New York Packaging II LLC v. Mustang Marketing Group LLC et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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NEW YORK PACKAGING II LLC d/b/a
REDIBAG USA,
Plaintiff,
v.
MUSTANG MARKETING GROUP LLC and
JOHN MAIERHOFFER,
Defendants.
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MEMORANDUM & ORDER
21-CV-1629 (MKB)
I. 	Background ............................................................................................................................. 4
a. 	Factual background ............................................................................................................. 4
b. 	Plaintiff’s allegations .......................................................................................................... 8
i. 	The state court actions .................................................................................................... 8
ii. 	The current action ......................................................................................................... 13
II. 	Discussion ............................................................................................................................. 14
a. 	Standards of review........................................................................................................... 14
i. 	Rule 702 – Motion to strike expert report and preclude expert testimony ................... 14
ii. 	Rule 56 – Summary Judgment ...................................................................................... 18
iii. 	Rule 11 – Sanctions ...................................................................................................... 20
b. 	Defendants’ motion to strike the report and proposed testimony of Plaintiff’s experts ... 22
i. 	The Court declines to strike Christopher L. Picone’s report and preclude his testimony
22
ii. 	The Court strikes Glen Balzer’s report and precludes him from testifying as an expert
39
c. 	The Court grants in part and denies in part Defendants’ motion for summary judgment 43
i. 	Res judicata ................................................................................................................... 43
ii. 	Alleged alternative reasons to dismiss Plaintiff’s claims ............................................. 47
iii. 	Alter ego claim .............................................................................................................. 92
d. 	Rule 11 sanctions .............................................................................................................. 98
III. 	Conclusion .......................................................................................................................... 100
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MARGO K. BRODIE, United States District Judge:
Plaintiff New York Packaging II LLC, doing business as RediBag USA, commenced the
above-captioned action on March 26, 2021, against Defendants Mustang Marketing Group LLC
(“Mustang”) and John Maierhoffer, alleging a federal claim for (1) misappropriation of trade
secrets pursuant to the Defend Trade Secrets Act, 18 U.S.C. § 1836 (“DTSA”) and state law
claims for (2) misappropriation of trade secrets, (3) breach of contract, (4) tortious interference
with prospective business relations, (5) breach of fiduciary duty, (6) negligence, (7) faithless
servant, and (8) unjust enrichment. Plaintiff seeks a declaratory judgment, injunctive relief,
damages and attorneys’ fees and costs. (Compl. ¶¶ 100–81, Docket Entry No. 1.)
On June 2, 2025, Plaintiff filed a motion in limine to exclude evidence that (1) products
from one of its competitors, Trinity Plastics, are not competing products and (2) sales in
Plaintiff’s industry “generally are the result of a competitive bidding process,” which Defendants
oppose.1 On July 16, 2025, Plaintiff filed a motion for leave to file a supplemental Rule 56.1
statement.2 On July 30, 2025, Defendants filed a motion for summary judgment, seeking
1 (Pl.’s Mot. in Limine, Docket Entry No. 119; Defs.’ Opp’n to Pl.’s Mot. in Limine,
Docket Entry No. 120; Pl.’s Reply in Supp. of Pl.’s Mot. in Limine, Docket Entry No. 121.)
2 (Pl.’s Mot. for Supp. 56.1 Stmt., Docket Entry No. 123.) Plaintiff requests leave to file
a supplemental 56.1 statement by pointing to Defendants filing a reply 56.1 statement, which
Plaintiff alleges is impermissible pursuant to Judge Nusrat J. Choudhury’s Chamber Rule 5.5.10.
(Pl.’s Mot. for Supp. 56.1 Stmt.) There was nothing impermissible about Defendants’ filing of a
reply 56.1 statement, as Judge Choudhury’s Chamber Rules do not require leave for Defendants
to do so, and Local Civil Rule 56.1 does not prohibit Defendants from doing so. See Sandy v.
Target Corp., No. 22-CV-4804, 2026 WL 1453774, at *1 n.4 (E.D.N.Y. May 22, 2026)
(collecting cases); Irish v. Tropical Emerald LLC, No. 18-CV-82, 2024 WL 1345711, at *9
(E.D.N.Y. Mar. 30, 2024) (stating that Local Civil Rule 56.1 does not prohibit a reply in further
support of a Rule 56.1 statement of undisputed facts); Adams v. Bloomberg L.P., No. 20-CV-
7724, 2023 WL 2662607, at *2 (S.D.N.Y. Mar. 28, 2023) (“Local Civil Rule 56.1 does not
provide for a reply in further support of a Rule 56.1 statement of undisputed facts, but it also
does not prohibit such replies.” (internal citation and quotation marks omitted) (collecting
cases)). The Court therefore denies Plaintiff’s request to file a supplemental Rule 56.1
statement.
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dismissal of all causes of action alleged in the Complaint, which Plaintiff opposes.3 On July 30,
2025, Defendants filed a motion to exclude Plaintiff’s experts, which Plaintiff opposes.4 On
November 24, 2025, Plaintiff filed a motion for sanctions pursuant to Rule 11 of the Federal
Rules of Civil Procedure, which Defendants oppose.5 For the reasons explained below the
Court: (1) grants in part and denies in part Defendants’ motion to exclude Plaintiff’s experts; (2)
grants in part and denies in part Defendants’ motion for summary judgment; (3) denies Plaintiff’s
Rule 37 motion in limine to exclude Defendants’ evidence and testimony; and (4) denies
Plaintiff’s Rule 11 motion for sanctions.
On April 16, 2026, the case was transferred from Judge Choudhury to the Court. (Order
dated Apr. 16, 2026.)
3 (Defs.’ Not. of Mot. for Summ. J. (“Defs.’ Mot.”), Docket Entry No. 126; Defs.’ Mem.
in Supp. of Defs.’ Mot. (“Defs.’ Mem.”), appended to Defs.’ Mot., Docket Entry No. 126-3; Pl.’s
Mem. in Opp’n to Defs.’ Mot. (“Pl.’s Opp’n”), appended to Defs.’ Mot., Docket Entry No. 126-
5; Defs.’ Reply in Supp. of Defs.’ Mot. (“Defs.’ Reply”), appended to Defs.’ Mot., Docket Entry
No. 126-14; Pl.’s Not. of Updated Auth. (“Pl.’s Supp. Auth.”), Docket Entry No. 135; Defs.’
Supp. Submission (“Defs.’ Supp. Auth.”), Docket Entry No. 137; Pl.’s Sur-Reply in Opp’n to
Defs.’ Mot. and Suppl. Reply in Supp. of Pl.’s Not. of Mot. for Sanctions (“Pl.’s Sur-Reply”),
Docket Entry No. 139; Defs.’ Sur-Reply in Supp. of Defs.’ Mot. (“Defs.’ Sur-Reply”), Docket
Entry No. 144; Pl.’s Reply to Defs.’ Sur-Reply, Docket Entry No. 145.)
4 (Defs.’ Not. of Mot. to Exclude (“Defs.’ Mot. to Exclude”), Docket Entry No. 127;
Defs.’ Mem. in Supp. of Defs.’ Mot. to Exclude (“Defs.’ Exclude Mem.”), appended to Defs.’
Mot. to Exclude, Docket Entry No. 127-1; Pl.’s Opp’n to Defs.’ Mot. to Exclude (“Pl.’s Exclude
Opp’n”), appended to Defs.’ Mot. to Exclude, Docket Entry No. 127-4; Defs.’ Reply in Supp. of
Defs.’ Mot. to Exclude (“Defs.’ Exclude Reply”), appended to Defs.’ Mot. to Exclude, Docket
Entry No. 127-6.)
5 (Pl.’s Not. of Mot. for Sanctions (“Pl.’s Sanctions Mot.”), Docket Entry No. 136; Pl.’s
Mem. in Supp. of Pl.’s Sanctions Mot. (“Pl.’s Sanctions Mem.”), appended to Pl.’s Sanctions
Mot., Docket Entry No. 136-2; Defs.’ Mem. in Opp’n of Pl.’s Sanctions Mot. (“Defs.’ Sanctions
Opp’n”), appended to Pl.’s Sanctions Mot., Docket Entry No. 136-4; Pl.’s Reply in Supp. of Pl.’s
Sanctions Mot. (“Pl.’s Sanctions Reply”), appended to Pl.’s Sanctions Mot., Docket Entry No.
136-6.)
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I. 	Background
a. 	Factual background
The following facts are undisputed unless otherwise noted.6
Plaintiff is a business that supplies and sells, among other things, paper and plastic bags.
(Defs.’ 56.1 ¶ 3.) Plaintiff’s Chief Executive Officer is Jeffrey Rabiea, (Rabiea July 16, 2025
Decl. ¶ 2), and Plaintiff’s Chief Financial Officer is Michael Zapf, (Zapf Decl. ¶ 2).
Mustang is a business that “has brokered the sale of products to large scale grocers,
distributors, and wholesalers” since 2008. (Defs.’ 56.1 ¶ 1.) Mustang is owned and operated by
Maierhoffer, and Maierhoffer is Mustang’s “managing member” and “perform[s] broker-related
duties in the course and scope of his manager’s position.” (Id. ¶ 2.)
From approximately 2008 to 2016,7 Mustang brokered products for Plaintiff and other
suppliers. (Id. ¶¶ 4, 12.) During this period, “Mustang and [Plaintiff] had no written contracts,
6 (Defs.’ Rule 56.1 Stmt. (“Defs.’ 56.1”), appended to Defs.’ Mot., Docket Entry No.
126-1; Pl.’s Resp. to Defs.’ 56.1 (“Pl.’s 56.1 Resp.”), appended to Defs.’ Mot., Docket Entry No.
126-10; Pl.’s 56.1 Counter-Stmt. (“Pl.’s 56.1”), appended in Pl.’s 56.1 Resp. 39–46; Defs.’ 56.1
Reply, appended to Defs.’ Mot., Docket Entry No. 126-12; Decl. of René M. Fix, Esq. (“Fix
Decl.”), appended to Defs.’ Mot., Docket Entry No. 126-2; Decl. of Stephen Weisbrod, Esq. in
Supp. of Pl.’s Opp’n (“Weisbrod Opp’n Decl.”), appended in Pl.’s 56.1 Resp. 47–49; Decl. of
Jeffrey Rabiea dated Feb. 13, 2025 (“Rabiea Feb. 13, 2025 Decl.”), appended in Pl.’s 56.1 Resp.
50–60; Decl. of Michael Zapf (“Zapf Decl.”), appended in Pl.’s 56.1 Resp. 61–63; Decl. of
Jeffrey Rabiea dated July 16, 2025 (“Rabiea July 16, 2025 Decl.”), appended in Exs. Vol. II 93–
96, Docket Entry No. 126-8.)
