Conflict International, Inc. et al v. Komorek et al, No. 1:2023cv02165 - Document 35 (S.D.N.Y. 2024)

Court Description: OPINION & ORDER re: 27 MOTION to Dismiss Complaint. filed by API International Consulting Group, Inc., Stephen Komorek., For the foregoing reasons, Defendants' motion to dismiss is GRANTED IN PART and DENIED IN PART, as follow s: The motion to dismiss is GRANTED with respect to the claims for abuse of process, tortious interference with contract, tortious interference with prospective economic advantage, and unjust enrichment (as to Komorek). Plaintiffs may amend thei r complaint by no later than April 12, 2024, to assert an unjust enrichment claim against API International. The dismissed claims are dismissed with prejudice because Plaintiffs have not requested leave to amend. See, e.g., Cesiro v. Rite Aid of N .Y., No. 20 Civ. 10519 (ER), 2022 WL 392907, at *6 (S.D.N.Y. Feb. 9, 2022) ("[W]here a plaintiff has neither requested leave to amend, nor indicated additional facts that would be added to the complaint, a court is not required to grant leave to amend sua sponte."). The motion to dismiss is DENIED with respect to the claims for breach of contract and unfair competition. With respect to the breach of fiduciary duty claim, the motion to dismiss is DENIED to the extent that the claim is premised on Komorek's misrepresentations while he was employed at Conflict. In all other respects, the motion to dismiss the breach of fiduciary duty claim is GRANTED. The parties are directed to appear for a status conference on April 19, 2024, at 2:30 p.m. at the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, New York 10007, Courtroom 619. The Clerk of Court is respectfully directed to terminate the motion, Doc. 27. It is SO ORDERED. (Status Conference set for 4/19/2024 at 02:30 PM in Courtroom 619, 40 Centre Street, New York, NY 10007 before Judge Edgardo Ramos.) (Signed by Judge Edgardo Ramos on 3/29/2024) (jca)

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Conflict International, Inc. et al v. Komorek et al Doc. 35 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK CONFLICT INTERNATIONAL, INC., and CONFLICT INTERNATIONAL, LTD., Plainti s, OPINION & ORDER – against – 23-cv-02165 (ER) STEPHEN KOMOREK and API INTERNATIONAL CONSULTING GROUP, INC., Defendants. RAMOS, D.J.: Con ict International, Inc. (Con ict), and Con ict International, Ltd. (Con ict UK), are private security rms that provide investigative services. ey brought this action alleging contract and tort claims against Stephen Komorek—a former employee of Con ict—and his company, API International Consulting Group, Inc. Defendants have moved to dismiss the complaint on multiple grounds. For the reasons set forth below, the motion to dismiss is GRANTED IN PART and DENIED IN PART. I. BACKGROUND Unless otherwise noted, the following facts are taken from the allegations in the complaint, which the Court accepts as true at this stage. Koch v. Christie’s Int’l PLC, 699 F.3d 141, 145 (2d Cir. 2012). A. e Parties Con ict UK is a private investigative and security services business based in the United Kingdom. Doc. 2 ¶ 11. e company employs approximately ten full-time employees and twelve part-time consultants. Id. Con ict UK is owned by Michael LaCorte and Jon Fawcett, who are UK residents and citizens. Id. ¶ 12. Dockets.Justia.com Con ict is a subsidiary of Con ict UK. Id. ¶ 8. Con ict incorporated in New York in 2010 and commenced operations in 2017. Id. ¶¶ 14–15. It holds private investigative licenses in New York and North Carolina. Id. ¶ 18. Stephen Komorek is an Ohio citizen and a former employee of Con ict. Id. ¶¶ 1, 9. He founded API International, an Ohio corporation, shortly before resigning from Con ict in February 2022. Id. ¶¶ 10, 94. B. Komorek’s Employment with Con ict In 2018, Con ict sought to hire an investigator in the United States. Id. ¶ 20. During that time, Con ict’s owners met Komorek at a Las Vegas conference. Id. Komorek represented that he had years of experience in investigations and intelligence, including experience and contacts from his time in the U.S. army. Id. ¶ 23. e complaint alleges that these representations “were later found to either be untrue or grossly misrepresented.” Id. ¶ 24. Con ict hired Komorek in October 2018. Id. ¶ 25. Because Con ict and Con ict UK provide investigative services that depend on con dentiality, Komorek was required to sign a nondisclosure agreement. Id. ¶ 26; see Doc. 2-1. 1 e parties named in the agreement were Komorek and Con ict UK. Doc. 2-1 at 2, 5. But it included a provision stating that “[t]he undertakings set forth herein shall also be binding upon any a liates, subsidiaries or successors of the Parties.” Id. ¶ 12. e agreement provided that each party would treat as con dential any information that the other party designated as proprietary. Id. ¶ 7. e parties agreed not to disclose such con dential information to any unauthorized third parties without the explicit consent of the other party. Id. ¶¶ 8.2– 8.4. Con ict alleges that Komorek breached the agreement by disclosing con dential information to various third parties. Doc. 2 ¶ 35. e Court may consider the agreement, Doc. 2-1, because it was attached to the complaint. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). 1 2 In March 2020, Andrew McLaren joined Con ict to assist in nding new clients. Id. ¶ 62. Komorek, serving as Con ict’s U.S. director of operations, signed an agreement stating that McLaren would earn 10% net pro t, per case, for each new client he brought to the company. Id. ¶ 63. McLaren eventually referred Trudy Jacobson to the rm for a variety of surveillance and investigative services. Id. ¶¶ 64, 67. 2 Jacobson retained Con ict in March 2021. Id. ¶ 68. Komorek was her sole point of contact at Con ict. Id. ¶ 70. According to the complaint, Komorek received payment from Jacobson for other investigative and business services while he was employed by Con ict and serving as an o cer of the company. Id. ¶ 71. Con ict also alleges that Jacobson owes money to Con ict and that Komorek has encouraged her not to pay the amounts due. Id. ¶¶ 72–76. In early February 2022, Komorek proposed certain surveillance activities for Jacobson’s case. Id. ¶ 77. He indicated that he intended to disclose con dential case information to third parties without authorization from Jacobson or Con ict. Id. ¶¶ 77– 78. Con ict senior management outlined several concerns with the proposal and ultimately restructured it to ensure that the surveillance conducted was lawful. Id. ¶¶ 79– 82. On February 24, McLaren learned for the rst time that Jacobson had paid Con ict substantial fees. Id. ¶ 85. McLaren asked Komorek why he had not been compensated for the fees to which he was entitled under their agreement. Id. ¶¶ 86–88. On the following evening, February 25, Komorek resigned his position with Con ict. Id. ¶ 92. In his resignation email, Komorek stated that he would “continue to abide by our agreement of non-disclosure of con dential information belonging to Con ict.” Id. ¶ 93. Prior to leaving, on February 23, Komorek had led articles of incorporation in Ohio for API International. Id. ¶ 94. e complaint also alleges that Komorek made Jacobson is the plainti in another case before the undersigned against Con ict, McLaren, and a John Doe defendant. See generally Jacobson v. Con ict Int’l, Inc., No. 22 Civ. 10177 (ER) (S.D.N.Y.). 2 3 unauthorized copies of Con ict’s con dential and proprietary information. Id. ¶¶ 103– 04. After he resigned, Komorek began soliciting Con ict clients and persuaded some— including Jacobson—to end their relationship with Con ict and retain Komorek instead. Id. ¶¶ 108–10. And Komorek continues to use the con dential information he improperly retained to solicit Con ict clients. Id. ¶¶ 111–12. Following Komorek’s departure, Con ict began conducting a review of the representations he had made. Id. ¶ 118. is investigation uncovered “a web of lies, misstatements, omissions, misrepresentations, and innuendo that Komorek made to Con ict and its employees.” Id. ¶ 119. According to the complaint, Komorek misrepresented several details about his employment history, quali cations, and credentials. Id. ¶¶ 120–36. Komorek also failed to disclose that he had been sued for violations of the Stored Communications Act and the Federal Wiretap Act. Id. ¶¶ 137– 40. Con ict alleges that it would not have hired Komorek had it known the truth about his employment history and experience. Id. ¶ 144. C. Post-Employment Incidents Several of Con ict’s claims arise from other events that occurred after Komorek resigned from the company in February 2022. Florida Division Complaint In April 2022, Komorek led an anonymous complaint against Con ict with the Florida Division of Licensing, which is the state’s licensing authority. Id. ¶¶ 244, 246. Komorek asserted that Con ict had attended a professional soccer conference in Miami even though the company was not licensed in Florida. Id. ¶¶ 238, 244. Con ict UK provides security services to European soccer clubs, so the conference presented a networking opportunity. Id. ¶¶ 236–39. After investigation, the Florida Division dismissed the complaint. Id. ¶ 247. Con ict alleges that Komorek led the complaint “to harass and injure Con ict and to manufacture evidence for his later led lawsuit.” Id. ¶ 249. 