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Current Developments in the Commercial Divisions of the
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Posted: February 12, 2017

Contract Claim Dismissed as Vague and Conclusory

On February 1, 2017, Justice Singh of the New York County Commercial Division issued a decision in Publications International, Ltd. v. Phoenix International Publications, Inc., 2017 NY Slip Op. 30225(U), dismissing a breach of contract claim for being too vague, explaining:

The allegations of the “manipulated returns” claim are set forth in paragraphs 41 through 48 of the answer and counterclaims.

Section 4.9 of the APA required the parties to adjust the purchase price based on the value of merchandise returned during the five month period after the closing. If the value of the returns during the period was greater than a certain reserve amount, PIL was required to pay PIP fifty percent of the excess.

PIP alleges that the PIL parties breached the APA by engaging in willful and bad faith conduct in order to manipulate returns. Specifically, PIP contends that the PIL parties instructed customers to stop or limit the return of merchandise and failed and/or refused to timely process returns that were requested by customers, thereby delaying returns. PIP contends that it performed a preliminary econometric analysis to determine the impact of the PIL parties’ misconduct.

In short, the Court finds that the manipulated returns claim fails to state a cause of action, for PIP fails to identify any customers by name or any specific transactions. The allegation that the PIL parties instructed unidentified customers to stop or delay returns on unspecified dates, without providing even one example, is vague and conclusory.

(Internal quotations and citations omitted) (emphasis added).

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