### Zaiger LLC v Bucher Law PLLC 2024 NY Slip Op 32244(U) July 1, 2024 Supreme Court, New York County Docket Number: Index No. 154124/2023 Judge: Mary V. Rosado Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local government sources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

### [FILED: NEW YORK COUNTY CLERK 07/02/2024 05:05 P~ NYSCEF DOC. NO. 162 INDEX NO. 154124/2023 RECEIVED NYSCEF: 07/02/2024 

### SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MARY V. ROSADO Justice ------------,----------------------X

ZAIGER LLC Plaintiff,

- V - BUCHER LAW PLLC, Defendant.

-------------------------------------------------------------------------X PART
INDEX NO. MOTION DATE 33M 154124/2023 06/16/2023 MOTION SEQ. NO. ------=--00---=2=------- DECISION + ORDER ON MOTION

The following e-filed documents, listed by NYSCEF document number (Motion 002) 1, 96, 97, 98, 99, 100,101,102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120, 121,122,123,124,128,129,137,138,139,140,141,142,143,144,145,146,147,148,149,150,151, 152, 153,154,155, 156,157,158, 159, 160, 161 were read on this motion to/for DISMISS Upon the foregoing documents, and after oral argument which occurred on October 31, 2023 with Gregory 

### 0. Tuttle, Esq. and Alex Banzhaf, Esq. appearing for PlaintiffZaiger LLC ("Plaintiff') and Seth K. Kugler, Esq. appearing for Defendant BucherLawPLLC ("Defendant"), Defendant's motion for an Order (1) dismissing Plaintiffs claims pursuant to CPLR 321 l(a)(7); (2) dismissing Plaintiffs claims as a SLAPP suitpursuantto CPLR 3211(g) and N.Y. Civ. Rights Law§ 76-a (the "Anti-Slapp Law") and awarding costs and attorneys' fees; and (3) dismissing or staying this action pending a determination of previously filed Connecticut action (the "ConnecticutAction"); is denied. 

### I. Background William Bucher ("Bucher") is the principal ofDefendant Bucher Law PLLC (NYSCEF Doc. 124 at

## ,r 2). Plaintiffis a New York limited liability company engaged in the practice oflaw (NYSCEF Doc. 138 at

## ,r 7). Plaintiffemployed Bucherfrom August 15, 2022 until March 1, 2023 when Plaintiffterminated his employment (NYSCEF Doc. 1at

## ,r4).

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On May 9, 2023 Plaintiffcommencedthe instant action againstDefendant (NYSCEF Doc. 1

). On July 26, 2023 Plaintifffiled, without leave ofthe Court, an Amended Complaint asserting
causes ofaction for (1) tortious interference with contractual relations; (2) unfair competition; (3) misappropriation; (4) unjust enrichment; and (5) violation of New York Judiciary Law §475 (NYSCEF Doc. 129). Specifically, Plaintiff alleges that after Bucher's employment was terminated he stole the personal information ofnearly 34,000 ofPlaintiff's clients (the "Client List") andusedthose contactsto engage in a solicitationcampaignto induce wrongfullyPlaintiff's clients to end their client relationship with Plaintiff(NYSCEF Doc. 129) On June 16, 2023 Defendantfiled the instant motionfor an Order (1) dismissing Plaintiff's claims pursuant to CPLR 3211(a)(7); (2) dismissing Plaintiffs claims as a SLAPP suit pursuant to 321 l(g) and N.Y. Civ Rights Law§ 76-a; (3) awarding Defendants costs and attorneys' fees pursuant to N.Y. Civ Rights Law § 70-a; or (4) dismissing and staying this action due to the pendency ofapreexisting federal action (NYSCEF Doc. 96). 

