting Mobile Data Shred, Inc. v. United Bank of

Switz., No. 99-CV-10315, 2000 WL 351516. at *4 (S.D.N.Y. Apr. 5,

2000)). “[I]n the absence of ‘egregious’ circumstances, courts

have consistently rejected promissory estoppel claims when the

alleged injuries consisted of lost profits, lost fees, forgone

business opportunities or damage to business reputation.” Bd. of

Managers of Trump Tower at City Ctr. Condo. by Neiditch v.

Palazzolo, 346 F. Supp. 3d 432, 470 (S.D.N.Y. 2018) (quoting

Komlossy v. Faruqi & Faruqi, LLP, No. 15-CV-9316, 2017 WL 722033,

at *8 (S.D.N.Y. Feb. 23, 2017)).

Plaintiffs acknowledge that their promissory estoppel

claim was pled with the intention that the Court apply promissory

estoppel “[i]n the event the Court determines the Statute of Frauds

applies”. (Opp’n at 11.) Consequently, to plead in the

alternative a viable promissory estoppel claim, New York law

requires Plaintiffs to demonstrate unconscionable injury.

Plaintiffs argue they have demonstrated unconscionable injury by

pleading facts which demonstrate they have suffered, inter alia,

“the near total loss of City Calibration’s business, the complete

loss of the time and money spent developing a smart app to pair

with the Products, the loss of City Calibration and Platsky’s

customer goodwill . . . and the loss of opportunity to develop

City Calibration’s business on Long Island.” (Id. at 16-17 n.8.)

Here, none of the injuries pled rise to the level of

unconscionable injury because, as aptly highlighted by Defendant,

the damages caused by such injuries “flow naturally from the breach

of the” 2021 Agreement. Courts in this District have found that

damages of the kind pled here do not suffice to establish

unconscionable injury sufficient to maintain a promissory estoppel

claim. See Darby Trading, 568 F.Supp.2d at 341, (finding

“injuries, consisting of lost clients and lost opportunities,

while perhaps significant to Plaintiff, are most aptly described

as the expectation damages of [] non-performance of the

[parties’] . . . agreement”); N. Am. Knitting Mills, Inc. v. Int’l

Women’s Apparel, No. 99-CV-4643, 2000 WL 1290608, at *3 (S.D.N.Y.

Sept.12, 2000) (finding no unconscionable injury where plaintiff

pled it had “incurred substantial expenses to upgrade its operating

capacity and lost other substantial clients” since such injury

“flows naturally from defendant’s non-performance of the alleged

agreement”); Ellis v. Provident Life & Accident Ins. Co., 3 F.

Supp. 2d 399, 411 (S.D.N.Y. 1998) (“[I]t is well established under

New York law that injuries resulting in a[ ] . . . decision to

forgo other career opportunities do not constitute unconscionable

injuries.”); Schoeller Tech. Papers, 724 F. Supp. at 118-19

(S.D.N.Y. 1989) (finding that making investments in plant and

capital equipment, increasing payroll and foregoing other business

opportunities does not constitute unconscionable injury.)

Accordingly, Plaintiffs may not invoke promissory

estoppel to overcome application of the N.Y. UCC and/or GOL Statute

of Frauds should their breach of contract claim fail

post-discovery.11

11 To the extent Plaintiffs liken their case to the facts in

Cyberchron Corporation v. Calldata Systems Development, Inc., 47

F.3d 39 (2d Cir. 1995), the Court is unconvinced. As an initial

matter, the FAC is wholly devoid of facts supporting Plaintiffs’

contention that Defendant “continually pressured Plaintiffs to

purchase more Product”; this alone differentiates the facts in the

case at bar from those in Cyberchron.

D. Fraudulent Inducement as to the 2019 Agreement (Count

Four)12

1. The 2019 Choice-of-Law Clause

As a threshold matter, the Court must determine which

States’ law, New York or Texas, applies to Plaintiffs’ fraudulent

inducement claim. Plaintiffs argue Texas law should apply because

the 2019 Agreement contains a Texas choice-of-law provision.

(Opp’n at 19.) The Court disagrees.

“Under New York law, a choice-of-law provision

indicating that the contract will be governed by a certain body of

law does not dispositively determine that law which will govern a

claim of fraud arising incident to the contract.” Yak v. Bigger

Pockets, L.L.C., No. 20-CV-3498, 2022 WL 67740, at *3 (2d Cir.

Jan. 7, 2022) (quoting Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir.