4 The World Association of Detectives Two months later, in June 2022, several Con ict UK employees led an ethics complaint against Komorek with the World Association of Detectives, Inc. (WAD). Id. ¶¶ 149–53. e WAD is a nonpro t group composed of private investigators and security professionals. Id. ¶ 145. e group polices its own members through internal disciplinary procedures. Id. ¶ 146. Komorek, LaCorte, and Fawcett are all members of the WAD. Id. ¶¶ 148–50. e complaint against Komorek alleged six broad areas of potential ethical violations. Id. ¶ 155. e Con ict UK employees who led the complaint have not disclosed any of the accompanying documents or the ultimate decision to any third party. Id. ¶ 157. Komorek, however, disclosed the nature of the complaint in this Court and in Law Enforcement Today, a blog. Id. ¶ 158. In its submissions to the WAD board, moreover, Con ict redacted names and information concerning clients and investigations. Id. ¶ 159. But Komorek’s responses were not fully redacted, and he included the names of Con ict clients in his submissions. Id. ¶ 161. After the WAD complaint was led, Komorek sent several text messages and emails intended to damage Con ict’s relationships with employees, clients, and other associates. Id. ¶¶ 211–12. In December 2022, for instance, Komorek sent “Client #1” a link to a Law Enforcement Today story—discussed in more detail below—that accused Con ict of “bilking a client through bogus billing.” Id. ¶¶ 217–19. Komorek also sent anonymous emails to certain WAD board members, many of whom are professional associates of Con ict. Id. ¶¶ 225, 231. ese messages accused LaCorte of corruption and suggested that there was corruption within the WAD. Id. ¶¶ 226–28. Con ict alleges that these emails were intended to harm Con ict’s business relationships with the recipients. Id. ¶¶ 230–35. 5 Law Enforcement Today In December 2022, the Law Enforcement Today blog published a story about Con ict. Id. ¶ 171. 3 e blog is managed by Kyle Reyes, a friend of Komorek’s. Id. ¶ 164. Komorek had persuaded Con ict’s senior management to retain Reyes for marketing services. Id. ¶ 165. From 2019 to 2021, several positive stories about Con ict were featured on the blog. Id. ¶¶ 168–69. Once Komorek left Con ict, however, the blog began posting stories about Con ict that were false and misleading. Id. ¶ 170. One of those stories was authored by “Sgt. A. Merica,” which the complaint alleges is a pseudonym used by Komorek. Doc. 2-2; see also Doc. 2 ¶¶ 171–73, 221. e story disclosed speci c details from client investigations and included facts known only to Con ict and Komorek. Doc. 2 ¶¶ 174, 176. Con ict further alleges that Komorek manufactured a false statement in a New York state court defamation action against Law Enforcement Today and Reyes. Id. ¶ 181. 4 at action was led by Trevor Shapiro, who was the subject of Jacobson’s investigation. Id. ¶¶ 181–84. In January 2023, Law Enforcement Today led a motion to dismiss the complaint and attached a purported communication, signed by Komorek, from Con ict to Law Enforcement Today. Id. ¶¶ 190–91. In the communication, Komorek falsely stated that a Con ict employee provided con dential information to Law Enforcement Today, with LaCorte’s knowledge. Id. ¶ 192; see Doc. 2-4. Con ict searched its business records and did not nd anything resembling this communication. Doc. 2 ¶¶ 193–94. Con ict denies that it provided any con dential information to Law Enforcement Today. Id. ¶ 201. e complaint alleges that Komorek manufactured this statement for the bene t of his friends at Law Enforcement Today and to damage Con ict’s relationships with its clients. Id. ¶¶ 208–09. 3 e story is attached to the complaint as Doc. 2-2. 4 e statement is attached to the complaint as Doc. 2-4. 6 In February 2023, after the publication of the Law Enforcement Today article, Con ict learned that a complaint against the company had been led with “the New York licensing authority.” Id. ¶¶ 250–52. Con ict alleges that Komorek—or Jacobson, acting on his behalf— led the complaint in order to harass Con ict and manufacture evidence for Jacobson’s case. Id. ¶¶ 254–55. D. Procedural History Con ict and Con ict UK (Plainti s) led this lawsuit on March 14, 2023, alleging various contract and tort claims against Komorek and API International. Doc. 2 ¶¶ 256–357. Plainti s sought damages and injunctive relief. Id. at 45–47. ey also requested a temporary restraining order and preliminary injunction to enjoin Defendants from violating the nondisclosure agreement and disclosing any con dential information. Doc. 6. e Court denied that request at a hearing on March 15, 2023. On April 24, Plainti s led proof of service as to API International. Doc. 18. Plainti s led proof of service as to Komorek on June 26. Doc. 26. Defendants have moved to dismiss. Doc. 27. ey argue that the complaint should be dismissed as to all defendants for lack of standing under Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule 12(b)(6). Id. ey also assert that the claims against Komorek should be dismissed for defective service. Id. II. LEGAL STANDARD A. Rule 12(b)(1) A court must dismiss the case for lack of subject matter jurisdiction if it “lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing Fed. R. Civ. P. 12(b)(1)). e party asserting subject matter jurisdiction bears the burden of establishing that jurisdiction exists by a preponderance of the evidence. Morrison v. Nat’l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). e court accepts all material factual allegations in the complaint as true, 7 id., but it does not presume the truthfulness of the complaint’s jurisdictional allegations, Frisone v. Pepsico, Inc., 369 F. Supp. 2d 464, 469–70 (S.D.N.Y. 2005). When a party moves to dismiss pursuant to Rules 12(b)(1) and 12(b)(6), a court must consider the Rule 12(b)(1) motion rst. Baldessarre v. Monroe-Woodbury Cent. Sch. Dist., 820 F. Supp. 2d 490, 499 (S.D.N.Y. 2011). at is because “disposition of a Rule 12(b)(6) motion is a decision on the merits, and therefore, an exercise of jurisdiction.” Chambers v. Wright, No. 05 Civ. 9915 (WHP), 2007 WL 4462181, at *2 (S.D.N.Y. Dec. 19, 2007) (citation omitted). B. Rule 12(b)(6) In considering a motion to dismiss pursuant to Rule 12(b)(6), a court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plainti ’s favor. Koch, 699 F.3d at 145. But “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not su ce.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). e purpose of Rule 12(b)(6) “is to test, in a streamlined fashion, the formal su ciency of the plainti ’s statement of a claim for relief without resolving a contest regarding its substantive merits.” Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (citation omitted). “To survive a motion to dismiss, a complaint must contain su cient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plainti pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. is standard “is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). To state a plausible claim, the plainti must “‘raise a reasonable expectation that discovery will reveal evidence’ of the wrongdoing alleged, ‘even if it strikes a savvy judge that actual proof of those facts is improbable.’” Citizens United v. Schneiderman, 8 882 F.3d 374, 380 (2d Cir. 2018) (quoting Twombly, 550 U.S. at 556). If the plainti has not “nudged [the] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570. III. DISCUSSION Plainti s bring claims against Komorek for breach of contract, abuse of process, tortious interference with contract, tortious interference with prospective economic advantage, unfair competition, breach of duciary duty, and unjust enrichment. Doc. 2 ¶¶ 256–357. e claims for tortious interference with contract and unfair competition are also alleged against API International. Id. ¶¶ 298–305, 334–43. Defendants challenge the su ciency of each claim on various grounds. 5 A. Failure to Serve Komorek As an initial matter, Defendants argue that the claims against Komorek should be dismissed because he was not timely served. Doc. 28 at 19. “Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satis ed.” Sikhs for Justice v. Nath, 850 F. Supp. 2d 435, 439–40 (S.D.N.Y. 2012) (quoting Dynegy Mistream Servs. v. Trammochem, 451 F.3d 89, 94 (2d Cir. 2006)). Rule 4(m) requires that service of the complaint and summons be completed within ninety days after the complaint is led. Fed. R. Civ. P. 4(m). If a defendant is not served within ninety days, the court “must dismiss the action without prejudice against that defendant or order that service be made within a speci ed time.” Id. But the court must extend the time for service if the plainti shows “good cause” for the failure. Id. is case was led on March 14, 2023, Doc. 2, so the deadline for service was June 12, 2023. Plainti s timely served API International on April 11, 2023. Doc. 18. But they did not serve Komorek until June 22, 2023. Doc. 26. Komorek thus was not timely served. 