### II. Discussion i. Plaintiff's Amended Complaintis Controlling Preliminarily, while Defendant argues that Plaintiff's Amended Complaint was untimely, pursuant to CPLR 3025(a) "[a] party may amend his pleading once without leave ofthe court within twenty days after its service, or at any time before the period for responding to it expires,
or within twenty days after service of a pleading responding to it." Further, pursuant to CPLR 321 l(f) the service ofa notice ofmotionunder CPLR 321 l(a)(l) "beforethe service ofapleading responsive to the cause ofaction or defense sought to be dismissed extends the time to serve the [responsive] pleadinguntiltendays after service ofnotice ofentry ofthe order" (see Roam Capital, Inc. vAsiaAlternativesMgt. LLC, 194 AD3d 585, 585-586 [1stDept2021]. Accordingly, by filing

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the instant motion, Defendant's period for responding to Plaintiffs claims is extended until ten days after a decision on the motion is rendered. Because Defendant's period for responding to Plaintiffspleadinghas notyet expired, Plaintiffsfiling ofthe Amended Complaint is made as of right and is timely pursuantto CPLR 3025(a). Further, it is well settled that when an amended complaint is filed it supersedes the initial complaint leaving it the only complaint inthe action (Pomerance vMcGrath, l04 AD3d440, 442 [Ist Dept 2013]). Accordingly, Defendant's motion shall be applied to Plaintiffs Amended Complaint (NYSCED Doc. 129). ii. Standard Pursuantto CPLR 321 l(g), a motion to dismiss under CPLR 321 l(a)(7) in which the moving party has demonstrated that the action, claim, cross claim or counterclaim subject to the motion is an action involving public petition and participation as defined in paragraph (a) ofsubdivision one ofsection [76-a] ofthe civil rights law, shall be granted unless the party responding to the motion demonstrated thatthe cause ofaction has a substantial basis in law or is supported by a substantial argument for an extension, modification orreversal ofexisting law An action involves public petition and participation ifit is "any communication in a place open to the public or a public forum in connection with an issue ofpublic interest" or ifit is "any other lawful conduct in furtherance ofthe exercise ofthe constitutional right offree speech in connection with an issue of public interest" (see Civil Rights Law § 76-a[l][a]). Indeed, the implementationofthe anti-SLAPP lawwas a response to the "rising concern aboutthe use ofcivil litigation, primarily defamation suits, to intimidate or silence those who speak out" (600 W I15th St. Corp. v Von Gutfeld, 80 NY2d 130, 137 n.1 [1992), certdenied 508 U.S. 910 [1993)). In 2020, the legislature amended the anti-Slapp law to "broaden the scope ofthe law and afford greater protections to citizens" (Aristocrat Plastic Surgery, P.C. v Silva, 206 AD3d 26, 28 206 AD3d 26

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[1st Dept 2022] quoting Mable Assets, LLC v Rachmanov, 192 AD3d 998, 1000 [2d Dept 2021], citing L 2020, ch 250). Whether a matter touches upon the "public interest" is to "be construed broadly and shall mean any subject other than a purely private matter" (Civil Rights Law § 76- a[l][d]). Once a movanthas shownthather statementinvolves publicpetition andparticipation, the burden then shifts to the non-movant. Civil Rights Law Section 76 § 76-(a)(2) provides that a plaintiffmay only recover damages in an action involving public petition and participation if, "in addition to all other necessary elements, plaintiffshows by clear and convincing evidence thatthe allegedly actionable communication was made with knowledge of its falsity or with reckless disregard ofwhether it was false". However, the Appellate Division has held that a clear and convmcmg standard is inappropriate on a pre-motion to dismiss (Zeitlin v Cohan, 220 AD3d 631, 632 [1st Dept 2023]). Instead, on a pre-answer motion, the plaintiffmust show that the claim has a substantial basis in law, which the First Department has defined as "such relevant proofas a reasonable mind may accept as adequate to support a conclusion or ultimate fact" (Karl Reeves, CE.INY Corp. v AssociatedNewspapers, Ltd., 210 NYS3d 25, 28 [1st Dept 2024]). Whetherthere is a substantial basis thata statement was made withknowledge ofits falsity
or with reckless disregard of its falsity will be inferred from objective facts, including "the defendant's own actions or statements, the dubious nature of [her] sources, [and] the inherent improbability ofthe story." (Great Wall Medical P.C. v Levine, 74 Misc.3d 1224[A] at *2 [Sup. Ct., N.Y. County 2022] quoting Coleman v Grand, 523 F.Supp.3d 244, 260 [EDNY 2021]). The courtmustconsiderthepleadings and affidavitsto determine ifa plaintiff's claimhas a substantial basisin law(CPLR §3211 [g][2]; Careyv Carey, 74Misc. 3d 1214[A] at *4 [Sup. Ct.,N.Y. County

