Mexican Hass Avocado Importers Association v. The Preston/Tully Group, Inc., No. 2:2009cv05522 - Document 66 (E.D.N.Y. 2012)
Court Description: MEMORANDUM AND ORDER granting in part and denying in part 50 Motion for Summary Judgment; denying 23 Motion for Summary Judgment. For the foregoing reasons, Plaintiff's motion for partial summary judgment is DENIED, and Defendant's cross-motion for summary judgment is GRANTED IN PART AND DENIED IN PART. Accordingly, Plaintiff's causes of action for an accounting and for fraud are hereby DISMISSED. So Ordered by Judge Joanna Seybert on 1/23/12. C/ECF (Valle, Christine)
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Mexican Hass Avocado Importers Association v. The Preston/Tully Group, Inc. Doc. 66 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ---------------------------------------X MEXICAN HASS AVOCADO IMPORTERS ASSOC., Plaintiff, MEMORANDUM & ORDER 09-CV-5522(JS)(WDW) -againstTHE PRESTON/TULLY GROUP INC., Defendant. ---------------------------------------X APPEARANCES For Plaintiff: Anthony Filosa, Esq. David I. Rosenberg, Esq. Rosenberg, Fortuna & Laitman, LLP 666 Old Country Road, Suite 810 Garden City, NY 11530 For Defendant: E. Christopher Murray, Esq. Ruskin Moscou Faltischek, P.C. 1425 RXR Plaza, East Tower, 15th Floor Uniondale, NY 11556 SEYBERT, District Judge: Plaintiff Mexican Hass Avocado Importers Association (“MHAIA” or December 17, “Plaintiff”) 2009 commenced against this Defendant diversity Preston/Tully action Group on Inc. (“Preston/Tully” or “Defendant”) asserting claims for breach of contract, an accounting, and fraud. On June 20, 2011, Plaintiff moved for partial summary judgment as to liability on its breach of contract claim. cross-moved for On July 21, 2011, Defendant opposed and summary judgment on all claims. Presently pending before the Court are the parties’ cross-motions. For Dockets.Justia.com the following reasons, Plaintiff’s motion is DENIED, and Defendant’s motion is GRANTED IN PART AND DENIED IN PART. BACKGROUND 1 I. Factual Background MHAIA was formed in 2003 by importers of Mexican Hass avocados to promote the sale of avocados of Mexican origin in the United States. Using assessments collected by the United States Department of Agriculture (“USDA”) pursuant to the Hass Avocado U.S.C. Promotion, § 7801 Research et seq., “Promotional Services Preston/Tully agreed and Information MHAIA entered Agreements,” to develop with and Act into of a 2000, series Preston/Tully implement marketing campaign for Mexican Hass avocados. an 7 of whereby integrated (Pl. Exs. K-N; Def. Exs. 1-5.) The Services between parties Agreement March 2004 in entered March and into 2004, December the which 2004 first covered (Def. Ex. Promotional the 1, period “2004 Contract”), and the second in August 2004, which covered the period between August 2004 and December 2005 (Pl. Ex. K & Def. Ex. 2, “2004-2005 Contract”). The parties performed under these contracts without issue, and they are not the subject of this 1 The following facts are drawn from the parties’ Local Civil Rule 56.1 Statements and the exhibits attached to the affidavits submitted in support of the cross-motions. Any relevant factual disputes are noted. 2 lawsuit. MHAIA subsequently entered into three additional one- year Promotional Services Agreements with Preston/Tully. The Court will discuss the details of each in turn. A. 2005-2006 Contract On or about October 1, 2005, the parties entered into a new Promotional Services Agreement covering the period between November 1, 2005 and October 31, 2006 (Pl. Ex. L & Def. Ex. 3, “2005-2006 Contract”). The 2005-2006 Contract, like the ones prior, was drafted in the form of a letter on Preston/Tully letterhead. The letter was from Christopher Tully, the President and sole owner of Preston/Tully, to Mr. E. Figueroa, the then-Chairman of the MHAIA Board, and was signed by both individuals. The letter set out to “outline [the parties’] understanding of the promotional campaign, and list the services [Preston/Tully] will provide, as well as the payment schedule for [those] services.” (2005-2006 Contract, at 1.) Pursuant to the terms of the agreement, Preston/Tully agreed to provide the following services: - Development of marketing conceptual plan, communications strategy, brand positioning and its implementation[.] - Website maintenance[.] - Administrate co-op marketing fund used to reimburse importers for promotions executed with retailers and or [sic] in support of retailer activities. 