1996)). To that end, “[u]nder New York law, . . . tort claims are

outside the scope of contractual choice-of-law provisions that

specify what law governs construction of the terms of the

contract”. Fin. One Public Co. Ltd. V. Lehman Bros. Special Fin.,

Inc., 414 F.3d 325, 355 (2d Cir. 2005). While “a contractual

choice-of-law clause could be drafted broadly enough to reach such

tort claims”, id., “New York courts have shown ‘reluctance to read

choice-of-law clauses broadly.’” Ramiro Aviles v. S & P Glob.,

12 The Fraudulent Inducement Claim is the only claim Plaintiffs

bring in connection with the 2019 Agreement.

Inc., 380 F. Supp. 3d 221, 270 (S.D.N.Y. 2019). Generally,

“provisions applying to disputes ‘arising out of’ or ‘relating to’

a contract are capacious enough to reach related tort claims, while

provisions stating that a contract will be ‘governed by’ or

‘construed in accordance with’ the law of a state are not.”

Chigirinskiy v. Panchenkova, No. 14-CV-4410, 2015 WL 1454646, at

*6 (S.D.N.Y. Mar. 31, 2015) (quoting Refco Grp. Ltd., LLC v. Cantor

Fitzgerald, L.P., No. 13-CV-1654, 2014 WL 2610608, at *40 (S.D.N.Y.

June 10, 2014)).

Here, Plaintiffs’ fraudulent inducement claim sounds in

tort, not contract. See Yookel, Inc. v. U.S. Steel Corp., 2022 WL

542379, at *4 (E.D.N.Y. Feb. 23, 2022) (stating a fraudulent

inducement claim is a claim which does not “sound in contract” and

was thus “not governed by the . . . Agreement’s choice of law

provision”); see also Dessert Beauty, Inc. v. Platinum Funding

Corp., No. 06-CV-2279, 2006 WL 3780902, at *5 (S.D.N.Y. Dec. 26,

2006) (“[T]he choice of law provision does not determine which

state’s law should apply to the tort claim [for fraudulent

inducement].”). Moreover, the 2019 Agreement’s choice-of-law

provision is akin to the narrow provisions which New York courts

hold are not broad enough to reach related tort claims.13 Compare

13 The 2019 Agreement’s choice-of-law provision is in Section 12(k)

and reads: “This Agreement shall be governed and interpreted in

accordance with the laws of the State of Texas. Venue of any

dispute shall lie in Harris County, Texas.”

Ramiro Aviles, 380 F. Supp. 3d at 271 (finding choice-of-law

provision that read “[t]his Agreement shall be governed by, and

construed in accordance with, the laws of the State of New

York . . . fits to a tee the sort of contractual language that

courts applying New York law have held insufficient to cover tort

claims”); and Knieriemen v. Bache Halsey Stuart Shields Inc., 74

A.D.2d 290, 293 (1st Dep’t 1980) (finding, where contract contained

choice-of-law clause which “recited that ‘[t]his contract shall be

governed by the laws of the State of New York’”, such clause was

not broad enough to encompass tort claims), with Turtur v.

Rothschild Registry Intern., Inc., 26 F.3d 304, 309-10 (2d Cir.

1994) (rejecting appellant’s contention that the choice-of-law

claim in the at-issue agreement did not apply to fraud claim

because the fraud claim sounded in tort where appellants had

“agreed to be bound by a choice of law provision that covers any

controversy ‘arising out of or relating to’ the subscription”).

In view of the foregoing, the Court finds the

choice-of-law provision in the 2019 Agreement does not apply to

Plaintiffs’ fraudulent inducement claim.

2. Choice of Law Analysis

A federal Court “sitting in diversity jurisdiction must

apply the law of the forum state to determine the choice-of-law.”14

14 The basis for removing this case from the State Court to this

Court was the existence of diversity jurisdiction since “both

Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir.

