SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK : IAS PART 53
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BUSINESS NETWORKS OF NEW YORK INC.,
Plaintiff,
Index No., 605463/98
-against-
COMPLETE NETWORK SOLUTIONS, INC.,
JOSEPH D'AGOSTINO and IMRAN ALI,
Defendants.
DECISION & ORDER
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CHARLES EDWARD RAMOS, J.S.C.:
In this action for, among other things, breach of non-compete covenant, the plaintiff Business Networks of New York, Inc., ("BNNY") moves for an order, pursuant to CPLR 6301: (1) preliminarily enjoining defendant Complete Networks Solutions, Inc., ("CNS"), from employing defendants Joseph D’Agostino ("D’Agostino") and Imran Ali ("Ali"); (2) preliminarily enjoining CNS from engaging in business procured from customers and clients gained by D’Agostino and Ali’s contact or solicitation who were clients or customers of BNNY while the latter two were employees of BNNY; (3) preliminarily enjoining D’Agostino and Ali from disclosing confidential information and trade secrets of BNNY to CNS; (4) compelling D’Agostino and Ali to turn over to BNNY all material including client information secreted by the latter two, such as customer lists, records, information, documents, analyses, plans, and strategies either obtained and/or gathered while employed by BNNY; and (5)preliminarily enjoining CNS from using said information, material, and trade secrets obtained from D’Agostino and/or Ali.
Defendants cross-move for an order dismissing all eleven counts of the complaint, pursuant to CPLR 3211 [a] [1] and [7], on the ground that the very documents submitted by the plaintiff support the cross-motion and/or the complaint does not state a cause of action.
BACKGROUND
D’Agostino and Ali were former employees of BNNY. D’Agostino was employed on or about August 5, 1996, as vice-president of sales. His business background, however, did not start with BNNY. D'Agostino maintains that he has been employed in the sales field for more than twelve years. (D'Agostino 11/24/98 Aff., at 2). D'Agostino managed BNNY’s sales staff. Ali was employed by BNNY as a salesperson. He allegedly signed a confidentiality and non-disclosure agreement, wherein he agreed not to divulge confidential information and trade secrets or engage in hiring away or attempting to hire away other employees to compete against BNNY, for a period of one year.
BNNY provides, among other things, telecommunication service lines in or about the New York City. It claims a niche in the installation and servicing of exclusive and dedicated line services to businesses in the financial sector. BNNY maintains it provides diverse, unique, individual telecommunication services,such as: private line; digital line; voice frequency; open private line; manual ring; frame relay; international private line; local exchange private line; and Internet access. BNNY further claims its unique services are based on confidential and proprietary information. It maintains that time, money, and effort has been spent in developing and maintaining a unique client list as well as prospective clients. Moreover, it claims to have developed proposals, plans, financial information, compensation , commission structures, and pricing strategies based on the information it has gathered from its unique services.
During D'Agostino's employment with BNNY, he ran the sales group that serviced customers and clients seeking local service lines. Local service lines were accessed from Bell Atlantic/NYNEX and, therefore, BNNY acted as that company's subagent, receiving a commission and/or fee as consideration. In the fall of 1997, BNNY ceased operating as a subagent, thus, causing customers and clients for local service line access to fill their orders elsewhere. D'Agostino was informed to discontinue such sales on behalf of BNNY and to concentrate on BNNY's other services.
In or about October 1998, D'Agostino and Ali terminated their employment with BNNY and commenced work with CNS, a company formed by D'Agostino months prior to his departure. CNS provideslocal service lines in or about New York City. It also provides services that BNNY provides, it has accepted orders from, among others, BNNY's past and present clients and customers. In fact, while D'Agostino was employed by BNNY, he referred one particular client, who declined BNNY's final offer on a particular service, to CNS. D’Agostino concedes that Ali and he are the owners of CNS. (See, D’Agostino 11/30/98 Aff., at 6).
CONTENTIONS
This action ensued as a result of plaintiff's complaint that the individual defendants and CNS have engaged and continue to engage in tortious conduct. The plaintiff interposes eleven causes of action. BNNY contends that the defendants have, inter alia, breached fiduciary duties and converted property. BNNY argues that the record is sufficient to grant its motion.