5 e parties agree that New York law applies to each claim. 9 Plainti s contend that they have shown good cause to extend the service deadline. Doc. 31 at 24. But they fail to provide any details as to what “reasonable e orts” they made to serve Komorek. See Gong v. Sarno , No. 23 Civ. 00343 (LJL), 2023 WL 8096970, at *2 (S.D.N.Y. Nov. 21, 2023) (“Good cause is measured against the plainti ’s reasonable e orts to e ect service and the prejudice to the defendant from the delay, and the court should look to whether the plainti was diligent in making reasonable e orts to e ect service.” (quoting George v. Professional Disposables Int’l Inc., 221 F. Supp. 3d 428, 432–33 (S.D.N.Y. 2016))). Instead, Plainti s assert only that they served Komorek after “several attempts” and that they have otherwise been responsive to deadlines. Doc. 31 at 24. at is not su cient to demonstrate good cause. See, e.g., Kogan v. Facebook, Inc., 334 F.R.D. 393, 401 (S.D.N.Y. 2020) (“Good cause to excuse a failure to e ect service exists only in exceptional circumstances where the plainti ’s failure to serve process in a timely manner was the result of circumstances beyond its control.” (internal quotation marks and citation omitted)); Ping Chen ex rel. United States v. EMSL Analytical, Inc., 966 F. Supp. 2d 282, 306 (S.D.N.Y. 2013) (“An attorney’s inadvertence, neglect, mistake or misplaced reliance does not constitute good cause.” (citation omitted)). Even in the absence of good cause, however, a district court has discretion to grant an extension under Rule 4(m). Buon v. Spindler, 65 F.4th 64, 75 (2d Cir. 2023). In determining whether a discretionary extension is warranted, “a court considers the following four factors: (1) whether any applicable statutes of limitations would bar the action once re led; (2) whether the defendant had actual notice of the claims asserted in the complaint; (3) whether [the] defendant attempted to conceal the defect in service; and (4) whether [the] defendant would be prejudiced by extending plainti ’s time for service.” Agapov v. UBIF Franchising Co., No. 23 Civ. 02178 (PMH), 2024 WL 1018453, at *5 (S.D.N.Y. Mar. 8, 2024) (alterations in original) (quoting DeLuca v. AccessIT Grp., Inc., 695 F. Supp. 2d 54, 66 (S.D.N.Y. 2010)). 10 First, the parties do not address the applicable statutes of limitations. But even if the statutes of limitations would not bar re ling, the Court concludes that “it would be judicially uneconomical to force that procedure at this point where extension can be granted.” Feingold v. Hankin, 269 F. Supp. 2d 268, 277 (S.D.N.Y. 2003). Second, it is clear that Komorek had actual notice of the claims asserted. On March 15, 2023, the day after the complaint was led, counsel appeared on behalf of both Defendants at a preliminary injunction hearing. On May 2, the parties submitted a stipulation extending the deadline for both Defendants to respond to the complaint. Doc. 20. On May 17, both Defendants requested a premotion conference in contemplation of a motion to dismiss. Doc. 21. And both Defendants moved to dismiss on July 11. Doc. 27. Komorek plainly was on notice of the claims asserted against him. Accordingly, this factor weighs in favor of an extension. See, e.g., Agapov, 2024 WL 1018453, at *5 ( nding “no question” that defendant received notice of the action and had su cient notice to engage in motion practice, which weighed in favor of extension); Patel v. Singh, No. 21 Civ. 00759 (HG) (LGD), 2023 WL 2262792, at *5 (E.D.N.Y. Feb. 28, 2023) (concluding that extension was appropriate where defendants had notice of the lawsuit and had “participated extensively in the case”). ird, there is no indication that Komorek attempted to conceal the defect in service. In fact, Defendants noted in their premotion letter that Komorek had not been served. Doc. 21 at 4 n.2. But this factor “is not dispositive.” Blanco v. Success Academy Charter Schs., Inc., No. 23 Civ. 01652 (LJL), 2024 WL 965001, at *7 (S.D.N.Y. Mar. 6, 2024); see also, e.g., Jordan v. Forfeiture Support Assocs., 928 F. Supp. 2d 588, 599 (E.D.N.Y. 2013) (“[T]his factor alone does not o set the numerous reasons that support granting plainti additional time to correct service of process.”). Fourth, the Court nds that Komorek would not be prejudiced by extending the time for service. Komorek was aware of the lawsuit and fully briefed the motion to dismiss the claims asserted against him. See Buon, 65 F.4th at 76 (“[O]n the issue of any 11 prejudice to [defendants], we emphasize that there is no question that they had su cient notice here, as they . . . successfully moved to dismiss the [complaint].”); Blanco, 2024 WL 965001, at *7 ( nding no prejudice “at this early stage of the litigation” given that motion to dismiss had been fully briefed on behalf of all defendants). And only ten days elapsed between the deadline for service and the date on which Plainti s served Komorek, which further indicates that an extension is appropriate. See John v. City of Bridgeport, 309 F.R.D. 149, 156 (D. Conn. 2015) (concluding that defendants su ered only “slight” prejudice, if any, from forty-nine-day delay); see also Klinker v. Furdiga, No. 12 Civ. 254, 2013 WL 1705106, at *4 n.5 (D. Vt. Apr. 19, 2013) (noting another court’s conclusion that delay was insu cient to show prejudice because “the case was only [a] couple months older than it would have been if [Plainti ] hadn’t been given this extension” (alterations in original) (internal quotation marks and citation omitted)). In sum, given the strength of the second and fourth factors, the Court concludes that a discretionary extension of the service deadline is warranted. See John, 309 F.R.D. at 156 (extending deadline where two factors weighed in favor of each party); Bernstein v. Vill. of Piermont, No. 11 Civ. 3677 (ER), 2012 WL 6625231, at *5 (S.D.N.Y. Dec. 20, 2012) (granting discretionary extension and noting “the general preference for deciding cases on the merits”). Defendants’ motion to dismiss the claims against Komorek for improper service is denied. B. Breach of Contract Plainti s allege that Komorek breached his nondisclosure agreement by disclosing con dential information to third parties. Doc. 2 ¶¶ 256–76. Defendants seek to dismiss this claim on several grounds. Standing At the outset, Defendants argue that the breach of contract claim should be dismissed for lack of standing. Doc. 28 at 3. Because the nondisclosure agreement was 12 signed by Komorek and Con ict UK, Defendants reason, Con ict does not have standing to assert breach of contract claims for violation of the agreement. Id. at 4. 6 Plainti s concede that a parent corporation and its subsidiary are generally treated as legally distinct entities. Doc. 31 at 8. But they argue that Con ict still has standing because it was bound by the terms of the nondisclosure agreement. Id. at 8–9. In New York, “a third party may enforce a contract when ‘recognition of a right to performance in the bene ciary is appropriate to e ectuate the intention of the parties and . . . the circumstances indicate that the promisee intends to give the bene ciary the bene t of the promised performance.’” Bayerische Landesbank, N.Y. Branch v. Aladdin Cap. Mgmt. LLC, 692 F.3d 42, 52 (2d Cir. 2012) (omission in original) (quoting Levin v. Tiber Holding Corp., 277 F.3d 243, 248 (2d Cir. 2002)). e bene t to the third party must be “su ciently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [the third party] if the bene t [was] lost.” Id. (alterations in original) (quoting Madeira v. A ordable Housing Found., Inc., 469 F.3d 219, 251 (2d Cir. 2006)). e analysis focuses on “whether the parties intended to bene t the third party.” Id. In making that determination, a court “should consider the circumstances surrounding the transaction as well as the actual language of the contract.” Id. (quoting Subaru Distribs. Corp. v. Subaru of Am., Inc., 425 F.3d 119, 124 (2d Cir. 2005)). Defendants raise this argument under Rule 12(b)(1), and Plainti s do not question that approach. It is not clear that Rule 12(b)(1) is the proper vehicle for this challenge. See, e.g., Toretto v. Donnelley Fin. Solutions, Inc., 523 F. Supp. 3d 464, 476 (S.D.N.Y. 2021) (“[B]y challenging the su ciency of the allegations to plead a cause of action for breach of contract in the context of a Rule 12(b)(1) challenge to Plainti s’ standing, Defendants again tempt the Court to con ate a merits inquiry with standing.”); Bu alo Xerographix, Inc. v. Hartford Ins. Grp., 540 F. Supp. 3d 382, 390 (W.D.N.Y. 2021) (“Although a motion under Rule 12(b)(1) is the proper mechanism to challenge Article III standing, the Second Circuit has made clear that a challenge to contractual standing—a party’s right to relief for breach of contract—implicates the merits of the claim rather than a court’s subject-matter jurisdiction.” (citing SM Kids, LLC v. Google LLC, 963 F.3d 206, 210–12 (2d Cir. 2020))). In any event, Defendants’ argument fails regardless of whether Rule 12(b)(1) or Rule 12(b)(6) applies. 