3 - Reprint material program[.] used in point - Plan and purchase consumer media in U.S. markets. - Plan and advertising. purchase of sale advertising trade directed - Conceive, develop, implement, track, administer [sic] public relations program. - Provide campaign administration. (Id. at 2.) follow-up and Those services are itemized in a “line item budget” attached to the letter (id.) that was drafted by Mr. Tully 2 (see Tully Dep. 31-32). The budget includes a list of nine items with short descriptions of the services to be provided and corresponding dollar amounts. They are as follows: 1. $700,000 for “POS/Demo/Importer fund,” which is described as “In-store demo fund used to reimburse importers for promotional efforts. Includes demo kit fulfillment and $100,000 for supervision, administration and monitoring of program by agency.” 3 (emphasis added). 2. $106,000 for “POS material reprint,” which is described as “Reprint demo kit materials including recipe brochure, 2 While Mr. Tully drafted the attached budget, the body of the letter was adapted from a template of standard USDA contract language. (See Tully Dep. 15.) 3 Although agency is not defined anywhere in the agreement, the parties do not dispute that the “agency” referred to is Preston/Tully. (Pl. 56.1 Stmt. ¶ 10; Def. 56.1 Cntr-Stmt. ¶ 10.) 4 counter card, napkins, serving gloves, etc. Printing 1,000 kits English [sic]. Develop and design Hispanic POS kit. Print 1000 kits Spanish [sic].” 3. $550,000 for “Public Relations,” which is described as “P.R. activities directed at trade and consumer publications editors.” 4. $2,523,000 for “Radio Advertising,” which is described as “Media. Includes 15% Agency fee for planning and buying, verification and administration. Radio Spot production (two English and two Spanish commercials). Talent and distribution.” (emphasis added). 5. $176,000 for “Trade Advertising,” which is described as “Design and production of one 4/c trade advertisement. Production of films & proofs. Media placements in trade publications.” 6. $50,000 for “Misc. Production,” which is described as “Misc. campaign production expenses.” 7. $40,000 for “Website maintenance and updating,” which is described as “Maintenance trade website (English and Spanish) www.mexhass.com. Consumer website www.mexhassrecipes.com maintenance and refreshing.” 8. $330,000 for “Agency Administration,” which is described as “Development of strategy, program plan, execution and follow-up.” 9. $25,000 for “Agency Travel/Misc Expenses,” which is described as “Airfare, hotel, phone, fax, deliveries, misc. expenses, etc.” (Id. at Attachment.) Preston/Tully may, but was not required to, subcontract specific items to outside parties. 5 (Id. at 4- 5.) Additionally, contract to Preston/Tully “keep accurate was records, obligated books, under and the documents involving transactions relating to this agreement,” retain them for three years, and make them “available for inspection and audit by a representative of the Secretary of Agriculture” upon request. (Id. at 4.) The agreement does not contain any additional information regarding the services to be provided by Preston/Tully. The agreement states that “[t]he total amount covered . . . is $4,500,000,” which is to be paid by MHAIA to Preston/Tully in installments. (Id. at 3.) “If the campaign is cancelled for any reason whatsoever, Preston/Tully’s entire fee for implementation, administration, and any other costs or fees incurred to date, shall, nevertheless, be deemed to have been earned and will be paid within ten (10) days of billing.” at 5 (emphasis added).) (Id. The parties do not dispute that this constitutes the entire agreement between them. All of the services provided for in the 2005-2006 Contract were adequately performed by either Preston/Tully or a third-party subcontractor. Preston/Tully breached Nonetheless, the agreement MHAIA by asserts retaining that