7 Plaintiff argues that “Defendants began brokering products for [Plaintiff] in 2008.”
(Pl.’s 56.1 Resp. ¶ 4 (citing Rabiea July 16, 2025 Decl. ¶ 3 (stating that Defendants “brokered
sales for [Plaintiff] between 2008 and March 2, 2021”)); see Rabiea Feb. 13, 2025 Decl. ¶ 3
(“Defendants began brokering products for [Plaintiff] in 2008.”).) Defendants’ statement in ¶ 4
of their 56.1 is later contradicted in ¶ 12, as Defendants state that, in 2019, “[t]he parties
discussed Mustang serving as [Plaintiff’s] broker, as it had from 2008 to 2016.” (Defs.’ 56.1 ¶
12.) Moreover, Defendants state in their briefing papers that they have sold Plaintiff’s products
since 2008. (See Defs.’ Mem. 1, 16; Defs.’ Reply 2, 5.) In “draw[ing] all permissible factual
inferences in favor of” Plaintiff, the Court notes this discrepancy, but notes that it is not a
disputed issue of fact since Defendants admit to this date. See Koral v. Saunders, 36 F.4th 400,
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including without limitation, restrictive covenants.” (Id.) Maierhoffer alleges that, in August of
2016, he “accepted employment as [Plaintiff]’s sales manager,” for which the terms were
outlined in a written document (the “Offer”).8 (Id. ¶¶ 5–6; Offer, annexed to Fix Decl. 15–16 as
Ex. B.) In addition, in his corporate capacity as Mustang, Maierhoffer signed a non-compete and
non-solicitation agreement with Plaintiff (the “Non-Compete and Non-Solicitation Agreement”).
(Defs.’ 56.1 ¶ 6; Non-Compete and Non-Solicitation Agreement, annexed to Fix Decl. 17–21 as
Ex. C.) The Non-Compete and Non-Solicitation Agreement states, in relevant part:
This is an Agreement between Mustang Marketing Group, LLC
including all affiliates, subsidiaries and principals (“You”) and New
York 	Packaging 	Corporation 	II, 	LLC 	(“Company”). 	The
Agreement is effective on August 23, 2016 (“Effective Date”).
In consideration of the independent contractor opportunity provided
by New York Packaging II, LLC, You, intending to be legally
bound, agree to the following:
1. Term of Agreement. This Agreement is effective on the Effective
Date, and shall remain in effect throughout the term of your
relationship with the Company as an independent contractor and for
a period of two years thereafter.
. . .
3. Covenant Not to Compete. You agree that at no time during the
term of your relationship with the Company as an independent
contractor will you engage in any business activity which is directly
competitive with the Company nor work for any company which
408 (2d Cir. 2022) (quoting Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)). Moreover, this
discrepancy does not impact Plaintiff’s claims, as they arise from Defendants’ alleged conduct
since approximately 2016, and whether Defendants began brokering products in 2008 or 2012
does not affect the outcome of this action. See Chislett v. N.Y.C. Dep’t of Educ., 157 F.4th 172,
183 (2d Cir. 2025) (“A dispute is genuine ‘if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.’” (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 252 (1986))).
8 Plaintiff argues that Maierhoffer was never Plaintiff’s employee, but instead,
“performed the role of sales manager as an independent contractor.” (Pl.’s 56.1 Resp. ¶ 5.)
Defendants argue that Maierhoffer and Plaintiff had an “employment relationship” while
Maierhoffer was Plaintiff’s sales manager. (See Defs.’ 56.1 ¶¶ 5, 7, 13, 15, 25, 32; Defs.’ Mem.
1, 3.) The Court considers these stated facts as disputed.
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directly competes with the Company. The only exceptions shall be
with the companies for which You currently represent. 	You are
permitted to market products that are not directly competitive with
Company products on behalf of Barnes Paper, Omega, IBS/Trinity
Plastics, Pakpro and Advance Polybag Inc..
4. Non-solicitation. 	During the term of your relationship with the
Company as an independent contractor, and for a period of two (2)
years immediately thereafter, You agree not to solicit any employee
or independent contractor of the Company on behalf of any other
business 	enterprise, 	nor 	shall 	you 	induce 	any 	employee 	or
independent contractor associated with the Company to terminate or
breach an employment, contractual or other relationship with the
Company.
5. Soliciting Customers after Termination of Agreement.
. . .
B. If You voluntarily terminate your relationship with the Company
as an independent contractor: for a period of two (2) years following
the termination of your relationship with the Company as an
independent 	contractor, 	You 	shall 	not, 	directly 	or 	indirectly,
disclose to any person, firm or corporation the names or addresses
of any of the customers or clients of the Company or any other
information pertaining to them. 	Neither shall you call on, solicit,
take away, or attempt to call on, solicit, or take away any customer
of the Company on whom You have called or with whom You
became acquainted during the term of your relationship with the
company as an independent contractor, as the direct or indirect result
of your relationship with the Company. 	There shall be one
exception. 	You may continue to solicit Company customers with
whom you personally have called on within the last twelve (12)
months prior to termination, but only to sell product lines that are
not competitive with the Company’s existing business.
. . .
6. Injunctive Relief. You hereby acknowledge (l) that the Company
will suffer irreparable harm if You breach your obligations under
this Agreement; and (2) that monetary damages will be inadequate
to compensate the Company for such a breach. 	Therefore, if You
breach any of such provisions, then the Company shall be entitled
to injunctive relief, in addition to any other remedies at law or
equity, to enforce such provisions.
. . .
8. Modifications. 	This Agreement may be modified only by a
writing executed by both You and the Company.
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(Non-Compete and Non-Solicitation Agreement; Defs.’ 56.1 ¶¶ 15, 30, 31.)
On February 8, 2019, Maierhoffer resigned from Plaintiff.9 (Defs.’ 56.1 ¶ 7; Feb. 2019
Resignation Ltr. and Response, annexed to Fix Decl. 22–24 as Ex. D.)
(Defs.’ 56.1 ¶¶ 7–8; Feb. 2019 Resignation Ltr. and
Response.) That same day, Plaintiff sent Maierhoffer a letter “acknowleg[ing] receipt of [his]
resignation letter,” (Feb. 2019 Resignation Ltr. and Response), and “br[ought] [his] attention to
sections 4 and 8 of the [Non-Compete and Non-Solicitation Agreement],” (Defs.’ 56.1 ¶ 9).
Maierhoffer: (1) lost access to the database and email account provided by Plaintiff; (2) stopped
receiving a salary and benefits; (3) “stopped managing the sales force”; and (4) discarded his
business cards provided by Plaintiff.10 (Id. ¶ 10.) Following his resignation from Plaintiff,
Maierhoffer returned to running Mustang,11 (id. ¶ 34), and the parties agree that Defendants
acted as an independent broker for Plaintiff, (id. ¶ 12).
9 Plaintiff disputes Defendants’ characterization of Maierhoffer as having “resigned”
from his position as sales manager for two reasons. Plaintiff argues that Maierhoffer did not
“resign[]” from his position as sales manager because (1) Maierhoffer and Plaintiff did not have
an “employment relationship,” and (2) “Defendants functioned as independent contractors at all
relevant times and Defendants continued to broker products for [Plaintiff] before, on, and after
February 8, 2019 without interruption.” (Pl.’s 56.1 Resp. ¶ 7.) As discussed supra footnote 8,
whether Maierhoffer had an employment relationship with Plaintiff is disputed, and as discussed
infra Section II.c.ii.3, whether Defendants terminated their relationship with Plaintiff as an
independent contractor in February of 2019 is disputed.
10 Plaintiff disputes this statement “to the extent that it suggests that Maierhoffer was an
employee or that he ever stopped being an independent sales representative.” (Pl.’s 56.1 Resp. ¶
10.) See discussion supra footnote 9.
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Beginning in 2020, Plaintiff and Maierhoffer began disputing the payment of
Maierhoffer’s commissions. (Id. ¶¶ 42–45.) On March 2, 2021, “Mustang terminated its vendor
relationship with [Plaintiff].” (Id. ¶ 46; Mar. 2021 Resignation Ltr., annexed to Weisbrod Opp’n
Decl. as Ex. 4 and appended in Pl.’s 56.1 Resp. 109–14.)
b. 	Plaintiff’s allegations
i. 	The state court actions
Plaintiff filed several lawsuits against Defendants in New York state court.12 (Defs.’ 56.1
¶ 73.) Plaintiff filed the first action against Defendants on February 25, 2022 alleging: (1)
misappropriation of trade secrets under state law; (2) breach of the Non-Compete and Non-
12 The Court is aware of four actions in state court filed by Plaintiff against Defendants
and takes judicial notice of the documents filed in these state court actions. See Kelsey v. Kessel,
No. 24-1105, 2025 WL 1324213, at *2 n.3 (2d Cir. May 7, 2025) (summary order) (“A court
may take judicial notice of a document filed in another court not for the truth of the matters
asserted in the other litigation, but rather to establish the fact of such litigation and related
filings.” (quoting Michael Grecco Prods., Inc. v. RADesign, Inc., 112 F.4th 144, 148 n.1 (2d Cir.
2024))); Williams v. N.Y.C. Hous. Auth., 816 F. App’x 532, 534 (2d Cir. 2020) (stating that state
court decisions are appropriate for judicial notice where the decision was a public record);
Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006) (“[D]ocket sheets are public records
of which the court could take judicial notice . . . .”); Glob. Network Commc’ns, Inc. v. City of
New York, 458 F.3d 150, 157 (2d Cir. 2006) (“A court may take judicial notice of a document
filed in another court not for the truth of the matters asserted in the other litigation, but rather to
establish the fact of such litigation and related filings.” (quoting Int’l Star Class Yacht Racing
Ass’n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70 (2d Cir. 1998))); see also Fecteau v. City
of Mount Vernon, No. 23-CV-9173, 2025 WL 754043, at *7 (S.D.N.Y. Mar. 10, 2025) (stating
that “[c]ourts may take judicial notice of public documents or matters of public record . . .
including the contents of court dockets,” but “a document filed in another court . . . [only]
establish[es] the fact of such litigation and related filings” (second alteration in original)
(citations omitted)); Connelly v. City of St. Albans, No. 21-CV-291, 2024 WL 1976658, at *6 n.5
(D. Vt. May 3, 2024) (taking “conditional judicial notice” of a state court document on summary
judgment); Doe v. State Univ. of N.Y. Purchase Coll., 617 F. Supp. 3d 195, 201 n.3 (S.D.N.Y.
2022) (“‘Courts may take judicial notice of public documents and matters of public record,’
including ‘document[s] filed in another court[,] not for the truth of the matters asserted in the
other litigation, but rather to establish the fact of such litigation and related filings.’” (alterations
in original) (first quoting Casey v. Odwalla, Inc., 338 F. Supp. 3d 284, 294 (S.D.N.Y. 2018); and
then quoting Glob. Network Commc’ns, 458 F.3d at 157)).