6 13 Here, both the language of the contract and the surrounding circumstances indicate that Con ict was a third-party bene ciary of the nondisclosure agreement. In particular, the agreement included a provision stating that “[t]he undertakings set forth herein shall also be binding upon any a liates, subsidiaries or successors of the Parties.” Doc. 2-1 ¶ 12. ere is no dispute that Con ict is a subsidiary of Con ict UK. Doc. 2 ¶ 8. Defendants suggest that this language is insu cient because it merely binds Con ict rather than conferring a bene t. Doc. 28 at 4. But the provision demonstrates that this is not a case where “the two parties to the contract intended the contract to concern and to bene t only themselves.” Subaru Distribs., 425 F.3d at 125. And while the agreement does not refer to Con ict by name, “it is well-settled that the obligation to perform to the third party bene ciary need not be expressly stated in the contract.” Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 573 (2d Cir. 1991). Viewing the circumstances surrounding the transaction as a whole, moreover, the Court concludes that Con ict was an intended bene ciary. According to the complaint, Komorek signed the agreement “[a]s part of the employment process” after he was hired by Con ict as an o cer. Doc. 2 ¶¶ 25–26. e complaint also alleges that Con ict’s business relies on con dentiality and that the agreement “was reasonably necessary to protect Con ict’s business in the investigative services industry.” Id. ¶¶ 27–28. Against this backdrop, it is di cult to accept Komorek’s theory that the nondisclosure agreement required him to keep information he received from Con ict UK con dential, while leaving him free to disseminate any and all information he received from Con ict. e Court nds it improbable that Con ict UK intended such a result—or that Komorek thought he was so unconstrained when he signed the agreement. Instead, the circumstances surrounding the agreement suggest that Con ict was an intended bene ciary. See Bayerische, 692 F.3d at 56 (allegations about circumstances under which agreement was signed plausibly indicated that third party was intended bene ciary); see also Bild v. Konig, No. 09 Civ. 5576 (ARR) (VVP), 2012 WL 13109964, at *16 14 (E.D.N.Y. Dec. 20, 2012) ( nding at summary judgment stage that reasonable juror could conclude that “the contracting parties manifested their intent in such a way that the third party was likely to reasonably rely on the contract” (citation omitted)). And that conclusion is strengthened by Komorek’s statement in his resignation email that “I will continue to abide by our agreement of non-disclosure of con dential information belonging to Con ict.” Doc. 2 ¶ 93 (emphasis added). Based on the facts alleged, the Court nds that the parties to the nondisclosure agreement intended to make Con ict a bene ciary of Komorek’s promise to maintain con dentiality in the course of his employment. Con ict thus has standing to bring the breach of contract claim. Enforceability Next, Defendants argue that the breach of contract claim should be dismissed because the nondisclosure agreement is unenforceable. Doc. 28 at 4. Defendants point to the broad de nition of “con dential information,” which includes categories such as “technical plans,” “business strategies,” “trade secrets,” and “know-how.” Id. at 5. ey also assert that the con dentiality restrictions “last inde nitely.” Id. Con dentiality agreements are enforceable “to the extent that they are reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.” Denson v. Donald J. Trump for President, Inc., 530 F. Supp. 3d 412, 432 (S.D.N.Y. 2021) (internal quotation marks and citation omitted). New York courts recognize “the legitimate interest an employer has in safeguarding that which has made his business successful and to protect himself against deliberate surreptitious commercial piracy.” Reed, Roberts Assoc. v. Strauman, 353 N.E.2d 590, 593 (N.Y. 1976). As a result, “restrictive covenants will be enforceable to the extent necessary to prevent the disclosure or use of trade secrets or con dential customer information.” Id. But “[i]mpenetrable vagueness and uncertainty will not do[] because de niteness as to material matters is of the very essence 15 in contract law.” Denson, 530 F. Supp. 3d at 432 ( rst alteration in original) (internal quotation marks and citation omitted). Defendants rely heavily on Denson, but that case is not analogous. Doc. 28 at 4– 6. ere, a former employee of the Trump campaign challenged a nondisclosure agreement that she had been required to sign. Denson, 530 F. Supp. 3d at 417. e court rst noted that the nondisclosure provision had no time limitation. Id. at 432. In addition, the court found that the “vague, overbroad, and unde ned terms” of the agreement made it impossible for employees to know whether certain speech would be covered. Id. at 433–34. Because of the breadth of the agreement, the court concluded, “the mutual assent that is required for an enforceable contract under New York law is not present.” Id. at 434. e agreement in this case, by contrast, provides clearer guidance on what kind of information may not be disclosed. Speci cally, the agreement de nes “con dential information” as “all and any information, received by one Party (‘Recipient’) from the other (‘Discloser’) and designated by the Discloser as being proprietary in nature.” Doc. 2-1 ¶ 7. e same provision reiterates that con dential information includes materials “provided by one Party to the other and identi ed by the Discloser as con dential at the time of disclosure.” Id. is language ensures that the recipient has notice of what information the other party has identi ed as con dential. e uncertainty that characterized the agreement in Denson thus is not present here. See 530 F. Supp. 3d at 433–34; cf. L.I. City Ventures v. Urb. Compass, Inc., No. 18 Civ. 5853 (PGG), 2019 WL 234030, at *14 (S.D.N.Y. Jan. 16, 2019) ( nding that agreement was overbroad where it prohibited disclosure of any information regardless of whether it was proprietary and con dential). Nor is the nondisclosure agreement unenforceable based on its duration. e agreement provides that it shall be in e ect “till such time as the substance of the Con dential Information has entered the public domain . . . or till the permission to 16 release or issue press-releases in respect of such Con dential Information is speci cally granted in writing by the Discloser.” Doc. 2-1 ¶ 12. Defendants contend that the lack of a time limitation renders the agreement unenforceable. Doc. 28 at 5. e argument is not persuasive. As other courts have explained, “the mere fact that . . . con dentiality agreements [are] not limited in duration does not necessarily make them ipso facto unenforceable.” Schi v. ZM Equity Partners, LLC, No. 19 Civ. 4735 (WHP), 2020 WL 5077712, at *14 (S.D.N.Y. Aug. 27, 2020) (alteration and omission in original) (quoting Ashland Mgmt. Inc. v. Altair Invs. NA, LLC, 869 N.Y.S.2d 465, 471 (App. Div. 2008), a ’d as modi ed, 925 N.E.2d 581 (N.Y. 2010)); cf. Karpinski v. Ingrasci, 268 N.E.2d 751, 753 (N.Y. 1971) (holding that restrictive covenant may not be invalidated merely because “it is unlimited as to time”). “Protecting trade secrets and truly con dential information . . . does not have to be time limited in every instance where the covenant does not otherwise prevent a former employee from pursuing his or her livelihood or interfere with competition.” Ashland, 869 N.Y.S.2d at 471. Instead, the reasonableness of the duration “depends on the circumstances.” Id. at 472. 7 Here, the nondisclosure agreement was intended to safeguard con dential information concerning Con ict’s clients. Doc. 2 ¶¶ 26–28. Courts have recognized that protecting con dential information is a legitimate business interest. See, e.g., Adecco USA Inc. v. Sta works, Inc., No. 20 Civ. 744 (MAD) (TWD), 2021 WL 66563, at *3 (N.D.N.Y. Jan. 7, 2021) (citing Am. Inst. of Chem. Eng’rs v. Reber-Friel Co., 682 F.2d 382, 387 (2d Cir. 1982)). e duration of the agreement—maintaining con dentiality until the information entered the public domain or the discloser granted permission to Defendants cast some doubt on the extent to which the Appellate Division’s decision in Ashland remains good law following its modi cation by the Court of Appeals. Doc. 34 at 4. e Court of Appeals dismissed in part other causes of action—in addition to those dismissed by the lower courts—because the con dentiality agreements at issue did not prohibit the defendants from soliciting the plainti ’s clients. Ashland, 925 N.E.2d at 581. But the high court’s decision did not turn on whether the agreements included time limitations, as Defendants seem to concede, see Doc. 34 at 4 (asserting that the Ashland test, as stated in Denson, “ rst queries whether the agreement is reasonable in time and area” (internal quotation marks and citation omitted)). 