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2022]). A Plaintiff's failure to defeat a CPLR 321 l(g) motion mandates a defendant be awarded its costs and attorneys' fees (Civil Rights Law§ 70-a [l][a]).
111. Defendant has Failed to Show that his Statements are Matters of Public Interest It is well establishedthat "publications directed onlyto alimited, private audience" are not matters ofpublic interest (Aristocrat Plastic Surgery, P. C. v Silva, 206 AD2d 26, 30 [lst Dept 2022] see also Huggins vMoore, 94 NY2d 296, 303 [1999] holdingthatpublications directed only to alimited,private audience are matters ofpurelyprivateconcern). Here, eachofPlaintiff'sclaims relate to solicitation emails Defendant sent only to Plaintiff's clients included on their Client List (NYSCEF Doc. 129). The Court finds that these communications were made to a limited, private audience, as opposed to the public. As such, Defendant has failed to demonstrate that his statements were matter ofpublic concern. Having failed to demonstrate that his statements were matters ofpublic interest, Defendant's motion to dismiss Plaintiff's Claims pursuant to CPLR 3211(g) is denied. iv. Defendant has Failed to Show that CUTSA Preempts Plaintifrs Claims Defendantcontendsthatthe ConnecticutUniform Trade Secrets Act ("CUTSA")preempts all ofPlaintiff's Claims (NYSCEF Doc. 122 at 6). The First Departmenthas heldthat "[i]nthe context oftort law, New Yorkutilizes interest analysis to determine which oftwo competingjurisdictions has the greater interest in having its law appliedto the litigation" (Elmaliach vBankof China Ltd, 110 AD3d 192, 202 [lst Dept 2012] quoting Padula v Lilarn Properties Corp., 84 NY2d 519,521 [1994]). Here, Defendant contends that Connecticut has the greatest concern with the dispute in question (NYSCEF Doc. 122 at 6). However, Plaintiffis a New York LLC and Defendant is a New York PLLC (NYSCEF Doc. 129 at 4). Further, Defendant's sole member and Principal is

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licensed to practice law in New York (NYSCEF Doc. 124 at 

### ,i,i 1-2) and Defendant's alleged damages were suffered in New York. Moreover, the First Department has held that "New York has an interest in regulating the conduct of its attorneys" (Engelke v Brown Rudnick Berlack Israels, LLP, 45 AD3d 324, 326 [1st Dept 2007]). As Plaintiffs claims in this action relate to the parties' attorney client relationships, the Court finds that New York has the greatest concern with the dispute in question. As such, Defendant has failed to show that CUTSA preempts Plaintiffs claims.
v. Defendant's Motion to Dismiss Plaintifrs Complaint Pursuant to CPLR 3211(a)(7) is Denied Pursuant to CPLR 321 l(a)(7), "[a] party may move forjudgment dismissing one or more causes ofaction asserted against him on the ground that
...the pleading fails to state a cause of action
...." In considering amotionpursuantto CPLR 321 l(a)(7) to dismiss a complaintfor failure to state a cause ofaction, "the court must give the pleading a liberal construction, accept the facts alleged in the complaint to be true and afford the plaintiffthe benefit ofevery possible favorable inference" (JP. Morgan Sec. Inc. v Vigilant Ins. Co. 21 NY3d 324, 334 [2013]). "[T]he sole criterion is whether the pleading states a cause of action, and therefore iffrom its four comers factual allegations are discernedwhichiftakentogethercanmanifestany cause ofaction, amotion for dismissal must fail" (Kusher v King 126 AD2d 446, 467 [1st Dept 1987]).
a. Defendant's Motion to Dismiss Plaintifrs First Cause of Action for Tortious Interference with Contractis Denied The Court ofAppeals has heldthat a cause ofaction for tortious interference with contract "requires the existence of a valid contract between the plaintiff and a third party, defendant's knowledge ofthat contract, defendant's intentional procurement ofthe third-party's breach ofthe

