Monex Fin. Servs. Ltd. v Dynamic Currency Conversion, Inc.

[*1] Monex Fin. Servs. Ltd. v Dynamic Currency Conversion, Inc. 2008 NY Slip Op 50674(U) [19 Misc 3d 1113(A)] Decided on March 26, 2008 Supreme Court, Nassau County Bucaria, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 26, 2008
Supreme Court, Nassau County

Monex Financial Services Ltd., an Irish Corporation, and Planet Payment, Inc., a Delaware Corporation, Plaintiffs,

against

Dynamic Currency Conversion, Inc., a New York Corporation, Mark A. Silverman, and Individual, and David Nahor, an Individual, Defendants.



21215/06

Stephen A. Bucaria, J.

This motion, by defendants, Dynamic Currency Conversion, Inc. ("Dynamic"), Mark A. Silverman ("Silverman") and David Nahor ("Nahor"), pursuant to CPLR 3211(a)(1), (5) and (7), dismissing the amended complaint of the plaintiffs, Monex Financial Services, Ltd. ("Monex") and Planet Group, Inc. ("Planet"), is determined as provided herein.

The amended complaint in this action states causes of action for tortious interference with contract, tortious interference with existing and prospective business

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relations and unjust enrichment arising from an alleged concerted effort among defendants Silverman, Nahor and Dynamic to interfere with and usurp for their own unfair and unjust gain the benefits of Planet and Monex's contract with non-party, Global [*2]Card Services, Inc. ("GCS").

Insofar as a motion made pursuant to CPLR 3211 requires this Court to accept as true the allegations of the complaint (Guggenheimer v. Ginzburg, 43 NY2d 268, 275, 1977), the underlying facts are as follows: On December 10, 2001, plaintiffs Planet and Monex entered into a Teaming Agreement with GCS under which the parties agreed to cooperatively market Planet and Monex's dynamic currency conversion services to GCS's customers. The Teaming Agreement provides, inter alia, that the "parties shall work together to develop the systems necessary to enable DCC services to be provided to their respective clients" and "shall endeavor to undertake pilot programs for selected merchants, including Royal Caribbean, Princess [Cruises], and Marriot Hotels, with a view to securing DCC agreements with such merchants as soon as possible" (Id. at ¶13-14). Plaintiffs' amended complaint alleges that the Teaming Agreement is "at its core an exclusive arrangement," under which Planet and Monex would be "the exclusive provider of DCC services for GCS's customers" (Id. at ¶¶20-21).

Plaintiffs allege that, rather than perform honestly under the Teaming Agreement, defendant and then president of GCS, Mark Silverman (on behalf of GCS), signed a conflicting agreement in December 2002 with defendant Dynamic through its principal David Nahor, thus inducing the breach of GCS's Teaming Agreement with Planet and Monex.

Plaintiffs originally commenced this action on December 15, 2006 against defendants, Dynamic and Silverman. The complaint asserted five causes of actions, each predicated on allegations that Dynamic and Silverman misappropriated plaintiff's alleged trade secrets. According to the complaint, Dynamic and Silverman used those trade secrets to get business that rightfully belong to them, including Princess Cruises, Inc. ("Princess") and Royal Caribbean Cruise Lines ("RCCL"), as customers. Plaintiffs claimed that had Dynamic and Silverman not misappropriated plaintiffs' trade secrets, they could not have obtained Princess and RCCL as customers, and thus the business derived from those entities rightfully belonged to plaintiffs. In response to defendants, Dynamic and Silverman's pre-answer motion to dismiss the complaint, this Court, in an Order dated May 31, 2007, concluded that plaintiffs had met their de minimus pleading

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requirement. Thereafter, on June 23, 2007, defendants answered the complaint. [*3]

Subsequently, on December 14, 2007, plaintiffs' counsel wrote to defendants' counsel advising that "plaintiffs are amending their complaint in light of the discovery that has been had to date" (Motion, Ex. C). Defendants consented to plaintiffs' request to amend the complaint on the condition that the plaintiffs dismiss their claims, including those relating to trade secrets, in the original complaint with prejudice (Id., Ex. E). On January 4, 2008, the parties entered into a stipulation that permitted plaintiffs to file their proposed amended complaint with its new theory and causes of action (Id).

