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East Point Systems, Inc. v. Maxim

United States District Court, D. Connecticut

September 21, 2015

EAST POINT SYSTEMS, INC., THOMAS MARGARIDO, JASON MARGARIDO, AND PAUL TAFF, Plaintiffs,
v.
STEVEN MAXIM, S2K, INC., MAXIM ENTERPRISES, INC., MAXIM FIELD SERVICE SUPPLY, INC., EDWIN PAJEMOLA, AND CLEVELAND FIELD SYSTEMS, LLC, Defendants

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[Copyrighted Material Omitted]

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          For East Point Sys Inc, Plaintiff, Counter Defendant: Bruce H. Raymond, Jay M. Wolman, LEAD ATTORNEYS, Raymond Law Group LLC, Glastonbury, CT; Michael J. Kopsick, LEAD ATTORNEY, Kahan, Kerensky & Capossela, Vernon, CT.

         For Thomas Margarido, Jason Margarido, Paul Taff, Plaintiffs, Counter Defendants: Bruce H. Raymond, Jay M. Wolman, LEAD ATTORNEYS, Raymond Law Group LLC, Glastonbury, CT.

         For Steven Maxim, S2K, Inc., Maxim Enterprises, Inc., Maxim Field Service Supply, Inc., Defendants: Brian O'Donnell, LEAD ATTORNEY, Reid & Riege-Htfd, Hartford, CT; Mary Elizabeth Mintel, LEAD ATTORNEY, Reid & Reige, P.C., Hartford, CT; Robert McNamara, Sidney N Freeman, LEAD ATTORNEYS, PRO HAC VICE, McNamara, Demczyk Co., L.P.A., Uniontown, OH.

         For Maxim Enterprises, Inc., S2K, Inc., Maxim Field Service Supply, Inc., Steven Maxim, Cross Claimant, Counter Claimant: Brian O'Donnell, LEAD ATTORNEY, Reid & Riege-Htfd, Hartford, CT; Mary Elizabeth Mintel, LEAD ATTORNEY, Reid & Reige, P.C., Hartford, CT.

         For Edwin Pajemola, Cleveland Field Systems, LLC, Defendants: Edward R. Scofield, LEAD ATTORNEY, Zeldes, Needle & Cooper, P.C., Bridgeport, CT; Timothy L McGarry, LEAD ATTORNEY, PRO HAC VICE, Henderson & Schmidlin Co., LPA, Highland Heights, OH.

         For Cleveland Field Systems, LLC, Cross Defendant: Edward R. Scofield, LEAD ATTORNEY, Zeldes, Needle & Cooper, P.C., Bridgeport, CT; Timothy L McGarry, Henderson & Schmidlin Co., LPA, Highland Heights, OH.

         For Edwin Pajemola, Cleveland Field Systems, LLC, Cross Claimant, Counter Claimant, Cross Defendant: Edward R. Scofield, LEAD ATTORNEY, Zeldes, Needle & Cooper, P.C., Bridgeport, CT.

         For Maxim Field Service Supply, Inc., Cross Defendant: Brian O'Donnell, LEAD ATTORNEY, Reid & Riege-Htfd, Hartford, CT; Mary Elizabeth Mintel, LEAD ATTORNEY, Reid & Reige, P.C., Hartford, CT; Robert McNamara, Sidney N Freeman, LEAD ATTORNEYS, McNamara, Demczyk Co., L.P.A., Uniontown, OH.

         For Steven Maxim, Cross Claimant, Counter Claimant : Brian O'Donnell, LEAD ATTORNEY, Reid & Riege-Htfd, Hartford, CT; Mary Elizabeth Mintel, LEAD ATTORNEY, Reid & Reige, P.C., Hartford, CT; Robert McNamara, Sidney N Freeman, LEAD ATTORNEYS, McNamara, Demczyk Co., L.P.A., Uniontown, OH.

