Cortez v. Stillwell Ready-Mix and Building Materials, L.L.C.

Background

Michael Cortez brought claims against Stillwell Ready-Mix and Building Materials, L.L.C., Stillwell Ready Mix L.L.C., Stillwell Realty L.L.C., and Vito Gargano for wrongful termination and discrimination based on sexual orientation. The opinion states that Cortez had worked for the defendants in an administrative role and that Gargano ultimately fired him.

The defendants denied Cortez’s allegations and asserted five counterclaims: employee negligence, tortious interference with business relations or contracts, defamation of Stillwell, defamation of Gargano, breach of fiduciary duty, and unjust enrichment. Cortez moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a pleading does not state a legally sufficient claim. He also moved to strike 16 of the defendants’ 30 affirmative defenses.

Counterclaims

The court held that the counterclaims did not identify their legal theories clearly and did not provide enough factual detail to make plausible claims under the federal pleading rules. The court treated the first counterclaim as employee negligence and dismissed it because New York law does not allow an employer to sue an employee for damages based on negligent acts or poor job performance.

The court construed the second counterclaim as one for tortious interference with contract. It dismissed that claim because an employee could not be sued on that theory for the reasons already discussed, and because the defendants did not identify particular contracts, the parties to those contracts, the relevant terms, any breach, or resulting damages. The court stated that the claim would also fail if construed as interference with prospective economic advantage.

The court dismissed the defamation counterclaims because the defendants did not describe the alleged social-media statements, explain why they were defamatory, plead facts showing that the statements were false, or provide adequate allegations of damages.

The court dismissed the breach-of-fiduciary-duty counterclaim because the defendants did not explain why Cortez, whose duties were described as ministerial and administrative, owed them a fiduciary duty. The alleged social-media activity and complaints about the employers did not rise to the level of a fiduciary-duty breach, and the damages allegations were too vague.

The court dismissed the unjust-enrichment counterclaim because it duplicated the defendants’ other claims and because the defendants indicated that an employment agreement or contract governed the relevant conduct. Under New York law, unjust enrichment generally cannot replace or duplicate a conventional contract or tort claim covering the same subject.

Affirmative defenses

The court denied Cortez’s motion to strike all the challenged affirmative defenses except the tenth. An affirmative defense is a defense that can defeat or limit a claim even if the opposing party proves its allegations. The court found that Cortez’s arguments were too cursory to show that the other defenses could not succeed or that their inclusion would prejudice him.

The court ordered the tenth affirmative defense stricken because it asserted waiver and estoppel together in a way that duplicated the second and third affirmative defenses, which separately invoked waiver and estoppel.

Disposition

The court granted Cortez’s motion to dismiss the counterclaims. It denied his motion to strike the affirmative defenses except as to the tenth defense, which it ordered stricken. The opinion does not state that either dismissal was with or without prejudice. The court directed the parties to continue their disclosure obligations and meet to establish a case-management plan.