7 17 release it—is a reasonable means of furthering that interest. And there is no reason to think that Komorek was unable to pursue his livelihood based on the restriction; he was merely required to keep certain information con dential. See Ashland, 869 N.Y.S.2d at 472 & n.2 (holding that con dentiality agreements were not unreasonable where they “merely attempt to prevent defendants from unfairly using plainti ’s trade secrets” and did not “perpetually restrict defendants from working for someone else or in a similar business”). Plainti s have plausibly alleged that the nondisclosure agreement is enforceable. Applicability Finally, Defendants challenge the breach of contract claim on the basis that the nondisclosure agreement is “factually inapplicable.” Doc. 28 at 6. e agreement is limited to the “pre-employment setting,” they argue, because it states that “both parties are interested in meeting to consider possible collaboration.” Id.; see Doc. 2-1 ¶ 1. According to Defendants, the complaint does not allege that Komorek violated the nondisclosure agreement in the pre-employment context, so the breach of contract claim must be dismissed. Doc. 28 at 7–8. As a preliminary matter, this argument is somewhat at odds with Defendants’ position that the duration of the agreement is unreasonably broad. But even setting that aside, the Court nds that the terms of the nondisclosure agreement are clear. e agreement states that “both parties are interested in meeting to consider possible collaboration” and that “all information . . . that is supplied in the course or as a result of so meeting shall be treated as con dential by the receiving party.” Doc. 2-1 ¶ 1. e agreement also provides that it “shall be in full force and e ect until agreed otherwise by [Con ict UK]” and “shall continue to be binding” until the con dential information either enters the public domain or is approved for release by the discloser. Id. ¶ 12. Based on this language, the Court nds it implausible that the parties intended for the agreement to apply only in the pre-employment context. Instead, the terms of the agreement indicate 18 that the con dentiality restrictions took e ect when the agreement was signed and remained in place until the con dential information was disclosed. Even if the agreement were ambiguous, moreover, the Court could look to Komorek’s resignation email to con rm his understanding that the agreement was not limited to the pre-employment context. See Doc. 2 ¶ 93 (Komorek’s resignation email stated that he would “continue to abide by our agreement of non-disclosure of con dential information belonging to Con ict”). See generally, e.g., Donohue v. Cuomo, 184 N.E.3d 860, 866 (N.Y. 2022) (explaining that extrinsic or parol evidence is admissible if court nds ambiguity in contract). While Defendants rely on contra proferentem—the principle that ambiguities in a contract are resolved against the drafter—that doctrine “may only be applied as a last resort, if the extrinsic evidence is inconclusive.” Perella Weinberg Partners LLC v. Kramer, 58 N.Y.S.3d 384, 389 (App. Div. 2017); see also Albany Sav. Bank, FSB v. Halpin, 117 F.3d 669, 674 (2d Cir. 1997) (explaining that New York courts apply the doctrine “only as a matter of last resort after all aids to construction have been employed without a satisfactory result” (citation omitted)). Because Komorek’s email makes clear that he understood his con dentiality obligations to be ongoing, the Court need not resort to the doctrine of contra proferentem. 8 At this stage, the complaint plausibly alleges a breach of contract claim for violations of the nondisclosure agreement. With respect to that claim, Defendants’ motion to dismiss is denied. C. Abuse of Process Plainti s also bring an abuse of process claim against Komorek. Doc. 2 ¶¶ 344– 57. e complaint invokes the following proceedings: (1) Jacobson’s lawsuit against Defendants suggest that Komorek could not have “expand[ed] the scope” of the agreement in his resignation email because he received no bene t in return. Doc. 34 at 7–8. at argument misses the point, which is that the email illustrates the parties’ understanding of the agreement—not that the email changed the terms of the agreement. 8 19 Con ict in this District; (2) Komorek and API International’s lawsuit against Con ict in this District; (3) Komorek’s complaint against Con ict with the Florida Division of Licensing; (4) Komorek’s complaint against Con ict with the North Carolina Protective Services Board; and (5) Komorek’s complaint “with the State of New York” alleging unknown violations. Id. ¶¶ 345–49. Plainti s assert that Komorek used these complaints “for the purpose of tying up Plainti s’ assets and time” and to “manufacture evidence” to harm Plainti s’ business relationships. Id. ¶¶ 351–52. To state a claim for abuse of process, “a plainti must allege that the defendant “(1) employ[ed] regularly issued legal process to compel performance or forbearance of some act, (2) with intent to do harm without excuse o[r] justi cation, and (3) in order to obtain a collateral objective that is outside the legitimate ends of process.” Gilman v. Marsh & McLennan Cos., 868 F. Supp. 2d 118, 131 (S.D.N.Y. 2012) (alterations in original) (quoting Savino v. City of New York, 331 F.3d 63, 70 (2d Cir. 2003)). Plainti s have failed to meet the pleading requirements for an abuse of process claim. In New York, “the mere ‘institution of a civil action by summons and complaint is not legally considered process capable of being abused.’” Manhattan Enterprise Grp. LLC v. Higgins, 816 F. App’x 512, 514 (2d Cir. 2020) (quoting Curiano v. Suozzi, 469 N.E.2d 1324, 1326 (N.Y. 1984)). Put di erently, “the commencement of a civil action cannot, by itself, support a plainti ’s claim for abuse of process, even when the civil action was ‘intended to cause the plainti [] expense and to burden [him] with the defense of a protracted legal proceeding.’” Id. (alterations in original) (quoting Curiano, 469 N.E.2d at 1326); see also PSI Metals, Inc. v. Firemen’s Ins. Co. of Newark, 839 F.2d 42, 43 (2d Cir. 1988) ( nding that “there could be no abuse of process claim where the only process employed by the defendant was the ling of an answer and counterclaim”). e allegations that Defendants led these complaints to deplete Plainti s’ resources and interfere with their business relationships, Doc. 2 ¶¶ 351–52, are thus insu cient to state a claim for abuse of process. 20 Plainti s’ arguments to the contrary lack merit. For one, they assert that Defendants have initiated “a wake of litigation, complaints, and lings . . . with the intent to harm Plainti s’ business.” Doc. 31 at 14. Again, however, these kinds of lings are not su cient to state an abuse of process claim. See, e.g., Manhattan Enterprise, 816 F. App’x at 514–15 (holding that various court lings such as appeals and objections did not qualify as legal process because they “do not require Plainti s ‘to perform or refrain from the doing of some prescribed act’ and are no more encumbering of Plainti s’ persons or property than a civil summons and complaint” (quoting Julian J. Studley, Inc. v. Lefrak, 362 N.E.2d 611, 613 (N.Y. 1977))); see also Williams v. Williams, 246 N.E.2d 333, 335 (N.Y. 1969) (rejecting abuse of process claim due to lack of “unlawful interference with one’s person or property under color of process”). Plainti s also point to Komorek’s statement in the New York state action for defamation against Law Enforcement Today. Doc. 31 at 14. e complaint alleges that Komorek manufactured a false statement—submitted in connection with a motion to dismiss that case—for the bene t of his friends at Law Enforcement Today and to damage Con ict’s reputation. Doc. 2 ¶ 208. But Plainti s fail to elaborate on how the ling of a false statement in a case to which neither Plainti s nor Defendants are parties constitutes abuse of process. Defendants’ motion to dismiss the abuse of process claim is granted. D. Tortious Interference with Contract Count Four of the complaint alleges tortious interference with contract against Komorek and API International. Plainti s assert that Komorek attempted to induce Con ict customers—including Jacobson—to repudiate their business relationships with Con ict and retain Komorek instead. Doc. 2 ¶¶ 301–02; see also id. ¶¶ 108–10. To state a claim for tortious interference with contract, a plainti must allege “(1) the existence of a valid contract between the plainti and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional procurement of the 21 third-party’s breach of the contract without justi cation; (4) actual breach of the contract; and (5) damages resulting therefrom.” Regeneron Pharms., Inc. v. Novartis Pharma AG, --- F.4th ---, No. 22 Civ. 0427, 2024 WL 1145340, at *11 (2d Cir. Mar. 18, 2024) (internal