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Solicitation Agreement; (3) breach of contract; (4) to1tious interference with prospective
business relations; (5) breach of fiduciaiy duty; (6) negligence; (7) faithless servant; and (8)
unjust enrichment (the "First State Comt Action"). Compl., NY Packaging II LLC v. Mustang
Mktg. Gr. LLC, No. 602439/2022 (N.Y. Sup. Ct. filed Feb. 25, 2022), Docket Enny No. 1. On
Mai·ch 24, 2022, Plaintiff filed a notice of discontinuance. Not. of Discontinuance, NY
Packaging II LLC, No. 602439/2022 (filed Mai·. 24, 2022), Docket Enny No. 4.
Plaintiff filed a second action against Defendants on December 30, 2022 alleging: (1)
breach of conn·act; (2) breach of fiducia1y duty; and (3) to1tious interference with conh'act (the
"Second State Comt Action"). Compl., NY Packaging IL LLC v. Maierhoffer, No.
600068/2023 (N.Y. Sup. Ct. filed Dec. 30, 2022), Docket Enny No. 1. On Febrnaiy 10, 2025,
Plaintiff and Defendants signed a settlement agreement and release (the "Settlement Agreement
and Release"). (Settlement Agreement and Release, annexed to Pl.'s Not. of Filing as Ex. A,
Docket Enny No. 143-1.) The Settlement Agreement and Release states, in relevant pait:
13 The Settlement Agreement and Release defines the "EDNY Action" as this action.
(Settlement Agreement and Release 1 ("[Plaintiff] filed a lawsuit in the U.S. Disn-ict Comt for
the Eastern Disn·ict of New York captioned New York Packaging II LLC v. John Maierhoffer and
Mustang Marketing Group LL[C}, [N]o. 21-[CV]-1629 (the 'EDNY Action')").)
9
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(Settlement Agreement and Release 2 (emphasis added).) On Febmaiy 13, 2025, pursuant to the
Settlement Agreement and Release, Plaintiff filed a stipulation ofdiscontinuance in the Second
State Comi Action with prejudice. Stip. ofDiscontinuance with Prejudice, NY Packaging II,
LLC, No. 600068/2023 (filed Feb. 13, 2025), Docket Entiy No. 40.
Plaintiff filed a third action on Mai·ch 8, 2024 against Maierhoffer and Dai·yl
Danielowicz, a non-pa1iy to this action, 15 alleging: (1) misappropriation ofti·ade secrets under
state law against Danielowicz; (2) conspiracy to misappropriate ti·ade secrets under state law
against Maierhoffer and Danielowicz; (3) breach ofthe duty ofloyalty against Danielowicz; and
(4) aiding and abetting breach ofthe duty ofloyalty against Maierhoffer (the "Third State Comi
Action"). Compl., NY Packaging II LLC v. Danielowicz, No. 604169/2024 (N.Y. Sup. Ct. filed
Mai·. 8, 2024), Docket Entiy No. 1. On September 30, 2024, the state comi dismissed several of
Plaintiffs claims. Decision and Order, NY Packaging II LLC, No. 604169/2024 (filed Sep. 30,
2024), Docket Entiy No. 68. The state comi first dismissed Plaintiffs misappropriation ofti·ade
secrets claim because the employee handbook did not create a duty ofconfidentiality. Id. at 3.
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Second, in addition to dismissal of the misappropriation of trade secrets claim, the state court
dismissed Plaintiff’s conspiracy to misappropriate trade secrets claim. Id. Third, the state court
dismissed Plaintiff’s aiding and abetting breach of the duty of loyalty claim, in part, because the
claim was “too general, unspecific and speculative for the [c]ourt to find that [it] articulate[s] a
cause of action against [ ] Maierhoffer.” Id. The state court did dismiss Plaintiff’s breach of the
duty of loyalty claim and related permanent injunction claim, “but only to the extent of
[Danielowicz’s] actions prior to his leaving [Plaintiff’s] employment on March 9, 2021.” Id. On
October 16, 2024, Plaintiff moved for leave to reargue, and on April 3, 2025, the state court
heard oral argument where Plaintiff argued that “the [c]ourt should not have only considered [ ]
[Plaintiff’s] handbook . . . but that the [c]ourt should also have considered the common law
aspects of the case.” Decision and Order 3, N.Y. Packaging II LLC, No. 604169/2024 (filed June
11, 2025), Docket Entry No. 120. On June 11, 2025, the state court vacated its dismissal and
reinstated the dismissed claims for misappropriation of trade secrets, conspiracy to
misappropriate trade secrets, and aiding and abetting breach of the duty of loyalty (the “Third
State Court Action Reinstatement”). Id. at 4. In reinstating the action, the state court concluded,
in part, that when viewing the complaint, “at the very least from a common law perspective, [it]
states causes of action that comply with common law, and where applicable, [New York Civil
Practice Law and Rules] § 3016(b).” Id. On June 13, 2025, Maierhoffer filed a motion
requesting that the court vacate the Third State Court Action Reinstatement, which the state court
denied on November 25, 2025.16 On July 3, 2025, Maierhoffer filed a notice of appeal to the
Appellate Division, Second Judicial Department of the Supreme Court of the State of New York,
16 Not. of Mot. to Vacate, N.Y. Packaging II LLC, No. 604169/2024 (filed June 13,
2025), Docket Entry No. 122; Decision and Order, N.Y. Packaging II LLC, No. 604169/2024
(filed Nov. 25, 2025), Docket Entry No. 149.
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which appeal is currently pending. Not. of Appeal, N.Y. Packaging II LLC, No. 604169/2024
(filed July 3, 2025), Docket Entry No. 137; see Not. of Appeal, N.Y. Packaging II LLC v.
Danielowicz, No. 2025-8780 (App. Div. filed July 3, 2025), Docket Entry No. 1. On January 20,
2026, Maierhoffer moved for a judgment on the pleadings in the Third State Court Action
despite the pending appeal. Not. of Mot. for J. on the Pleadings, N.Y. Packaging II LLC, No.
604169/2024 (filed Jan. 20, 2026), Docket Entry No. 163. On February 25, 2026, Plaintiff and
Danielowicz filed a joint stipulation of discontinuance with prejudice stating that “[f]or
avoidance of doubt, [Plaintiff]’s claims against [ ] Maierhoffer are not dismissed pursuant to this
[s]tipulation.” Stip. of Discontinuance as to Danielowicz, N.Y. Packaging II LLC, No.
604169/2024 (filed Feb. 25, 2026), Docket Entry No. 172.
Plaintiff filed a fourth action in state court on July 16, 2025, against Defendants alleging:
(1) breach of contract; (2) breach of fiduciary duty; (3) tortious interference with contract; and
(4) tortious interference with business relations (the “Fourth State Court Action”). Compl., N.Y.
Packaging II, LLC v. Maierhoffer, No. 615114/2025 (N.Y. Sup. Ct. filed Aug. 18, 2025), Docket
Entry No. 5. On December 29, 2025, the state court dismissed the action because the
discontinuation of the Second State Court Action precluded the complaint pursuant to the
doctrine of res judicata. Decision and Order 6, N.Y. Packaging II, LLC, No. 615114/2025 (filed
Dec. 29, 2025), Docket Entry No. 30. On January 13, 2026, Plaintiff filed a notice of appeal to
the Appellate Division, Second Judicial Department of the Supreme Court of the State of New
York, which appeal is currently pending. Not. of Appeal, N.Y. Packaging II, LLC, No.
615114/2025 (filed Jan. 13, 2026), Docket Entry No. 32; see Not. of Appeal, N.Y. Packaging II
LLC v. Maierhoffer, No. 2026-545 (App. Div. filed Feb. 20, 2026), Docket Entry No. 1.
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ii. 	The current action
Plaintiff commenced the above-captioned action on March 26, 2021 in this Court. (See
Compl.) First, Plaintiff alleges that Defendants misappropriated its trade secrets in violation of
the DTSA and state law and breached the Non-Compete and Non-Solicitation Agreement to
“broker[] sales for directly competitive products.” (Id. ¶¶ 109, 120.) Second, Plaintiff alleges
that Defendants breached the parties’ oral agreement, as Defendants promised Plaintiff that they
would sell any unsold inventory. (Id. ¶¶ 69, 143.) Third, Plaintiff alleges that Defendants were
unjustly enriched because they received $30,000 in hand sanitizer commission payments that
they were not entitled to receive.17 (Id. ¶ 178.) Plaintiff also alleges contract violations for
tortious interference with prospective business relations, breach of fiduciary duty, negligence,
and faithless servant, arising from Defendants’ conduct. (See Compl.) In support of its claims,
Plaintiff offers the expert reports of (1) Christopher L. Picone, who is prepared to opine on
Plaintiff’s damages arising from Defendants’ alleged violation of the Non-Compete and Non-
Solicitation Agreement by engaging in competitive sales and (2) Glen Balzer, who is prepared to
opine on the standard industry practices of the sales and distribution industry. In addition,
Plaintiff argues that “Maierhoffer and Mustang are alter egos and should be treated as one.”
(Defs.’ 56.1 ¶ 68.)
On May 19, 2021, Defendants filed a motion to dismiss pursuant to Rules 12(b)(1),
12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure. (Defs.’ Mot. to Dismiss 1,
17 Plaintiff claims that Defendants “were enriched by $30,000 in commission advances
related to sales of hand sanitizer,” (Compl. ¶ 178), because Plaintiff “either did not receive
payment for, received returns but not re-orders of, or refunded payments,” (id. ¶ 179), for hand
sanitizer sold by Defendants, as the hand sanitizer products had been recalled and Plaintiff
“reasonably believed the customer payments would be refunded by [Plaintiff] to the purchasers,”
(Rabiea Feb. 13, 2025 Decl. ¶ 77).
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Docket Entry No. 16.) On May 26, 2021, Plaintiff filed a motion for preliminary injunction to
enjoin Defendants from violating the Non-Compete and Non-Solicitation Agreement and from
using Plaintiff’s “pricing, sales, or technical product information.” (Pl.’s Not. of Mot. for
Prelim. Inj. 1, Docket Entry No. 18.) On March 1, 2022, Judge Joan M. Azrack denied (1)
Plaintiff’s motion for a preliminary injunction and (2) Defendants’ motion to dismiss for failure
to state a claim and for improper venue.18 (Order dated March 1, 2022; Mem. & Order dated
March 1, 2022.)