whatever remained of the $4,500,000 budget after third-party fees and expenses were Administration, paid, rather $100,000 for than just $330,000 supervising, 6 for Agency administering and monitoring the POS/Demo/Importer fund program, and 15% of the value of the radio ads purchased--the fees specifically provided for in the agreement. retained the entire Preston/Tully does not dispute that it budget, but rather argues that it was entitled to do so under the terms of the contract. B. 2006-2007 Contract The parties entered into a new Promotional Services Agreement on or about September 14, 2006 covering the period between November 1, 2006 and October 31, 2007 (Pl. Ex. M & Def. Ex. 4, “2006-2007 Contract”). The substance of the 2006-2007 Contract was nearly identical to the substance of the 2005-2006 Contract with the exception of “[t]he total amount covered under th[e] agreement”--now $6,246,500 (2006-2007 Contract, at 3)--and the amounts allocated to and descriptions of certain line-items on the attached budget (id. at Attachment). Five new items were added to the budget: 1. “NASCAR Sponsorship,” defined as “Consumer trade components of NASCAR sponsorship for races. Includes agency supervision.” (emphasis added). 2. “NASCAR Promotion,” defined as “Design, production and printing of P-O-S materials, sweepstakes, trade and consumer advertisement.” 3. “In-Store Advertising,” defined as “Design, production and placement of literature and dispensers for supermarkets.” 7 4. “Joint Consumer Promotion,” defined as “Joint promotion concept, tie-in, creative development, production, printing and coupon redemption.” 5. “TV Spot Creative Development,” defined as “Creative development of TV commercial to animatic stage.” (Id.) Additionally, the description of the “Public Relations” services to be provided by Preston/Tully was modified to state, “Agency public relations/promotions activities directed at trade and consumer targets.” (Id. (emphasis added).) The descriptions of all other line-items in the 2006-2007 budget were identical to their 2005-2006 counterparts, including $100,000 for supervision, administration and monitoring by the agency of the Importer Fund, a 15% agency fee for planning and buying radio advertising, and a flat fee ($440,000) for Agency Administration. All (Id.) of the services provided for in the 2006-2007 Contract were adequately performed by either Preston/Tully or a third-party subcontractor. Preston/Tully breached But the MHAIA agreement again by asserts retaining that whatever remained of the $6,246,500 budget after third-party fees and expenses were Administration, paid, rather $100,000 for than just $440,000 supervising, for Agency administering and monitoring the Importer fund program, and 15% of the value of the radio ads purchased. Preston/Tully again does not dispute 8 that it retained the entire budget, but rather argues that it was entitled to it under the terms of the contract. C. 2007-2008 Contract On or about September 19, 2007, the parties entered into their final Promotional Services Agreement covering the period between November 1, 2007 and October 31, 2008 (Pl. Ex. N & Def. Ex. 5, “2007-2008 Contract”). The substance of the 2007- 2008 Contract was nearly identical to the substance of the 20062007 Contract with the exception of “[t]he total amount covered under th[e] agreement”--which was increased to $7,042,000 (20062007 Contract, at 3), the signatory on behalf of MHAIA, now Antonio Villasenor (id. at 1), and the amounts allocated to and descriptions of certain line-items on the attached budget (id. at Attachment). The following changes were made to the descriptions in the budget: titled (i) “Co-op “supervision, the description Marketing”), administration of the Importer although and Fund still monitoring of (now including program by agency,” no longer specified the amount of the Co-op Marketing budget that was to be allocated towards compensating the agency for its involvement; (ii) the Advertising budget was expanded to include both radio and television, with the budget for both including a 15% agency fee for planning and buying; (iii) no money was allocated for POS material reprint; and (iv) a line9 item was added for