On January 10, 2008, plaintiffs filed their amended complaint against Dynamic, Silverman and now also David Nahor, Dynamic's president and principal shareholder. Plaintiffs' amended complaint is predicated on allegations that the defendants tortiously interfered with the Teaming Agreement between plaintiffs and GCS (defendant Silverman's former employer). Plaintiffs' theory is that defendant Dynamic obtained Princess and RCCL as clients - not by stealing plaintiffs' trade secrets as plaintiffs originally claimed - but rather by entering into a contract with GCS that was allegedly "inconsistent" with the Teaming Agreement. Plaintiffs allege that with complete and knowing disregard of GCS' contractual obligations to Planet and Monex under the Teaming Agreement, defendants conspired to interfere with the Teaming Agreement and to replace it with their own contract with GCS, in order to obtain for themselves the money available to be earned under the Teaming Agreement. Plaintiffs also allege that using that contract as a springboard, defendants then interfered with Planet and Monex's prospective business relationships with Princess and RCCL, and usurped those relationships for their own personal gain.

Upon the instant motion, defendants seek to dismiss plaintiffs' amended complaint on the grounds that: (1) the claims against Nahor are barred by the three year statute of limitations; and (2) the claims against all of the defendants are not supported by the facts pled.

First, Second, Third and Fourth Causes of Action: David Nahor

[Tortious Interference with Contract; Tortious Interference with Existing and Prospective Business Relations]

On a motion to dismiss the complaint on the grounds that causes of action set forth did not accrue within the time limited by law for commencement of such actions, the allegations in the complaint, with all reasonable inferences to be drawn therefrom, must

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be deemed to be true (Nasaba Corporation v. Harfred Realty Corporation, 287 [*4]NY290 [1942]; Goldstein v. Schachne, 261 AD 922, 2nd Dept., 1941). To make a prima facie showing that the time in which to sue has expired, the defendant must establish, inter alia, when the plaintiff's cause of action accrued (Swift v. New York Medical College, 25 AD3d 686, 2nd Dept., 2006).

Plaintiffs' first, second, third and fourth causes of action, sounding in tortious interference with the Teaming Agreement and tortious interference with plaintiffs' existing and prospective business relations are time barred as against defendant David Nahor. It is undisputed that, unless the relevant New York statutory period of three years (CPLR 214 [4]; Kronos, Inc. v. AVX Corp., 81 NY2d 90 [1993]) is tolled, this action, which accrued no later than December 31, 2003, but was not commenced against David Nahor until January 2008, is untimely. A claim for tortious interference with contract is governed by a three-year statute of limitations and is not a continuing tort (CPLR 214[4]; Spinap Corp. v. Cafagno, 302 AD2d 588, 2nd Dept., 2003; American Fed. Group v. Edelman, 282 AD2d 279, 1st Dept., 2001). The claim accrues when the injury is sustained, not discovered (CPLR 214 [4]; American Fed. Group v. Edelman, supra).

Plaintiffs allege that the defendants interfered with the Teaming Agreement "as late as June 2006 when [Dynamic] and Nahor separately contracted with RCCL, only 19 months (i.e., well within three years) before filing of the Amended Complaint" (Memo in Opp, II). In claiming that its causes of action are not time barred as against David Nahor, plaintiffs argue that defendant Nahor tortiously interfered with the Teaming Agreement in July 2006 by usurping the RCCL account in concert with Nova (GCS's successor) which had expressly assumed GCS's obligations under the Teaming Agreement (Complaint , ¶34).