II. 	Discussion
a. 	Standards of review
i. 	Rule 702 – Motion to strike expert report and preclude expert
testimony
“The admission of expert testimony is governed primarily by the Federal Rules of
Evidence.” Waldman v. Palestine Liberation Org., 171 F.4th 575, 594 (2d Cir. 2026); United
States v. Walker, No. 18-3506, 2023 WL 3451419, at *1 (2d Cir. May 15, 2023); see also
Bustamante v. KIND, LLC, 100 F.4th 419, 427 (2d Cir. 2024) (explaining that “Rule 702 of the
Federal Rules of Evidence governs the admissibility of expert witness testimony,” but that “a
judge . . . should also be mindful of other applicable rules” (citation omitted)). Rule 702 of the
Federal Rules of Evidence was amended on December 1, 2023, which provides:
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if the proponent demonstrates to the court that
it is more likely than not that: (a) the expert’s scientific, technical,
18 Maierhoffer argued that the Eastern District of New York is an improper venue
because he and Mustang are Florida residents and Plaintiff did not allege that “any significant
events occurred in this District”; Plaintiff argued that “substantial events” occurred from in this
District, including the development of and access to its trade secrets. (Mem. & Order dated
March 1, 2022 6, Docket Entry No. 33.) In denying Maierhoffer’s motion to dismiss for
improper venue, Judge Azrack concluded that “Plaintiff’s argument that its trade secrets were
developed and accessed from this District, alone, is sufficient for venue.” (Id.)
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or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the
testimony is based on sufficient facts or data; (c) the testimony is the
product of reliable principles and methods; and (d) the expert’s
opinion reflects a reliable application of the principles and methods
to the facts of the case.
Fed. R. Evid. 702; Faison-Williams v. United States, No. 24-1404, 2025 WL 974831, at *3 (2d
Cir. Apr. 1, 2025) (summary order) (quoting id.); Rutledge v. Walgreen Co., 182 F.4th 168, 183–
84 (2d Cir. 2026) (quoting same). “The district court plays the role of gatekeeper, determining
whether the expert’s testimony is reliable and relevant.” Faison-Williams, 2025 WL 974831, at
*3 (citing Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256, 265 (2d Cir. 2002)); see
Waldman, 171 F.4th at 594 (“The law assigns district courts a ‘gatekeeping’ role in ensuring that
expert testimony satisfies the requirements of Rule 702.” (quoting United States v. Farhane, 634
F.3d 127, 158 (2d Cir. 2011))); United States v. Jones, 965 F.3d 149, 161 (2d Cir. 2020) (“While
the proponent of expert testimony has the burden of establishing by a preponderance of the
evidence that the admissibility requirements of Rule 702 are satisfied, . . . the district court is the
ultimate gatekeeper.” (alteration in original) (quoting United States v. Williams, 506 F.3d 151,
160 (2d Cir. 2007))); see also Richardson v. Corr. Med. Care, Inc., No. 22-210, 2023 WL
3490904, at *2 (2d Cir. May 17, 2023) (summary order) (“The proponent of expert testimony
bears the burden of establishing admissibility, with the district court serving a gatekeeping role
to ensure that the ‘expert’s testimony both rests on a reliable foundation and is relevant to the
task at hand.’” (quoting Williams, 506 F.3d at 160)).
Prior to permitting a person to testify as an expert under Rule 702, the court must make the
following findings: (1) the witness is qualified to be an expert; (2) “the opinion is based upon
reliable data and methodology”; and (3) the expert’s testimony on a particular issue will “assist the
trier of fact.” Nimely v. City of New York, 414 F.3d 381, 396–97 (2d Cir. 2005) (quoting Fed. R.
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Evid. 702); see also Rutledge, 182 F.4th at 184 (“In addition to confirming that experts are
qualified to offer testimony, Rule 702 charges district courts with the ‘task of ensuring that an
expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.’” (quoting
Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993))); Bustamante, 100 F.4th at 427
(“Under this rule, the [d]istrict [c]ourt . . . ‘is charged with the task of ensuring that an expert’s
testimony both rests on a reliable foundation and is relevant to the task at hand.’” (emphasis
omitted) (quoting Amorgianos, 303 F.3d at 266)); United States v. Napout, 963 F.3d 163, 187–88
(2d Cir. 2020) (explaining that the court is tasked with “ensuring that an expert’s testimony both
rests on a reliable foundation and is relevant to the task at hand” (quoting Daubert, 509 U.S. at
597)); United States v. Cruz, 363 F.3d 187, 192 (2d Cir. 2004) (quoting same). In Daubert v.
Merrell Dow Pharmaceuticals, Inc., the Supreme Court set forth a list of factors, in addition to the
criteria set forth in Rule 702, that bear on the determination of reliability:
(1) whether a theory or technique has been or can be tested; (2)
“whether the theory or technique has been subjected to peer review
and publication;” (3) the technique’s “known or potential rate of
error” and “the existence and maintenance of standards controlling
the technique’s operation;” and (4) whether a particular technique
or theory has gained general acceptance in the relevant scientific
community.
Williams, 506 F.3d at 160 (quoting Daubert, 509 U.S. at 593–94); see also United States v.
Wilbern, No. 20-3494, 2022 WL 10225144, at *1 (2d Cir. Oct. 18, 2022) (summary order)
(quoting same); United States v. Morgan, 675 F. App’x 53, 55 (2d Cir. 2017) (quoting same);
Zaremba v. Gen. Motors Corp., 360 F.3d 355, 358 (2d Cir. 2004) (citing Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 149–50 (1999)) (similar). The Daubert inquiry for reliability is a
“flexible one” and does not “constitute a definitive checklist or test,” Kumho Tire, 526 U.S. at
141, 150 (citation omitted), and thus, the Daubert factors “neither necessarily nor exclusively
appl[y] to all experts or in every case,” United States v. Green, No. 22-3217, 2024 WL 4488577,
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at *1 (2d Cir. Oct. 15, 2024) (summary order) (alteration in original) (quoting id. at 141), cert.
denied, 145 S. Ct. 1216 (2025).
The “district court is afforded ‘the same broad latitude when it decides how to determine
reliability as it enjoys [with] respect to its ultimate reliability determination.’” Id. (emphasis
omitted) (quoting Kumho Tire, 526 U.S. at 142); see also Kumho Tire, 526 U.S. at 142 (citing
Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997)). Expert testimony should be excluded if it is
“speculative or conjectural.” United States v. Rivera, No. 22-2780, 2024 WL 2813548, at *3 (2d
Cir. June 3, 2024) (summary order) (quoting Boucher v. U.S. Suzuki Motor Corp., 73 F.3d 18, 21
(2d Cir. 1996)), cert. denied, 145 S. Ct. 1099 (2025); Jones, 965 F.3d at 162 (quoting same);
Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 311 (2d Cir. 2008) (quoting
same). When an expert’s opinion is “based on data, a methodology, or studies that are simply
inadequate to support the conclusions reached, Daubert and Rule 702 mandate the exclusion of
that unreliable opinion testimony.” Souza v. Exotic Island Enters., Inc., 68 F.4th 99, 113 (2d Cir.
2023) (quoting Amorgianos, 303 F.3d at 266); Ruggiero v. Warner-Lambert Co., 424 F.3d 249,
253 (2d Cir. 2005) (quoting same); see also Nimely, 414 F.3d at 396 (“[N]othing in either
Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence
which is connected to existing data only by the ipse dixit of the expert. A court may conclude
that there is simply too great an analytical gap between the data and the opinion proffered.”
(alteration in original) (quoting Gen. Elec., 522 U.S. at 146)). “Nevertheless, in accordance with
the liberal admissibility standards of the Federal Rules of Evidence, only serious flaws in
reasoning or methodology will warrant exclusion.” U.S. Small Bus. Admin. v. Feinsod, No. 17-
CV-3586, 2025 WL 1677409, at *7 (E.D.N.Y. June 13, 2025) (internal quotation marks and
citation omitted); see Adams v. Liberty Mar. Corp., 407 F. Supp. 3d 196, 202 (E.D.N.Y. 2019)
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(same); In re Fosamax Prods. Liab. Litig., 645 F. Supp. 2d 164, 173 (S.D.N.Y. 2009) (citing
Amorgianos, 303 F.3d at 267) (same).
ii. 	Rule 56 – Summary Judgment
Summary judgment is proper only when “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Colwell v.
Sig Sauer, Inc., 177 F.4th 382, 390 (2d Cir. 2026) (quoting Fed. R. Civ. P. 56(a)); Bellin v.
McDonald, 177 F.4th 167, 181 (2d Cir. 2026) (quoting same); Delshah 60 Ninth, LLC v. Free
People of PA LLC, 175 F.4th 192, 197 (2d Cir. 2026) (quoting Galloway v. Cnty. of Nassau, 141
F.4th 417, 422–23 (2d Cir. 2025). The court must “constru[e] the evidence in the light most
favorable to the nonmoving party,” Radwan v. Manuel, 55 F.4th 101, 113 (2d Cir. 2022)
(alteration in original) (quoting Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir.
2011)), and “resolve all ambiguities and draw all permissible factual inferences in favor of the
party against whom summary judgment is sought,” Koral v. Saunders, 36 F.4th 400, 408 (2d Cir.
2022) (quoting Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)). See Qorrolli v. Metro.
Dental Assocs., 124 F.4th 115, 122 (2d Cir. 2024) (“In determining whether there is a genuine
dispute as to a material fact, we must resolve all ambiguities and draw all inferences against the
moving party.” (quoting Garcia v. Hartford Police Dep’t, 706 F.3d 120, 127 (2d Cir. 2013))).
The role of the court “is not to resolve disputed questions of fact but only to determine
whether, as to any material issue, a genuine factual dispute exists.” Suarez v. Morton, 170 F.4th
33, 58 (2d Cir. 2026) (quoting Lara-Grimaldi v. Cnty. of Putnam, 132 F.4th 614, 633 (2d Cir.
2025)); Vista Food Exch., Inc. v. Comercial De Alimentos Sanchez S De R L De C.V., 147 F.4th
73 (2d Cir. 2025) (quoting Rupp v. City of Buffalo, 91 F.4th 623, 634 (2d Cir. 2024)); Kee v. City
of New York, 12 F.4th 150, 166–67 (2d Cir. 2021) (quoting Kaytor v. Elec. Boat Corp., 609 F.3d
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537, 545 (2d Cir. 2010)). A genuine issue of fact exists when there is sufficient “evidence on
which the jury could reasonably find for the [nonmoving party].” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986); see Chislett v. N.Y.C. Dep’t of Educ., 157 F.4th 172, 183 (2d Cir.
