IDT Corp. v Morgan Stanley Dean Witter & Co.

IDT Corp. v Morgan Stanley Dean Witter & Co. 2012 NY Slip Op 09154 Decided on December 27, 2012 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on December 27, 2012
Andrias, J.P., Saxe, Moskowitz, Freedman, Abdus-Salaam, JJ.
8858N 603710/04

[*1]IDT Corporation, Plaintiff-Appellant,

v

Morgan Stanley Dean Witter & Co., et al., Defendants-Respondents.




Boies, Schiller & Flexner LLP, Armonk (Edward Normand of
counsel), for appellant.
David Polk & Wardwell LLP, New York (Guy Miller Struve of
counsel), for respondents.

Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered April 4, 2012, which denied plaintiff's motion to amend the complaint, unanimously affirmed, with costs.

Plaintiff is unable to allege that it reasonably relied on defendants' misrepresentation that they would stop disparaging it in discussions with Telefonica. In a prior appeal, the Court of Appeals rejected plaintiff's argument that defendants' statute of limitations affirmative defenses should be barred by equitable estoppel, because after learning of defendants' disparagement of it, plaintiff was on inquiry notice that it might have legal claims against them and therefore "should have made further inquiry before the statute of limitations expired" (see 12 NY3d 132, 141 [2009]). Contrary to plaintiff's interpretation of the Court's statement, the point is that had it made further inquiry, it would have learned that defendants' alleged promise to stop disparaging it was illusory. The proposed amended complaint does not allege that plaintiff made further inquiry. It alleges that defendants continued to disparage plaintiff even after they promised to stop doing so. These allegations do not cure the pleading defect concerning justifiable reliance (see Rosenblum v Glogoff, 96 AD3d 514 [1st Dept 2012]). Moreover plaintiff's lost opportunity claim is not viable as damages are limited by the out-of-pocket rule (Lama Holding v Smith Barney, 88 NY2d 413).

We have considered plaintiff's remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: DECEMBER 27, 2012

CLERK