Amsterdam Hospitality Group, LLC v. Marshall-Alan Associates, Inc.

120 A.D.3d 431, 992 N.Y.S.2d 2

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: August 28, 2014
• Docket: 10587 113685/11
• Status: Published

Opinions

Order, Supreme Court, New York County (Jeffrey K. Oing, J), entered July 16, 2012, which, insofar as appealed from, denied defendant’s motion to dismiss the third and fourth causes of action for fraudulent misrepresentation and negligent misrepresentation, affirmed, without costs.

Plaintiff alleges that defendant, a senior executive search firm retained by plaintiff to recruit senior level executives to help it develop its hotel division, misrepresented that a potential placement, nonparty David Bowd, was not subject to a nonsolicitation agreement with his former employer. Plaintiff further alleges that it relied on this misrepresentation in hiring Bowd, and subsequently incurred legal expenses to defend a lawsuit brought by his former employer against plaintiff and the employee for breach of a restrictive covenant between the employee and his former employer.

The allegations set forth in the complaint state causes of action for fraudulent misrepresentation and negligent misrepresentation (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). In support of its argument that plaintiff cannot establish reasonable reliance on the alleged misrepresentation, defendant submits an affidavit and email showing that Bowd informed plaintiff of the nonsolicitation agreement with his former employer prior to the effective date of his employment with plaintiff. In opposition, plaintiff submits an affidavit and letter showing that the employee had accepted plaintiff’s offer of employment days before the email disclosing the restrictive covenant. The dissent contends that the affidavit and email submitted by defendant, taken together, constitute “documentary evidence” that “negates the element of justifiable reliance as a matter of law.” As a result, the dissent argues, defendant’s motion to dismiss pursuant to CPLR 3211 (a) (1) should have been granted.

The courts of this state have grappled with the issue of what writings do and do not constitute documentary evidence, since the term is not defined by statute. “Judicial records, such as judgments and orders, would qualify as ‘documentary’, as should the entire range of documents reflecting out-of-court transactions, such as contracts, deeds, wills, mortgages, and even correspondence” (David D. Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3211:10 at 22). To qualify as “documentary,” the paper’s content must be “essentially undeniable and . . ., assuming the verity of [the paper] and the validity of its execution, will itself support the ground on which the motion is based. (Neither the affidavit nor the deposition can ordinarily qualify under such a test.)” (Id.)

We have held that affidavits that “do no more than assert the inaccuracy of plaintiffs’ allegations . . . may not be considered, in the context of a motion to dismiss, for the purpose of determining whether there is evidentiary support for the complaint . . . and do not otherwise conclusively establish a defense to the asserted claims as a matter of law” (Tsimerman v Janoff, 40 AD3d 242, 242 [1st Dept 2007]; see also Fontanetta v John Doe 1, 73 AD3d 78, 85 [2d Dept 2010]).

The cases cited by the dissent do not require us to reach a different result in this case. In WFB Telecom. v NYNEX Corp. (188 AD2d 257, 259 [1st Dept 1992], lv denied 81 NY2d 709 [1993]), the documentary evidence submitted by defendants included letters from both parties’ counsel, which, taken together, constituted “undisputed proof that defendants’ actions were motivated, at least in part, by legitimate business goals” sufficient to defeat plaintiffs’ claims for prima facie tort. This is wholly consistent with the rule that to constitute documentary evidence, the papers must be “essentially undeniable” and support the motion on its own (Siegel at 22). Nor is our conclusion that the email in Advanced Global Tech., LLC v Sirius Satellite Radio, Inc. (44 AD3d 317, 318 [1st Dept 2007]) did not constitute documentary evidence translate into a blanket rejection of emails as documentary evidence. As Professor Siegel recognizes, “even correspondence” may, under appropriate circumstances, qualify as documentary evidence (Siegel at 22). In our electronic age, emails can qualify as documentary evidence if they meet the “essentially undeniable” test (see Art & Fashion Group Corp. v Cyclops Prod., Inc., 120 AD3d 436 [1st Dept 2014] [decided simultaneously herewith]; see also Langer v Dadabhoy, 44 AD3d 425 [1st Dept 2007], lv denied 10 NY3d 712 [2008]). The email at issue here simply fails this test.

Significantly, we note that a motion to dismiss under CPLR 3211 (a) (1) obliges the court “to accept the complaint’s factual allegations as true, according to plaintiff the benefit of every possible favorable inference, and determining only whether the facts as alleged fit within any cognizable legal theory” (Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 270-271 [1st Dept 2004] [internal quotation marks omitted]). Dismissal is warranted only if the documentary evidence submitted “utterly refutes plaintiffs factual allegations” (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]; see Greenapple v Capital One, N.A., 92 AD3d 548, 550 [1st Dept 2012]), and “conclusively establishes a defense to the asserted claims as a matter of law” (Weil, Gotshal, 10 AD3d at 270-271 [internal quotation marks omitted]).

Schutty v Speiser Krause P.C. (86 AD3d 484, 485 [1st Dept 2011]), also cited by the dissent, is similarly distinguishable. There we found multiple drafts of a contemplated new employment agreement, the parties’ correspondence and plaintiff’s written letter of resignation to be sufficient to undeniably establish “that the parties did not intend to be bound until there was a signed written contract and that there was never a meeting of the minds on all material terms of the new agreement.” (Id.)

The emails in this particular case, aside from being not otherwise admissible, are not able to support the motion to dismiss. The “documentary evidence” here, unlike the emails in Langer, do not, standing on their own, conclusively establish a defense to the claims set forth in the complaint. While they may indicate that Bowd put defendants on notice of potential employment restrictions, other letters indicate that Bowd had, in fact, accepted the offer of employment days before he sent the emails in question. Because defendant has not “negated beyond substantial question” the allegation of reasonable reliance, and the submissions raise factual issues concerning the circumstances and communications underlying plaintiffs hiring of Bowd, it cannot be concluded that plaintiff has no causes of action for fraudulent and negligent misrepresentation (Guggenheimer v Ginzburg, 43 NY2d at 275).

Concur — Sweeny, J.P., Manzanet-Daniels and Clark, JJ.