2001) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,

497 (1941)). “Typically, New York courts apply New York’s

substantive law to cases filed in New York.” Ramiro Aviles, 380

F. Supp. 3d at 271 (citing Wall v. CSX Transp., Inc., 471 F.3d

410, 415 (2d Cir. 2006)). However, “where a party has identified

a conflict between New York’s tort law and the tort laws of another

relevant jurisdiction, a New York court will apply ‘[t]he law of

the jurisdiction having the greate[r] interest in the

litigation.’” Id. (quoting GlobalNet Financial.com, Inc. v. Frank

Crystal & Co., 449 F.3d 377, 383 (2d Cir. 2006)). Where the

parties are domiciled in different states, “the locus of the tort

will almost always be determinative in cases involving conduct-

regulating laws.” Yookel, Inc., 2022 WL 542379, at *4 (quoting

Chigirinskiy, 2015 WL 1454646, at *6 n.7); see also H.S.W. Enters.,

Inc. v. Woo Lae Oak, Inc., 171 F. Supp. 2d 135, 142 (S.D.N.Y. 2001)

(same). “New York courts consider the locus of a fraud to be the

place where the injury was inflicted and not the place where the

fraudulent act originated.” Id. (quoting H.S.W. Ents., Inc., 171

F. Supp. 2d at 142).

plaintiffs are New York corporations with their principal places

of business in the State of New York” and the “sole defendant is

a Delaware corporation with its principal place of business in the

State of Texas.” (See Notice of Removal at 1.)

Here, Platsky is a New York-based domiciliary which

maintains its principal place of business in New York. (See FAC

¶ 17.) The 2019 Agreement is a distribution contract in which

Platsky contracted to purchase and sell products from Defendant

for distribution in the New York Metropolitan Area market, to New

York LMPs. (See 2019 Agreement, Ex. A.) New York is the locus of

Plaintiffs’ injury; therefore, New York law applies to their

fraudulent inducement claim.

3. Fraudulent Inducement15

“To state a claim for fraudulent inducement under New

York law, a plaintiff must allege: ‘(1) a material

misrepresentation or omission that induced the party to sign the

contract; (2) scienter; (3) reliance; and (4) injury.’” Centauro

Liquid Opportunities Master Fund, L.P. v. Bazzoni, No. 15-CV-9003,

15 The Court acknowledges that the 2019 Agreement contains a merger

clause and, as highlighted by Defendant, that there are instances

in which a merger clause forecloses a fraudulent inducement claim.

However, such clauses generally must “state[] that a contracting

party disclaims the existence of or reliance upon [a] specified

representation.” Mfrs. Hanover Tr. Co. v. Yanakas, 7 F.3d 310,

315 (2d Cir. 1993) (citing Citibank, N.A. v. Plapinger, 66 N.Y.2d

90, 94-95 (1985)). The general rule is that “‘an omnibus statement

that the written instrument embodies the whole agreement, or that

no representations have been made’ is insufficient to bar a claim

of fraudulent inducement.” PetEdge, Inc., 234 F. Supp. 3d at 488

(quoting Mfrs. Hanover Tr. Co., 7 F.3d at 315). The Court finds

that the merger clause contained in the 2019 Agreement is more

akin to a standard omnibus statement which does not identify the

specific representations upon which Plaintiffs’ fraudulent

inducement claim is premised. Notwithstanding this finding, the

Court finds Plaintiffs have failed to adequately plead scienter as

to their fraud claim.

2017 WL 3726754, at *4 (S.D.N.Y. Aug. 28, 2017) (quoting Davidowitz

v. Patridge, No. 08-CV-6962, 2010 WL 5186803, at *7 (S.D.N.Y. Dec.

7, 2010)).

Additionally, fraud claims are evaluated with reference

to the heightened pleading standards established by Federal Rule

of Civil Procedure 9(b). Rule 9(b) “places ‘two further burdens

on fraud plaintiffs—the first goes to the pleading of the

circumstances of the fraud, the second to the pleading of the

defendant’s mental state.’” Id. at *5 (quoting Loreley Fin.

(Jersey) No. 3 Ltd. V. Wells Fargo Sec., LLC, 797 F.3d 160, 171

(2d Cir. 2015)); see also Nakahata v. N.Y.-Presbyterian Healthcare

Sys. Inc., 723 F.3d 192, 197 (2d Cir. 2013) (“Allegations of fraud

are subject to a heightened pleading standard. When alleging

fraud, ‘a party must state with particularity the circumstances

constituting fraud,’ . . . which we have repeatedly held requires

the plaintiff to ‘(1) specify the statements that the plaintiff

contends were fraudulent, (2) identify the speaker, (3) state where

and when the statements were made, and (4) explain why the

statements were fraudulent.’” (first quoting FED. R. CIV. P. 9(b);

then quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175

(2d Cir. 1993))). The facts alleged must “give rise to a strong

inference of fraudulent intent.” First Cap. Asset Mgmt., Inc. v.

Satinwood, Inc., 385 F.3d 159, 179 (2d Cir. 2004) (emphasis in

original) (citation omitted).

