| Ullmannglass v Oneida, Ltd. |
| 2011 NY Slip Op 06001 [86 AD3d 827] |
| July 21, 2011 |
| Appellate Division, Third Department |
| Ullmannglass et al., Respondents, v Oneida, Ltd., et al.,Appellants. |
—[*1] Hinman Straub, P.C., Albany (David T. Luntz of counsel), for respondents.
Malone Jr., J. Appeal from an order of the Supreme Court (Cerio, J.), entered November 4,2010 in Madison County, which partially denied defendants' motion to dismiss the complaint.
Plaintiff Ullmannglass is a German company and plaintiff Norbert Ullmann is its owner andpresident. As alleged in the complaint, defendants Oneida, Ltd., Oneida Silversmiths, Ltd. andOneida Silversmiths, Inc. are corporations doing business in New York, and defendant James E.Joseph is their chief executive officer.[FN*]The parties had a business relationship that ended in 2005, following which plaintiffs enteredinto a contract with Inn Crystal Glass. The contract became effective on December 1, 2005, andwas renewable on an annual basis. Plaintiffs allege that, in October 2006, prompted bycommunications with Joseph or other representatives of the Oneida corporations, Inn Crystalinformed them that it would discontinue their agreement. Thereafter, plaintiffs commenced thisaction against defendants in October 2009 asserting three causes of action, namely tortiousinterference with a contract, tortious interference with economic relations, prospectivecontractual relations and/or business expectancy (hereinafter collectively referred to as tortiousinterference with prospective contractual relations), and injurious [*2]falsehood and business disparagement. Defendants made apre-answer motion to dismiss the complaint on statute of limitations grounds and for failure tostate a cause of action. Supreme Court partially granted the motion, by dismissing only the thirdcause of action for injurious falsehood and business disparagement on statute of limitationsgrounds. Defendants now appeal.
Defendants first argue that the remaining two causes of action should have been dismissed onstatute of limitations grounds, asserting that the one-year limitation period applicable todefamation applied. A one-year statute of limitations applies to a claim sounding in defamation(see CPLR 215 [3]; Ramsay v Mary Imogene Bassett Hosp., 113 AD2d 149, 151[1985], lvs dismissed 67 NY2d 608, 1028 [1986]), whereas a claim for tortiousinterference with a contract is governed by a three-year statute of limitations (see CPLR214 [4]; Andrew Greenberg, Inc. vSvane, Inc., 36 AD3d 1094, 1099 [2007]), as is a tortious interference with prospectivecontractual relations claim (see CPLR 214 [4]; see e.g. Besicorp, Ltd. v Kahn,290 AD2d 147, 150 [2002], lv denied 98 NY2d 601 [2002]). In determining whichstatute of limitations is applicable to a cause of action, it is " 'the essence of the action and not itsmere name' " that controls (Morrison v National Broadcasting Co., 19 NY2d 453, 459[1967], quoting Brick v Cohn-Hall-Marx Co., 276 NY 259, 264 [1937]; see Ramsayv Mary Imogene Bassett Hosp., 113 AD2d at 151).
Here, plaintiffs' first cause of action clearly describes the existence of a "specific contract[ ]with which . . . defendant[s] allegedly successfully interfered, albeit by words,"thereby causing economic injury to plaintiffs (Classic Appraisals Corp. v DeSantis, 159AD2d 537, 537 [1990]; see AmaranthLLC v J.P. Morgan Chase & Co., 71 AD3d 40, 48 [2009], lv dismissed anddenied 14 NY3d 736 [2010]). The gravamen of plaintiffs' claim is an economic injury, not areputational one and, accordingly, we agree with Supreme Court's conclusion that a three-yearstatute of limitations is applicable and plaintiffs' first cause of action is not time-barred (seeAmaranth LLC v J.P. Morgan Chase & Co., 71 AD3d at 48; Mannix Indus. vAntonucci, 191 AD2d 482, 483 [1993], lv dismissed 82 NY2d 846 [1993];Classic Appraisals Corp. v DeSantis, 159 AD2d at 537). Similarly, the gravamen ofplaintiffs' tortious interference with prospective contractual relations claim is defendants'interference with plaintiffs' ongoing relationship with Inn Crystal resulting in lost commissionsand sales and service revenues and not, at its essence, reputational harm. As such, a three-yearstatute of limitations is also applicable to this claim and it also was not time-barred.