Defendants contend that the complaint should be dismissed in its entirety. They contend that the pleading does not state one cause of action. In the alternative, they contend that the record does not support the granting of an injunction.
The court will first determine the cross-motion to dismiss. It will then determine the motion for a preliminary injunction.
DISCUSSION
Plaintiff interposes eleven causes of action. The first cause of action is breach of the non-compete covenant by defendant Ali. The second cause of action is breach of fiduciaryduty to BNNY by the former employees, D'Agostino and Ali. The third cause of action is tortious interference by CNS of Ali's confidentiality and non-disclosure agreement. The fourth cause of action is tortious interference with BNNY's prospective business relations by the defendants. The fifth cause of action is unjust enrichment of defendants D'Agostino and Ali. The sixth cause of action is breach of implied covenant of good faith and fair dealing by defendant Ali. The seventh cause of action is breach of fiduciary duty and of loyalty by defendant D'Agostino as officer and employee of BNNY. The eighth cause of action is diversion of corporate assets and opportunities by defendant D'Agostino. The ninth cause of action is fraud by defendants D'Agostino and Ali by way of an allege sale to a non-existing entity. The tenth cause of action is conversion by D'Agostino and Ali of confidential and proprietary information. The eleventh cause of action is unfair competition by D'Agostino and Ali based on their allege use of confidential and proprietary information.
The plaintiff seeks preliminarily and permanent injunction restraining CNS, D'Agostino, and Ali for a period of one year from working together in whatever form in a competitive business and from engaging with customers and/or clients, whose identities were learned while employed by BNNY. Moreover, BNNY seeks permanent injunction of the defendants from ever using any tradesecrets, confidential information, and/or proprietary information obtained from D'Agostino and/or Ali. Lastly, plaintiff seeks compensatory and punitive damages, an award of attorneys' fees, and costs and disbursements.
On a motion to dismiss a complaint for failure to state a cause of action, pursuant to CPLR 3211(a) (7), the court must accept each and every allegation as true, without expressing any opinion as to whether plaintiff ultimately will be able to establish the truth of the averments. (219 Broadway Corp. v Alexander's Inc., 46 NY2d 506, 509 [1979]). The court's inquiry is limited to ascertaining whether the pleading states any cause of action, and not whether there is evidentiary support for the complaint. (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). When extrinsic evidence is introduced attacking the complaint, however, the truthfulness of the pleaded allegations is not assumed, and the inquiry is as to whether the pleader has a cause of action or defense, not whether he has properly stated one. (Rovello v Orofino Realty Co., Inc., 40 NY2d 633 [1976]).
The first cause of action of breach of the non-compete covenant by defendant Ali is not deficient. Ali does not dispute the existence of such an agreement. Moreover, the agreement can be enforced where "necessary to protect trade secrets, customer lists or good will of the employer’s business, or perhaps when the employer is exposed to special harm because of the uniquenature of the employee’s services." (Independent Health Assn., Inc. v Murray, 233 AD2d 883, 884 [4th Dept 1996]; Perfect Fit Glove Co. v Post, 222 AD2d 1025[4th Dept 1995] [employer's allegations that its customer information, pricing policies, and manufacturing processes were not publicly known or ascertainable from sources outside company, that former employee acquired knowledge of those confidences while he was employed, and that he misappropriated that information and used it to benefit of a competitor in violation of the nondisclosure provision of his employment contract were sufficient to state claim against employee for breach of covenant to preserve confidentiality of customer information, pricing policies, and manufacturing processes]).
The pleading as to the second cause of action of breach of fiduciary duty is also not deficient.
Accepting the truth of the allegations that D’Agostino was an officer and Ali a salesperson, and that they had access and worked with confidential information and trade secrets, which they have used and continue to use in their new employment, plaintiff pleads a cause of action. An employee or agent or prior employee or agent owes a duty of fidelity to his or her employer or principal. (Western Elec., Co. v Brenner, 41 NY2d 291 [1977]; see also, Royal Carbo Corp. v Flameguard, Inc., 229 AD2d 430 [1st Dept 1996]). It is well-established in the law of thisstate that an employee "is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties." (Lamdin v Broadway Surface Adv. Corp., 272 NY 133, 138 [1936]) While an employee may secretly incorporate a competitive business prior to his departure, he must not "use his principal's time, facilities or proprietary secrets to build the competing business." (Maritime Fish Products Inc. v World Wide Fish Products, Inc., 100 AD2d 81, 88 [1st Dept 1984] appeal dismissed 63 NY2d 675 [1984]; see, 7th Sense, Inc. v Liu, 220 AD2d 215 [1st Dept 1995]).