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contract withoutjustification, actual breach ofthe contract, and damages (Lama Holding Co. v Smith BarneyInc., 88 NY2d 413,424 [1996]). 

### It is well established that "[ a]greements that are terminable at will are classified as only prospective contractual relations, and thus cannot support a claim for tortious interference with existing contracts" (American PreferredPrescription, Inc. v Health Mgmt, 252 AD2d 414, 417 [1st Dept 1998]). Moreover, a client "hasthe absolute right on public policy grounds to terminate the attorney-client relationship at any time without cause..." (Demov, Morris, Levin & Shein v Glantz, 53 NY2d 553, 556-557 [1981]). However, the First Department has held that a plaintiff may state a claim for tortious interference with a nonbinding contract where the defendant's alleged conduct "constituted a crime or an independenttort" (Steinberg v Schnapp, 73 AD3d 171, 176 [1st Dept 2010]). Judiciary Law §479 states that: [i]t shall be unlawful for any person or his agent...to solicit or procure through solicitation either directly or indirectly, legal business, or to solicit or procure through solicitation a retainer, writtenororal, or any agreement authorizing an attorney to perform or render legal services, or to make it a business so to solicit or procure such business, retainers or agreements. Here, Plaintiffs allegations that Defendant stole Plaintiffs client list to solicit improperly the Firm'sclients constitutesa violationofJudiciary Law§479, whichis anunclassifiedmisdemeanor (see Ginarte Gallardo Gonzalez & Winogradv Schwitzer, 193 AD3d 614,616 [1st Dept 2021]). Accordingly, as Plaintiffhas alleged that it had valid enforceable contracts with its clients of which Defendant was aware and that Defendant induced Plaintiffs clients to breach their contracts causing damages to Plaintiff, the Court finds that Plaintiffhas sufficiently stated a cause of action for tortious interference with contract. Accordingly, Defendant's motion to dismiss Plaintiffs First Cause ofAction for tortious interference with contract is denied.

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b. Defendant's Motion to Dismiss Plaintiff's Second Cause of Action for Unfair Competition is Denied 

### It is well settled that "the primary concern in unfair competition is the protection of a business from another's misappropriationofthe business' organization or its expenditure oflabor, skill, and money" (Macy's Inc. v Martha Stewart Living Omnimedia, Inc., 127 AD3d 48, 56 [1st Dept 2015] quoting (Ruder & Finn, Inc. v Seaboard Sur. Co., 52 NY2d 663, 671 [1981]). Moreover, the First Department has held that"[a]llegations ofa 'bad faith misappropriation ofa commercial advantage belonging to another by exploitation ofproprietary information' can give rise to acause ofaction for unfair competition" (Macy's Inc. vMartha StewartLiving Omnimedia, Inc., 127 AD3d 48, 56 [1st Dept 2015] quoting (Out of the BoxPromotions, LLCv Koschitzki, 55 AD3d 575, 578 [2d Dept 2008]). Here, Plaintiffs Amended Complaint alleges that by soliciting Plaintiff's clients, Defendant has, in bad faith, misappropriated Plaintiff's labors, skills, expenditures and goodwill (NYSCEF Doc. 129 at 