Plaintiffs’ fraudulent inducement claim is based upon

two alleged representations and one material omissions of fact

which it contends Defendant utilized to induce Platsky into the

2019 Agreement.16 First, Plaintiffs allege Heath “falsely

represented that it had the ability to grant Plaintiffs an

exclusive distributorship of all the Products described in the

2019 Agreement” (the “Exclusive Distributorship Representation”)

(Opp’n at 20-21). Second, Plaintiffs assert Heath “falsely

represented that the LMP200 could connect via Bluetooth to a

service provider’s personal device to efficiently store and

transfer the data through software applications already created by

the local utility companies” (the “Bluetooth Capability

Representation”). (Id. at 21.) Finally, Plaintiffs contend Heath

“omitted that the LMP200 devices would stop working if the data

was not removed on a regular basis and that there was, at the time,

no means for removing or storing that data” (the “Data Removal

Omission”). (Id.) Plaintiffs argue the FAC adequately alleges

“that these representations were false and that Heath [k]new these

statements were false at the time its representatives made them.”

(Id.) Plaintiffs aver Heath, nonetheless, intended for Plaintiffs

16 Plaintiffs presented their fraudulent inducement argument under

Texas law only. However, the Court has already determined New

York law governs their fraudulent inducement claim.

to rely upon the false statements and omission and that it did

this “by including them in the contract itself.” (Id.)

Defendant contends the FAC fails “to allege that Heath

intended to fraudulently induce Platsky to enter into the 2019

Agreement” and that this failure is fatal to their fraudulent

inducement claim. (Support Memo at 16.) Defendant elaborates,

“[s]imply alleging that Heath ‘knew’ its statements concerning

Bluetooth connectivity were false when made is insufficient”.

(Id.) Defendant emphasizes that the plain language of the contract

contradicts Plaintiffs’ claim that Heath represented it could

grant Plaintiffs an exclusive distributorship since the contract

states that “[a] contractor would have the option of purchasing

the ABC calibration station and calibration gasses from Platsky or

could use the extensive network of distributors and locations in

the surrounding NYC area.” (Reply at 6.) Finally, Defendant

argues the FAC as pled fails to plead fraud with particularity.

Defendant contends the FAC’s allegations that Wehnert and Sims

made false representations are insufficient in this regard since

the FAC does not specify “to whom these purported representations

were made and how they were communicated.” (Reply 6-7.)

i. The Exclusive Distributorship Representation

was Meaningfully Contradicted by the Written

Terms of the 2019 Agreement

As an initial matter, the Court finds the Exclusive

Distributorship Representation cannot form the basis of a

fraudulent inducement claim since it is contradicted in a

meaningful way by the plain terms of the 2019 Agreement, to wit,

the 2019 Agreement’s statement that: “A contractor would have the

option of purchasing the ABC calibration station and calibration

gasses from Platsky or could use the extensive network of

distributors and locations in the surrounding NYC Area.”17 See

Republic Nat’l Bank v. Hales, 75 F. Supp. 2d 300, 315 (S.D.N.Y.

1999) (“Under New York law, reasonable reliance is precluded when

‘an express provision in a written contract contradicts a prior

alleged oral representation in a meaningful fashion.’” (quoting

Villa Marin Chevrolet v. Gen. Motors Corp., No. 98-CV-6167, 1999

WL 1052494, at *5 (E.D.N.Y. Nov. 18, 1999))). Plaintiffs are

sophisticated parties such that this provision should have

prompted further inquiry from them considering Plaintiffs believed

they were to be the exclusive distributer of the Products.18 See

Tevac, Inc. v. Dynamics eShop, Inc., No. 19-CV-3650, at *3

(E.D.N.Y. Sept. 27, 2022) (Seybert, J.) (“As a sophisticated

17 Even if this were not the case, the Court finds the FAC does not

sufficiently allege facts plausibly supporting the scienter

element of a fraudulent inducement claim.

18 The Court finds that the FAC’s factual statement that Platsky

has been in business for nearly a century supports the Court’s

conclusion that Platsky was a sophisticated party at the time of

the 2019 negotiations. See e.g., Taylor Precision Prods., Inc. v.