a “Consumer Contest”--“Make your own HASS TV spot.” (2007-2008 Contract, at Attachment.) The descriptions of all other line-items in the 2007- 2008 budget were identical to their 2006-2007 counterparts, including agency supervision of the NASCAR Sponsorship, agency public relations/promotions activities, ($480,000) for Agency Administration. Either Preston/Tully or a and a flat fee (Id.) third-party subcontractor adequately performed all of the services provided in the 20072008 Contract. But MHAIA asserts that Preston/Tully similarly breached this agreement by retaining whatever remained of the $7,042,000 budget after third-party fees and expenses were paid, rather than just $480,000 for Agency Administration and 15% of the value of the radio and television ads purchased. Preston/Tully again argues that it was entitled to do so under the terms of the contract. II. Procedural Background MHAIA commenced this action in December 2009 asserting causes of action for breach of the 2005-2006, 2006-2007 and 2007-2008 Contracts, for an accounting, and for fraud in the inducement. On June 20, 2011, MHAIA moved for summary judgment as to liability on its breach of contract claims, arguing that the contracts (more specifically the budgets attached thereto) unambiguously state precisely what Preston/Tully’s compensation 10 was for each contract; yet Preston/Tully retained the entire budget (minus expenses) as its compensation. On July 21, 2011, Preston/Tully filed an opposition and cross-motion for summary judgment on all unambiguously claims support asserting its position that that (i) the the contracts entire contract amount constituted its compensation and thus the contracts were not breached; (ii) that it is entitled to judgment as a matter of law on MHAIA’s equitable claim for an accounting because the parties were not fiduciaries; and (iii) that the fraud claim must be dismissed as duplicative of the breach of contract claim. DISCUSSION I. Standard of Review “Summary judgment is appropriate where there are no genuine disputes concerning any material facts, and where the moving party is entitled to judgment as a matter of law.” Harvis Trien & Beck, P.C. v. Fed. Home Loan Mortg. Corp. (In re Blackwood Assocs., L.P.), 153 F.3d 61, 67 (2d Cir. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). “In assessing the record to determine whether there is a genuine issue to be tried as to any material fact, the court is required to resolve all ambiguities and 11 draw all permissible factual inferences in favor of the party against whom summary judgment is sought.” McLee v. Chrysler Corp., 109 F.3d 130, 134 (2d Cir. 1997). “The burden of showing the absence of any genuine dispute as to a material fact rests on the party seeking summary judgment.” Id.; see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970). A genuine factual issue exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” 477 U.S. at 248. Anderson, To defeat summary judgment, “the non-movant must ‘set forth specific facts showing that there is a genuine issue for trial.’” (2d Cir. 2000) Weinstock v. Columbia Univ., 224 F.3d 33, 41 (quoting Anderson, 477 U.S. at 256). “Mere speculation or conjecture as to the true nature of the facts” will not overcome a motion for summary judgment. Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986); see also Williams v. Smith, 781 F.2d 319, 323 (2d Cir. 1986) (“Mere conclusory allegations or denials will not suffice.”); Weinstock, 224 F.3d at 41 (“[U]nsupported allegations do not create a material issue of fact.” (citing Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995)). “The same standard applies where, as here, the parties file cross-motions for summary judgment . . . .” See Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001) (citing 12 Terwilliger v. Terwilliger, 206 F.3d 240, 244 (2d Cir. 2000)). Thus, even if both parties move for summary judgment and assert the absence of any genuine issues of material fact, “a district court is not required to grant judgment as a matter of law for one side or the other.” Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993). must be examined on reasonable inferences motion under its is own must “Rather, each party’s motion merits, be drawn consideration.” (citation omitted). and in against Morales, each the 249 case party F.3d all whose at 121 It is under this framework that the Court analyzes the pending motions. II. Breach of Contract Generally, “a motion for summary judgment may be granted in a contract dispute only when the contractual language on which the moving party’s case rests is found to be wholly unambiguous and to convey a definite meaning.” Topps Co. v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir. 2008) (citation omitted). “Contract language is ambiguous if it is ‘capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated L’Union Inc., agreement.’” Europeenne 232 F.3d v. 153, Compagnie Merrill 157 (2d Financiere Lynch, Cir. 13 Pierce, 2000) de CIC Fenner (quoting et & de Smith Sayers v. Rochester Tel. Corp. Supplemental Mgmt. Pension Plan, 7 F.3d 1091, 1094 (2d Cir. 2000)). Both parties argue that the 2005-2006, 2006-2007 and 2007-2008 Contracts unambiguously state the compensation to which Preston/Tully was entitled. amount of MHAIA asserts that Preston/Tully’s compensation was limited to the portions of the budget that specifically provided for payment of fees to the agency: for example, the flat fee for Agency Administration and the of 15% all television and radio ads purchased; whereas Preston/Tully asserts that it was entitled to the total amount covered by the contracts at issue--in other words, the entire budget. The Court finds that an intelligent person viewing the contracts could reasonably choose either interpretation. On the one hand, the contracts do not state that the “total amount covered” by Preston/Tully’s compensation. the contracts is equal to Rather, the total amount covered is broken down in an attached “budget.” Budget is not defined in the contracts, but its dictionary definition--“the amount of money that is available for, required for, or assigned to a particular purpose,” Merriam-Webster’s Third New Int’l Dictionary 290 (3d ed. 1993)--coupled with the fact that certain line-items specifically provide for the payment of fees to Preston/Tully supports MHAIA’s interpretation that Defendant’s compensation was limited to those line-items. 14 In other words, since certain line-items provide for the payment of specified fees to Preston/Tully, the other exclude any payment of fees. line-items must be read to See Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs., 63 N.Y.2d 396, 403-04, 472 N.E.2d 315, 318, 482 N.Y.S.2d 465, 468 (1984) (applying the doctrine of “inclusio unius est exclusio alterius”--that to express or include one thing implies the exclusion of the other--to the interpretation of a contract). On the other hand, there are other line-items that state that the budgeted figure “includes agency supervision” but does not specify a dollar amount. Additionally, each of the contracts at issue provides that if the contract is cancelled for any reason, Preston/Tully will still receive its entire fee for Agency Administration, “and any other costs or fees incurred to date,” see supra page 6, and none of the contracts specify what should be done if Defendant is over or under budget for a particular supports line item. Defendant’s The Court interpretation finds that that its this reasonably compensation was not limited to the flat fees specified in the budgets--namely the Agency Administration fee, the 15% fee for television and radio advertisements, and, for two out of the three years, the $100,000 for supervising and administering the Importer Fund-and also includes costs and fees incurred by Preston/Tully in performing the other services provided for in the contracts. 15 Whether the Court draws all inferences in favor of Plaintiff or Defendant, the contract is amenable to multiple interpretations. Because a reasonably intelligent person viewing the contracts could choose either interpretation, the Court finds that the contracts are ambiguous. 