Tortious interference with contractual relations consists of four elements: (1) the existence of a contract between the plaintiff and a third party; (2) the defendant's knowledge of the contract; (3) the defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to the plaintiff (Kronos, Inc. v. AVX Corp., supra). "Since damage is an essential element of the tort, the claim is not enforceable until damages are sustained" (Id).

In this case, plaintiffs' amended complaint makes it clear that they were first damaged by defendants ' alleged interference with the Teaming Agreement when Dynamic signed a contract with Princess Cruises on December 31, 2003 - more than 4

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years before plaintiffs filed the amended complaint naming Dynamic's president, David Nahor, as a defendant. Thus, while it may be true that defendant, Nahor, continued to interfere with the Teaming Agreement as late as 2006 when Dynamic entered into a contract with RCCL, tortious interference with contract is not a continuing tort (Spinap Corp. Inc. v. Cafagno, supra). Plaintiffs concede in this case that the first time they suffered any damages as a result of Nahor's alleged tortious interference with the Teaming Agreement was in December 2003 when Dynamic signed a contract with Princess. All of the facts necessary to the causes of action sounding in tortious interference with contract existed by December 2003 and the plaintiffs could have obtained relief in Court as of that date (Id. at 588; see also American Fed. Group v. Edelman, 282 AD2d 279, 1st Dept., 2001). Plaintiffs' argument, that a claim against Nahor for usurping RCCL's business away from plaintiffs in 2006 could not have been brought in December 2003 because no breach or interference with regard to RCCL occurred until July 2006, is unavailing. Nahor had already tortiously interfered with the Teaming Agreement when he secured a contract on behalf of Dynamic with Princess in 2003.

To the extent that plaintiffs' claim against Nahor for tortious interference with existing and prospective business relationships is predicated solely on plaintiffs' time barred claim for tortious interference with the Teaming Agreement, plaintiffs' third and fourth causes of action as against David Nahor are also time barred and dismissed.

It is noted that the "relation back" doctrine does not save the plaintiffs from the three year statute of limitations requirement. Under the relation-back doctrine, a claim asserted against a new defendant may relate back to the date the claim was filed against a co-defendant if the plaintiff establishes that: "(1) both claims arose out of the same conduct, transaction, or occurrence, (2) the new defendant is united in interest with the original defendant, and (3) the new defendant knew or should have known that, but for a mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against him or it as well" (Holster v. Ross, 45 AD3d 640, 641-42, 2nd Dept., 2007) [Emphasis Added]. Although plaintiffs specifically identified Nahor in the original complaint, they did not name him as a defendant and thus cannot establish that their failure to do so was a mistake. As the Second Department held in Holster, "[w]hen a plaintiff intentionally decides not to assert a claim against a party known to be potentially liable, there has been no mistake and the plaintiff should not be given a second opportunity to assert that claim after the limitations period has expired" (Id). Here, the plaintiffs unquestionably knew that if Dynamic was liable for the claims asserted in the original complaint, David Nahor could potentially be liable as well. Yet, plaintiffs chose

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not to name him as a defendant.

For these reasons, plaintiffs' first, second, third and fourth causes of action as asserted against David Nahor are dismissed.

First and Second Causes of Action: Mark Silverman

[Tortious Interference with Contract]

