Summary
affirming dismissal of a cause of action for breach of good faith as "duplicative of a cause of action alleging breach of contract, since every contract contains an implied covenant of good faith and fair dealing"
Summary of this case from Payday Advance Plus, Inc. v. Findwhat.com, Inc.Opinion
May 7, 1992
Appeal from the Supreme Court, New York County (Beverly Cohen, J.).
This action arises out of a contract whereby plaintiffs conveyed to defendant a system, then asserted as revolutionary by the plaintiffs, but now commonly accepted in the securities industry, of trading municipal securities through "immobilization" and book entry. The ultimate issue to be determined is whether the procedure as devised by plaintiffs was sufficiently novel, that is, the fully realized product of a combination of previously known disparate elements (see, e.g., Murray v. National Broadcasting Co., 844 F.2d 988, 993, cert denied 488 U.S. 955). Here, as is usually the case (see, e.g., Lois Pitts Gershon PON/GGK v. Tri-Honda Adv. Assn., 166 A.D.2d 357), novelty is a question of fact. It is for the factfinder to decide whether or not the plaintiffs' idea was sufficiently novel to constitute consideration for the defendants' obligations.
Although the parties entered into an express contract, plaintiff is not precluded from recovery on the theory of quasi contract or contract implied in law (Singer Co. v. Alka Knitting Mills, 41 A.D.2d 856). Accordingly, plaintiffs' cause of action sounding in unjust enrichment should be reinstated. The cause of action alleging a breach of good faith is duplicative of a cause of action alleging breach of contract, since every contract contains an implied covenant of good faith and fair dealing (Gross v. Neuman, 53 A.D.2d 2, 5).
The demand for punitive damages is here improper since punitive damages will not be awarded in what is essentially a private action (Gazda v. Kolinski, 91 A.D.2d 860, affd in part and appeal dismissed in part 64 N.Y.2d 1100), particularly if the action involves a mere breach of contract (see, e.g., Stack Elec. v DiNardi Constr. Corp., 161 A.D.2d 416).
We have reviewed the remaining respective arguments of the parties, and find them to be without merit.
Concur — Sullivan, J.P., Carro, Wallach and Smith, JJ.