As to the third cause of action of tortious interference by CNS of Ali's confidentiality and non-disclosure agreement, the plaintiff pleads that CNS knew of the existence of a valid contract, that it caused Ali to breach that contract, that such breach has caused and continues to damage plaintiff, and that CNS has benefitted and continues to benefit from that breach. The pleading is sufficient. The contention that CNS and Ali are one of the same and, thus, a party cannot interfere with its own contract merits no comment, lest defendants concede that CNS is a sham corporation. (But cf., Tri-Delta Aggregates Inc., v Goddell, 188 AD2d 1051 [4th Dept 1992] [the defendant acted on behalf of county and within scope of authority and could not be held liable for inducing county to breach contract with plaintiff]; PerfectFit Glove Co. v Post, 222 AD2d 1025, supra [employer's allegation that competitor induced employee to violate covenant restricting disclosure of confidential information acquired while working for employer was sufficient to state claim against competitor for intentional interference with employment relationship]).
The same reasoning is applicable to the fourth cause of action of tortious interference with BNNY's prospective business relations by the defendants D’Agostino, Ali and CNS. Plaintiff properly pleads a fourth cause of action. (See, Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183 [1980]; A.S. Rampell, Inc. v Hyster Co., 3 NY2d 369 [1957]).
The fifth cause of action of unjust enrichment by the defendants D'Agostino and Ali is also sufficiently pleaded in view of the finding that the third and fourth causes of action are properly plead. (See also, Foley v D'Agostino, 21 AD2d 60, 66 [1st Dept 1964] [the rejection by the corporations of the opportunity of taking over the rival and competing business would not release the defendants, as long as they remained in office and were in the employment of the corporations, from their continuing and overriding obligation of loyalty and good faith to the corporations]).
Assuming the truth of the allegations in the complaint and statements in the affidavit submitted by plaintiff (see, Leon v Martinez, 84 NY2d 83, 87-88 [1994]), I can only conclude thatplaintiff has sufficiently alleged that its customer information, pricing policies, and other records are not publicly known nor ascertainable from sources outside BNNY; that Ali acquired knowledge of those confidences while employed with plaintiff; and that, while employed with plaintiff, Ali misappropriated that information and used it to the benefit of a competitor of BNNY in violation of the non-disclosure provision of his agreement. (see, Ward v Arcade Bldg. Maintenance, 191 AD2d 368 [1st Dept 1993]; Rochester Tel. Mobile Communications v Auto Sound Sys., 182 AD2d 1119 [4th 1992]). Therefore, the sixth cause of action of breach of implied covenant of good faith and fair dealing states a cause of action.
In view of the above allegations as to D’Agostino, and assuming that they are true, the seventh cause of action of breach of fiduciary duty and duty of loyalty by D'Agostino as officer and employee of BNNY also states a cause of action. "The duty of an employee not to use or divulge confidential knowledge acquired during his employment is implicit in the employer-employee relation, is an absolute, and not a relative, duty." (See, 60 NYJur., Trademarks, Tradenames and Unfair Competition, § 112, p 184). Consequently, the defendants here had a fiduciary duty not to disclose any confidential information. As employees of BNNY, the defendants owed their employer a duty not to divulge confidential information,therefore it is not necessary to determine the viability of an alleged confidentiality agreement. "Even in the absence of a contract restriction, a former employee is not entitled to solicit customers by fraudulent means, the use of trade secrets, or confidential information." (Support Systems Assocs., Inc. v Tavolacci, 135 AD2d 704, 706 [2nd Dept 1987]; Duane Jones Co. v Burke, 306 NY 172, 189 [1954] [for example, where officers of a corporation organized a competitor, diverted business from their employer and raided its key employees, the Court of Appeals sustained a verdict against various individual employees based upon the "violation of the fiduciary duties of good faith and fair dealing imposed on defendants by their close relationship with plaintiff corporation"]).