### ,i,i 103-104). In light ofthe foregoing, affording Plaintiffthe benefit of every possible favorable inference, the Court finds that Plaintiff's Amended Complaint alleges facts sufficient to manifest a cause of action for unfair competition. Accordingly, Defendant's motion to dismiss Plaintiff's Second Cause ofAction for unfair competition is denied.
c. Defendant's Motion to Dismiss Plaintiff's Third Cause of Action for Misappropriation is Denied' The CourtofAppealshas heldthat"[a] plaintiffclaimingmisappropriationofatrade secret must prove: (1) itpossessed atrade secret, and (2) defendant is using that trade secret inbreach of

1Defendantrefers to Plaintiffs cause ofaction for misappropriation as the Fifth Cause ofAction (NYSCEF Doc. 122 at 11). While Misappropriation is the Fifth Cause ofAction in Plaintiffs original Complaint (NYSCEF Doc. I), Plaintiffs Amended Complaint includes misappropriation as Plaintiffs Third Cause ofAction (NYSCEF Doc. 129 at 23).

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an agreement, confidence, or duty, or as a result ofdiscovery by improper means" (E.J Brooks Co. v Cambridge Sec. Seals, 31 NY3d 441,452 [2018)). In considering whether a customer list constitutes a trade secret, the Court ofAppeals has held that "where the customers are readily ascertainable outside the employer's business as prospective users orconsumers ofthe employer's services orproducts, trade secretprotectionwill not attach
..." (Leo Si/fen, Inc. v Cream, 29 NY2d 387, 392 [1972)). Conversely, "where the customers are not known in the trade or are discoverable only by extraordinary efforts courts have not hesitated to protect customer lists and files as trade secrets. This is especially so where the customer's patronage had been secured by years of effort and advertising effected by the expenditure ofsubstantial time and money" (Id. at 391-393). Here, Defendant argues that Plaintiffs cause of action for misappropriation must be dismissedbecausethe clientlistis not atrade secret (NYSCEF Doc. 122 at 11). However, Plaintiff alleges that it expended significanttime and expenseto develop and to safeguardthe client list and that Defendantunlawfully misappropriatedthe client listthrough impropermeans (NYSCEF Doc. 129 at ~~109-110). Affording Plaintiffthe benefitofevery possible favorable inference, the Court finds that Plaintiffhas alleged sufficient facts to state a claim for misappropriation. Accordingly, Defendant's motion to dismiss Plaintiffs Third Cause ofAction for Misappropriation is denied. d. Defendant's Motion to Dismiss Plaintiff's Fourth Cause of Action for Unjust Enrichment is Denied2 To state a claim for unjust enrichment, "[a] plaintiffmust allege 'that (1) the other party was enriched, (2) at that party's expense, and (3) that 'it is against equity and good conscience to

2 Defendant refers to Plaintiffs cause ofaction for unjust enrichment as the Sixth Cause ofAction (NYSCEF Doc. 122 at 15). While unjust enrichment is the Sixth Cause ofAction in Plaintiffs original Complaint (NYSCEF Doc. 1), Plaintiffs Amended Complaint includes unjust enrichment as Plaintiffs Fourth Cause ofAction (NYSCEF Doc. 129 at 23).

