Opinion ID: 726057
Heading Depth: 2
Heading Rank: 2

Heading: evergreen's prima facie business tort claim

Text: 33 Under New York law there are four elements to a prima facie business tort claim: (1) an intentional infliction of harm; (2) without excuse or justification and motivated solely by malice; (3) resulting in special damages; (4) by an act that would otherwise be lawful. See, e.g., Burns Jackson Miller Summit & Spitzer v. Lindner, 59 N.Y.2d 314, 464 N.Y.S.2d 712, 720, 451 N.E.2d 459, 467 (1983) (citations omitted); Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 571 (2d Cir.1990); Azby Brokerage, Inc. v. Allstate Ins. Co., 681 F.Supp. 1084, 1087-88 (S.D.N.Y.1988). Paragraph 19 of EPC's amended complaint alleges $500,000 in lost profits and lost business opportunities, and $860,628.32 in withheld payments. The district court dismissed Evergreen's prima facie business tort claim for failure to plead special damages with sufficient particularity. We agree with the lower court that this claim should have been dismissed, but our reasoning goes beyond that of the district court. 34 In addressing the district court's ruling, Evergreen contends that it can plead its lost profits and lost business opportunities with no greater specificity than $500,000, and that its claim for $860,628.32 in withheld payments is surely specific enough. It argues, further, that it cannot be made whole by recovery of lost profits and lost business opportunities, except by obtaining tort recovery. 35 We agree that the withheld payment allegation is specific, but it is entirely duplicative of contract damages. We also recognize that a plaintiff in these circumstances cannot precisely allege the amount of lost profits and lost business opportunities. Round numbers appear, however, not to be good enough under New York law, see, Leather Development Corp. v. Dun & Bradstreet, Inc., 15 A.D.2d 761, 224 N.Y.S.2d 513 (1st Dep't 1962) (per curiam ) (round sums state general, not specific damages), aff'd 12 N.Y.2d 909, 237 N.Y.S.2d 1007, 188 N.E.2d 270 (1963), and we here follow, rather than seek to justify, state law. 36 Moreover, Evergreen may well have been able to pursue lost profits and lost business opportunities as consequential damages pursuant to its breach of contract claim: 37 Loss of future profits as damages for breach of contract have been permitted in New York under long-established and precise rules of law. First, it must be demonstrated with certainty that such damages have been caused by the breach and, second, the alleged loss must be capable of proof with reasonable certainty.... In addition, there must be a showing that the particular damages were fairly within the contemplation of the parties to the contract at the time it was made. 38 Kenford Co. v. County of Erie, 67 N.Y.2d 257, 502 N.Y.S.2d 131, 132, 493 N.E.2d 234, 235 (1986) (per curiam ); Kenford Co. v. County of Erie, 73 N.Y.2d 312, 540 N.Y.S.2d 1, 537 N.E.2d 176 (1989) (jury award for anticipated appreciation in land value reversed because parties did not contemplate these damages when contract was formed). It did not do so, and the claim is now waived. 39 Finally, we do not think that the restrictions upon damages for breach of contract claims can be avoided merely by recasting the breach as a tort. It has long been New York law that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated.... This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract. Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 521 N.Y.S.2d 653, 656-57, 516 N.E.2d 190, 192 (1987) (citations omitted). Thus, a legal duty independent of contractual obligations may be imposed by law as an incident to the parties' relationship or arise in connection with the nature of the injury, the manner in which the injury occurred and the resulting harm. Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 583 N.Y.S.2d 957, 961, 593 N.E.2d 1365, 1369 (1992). That distinction has caused one court to conclude that if a plaintiff has not suffered personal injury or property damage but is seeking merely the replacement cost of a product or enforcement of the bargain, it should proceed only on a contract theory. But if the plaintiff has suffered personal injury or property damage, particularly if the loss results from an 'abrupt, cataclysmic occurrence,' then a tort claim may be viable. Insurance Co. of North America v. Historic Cohoes II, 879 F.Supp. 222, 227 (N.D.N.Y.1995). 40 Here the tort claim relates solely to breach of a bargain, egregious though it may have been. Simply put, this is one of those contract cases which cannot be converted into a business tort, and the district court was correct in dismissing EPC's prima facie business tort claim.