The eighth cause of action of diversion of corporate assets and opportunities by defendant D'Agostino also pleads a cause of action. The allegation is that D’Agostino diverted assets of BNNY’s, e.g., trade secrets and confidential material, to CNS.
The ninth cause of action of fraud by defendants D'Agostino and Ali by way of an alleged sale to a non-existing entity is, however, deficient. The plaintiff indicated in its own correspondence of October 28, 1998, to Ali, after his departure from employment, that the alleged non-existing corporate entity in fact existed. (Rovello v Orofino Realty Co., Inc., 40 NY2d 633 [1976]). The plaintiff's review of that corporation'sfinances indicated insufficient credit, and plaintiff canceled the order for telephone line services placed by Ali. (See, Defendant Cross Motion, Ex B). Consequently, the allegations contained in the ninth cause of action do not state a cause of action of fraud.
The tenth cause of action of conversion and the eleventh cause of action of unfair competition by D'Agostino and Ali are sufficient in view of the allegations regarding the first through eighth causes of action. A claim of unfair competition will lie where a former employee misappropriates and exploits confidential information belonging to the former employer in abuse of the relationship of trust. (E.g. Comprehensive Community Development Corp. v Lehach, 223 AD2d 399 [ 1st Dept 1996]).
Accordingly, that branch of the cross-motion is granted to the extent that the ninth cause of action is dismissed pursuant to CPLR 3211 [a] [1] and [7].
In support of the plaintiff's motion for an order granting preliminary injunction, BNNY alleges that Ali signed a confidentiality and non-disclosure agreement, agreeing not to divulge confidential information and trade secrets to a competitor of BNNY or in his future employment. He also agreed not to hire away or attempt to hire away BNNY employees for one year period after his departure from BNNY. (See, Complaint, ExA). BNNY also "believes" that D'Agostino executed a similar agreement, but provides no copy to the court to support the allegation. It, however, complains that D'Agostino was privy to confidential information and trade secrets and as an ex-employee owes a continuing fiduciary duty not to divulge confidential information and trade secrets nor engage in or compete against BNNY in a related employment based upon said confidential information and trade secrets.
BNNY complains that D'Agostino and Ali along with CNS are engaging in unfair competition stemming from D'Agostino and Ali's breaches of loyalty and good faith as past employees of BNNY. BNNY complains that the individual defendants continue to engage in unfair and unlawful business activities to the detriment of the plaintiff. It moves for an order granting preliminary injunction against the defendants. BNNY argues it can demonstrate the likelihood of success on the merits, irreparable harm if the injunction is not granted, and that the equities favor BNNY. (See, Aetna Ins. Co. v Capasso, 75 NY2d 860, 862 [1990]). The Legislature added a new subdivision (c) to CPLR 6312, effective January 1, 1997, to make it quite clear that the existence of an issue of fact on a motion for a preliminary injunction is not, without more, a sufficient basis for denying a preliminary injunction. The amendment is designed to overcome the language of several judicial opinions that held a preliminaryinjunction be denied whenever the party opposing the motion demonstrates that the facts are in "sharp dispute." (Cf. BR Ambulance Service, Inc. v Nationwide Nassau Ambulance, 150 AD2d 745 [2nd Dept 1989]; Ma v Lien, 198 AD2d 186 [1st Dept 1993], appeal dismissed 83 NY2d 847 [1984]).
The record reveals that D'Agostino started CNS while he was employed by BNNY and that CNS competes in the same business as BNNY. CNS was incorporated on or about March 5, 1998. D'Agostino left BNNY's employment on or about October 16, 1998. Ali was a salesman and upon commencing employment allegedly signed a confidentiality and non-disclosure agreement. Ali left BNNY’s employment on or about October 19, 1998. The record also reveals that D'Agostino referred BNNY customers and/or clients to CNS while he was employed by BNNY.
