Giumenta Corp. v Desktop Solutions Software, Inc.

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Giumenta Corp. v Desktop Solutions Software, Inc. 2012 NY Slip Op 30944(U) April 9, 2012 Sup Ct, Suffolk County Docket Number: 07-32277 Judge: Thomas F. Whelan Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER rNDEXNo. CAL. No. 07-32277 11-0 1044CO SUPREME COURT - STATE OF NEW YORK IAS. PART 33 - SUFFOLK COUNTY PRESENT: Hon. THOMAS F. WHELAN MOTION DATE 6-24-11 (#006 & #0(7) MOTION DATE 10-24-11 (#008) MOTION DATE 1-23-12 (#009) ADJ. DATE 1-23-12 Mot. Seq. # 006 - WDN # 008 - MD # 007 - XMG # 009 - MD Justice of the Supreme Court ---------------------------------------------------------------X GIUMENTA CORP. DiBlAI ARCHITECTURAL GRILLE, Plaintiff, PANTERIS & PANTERlS, LLP Attorney for Plaintiff 35-16 Bell Boulevard, Suite 201 Bayside, New York 11361 - against - P.B. TUFARIELLO, P.C DESKTOP SOLUTIONS SOFTWARE, rNC, Defendant. Attorney for Defendant 25 Little Harbor Road Mount Sinai, New York 11766 ---------------------------------------------------------------X Upon the following papers numbered 1 to~ read on this motion to vacate note of issue: motion to dismiss; cross motion forsumrnary judgment; and motion 10vacate note ofissue ; Notice ofMotion/Orderto Show Cause and supporting papers 1-12; 13-47; 48-50, Notice of Cross Motion and supporting papers 51-59 ,Answering Affidavits und SUpPol1ingpapers 60· 62; 63-78; 79-87; Replying Affidavits and supporting papers 88-89; 90-107 ; Other Defendant's memorandum of law and cOlTespondence from defendant dated 12/30/11; (dnd after hetHill", COUIi3e1 $UppoJll'!lld oppo3ed t\") llie lilt'itieHl)l is, ill i ORDERED that the motions (#006, #008 & #009) by defendant Desktop Solutions Software, luc" and the cross motion (#007) by plaintiff Giumenta Corp., d/b/a Architectural purposes of this determination; and it is Grille, are consolidated for the ORDERED that the motion (#006) by defendant Desktop Solutions Software, Inc. shall be marked withdrawn in accordance with correspondence from movants' counsel dated December ORDERED that the cross motion (#007) by plainliff for sununary judgmenl counterclaims against it is granted; and it is 30, 2011; and it is dismissing defendant's [* 2] GlUll1Cnta Corp v Desk Top Solutions Index No. 07-32277 Page No.2 ORDERED that the motion (#009) by defendant seeking the identical relief containcu ill its correspondence to Lhc eOUl1. to wit, withurawal of its motion for vacatur of the note of issue. is denied, as moot: and it is IS OR[)ERED that the motion (#008) by defendant decided as follows. seeking an order dismissing plaintiffs complaint In this action for breach or contract and unjust enrichment, plaintiff (Jiumcnta Corp .. d/b/a Architectural Grille. sl,,";cksjudgment against deCcndant Desktop Solutions So!t\.varc.lnc. lor damages related to defendant"s alleged failure to develop and host a website for its business. By its complaint. plaintiff alleges that it paid defendant a sum oC$47 .928 torthe development ohhe website, that there were inordl11ate delays in completion of the website, and that defendant failed to deliver a website that could be published to the internet or which t.:ontaincd lllany of the essential features specified in the parties' agreement. The complaint further alleges that defendant has been unjustly enriched since it received substantial payment despite failing to deliver the wcbsite in accordance with the terms ofthe agreement. Defendant joined issue on December 6, 2007, asserting. in addition to general denials, thal any delay in its delivery of the wcbsite \-vas caused by plaintiffs· demand for additional features to the website and changes to the contract. as well as plainti ITs' failure to provide information and