quotation marks and citation omitted). e plainti must also allege that “the contract would not have been breached but for the defendant’s conduct.” Id. (quoting Rich v. Fox News Network, LLC, 939 F.3d 112, 126–27 (2d Cir. 2019)). e dispute here focuses on the fourth element: an actual breach of the contract. In New York, a contract that is terminable at will “cannot be the basis for a tortious interference with contract claim because there can be no breach of contract, a necessary element for tortious interference with contract, when the contract may be terminated at will.” Tatintsian v. Vorotyntsev, No. 16 Civ. 7203 (GHW), 2019 WL 1746004, at *3 (S.D.N.Y. Apr. 18, 2019) (internal quotation marks and citation omitted). In this case, Defendants argue, the tortious interference with contract claim is based on Con ict’s relationship with Jacobson—who was not required to use Con ict’s services and was free to terminate the relationship at will. Doc. 28 at 12. Plainti s respond that the alleged tortious interference concerns past services rendered and amounts owed. Doc. 31 at 15–16. In particular, the complaint asserts that Komorek encouraged Jacobson not to pay fees she owed Con ict pursuant to her contract. Doc. 2 ¶ 76. According to Plainti s, Jacobson had continuing obligations to pay those fees, and Komorek interfered with those obligations. Doc. 31 at 16. Plainti s have not adequately alleged tortious interference with contract. As other courts have explained, “it is insu cient, for purposes of stating a viable claim for tortious interference with contract, to allege in conclusory terms that a contract existed and was breached.” A.V.E.L.A., Inc. v. Est. of Marilyn Monroe, LLC, No. 12 Civ. 4828 (KPF), 2018 WL 1273343, at *11 (S.D.N.Y. Mar. 5, 2018) (collecting cases); see also, e.g., Valley Lane Indus. Co. v. Victoria’s Secret Direct Brand Mgmt., L.L.C., 455 F. App’x 102, 104 (2d Cir. 2012) (“Without providing additional factual allegations regarding, inter 22 alia, the formation of the contract, the date it took place, and the contract’s major terms, the proposed amended complaint similarly fails to su ciently plead the existence of a contract.”). Instead, the plainti must “plead the terms of the alleged underlying contract . . . and any speci c breach thereof.” Bennett v. State Farm Fire & Cas. Co., 26 N.Y.S.3d 554, 555 (App. Div. 2016); see also, e.g., Corning Inc. v. Shenzhen Xinhao Photoelectric Tech. Co., 546 F. Supp. 3d 204, 211 (W.D.N.Y. 2021) (“It is not enough to describe the contract in general terms . . . .”). e complaint falls short of that standard. Plainti s allege that Jacobson retained Con ict to conduct surveillance in March 2021 and that she has paid the company “most, but not all,” of the fees due under the agreement. Doc. 2 ¶ 68–69. e complaint also asserts that “Jacobson still owes monies payable to Con ict for services rendered and is in breach of her agreement with Con ict.” Id. ¶ 75. But the complaint fails to provide any factual allegations concerning the speci c terms of the agreement that Komorek caused Jacobson to breach. See, e.g., Alvarado v. Mount Pleasant Cottage Sch. Dist., 404 F. Supp. 3d 763, 791 (S.D.N.Y. 2019) (dismissing tortious interference claim where plainti failed to plead “the terms of the contract that Defendants caused a third party to breach”); Berman v. Sugo LLC, 580 F. Supp. 2d 191, 208 (S.D.N.Y. 2008) (dismissing tortious interference claim because the complaint provided “no facts to allege what kind of contract [the parties had], whether it was nonexclusive, and whether it was valid”). Nor does the complaint o er any details about the contracts between Con ict and other customers that Komorek allegedly interfered with. Accordingly, the complaint fails to state a claim for tortious interference of contract. Defendants’ motion to dismiss that claim is granted. E. Tortious Interference with Prospective Economic Advantage Plainti s’ claim for tortious interference with prospective economic advantage fares no better. e complaint alleges that Komorek sent an email to “Client #1”—who had a longstanding business relationship with Con ict—that linked to a story accusing 23 Con ict of “bilking a client through bogus billing.” Doc. 2 ¶¶ 309, 311. Komorek emailed the same story to several WAD members—“Clients 2 through 11”—who also had business relationships with Con ict. Id. ¶¶ 323, 325. In doing so, Plainti s allege, Komorek sought to interfere with Con ict’s business relations. Id. ¶¶ 312, 326. To state a claim for tortious interference with prospective economic advantage, “a plainti must show that ‘(1) the plainti had business relations with a third party; (2) the defendant interfered with those business relations; (3) the defendant acted for a wrongful purpose or used dishonest, unfair, or improper means; and (4) the defendant’s acts injured the relationship.’” 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 261 (2d Cir. 2015) (quoting Catskill Dev., L.L.C. v. Park Place Ent. Corp., 547 F.3d 115, 132 (2d Cir. 2008)). 9 Defendants argue that the complaint fails to satisfy these requirements. Doc. 28 at 13. In their view, the complaint alleges nothing more than “a ght for business and referral sources in a competitive market for private investigations services.” Id.; see, e.g., Doc. 2 ¶ 108 (alleging that Komorek “began soliciting several of Con ict’s clients and indicated to the clients that Con ict was no longer capable of servicing these clients without Komorek”). Defendants assert that this “pursuit of economic bene t” does not give rise to a claim for tortious interference with prospective economic advantage. Doc. 28 at 13. In response, Plainti s highlight the complaint’s allegations that Komorek sent emails to Con ict’s clients and associates falsely accusing the company of fraudulent billing practices and criminal activity. Doc. 31 at 17–18; see, e.g., Doc. 2 ¶¶ 228, 311. e complaint describes this as a claim for tortious interference with prospective business advantage, Doc. 2 at 39–40, while the parties’ briefs describe it as tortious interference with prospective economic advantage, Doc. 28 at 12; Doc. 31 at 17. “Courts refer to this cause of action by a number of di erent names, including prospective economic advantage, bene cial business relations, prospective business advantage, and business or economic relations.” Henneberry v. Sumitomo Corp. of Am., 415 F. Supp. 2d 423, 465 n.23 (S.D.N.Y. 2006) (internal quotation marks and citation omitted). But regardless of the term used, “the same legal standards apply.” Id. 9 24 ey argue that those communications are actionable on their own and thus satisfy Plainti s’ burden to show “more culpable conduct.” Doc. 31 at 18. ese allegations are not su cient. As other courts applying New York law have recognized, “[p]leading the presence of false statements alone is not enough to support a claim for tortious interference.” Friedman v. Coldwater Creek, Inc., 551 F. Supp. 2d 164, 170 (S.D.N.Y. 2008); see also Boehner v. Heise, 734 F. Supp. 2d 389, 406 (S.D.N.Y. 2010) (“[N]o reasonable juror could conclude that Plainti s satisfy the elements of tortious interference with prospective economic relations merely by showing that Defendants said bad things about them.”). Instead, “the false statements must constitute an independent crime or tort, be made solely out of malice, or amount to ‘extreme and unfair’ economic pressure.” Friedman, 551 F. Supp. 2d at 170. e closest Plainti s come to satisfying this standard is alleging that the emails Komorek sent were “defamatory.” Doc. 2 ¶¶ 311, 325; see also Doc. 31 at 17 (asserting that Komorek sent “false and defamatory emails”). But conclusory allegations that a statement was defamatory are not enough to state a claim for tortious interference with prospective economic advantage. See Williams v. Citigroup, Inc., No. 08 Civ. 9208 (LAP), 2009 WL 3682536, at *10 (S.D.N.Y. Nov. 2, 2009) (dismissing tortious interference claim where plainti ’s allegation of defamation was “a bald legal conclusion, unsupported by any further allegations”), vacated in part on other grounds, 659 F.3d 208 (2d Cir. 2011). Plainti s also attempt to satisfy the “wrongful purpose” or “improper means” requirement by pointing to various allegations of Komorek’s wrongdoing in the complaint. Doc. 31 at 18. e complaint alleges, for example, that Komorek resigned without notice; deleted company data from his Con ict-issued devices; damaged o ce property; and attempted to poach employees. Id.; see, e.g., Doc. 2 ¶¶ 92–117. None of these allegations state a claim for tortious interference with economic advantage, however, because they involve conduct directed at Plainti s. e case law is clear that conduct may constitute tortious interference only if it is “directed at the third parties with 25 whom plainti sought to have the relationship.” Bradbury v. Israel, 168 N.Y.S.3d 16, 19 (App. Div. 2022); see also, e.g., Carvel Corp. v. Noonan, 818 N.E.2d 1100, 1104 (N.Y. 2004) (“As federal courts applying New York law have recognized, conduct constituting tortious interference with business relations is, by de nition, conduct directed not at the plainti itself, but at the party with which the plainti has or seeks to have a relationship.”). e allegations cited by Plainti s are unavailing because they do not show that any of Komorek’s acts were directed at Con ict’s clients. Defendants’ motion to dismiss the tortious interference with prospective economic advantage claim is granted. 