4 “Although generally interpretation of ambiguous contract language is a question of fact to be resolved by the factfinder, the court may resolve ambiguity in contractual language as a matter of law if the evidence presented about the parties’ intended meaning is so one-sided that no reasonable person could decide the contrary.” Compagnie, 232 F.3d at 158 (internal quotation marks and citations omitted); accord Topps Co., 526 F.3d at 68. evidence supporting Plaintiff failed to cite any extrinsic its interpretation of the contract; therefore, the Court must deny its motion for summary judgment. Defendant, evidence on in the other support of hand, its did provide some interpretation, extrinsic specifically deposition testimony of Mr. Figueroa and Ron Campbell, MHAIA’s Executive Director during the relevant 4 time period, that if Plaintiff asserts that it is still entitled to summary judgment because any ambiguity must be construed against the drafter. While this is a correct statement of the law in New York, see Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 67 (2d Cir. 2000), Preston/Tully did not draft the entire contract. Rather, the record reflects that Mr. Tully drafted the budget and the body of the contract was adapted from a USDA template. 16 Preston/Tully provided services under a specific budget item, it would be However, entitled this to does compensation not that line-item. 5 support Defendant’s under unambiguously interpretation that it was entitled to retain the entire budget figure; it also supports an interpretation that Preston/Tully was entitled particular Since could it to a item is decide fraction depending not “so of on the one-sided contrary to the budget amount that no of allocated for a work performed. reasonable factfinder [Defendant]’s interpretation,” Compagnie, 232 F.3d at 159, see also Scholastic, Inc. v. Harris, 259 F.3d 73, 83 (2d Cir. 2001) (“Only in the rare case is the extrinsic evidence so one-sided that no reasonable factfinder could find to the contrary, in which event the court should resolve the ambiguity as a matter of law.”), Defendant’s motion for summary judgment on Plaintiff’s breach of contract claims must also be denied. 5 (See, e.g., Figueroa Dep. 45 (“Q. Was it your understanding that under this item, Chris Tully would spend a[n] amount of his time for public relations on behalf of MHAIA? A. That was his job, yes. Q. Would he be entitled to be compensated for that effort through this budget item? A. Yes.”); Campbell Dep. 39 (“Q. What was that $500,000 [referring to line-item on 2005-2006 Contract budget] representing? A. Public relations. Q. Those are services being performed by Preston/Tully; is that correct? A. That’s correct. Q. And that’s what they were being paid for, those services? A. Yes.”). 17 III. Accounting Defendant also argues that it is entitled to summary judgment on Plaintiff Plaintiff’s failed relationship. to action establish for the an accounting existence of a because fiduciary The Court agrees. In New York, “[i]t is well settled that an equitable action for fiduciary an accounting relationship will between not the lie in the parties.” absence of a Gersten-Hillman Agency, Inc. v. Heyman, 68 A.D.3d 1284, 1286, 892 N.Y.S.2d 209, 211 (3d Dep’t 2009) (citing Bradkin v. Leverton, 26 N.Y.2d 192, 199 n.4, 209 N.Y.S.2d 192, 198 n.4, 257 N.E.2d 643, 647 n.4 (1970)); accord AHA Sales, Inc. v. Creative Bath Prods., Inc., 58 A.d.3d 6, 23, 867 N.Y.S.2d 169, 182 (2d Dep’t 2008); Bouley v. Bouley, 19 A.D.3d 1049, 1051, 797 N.Y.S.2d 221, 223 (4th Dep’t 2005). accounting “The fiduciary relationship necessary to obtain an is created by the plaintiff entrusting to the defendant some money or property with respect to which defendant is bound to reveal his dealings.” Stevens v. St. Joseph’s Hosp., 52 A.D.2d 722, 723, 381 N.Y.S.2d 927, 929 (4th Dep’t 1976). The level relationship, of trust however, is necessary to develop “higher . . . than a fiduciary [the level] normally present in the marketplace between those involved in arm’s length business transactions,” EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11, 19, 832 N.E.2d 26, 31, 99 N.Y.S.2d 18 170, 175 (2005); N.Y.S.2d at without more, see 181 also (“[A] is AHA Sales, conventional insufficient 58 A.D.3d business to at 21, 867 relationship, create a fiduciary relationship.” (citation omitted)); Faulkner v. Arista Records L.L.C., 602 F. Supp. 2d 470, 482 (S.D.N.Y. 2009) (“Generally, an arm’s length