Guardit Technologies, LLC v. Empire IP LLC

Background

Guardit Technologies, LLC and Michael Script asserted claims against Empire IP LLC, Daniel Mitry, and Timothy Salmon for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, promissory estoppel, fraud, negligence, and breach of bailment. The defendants previously moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6).

In a February 15, 2024 order, the court denied the challenge to subject-matter jurisdiction, dismissed all claims against Mitry and Salmon for lack of personal jurisdiction, dismissed Script’s breach-of-contract claim, and allowed Guardit’s breach-of-contract claim against Empire to proceed. The court dismissed the other identified claims, but its order indicated that Guardit’s negligence claim against Empire would proceed without substantively addressing that claim.

Motion for Reconsideration

Empire moved for reconsideration of the decision allowing Guardit’s negligence claim to proceed. Guardit opposed the motion. The court explained that reconsideration is an extraordinary remedy generally available only when the court overlooked controlling decisions or information that could reasonably change its conclusion.

The court found that it had erred by failing to substantively address the negligence claim. It therefore granted the motion for reconsideration and considered whether the claim stated a valid negligence claim under New York law.

Analysis

The court stated that a negligence claim requires a duty of care, a breach of that duty, and an injury caused by the breach. It also explained that a negligence claim may coexist with a contract claim only when it arises from a duty separate from the contractual duty, concerns conduct collateral or extraneous to the contract, or seeks special damages not recoverable under contract law.

Guardit’s contract claim alleged that it had not received the full amount of monetary recoveries required under the January 1, 2015 agreement between Guardit and Empire. Its negligence claim alleged that the defendants failed to supervise employees, agents, or outside consultants and failed to exercise reasonable care in enforcing patents. The court concluded that these allegations concerned the same alleged failure to ensure that Guardit received the monetary recoveries required by the agreement. Because the negligence claim pleaded the same acts, arose from the same contractual obligations, and sought essentially the same relief as the contract claim, the court found it duplicative.

Disposition

The court granted Empire’s motion for reconsideration, adopted Judge Stewart D. Aaron’s recommendation concerning the negligence claim, and dismissed that claim under Rule 12(b)(6) for failure to state a claim. The clerk was directed to terminate the reconsideration motion.