The record does not reveal that CNS is in competition with BNNY as to local service line access. BNNY decided not to continue business in that field. It is logical to assume that CNS filled that void not as a competitor. CNS does not compete against BNNY in the field where BNNY is no longer doing business in local service line access as a subagent for a major carrier, but that does not mean defendants may use trade secrets and confidential records regarding BNNY’s prior local service line business. Moreover, the record reveals that CNS and BNNY are competitors, or as termed by defendants, "resellers" of telephoneservices which are purchased from principal carriers such as NYNEX, AT&T, MCI or Sprint, at discount and sold to customers at a profit. (See, Defendant Cross-Motion, at 2). CNS does not refute the claim that aside from providing local service line access as a subagent, it also provides similar services provided by BNNY.
The record further reveals that D'Agostino while employed by BNNY received an inquiry from a BNNY customer, Comtel Debit Technologies ("CDT"), regarding the placement of a dedicated telephone line. D'Agostino quoted BNNY’s price to CDT, which was rejected. D'Agostino maintains that BNNY was unwilling to lower the quote, but he also concedes that he referred CDT to his own company, CNS, after CDT inquired if D'Agostino could recommend another carrier or reseller who had a lower price. (D'Agostino 11/24/98 Aff., at 4).
The record, nevertheless, does reveal a material disputed fact as to certain events. BNNY maintains it directed D'Agostino to cease selling local service lines and to place orders in BNNY's other businesses. D'Agostino, however, maintains that BNNY continued to receive inquiries for local service line access and that he would advise clients and customers of BNNY that the service was no longer provided, but that he would then refer them to other subagents. Defendant D'Agostino maintains that an injunction is not supported by the record. He avers that BNNY'spresident, Joseph Sciacca ("Sciacca") constructively consented to his incorporation of CNS so that D'Agostino could collect a commission from customers who could no longer obtain direct local service line from BNNY. D'Agostino also maintains that the other incidents plaintiff complains of are easily explained away. D'Agostino now claims he interpreted this to mean that BNNY would not object to such transactions in the future and that D'Agostino could, for example, do future transactions by incorporating CNS while employed by BNNY. Moreover, he could receive such inquires and refer them to CNS while employed by BNNY. Lastly, he could earned commissions by payments made from clients to CNS while he remained employed by BNNY. (See, D'Agostino 11/24/98 Aff., at 4).
The record, however, does not reveal that D'Agostino and/or Ali have taken proprietary trade secrets and/or information. The plaintiff maintains it compiled such a database and that the database was available to both D'Agostino and Ali. (Tsarnas 11/7/98 Aff., pp 2-3). But, the mere allegation that a copy of the database had to have been taken, without more, and which is materially disputed by D'Agostino, cannot serve as the foundation for granting preliminary injunction.
It is beyond cavil that an employer can enjoin and prevent a former employee from disclosing proprietary and confidential information gained through his/her employment with the employer. Injunction is warranted to prevent the improper use of confidential or proprietary equipment, designs, trade secrets, customer lists, product costs, profit information or other records obtained by a former employee or agent to the detriment of the employer. Our courts have adopted the definition of trade secret set forth in the Restatement of Torts: "any formula, pattern, device, or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it." (Restatement of Torts, § 757, comment b; see Ashland Management v Janien, 82 NY2d 395, 407 [1993])
The Restatement lists several factors to be considered in evaluating a claim of trade secrecy: (1) the extent to which the information is known outside of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of the information; (4) the value of the information to [the business] and [its] competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. (Restatement of Torts § 757, comment b.).
However, the granting of such an injunction is extreme, and the court should not grant the same where the dispute is rife with questions of fact, including whether trade secrets orconfidential matters are involved and whether defendants have appropriated any such material. (Gaynor & Company, Inc. v Stevens, 61 AD2d 775 [1st Dept 1978]). There must be a showing of a clear right to a permanent injunction, and plaintiff should not be granted the relief which it may not be able to attain at the conclusion of the lawsuit. (Brand v Bartlett, 52 AD2d 272, 275 [3d Dept 1976]; City of Buffalo v Mangan, 49 AD2d 697 [4th Dept 1975]).
Here, the defendants argue that their prior experience in the subject field pre-dates their employment with BNNY. In fact, D’Agostino maintains that he introduced BNNY to the subagent field of servicing local phone line access on behalf of major carriers.