business transaction . . . is not enough to give rise to a fiduciary relationship.” (internal quotation marks and citation omitted)), and “a plaintiff must make a showing of ‘special circumstances’ that could have transformed the parties’ business relationship to a fiduciary one.” AHA Sales, 58 A.D.3d at 21 (internal quotation marks and citation omitted) (finding fiduciary relationship where (i) plaintiff was induced to continue working for defendants for many years without a written contract based on representations that he could trust and rely on defendants, (ii) plaintiff refrained from other contractual relationships with defendants’ competitors at defendants’ insistence, and (iii) defendants demanded that plaintiff render uncompensated services as a contribution to their “venture”); see also, e.g., Apple Records, Inc. v. Capitol Records, Inc., 137 A.D.2d 50, 57-58, 529 N.Y.S.2d 279, 283 (1st Dep’t 1988). Here, although Plaintiff asserts in its papers that it “entrusted” contracts Defendant (Pl. with Reply/Opp. the 18), amounts there is specified no evidence in in the the record of any “special circumstances” that elevate the parties’ 19 relationship to that of fiduciaries. 2d at 482. See Faulkner, 602 F. Supp. Such a conclusory allegation of trust and confidence without more will not defeat summary judgment. Rather, Plaintiff requiring Defendant available for accounting. to argues keep inspection (Pl. adequate and Reply/Opp. that contract records audit 18.) the and entitles This is language make MHAIA not an to them an accurate statement of the law, as only the existence and breach of a fiduciary duty entitle MHAIA to an accounting. Since Plaintiff failed to put forward any evidence to support the existence of a fiduciary relationship, the Court must grant summary judgment in favor of Defendant and dismiss the cause of action for accounting. IV. Fraud Defendant also asserts that it is entitled to summary judgment on Plaintiff’s fraud claim because it is duplicative of Plaintiff’s breach of contract claim. The Court agrees. “Under New York law, a plaintiff cannot maintain a claim for both fraud and breach of contract where the alleged fraudulent misrepresentations are to the underlying terms of the contract.” See Sylhan, L.L.C. v. Schwarzkopf Techs. Corp., No. 01-CV-4368, 2002 WL 32605796, at *4 (E.D.N.Y. quotation marks and citations omitted). 20 Aug. 9, 2002) (internal Here, Plaintiff asserts that Defendant induced MHAIA to maintain and renew its contracts with Defendant for 2006-2007 and 2007-2008 by presenting budgets to the Board of Directors “with a preconceived and undisclosed intention of not adhering to them.” (Pl. Reply/Opp. 22-23.) “Although a promise made with a preconceived and undisclosed intention of not performing it can give rise to a fraudulent inducement claim, the promise must be collateral agreement . . . .” or extraneous to the terms of future alleged here, are the D.S. Am. (E.), Inc. v. Chromagrafx Imaging Sys., Inc., 873 F. Supp. 786, 796 (E.D.N.Y. 1995). promises of performance not under collateral insufficient to allege fraud. a contract, or Insincere like extraneous and those are See id. at 798; see also Caniglia v. Chi. Tribune-N.Y. Syndicate, Inc., 204 A.D.2d 233, 234, 612 N.Y.S.2d 146, 147 (1st Dep’t 1994) (“It is well settled that a cause of action for fraud does not arise, where, as here, the only fraud alleged merely relates to a contracting party’s alleged intent to breach a contractual obligation.”); Ross v. DeLorenzo, 28 A.D.3d 631, 636, 813 N.Y.S.2d 756, 76061 (2d Dep’t 2006); Gosmile, Inc. v. Levine, 81 A.D.3d 77, 81, 915 N.Y.S.2d 521, 524 (1st Dep’t 2010). Therefore, Defendant is entitled to judgment matter of law and the fraud claim is hereby dismissed. 21 as a CONCLUSION For partial the summary foregoing judgment reasons, (Docket Plaintiff’s Entry 23) is motion for DENIED, and Defendant’s cross-motion for summary judgment is GRANTED IN PART AND DENIED IN PART. Accordingly, Plaintiff’s causes of action for an accounting and for fraud are hereby DISMISSED. SO ORDERED. /s/ Joanna Seybert____ Joanna Seybert, U.S.D.J. Dated: January 23, 2012 Central Islip, NY 22
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