United States District Court, District of New Jersey
For GRANGE CONSULTING GROUP, PAUL PARMAR, Plaintiffs: MATTHEW CONO CAPOZZOLI, LEAD ATTORNEY, ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK PC, NEW YORK, NY.
For DAVID BERGSTEIN, PINEBOARD HOLDINGS, INC., ROBERT B. SILVERMAN, LAWRENCE TWERSKY, SOVRIN HEALTH SYSTEMS, INC., Defendants: CLEMENT J. FARLEY, LEAD ATTORNEY, MCCARTER & ENGLISH, LLP, NEWARK, NJ.
For ALBERT HALLAC, CAPITAL MANAGEMENT LLC, Defendants: MARLEN KRUZHKOV, LEAD ATTORNEY, GUSRAE KAPLAN BRUNO & NUSBAUM PLLC, NEW YORK, NY.
MEMORANDUM AND ORDER
PETER G. SHERIDAN, UNITED STATES DISTRICT JUDGE.
This matter is before the Court on a motion to dismiss the Complaint against Defendants David Bergstein (" Bergstein") and Robert B. Silverman (" Silverman") (collectively " Defendants") for failure to state a claim based on various arguments. Those grounds are: (a) to compel arbitration and stay the matter on all ten counts; (b) dismiss counts one and two due to a release provision in an agreement, (c) dismiss counts four and five because the tort of economic duress is not recognized as an independent cause of action in New Jersey; and (c) dismiss count ten for failure to plead allegations sufficient to state a cause of action for tortious interference with contract. (Dkt. Entry 45).
On a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), the Court is required to accept as true all allegations in the Complaint and all reasonable inferences that can be drawn therefrom, and to view them in the light most favorable to the non-moving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). " To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to 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) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). While a court will accept well-pleaded allegations as true for the purposes of the motion, it will not accept bald assertions, unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. Iqbal, 556 U.S. at 678-79; see also Morse v. Lower Merion School District, 132 F.3d 902, 906 (3d Cir. 1997). A complaint should be dismissed only if the well-pleaded alleged facts, taken as true, fail to state a claim. See In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir. 2000). The question is whether the claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir.), cert. denied, Forbes v. Semerenko, 531 U.S. 1149, 121 S.Ct. 1091, 148 L.Ed.2d 965 (2001). The pleader is required to 'set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that these elements exist.'" Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993) (quoting 5A Wright & Miller, Fed. Practice & Procedure: Civil 2d § 1357 at 340). " While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, . . . . Factual allegations must be enough to raise a right to relief above the speculative level, . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact), . . . ." Twombly, 550 U.S. at 555, 127 S.Ct. at 1964-65 (internal citations and quotations omitted).
In this motion, the chief argument centers on the arbitration clause contained in a document entitled " Purchase Agreement and Amendment" (" Amended Purchase Agreement") between Pineboard Holdings, Inc. (" Pineboard") and an affiliated health care technology company associated with Paul Parmar (" Parmar") in which Pineboard purchased the assets of MD Tablet.
According to Bergstein and Silverman, the Amended Purchase Agreement clarifies that the assets purchased by Pineboard include:
" all assets and properties of MD Tablet, including . . . all underlying software licenses, intellectual property, trade secrets, confidential information, accounts receivable, deposits, leases, hardware, furniture, fixtures, equipment, customer lists, and the Patient Portal, MD Tablet and all other proprietary software, templates, modules, customization and components developed by any Seller or any Affiliate at any time within the ten (10) years immediately prior to the Effective Date which involves or relates to medical information technology.
From a review of the Complaint, Plaintiffs sue Bergstein on ten counts, but counts six through nine concern misappropriation of trade secrets, which include medical information and technology. Within the Complaint, Plaintiffs categorize the information seized by Pineboard as " business data compilations, programs, methods, techniques, plans and procedures for medical data and information. (ECF 1 at ¶ 55). In comparing the language of the Complaint (counts 6 through 9) to the relevant provision within the Amended Purchase Agreement, those counts involve the same assets as identified in the Amended Purchase Agreement. The Amended Purchase Agreement provides that such disputes will be resolved by arbitration so long as one of the parties requests same. Section 5.16 of the Purchase Agreement provides, in relevant part:
Mandatory Arbitration, Waiver of Jury Trial. At the request of either party, any dispute, claim or controversy of any kind (whether in contract or tort, statutory or common law, legal or equitable) now existing or hereafter arising between the parties and in any way arising out of, pertaining to or in connection with: (1) this Agreement, and/or any renewals, extensions, or amendments thereto; (2) any of the agreements entered into among the parties as contemplated hereby, including the Parmar Agreement, (3) any violation of this Agreement; (4) all past, present and future dealing between the parties respecting the transactions contemplated by this Agreement, (5) any incidents, omissions, acts, practices or occurrences arising out of or related to this Agreement causing injury to either party whereby the other party or its agents, employees or representatives may be liable, in whole or in part, or (6) any aspect of the present or future relationships of the parties, will be resolved through final and binding arbitration conducted at a location determined by the arbitrator in the State of California, and administered by the American Arbitration Association (" AAA") in accordance with the then existing Commercial Rules of the AAA. Judgment upon any award rendered by the arbitrator(s) may be entered in any state or federal courts having jurisdiction thereof.
Defendants argue that the entire matter should be resolved through arbitration. But the arbitration clause hones in on the misappropriation of trade secrets, which concerns only counts six through nine. As such, ...