2025) (“A dispute is genuine ‘if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.’” (quoting id. at 248)). “A fact is material if it ‘might affect the
outcome of the suit under the governing law.’” Chislett, 157 F.4th at 183 (quoting Anderson,
477 U.S. at 248). The “mere existence of a scintilla of evidence” is not sufficient to defeat
summary judgment. Anderson, 477 U.S. at 252; see Solid 21, Inc. v. Breitling U.S.A., Inc., 96
F.4th 265, 276 (2d Cir. 2024) (“The mere existence of a scintilla of evidence in support of the
non-movant’s position will be insufficient; there must be evidence on which the trier of fact
could reasonably find for the non-movant.” (quoting Sports Auth., Inc. v. Prime Hosp. Corp., 89
F.3d 955, 960 (2d Cir. 1996))). “The trial court’s function in deciding such a motion is not to
weigh the evidence or resolve issues of fact, but to decide instead whether, after resolving all
ambiguities and drawing all inferences in favor of the non-moving party, a rational juror could
find in favor of that party.” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000); see
Miller v. N.Y. State Police, No. 20-3976, 2022 WL 1133010, at *1 (2d Cir. Apr. 18, 2022)
(summary order) (stating that the court’s function is to decide whether, “after resolving all
ambiguities and drawing all inferences in favor of the nonmovant, a reasonable jury could return
a verdict for the nonmovant” (first citing Anderson, 477 U.S. at 248; and then citing Garcia, 706
F.3d at 127, 129)). “Summary judgment should be granted only if ‘there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.’” Chislett, 157
F.4th at 183 (quoting Fed. R. Civ. P. 56(a)); see Capitol Recs., LLC v. Vimeo, Inc., 125 F.4th
409, 418 (2d Cir. 2025) (“[A] genuine dispute as to a material fact precludes summary judgment
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‘where the evidence is such that a reasonable jury could decide in the non-movant’s favor.’”
(quoting Lucente v. Cnty. of Suffolk, 980 F.3d 284, 296 (2d Cir. 2020))), amended on reh’g in
part, 151 F.4th 13 (2d Cir. 2025).
iii. 	Rule 11 – Sanctions
Rule 11 provides that “[b]y presenting to the court a pleading, written motion, or other
paper . . . an attorney or unrepresented party certifies that to the best of the person’s knowledge,
information, and belief, formed after an inquiry reasonable under the circumstances . . . the
factual contentions have evidentiary support or, if specifically so identified, will likely have
evidentiary support after a reasonable opportunity for further investigation or discovery.” Fed.
R. Civ. P. 11(b); see Farrington v. Poole, 185 F.4th 334, 341 n.5 (2d Cir. 2026) (quoting Bus.
Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533, 551 (1991)); Park v. Kim, 91
F.4th 610, 614 (2d Cir. 2024) (“Rule 11 imposes a duty on attorneys to certify that they have
conducted a reasonable inquiry and have determined that any papers filed with the court are well
grounded in fact, [and] legally tenable.” (alteration in original) (quoting Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 393 (1990))); Caisse Nationale de Credit Agricole-CNCA, N.Y.
Branch v. Valcorp, Inc., 28 F.3d 259, 264 (2d Cir. 1994) (“Under Fed. R. Civ. P. 11, sanctions
may be imposed on a person who signs a pleading, motion, or other paper for an improper
purpose such as to delay or needlessly increase the cost of litigation, or [a person who] does so
without a belief, formed after reasonable inquiry, that the position espoused is factually
supportable and is warranted by existing law or by a nonfrivolous argument for the extension,
modification, or reversal of existing law.”); Bergon v. ASCAP!, No. 24-CV-4660, 2024 WL
4955283, at *9 (E.D.N.Y. Dec. 2, 2024) (quoting Caisse, 28 F.3d at 264) (same). A court may
impose sanctions where “there is clear evidence that the conduct at issue is (1) entirely without
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color and (2) motivated by improper purposes.” Wolters Kluwer Fin. Servs., Inc. v. Scivantage,
564 F.3d 110, 114 (2d Cir. 2009) (citation omitted); see also United States v. Sullivan, 118 F.4th
170, 206 (2d Cir. 2024) (“Whether ‘[a]n argument constitutes a frivolous legal position for
purposes of Rule 11 sanctions’ is determined ‘under an objective standard of reasonableness.’”
(alteration in original) (quoting Caisse, 28 F.3d at 264)); Kim, 91 F.4th at 614–15 (“Under Rule
11, a court may sanction an attorney for, among other things, misrepresenting facts or making
frivolous legal arguments.” (quoting Muhammad v. Walmart Stores E., L.P., 732 F.3d 104, 108
(2d Cir. 2013) (per curiam)); Kyros L. P.C. v. World Wrestling Ent., Inc., 78 F.4th 532, 543 (2d
Cir. 2023) (quoting Fed. R. Civ. P. 11(b)); Int’l Techs. Mktg., Inc. v. Verint Sys., Ltd., 991 F.3d
361, 368 (2d Cir. 2021) (quoting Enmon v. Prospect Cap. Corp., 675 F.3d 138, 143 (2d Cir.
2012)); Huebner v. Midland Credit Mgmt., Inc., 897 F.3d 42, 56 (2d Cir. 2018) (quoting Wolters
Kluwer Fin. Servs., 564 F.3d at 114); Orr v. McGinty, No. 17-CV-1280, 2022 WL 2440064, at
*1 (N.D.N.Y. July 5, 2022) (quoting same).
Pursuant to Rule 11 motions for sanctions must be made “separately from any other
motion.” Fed. R. Civ. P. 11(c)(2); Kyros, 78 F.4th at 543 (“A party must move for sanctions in a
filing that is ‘separate[ ] from any other motion’ and that ‘describe[s] the specific conduct that
allegedly violates Rule 11(b).’” (alterations in original) (quoting Fed. R. Civ. P. 11(c)(2)));
Rafter v. Fleet Boston Fin. Corp., 523 F. App’x 79, 81–82 (2d Cir. 2013) (“Rule 11[] require[s]
that the motion be ‘made separately from any other motion.’” (quoting Fed. R. Civ. P. 11(c)(2))).
“Such a motion may not be presented to the court until the expiration of a twenty-one-day ‘safe
harbor’ period, during which the alleged violator has the chance to withdraw or correct the
challenged filing.” Kyros, 78 F.4th at 543 (quoting Fed. R. Civ. P. 11(c)(2)); see Sheehan v.
Starbucks Corp., No. 25-189, 2026 WL 746725, at *2 (2d Cir. Mar. 17, 2026) (summary order)
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(“Rule 11 sanctions, which are subject to safe-harbor protection and require only a finding of
objective unreasonableness.”). “The safe-harbor provision is a strict procedural requirement.”
Star Mark Mgmt., Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, Ltd., 682 F.3d 170, 175
(2d Cir. 2012) (citations omitted); see Behrens v. JPMorgan Chase Bank, N.A., No. 16-CV-5508,
2019 WL 1437019, at *14 (S.D.N.Y. Mar. 31, 2019) (“A motion that fails to comply with the
safe harbor provision of Rule 11 must be denied.” (citing Fierro v. Gallucci, 423 F. App’x 17,
18–19 (2d Cir. 2011))), aff’d, No. 21-2603, 2024 WL 1090856 (2d Cir. Mar. 13, 2024)
(summary order).
b. 	Defendants’ motion to strike the report and proposed testimony of Plaintiff’s
experts
Defendants move to strike the entire report and proposed testimony of Plaintiff’s experts,
Christopher L. Picone and Glen Balzer.
i. 	The Court declines to strike Christopher L. Picone’s report and
preclude his testimony
Defendants move to strike the entire report and proposed testimony of Christopher L.
Picone, Plaintiff’s expert who is prepared to opine on Plaintiff’s damages arising from
Defendants’ alleged violation of the Non-Compete and Non-Solicitation Agreement. In support,
Defendants argue that Picone’s report should be stricken and his testimony should be precluded
because: (1) he offers impermissible legal conclusions, as he “intends to testify that a long list of
sales Mustang made from February [of] 2019 and March [of] 2023 were competitive,” and the
“question of whether certain sales are competitive is a legal conclusion,” (Defs.’ Exclude Mem.
12–13); (2) he is not qualified to determine which products are competitive, as he is “not an
industry expert” and “has no experience as a broker or manufacturer” in Mustang’s industry, (id.
at 13–14); (3) his report and testimony are not based on sufficient facts or data, as his “proposed
damage calculations are based on conjecture and speculation,” as Plaintiff “collected Mustang’s
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sales records,” “identified all products it considers competitive,” and “directed Picone to assume
all such sales would have gone to [Plaintiff] but for Mustang’s alleged breach of [the Non-
Compete and Non-Solicitation] Agreement,” (id. at 15–16); and (4) he did not apply any
principles or methods to his analysis, as he “does nothing more than add Mustang’s sales data
and speculate that all sales for allegedly competitive products would have gone to [Plaintiff],”
(id. at 16–17).
Plaintiff argues that Picone: (1) does not offer impermissible legal conclusions as to
whether any product was competitive, as “he was asked to quantify damages based on factual
assumptions,” which includes “the assumption that certain sales involved competitive products,”
(Pl.’s Exclude Opp’n 11); (2) is qualified to offer expert testimony because he has “nearly forty
years of experience in financial consulting, litigation support, and damages analysis” and “[h]e
and his firm regularly provide services in forensic accounting, business valuation, and damage
modeling,” (id. at 13–14); (3) bases his opinion on sufficient facts and data, as he relied on
“extensive documentation obtained from Defendants, [Plaintiff], and [Plaintiff’s] competitors,”
which includes “sales records, commission reports, and business correspondence,” (id. at 15);
and (4) applied a reliable methodology, which is a “straightforward, industry-accepted lost
profits analysis using documentary sales data and factual assumptions provided by counsel” that
“has been accepted by courts and approved by hundreds of food industry claimants in complex
commercial cases,” (id. at 16–17).
1. 	Picone’s background and expert opinion
Since 2012, Picone has been the President and General Counsel of Picone Advisory
Group, LLC. (Report of Christopher L. Picone (“Picone Report”) 2, annexed in Decl. of Stephen
Weisbrod, Esq. in Supp. of Pl.’s Exclude Opp’n (“Weisbrod Exclude Decl.”) 11–20 as Ex. 2,
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Docket Entry No. 127-5; CV of Christopher L. Picone (“Picone CV”) 1, annexed in Weisbrod
Exclude Decl. 4–10 as Ex. 1.) Picone Advisory Group, LLC is “an international financial
advisory firm that specializes in providing consulting services to companies of all sizes and in all
industries.” (Picone CV 1.) It provides services such as “strategic planning and financial
assessment of business operations,” “forensic analysis,” and “litigation support and expert
testimony.” (Id.) Between 2008 and 2012, Picone was the President and General Counsel of
Buccino & Associates, Inc., a “strategic and financial consulting firm[] providing clients
comprehensive advisory services designed to enhance cash flow and position companies for long
term profitability,” which offered, inter alia, “strategic and financial assessment of business
operations,” “insolvency and reorganization services,” and “litigation support and expert
testimony.” (Id.) Between 2003 and 2008, Picone was the Principal of Stage Development
Company, LLC, a “full service real estate firm specializing in the development of . . . properties
primarily in the Midwest region.” (Id. at 2.) Prior to 2003, Picone served in various executive
roles in general contracting and real estate firms. (See id. at 2–3.)