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permit [the other party] to retain what is sought to be recovered"' (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011]). "The essential inquiry in any action for unjust enrichment
.. .is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered" (Paramount Film Distrib. Corp. v State, 30 NY2d 415, 421 [1972]). Here, Plaintiffalleges that Defendant was enriched by wrongfully obtaining the client list created by Plaintiffand subsequently inducing Plaintiffs clients to abandon their contracts with Plaintiff(NYSCEF Doc. 129). Plaintifffurther alleges that its clientbase was created at great cost to Plaintiff(Id. at 24). In light ofthe foregoing, that Plaintiffhas alleged sufficient facts to state a cause ofaction for unjust enrichment. Accordingly, Defendant's motion to dismiss Plaintiffs cause ofaction for unjust enrichment is denied.3 vi. Defendant'sMotionto Staythis ActionPursuantto CPLR3211(a)(4) is Denied CPLR 321 l(a)(4) provides that a party may move for judgment dismissing one or more causes ofaction asserted against him on the ground that "there is another actionpending between the same parties for the same cause ofaction in a court ofany state orthe United States; the court need not dismiss upon this ground but may make such order asjustice requires." Further, CPLR 2201 permits the court in which an action is pending to "grant a stay ofproceedings in a proper case, upon such terms as may bejust." Here, Defendant argues that this action should be stayed pending a resolution of the Connecticut Action because the parties are substantially identical and the actions each arise from

3 While Defendant's motion seeks dismissal ofPlaintiffs claims for aiding and abetting a breach ofthe duty of loyalty and aiding and abetting fraud, defendant's motion to dismiss these claims is moot as they are not included in Plaintiffs Amended Complaint (NYSCEF Doc. 129).

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the business relationship between Bucher and Plaintiff(NYSCEF Doc. 122 at 27). However, the FirstDepartmenthas heldthat evenwhere "there is some overlap betweenthe parties and claims," it is within the Court's discretion to deny a motion under CPLR 321 l(a)(4) where "the nature of the relief sought is not substantially the same and the parties are not identical (Wimbledon Fin. Master Fund, Ltd. v Bergstein, 147 AD3d 644,645 [1st Dept 2017]). While the parties in the present action are also included in the ConnecticutAction and the two actions have overlapping facts, the causes of action in the Connecticut Action differ significantly from those asserted here. With respect to the parties to this action, the Connecticut Actionprimarily concerns claims by Bucheragainst Plaintifffor alleged wrongful termination and breach ofemployment agreements (NYSCEF Doc. 119). Conversely, this action is centered on Plaintiff's allegations relating to Defendant's acquisition of Plaintiff's client list and wrongful solicitation ofPlaintiff's clients. As the reliefsought in the Connecticut Action is not substantially the same as that sought inthe instant action, Defendant'smotionto stay theproceedings inthis actionpending aresolution ofthe Connecticut Action is denied. Accordingly, it is hereby, ORDERED that Defendant Bucher Law PLLC's motion for an Order dismissing Plaintiff Zaiger LLC's claims pursuant to CPLR 321 l(g) and N.Y. Civ. Rights Law§ 76-ais denied; and it is further ORDERED that Defendant Bucher Law PLLC's motion for an Order dismissing Plaintiff Zaiger LLC's claims for tortious interference with contract, unfair competition, misappropriation, unjust enrichment, aiding and abetting fraud and aiding and abetting breach ofthe duty ofloyalty is denied; and it is further

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ORDEREDthat DefendantBucherLawPLLC'smotionfor an Orderdismissing or staying this action pending a determination ofpreviously filed Connecticut Action is denied; and it is further ORDERED that on orbefore July 23, 2024, the parties are directedto submit a proposed Preliminary Conference Orderto the Court via e-mail to SFC-Part33~Clerk@nycourts.gov. 

### Ifthe parties are unable to agree to a proposed Preliminary Conference Order, the parties are directed to appear for an in-person preliminary conference with the Court in Room 442, 60 Centre Street,
on July 24, 2024 at 9:30 a.m.; and it is further ORDERED that within ten days ofentry, counsel for Defendant Zaiger LLC shall serve a copy ofthis Decision and Order, with notice ofentry, on all parties to this case; and it is further ORDERED that the Clerk ofthe Court is directed to enterjudgment accordingly. This constitutes the Decision and Order ofthe Court.

7/1/2024

DATE CHECK ONE:

APPLICATION: CASE DISPOSED GRANTED SETTLE ORDER

### ~ DENIED

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN

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x NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT

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