documentation necessary Cor the comp!ction orlhe website. The answer interposes counterclaims for breach of contnct, breach of fiduciary duty, misappropriation of JI1tellectual property, and a permanent injunction enjoining plaintiff frol11 using its current website. Thc panics have engagcd in a protracted dispute over plaintiffs alleged failure to respond to defendant's discovery demands. As a result of the dispute, defendant made two separate motions for the dismissal of plaintiff s complaint. PlaintifFs first motion was withdrawn in accordance with a stipulation entered hy thc parties. By order dated November 6, 2008. this court denied defendant's second motion, finding, inter alia, that plaintiff substantially complied with defendant's demand for a second set of interrogatories. On March 11.2009, defendant moved for summary judgment dismissing the complaint. Plainti ITopposed the motion and cross moved tor dismissal of defendant's counterclaims. In opposition to defendant's motion, plaintiff submitted, among other things, an ani.davit by Thomas Tidwell. Vice President of Sales and Marketing of The Ad Firm. a technology company allegedly hired by plaintiJTto complete the unfinished website. The parties subsequently entered a stipulation withdrawing both motions on July 22. 2009. Following withdrawal orthe motions. defendant made numerous unsuccessful attempts to locate and depose Mr. Tidwell. including obtaining a commission from the court permitting it to conduct a deposition of Mr. Tidwell in the State of Ari7.0na. A compliance conference was conducted III this action on April 12. 2011. und a note ni"isslic and certificate ot"readiness indicating the cnd ot'discovery were liled on May 18. 2011. Defendant now movcs for an order vacating the note ofissuc. arguing that discovery is incomp!clt: and that it wIiI be unable to conduct Mr. TidwcU-s deposition in time to file ils lllolion for summary judgment ,,,,ithin 120 days of entry of the note of issuc. Defendant also requests that plaintiffbe precluded from utilizing Mr. Tidwcll's al1idavit in connection with its cross motion. since it only identified him as a [* 3] Giul11entaCorp v Desk Top Solutions Index No. 07-32277 Page No.3 witness in its opposition to defendant's summar)' judgmcnt molion. Plaintiff opposes the motion and crossmoves lor an order dismissing defendant's counterclaims. Plaintiff asserts. inter alia. that it never Impeded defendant's attempts to depose Mr. Tidwell. and that defendant did not serve a notice for such deposition unlil May 12,20] I, approximatcly three days aher it received plainti IT's note ofissuc. Plaintiff further seeks dismissal oj defendant's counterclaims on the grounds the court lacks subject mailer jurisdiction to resolve the counterclaims. and that such counterclaims are contrary to the terms of the parties' contract. which specilied that the website was a work made f()r hire. In opposition to plaintiffs cross motion, delcndant avers that triable issues exist as to whether the parties' contract grants plainti rr ownership of its "original, singular allLlconcrete ieit:asand intellectual property"' embodied in the subject website, and whether plainti 1'1' breached the parties' contract and misappropriated such intellectual propert)' when it requested defendant publish the website to a third-party server and permitted the website to be copied by an independent contractor. After the J-ilingof such motions, the Court received correspondence from defendant's counsel, dated Deccmber 30, 2011. stating that defendant wishes to withdrav·,' its motion for vacatm of the note of issue. PlaintiJTopposes defendant's request only to the extent that such withdrawal requires dismissal of its cross motion. Inasmuch as the withdrawal ofthe motion