Plaintiff has not adduced sufficient proof to support the claim of trade secrets and confidential customer lists. The only proof is either by averments made by a principal and the allegations of the complaint. Without more, the same is not sufficient to warrant preliminary injunction against another's use of alleged proprietary information. (Perfect Fit Glove Co. v Post, 222 AD2d 1025, supra). The circumstance of Ali's agreement do not require a different result. Reasonable restrictions related to the disclosure of trade secrets or confidential customer information will be enforced. (American Broadcasting Cos. v Wolf, 52 NY2d 394, 403-404 [1981]; Victor Temporary Servs.v Slattery, 105 AD2d 1115, 1116 [4th Dept 1984]). But, there must be some showing that such data and material and/or information in fact exists and that the same was appropriated by the defendants. The mere access to such material and information, without more, does not constitute appropriation. (Falconwood Corp. v In Touch Tech., Ltd., 227 AD2d 215, 216 [1st Dept 1996]). The belief that there has been such an appropriation is materially disputed. The defendants maintain that their skills have been independently developed. ( Leo Silfen, Inc. v Cream, 29 NY2d 387, 391 [1972] ["where the customers are readily ascertainable outside the employer's business as prospective users or customers of the employer's services or products, ... trade secret protection will not attach and courts will not enjoin the employee from soliciting his employer's customers"]; see also, Panther Sys. II, Ltd. v Panther Computer Sys., Inc., 783 FSupp 53, 67 [D Ct NY 1991] [where detailed information concerning plaintiff's customers was developed as a direct response to a review in a magazine concerning plaintiff's product, and could not be obtained from public sources, defendants were enjoined from soliciting those customers]; Webcraft Technologies, Inc. v McCaw, 674 FSupp 1039, 1045 [D Ct NY 1987] [where company sold an unusual, highly specialized in-line finishing process, and educating and converting prospective customers was a long and difficult process, company's customer list was a trade secret];Town & Country House & Home Serv., Inc. v Newbery, 3 NY2d 554, 559 [1958] [where "customers of plaintiff were not and could not be obtained merely by looking up their names in the telephone or city directory or going to any advertised locations, but had to be screened" from among many others, defendant was enjoined from soliciting those customers]).
The defendants further argue that their customer base as well as plaintiff’s alleged customer/client data, is easily ascertainable from public directories and other public available sources. It is noted that a former employee may not be enjoined from soliciting his or her former employer's customers where the names and addresses of potential customers are readily discoverable through public sources. (Reed, Roberts Assocs., Inc., v Strauman, 40 NY2d 303, 308 [1976] [where the former employer's past or prospective customer names can be readily ascertained from sources outside its business, "trade secret protection will not attach and their solicitation by the former employee will not be enjoined"]; see also, Abraham Zion Corp. v Lebow, 593 FSupp 551, 564 [D Ct NY 1984] [employee who contacted ex-employer's retail customers and suppliers from memory based on previous personal associations with them did not misappropriate confidential customer information], affirmed 761 F2d 93 [2d Cir1985]; Ability Search, Inc. v Lawson, 556 FSupp 9, 15 [Dist Ct NY 1981] [a former employee "may solicit customers of hisformer employer who are openly engaged in the business or whose identity is readily or equally available to him"], affirmed 697 F2d 287 [2d Cir 1982]; Zurich Depository Corp. v Gilenson, 121 AD2d 443, 444 [2nd Dept 1986] ["The mere recollection of [customer] information as a result of casual memory is not actionable"]).
At this juncture, the complaint and plaintiff’s affidavit are just plain insufficient, thus rendering unclear plaintiff’s likelihood of ultimate success on the merits. (W.T. Grant Co. v Srogi, 52 NY2d 496 [1981]). Plaintiff has not met its burden on the motion.
Whether there should be expedited and limited discovery is discretionary. The parties are to proceed to discovery in accordance with the CPLR and court rules. It is best that the parties be permitted to chart their own course with respect to discovery. Accordingly, that branch of the motion for an order directing expedited disclosure is denied.
CONCLUSION
ORDERED, that the motion for an order granting preliminary injunction is denied; and it is further
ORDERED that the cross-motion is granted to the extent that the ninth cause of action of fraud is dismissed pursuant to CPLR 3211 [a] [1] and [7].
This constitutes the decision and order of the Court.
Dated: February 19, 1999