CCCLF, Inc. v Bonin

[*1] CCCLF, Inc. v Bonin 2009 NY Slip Op 51537(U) [24 Misc 3d 1221(A)] Decided on July 17, 2009 Supreme Court, Kings County Demarest, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 17, 2009
Supreme Court, Kings County

CCCLF, Inc., Plaintiff,

against

Charlene M. Bonin, et. ano., Defendants.



34486/08



Attorneys for Plaintiff

Eli Poltorak, Esq.

Leah M. Selinger, Esq.

Poltorak & Associates, PC

1650 Eastern Parkway, Suite 400

Brooklyn, NY 11233

Attorney for Defendant

Mark M. Rottenberg, Esq.

369 Lexington Ave., 16th Floor

New York, NY 10017

Carolyn E. Demarest, J.

Upon the foregoing papers in this action by plaintiff CCCLF, Inc. (CCCLF) asserting various claims concerning the alleged breach of agreements and the alleged unlawfully taking over of its day care center business by defendants Michael Bonin and Charlene Bonin (defendants), defendants move to dismiss CCCLF's complaint: (1) pursuant to CPLR 3211 (a) (1), based on documentary evidence, (2) pursuant to CPLR 3211 (a) (7), for failure to state a claim upon which relief may be granted, and (3) pursuant to CPLR 327 (a) based upon the forum non conveniens ground that, in the interest of substantial justice, this action should be heard in another forum, namely, the Superior Court of the State of New Jersey, Passaic County, which has plenary jurisdiction over all interested parties to this dispute. Defendants, in their motion, also seek an order, pursuant to Rules of the Chief Administrator (22 [*2]NYCRR) § 130-1.1 et seq., imposing sanctions against CCCLF, in the nature of an award of the costs and attorney's fees incurred by them in this action based upon the ground that the claims alleged by CCCLF in this action are frivolous.

In late 2002, Jay Best and his wife, Susan Best, began negotiations with Christine Bruno (Bruno), the owner of a day care center (the Daycare Center) at 4 Countryside Lane, in Ringwood, New Jersey, for the purchase of the Daycare Center. Bruno, together with Vincent Lanza (Lanza) (collectively, the Landlords) own the premises where the Daycare Center was located. On December 16, 2002, Jay Best incorporated CCCLF (Cradles to Crayons Childcare and Learning Facility, Inc.) in New Jersey [FN1] for the purpose of running the Daycare Center. In June 2003, CCCLF purchased the Daycare Center from Bruno for approximately $775,000, a portion of which was paid by a note to Bruno for $150,000 secured by a mortgage on the home of Choulamith Nash (Nash), who was also to be involved in CCCLF's Daycare Center business. For such consideration, CCCLF acquired the Daycare Center, a lease dated April 24, 2003 which was to run from June 1, 2003 with a term ending on May 31, 2013, the goodwill associated with the Daycare Center, the customer base of the Daycare Center, and certain fixtures, equipment, and property located in the premises.

According to Jay Best, the Daycare Center's business was not as successful as anticipated, and CCCLF lacked the resources to continue to provide the necessary additional investment to maintain its business. Therefore, on or about January 2007, CCCLF listed the Daycare Center for sale through Executive Business Brokers (EBB), a broker, with an asking price of $795,000. By a letter dated May 4, 2007, Vito Mastromonaco, a broker with EBB, working on CCCLF's behalf, stated that there were two serious buyers. In early July 2007, defendants entered into a Confidentiality Agreement with EBB (the Confidentiality Agreement), under which they, as prospective purchasers, acknowledged receipt of confidential information about the business shown to them by EBB, and in which they agreed to conduct all further inquiries in connection with the business exclusively through EBB. The Confidentiality Agreement further provided that if defendants should enter into a Purchase and Sale Agreement directly or indirectly with CCCLF without EBB's written authorization, they and CCCLF jointly agreed to pay a broker's commission to EBB of 10% of the total selling price. Defendants also agreed, under the Confidentiality Agreement, to retain in the strictest confidence all of the information provided regarding the business.