does not preclude plaintiff's cross motion lor dismissal of defendant's counterclaims, defendant is permitted to withdraw its motion. De1endants' request that all relevant submissions included in its moving papers be considered in opposition to plaintifT's cross motion also is granted. However, the Court denies. as academic, defendant's further request in its correspondence that it be precluded from deposing nonpany witness Thomas Tidwell. Based upon the foregoing, the motion (#009) by defendant seeking the identical relief requested in its December 30, 201] correspondence to the court is denied, as moot. As to plaintiff's cross motion, the federal Copyright Act preempts a state cause of action if the claim asserted falls within the subject matter of federal copyright law and seeks protection of rights that are equivalent to the exclusive rights protected by the statute (] 7 use §30 I [a1; see Computer Associates Imernational, Ille. v. Altai. 982 F2d 693. 716 [2d Cir. 1992]; Harper & Row, Publishers, fllc. v. Natioll Enter.'!., 723 F2d 195.200 [2d Cir. 1983], rev'd on other ground,', 471 U.S. 539 [1985]; see ii/SO Hicil1bothem v National Gu!fCorp., 266 AU2d 637, 697 NYS2d 760 13d Dept ]9991). "A state right is equivalent to copyright if the state right is infringed by the mere act(s) of reproduction, performance. distribution or display" (Universal City Studios, Illc. v. The T-Shirt Gallery, L1t!.. 634 F Supp 1468. 1475 ISD NY 19861, quofing Ma.ver v. JO.\·iahWedgwoot! & SOliS, LId., 601 r Supp 1523. 1535 [SD NY ] 985 I). "A dispute that turns on whether a copyrighted work was created independently (lr as a work made for hire is an ownership dispute that unquestionably arises under the Copyright Act"· (Scandinaviall Satellite S:vs. v Prime TV LId.. 291 F3d 839. 845 IDC 2002]). Furthermore. while "ideas" generally do not enjoy copyrig.ht protection, couJ1Shave consistently held that they fi:Ill within the "subjcctl11atter of copyright" for the purposes of preemption analysis when they are embodied within a copyrighted work l-~('eElltOliS JI Viacomlll1l. Illc .. 151 F Supp 2d 1053 lCD CuI 20011: Selby v New Lille Cillema Corp., 96 F Supp 2d 1053 [CD Ca12000J) [* 4] Giumenta Corp v Desk Top Solutions Index No. 07-32277 Page No.4 Here, defendant's counterclaims asserts causes of action based on brcach of contract, breach of liducial)' duty. misappropriation of intellectual propeJ1y, and injunctive reJiefenjoining plaintifffrolll further use or its current website. The counterclaims. including the counterclaim based upon breach of contract. arc predicated upon plaintilrs alleged misappropriation, transfer and unauthorized copying of delcndant' s intellectllal propeny. Therefore, the claims, which seek protection of righls equivalent to those exclusively protected by the federal Copyright Act, are preempted by the federal statute (see Scandinllvian L\'lltelliteSy.''', v Prime TV Ltd., xl/pm; NllfiOlwl Basketball As . ¢ ¢. v Motorola, 105 F3d 841 12d Cir 1997]: Computer n. As! ¢. ciate . ¢ ¢. o llltema/iollal, Inc. v. Altai, supra; e..fJordan v Aarismaa, 245 A02d 616. 665 NYS2d 973 L3cl Dept I ()f}7J). "'mther, inasmuch as dcfendant"s counterclaim lor the alleged misappropriation of ·'original ideas" or "concrete work product" refers to intellectual properly contained within the subject website, such claims also are preempted (see Ell/OilS v Viacom Jntl./nc., supra; Selby v New Line Cinema Corp., supra). Accordingly, plaintiff's cross motion for summary judgment dismissing defendant'::; counterclaims is granted. Defendant also moves for dismissal of plaintiffs complaint pursuant to CPLR 3211(a) (7). Defendant argucs, inter alia. that plaintiff failed to state a cause of action for breach of contract since it created and delivered a