"A cause of action seeking to hold corporate officials personally responsible for the corporation's breach of contract is governed by an enhanced pleading standard" (Joan Hansen & Co., Inc. v. Everlast World's Boxing Headquarters Corp., 296 AD2d 103, 1st Dept. 2002). This standard requires a particularized pleading of the allegations that the acts of the defendant corporate officer, which resulted in the tortious interference with contract, either were beyond the scope of his or her employment or, if not, were motivated by his or her personal gain, as distinguished from gain for the corporation. Personal gain is construed in terms that the challenged acts were undertaken "with malice and were calculated to impair the plaintiff's business for the personal profit of the [individual] defendant" rather than for the corporate interests (Joan Hansen & Co., supra at 110; Hoag v. Chancellor, Inc., 246 AD2d 224, 228, 1st Dept., 1998; Potter v. Minskoff, 2 AD2d 513, 514-515, 4th Dept., 1956 affd 4 NY2d 695 [1958];Courageous Syndicate v. People-To-People Sports Comm., 141 AD2d 599, 600, 2nd Dept., 1988; A.S. Rampell, Inc. v. Hyster Co., 3 NY2d 369, 379, 1957; Robbins v. Panitz, 61 NY2d 967, 969, 1984). "Failure to plead in nonconclusory language facts establishing all the elements of a wrongful and intentional interference in the contractual relationship requires dismissal of the action" (Bonanni v. Straight Arrow Pubs., 133 AD2d 585, 587, 1st Dept., 1987 citing Jennings v. Burlington Indus., 19 AD2d 877, 878, 1 st Dept., 1963).

Plaintiffs' allegations in their amended complaint, supporting their claim that defendant, Mark Silverman "wanted to help set up [Dynamic] and secure his own future profit" (Id., ¶31), sufficiently supports the conclusion that Silverman acquired personal pecuniary gain from GCS's alleged breach of the Teaming Agreement. A corporate officer will remain individually liable, notwithstanding the "Greyhound rule" which excuses them from liability for interference with their own company's contracts, if their actions constitute independent tortious conduct (Greyhound Corp. v. Commercial Cas. Ins. Co., 259 AD 317, 321, 1st Dept., 1941; Janoff v. Sheepshead Towers, Inc., 22 AD2d 950, 951, 2nd Dept., 1964; Murtha v. Yonkers Child Care Ass'n Inc. 45 NY2d 913, 915, 1978; Robbins v. Panitz, supra at 969; Bank of New York v. Berisford

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Intern ., 190 AD2d 622, 1st Dept., 1993). While the corporate representative cannot be held liable for inducing the corporation to terminate a contract without evidence that the representative used fraud, misrepresentation, deceit or other tortious means or acted purely from malice, where, as here, the plaintiffs advance a claim alleging that the corporate representative used improper means and acted for personal gain and to further his own interests rather than the corporate interests, that claim will survive a motion to dismiss.

In their amended complaint, plaintiffs allege as follows: "But Planet/Monex's successful launch of DCC for RCCL was not sufficient for Silverman who wanted to help set up [Dynamic] and secure his own future profit...Planet/Monex believed that throughout 2003 the parties had continued to pursue their mutual interests under the Teaming Agreement, including the effort to secure Princess as a customer under the agreement. Unbeknownst to Planet/Monex, however, Silverman and Nahor conspired to have GCS and [Dynamic] enter into a contract for [Dynamic] to support GCS in providing DCC services to GCS' customers including Princess, in breach of GCS' obligations under the Teaming Agreement" (Id., ¶31).

Plaintiffs further allege: "Silverman left GCS in 2006, and became employed by [Dynamic]. Silverman's conduct of accepting employment with [Dynamic] after having helped establish it while still employed by GCS repeats a pattern he has engaged in previously...Silverman helped [Dynamic]'s principal, defendant David Nahor (with whom Silverman has a previous working relationship), establish [Dynamic], and then (for his own personal profit) steered business that contractually should have gone to Planet/Monex to [Dynamic] instead. Silverman then joined [Dynamic] when his employment with GCS ended" (Id., ¶9).