Larimer Grp. Inc., No. 15-CV-4428, 2018 WL 4278286, at *25 n.20

(S.D.N.Y. Mar. 26, 2018) (finding where plaintiff was, inter alia,

“a corporation founded in 1851” the plaintiff was a sophisticated

party).

business entity, [plaintiff’s] time to address any purported

ambiguity was during negotiations. Given the parties’ dispute

arises from a contract that was negotiated as part of an arm’s

length business transaction between two undisputed sophisticated

business entities[, plaintiff] will not be heard to object about

the plain language of the Agreement.”) (internal quotation marks

and alterations omitted); see also Clifton v. Vista Comput. Servs.,

LLC, No. 01-CV-10206, 2002 WL 1585550, at *4 (S.D.N.Y. July 16,

2002) (“When a promise is not extraneous to the terms of the

contract, a plaintiff with this level of business sophistication

cannot make out a claim that he reasonably relied on those

promises.”).

ii. Plaintiffs Have Failed to Adequately Plead

Scienter

“[A]llegations of scienter . . . are not subjected to

the more exacting consideration applied to the other components of

fraud.” 380544 Can., Inc. v. Aspen Tech., Inc., 633 F. Supp. 2d

15, 29 (S.D.N.Y. 2009) (quoting Breard v. Sachnoff & Weaver, Ltd.,

941 F.2d 142, 143 (2d Cir. 1991)) (alteration in original).

Nevertheless, while “[m]alice, intent, knowledge and other

condition of the mind of a person may be averred

generally,’ . . . this leeway is not a ‘license to base claims of

fraud on speculation and conclusory allegations.’” Eternity Glob.

Master Fund Ltd. V. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168,

187 (2d Cir. 2004) (first quoting FED. R. CIV. P. 9(b); then quoting

Acito v. IMCERA Grp., Inc., 47 F.3d 47, 52 (2d Cir. 1995)).

Plaintiffs “‘must allege facts that give rise to a strong inference

of fraudulent intent,’ which may be established ‘either (a) by

alleging facts to show that defendants had both motive and

opportunity to commit fraud, or (b) by alleging facts that

constitute strong circumstantial evidence of conscious misbehavior

or recklessness.’” Id. (quoting Shields v. Citytrust Bancorp,

Inc., 25 F.3d 1124, 1128 (2d Cir. 1994)).

Plaintiffs represent they have alleged facts

constituting strong circumstantial evidence of conscious

misbehavior or recklessness.19 (Opp’n at 23.) In doing so,

Plaintiffs highlight the FAC pleads, at the time it negotiated the

2019 Agreement, Heath knew that the representations regarding the

Products’ capabilities were false yet it failed to take additional

steps to remedy the issues. (Id.)

Notwithstanding that knowledge may be averred to

generally, the Court finds the FAC does not adequately plead

scienter. Instead, the FAC simply states in conclusory fashion

that Heath knew its statements were false without alleging facts

19 Plaintiffs do not proffer that Heath had any motive to commit

fraud. However, “[w]here motive is not apparent, it is still

possible to plead scienter by identifying circumstances indicating

conscious behavior by the defendant, though the strength of the

circumstantial allegations must be correspondingly greater.”

Kalnit v. Eichler, 264 F.3d 131, 142 (2d Cir. 2001).

as to how Heath and/or its representatives possessed such

knowledge. See e.g., PetEdge, Inc., 234 F. Supp. 3d at 495

(finding allegations that the alleged scheme “was done ‘with

[defendant’s] knowledge and approval’ are too conclusory and

speculative” to support a fraudulent inducement claim); see also

Citytrust Bancorp, Inc., 25 F.3d at 1129 (holding factual

assertions coupled with conclusory allegations that defendants

“knew or should have known” or “knew but concealed” are “so broad

and conclusory as to be meaningless”); High View Fund, L.P. v.

Hall, 27 F. Supp. 2d 420, 426-27 (S.D.N.Y. 1998) (“Neither

plaintiffs’ conclusory allegations of the [defendant’s] knowledge

and intent . . . support an inference of fraud.”). Similarly,

there are no factual allegations pleaded that would allow the Court

to infer that Defendant and/or its Representatives learned of, or

possessed, the aforementioned knowledge at the time of the 2019

negotiations. Defendant’s knowledge its representations were

false would have to have been in its possession prior to when

negotiations of the 2019 Agreement began, the FAC pleads no facts

plausibly alleging this was the case. See e.g., Banco Espirito

Santo de Investimento, S.A. v. Citibank, N.A., No. 03-CV-1537,

2003 WL 23018888, at *13 (S.D.N.Y. Dec. 22, 2003) (“[Plaintiff]

has failed to plead a cause of action for fraudulent inducement

because it has not alleged that Citibank knew the statements to be

false at the time the statements were made or that Citibank

intended to defraud BESI.”) Indeed, there are no supportive

factual allegations in the FAC that nudge Plaintiffs’ fraud

allegations from the conclusory to the plausible.