Turning to defendants' next contention, they assert that plaintiffs failed to sufficiently pleadcauses of action for tortious interference with a contract and tortious interference withprospective contractual relations. Liberally construing the complaint, treating all its allegations astrue and giving plaintiffs the benefit of every favorable inference (see Leon v Martinez,84 NY2d 83, 87 [1994]; Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1054 [2009]),we find that plaintiffs stated viable claims for tortious interference with a contract and tortiousinterference with prospective contractual relations.
" '[T]o sustain a claim for tortious interference with a contract, it must be established that avalid contract existed which a third party knew about, the third party intentionally and improperlyprocured the breach of the contract and the breach resulted in damage to the plaintiff' "(Clearmont Prop., LLC v Eisner, 58 AD3d at 1055, quoting Bradbury v Cope-Schwarz, 20 AD3d657, 659 [2005]; see Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993]; Butlerv Delaware Otsego Corp., 218 AD2d 357, 360 [1996]). In their complaint, plaintiffs allegedthat a valid contract existed between Ullmann and Inn Crystal, defendants were aware of thecontract and they wrongly induced Inn Crystal to terminate it. Further, plaintiffs alleged that thecontract was [*3]entered into in December 2005, and operated"on an annual basis," that they were informed by Inn Crystal in October 2006 that Joseph hadadvised it to terminate the contract and it "would have to discontinue the valid servicesagreement" with Ullmann due to "information . . . received from . . .Joseph." As a result, plaintiffs allege, they "suffered . . . substantial monetary lossfrom lost commissions and sales of goods and services." Contrary to defendants' assertions,liberally construing the complaint as a whole, plaintiffs use of the terms "discontinue" and"terminate" sufficiently allege that the contract was breached. In light of the foregoing, plaintiffssufficiently stated a claim for tortious interference with a contract and that portion of defendants'motion that sought to dismiss it was properly denied (see Butler v Delaware OtsegoCorp., 218 AD2d at 360).
Turning next to plaintiffs' claim of tortious interference with prospective contractualrelations, we find that plaintiffs' complaint sufficiently sets forth "wrongful means" employed bydefendants, and Supreme Court correctly permitted that cause of action to proceed. Generally, the"wrongful means" that make such interference actionable "must amount to a crime or anindependent tort" (Carvel Corp. vNoonan, 3 NY3d 182, 190 [2004]; see NBT Bancorp v Fleet/Norstar Fin.Group, 87 NY2d 614, 624 [1996]; Guard-Life Corp. v Parker Hardware Mfg. Corp.,50 NY2d 183, 191 [1980]; Lerwick vKelsey, 24 AD3d 918, 919 [2005], lv denied 6 NY3d 710 [2006]). Absent sucha showing, an exception to the general rule must apply, such as where a defendant's conduct wasmotivated solely by malice (Carvel Corp. v Noonan, 3 NY3d at 190; Lerwick vKelsey, 24 AD3d at 919). We agree with defendants that, standing alone, plaintiffs'conclusory allegations of malicious motives on defendants' part would be insufficient to avoiddismissal of this cause of action (see John R. Loftus, Inc. v White, 150 AD2d 857, 860[1989]; see also M.J. & K. Co. v Matthew Bender & Co., 220 AD2d 488, 490 [1995]).However, bearing in mind the favorable light by which we assess plaintiffs' complaint, we findtheir cause of action for tortious interference with contractual relations to be a sufficientindependent cause of action providing the predicate wrongful conduct for their tortiousinterference with prospective contractual relations claim. Importantly, plaintiffs have alleged thatthe contract with which defendants interfered was an annual "ever green"—and thusautomatically renewed—contract and, as such, defendants' tortious interference with thatcontract may have directly resulted in harm to its prospective contractual and business relationswith Inn Crystal. Accordingly, Supreme Court properly denied that portion of defendants' motionas sought to dismiss plaintiffs' second cause of action for failure to state a cause of action.
Peters, J.P., Spain, Lahtinen and McCarthy, JJ., concur. Ordered that the order is affirmed,with costs.
Footnote *: To the extent that defendantsassert in their brief that Oneida Silversmiths, Ltd. is not an entity, they admit that this issue is notrelevant to this appeal.