Diversion of a business opportunity is an independent tort that sufficiently supports personal liability against Silverman in this case (Pangia & Co., CPAs, P.C. v. Diker, 291 AD2d 539, 2nd Dept., 2002; see also, Mazarella v. Electropep Datacom Products, Inc., 241 AD2d 513, 2nd Dept., 1997). It is well settled that "an officer or director of a corporation may not deprive the corporation of a business opportunity" (Pangia & Co., CPAs, P.C., supra; H.W. Collections v. Kolber, 256 AD2d 240, 1st Dept., 1998; 7th

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Sense v. Liu, 220 AD2d 215, 1st Dept., 1995). Moreover, "[a]s a corporate officer who acted tortiously, [defendant Silverman] may be held accountable regardless of whether he acted in furtherance of the interests of either corporation" (Herald Hotel Assocs. v. Ramada Franchise Systems, Inc., 191 AD2d 288, 1st Dept., 1993). Thus, plaintiffs have advanced sufficient allegations that defendant, Silverman, the president of GCS, can be personally liable for tortiously interfering with the Teaming Agreement and causing GCS' breach with the plaintiffs under it because he was motivated by his personal, rather than GCS' corporate interests (Hoag v. Chancellor, Inc., supra at 230).

In addition, to the extent that defendant, Silverman, signed the Teaming Agreement on behalf of GCS and so was obviously aware of the agreement and its specific terms, this Court finds that the plaintiffs have asserted the essential elements of the first two causes of action sounding in tortious interference with contract as against defendant Silverman.

Third and Fourth Causes of Action: Mark Silverman

[Tortious Interference with Existing and Prospective Business Relations]

As elaborated below, to establish a claim based on tortious interference with existing business relations, a plaintiff must show (1) the existence of a business relation with a third party, (2) defendant's interference with the relation by use of dishonest, unfair or improper means, and (3) plaintiff sustained damages (Fonar Corp. v. Magnetic Resonance Plus, Inc., 957 FSupp 477, 481-482 [SDNY 1997]; M.J. & K. Co., Inc. v. Matthew Bender & Co., Inc., 220 AD2d 488, 490, 2nd Dept., 1995). Similarly, "[t]ortious interference with [prospective] business relations applies to those situations where the third parties would have entered into an extended or contractual relationship with plaintiff but for the wrongful acts of the defendant" and "[i]n such an action the motive for the interference must be solely malicious" (M.J. & K. Co., Inc. v. Matthew Bender & Co., Inc., supra). A necessary allegation for the claim for tortious interference with prospective business relations is ". . .that defendant's conduct was motivated solely by malice or to inflict injury by unlawful means, beyond mere self-interest or other economic considerations" (Shared Communications Servs. Of ESR, Inc. v. Goldman Schs & Co., 23 AD3d 162, 163, 1st Dept., 2005). " Wrongful means' includes physical violence, fraud, misrepresentation, civil suits, criminal prosecutions, and some degree of economic pressure, but more than simple persuasion is required" (Snyder v. Sony Music Entertainment, 252 AD2d 294, 300, 1st Dept., 1999).

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To the extent that defendant Silverman (a corporate officer of GCS) allegedly steered RCCL (Dynamic's existing customer) and Princess (Dynamic's prospective customer) as well as allegedly diverted other potential business opportunities away form the plaintiffs, thus inducing the breach of the Teaming Agreement, this Court finds that plaintiffs have sufficiently stated their third and fourth causes of action as against Mark Silverman.

Also, plaintiffs' allegation that defendant, Silverman, "tortiously and improperly" interfered with plaintiff's prospective business relationship by "dishonest[ly] conceal[ing] his role in the negotiations between [Dynamic] and Princess" (Complaint, ¶61), plaintiffs sufficiently state a cause of action sounding in tortious interference with prospective business relations against Silverman.

First and Second Causes of Action: Dynamic

[Tortious Interference with Contract]

"A claim of tortious interference with contract requires: (1) the existence of a valid contract between plaintiff and a third party, (2) defendant's knowledge of the contract, (3) defendant's intentional procurement of a breach of the contract without justification, (4) actual breach of the contract, and (5) resulting damages" (Lama Holding Co. v. Smith Barney, 88 NY2d 413, 424 [1996]).

