Jacobson v. Conflict International, Inc.

Background

Trudy Jacobson sued Conflict International, Inc. (Conflict), Andrew McLaren, and John Doe. The lawsuit concerns a March 2, 2021 contract under which Conflict agreed to provide private-investigation services. Jacobson alleged that she paid Conflict $1.8 million over approximately one year.

The contract included a confidentiality clause stating that Jacobson’s relationship with Conflict, and all documents and communications related to her case, would be treated as confidential and privileged. Jacobson alleged that McLaren learned the identity of the investigation’s target, the amount she paid, and the identities of investigators. She further alleged that McLaren disclosed that information to Victoria Pressley, disclosed the existence of the investigation to the target, and helped cause the target to send an email to Jacobson’s husband. Jacobson alleged that John Doe, an unidentified Conflict employee, participated in the information leak.

Jacobson claimed that Conflict breached the contract and that McLaren and Doe tortiously interfered with the contract by inducing Conflict to breach it. She sought damages, including legal fees, increased investigative costs, and emotional distress, as well as punitive damages or rescission of the contract. The amended complaint abandoned earlier negligence claims and released Jane Doe as a defendant.

Motion to Dismiss and the Email

Defendants moved to dismiss the amended complaint under Rule 12(b)(6), which permits dismissal when a complaint does not adequately state a legal claim. The court generally had to accept the amended complaint’s factual allegations as true and draw reasonable inferences in Jacobson’s favor.

Defendants asked the court to consider an email that the investigation’s target sent to Jacobson’s husband. They argued that the email showed the target discovered the investigation independently, meaning disclosures by McLaren could not have caused Jacobson’s claimed damages. The court found that the email was not incorporated by reference into the amended complaint. The court nevertheless assumed, without deciding, that it could consider the email as an integral document, but only for what it said—not to establish that its statements were true. The email did not change the court’s conclusion that the amended complaint adequately stated claims.

Breach of Contract

Under New York law, a breach-of-contract claim requires a contract, the plaintiff’s performance, a breach, and resulting damages. The court found that Jacobson adequately identified the contract’s confidentiality clause and alleged how Conflict violated it: by disclosing confidential information to McLaren and Pressley and disclosing the existence of the investigation to the target.

The court rejected defendants’ argument that Conflict’s disclosure to McLaren could not be unauthorized because McLaren was an employee, contractor, or agent. The amended complaint alleged that McLaren was not generally Conflict’s employee and was not acting as Conflict’s agent when the disclosures occurred. Drawing inferences for Jacobson, the court found it plausible that McLaren was not authorized to receive the information. The court also found that the complaint did not establish that Jacobson herself had given Pressley the target’s identity, the amount paid, or the investigators’ identities.

The court likewise rejected defendants’ reliance on the email to show that the target learned about the investigation independently. At the motion-to-dismiss stage, the court had to accept Jacobson’s contrary allegations that McLaren informed the target and that Conflict and McLaren supplied information for the email.

The court also found that Jacobson adequately alleged damages. She claimed that the disclosures led to legal fees incurred while resisting McLaren’s and Pressley’s demands for compensation, increased investigative costs, and extreme emotional distress caused by the email to her husband. The court concluded that she did not need to establish the precise amount of damages at this stage.

Tortious Interference with Contract

A tortious-interference claim generally requires a contract, the defendant’s knowledge of it, intentional and unjustified inducement of a breach, an actual breach, and damages. The interference must ordinarily be by someone outside the contract; an agent or employee generally is not a stranger unless acting beyond authorized duties.

The court found that Jacobson plausibly alleged each required point. She alleged that McLaren knew about the contract because he referred her to Conflict, and that Doe knew about it because he was a Conflict employee. She also alleged that McLaren and Doe intentionally induced Conflict to breach the confidentiality clause to penalize her for continuing to work with Stephen Komorek.

Because Doe’s identity and role at Conflict were unknown, the court could not determine whether he exceeded his authority when he allegedly participated in the leak. The court also could not conclude at this stage that McLaren was Conflict’s agent or otherwise not a stranger to the contract. The tortious-interference claim against both defendants could therefore proceed.

Disposition

Judge Ramos denied defendants’ motion to dismiss. The Clerk of Court was directed to terminate the motion, and the parties were directed to appear for a status conference on April 19, 2024. The court noted that, to maintain claims against John Doe, Jacobson would need to take reasonable steps through discovery to identify him and then amend the operative pleading to name him.