On July 6, 2007, defendants allegedly executed an Offer Agreement (the Offer Agreement) to purchase the Daycare Center from CCCLF for $600,000 through EBB.[FN2] CCCLF, however, does not allege that it actually accepted this offer or that a binding contract [*3]was ever formed between it and defendants. CCCLF claims that it, in reliance on this Offer Agreement, introduced defendants to the Landlords so as to secure a lease agreement between the Landlords and defendants.

Defendants, however, decided to break off negotiations with CCCLF and not purchase the Daycare Center from it. Defendants claim that among their reasons for not purchasing the Daycare Center from CCCLF were that they had learned: (1) that CCCLF was in significant arrears in the payment of rent to the Landlords under its lease for the premises and that the Landlords were proceeding to evict CCCLF from the premises and were demanding the payment of back rent as a condition for them to approve of an assignment of the lease to a purchaser of CCCLF's business; (2) that CCCLF was in default of its obligations to repay loans guaranteed by the United States Small Business Administration, and that the Internal Revenue Service (IRS) had placed liens on CCCLF's property and had executed, through the Sheriff of Passaic County, on CCCLF's assets, seizing certain of its assets, including a school bus; (3) that CIT Small Business Lending Corp. (CIT), as a secured lender to CCCLF, had a security interest in all of CCCLF's assets, including, but not limited to, all of its furniture, computers, learning equipment, cribs, accounts receivables, business papers, and inventory, and that CIT was planning to foreclose on CCCLF's assets pursuant to this security interest; (4) that CCCLF had failed to pay wages to its employees and to pay over to the taxation authorities monies for taxes and employee benefits that it had withheld from its employees' paychecks; (5) that CCCLF had failed to pay for utilities, including water, electricity, and gas; (6) that the Daycare Center was not in compliance with New Jersey State law and regulations, including health and safety regulations, pertaining to the operation of a day care center; among other things, its fire safety sprinkler system and fire alarm were not operable; and (7) that the premises were in a state of disrepair and needed major renovation and refurbishing.

By letter dated January 10, 2008, John A. Paparazzo, Esq., the attorney for the Landlords, advised CCCLF, Nash, Susan Best, and Jay Best that they were in default under the lease, and that there were arrears in rent in the sum of $105,500. John A. Paparazzo, Esq., by this letter, further informed them that due to this failure to pay the rent, their lease agreement was terminated as of January 18, 2008, and they would have to vacate the premises. He also informed them, in this letter, that if they did not vacate the premises by January 19, 2008, they and all of their property would be removed from the premises. A letter dated January 16, 2008 from Richard A. Herman, Esq. (who was CCCLF's former attorney) to John A. Paparazzo, Esq. stated that in response to his January 10, 2008 letter, his client had proposed to voluntarily remove itself from the property by February 29, 2008.

Defendants claim that while the Landlords were in the process of attempting to obtain possession of the premises back from CCCLF, they asked them if they were still interested in operating a child care center at the premises, and they said that they were. On February 13, 2008, defendants formed Charmik as a New Jersey limited liability company, and they [*4]registered, with the State of New Jersey, the alternate name of Countryside Childcare and Learning Center.

A February 15, 2008 letter (submitted by defendants) addressed to the Landlords, purporting to be from Jay Best, stated that as of February 15, 2008, he would no longer be the sponsor of Cradles to Crayons at the location of 4 Countryside Lane, that all equipment and property currently at this location would remain for good faith, that it was his understanding that the current facility would continue to be used as a child care program and that he would have no involvement with it, that all tuition collection and bank account balances to that point would remain so that outstanding payroll and expenses could be satisfied, and that the staff at the Daycare Center currently employed had his authorization to complete transactions in place. Jay Best denies writing this letter. Defendants claim that after the Landlords showed them this February 15, 2008 letter purportedly written by Jay Best relinquishing all interests in the premises, they took over the premises (which had been operating as an active child care center) on February 19, 2008, and began their operation of it as a child care center under the new name of Countryside Childcare and Learning Center.