The knowledge on defendant's part of plaintiff's contract rights must be actual (Burns Jackson Miller Summit & Spitzer v Lindner, 88 AD2d 50, 2nd Dept., 1982, aff'd, 59 NY2d 314, 1983). It is not sufficient that defendant should have known of those rights if defendant did not in fact know of them (Roulette Records, Inc. v Princess Production Corp., 15 AD2d 335, 1st Dept., 1962 aff'd, 12 NY2d 815, 1962; A A Tube Testing Co. v Sohne, 20 AD2d 639, 3rd Dept., 1960). It is not necessary, however, that defendant have full knowledge of the detailed terms of the contract (Gold Medal Farms, Inc. v Rutland County Co-operative Creamery, Inc., 9 AD2d 473, 3rd Dept., 1960). "As an essential element of the cause of action sought to be pleaded, the plaintiff must allege that the defendants had actual knowledge; an allegation that they should have known' of the existence of the contract is insufficient" (AA Tube Testing Co., Inc. v. Sohne, supra). As the Second Department held in AA Tube Testing, a cause of action pleaded in the disjunctive is insufficient if any branch of the disjunctive is insufficient (Id).

As to the corporate defendant Dynamic's knowledge of the Teaming Agreement, plaintiffs allege, in pertinent part, as follows:

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48.Defendant [Dynamic], through Nahor, was aware of the Teaming Agreement and its specific terms, or it remained willfully ignorant of them.

This Court is not persuaded that plaintiffs' allegation, numbered forty-eight, is not legally sufficient to state a cause of action for tortious interference with contract. In AA Tube Testing, the Court held that "[a] cause of action cannot stand if...one of the alternatives does not state a cause of action." Clearly, the first part of the disjunctive - that defendants Dynamic and Nahor were aware of the Teaming Agreement and its specific terms - states a cause of action. This Court finds, however, that the second part of the disjunctive - that defendants Dynamic and Nahor "remained willfully ignorant of [the Teaming Agreement and its specific terms]" also states a cause of action for tortious interference with the Teaming Agreement.

While ordinarily the plaintiffs' allegation, that defendants were "willfully ignorant" of the existence of the contract or its terms, would be insufficient to constitute "actual knowledge" on the part of the defendants, because the plaintiffs have otherwise alleged particular facts that tend to show that Dynamic (through Nahor) "actually" knew of the Teaming Agreement, this Court finds that plaintiffs have sufficiently alleged the essential elements of the first two causes of action, including actual knowledge, as against defendant, Dynamic (JHW Greentree Capital, L.P. v. Whittier Trust Co., 2005 WL 3008452, SDNY 2005).

In fact, in this case, the defendants concede in their own papers that they "actually knew" of the existence of the Teaming Agreement. Defendant, Nahor, in his affidavit in support of the instant motion to dismiss the amended complaint states, as follows:

4.The GCS/[Dynamic] Agreement provides that GCS would provide a copy of the Teaming Agreement to [Dynamic] "provid[ed] that no confidentiality provisions are violated by providing said copies." However, neither Mark Silverman, my co-defendant and GCS's then President, nor anyone else, provided me with a copy of the Teaming Agreement or otherwise disclosed its terms to me. In fact, the first time I ever learned of any of the Teaming Agreement's terms was long after [Dynamic] had signed its contract with Princess Cruises.

Based upon a plain and simple reading of David Nahor's sworn statement, it is

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plainly clear that not only were the defendants, Dynamic and Nahor, "actually"aware of the existence of the Teaming Agreement, but that GCS (through a contract signed by defendants Silverman and Nahor) was contractually bound to give Dynamic and Nahor a copy of the Teaming Agreement. The fact that confidentiality restrictions in the Teaming Agreement might have prevented Silverman from disclosing the Teaming Agreement to Nahor is irrelevant because the fact of the matter is that the defendants, Dynamic and Nahor, were actually aware of the existence of the contract (Gold Medal Farms, Inc. v. Rutland County Co-operative Creamery, Inc, supra).