Picone has experience as a neutral claims administrator, “[s]ettled [c]laims [t]rustee,”
consultant, and expert witness. (Picone Report 2.) In addition, Picone has experience in
employment agreement, trade secret, non-compete, and non-solicitation matters as a licensed
attorney and corporate consultant. (Id.) Picone states that he has been retained (1) “in product
recall and similar cases to evaluate claims as a result of damages incurred” resulting from
product recalls and (2) “to evaluate claims as a result of breach of obligations pursuant to, among
other things, non-compete and non-solicitation agreements, employment agreements, and other
business arrangements.” (Id.) He earned his Master of Law degree from DePaul University,
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Juris Doctor from the John Marshall Law School, and Bachelor of Business Administration from
Loyola University. (Picone CV 5.)
Plaintiff’s counsel retained Picone as an expert to assist in the litigation against
Defendants. (Picone Report 1.) Picone prepared a damages assessment based on Defendants’
“sales for its benefit on behalf of other companies that were competitors of [Plaintiff]” and
“estimated the lost sales and ultimately the lost gross profit damages incurred by [Plaintiff] as a
result of [Defendants’] sales of competing products for other companies” between February of
2019 and March 2, 2023 (the “Evaluation Period”). (Id. at 6.) On January 6, 2025, Picone
provided his report to Plaintiff and subsequently updated his report and damages calculation on
February 10, 2025, following “the discovery of additional relevant information” from
Maierhoffer’s January 16, 2025 deposition regarding “certain items he brokered on behalf of
Barnes Paper that he did not previously provide.” (Id. at 1.)
Regarding methodology, Picone and his team considered, inter alia: (1) sales information
obtained from Defendants detailing sales they brokered for and received commissions from other
companies; (2) sales information obtained from other companies detailing sales for which
Defendants received commissions; (3) Mustang’s monthly and annual income statements
obtained from Defendants; (4) the classification of products sold that either compete, may not
compete, or do not compete with Plaintiff’s products; and (5) a comparison of commission
pursuant to sales information to revenues recognized by Defendants. (Id. at 6–7.) Picone and his
team also “reviewed hundreds of files provided by [Plaintiff]’s counsel that were produced by
[Defendants] and companies that [Defendants] brokered products for in connection with
discovery requests in this litigation.” (Id. at 7.)
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Picone states that “it is industry practice, and my team’s practice, to include only verified
amounts for sales and other claims related information.” (Id.) However, “[d]espite numerous
requests by [Plaintiff]’s counsel,” Defendants failed to “produce, among other things, detailed
sales information describing sales to other companies during the Evaluation Period for which
[Defendants] received commissions.” (Id.) Picone states that “in [his] experience, parties in the
position of [Defendants] ordinarily would have [produced] such information.” (Id.) “As a result,
[Plaintiff]’s counsel requested this information from the competitive companies,” and Picone and
his team “extrapolate[d] competitive sales from information deemed reasonably complete and
accurate using reasonable and conservative assumptions.” (Id.) Picone states that “this approach
results in a conservative estimate” of “competitive sales of at least $42 million during the
Evaluation Period,” resulting in between $9,300,000 and $11,400,000 in damages to Plaintiff.
(Id. at 8.)
2. 	Impermissible legal conclusions
“As a general rule an expert’s testimony on issues of law is inadmissible.” United States
v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991) (citation omitted); Noriega v. Abbott Lab’ys, ---
F. Supp. 3d ----, ---, 2026 WL 1601501, at *23 (S.D.N.Y. June 4, 2026) (quoting id. at 1294); In
re ACTOS Antitrust Litig., 783 F. Supp. 3d 749, 796 (S.D.N.Y. 2025) (quoting same); United
States v. Prevezon Holdings, Ltd., 251 F. Supp. 3d 684, 699 (S.D.N.Y. 2017) (quoting same); see
also United States v. Scop, 846 F.2d 135, 139 (2d. Cir. 1988) (stating that Federal Rule of
Evidence 704 “was not intended to allow experts to offer opinions embodying legal
conclusions”). “[A]lthough an expert may opine on an issue of fact within the jury’s province,
he may not give testimony stating ultimate legal conclusions based on those facts.” Bilzerian,
926 F.2d at 1294; see also Fiataruolo v. United States, 8 F.3d 930, 941 (2d Cir. 1993) (stating
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that testimony “is not objectionable merely ‘because it embraces an ultimate issue to be decided
by the trier of fact,’” but that courts should guard against “the admission of opinions which
would merely tell the jury what result to reach” (first quoting Fed. R. Evid. 704; and then quoting
Fed. R. Evid. 704 advisory committee’s note to 1972 Proposed Rules)). In addition, the Second
Circuit has “consistently held . . . that expert testimony that ‘usurp[s] the role of the trial judge in
instructing the jury as to the applicable law . . .’ by definition does not ‘aid the jury in making a
decision’; rather, it ‘undertakes to tell the jury what result to reach.’” Nimely, 414 F.3d at 397
(first quoting Bilzerian, 926 F.2d at 1294; and then quoting United States v. Duncan, 42 F.3d 97,
101 (2d Cir. 1994)); In re LIBOR-Based Fin. Instruments Antitrust Litig., 801 F. Supp. 3d 330,
380 (S.D.N.Y. 2025) (“Expert testimony must not ‘usurp either the role of the trial judge in
instructing the jury as to the applicable law or the role of the jury in applying that law to the facts
before it.’” (quoting Bilzerian, 926 F.2d at 1294)), appeal dismissed, No. 25-2756, 2025 WL
4092207 (2d Cir. Dec. 10, 2025); SEC v. Tourre, 950 F. Supp. 2d 666, 675 (S.D.N.Y. 2013)
(“Expert testimony may not usurp the province of the judge to instruct on the law . . . .” (first
citing Bilzerian, 926 F.2d at 1294; and then citing Marx & Co. v. Diners’ Club, Inc., 550 F.2d
505, 510–11 (2d Cir. 1977))); see also A.G. v. Paradise Valley Unified Sch. Dist. No. 69, 815
F.3d 1195, 1207 (9th Cir. 2016) (stating that “instructing the jury as to the applicable law is the
distinct and exclusive province of the court” (quoting Hangarter v. Provident Life & Accident
Ins. Co., 373 F.3d 998, 1016 (9th Cir. 2004))).
Defendants’ argument that Picone offers impermissible legal conclusions is not supported
by the evidence. First, Defendants do not provide any caselaw supporting their argument that a
damages calculation assuming competitive sales is an impermissible legal conclusion, and
Plaintiff persuasively argues that Picone does not offer impermissible legal conclusions because
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he was “not asked to determine whether any product was competitive.” (Pl.’s Exclude Opp’n
11.) Plaintiff, instead, “asked [Picone] to quantify damages based on factual assumptions,”
which includes “the assumption that certain sales involved competitive products.” (Id.) Picone
testified at his deposition that he and his team “did[] [not] and [ ] would not give an opinion on
whether an agreement was breached or not breached because that’s a legal opinion and we’re not
here to give either legal advice or express legal opinions” and affirmed that any particular
transaction identified as part of the damages calculation does not constitute a conclusion that
Mustang breached any agreement. (Picone Dep. 71:9–19, 1/8/25, annexed in Weisbrod Exclude
Decl. 21–65 as Ex. 3.) Because an expert may present a damages calculation on the basis of
assumed facts, the Court finds that Picone’s opinions do not constitute impermissible legal
conclusions. See Brun v. PeakCM Lake St. Hotel, LLP, No. 24-CV-846, 2026 WL 1724560, at
*3 (D. Vt. June 15, 2026) (“Under settled evidence law, an expert may express an opinion that is
based on facts that the expert assumes, but does not know, to be true.” (quoting Williams v.
Illinois, 567 U.S. 50, 57 (2012))); Bigglestone v. Crowe LLP, No. 21-CV-273, 2026 WL
1245998, at *9 (D. Vt. Mar. 31, 2026) (“An expert may testify on the basis of assumed facts or in
response to hypothetical questions as long as there is or will be some basis in the record to permit
the trier of fact to find that the assumptions or hypothe[ses] are correct.” (alteration in original)
(quoting SEC v. Biovail Corp., No. 08-CV-2979, 2009 WL 10872976, at *1 (S.D.N.Y. Dec. 22,
2009))); Harrington Glob. Opportunity Fund, Ltd. v. BofA Sec., Inc., No. 21-CV-761, 2026 WL
836248, at *11 (S.D.N.Y. Mar. 26, 2026) (“[A]n expert may ground his opinion on
‘hypotheticals based on assumptions about testimony,’ allowing the expert to give his opinion
‘but leaves the credibility issues to the jury.’” (quoting Scop, 846 F.2d at 143)).
In addition, Picone’s assumption of competitive sales for the purposes of calculating
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damages is not an impermissible legal conclusion because an expert may presume causation
when presenting damage calculation methods. See Avery Dennison Corp. v. Four Pillars Ent.
Co., 45 F. App’x 479, 486–87 (6th Cir. 2002) (holding that the district court did not abuse its
discretion in admitting the testimony of plaintiff’s damages expert witness where the expert
witness assumed “central questions of liability in the case”); Int’l Adhesive Coating Co. v. Bolton
Emerson Int’l, Inc., 851 F.2d 540, 545 (1st Cir. 1988) (“[The expert’s] testimony did not have to
establish the validity of the central, disputed factual claims in this case in order to have a factual
basis and be admissible.”); TK-7 Corp. v. Est. of Barbouti, 993 F.2d 722, 731 (10th Cir. 1993)
(“The fact that [the expert] assumed certain sales figures does not necessarily make his testimony
inadmissible. Indeed, this is the classic form of the ‘hypothetical question,’ which has long been
recognized as a proper method of bringing out expert testimony.”); Harrington Glob.
Opportunity Fund, Ltd., 2026 WL 836248, at *11 (“[A]n expert may ground his opinion on
‘hypotheticals based on assumptions about testimony,’ allowing the expert to give his opinion
‘but leaves the credibility issues to the jury.’” (quoting Scop, 846 F.2d at 143)); Actava TV, Inc.
v. Joint Stock Co. “Channel One Russia Worldwide”, No. 18-CV-6626, 2023 WL 2529115, at
*5 (S.D.N.Y. Mar. 15, 2023) (concluding that a damages expert is sufficiently qualified and can
assume a finding of liability where he “holds a Ph.D. in Economics and is an economic
consultant and author, with more than 40 years of experience”); AngioDynamics, Inc. v. C.R.