Defendants entered into an oral month-to-month lease with the Landlords, and informed the existing staff, the families of the students, and the public at large, that there had been a change in the ownership and control of the child care center. A letter from Countryside Childcare and Learning Center dated February 19, 2008 announced to the teachers and staff that it would be running the school and taking over the business.

CCCLF alleges that on February 26, 2008, prior to the termination of CCCLF's lease, Jay Best attempted to enter the Daycare Center and found that the locks on the premises had been changed without his knowledge or permission. CCCLF further alleges that several days after the locks were changed, defendants dumped some of the property belonging to the Daycare Center in front of another business owned by it, and that this caused the destruction of the majority of this property.

By a letter dated February 19, 2008, but executed by Jay Best and notarized on February 29, 2008, Jay Best stated that he "w[ould] no longer be the sponsor of Cradles to Crayons Childcare and Learning Center, located at 4 Countryside Lane, Ringwood, New Jersey." Under New Jersey law, a sponsor is defined as "any person owning or operating a child care center" (New Jersey Child Care Center Licensing Act, N.J.S.A. 30:5-3 [g]).

An agreement dated February 28, 2008, but notarized on March 24, 2008 (the Surrender Agreement), stated that CCCLF, Nash, Susan Best, Jay Best, as the tenants under a lease agreement dated April 24, 2003, are in arrears as to rent and are in default in the terms of the lease agreement, and that Bruno and CCCLF have entered into a separate agreement and release pertaining to the Daycare Center, which shall be executed contemporaneously with this release. The Surrender Agreement then provided that it is agreed that the lease agreement is "voided and terminated," that "the [t]enants have no past, present or future obligations under the terms of the Lease Agreement and shall not be responsible for any past, present, or future rent charges or expenses under the terms of the Lease Agreement," and that [*5]the Landlords "waive any claims for [such] . . . rent charges and/or repairs." The Surrender Agreement further provided that "[i]n consideration of the terms of this Agreement, the Tenants shall vacate the premises on or before 5:00 p.m. on February 29, 2008," "shall remove all of the personal property located at the leased premises by no later than 5:00 p.m. on February 29, 2008, and any property remaining after that date c[ould] be disposed of by the Landlords." The Surrender Agreement additionally provided that it would be executed in conjunction with a release attached to the Surrender Agreement and simultaneously with a release between CCCLF and Bruno.

The Surrender Agreement was executed by the Landlords and by Nash, Susan Best, and Jay Best. Although a copy of the Surrender Agreement submitted by defendants purports to contain the additional signature of Jay Best, on behalf of CCCLF, this signature line is blank on the copy of the Surrender Agreement submitted by CCCLF, and Jay Best maintains that this signature, on CCCLF's behalf, is a forgery. Jay Best asserts that he executed the Surrender Agreement once he realized that defendants were not planning to purchase the Daycare Center since he did not want to be held responsible for back rent to the Landlords, and because he was also concerned abut protecting Nash's house from the threat of foreclosure by the Landlords based on the note.

A release in favor of Bruno dated and notarized on February 28, 2008, releasing any and all claims, including claims in connection with the note and mortgage, was executed by Susan Best and Nash. A release in favor of CCCLF, Nash, Susan Best, and Jay Best, releasing any claims for past, present, or future obligations under the lease, including rent and/or repairs, was executed by the Landlords, and a release notarized on March 24, 2008, releasing all claims in connection with the note and mortgage dated May 28, 2003 from Susan Best and Nash was executed by Bruno.

A letter from CIT dated March 11, 2008 informed the Landlords that CCCLF, operated by Susan Best and Jay Best, had defaulted on its loan obligations to it and that it had a security interest in all business collateral owned by the Daycare Center, including, but not limited to, any furniture, computers, learning equipment, cribs, account receivables, and inventory maintained at the facility. CIT, in that letter, advised the Landlords that they were being put on notice of this lien interest, and it directed them to preserve this collateral, pending its scheduling of an inventory and retrieval of it.