Defendants' argument that "in order to plead the required element of a tortious interference claim, a plaintiff must allege that the defendant had actual knowledge of the third-party's obligation that was breached" is unavailing. Defendants submit that the amended complaint here does not allege that Nahor or Dynamic had any understanding of GCS' obligations under the Teaming Agreement or contend that the Teaming Agreement was "virtually exclusive" and prohibited GCS from entering into a contract with Dynamic.

As stated above however, to state a claim for tortious interference with contract, all a plaintiff must plead is "the existence of a valid contract between the plaintiff and a third party, defendants' 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" (Fusco v. Fusco, 36 AD3d 589, 491, 2nd Dept., 2007). In their amended complaint, plaintiffs allege as follows:

31. Unbeknownst to [plaintiffs], however, Silverman and Nahor conspired to have GCS and [Dynamic] enter into a contract for [Dynamic] to spport GCS in providing DCC services to GCS' customers including Princess, in breach of GCS' obligations under the Teaming Agreement (Complaint , ¶ 31 [Emphasis Added]).

Plaintiffs also state:

42.Defendant Nahor, acting through defendant [Dynamic], conspired with Silverman to procure the breach of the Teaming Agreement by entering into the contract between GCS and [Dynamic] which was inconsistent with GCS' obligations to [plaintiffs] under the Teaming Agreement (Id., ¶ 42).

For the purposes of this motion, made pursuant to CPLR 3211, the plaintiffs need not allege that defendants had actual knowledge of the third-party's obligation to the

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plaintiffs. It is sufficient that the plaintiffs allege that defendants knew of the existence of a valid contract (the Teaming Agreement) and that they, the defendants, intentionally procured its breach which ultimately resulted in the plaintiffs sustaining damages (Fusco v. Fusco, supra). Accordingly, this Court finds that plaintiffs have asserted the essential elements of the first two causes of action as against defendant, Dynamic.

Third Cause of Action: Dynamic

[Tortious Interference with Existing Business Relations]

In their third cause of action, plaintiffs allege that defendants' purported conduct has interfered with their existing relationships with customers, including RCCL, with whom they "had a long-term, four-year mutually profitable business relationship" (Complaint, ¶ 54), and as a result, plaintiffs have suffered damages.

As previously stated, to establish a claim based on tortious interference with business relations, a plaintiff must show the existence of a business relation with a third party, defendant's interference with the relation by use of dishonest, unfair or improper means, and plaintiff sustained damages ( Fonar Corp. v. Magnetic Resonance Plus, Inc., supra; M.J. & K. Co., Inc. v. Matthew Bender & Co., Inc., supra at 490). "Conduct constituting tortious interference with business relation is, by definition, conduct directed not at the plaintiff itself, but at the party with which the plaintiff has or seeks to have a relationship" (Carvel Corp. v. Noonan, 3 NY3d 182, 192, 2004). "[U]nder New York law, in order for a party to make out a claim for tortious interference with prospective economic advantage, the defendant must direct some activities towards the third party " (Fonar Corp. v. Magnetic Resonance Plus, Inc., supra at 482). In order to establish a claim under the tort of interference with contractual relations, a third party must breach the contract after being induced to do so by the defendant (Kronos, Inc. v. AVX Corp., supra at 94).

As against defendant, Dynamic, while the plaintiffs have clearly alleged the existence of a business relation with a third party, namely RCCL (Complaint, ¶ 54) and that they sustained damages as a result of RCCL's termination of its relationship with the plaintiffs (Id., ¶56), they have failed to adequately plead that defendant Dynamic (through Nahor), used "dishonest, unfair or improper means" to interfere with plaintiffs' relations with RCCL.