10 F. Unfair Competition Count Seven of the complaint alleges unfair competition against Komorek and API International. Doc. 2 ¶¶ 334–43. Plainti s assert that Komorek has used Con ict’s con dential business information and proprietary materials to compete against Con ict. Id. ¶¶ 335–36. “Common law unfair competition is ‘a broad and exible doctrine . . . [that] is adaptable and capacious.’” Barbagallo v. Marcum LLP, 820 F. Supp. 2d 429, 446 (E.D.N.Y. 2011) (alteration and omission in original) (quoting Roy Export Co. Establishment v. Columbia Broad. Sys., Inc., 672 F.2d 1095, 1105 (2d Cir. 1982)). A claim for unfair competition “must be grounded in either deception or appropriation of the exclusive property of the plainti .” Id. (quoting H.L. Hayden Co. v. Siemens Med. Sys., Inc., 879 F.2d 1005, 1025 (2d Cir. 1989)). To state a claim, the plainti “must allege special damages by identifying actual losses and their causal relationship to the alleged tortious act.” Fullsend, Inc. v. Cannafellas, Inc., No. 22 Civ. 2515 (ENV) (ARL), 2023 Defendants raise another argument in support of their motion to dismiss this claim, asserting that the complaint is de cient because it fails to identify speci c clients with whom Komorek interfered. Doc. 28 at 13. Plainti s request leave to amend the claim if it is dismissed—but only to add the names of the anonymous clients referenced in the complaint. Doc. 31 at 18–19. Because the Court dismisses the claim on the other grounds advanced by Defendants, an amendment merely to add the clients’ names would be futile. 10 26 WL 2970458, at *5 (E.D.N.Y. Jan. 31, 2023); see also, e.g., Waste Distillation Tech., Inc. v. Blasland & Bouck Eng’rs, P.C., 523 N.Y.S.2d 875, 877 (App. Div. 1988) (“[T]he absence of su cient allegation of special damages mandates the dismissal of the plainti 's unfair competition and prima facie tort causes of action.”). “In this context, special damages refers to direct nancial loss, lost dealings, or an accounting of the pro ts caused by the anticompetitive acts at issue.” CA, Inc. v. Simple.com, Inc., 621 F. Supp. 2d 45, 54 (E.D.N.Y. 2009) (internal quotation marks and citation omitted). Defendants challenge the unfair competition claim solely on the basis that the complaint fails to allege special damages. Doc. 28 at 14. In particular, they assert that “there is no speci c identi cation of pecuniary losses or an assessment of how such a gure was calculated.” Id. Plainti s do not dispute that special damages must be alleged. Doc. 31 at 19. Instead, they contend that the complaint is su cient because it alleges that Komorek destroyed the contractual relationships between Con ict and several of its clients, thereby “causing monetary loss.” Id. (citing Doc. 2 ¶¶ 302, 304, 324, 328, 330). Plainti s also cite allegations in the complaint suggesting that Komorek received some of the fees Jacobson owed to Con ict. Id. at 20 (citing Doc. 2 ¶¶ 71–76). And they rely on allegations that Komorek made erroneous accounting entries and deleted company records before his resignation, which resulted in additional monetary losses for Plainti s. Id. (citing Doc. 2 ¶¶ 51, 100–02, 106). According to Plainti s, these allegations of “special damages in the form of pecuniary losses” su ce to state a claim for unfair competition. Id.; see also id. at 19 (“Although Plainti s do not yet know the total dollar value, they have clearly alleged an economic loss that quali es as special damages.”). e complaint has adequately alleged special damages. Plainti s allege that Komorek retained con dential information when he left Con ict—and that he used that information to successfully solicit Con ict clients. Doc. 2 ¶¶ 103–04, 108–12; see also id. ¶¶ 335–37. With all reasonable inferences drawn in Plainti s’ favor, therefore, the 27 complaint plausibly alleges that Defendants diverted business from Plainti s. See Barbagallo, 820 F. Supp. 2d at 447 (concluding that special damages were adequately pled where counterclaim alleged that plainti continued professional relationships with sixty-seven clients after leaving employment with defendant); Out of Box Promotions, LLC v. Koschitzki, 866 N.Y.S.2d 677, 681 (App. Div. 2008) ( nding that complaint stated claim for unfair competition where it alleged that defendant had diverted business from plainti and appropriated plainti ’s customers). at diversion of business is su cient, at this stage, to allege special damages. See Barbagallo, 820 F. Supp. 2d at 447 (“Simply alleging that defendant diverted plainti ’s customers and business is su cient to show special damages.”); see also CA, Inc., 621 F. Supp. 2d at 54 (explaining that “a loss of business . . . satis es the requirement for special damages”). Defendants argue that the complaint does not allege special damages with su cient speci city, but their cited authority is not persuasive. Doc. 34 at 13–14. ose cases addressed the pleading requirements for special damages in the context of claims for disparagement of goods. See Globe Cotyarn Pvt. Ltd. v. Next Creations Holdings LLC, No. 18 Civ. 04208 (ER), 2019 WL 498303, at *7 (S.D.N.Y. Feb. 8, 2019) (noting that where plainti seeks to recover for loss of customers from disparagement of goods, “the individuals who ceased to be customers, or who refused to purchase, must be named and the exact damages itemized” (quoting Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 59 (2d Cir. 2002))); Formulated Solutions, LLC v. CKD, Inc., No. 02 Civ. 6490 (DLI) (RLM), 2005 WL 2413506, at *6 (E.D.N.Y. Sept. 29, 2005) (holding that “approximated damages are insu cient to make out a cause of action in disparagement” (emphasis added)). e unfair competition claim alleged here— predicated on Komorek’s use of con dential information to solicit Con ict clients—is more analogous to cases in which courts have found that pleading diversion of business is su cient. See Barbagallo, 820 F. Supp. 2d at 447 (unfair competition claim involved allegations that third-party defendant misused con dential information to solicit clients); 28 Out of Box, 866 N.Y.S.2d at 578 (unfair competition claim was predicated on “alleged bad faith misappropriation of a commercial advantage belonging to another by exploitation of proprietary information or trade secrets” (internal quotation marks and citation omitted)). Defendants’ motion to dismiss the unfair competition claim is denied. G. Breach of Fiduciary Duty Plainti s also bring a claim against Komorek for breach of duciary duty. Doc. 2 ¶¶ 277–91. e complaint alleges that Komorek had a duciary relationship with Con ict and owed duties of honesty, care, and loyalty. Id. ¶¶ 280–81. And it alleges that Komorek breached those duties in several ways, including: (i) making false representations about his quali cations; (ii) failing to disclose to Con ict the litigation led against Komorek for wiretapping[;] (iii) misappropriating funds and assets of the corporation; (iv) engaging in self-dealing; (v) misappropriating con dential and proprietary information of Con ict; (vi) encouraging and continuing to encourage Con ict’s clients to seek services from him and/or his competing entity; (vii) encouraging and continuing to encourage Con ict’s employees to seek employment with him and/or his competing entity; [and] (viii) contacting and continuing to contact Con ict’s current clients to steer those clients away from Con ict and to Komorek and/or API [International] for services from his competing entity. Id. ¶ 285. “To state a claim for breach of duciary duty under New York law, ‘a plainti must prove the existence of a duciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant’s misconduct.’” Advanced Oxygen Therapy Inc. v. Orthoserve Inc., 572 F. Supp. 3d 26, 36 (S.D.N.Y. 2021) (citation omitted). A duciary relationship “exists between two persons when one of them is under a duty to act for or to give advice for the bene t of another upon matters within the scope of the relation.” Intellivision v. Microsoft Corp., 784 F. Supp. 2d 356, 372 (S.D.N.Y. 2011) (quoting EBC I, Inc. v. Goldman, Sachs & Co., 832 N.E.2d 26, 31 (N.Y. 2005)). 