In an undated letter to Janet Hackman of the State of New Jersey Department of Children and Families Licensing, the Landlords requested that Jay Best's February 29, 2008 notarized letter, which relinquished his sponsorship of the Daycare Center, be accepted. In that letter, the Landlords stated that the IRS had levied all of the equipment of the Daycare Center, and that Jay Best owed thousands in payroll taxes and over two years of back rent.

Defendants, upon taking over the operation of the child care center at the subject premises, claim to have spent in excess of $150,000 renovating the premises. Defendants, subsequently, entered into a written lease dated September 12, 2008 with the Landlords. [*6]

CCCLF claims that defendants unlawfully took over the physical space of the Daycare Center and ran the business as their own, without paying it any consideration. CCCLF asserts that defendants conspired with the Landlords to oust it and to rob it of its business in direct contravention of their obligations pursuant to the Offer Agreement and the Confidentiality Agreement. CCCLF alleges, upon information and belief, that defendants had offered to pay the Landlords approximately $200,000 as consideration for its eviction and to obtain a lease to the premises. CCCLF maintains that defendants took possession of virtually all of the Daycare Center's assets, records, equipment, and fixtures, and began running the Daycare Center as if they had acquired the business, and that defendants improperly held themselves out as the new owner of the Daycare Center. Defendants, on the other hand, claim that they merely started their own child care center, under a new name, in the premises that CCCLF had occupied before its business failed.

On December 26, 2008, CCCLF filed this action against defendants. CCCLF's complaint alleges a first cause of action for conversion of corporate assets, a second cause of action for unlawful ouster, a third cause of action for tortious interference with contract as to the lease agreement with the Landlords, a fourth cause of action for tortious interference with contract as to the contracts with the patrons of the Daycare Center, a fifth cause of action for tortious interference with business opportunity to sell its business, a sixth cause of action for breach of contract with respect to the Offer Agreement, a seventh cause of action for unjust enrichment, an eighth cause of action for equitable estoppel, a ninth cause of action for fraud, a tenth cause of action for misappropriation of corporate assets, and an eleventh cause of action for breach of contract with respect to the Confidentiality Agreement.

In addressing defendants' motion, it is noted that CPLR 3211 (a) (7) provides for the dismissal of a complaint where the pleading fails to state a cause of action, and CPLR 3211 (a) (1) provides for the dismissal of a complaint where a defense is founded upon documentary evidence. On a motion to dismiss pursuant to CPLR 3211 (a), a court must ordinarily presume the factual allegations of the complaint, as pleaded, to be true and accord the plaintiff the benefit of every possible favorable inference (see 511 W. 232nd Owners Corp.v Jennifer Realty Co., 98 NY2d 144, 152 [2002]; Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]). However, factual allegations consisting of bare legal conclusions or that are inherently incredible or that are flatly contradicted by the documentary evidence are not entitled to such consideration (see Pincus v Wells, 35 AD3d 569, 570 [2006]; Syracuse Orthopedic Specialists, P.C. v Hootnick, 16 AD3d 1019, 1020 [2005]; Tectrade Intl. v Fertilizer Dev. & Inv., 258 AD2d 349, 349 [1999]; Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1999]; Wilson v Hochberg, 245 AD2d 116, 116 [1997]; Kliebert v McKoan, 228 AD2d 232, 232 [1996]; SRW Assoc. v Bellport Beach Prop. Owners, 129 AD2d 328, 331 [1987]).