Plaintiffs do not allege that either Nahor or Dynamic were motivated solely by

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malice or to inflict injury by unlawful means, other than to allege that they interfered with plaintiffs' business relationships with RCCL and secured it as a customer for GCS and Dynamic "through the improper and tortious contract that Silverman and Nahor caused to entered between GCS and [Dynamic]" (Complaint, ¶¶ 55, 61). The amended complaint does not plead any [*9]independent wrongful conduct on Dynamic's part, other than asserting that defendants tortiously interfered with the Teaming Agreement. Unlike in their original complaint, where plaintiffs alleged that defendants tortiously interfered with their prospective relationships with RCCL and Princess by "using plaintiffs' confidential and proprietary information and know how", they no longer assert the information was confidential, proprietary or trade secret, or that it was even provided it to any defendant. Plaintiffs stipulated to the dismissal of those claims, with prejudice. While they continue to allege that they transferred the information to non-party GCS, this allegation concerning that information cannot form the basis for a tortious interference claim herein. Plaintiffs' third cause of action against Dynamic is dismissed.

Fourth Cause of Action: Dynamic

[Tortious Interference with Prospective Business Relations]

Plaintiffs complain that defendants acted "willfully, wantonly, recklessly and with callous disregard for the rights of [the plaintiffs]" (Complaint, ¶63). The complaint alleges that defendants interfered with plaintiff's prospective business relationship with Princess by "tortiously and improperly" securing a contract with GCS and Dynamic which ultimately led to defendants' contract with Princess for the provision of DCC and other currency related services. The wrongful means alleged are "Silverman's dishonest concealment of his role in the negotiations between [Dynamic] and Princess" (Complaint, ¶61). Thus, while this allegation is sufficient to satisfy the pleading requirements of CPLR 3211 against defendant Silverman, plaintiffs' failure to allege any malicious motive on the party of the corporate defendant, Dynamic (through Nahor) compels this Court to dismiss plaintiffs' fourth cause of action against it.

Fifth Cause of Action: Dynamic, Silverman and Nahor

[Unjust Enrichment]

Plaintiffs' fifth cause of action for unjust enrichment is also dismissed. "To prevail on a claim of unjust enrichment, a [plaintiff] must show that (1) the [defendant] was enriched, (2) at [plaintiff' s] expense, and (3) that it is against equity and good conscience to permit the [defendant ]to retain what is sought to be recovered" (Citibank, N.A. v.

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Walker, 12 AD3d 480, 481, 2nd Dept., 2004; Clark v. Daby, 300 AD2d 732, 3rd Dept., 2002). In addition, "it is the plaintiff's burden to demonstrate that services were performed for the defendant resulting in [the latter's] unjust enrichment' " ( Clark v. Daby, supra, citing Kagan v. K-Tel Entertainment, 172 AD2d 375, 376, 1st Dept., 1991).

Here, the amended complaint alleges only that the defendants were "enriched by their receipt and retention of revenue and profits from servicing Princess and RCCL as customers..." (Complaint, ¶65). Plaintiffs failure to allege, however, that plaintiffs performed any services for defendants or [*10]otherwise provided them with any benefit is fatal to their claim for unjust enrichment.

Plaintiffs' allegation that they "schooled" non-party GCS in how to perform DCC transactions do not suffice for their unjust enrichment claims against the named defendants. Unlike in their original complaint, plaintiffs do not contend that any information they provided to GCS was confidential or that defendants benefited from any such information. In fact, they have abandoned any claims related to misappropriation of confidential information. Accordingly, plaintiffs' allegations in this regard do not support their unjust enrichment claims and are therefore dismissed as against all defendants.

THEREFORE, the only surviving claims from this motion to dismiss, pursuant to CPLR 3211, are as follows:

First Cause of Action against defendants Dynamic and Silverman.

Second Cause of Action against defendants Dynamic and Silverman.

Third Cause of Action against defendant Silverman.

Fourth Cause of Action against defendant Silverman.

This shall constitute the decision and order of this Court.

DatedMarch 26, 2008J.S.C.