Bard, Inc., 537 F. Supp. 3d 273, 333 (N.D.N.Y. 2021) (concluding that it is appropriate for an
expert on causation and damages to assume a finding of liability); Loreley Fin. (Jersey) No. 3
Ltd. v. Wells Fargo Sec., LLC, 412 F. Supp. 3d 392, 406 (S.D.N.Y. 2019) (“[The d]efendants are
free to challenge the accuracy of [the expert’s] assumptions underlying his opinion on loss
causation, but his testimony does not contain bare conclusions, relies on legitimate sources, and
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is admissible.”), aff’d, 13 F.4th 247 (2d Cir. 2021).
The Court therefore finds that Picone’s report and intended testimony regarding his
damages calculation is not an impermissible legal conclusion.19
3. 	Qualifications
In some cases, “a district court may properly conclude that witnesses are insufficiently
qualified despite the relevance of their testimony because their expertise is too general or too
deficient.” Stagl v. Delta Air Lines, Inc., 117 F.3d 76, 81 (2d Cir. 1997); see Williams v. E.
Meadow Union Free Sch. Dist., No. 21-CV-3310, 2026 WL 790580, at *7 (E.D.N.Y. Mar. 20,
2026) (quoting Stagl, 117 F.3d at 81); Mobius v. Quest Diagnostics Clinical Lab’ys, Inc., 687 F.
Supp. 3d 357, 372 (W.D.N.Y. 2023) (quoting same); Lickteig v. Cerberus Cap. Mgmt., L.P., 589
F. Supp. 3d 302, 329 (S.D.N.Y. 2022) (quoting same). However, even if a proposed expert lacks
such specific training or experience, “he may still have ‘practical experience’ or ‘specialized
knowledge’ qualifying him to give opinion testimony under Rule 702.” Guerrero v. Loiacono,
769 F. Supp. 3d 158, 166 (E.D.N.Y. 2024) (quoting Lickteig, 589 F. Supp. 3d at 328); Lickteig,
589 F. Supp. 3d at 328 (citing McCullock v. H.B. Fuller Co., 61 F.3d 1038, 1043 (2d Cir. 1995));
see United States v. Leech, No. 24-CR-658, 2026 WL 1113346, at *16 (S.D.N.Y. Apr. 24, 2026)
(citing McCullock, 61 F.3d at 1043); see also United States v. Simmons, No. 23-6771, 2025 WL
19 Defendants also rely on Picone’s assumption of causation to argue that Picone’s
opinions are prejudicial. (Defs.’ Exclude Mem. 23.) However, for the same reasons as discussed
above, Picone’s report and proposed testimony are not prejudicial because Picone may presume
causation to present his damage calculation methods. See AngioDynamics, Inc. v. C.R. Bard,
Inc., 537 F. Supp. 3d 273, 333 (N.D.N.Y. 2021) (concluding that it is appropriate for an expert
on causation and damages to assume a finding of liability); Luitpold Pharms., Inc. v. Ed.
Geistlich Sohne A.G. Fur Chemische Industrie, No. 11-CV-681, 2015 WL 5459662, at *10
(S.D.N.Y. Sep. 16, 2015) (“For the purpose of presenting his damage calculation methods, [a
damages expert] is entitled to presume causation (a prerequisite to recovery which will have to
be established by evidence other than [his] testimony).” (alterations in original) (citation
omitted)).
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615459, at *3 (2d Cir. Feb. 26, 2025) (summary order) (“Rule 702 allows an expert witness to
give an opinion based on her . . . ‘specialized knowledge . . . .’” (quoting Fed. R. Evid. 702)). In
such cases, the court must “‘compar[e] the area in which the witness has superior knowledge,
skill, experience, or education’ with the actual ‘subject matter of the witness’s testimony.’”
Karavitis v. Makita U.S.A., Inc., 722 F. App’x 53, 55 (2d Cir. 2018) (quoting United States v.
Diallo, 40 F.3d 32, 34 (2d Cir. 1994)); see United States v. Chin, 371 F.3d 31, 40 (2d Cir. 2004)
(“To determine whether a witness qualifies as an expert, courts compare the area in which the
witness has superior knowledge, education, experience, or skill with the subject matter of the
proffered testimony.”); Spectrum Dynamics Med. Ltd. v. GE Healthcare Techs., Inc., No. 18-
CV-11386, 2026 WL 926689, at *5 (S.D.N.Y. Apr. 6, 2026) (quoting Chin, 371 F.3d at 40)); see
also Suffolk Cnty. Water Auth. v. Dow Chem. Co., No. 17-CV-6980, 2025 WL 1907206, at *2
(E.D.N.Y. July 10, 2025) (explaining that in order to determine whether the witness is an expert,
the court must compare “‘the area in which the witness has superior knowledge, skill,
experience, or education’ and ‘the actual subject matter of the witness’s testimony’” (citation
omitted)).
“If the expert has educational and experiential qualifications in a general field closely
related to the subject matter in question, the court will not exclude the testimony solely on the
ground that the witness lacks expertise in the specialized areas that are directly pertinent.”
Guerrero, 769 F. Supp. 3d at 166 (quoting In re Zyprexa Prods. Liab. Litig., 489 F. Supp. 2d
230, 282 (E.D.N.Y. 2007)); Hamraz v. Diversified Maint. Sys., LLC, No. 18-CV-1864, 2023 WL
5200282, at *3 (E.D.N.Y. Aug. 14, 2023) (quoting same); Zyprexa Prods., 489 F. Supp. 2d at
282 (citing Stagl, 117 F.3d at 80). “Assertions that the witness lacks particular educational or
other experiential background, ‘go to the weight, not the admissibility, of [the] testimony.’”
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Zyprexa Prods., 489 F. Supp. 2d at 282 (alteration in original) (quoting McCullock, 61 F.3d at
1044); see also 136 Field Point Circle Holding Co. v. Razinski, No. 21-CV-11076, 2025 WL
757558, at *14 (S.D.N.Y. Mar. 4, 2025) (quoting Zyprexa Prods., 489 F. Supp. 2d at 282).
Defendants’ argument that Picone is not qualified to opine about Plaintiff’s damages is
not supported by the record. First, it is more appropriate for Defendants to challenge Picone’s
qualifications on cross-examination because his qualifications impact the credibility and weight
of his testimony, not its admissibility. See McCullock, 61 F.3d at 1043 (stating that challenges to
an expert’s qualifications were “properly explored on cross-examination and went to his
testimony’s weight and credibility — not its admissibility”); Evers v. Hoffman, 822 F. Supp. 3d
295, 303 (E.D.N.Y. 2026) (“[O]bjections to an expert’s qualifications generally go to the
credibility and weight of the expert’s testimony, not its admissibility.” (quoting Thomas v. YRC
Inc., No. 16-CV-6105, 2018 WL 919998, at *5–6 (S.D.N.Y. Feb. 14, 2018))); Sabby Volatility
Warrant Master Fund Ltd. v. Kennedy, No. 23-CV-601, 2025 WL 3640229, at *5 (S.D.N.Y.
Dec. 16, 2025) (“Arguments that a proffered expert lacks particular education or other
experiential background, go to the weight, not the admissibility, of the testimony.” (quoting
Crown Cork & Seal Co. Master Ret. Tr. v. Credit Suisse First Bos. Corp., No. 12-CV-5803,
2013 WL 978980, at *2 (S.D.N.Y. Mar. 12, 2013))); Am. Empire Surplus Lines Ins. Co. v. J.R.
Contracting & Env’t Consulting, Inc., 743 F. Supp. 3d 530, 539 (S.D.N.Y. 2024) (“Assertions
that the witness lacks particular educational or other experiential background, go to the weight,
not the admissibility, of [the] testimony.” (alteration in original) (quoting Zyprexa Prods., 489 F.
Supp. 2d at 282)).
Picone is also qualified to opine on damages because “an expert may be qualified based
on ‘knowledge, skill, experience, training, or education,’” SR Int’l Bus. Ins. Co. v. World Trade
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Ctr. Props., LLC, 467 F.3d 107, 132 (2d Cir. 2006) (quoting Fed. R. Evid. 702), and courts in the
Second Circuit liberally construe expert-qualification requirements. See CCM Touring LLC v.
Moonbug Ent. Ltd., No. 23-CV-7116, 2026 WL 848392, at *19 (S.D.N.Y. Mar. 27, 2026) (“In
this Circuit, ‘[i]f the expert has educational and experiential qualifications in a general field
closely related to the subject matter in question, the court will not exclude the testimony solely
on the ground that the witness lacks expertise in the specialized areas that are directly
pertinent.’” (quoting Ultra Recs., LLC v. Ultra Int’l Music Publ’g, LLC, No. 22-CV-9667, 2024
WL 4663011, at *2 (S.D.N.Y. Nov. 4, 2024))); Wells Fargo Bank, N.A. v. U.S. Life Ins. Co. in
N.Y., No. 22-CV-8606, 2025 WL 2220948, at *29 (S.D.N.Y. Aug. 4, 2025) (“An expert witness
may be qualified where he has ‘experience, knowledge, or training related to [a] general area,’
even if he lacks experience as to the ‘specific question before [the] trier of fact.’” (alterations in
original) (quoting Johnson & Johnson Vision Care, Inc. v. CIBA Vision Corp., No. 04-CV-7369,
2006 WL 2128785, at *5 (S.D.N.Y. July 28, 2006))); Tang Cap. Partners, LP v. BRC Inc., 757
F. Supp. 3d 363, 389 (S.D.N.Y. 2024) (“Courts in the Second Circuit liberally construe expert-
qualification requirements.”).
Liberally construing the expert-qualification requirements, the Court finds that Picone is
sufficiently qualified to opine on Plaintiff’s alleged damages. First, Picone is qualified as a
damages expert because he has “nearly forty years of experience in financial consulting,
litigation support, and damages analysis” and has served “as a consultant and expert in matters
involving business losses, product recalls, non-compete disputes, and contract claims.” (Pl.’s
Exclude Opp’n 2, 13.) See Liberty Mut. Ins. Co. v. Day to Day Imps. Inc., No. 22-CV-2181,
2025 WL 2117897, at *12 (S.D.N.Y. July 29, 2025) (“[The expert’s forty] years of experience in
the marine insurance industry are sufficient to qualify him as an expert on industry practice.”),
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on reconsideration in part, 2025 WL 2531478 (S.D.N.Y. Sep. 3, 2025); Better Holdco, Inc. v.
Beeline Loans, Inc., 666 F. Supp. 3d 328, 380–81 (S.D.N.Y. 2023) (“[The expert] — a [certified
public accountant] with decades of accounting experience — is qualified to testify as to
damages.”).