CCCLF's first cause of action for conversion alleges that defendants unlawfully took possession of the Daycare Center and its assets without paying CCCLF any consideration for the benefit of its business assets, goodwill, equipment, fixtures, and current clients. [*7]However, in order " to establish a cause of action in conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question . . . to the exclusion of the plaintiff's rights'" (Estate of Giustino v Estate of DelPizzo, 21 AD3d 523, 523 [2005], quoting Independence Discount Corp. v Bressner, 47 AD2d 756, 757 [1975]; see also Zendler Constr. Co., Inc. v First Adj. Group, Inc., 59 AD3d 439, 440 [2009]; La Place v Briere, 404 NJ Super 585, 595, 962 A2d 1139, 1144 [NJ Super App Div 2009]).[FN3] Moreover, "[t]angible personal property or specific money must be involved" (Independence Discount Corp., 47 AD2d at 757; see also Batsidis v Batsidis, 9 AD3d 342, 343 [2004]; Cameco, Inc. v Gedicke, 299 NJ Super 203, 217, 690 A2d 1051, 1058 [NJ Super App Div [1997], affd as mod on other grounds, 157 NJ 504 [1999]).

The Surrender Agreement established that CCCLF voluntarily surrendered all of its interest in the premises, including any property or fixtures remaining in the premises after February 29, 2008. Thus, under the explicit terms of the Surrender Agreement, there was a relinquishment of any claim to any property remaining on the premises.

Jay Best, however, while conceding that the Surrender Agreement dated February 28, 2008 and notarized on March 24, 2008 was executed by him, Susan Best, and Nash, in their individual capacities, asserts that it was not executed on behalf of CCCLF. Jay Best argues that since the Surrender Agreement was not signed on behalf of CCCLF, it was in no way binding upon CCCLF. Although Jay Best admits that CCCLF's former attorney had proposed, in the January 16, 2008 letter, that CCCLF voluntarily vacate the premises, he contends that this did not obligate CCCLF to do so.

Jay Best's argument is unavailing. The Surrender Agreement was executed by all of the principals of CCCLF, in consideration for a release from paying rental arrears, and it specifically stated that the lease agreement was "voided and terminated" and that "the Tenants," which expressly included CCCLF, agreed to vacate the premises and remove all personal property by February 29, 2008. There were no rights reserved by or on behalf of CCCLF in the Surrender Agreement with respect to the leasehold interest or as to any other claim regarding the Daycare Center business.

While Jay Best, in opposition to defendants' motion, asserts that the locks to the premises were changed on February 26, 2008 and that CCCLF's property was removed from the premises prior to February 29, 2008, he concedes that he executed the Surrender Agreement on March 24, 2008 (when it was notarized) after he was aware of the change of locks and this removal. Moreover, any claims which CCCLF conceivably could have with respect to its property or its eviction would be as against the Landlords, rather than defendants. In addition, CCCLF does not deny that CIT had a security interest in all of its [*8]business collateral, including its furniture, equipment, inventory, and accounts receivable, and was about to foreclose upon it.

To the extent that CCCLF's first cause of action alleges that defendants converted CCCLF's goodwill, current clients, or other intangible interests, CCCLF cannot assert that defendants deprived it of this property (see Estate of Giustino, 21 AD3d at 523; Cameco, Inc., 299 NJ Super at 217, 690 A2d at 1058). By the February 29, 2008 notarized letter, Jay Best had explicitly withdrawn as the sponsor of the Daycare Center, thus relinquishing his right to operate it as a child care center (see New Jersey Child Care Center Licensing Act, N.J.S.A. 30:5B-3[g]). Moreover, such a claim does not involve items of tangible personal property or specific money (see Rae v Verde, 222 AD2d 569, 570 [1995]; Cameco, Inc., 299 NJ Super at 217, 690 A2d at 1058). Thus, dismissal of CCCLF's first cause of action is mandated (see CPLR 3211 [a] [1], [7]).

CCCLF's second cause of action for unlawful ouster alleges that defendants unlawfully ousted it from the premises. An ouster is "the wrongful dispossession or exclusion of someone . . . from property" (Black's Law Dictionary [8th ed 2004]; see also Davidovich v Wivern Capital, LLC, 2005 WL 2739188, *5 [NJ Super Ch 2005]).