E. Common Law Unfair Competition (Count Three)

“The law of unfair competition in New York encompasses

a broad range of unfair practices.” CA, Inc. v. Simple.com, Inc.,

621 F. Supp. 2d 45, 52 (E.D.N.Y. 2009). “To state a claim for

unfair competition under New York law, ‘a plaintiff must allege

that a defendant misappropriated plaintiff’s labor, skills,

expenditures or good will, and displayed some element of bad faith

in doing so.’” TileBar v. Tiles, No. 22-CV-3823, 2024 WL 1186567,

at *19 (E.D.N.Y. Mar. 15, 2024) (quoting Data Device Corp. v. W.G.

Holt, Inc., No. 19-CV-4105, 2020 WL 7024312, at *6 (Nov. 30,

2020)); see also Coca-Cola, N.A. v. Crawley Juice, Inc.,

No. 09-CV-3259, 2011 WL 1882845, at *6 (E.D.N.Y. May 17, 2011)

(“[T]he essence of an unfair competition claim is that ‘the

defendant has misappropriated the labors and expenditures of

another’ and has done so in bad faith.” (quoting Saratoga Vichy

Spring Co. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980))).

“Although unfair competition often involves misappropriation of

trade secrets or ideas, a claim may be based on misappropriation

of client lists, internal company documents, and business

strategies ‘if wrongful or fraudulent tactics [are] employed.’”

Barbagallo v. Marcum LLP, 820 F. Supp. 2d 429, 447 (E.D.N.Y. 2011)

(quoting Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387, 328 (1972)).

Additionally, “when a business . . . possesses goodwill

constituting property or a commercial advantage in [New York],

that goodwill is protected from misappropriation under New York

unfair competition law.” RBG Mgmt. Corp. v. Vill. Super Mkt.,

Inc., No. 22-CV-7996, 2023 WL 5976273, at *10 (S.D.N.Y. Sept. 4,

2023) (quoting ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 476

(2007)).

Typical, and illustrative, examples of unfair

competition claims include: “when a defendant

takes a plaintiff’s customer list and uses it

to divest business away from plaintiff and to

defendant, or when a defendant obtains access

to a plaintiff’s proprietary technology for a

mobile ticketing platform as part of a

potential partnership effort to win bids from

mass transit agencies and then uses that

proprietary information to submit its own bid

while freezing plaintiff out of the

transaction.”

Id. (quoting Red Mountain Med. Holdings, Inc., 563 F. Supp. 3d

159, 181-82 (S.D.N.Y. 2021)).

Defendant primarily advances four arguments in support

of its Dismissal Motion as to this count. First, Defendant argues

“Plaintiffs have failed to allege that [the] 2021 Draft is a valid

agreement or that a confidential relationship existed” between the

parties. (Support Memo at 21.) Similarly, “there was no non-

compete agreement that existed between the parties.” (Id.)

Second, Defendant contends the FAC does not allege “any

misappropriation by Heath of [Plaintiffs’] exclusive commercial

advantage, trade secrets, or other property,20 and, that

“[i]nternal sharing of information is insufficient to support a

claim for unfair competition.” (Id.) Finally, Defendant

highlights Plaintiffs have neither alleged “what customers, if

any, were lost as a result of Heath’s actions” nor pled “how

Heath’s nonexclusive control of the Products was done in bad

faith.” (Id. at 22.)

Plaintiffs counter that they have pled a

misappropriation claim in that the FAC alleges “Heath

misappropriated City Calibration’s commercial advantage when it

entered the New York City Metropolitan Area market and falsely

advertised that it was ‘taking over’ City Calibration’s

distribution and calibration business.” (Opp’n at 18). Plaintiffs

maintain “Heath did this secretly and in [] violation of its

promise not to compete with City Calibration.” (Id.) Plaintiffs

contend Heath’s “purpose in doing so . . . was to cause Plaintiffs

to use its longstanding relationships with plumbers and

[plumbers’] unions in the New York City Metropolitan Area to

20 On arguing Plaintiffs have not pled any misappropriation by

Heath of an exclusive commercial advantage owned by Plaintiffs,

Defendant appears to cite to the 2019 Agreement’s language a vast

network of distributors could sell the products to contractors.

The Court notes, as highlighted by Plaintiffs, the 2019 Agreement

does not form the basis of Plaintiffs’ unfair competition claim.