functioning website to plaintifTin accordance with parties' agreement. Defendant further asserts that plaintiffs cause of action for unjust enrichment is not actionable since, among other things. plaintiffbenefittcd from delivery of the subject website. When considering a mOlion to dismiss pursuant to CPLR 3211 (a) (7), the couJ1must construe the pleadings liberally, accept the allegations of the complaint as true and provide the plaintiffs the benefit of every possible favorable inlcrence (see EBC/,llle. v Goldman, Sadls & Co., 5 NY3d II, 19,799 N. Y.S.2d 1701.2005); Griffin vAnslow, 17 AD3d 889, 891,793 N. Y.S.2d 615 [3d Ocpt 20051). A court may consider evidentiary material submitted by a plaintiff to remedy dcfects in the complaint, but the court should not rely on evidence submitted by the proponent of the motion as a basis [-or dismissal unless thCtt evidence conclusively establishes the falsity of an alleged fact (see Guggellheimer v Ginzburg, 43 NY2d 268, 275, 401 NYS2d 182 119771; COllllty ofSuffo/k v MHC Greelllvood Vii/age, LLC, 91 All3d 587, 937 NYS2d 89 [2d Oep! 2012]; Sokol v Leader, 74 AD3d 1180.904 NYS2d 153 [2d Dept 20J 01). On amotion pursuant to CPLR 321] (a) (7). the Court's sole inquiry is whether the facts alleged in the complaint fit within any cognizable legal theory. not whether there is evidential)' support for the complaint (Leon v. Martinez. 84 NY2d 83, 87. 614 NYS2d 972 I 19941l. lien:. plaintiff's complaint. which states thai it paid plaintiff to develop and host a working website. and that it incurred damages when plaintiff failed to deliver such website, states a valid caused of action lor breach of contract (see J.P. Morgall Chase v i.H. Elec. oj N. Y., /Ilc .. 69 Al>3d 802. 893 NYS2d 237 [2d Dcpt 201 0]: Furia v Furia. /16 AD2d 694. 498 NYS2d 1212d Dept 1986]). Further. none orlhe evidence submitted by defendant conclusively establishes the falsity of the factual allegations underlying the claim. ··Whcther a plaintiff can ultimately establish its allcgations is not parr of the calculus on a Illotion to dismiss" (EBe I, Illc. t· Go/tlmall, Sachs & Co.. supra a119; see LeoJl v Martinez. 84 N Y2d 83. 6] 4 NYS2d 972 119941). Thus. the branch of dctendant's motion for dismissal of plaintiff's breach of contract claim is denied. [* 5] Giumenla Corp v Desk Top Solulions Index No. 07-32277 Page NO.5 However. as for the branch of defendant's motion secking dismissal of plaintiffs claim for unjust ~nrichment. "It ]he existence ofa valid and enforceable writtcn contract governing a particular subjeclmattcr ordinarily precludes recovery in quasi contract for events arising out orthe same subject matter. .. A 'quasi contract' only applies in the absence of an express agreement" (Clark-Fitzpatrick, Illc. v Long Islalld R Co.. 70 NY2d 382, 388,521 NYS2d 653 [] 987]: see A. Montilli Plumbing & Heating Corp. v Valemillo. 90 AD3d 961. 935 NYS2c1647 r2d Dept 2011]; Scott v Fields. 85 AD3d 756, 925 NYS2d 135 r2d Dcpt 20111). Under [he circumstances of this case, it is undisputed that the parties entered into a valid contract covering the creation and publication of the website. and that the alleged breach arises [·j·omthe subject ImlttCI" f such agrecment. Plainti ffs 4uas! contractual claim for unJust cnrichment, thercfore, is dismissed. o Alternately, defendant seeks summary judgment dismissing plainttfCs complaint pursuant to CPLR 3212(b} on the basis that it substantially complied with the contract and was prevented from completing pcrlonnance when plaintiff: in breach of its duty of good faith and fair dealing. requested that the website be published to a subsequently inaccessible third-party server. Defendant's submissions includes, inter alia, a copy of the parties' contract. as well as transcripts of