In claiming an unlawful ouster, CCCLF asserts that Jay Best did not release his sponsorship of the Daycare Center until February 29, 2008, whereas defendants had already assumed possession of the premises on February 19, 2008. This cause of action, however, is belied by the documentary evidence of the Surrender Agreement, which (as discussed above) indicated that CCCLF had agreed to its voiding of the lease and its eviction from the premises due to its failure to pay rental arrears. Thus, dismissal of CCCLF's second cause of action is required (see CPLR 3211 [a] [1], [7]).

CCCLF's third cause of action alleges that defendants tortiously induced the Landlords to breach the lease agreement. As noted above, CCCLF claims that defendants paid the Landlords approximately $200,000 as consideration to illegally evict it. A claim for tortious interference with contract, however, "requires the existence of a valid contract between the plaintiff and a third party, defendant's knowledge of that contract, defendant's intentional procurement of the third party's breach of the contract without justification, actual breach of the contract, and damages resulting therefrom" (Lama Holding Co. v Smith Barney, 88 NY2d 413, 424 [1996]; see also Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993]; M.J. & K. Co. v Matthew Bender & Co., 220 AD2d 488, 490 [1995]; 214 Corp. v Casino Reinvestment Dev. Auth., 280 NJ Super 624, 628, 656 A2d 70, 72 [NJ Super AppDiv 1994]).

Here, CCCLF cannot show that the Landlords breached the lease agreement with it. Rather, this cause of action is plainly refuted by the Surrender Agreement, which established that the Landlords negotiated the voluntary surrender of the premises from the tenants under the lease. Therefore, CCCLF's third cause of action must be dismissed (see CPLR 3211 [a] [1], [7]).

CCCLF's fourth cause of action alleges that defendants tortiously interfered with its contracts with its patrons by representing to its patrons they were the owners of the Daycare [*9]Center and operating it as their own without having purchased the Daycare Center from it. Defendants, however, used a different trade name, and there is no allegation that there was use of a confusing trade name by defendants or that CCCLF's patrons were not aware that the child care center was under new ownership. Moreover, CCCLF has failed to specify what contracts were actually breached by patrons or how, in view of Jay Best's relinquishment of sponsorship, CCCLF could have sustained damages (see M. J. & K. Co., 220 AD2d at 490). Thus, CCCLF's fourth cause of action cannot be maintained (see CPLR 3211 [a] [1], [7]).

CCCLF's fifth cause of action for tortious interference with business opportunity alleges that defendants represented to it that it planned to purchase the Daycare Center and then unlawfully misappropriated the assets of the Daycare Center, preventing it from selling the assets of the Daycare Center to other serious prospective buyers. To state a cause of action for tortious interference with business opportunity, a defendant must have acted with the sole purpose of harming the plaintiff or employed wrongful means, and such acts must have prevented the plaintiff from entering into a specific business relationship (see Schoettle v Taylor, 282 AD2d 411, 411-412 [2001]; Snyder v Sony Music Entertainment, 252 AD2d 294, 299-300 [1999]; Davidoff v Davidoff, 12 Misc 3d 1162 [A], 2006 NY Slip Op 51002 [U], *10 [2006]; Printing Mart-Morristown v Sharp Electronics Corp., 116 NJ 739, 751, 563 A2d 31, 37 [1989]).

Here, the documentary evidence submitted demonstrates that defendants did not prevent CCCLF from selling its business to another buyer. Rather, such documentary evidence discloses that CCCLF could not sell its business due to its impending loss of its leasehold and the impending foreclosure of the liens on its equipment and business assets.

While Jay Best admits that there were outstanding liens on CCCLF's property, he contends that these liens did not prohibit CCCLF from selling the Daycare Center business. However, Jay Best does not dispute that the existence of these liens directly impacted the value of its business to a prospective purchaser.