Instead, this claim is premised upon the 2021 Agreement.

develop the customer base for the Products, and then misappropriate

that customer base through false representations.” (Id.)

Plaintiffs highlight the 2021 Agreement “promised Plaintiffs

exclusive access to the market by making City Calibration Heath’s

exclusive distributor in the area.” (Id.)

The Parties’ respective arguments on Plaintiffs’ unfair

competition claim are enigmatic; however, the exclusive commercial

advantage upon which Plaintiffs’ unfair competition claim is

premised hinges upon whether the 2021 Agreement is a valid,

enforceable, contract. If the 2021 Agreement is enforceable then,

by its terms, Plaintiffs enjoyed the exclusive right to sell the

Products in the North American territory when Defendant knowingly

entered the New York City Metropolitan Area market and

misappropriated that advantage. The Court has already determined

that the FAC plausibly alleges the 2021 Agreement was a valid

contract, notwithstanding Defendants’ Statute of Frauds arguments.

Consequently, the Court declines to dismiss the unfair competition

claim at this stage. See Piccoli A/S v. Calvin Klein Jeanswear

Co., 19 F. Supp. 2d 157, 169 (S.D.N.Y. 1998) (denying motion to

dismiss unfair competition claim where “essence of [plaintiff’s]

claim [was] that defendants’ action in selling [the product] into

plaintiff’s arguably exclusive territory was akin to

misappropriation or passing off, [which are] traditional bases of

unfair competition relief.”).21

F. Tortious Interference with Economic Advantage (Count

Five)

To successfully plead a claim for tortious interference

with economic advantage, a plaintiff must allege: “(1) it had a

business relationship with a third party; (2) the defendant knew

of that relationship and intentionally interfered with it; (3) the

defendant acted solely out of malice, or used dishonest, unfair,

or improper means; and (4) the defendant’s interference caused

injury to the relationship.” Kirch v. Liberty Media Corp., 449

F.3d 388, 400 (2d Cir. 2006) (quoting Carvel Corp. v. Noonan, 350

F.3d 6, 17 (2d Cir. 2003)). The plaintiff must also allege that

it “would have entered into an economic relationship but for the

defendant’s wrongful conduct.” Corning Inc. v. Shenzhen Xinhao

Photoelectric Tech. Co., Ltd., 546 F. Supp. 3d 204, 215 (W.D.N.Y.

2021) (quoting Downtown Music Publ’g LLC v. Peloton Interactive,

21 The Court notes, however, that “[w]here a plaintiff’s unfair

competition claim is based entirely on the same alleged conduct

proscribed by contract, and plaintiff has pled a breach of contract

claim, the unfair competition claim is dismissed as duplicative of

the breach claim.” Bytemark, Inc. v. Xerox Corp., 342 F. Supp. 3d

496, 508 (S.D.N.Y. 2018) (collecting cases). Neither Party briefed

nor raised this issue as part of Defendant’s Dismissal Motion.

Since the Court, at this stage of the litigation, does not know

“whether the breach of contract claim . . . will survive post-

discovery”, it will allow the unfair competition claim to proceed

at this juncture. Accord N. Shore Window & Door, Inc. v. Andersen

Corp., No. 19-CV-6194, 2021 WL 4205196, at *13 n.12 (E.D.N.Y. Aug.

3, 2021).

Inc., 436 F. Supp. 3d 754, 766 (S.D.N.Y. 2020)). “‘[A]s a general

rule, a defendant’s conduct must amount to a crime or an

independent tort’ in order to amount to tortious interference with

a prospective economic advantage.” Friedman v. Coldwater Creek,

Inc., 321 F. App’x 58, 60 (2d Cir. 2009) (quoting Carvel Corp., 3

N.Y.3d at 190). “A defendant who has not committed a crime or

independent tort or acted solely out of malice may nevertheless be

liable if he has employed ‘wrongful means,’” i.e., “physical

violence, fraud or misrepresentation, civil suits and criminal

prosecutions, and extreme and unfair economic pressure.” Id.

(quotation marks and citation omitted). However, where a defendant

acts “with a permissible purpose, such as ‘normal economic self-

interest,’ wrongful means have not been shown, even if the

defendant was ‘indifferent to the [plaintiff’s] fate.” 16 Casa

Duse, LLC v. Merkin, 791 F.3d 247, 262 (2d Cir. 2015). Likewise,

“New York courts have dismissed complaints that failed to allege

the specific business relationship that was interfered with.”