the deposition testimony by Stephcn Giumenta and detendant' s president, Frank Imburgio. Plaintiffopposcs summary dismissal orits complaint, arguing triable issues exists as to whether defendant rendered substantial pcrformance, whether defendant wilfully breached the contract, and whether the subject website delivered by defendant was commercially inoperable because il was copied from a pre-existing website and utilized GNU General Public Licensed free open source software. The traditional clements for breach of contract arc (1) formation of a contract between the plaintilT and the defendant, (2) performance by the plaintiff~ (3) the dclendant's failure to perlorm, and (4) resulting damage (see J.P. Morgall CIHue v J.H. Elec. of N. Y., Illc .. supra; Furia v Furia, supra)_ If a pany substantially perlormed its contractual obligations, it is entitled to the payment due undcr the contract less a deduction for the cost of completion or correction for any defects in ils performance (':lee James E. McMurn~v Euters., v Frohlich, 309 AD2d 836, 766 NYS2d 78 [2003]; Teranw & Co. v O'Brie/l-Sheipe FUlleral Home, 283 AD2d 635, 725 NYS2d 87 [200]]). The party attcmpting to prove substantial performance must establish Ihat'the alleged defects were insubstantial, minor or trivial (see Spellce v Ham. ] 63 NY 220. 57 NE 412 ["19001;Carefree Bldg. Prod. ¢ ¢.II Belina, ]69 AD2d 956. 564 NYS2d 852 [] 991]: Jerry B. Wil.\"On Roofing & Painting v Jacob-E. R. Kel~)lA.\"Soc.,J 28 AD2d 953, 513 NYS2d 263. Iv denied 70 NY2d 828. 523 NYS2d 490 I] 987]). However. the question of wheiher there has been substanlial performance. or a breach. is to be detennined. whenever there is any doub!, by Ihe trier of tact (see Jacob & Voung.'!Jlle. l' Kellt. 230 NY 239. ] 29 NE 889 [] 921 J; F. Garofalo Elec. Co. l' New York lIllil' .. 300 AD2d 186.754 NYS2d 227 [20021: J. C. Drywall & AcollstieaIContr . ¢ ¢.v West Shore Partners, 187 AD2d , 564.590 NYS2d 2l6l] 992"]). Similarly, in the conlext of a party moving for summary judgment on a cause of action lor the alleged breach of an implied covenant or good Jailh and bir dealing. whether or nOl such duty has bcen breached is oftcn a factual question that becomes a question of law only in those cases where only oni: inference is rationally possible (Mechallicl'ille v Niagra Mohawk Power Corp .. 302 AD2d 780. 754 NYS2d 783 r2003): [)"o.,kill v PrillZ, 205 AD2d 661. 613 NYS2d 65411994]). [* 6] Giumenta Corp v Desk Top Solutions Index No. 07-32277 Page NO.6 Ilere. defendant failed to establish its prima faeie entitlement to summary judgment as a matter of law (see Alvarez v Prospect Hospital, 68 NY2d 320. 508 NYS2d 923 [1986]: Willegrad l' New York Uiliv. Med. Cellter. 64 NY2d 851,487 NYS2d 316 [19851; Blilger v Trf-Towll Agency. 148 AD2d 44, 47, 543 NYS2d 217 [3d Dept 1989 J). Defendant's own submissions include contradictory accounts by the owners of both corporate panies as to the operability or the website, and whethcr the alleged defects were so pervasive and essential that they denied plaintiff the bene lit it bargained f(x under the contract. Moreover. thc deposition transcripts of Mr. Giumenta and Mr. Imburgio, which contain contlicting accounts of the cause of the two-year delay in completion of the website, raise credibility issues as to whether such delay was thc result of defendanrs will fu] failure to comply with the terms of the contract or whether plaintilf inLentionally sought to prevenL defendant from completing performance by preventing it from gaining further access to the website ailcr it was published to a third-party server. Accordingly, the branch of defendant's motion seeking summary judgment dismissing plaintiff's complaint is denied. Dated:

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