Additionally, while Jay Best admits that the Landlords were threatening to evict CCCLF in January 2008, he contends that the eviction process could have taken time and that CCCLF could have sold the Daycare Center before the threatened eviction took place. Such contention is without merit since CCCLF could not have assigned the lease as part of the sale, if it were in the midst of eviction proceedings. Thus, dismissal of CCCLF's fifth cause of action must be granted (see CPLR 3211 [a] [1], [7]).

CCCLF's sixth cause of action alleges that defendants breached the Offer Agreement by failing to purchase the Daycare Center from it. The complaint, however, fails to allege that CCCLF ever accepted defendants' offer or that it and defendants ever entered into a valid binding contract. Consequently, no cognizable breach of contract claim is stated (see Kowalchuk v Stroup, 61 AD3d 118, 121 [2009]; Weichert Co. Realtors v Ryan, 128 NJ 427, 435, 435, 608 A2d 280, 284 [1992]). Dismissal of CCCLF's sixth cause of action is, therefore, warranted (see CPLR 3211 [a] [1], [7]). [*10]

CCCLF's seventh cause of action for unjust enrichment alleges that defendants have been unjustly enriched by unlawfully appropriating the corporate assets of the Daycare Center. "To prevail on a claim of unjust enrichment, a party must show that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered" (Anesthesia Assoc. of Mount Kisco, LLP v Northern Westchester Hosp. Ctr., 59 AD3d 473, 481 [2009] [internal quotation marks and citations omitted]; see also VRG Corp. v GKN Realty Corp., 135 NJ 539, 554, 641 A2d 519, 526 [1994]).

The documentary evidence discloses that defendants did not misappropriate any corporate assets, in which CCCLF retained any interest, but, rather, that CCCLF merely established its own similar business at the same location. Thus, CCCLF cannot show that defendants were unjustly enriched at its expense, and its seventh cause of action must be dismissed (see CPLR 3211 [a] [1], [7]).

CCCLF's eighth cause of action for equitable estoppel alleges that it reasonably relied upon defendants' stated intention to purchase the Daycare Center and the Offer Agreement in giving defendants information about the Daycare Center and introducing them to the Landlords. The essential elements of an equitable estoppel are a knowing and intentional misrepresentation by the party sought to be estopped under circumstances in which the misrepresentation would reasonably induce reliance, and reliance by the party seeking estoppel to his or her detriment (see Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 81-82 [1980]; O'Malley v Department of Energy, 109 NJ 309, 317, 537 A2d 647, 651 [1987]).

Here, CCCLF merely alleges a misrepresentation of an intention to enter into a contract, during negotiations of a contract, which is insufficient to form a basis for equitable estoppel. Thus, dismissal of CCCLF's eighth cause of action is required (see CPLR 3211 [a] [7]).

CCCLF's ninth cause of action for fraud alleges that defendants misrepresented to it that they intended to purchase the Daycare Center and that it reasonably relied on this representation in connecting them with the Landlords for the purpose of securing a lease with the Landlords. CCCLF asserts that this damaged it because defendants and the Landlords then conspired to wrongfully oust it from the premises.

In order to sufficiently plead the claim of fraud, a plaintiff must show that the defendant made a representation as to a material fact, which was false and known to be false by the defendant, for the purpose of inducing the plaintiff to rely on it, and that the plaintiff reasonably relied upon this representation to his or her injury (see Lama Holding Co., 88 NY2d at 421; New York Univ. v Continental Ins. Co.,87 NY2d 308, 318 [1995]; Jewish Ctr. of Sussex County v Whale, 86 NJ 619, 624, 432 A2d 521, 524 [1981]). In addition, pursuant to CPLR 3016 (b), the circumstances constituting the alleged fraud must be stated in detail (see Michaelson v Scaduto, 205 AD2d 507, 508 [1994]; Gervasio v DiNapoli, 126 AD2d 514, 514 [1987]). [*11]

CCCLF has not stated a cognizable claim for fraud. CCCLF cannot allege that it reasonably relied on defendants' offer to purchase its business to its detriment since there was no binding agreement. Moreover, CCCLF cannot show that its mere introduction of defendants to the Landlords caused it to sustain damages. Consequently, CCCLF's ninth cause of action for fraud must be dismissed (see CPLR 3211 [a] [1], [7]).

