The following papers read on this motion:Notice of Motion XXAffirmation in Support XXMemorandum of Law in Support XXMemorandum of Law in Opposition XXAffirmation in Opposition XXReply Memorandum XX Motion by plaintiffs Dual Purpose Corporation and Steve Diamantakes for leave to renew and reargue defendants Michael Hadjandreas, Andrew Hadjandreas, and Unique Mechanical Corp.’s motion for summary judgment is denied. Motion by defendants Michael Hadjandreas, Andrew Hadjandreas, and Unique Mechanical Corp. for leave to renew their motion for summary judgment dismissing the seventh cause of action is granted. Upon renewal, defendants are granted summary judgment dismissing the seventh cause of action.This is an action against former employees of a company. Plaintiff Dual-Purpose Corporation is engaged in the business of installing and servicing heating and air-conditioning equipment in the New York metropolitan area. Plaintiff Steve Diamantakes is Dual-Purpose’s sole shareholder. Defendant Michael Hadjandreas began working for Dual-Purpose part time in the 1980′s, became its service manager in 1990, and resigned on May 12, 2015. Defendant Andrew Hadjandreas, who is Michael’s son, began working for the company as a helper in 2005 and rose to the position of general manager. Andrew Hadjandreas resigned from Dual Purpose on the same date that his father resigned. Defendant Sharon Hadjandreas is Michael’s wife. Defendant Anthony Falcone was Dual-Purpose’s accountant from May 2007 through August 25, 2015.It appears that Michael and Andrew Hadjandreas negotiated with Diamantakes to buy Dual Purpose, but no agreement as to the purchase price was reached. On May 17, 2014, the Hadjandreas formed defendant Unique Mechanical Corp., which began to compete with Dual-Purpose sometime in 2015.This action was commenced on April 22, 2016. In the seventh cause of action in the second amended complaint, plaintiffs assert a claim against defendants Michael and Andrew Hadjandreas and Unique Mechanical for tortiously interfering with Dual-Purpose’s service and maintenance contracts with 18 specifically identified customers (Doc 102 at §110). Eleven of the jobs appear to be commercial, and the other seven customers appear to be of a residential nature (Id). With regard to the tortious interference claim, plaintiffs allege that the Hadjandreas engaged in an “intense campaign” of emails, attaching cancellation letter templates and Unique Mechanical contracts that were “clones” of the customers’ existing contracts with Dual Purpose. Additionally, plaintiffs claim that defendants made a donation to a not-for-profit customer, apparently in an attempt to win its business.Plaintiffs’ first, fourth, sixth, eighth, and ninth causes of action, as well as their claim for punitive damages, were dismissed on November 9, 2016. On May 8, 2018, the Hadjandreas defendants were granted summary judgment dismissing the third cause of action for breach of fiduciary duty and defendant Falcone was granted summary judgment dismissing plaintiffs’ fifth cause of action for aiding and abetting breach of fiduciary by the Hadjandreas defendants. The court notes that plaintiffs’ second cause of action for “theft of services” is duplicative of plaintiffs’ third cause of action for breach of fiduciary duty.In the May 8, 2018 order, the court granted the Hadjandreas defendants summary judgment dismissing the seventh cause of action to the extent that it alleged a claim tortious interference with prospective economic relations. While the means employed by defendants to seek to obtain Dual Purpose’s business were aggressive, they were not improper (See, NBT Bancroft v. Fleet/Norstar Financial Group, 87 NY2d 614, 621 [1996]).Defendants’ motion for summary judgment dismissing the seventh cause of action was denied to the extent that plaintiffs asserted a claim for tortious interference with contract. While it was undisputed that Dual Purpose’s service and maintenance contracts were terminable on 30 days notice, the actual contracts were not submitted to the court. Defendants did not offer proof as to the duration of the contracts, including whether they were to continue indefinitely, or the frequency of service, or the dates when the contracts were terminated. The court noted that if, for example, a commercial maintenance contract called for frequent regular service, Dual Purpose may have lost some business, despite the 30 day termination provision (See, Guard-Life Corp. v. Parker Hardware Mfg, 50 NY2d 183 (1980). The court also noted that, with respect to residential service contracts, if the service fee was paid in advance, and if the unearned portion of the service fee was forfeited upon cancellation of the contract by the customer, cancellation may actually have been to Dual Purpose’s benefit. Defendants were granted leave to renew their motion for summary judgment dismissing plaintiffs’ claim for tortious interference with contract, upon submission of the actual contracts, with proof as to dates of termination, which could be established by customer affidavit.By notice of motion dated June 6, 2018, plaintiffs move for leave to reargue defendants’ motions for