Innovative Municipal Products (U.S.), Inc., v. Central Equipment, LLC, Index No. 4073/13, March 7, 2017, (Platkin, J.)

Motion for Summary Judgment; Motion to Amend a Complaint; CPLR § 3212; CPLR § 3025(b); CPLR § 2220

By: Stephen Hernandez | Staff Writer

Plaintiff and Defendant developed and implemented a joint “Tank Agreement Program” that allowed customers to lease a storage tank, with an option to buy at a reduced cost or continue to lease if they signed a multi-year purchase contract for de-icing products. Unknown to Plaintiff, its director of sales was paid a ten percent commission on each storage-tank purchased subsequent to this Program. By the end of the Program, Plaintiff owed Defendant almost fifty-thousand dollars from unpaid invoices of storage tank purchases, but refused to pay after it discovered the secret “kickback” agreement between Defendant and Plaintiff’s director of sales. Subsequently, Plaintiff terminated its director of sales and brought suit against Defendant, alleging (1) breach of contract, (2) aiding and abetting breaches of a fiduciary duty, (3) unjust enrichment, and (4) fraud. Defendant counterclaimed for the balance due on the unpaid invoices. Defendant moved for summary judgment and Plaintiff cross-moved to amend the ad damnum clause its complaint, “to clarify that the amount of its claim for compensatory damages  is not limited to…the total amount of payments made by defendants…” Defendants opposed the motion.

Plaintiff argued that Defendant artificially inflated its prices to cover the “commissions” paid to its former director of sales. Defendant argued in its motion for summary judgment that it did not inflate the cost of its storage tanks to cover the commission, and alleged in the alternative that if costs were inflated, Plaintiff could not be damaged because Plaintiff recouped the cost from its customers. Defendant further argued against Plaintiff’s cross-motion stating that claiming that they cannot “defend against theses new claims, as they do not know which purchases are claimed to be excessive.”

The Court denied Defendant’s summary judgment motion because it did not establish a prima facie entitlement to a favoring judgment as a matter of law. The Court noted that many of Defendant’s arguments for summary judgment called for factual evaluations and were better served to an analysis at trial. The Court also held that Defendants could not prove as a matter of law that it performed its contractual obligations to Plaintiff.  With respect to Plaintiff’s cross-motion, the Court noted that courts generally grant a litigant the ability to amend the ad damnum clause prior to trial because no prejudice accrues to the opposing party. Furthermore, there was no evidence the Defendant would be prejudiced by Plaintiff’s amendment of the ad damnum clause. Thus, the Plaintiff’s motion to amend the ad damnum clause of the complaint was granted by the Court.

Innovative Municipal Products (U.S.), Inc., v. Central Equipment, LLC, Index No. 4073/13, March 7, 2017, (Platkin, J.)

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