Opinion
9760 Index 160990/17
06-27-2019
MEER ENTERPRISES, LLC, Plaintiff–Respondent, v. Durson KOCAK, et al., Defendants–Appellants.
The Roth Law Firm, PLLC, New York (Richard Roth of counsel), for appellants. Sadis & Goldberg LLP, New York (Ben Hutman of counsel), for respondent.
The Roth Law Firm, PLLC, New York (Richard Roth of counsel), for appellants.
Sadis & Goldberg LLP, New York (Ben Hutman of counsel), for respondent.
Friedman, J.P., Gische, Kapnick, Singh, JJ.
Order, Supreme Court, New York County (Gerald Lebovits, J.), entered November 20, 2018, which denied defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(7), unanimously modified, on the law, to dismiss the first cause of action as against defendant Durmesh Kocak, the second cause of action for misappropriation of confidential information and trade secrets as against defendant D.C. Group, Inc., the third cause of action for tortious interference with contract, and the fifth cause of action for unjust enrichment as against defendant Durson Kocak, D.C. Group Inc., Nuri Kocak and Nurco Technologies Inc., and otherwise affirmed, without costs.
Plaintiff Meer Enterprises, LLC purchased from defendant D.C. Group, Inc. an interest in a jewelry company doing business under the registered trade name Unique Settings of New York. Thereafter, defendants allegedly began operating a competing business under the name Unique Casting House and, later, Empire Casting House.
Plaintiff has pled a claim for breach of the noncompete, nonsolicitation and confidentiality provisions of the asset purchase agreement against Durson Kocak and D.C. Group ( Second Source Funding, LLC v. Yellowstone Capital, LLC, 144 A.D.3d 445, 445–446, 40 N.Y.S.3d 410 [1st Dept. 2016] ; Harris v. Seward Park Hous. Corp., 79 A.D.3d 425, 426, 913 N.Y.S.2d 161 [1st Dept. 2010] ). Durmesh Kocak is not a "covered person" bound by those provisions.
A claim for misappropriation of trade secrets against defendants Durson, Durmesh, Selina Kocak, Nuri Kocak, Gonco LLC and Nurco is sufficiently alleged ( Schroeder v. Pinterest, 133 A.D.3d 12, 27, 17 N.Y.S.3d 678 [1st Dept. 2015] ). Plaintiff claims that it provided its sales reports, customer lists, customer account information, and pricing data to Durson and Durmesh pursuant to the confidentiality provision of the asset purchase agreement, as well as an oral confidentiality agreement, with the understanding that they would use it solely to assess Unique Settings' showroom business. Notwithstanding, Durson and Durmesh allegedly used plaintiff's information in breach of those agreements, and shared it with Selina, Nuri, Gonco and Nurco, who knew they were not entitled to use it, but did so anyway in competition with plaintiff. However, the complaint does not plead a legally sufficient misappropriation claim against DC Group because it does not include allegations that DC Group, in particular, committed any acts of misappropriation.
The cause of action for tortious interference with contract is dismissed. Plaintiff has not sufficiently alleged that Durmesh, Nuri, Selina, Gonco or Nurco procured a breach of the asset purchase agreement by Durson ( White Plains Coat & Apron Co., Inc. v. Cintas Corp., 8 N.Y.3d 422, 426, 835 N.Y.S.2d 530, 867 N.E.2d 381 [2007] ; Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 424, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ), or that their activities were the "but for" cause of any such breach ( Cantor Fitzgerald Assoc. v. Tradition N. Am., 299 A.D.2d 204, 749 N.Y.S.2d 249 [1st Dept. 2002], lv denied 99 N.Y.2d 508, 757 N.Y.S.2d 819, 787 N.E.2d 1165 [2003] ; see Twin City Fire Ins. Co. v. Arch Ins. Group, Inc., 143 A.D.3d 533, 534, 143 A.D.3d 533 [1st Dept. 2016], lv dismissed 29 N.Y.3d 995, 53 N.Y.S.3d 612, 75 N.E.3d 1173 [2017] ).
Plaintiff sufficiently alleges a claim for unfair competition against Durson, Durmesh, Selina, Nuri, Gonco and Nurco (see Brook v. Peconic Bay Med. Ctr., 152 A.D.3d 436, 439, 59 N.Y.S.3d 310 [1st Dept. 2017] ; Apogee Handcraft, Inc. v. Verragio, Ltd., 155 A.D.3d 494, 496, 65 N.Y.S.3d 27 [1st Dept. 2017], lv denied 31 N.Y.3d 903, 2018 WL 1596433 [2018] ; Ahead Realty LLC v. India House, Inc., 92 A.D.3d 424, 425, 938 N.Y.S.2d 17 [1st Dept. 2012] ), including based on allegations of likely, if not actual, consumer confusion between plaintiff's trade name and defendants' competing business ( Allied Maintenance Corp. v. Allied Mech. Trades, 42 N.Y.2d 538, 543, 399 N.Y.S.2d 628, 369 N.E.2d 1162 [1977] ).
Plaintiff has also stated a claim against D.C. Group and its shareholder, Durson, based on Durson's efforts to solicit Unique Settings' customers subsequent to the sale of its goodwill to plaintiff ( Bessemer Trust Co., N.A. v. Branin, 16 N.Y.3d 549, 556–557, 925 N.Y.S.2d 371, 949 N.E.2d 462 [2011] ).
The unjust enrichment claim is duplicative of the breach of contract claim asserted against Durson and D.C. Group ( Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 388, 521 N.Y.S.2d 653, 516 N.E.2d 190 [1987] ), and is also dismissed against Nurco and Nuri, since they are not alleged to have operated Unique Casting House. The claim is properly pled against Durmesh and Selina, who allegedly operated the Unique Casting House business with Durson ( Georgia Malone & Co., Inc. v. Rieder, 19 N.Y.3d 511, 516, 950 N.Y.S.2d 333, 973 N.E.2d 743 [2012] ).
Plaintiff has pled defamation per se against Durmesh—who allegedly made a statement that may arguably impugn plaintiff's reputation in its trade, business or profession—and need not allege special damages ( Liberman v. Gelstein, 80 N.Y.2d 429, 435, 590 N.Y.S.2d 857, 605 N.E.2d 344 [1992] ; Glazier v. Harris, 99 A.D.3d 403, 404, 952 N.Y.S.2d 112 [1st Dept. 2012] ). Moreover, plaintiff pled the claim with the requisite particularity ( CPLR 3016[a] ; Amaranth LLC v. J.P. Morgan Chase & Co., 71 A.D.3d 40, 48, 888 N.Y.S.2d 489 [1st Dept. 2009], lv dismissed in part, denied in part 14 N.Y.3d 736, 898 N.Y.S.2d 74, 925 N.E.2d 73 [2010] ).