29 Defendants attack the breach of duciary duty claim on multiple grounds. ey argue that (1) Komorek was not a duciary of Con ict UK before he was hired; (2) Komorek’s failure to disclose the lawsuit against him is not the kind of conduct that gives rise to a claim for breach of duciary duty; (3) Komorek’s post-employment competition with Con ict for customers does not constitute a breach of duciary duty; and (4) Plainti s’ allegations that Komorek breached a duciary duty by misappropriating assets are duplicative of the unfair competition claim. Doc. 28 at 14–19. In their response, Plainti s fail to articulate any basis for nding that a duciary relationship existed between Komorek and Con ict before his employment began. Nor do Plainti s answer Defendants’ assertions that Komorek’s failure to disclose the lawsuit and his post-employment solicitation of Con ict customers are insu cient to show a breach of duciary duty. Plainti s also do not respond to Defendants’ argument that the allegations concerning misappropriation of assets are duplicative of the unfair competition claim, and the Court fails to see how the allegations are distinct. Cf. Delville v. Firmenich Inc., 920 F. Supp. 2d 446, 471 (S.D.N.Y. 2013) (dismissing breach of duciary duty counterclaim as duplicative to the extent it was based on alleged misappropriation). Courts have recognized that “[a] plainti ’s failure to address an issue in its opposition raised by its adversary amounts to a concession or waiver of the argument.” Cheng v. T-Mobile USA, Inc., No. 22 Civ. 3996 (PKC), 2023 WL 6385989, at *6 (S.D.N.Y. Sept. 29, 2023) (citation omitted). Accordingly, the breach of duciary duty claim is dismissed insofar as it relies on pre-employment allegations, Komorek’s failure to disclose the lawsuit, post-employment solicitation of Con ict clients, and misappropriation of assets. Plainti s focus more narrowly on the complaint’s allegations that Komorek breached a duciary duty while employed by Con ict. Doc. 31 at 20 (discussing Komorek’s actions “while employed and receiving a salary from Plainti s” (emphasis 30 omitted)). Speci cally, they assert that Komorek made ongoing misrepresentations about his background throughout his time at Con ict. Id. at 22. 11 e complaint su ciently alleges a breach of duciary duty based on Komorek’s conduct while employed by Con ict. e allegations suggest that Komorek falsely represented his employment history, overstated his intelligence-gathering capabilities, and misrepresented his quali cations. Doc. 2 ¶¶ 120–36. at kind of conduct could plausibly amount to a breach of duciary duty. See In re Parmalat Sec. Litig., 684 F. Supp. 2d 453, 478 (S.D.N.Y. 2010) (“Perfect candor, full disclosure, good faith, in fact, the utmost good faith, and the strictest honesty are required of promoters [and other duciaries], and their dealings must be open and fair, or without undue advantage taken.” (alteration in original) (citation omitted)); cf. Grumman Allied Indus., Inc. v. Rohr Indus., Inc., 748 F.2d 729, 738–39 (2d Cir. 1984) (“[T]his Court has expressly held that, under New York law, a duty to disclose material facts is triggered: rst, where the parties enjoy a duciary relationship . . . and second, where one party possesses superior knowledge, not readily available to the other, and knows that the other is acting on the basis of mistaken knowledge.” (omission in original) (internal quotation marks and citation omitted)). Defendants’ only argument in response is that Con ict had no need to rely on Komorek’s quali cations because it could evaluate his performance in real time. Doc. 34 at 15. But the complaint alleges that Con ict would not have hired Komorek had it known the truth about his past history. Doc. 2 ¶ 144. At this point, drawing all reasonable inferences in Plainti s’ favor, the Court can plausibly infer that Con ict also Plainti s also argue that Komorek “formed a competing venture, engaged in self-dealing with a known client, and then exploited a business opportunity of a current client using con dential information.” Doc. 31 at 20–21. As discussed above, however, Plainti s fail to explain how these allegations are distinct from the unfair competition claim. 11 31 would not have continued to retain Komorek had it known the truth about his experience and quali cations. 12 Defendants’ motion to dismiss the breach of duciary duty claim is granted in part and denied in part. e motion is denied to the extent that the claim is premised on Komorek’s misrepresentations while he was employed at Con ict. In all other respects, the motion is granted. H. Unjust Enrichment Finally, Plainti s bring an unjust enrichment claim against Komorek. Doc. 2 ¶¶ 292–97. e complaint alleges that Komorek accessed Con ict’s con dential les during his employment and that he has retained that information for his personal bene t. Id. ¶¶ 293–94. “Under New York law, for a plainti to prevail on a claim of unjust enrichment, the plainti must establish ‘(1) that the defendant was enriched; (2) that the enrichment was at the plainti ’s expense; and (3) that the circumstances are such that in equity and good conscience the defendant should return the money or property to the plainti .’” Advanced Oxygen, 572 F. Supp. 3d at 35 (quoting Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 519 (2d Cir. 2001)). Defendants contend that the unjust enrichment claim should be dismissed because it is duplicative of the claims for breach of contract, breach of duciary duty, and unfair competition. Doc. 28 at 19. Plainti s apparently concede this point, as they state: “Admittedly, Plainti s’ claims against Komorek sound in breach of contract[], breach [of] duciary duties, and other tortious acts based on his wrongful conduct.” Doc. 31 at 23. As a result, the unjust enrichment claim against Komorek is dismissed. In response to Plainti s’ narrower claim, Defendants do not speci cally challenge the existence of a duciary relationship between Con ict and Komorek. Doc. 34 at 15. Regardless, that “fact-speci c” inquiry, EBC I, Inc., 832 N.E.2d at 31, cannot be resolved here given the complaint’s allegations that Komorek was hired as an o cer of Con ict and later served as its vice president, Doc. 2 ¶¶ 25–26, 282. 12 32 Plainti s argue only that they have a potential unjust enrichment claim against API International. Id. In particular, they assert that API International does not have a contract with Plainti s but may have bene ted from Komorek’s wrongful actions. Id. Plainti s therefore request leave to amend their complaint to allege an unjust enrichment claim against API International. Id. Rule 15 provides that leave to amend should be “freely give[n] . . . when justice so requires.” Fed. R. Civ. P. 15(a)(2). A district court may deny leave to amend, however, for “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure de ciencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment.” Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). Here, Defendants do not assert that amendment would be prejudicial, futile, or in bad faith. Instead, they argue that Plainti s have improperly sought leave to amend in their opposition brief. Doc. 34 at 16–17. But plainti s routinely request permission for leave to amend in the event that a motion to dismiss is granted. See, e.g., Tavarez-Vargas v. Annie’s Publ’g, LLC, No. 21 Civ. 9862 (AT), 2023 WL 2499966, at *3 (S.D.N.Y. Mar. 14, 2023). See generally Van Buskirk v. The N.Y. Times Co., 325 F.3d 87, 91 (2d Cir. 2003) (“[I]t is often appropriate for a district court, when granting a motion to dismiss for failure to state a claim, to give the plainti leave to le an amended complaint.”). Accordingly, the Court will grant Plainti s leave to amend the complaint to assert an unjust enrichment claim against API International. IV. CONCLUSION For the foregoing reasons, Defendants’ motion to dismiss is GRANTED IN PART and DENIED IN PART, as follows: e motion to dismiss is GRANTED with respect to the claims for abuse of process, tortious interference with contract, tortious interference with prospective 33 economic advantage, and unjust enrichment (as to Komorek). Plainti s may amend their complaint by no later than April 12, 2024, to assert an unjust enrichment claim against API International. e dismissed claims are dismissed with prejudice because Plainti s have not requested leave to amend. See, e.g., Cesiro v. Rite Aid of N.Y., No. 20 Civ. 10519 (ER), 2022 WL 392907, at *6 (S.D.N.Y. Feb. 9, 2022) (“[W]here a plainti has neither requested leave to amend, nor indicated additional facts that would be added to the complaint, a court is not required to grant leave to amend sua sponte.”). e motion to dismiss is DENIED with respect to the claims for breach of contract and unfair competition. With respect to the breach of duciary duty claim, the motion to dismiss is DENIED to the extent that the claim is premised on Komorek’s misrepresentations while he was employed at Con ict. In all other respects, the motion to dismiss the breach of duciary duty claim is GRANTED. e parties are directed to appear for a status conference on April 19, 2024, at 2:30 p.m. at the urgood Marshall United States Courthouse, 40 Foley Square, New York, New York 10007, Courtroom 619. e Clerk of Court is respectfully directed to terminate the motion, Doc. 27. It is SO ORDERED. Dated: March 29, 2024 New York, New York EDGARDO RAMOS, U.S.D.J. 34

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