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         RULING AND ORDER

         VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiffs, East Point Systems, Inc. (" EPS" ), Thomas Margarido, Jason Margarido, and Paul Taff, filed this action against Defendants, Steven Maxim, S2K, Inc. (" S2K" ), Maxim Enterprises, Inc. (" MEI" ), Maxim Field Service Supply, Inc. (" MFSS" ), Edwin Pajemola, and Cleveland Field Systems, LLC (" CFS" ) for breach of contract, statutory and common law breach of fiduciary duty, specific performance, tortious interference with business expectancy, violations of the Connecticut Uniform Trade Secrets Act, Conn. Gen. Stat. § § 35-50, et seq. (" CUTSA" ), violations of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § § 42-110a, et. seq. (" CUTPA" ), computer-related offense under Conn. Gen. Stat. § 53a-251, copyright infringement under 17 U.S.C. § 501, and imposition of a constructive trust.

         In their original Answer, Steven Maxim, S2K, MEI, and MFSS (collectively, the " Maxim Defendants" ) counterclaimed for breach of contract, fraud, quantum meruit, accounting, specific performance, violations of CUTPA, rescission or reformation, punitive damages, injunction, and declaratory judgment. ECF No. 22 at 62-75.

         Plaintiffs moved to dismiss all of those counterclaims. ECF No. 29. The Court granted Plaintiffs' motion by order dated February 7, 2014 (the " First Order" ). ECF No. 59. In the First Order, the Court concluded that the Maxim Defendants had not pleaded fraud with sufficient particularity, and granted them leave to re-plead only those claims sounding in fraud -- specifically, fraud, quantum meruit based on fraud, CUTPA based on fraud, and rescission or reformation based on fraud. See id. at 13, 16, 20, 23.

         The Maxim Defendants then filed an Amended Answer. ECF No. 63. In it, the Maxim Defendants re-asserted all of the dismissed counterclaims except the independent count for punitive damages, and added a new counterclaim for breach of implied warranty. See generally id. at 72-99.

         Plaintiffs have moved to dismiss all of the counterclaims asserted in the Maxim Defendants' Amended Answer. ECF No. 66. Plaintiffs also have moved for summary judgment as to those amended counterclaims. ECF No. 134.

         The Maxim Defendants ultimately realized that the First Order had not given them leave to re-plead certain of the counterclaims asserted in their Amended Answer. They have moved to withdraw those counterclaims, specifically, counts 1, 2, 4, 5, 9, and 10, as well as paragraphs 380 through 383 of count 6. ECF No. 123. Plaintiffs ask that the Court dismiss those claims with prejudice. ECF No. 126.

         A. Motion to Withdraw Amended Counterclaims [ECF No. 123]

         The Maxim Defendants' motion to withdraw counterclaims (ECF No. 123) is GRANTED. Counts 1, 2, 4, 5, 9, and 10 are dismissed with prejudice consistent with the First Order. Paragraphs 380 through 383 of count 6 are withdrawn. The counterclaims that remain are addressed in the

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Court's below ruling on Plaintiffs' motion to dismiss.

         B. Motion to Dismiss Amended Counterclaims [ECF No. 66]

         Plaintiffs have moved under Federal Rules of Civil Procedure 9(b) and 12(b)(6) to dismiss all remaining counterclaims in the Maxim Defendants' Amended Answer. For the reasons stated below, the motion is GRANTED.

         1. Standard of Review

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff must state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A claim is facially plausible if " the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although " detailed factual allegations" are not required, a complaint must offer more than " labels and conclusions," or " a formulaic recitation of the elements of a cause of action" or " naked assertion[s]" devoid of " further factual enhancement." Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

          In determining whether the plaintiff has met this standard, the Court must accept the allegations in the complaint as true and draw all reasonable inferences in the light most favorable to the non-moving party, In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007), and generally may consider only " the facts as asserted within the four corners of the complaint, the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007).

         A plaintiff alleging statutory or common law fraud must also comply with Federal Rule of Civil Procedure 9(b), which requires a party to state the circumstances constituting fraud " with particularity." Fed.R.Civ.P. 9(b). " Specifically, the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993); Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 119 (2d Cir. 2013) (" [T]he 'complaint must adequately specify the statements it claims were false or misleading, give particulars as to the respect in which plaintiff contends the statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements.'" ) (quoting Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989)). Although a plaintiff may plead generally the requisite fraudulent intent, he must allege facts giving rise to a strong inference of fraudulent intent, which may include facts showing that the defendant(s) had both motive and opportunity to commit fraud, or facts that constitute strong ...


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