summary judgment with respect to the third cause of action for breach of fiduciary duty, the fifth cause of action for aiding and abetting, and the seventh cause of action, to the extent it asserts a claim for tortious interference with prospective economic relations. Plaintiffs submit Dual Purpose’s amended tax returns for 2009-2015 and a $25,000 insurance claim for employee dishonesty. It appears that the purpose of the amended returns is to re-characterize the Hadjandreas defendants’ fringe benefits as “embezzled income” (Doc 473).Dual Purpose maintained an insurance policy with Merchants Insurance from March 3, 2008 to January 10, 2014 that included $25,000 coverage for employee dishonesty (Doc 492). Dual Purpose submitted a claim for unauthorized expenses in the total amount of $46,425.96 (Doc 493). In paying the claim, Merchants requested that “its interests be made known” to this court (Doc 492). It is unclear what the insurer’s “interests” could be, other than avoiding the cost of investigating the claim, in view of the relatively small amount of coverage, which was roughly half of the loss which was claimed.In any event, self-serving affidavits are insufficient to defeat a summary judgment motion (Strenk v. Rodas, 111 AD3d 920 [2d Dept. 2013]). Diamantakes’ sworn proof of loss in support of the insurance claim is tantamount to a self-serving affidavit. Similarly self-serving are the purported amended tax returns, which were prepared on March 1, 2018, (Doc 340), after defendants’ motion for summary judgment had been filed. Since the new facts are insufficient to change this court’s determination with respect to defendants’ summary judgment motion, plaintiffs’ motion for leave to renew the summary judgment motion is denied (CPLR 2221 [e]). Since plaintiffs fail to establish that the court overlooked or misapprehended any matter of fact or law in deciding the prior motion, plaintiffs’ motion for leave to reargue is denied.By notice of motion dated July 20, 2018, defendants Michael Hadjandreas, Andrew Hadjandreas, and Unique Mechanical Corp. move for leave to renew and reargue their motion for summary judgment dismissing the seventh cause of action. In support of their motion to renew, defendants submit the heating and air conditioning service contracts. Dual Purpose’s commercial heating, ventilation, and air conditioning contract with Turnpike Gardens was for a period of one year, January 1-December 31, 2013 (Doc 584). The contract was renewable for one year terms, subject to either party’s right to cancel 30 days prior to the renewal date. The contract provides that it “must be paid in full in order for it to take effect.” Defendants interpret this language to mean that the customer would forfeit any unearned portion of the service fee, if the contract were cancelled or if the customer replaced Dual Purpose with another contractor.Dual Purpose’s HVAC contract with Diamond & Schultz was for a period of one year. It provides that, “Charges for agreement will be invoiced annually. Agreements not paid in full within three months will be removed from customer’s account….” (Doc 585). Defendants interpret the language of the Diamond & Schultz contract in similar fashion, that if the customer cancelled the contract, Dual Purpose was entitled to retain the service fee, which had been paid in advance. Defendants assert that the contracts for all eighteen identified customers contain language similar to that in the contracts for Turnpike Gardens and Diamond & Schultz. Thus, defendants argue that, if they interfered with any of Dual Purpose’s contracts, plaintiff did not sustain any damages because it was entitled to retain the prepaid service fees.On a motion for summary judgment, it is the proponent’s burden to make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (JMD Holding Corp. v. Congress Financial Corp., 4 NY3d 373, 384 [2005]). Failure to make such a prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers(Id). However, if this showing is made, the burden shifts to the party opposing the summary judgment motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial (Alvarez v. Prospect Hospital, 68 NY2d 320, 324 [1986]).Based on the language of the service contracts, defendants have established prima facie entitlement to judgment with respect to plaintiff’s tortious interference with contract claim. The burden shifts to plaintiffs to show a triable issue as to whether they were entitled to retain the service fee, in the event that the customer cancelled the contract.In his affidavit in opposition, plaintiff Steve Diamantakes introduces emails and flyers in which defendants solicited Dual Purpose’s customers. Tellingly, plaintiffs offer no alternative interpretation of the language of the service contracts. Nor do plaintiffs offer any affidavits from their customers as to refunds of prepaid service fees. The court concludes that plaintiffs failed to offer evidence of a triable issue as to whether defendants tortiously interfered with the service contracts. Upon renewal, defendants’ motion for summary judgment dismissing plaintiffs’ seventh cause of action is granted.So ordered.Date: 10/02/2018