Mastercraft Decorators, Inc. v. Orlando, 356 F. Supp. 3d 259, 267

(W.D.N.Y. 2018) (quoting Johnson & Johnson v. Am. Nat’l Red Cross,

528 F. Supp. 2d 462, 464 (S.D.N.Y. 2008)); see also Lesesne v.

Brimecome, 918 F. Supp. 2d 221, 227 (S.D.N.Y. 2013) (finding the

weight of authority “requires a plaintiff to identify the potential

customers at issue when asserting a cause of action for

interference with prospective economic advantage”) (collecting

cases).

Defendant argues, inter alia, the FAC’s allegation that

Plaintiffs have “‘established business relationships with LMPs and

organizations of LMPs’ and ‘plumbers unions and organizations,’

without naming a single customer” is too conclusory to sustain

their tortious interference claim. (Support Memo at 23.) The

Court agrees.

The FAC presently identifies no specific customer with

which Plaintiffs had a valid business relationship and with which

Defendant interfered; this failure is fatal to Plaintiffs’

tortious interference with economic advantage claim. See

Plasticware, LLC v. Flint Hills Res., LP, 852 F. Supp. 2d 398, 402

(S.D.N.Y. 2012) (“Plaintiff has not adequately alleged specific

business relationships with which Defendant allegedly interfered.”

(emphasis in original); Bayer Schera Pharma AG v. Sandoz, Inc.,

No. 08-CV-3710, 2010 WL 1222012, at *8 (S.D.N.Y. Mar. 29, 2010)

(dismissing tortious interference claim where plaintiff “ha[d] not

identified any specific business entities with which it had

business relationships.”); Am. Bldg. Maint. Co. of N.Y. v. Acme

Prop. Servs., Inc., 515 F. Supp. 2d 298, 316 (N.D.N.Y. 2007)

(“Allegations of tortious interference must be more than just mere

suspicions, and, therefore, the complaint must allege

‘interference with a specific identified business relationship

with a third party.’” (quoting Camp Summit of Summitville, Inc. v.

Visinski, No. 06-CV-4994, 2007 WL 1152894, at *14 (S.D.N.Y. Apr.

16, 2007))). Indeed, the allegations that Plaintiffs have

relationships with LMPs, plumbers’ unions and organizations of

LMPs is vague, and is similar to the relationships with “third-

party cover glass manufacturers and mobile device companies and

manufacturers” which the plaintiff pled in Corning. 546 F. Supp.

3d at 216. The Corning court dismissed the Corning plaintiff’s

tortious interference claim because, inter alia, “the claim [was]

insufficiently specific.” Id. The Corning court emphasized that

to sufficiently plead a tortious interference claim; a plaintiff

is required to “identify the potential customers at issue.” Id.

(quoting Lesesne, 918 F. Supp. 2d at 227). Compare Faiveley

Transp. USA, Inc. v. Wabtec Corp., 758 F. Supp. 2d 211, 221-22

(S.D.N.Y. 2010) (denying motion to dismiss tortious interference

with prospective economic advantage claim where plaintiff

“allege[d] with particularity no less than ten business

relationships with which [defendant] interfered, and includes in-

depth discussion of one business relationship in particular, with

New York City Transit”).

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CONCLUSION22

For the stated reasons, IT IS HEREBY ORDERED that

Defendant’s Motion to Dismiss (ECF No. 29) is GRANTED IN PART AND

DENIED IN PART to the extent that:

1. Defendant’s Motion to Dismiss Plaintiffs’ Breach

of Contract claim (Count One) is DENIED;

2. Defendant’s Motion to Dismiss Plaintiffs’

Promissory Estoppel Claim (Count Two) is GRANTED;

3. Defendant’s Motion to Dismiss Plaintiffs’ Unfair

Competition claim (Count Three) is DENIED;

4. Defendant’s Motion to Dismiss Plaintiffs’

Fraudulent Inducement claim (Count Four) is

GRANTED; and

5. Defendant’s Motion to Dismiss Plaintiffs’

Tortious Interference with Economic Advantage

claim (Count Five) is GRANTED.

22 To the extent not explicitly addressed, the Court has considered

the remainder of the Parties’ arguments in support of and in

opposition to the Dismissal Motion and, to the extent they were

not explicitly addressed, the Court finds them to be without merit.

IT IS FURTHER ORDERED that the parties are referred to

Magistrate Judge Tiscione for all pre-trial matters.

SO ORDERED.

/s/_JOANNA SEYBERT______

Joanna Seybert, U.S.D.J.

Dated: March 29, 2024

Central Islip, New York