CCCLF's tenth cause of action alleges that defendants unlawfully misappropriated its corporate assets (goodwill) without paying for it. To sustain a claim of unfair competition, it must be shown that the defendant "misappropriated the plaintiff['s] labors, skills, expenditures, or goodwill and displayed some element of bad faith in doing so" (Abe's Rooms, Inc. v Space Hunters, Inc., 38 AD3d 690, 693 [2007]; see also C.R. Bard v Wordtronics Corp., 235 NJ Super 168, 174, 561 A2d 694, 697-698 [NJ Super Ct Law Div 1989]). As discussed above, the documentary evidence refutes this claim. Thus, CCCLF's tenth cause of action is not viable and must be dismissed (see CPLR 3211 [a] [1], [7]).

CCCLF's eleventh cause of action alleges that defendants breached the Confidentiality Agreement, of which it was a third-party beneficiary, by communicating directly with the Landlords regarding the purchase of the Daycare Center. A non-party to a contract may only be a third-party beneficiary of a contract where its terms indicate an intention to benefit that non-party (see State of Cal. Pub. Employees' Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 434-435 [2000]; Strulowitz v Provident Life & Cas. Ins. Co., 357 NJ Super 454, 459, 815 A2d 993, 996 [NJ Super Ct App Div 2003]). The Confidentiality Agreement, however, by its terms, reflected that its purpose was to benefit EBB, not CCCLF, by the protection of its brokerage commission. While with respect to CCCLF, defendants did agree, in the Confidentiality Agreement, to retain in the strictest confidence the information provided regarding the business, there is no allegation that defendants disclosed any confidential information pertaining to CCCLF's business in breach of the Confidentiality Agreement. Therefore, dismissal of CCCLF's eleventh cause of action is warranted (see CPLR 3211 [a] [1], [7]).

Defendants have also sought dismissal of CCCLF's action on the ground of forum non conveniens since: CCCLF was registered as a corporation in New Jersey and is not authorized to do business in New York as a foreign corporation; Charmik is a New Jersey limited liability company that is not authorized to do business in New York; the Daycare Center was located in New Jersey and its staff and its patrons were located in New Jersey; and the Landlords, who, defendants assert, would be necessary parties to this action, are New Jersey residents and not subject to personal jurisdiction in New York, but are only amenable to suit in New Jersey. Defendants contend that this action does not have a substantial nexus with New York (see Smolik v Turner Constr. Co., 48 AD3d 452, 453 [2008]; Joseph L. Muscarelle, Inc. v Fluoro Elec. Corp., 55 AD2d 526, 526 [1976]). While the court notes that based upon the above, this issue of forum non conveniens would be significant, it is unnecessary to determine such issue in view of the dismissal of all of CCCLF's claims in this action pursuant to CPLR 3211 (a) (1) and (7). [*12]

Accordingly, defendants' motion to dismiss CCCLF's complaint as against them, is granted. Defendants' motion, insofar as it seeks an order, pursuant to 22 NYCRR § 130-1.1, imposing sanctions against CCCLF, is denied as such relief is not warranted herein.

This constitutes the decision, order, and judgment of the court.

E N T E R

J. S. C.

Footnotes

Footnote 1: The corporate charter of CCCLF was revoked for failure to file an annual report for two consecutive years, and, thus, CCCLF is presently not a corporation in good standing in the State of New Jersey.

Footnote 2: No copy of the Offer Agreement has been submitted to the court.

Footnote 3: Defendants contend that New Jersey law applies to this action since all acts occurred in New Jersey(see DeMasi v Rogers, 34 AD3d 720, 720 [2006]). In any event, the laws in New York and New Jersey, insofar as it is relevant to the outcome of this action, do not differ.