Picone testified at his deposition that he has conducted commissions calculations for
manufacturers “numerous times . . . in the course of [his and his team’s] consulting and . . . [his]
legal practice” and has served as an expert in at least three cases involving, for example, food
recalls and bankruptcy. (Picone Dep. 14:1–21, 56:10–22, 1/8/25, annexed in Decl. of René M.
Fix, Esq. (“Fix Exclude Decl.”), 5–25 as Ex. B, Docket Entry No. 127-2.) Moreover, Picone has
experience as a manufacturer of grocery products (1) as a co-owner of Chicago Electric, which
“manufactured control systems of assembly line processes primarily in the cardboard box
converting industry” and (2) through his involvement at Infinitybox, which “manufactures power
systems in the automotive industry.” (Id. at 24:13–25.) In these roles, he sold products both
directly and through brokers. (Id. at 25:10–11.) In addition, while Picone is not an accountant,
he “engaged and supervised other professional to assist [him],” including certified public
accountants. (Picone Report 2.) Picone testified at his deposition that a certified public account,
Paul Nockles, an individual who was previously a partner at a “big national public accounting
firm,” was involved in “a lot of the number crunching . . . [and] putting together the schedules.”
(Picone Dep. 9:19–25, 10:23–11:1, 1/8/25, annexed in Weisbrod Exclude Decl.) Therefore,
Picone’s lack of industry-specific experience does not disqualify his proffered testimony because
(1) he has sufficient business-related experience to opine on damages related to contract
violations and (2) he engaged with accountants to produce the report. See Leech, 2026 WL
1113346, at *28 (concluding that an expert was qualified to testify on issues related to portfolio
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management where the expert has “research experience in evaluating the performance of asset
managers and in portfolio management”); CCM Touring, 2026 WL 848392, at *19 (finding that
“[i]f the expert has educational and experiential qualifications in a general field closely related to
the subject matter in question, the court will not exclude the testimony solely on the ground that
the witness lacks expertise in the specialized areas that are directly pertinent” (alteration in
original) (quoting Ultra Recs., 2024 WL 4663011, at *2)); In re Corp. Res. Servs., Inc., 603 B.R.
888, 896 (Bankr. S.D.N.Y. 2019) (finding that the expert’s “lack of experience in litigation is not
disqualifying” because “work experience can and often does provide a proper basis for required
expertise” and the expert “testified about his many years of experience in financial analysis and
valuation services”).
The Court finds that Picone’s extensive experience in “financial consulting, litigation
support, and damages analysis” is sufficient to qualify him as an expert for the purposes of
Plaintiff’s damages calculations.
4. 	Sufficient facts or data and reasonable methodology
Defendants’ arguments that Picone’s report and testimony (1) are not based on sufficient
facts or data and (2) lacks reasonable methodology to his analysis, are not supported by the
record or the relevant law.
A. 	Sufficient facts or data
Defendants fail to show that Picone’s report and testimony are inadmissible on the
grounds that “it is based on assumptions that are so unrealistic and contradictory as to suggest
bad faith.” Electra v. 59 Murray Enters., Inc., 987 F.3d 233, 254 (2d Cir. 2021) (quoting
Boucher, 73 F.3d at 21); see Glenn v. UPMC Chautauqua, No. 21-CV-839, 2025 WL 1118624,
at *8 (W.D.N.Y. Mar. 27, 2025) (“Provided the basis for the expert testimony at issue is
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‘supported by good grounds,’ ‘shaky but admissible evidence’ should be subject to attack by
‘[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the
burden of proof.’” (alteration in original) (quoting Amorgianos, 303 F.3d at 267); Ctr. for Indep.
of Disabled, N.Y. v. Metro. Transp. Auth., No. 17-CV-2990, 2023 WL 7403642, at *3 (S.D.N.Y.
Nov. 9, 2023) (rejecting the plaintiff’s argument that the expert’s “methodologies are unreliable
because they are founded on flawed assumptions” where the plaintiffs did not show that the
expert’s “assumptions underlying his analysis are so unfounded as to suggest bad faith”).
Defendants argue that Picone’s report and testimony is “unreliable and/or speculative”
because he did not consider alternative factual scenarios. However, this argument fails because
the consideration of alternative factual scenarios impacts the weight and credibility of his report
and testimony, not their admissibility. See CCM Touring, 2026 WL 848392, at *13 (“[T]he
existence of alternative factual scenarios that an expert has not considered in rendering an
opinion goes only to the weight and credibility of the expert’s testimony, not its admissibility.”
(quoting Media Glow Digit., LLC v. Panasonic Corp. of N. Am., No. 16-CV-7907, 2019 WL
1055527, at *5 (S.D.N.Y. Mar. 6, 2019))); Glenn, 2025 WL 1118624, at *9 (“[A]lthough expert
testimony ‘should be excluded where it is speculative or conjectural, . . . arguments that the
expert’s assumptions are unfounded go to the weight, not the admissibility, of the testimony.’”
(second alteration in original) (quoting Robinson v. Suffolk Cnty. Police Dep’t, 544 F. App’x 29,
32 (2d Cir. 2013))), report and recommendation adopted, 2025 WL 1114389 (W.D.N.Y. Apr.
15, 2025); Pike Co. v. Universal Concrete Prods., Inc., 524 F. Supp. 3d 164, 176 (W.D.N.Y.
2021) (“[A]rguments about the assumptions and data underlying an expert’s testimony go to the
weight, rather than the admissibility, of that testimony.” (quoting Arista Recs. LLC v. Lime Grp.
LLC, No. 06-CV-5936, 2011 WL 1674796, at *7 (S.D.N.Y. May 2, 2011))); Guardino v. Alutiiq
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Diversified Servs., LLC, 457 F. Supp. 3d 158, 162 (N.D.N.Y. 2020) (“Disputes regarding . . . an
expert’s use or application of her methodology, or the existence or number of supporting
authorities for an expert’s opinion, go to the weight, not the admissibility of her testimony.”
(citing McCullock, 61 F.3d at 1044)); Lee Valley Tools, Ltd. v. Indus. Blade Co., 288 F.R.D. 254,
267 (W.D.N.Y. 2013) (“An expert opinion is not per se unreliable because it relies upon some
unverified or inaccurate information provided by the expert’s client.”).
B. 	Reasonable methodology
Picone sufficiently demonstrates his methodology for obtaining and analyzing data.
Picone concedes that he did not employ the “industry practice . . . to include only verified
amounts for sales and other claims[-]related information” because Defendants failed to
“produce[] most of the requested information.” (Picone Report 7.) To overcome this, Picone
“elected to extrapolate competitive sales from information deemed reasonably complete and
accurate using reasonable and conservative assumptions.” (Id.) Picone testified at his deposition
that his methodologies are “simple math” involving “detailed investigation and tracking down
pieces of evidence from start to finish.” (Picone Dep. 57:2–7, 1/8/25, annexed in Fix Exclude
Decl.) Moreover, Picone also testified that he has previously used this methodology when
“doing M&A activity for companies that . . . may have sustained some kind of loss.” (Id. at
130:10–23.) Picone states that this methodology for obtaining and analyzing data is “the most
reasonable approach to quantify the damages sustained by [Plaintiff], even if not perfectly
accurate.” (Picone Report 7; see Picone Dep. 112:11–15, 1/8/25, annexed to Weisbrod Exclude
Decl.)
Defendants argue that Picone’s methodology is based in bad faith because he “does
nothing more than add Mustang’s sales data and speculate that all sales for allegedly competitive
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products would have gone to [Plaintiff].” (Defs.’ Exclude Mem. 17.) The Court finds that
Picone’s methodology is not based on bad faith because experts can rely on a range of data to
opine on damages. See Angiodynamics, 537 F. Supp. 3d at 337 (stating that “experts have wide
latitude with respect to the data on which they rely, and challenges concerning the reliability of
an expert’s data often present questions of weight, rather than admissibility” (collecting cases));
Gaudette v. Saint-Gobain Performance Plastics Corp., No. 11-CV-932, 2014 WL 1311530, at *8
(N.D.N.Y. Mar. 28, 2014) (finding an expert’s opinions “sufficiently reliable and based on
sufficient facts” when the expert “physically inspected the [product] at issue, reviewed
deposition transcripts and other case materials, and researched applicable industry standards and
practices”).
The Court finds that Picone’s methodology for obtaining and analyzing data is sufficient
for the purpose of calculating damages. Moreover, Defendants can cross-examine Picone
regarding whether he ignored relevant evidence and that Picone incorrectly identified
competitive products. See Old Gate Partners, LLC v. Paddock Enters., LLC, No. 18-CV-1657,
2024 WL 3520168, at *14 (D. Conn. May 30, 2024) (stating that any “infirmities” as to the
expert’s remediation estimates are “properly addressed through cross examination”); Abbott
Lab’ys v. Adelphia Supply USA, No. 15-CV-5826, 2019 WL 5696148, at *47 (E.D.N.Y. Sep. 30,
2019) (“Absent a showing that [the expert’s] opinion is speculative or otherwise inherently
unreliable, [the d]efendants’ criticisms of [the expert’s] methodology and assumptions go the
weight of his testimony — not to its admissibility.”); R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244,
252 (S.D.N.Y. 2010) (“To the extent that a party questions the weight of the evidence upon
which the other party’s expert relied or the conclusions generated from the expert’s assessment
of that evidence, it may present those challenges through cross-examination of the expert.”).
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ii. 	The Court strikes Glen Balzer’s report and precludes him from
testifying as an expert
Defendants move to strike the entire report and proposed testimony of Glen Balzer,
Plaintiff’s expert who is prepared to opine on “standard industry practices and common
understandings within the sales and distribution industry regarding the expectations of sales
representatives and brokers who work on behalf of sellers and distributors of products.” (Pl.’s
Exclude Opp’n 6.) In support, Defendants argue that Balzer’s report should be stricken and his
testimony should be precluded because: (1) he offers “impermissible legal conclusions,” as
“[Plaintiff] seeks to admit Balzer’s proposed testimony that brokers owe a duty of loyalty to the
seller” and that “the duty of loyalty prohibits disclosure of confidential information,” (Defs.’
Exclude Mem. 18–19); (2) he is not qualified to opine on standard industry practices, as his
experience “as a legal expert who drafts and negotiates contracts” “arise[s] from the
unauthorized practice of law” because “he is not an attorney and has no legal training,” (id. at
19); (3) his report and testimony are not based on sufficient facts or data, as “only a court or fact
finder can decide whether a duty of loyalty exists and/or the circumstances under which the duty
is breached,” (id. at 20–21); and (4) he did not apply any principles or methods to his analysis, as
he “failed to apply any methodology” or “cite any authoritative sources, industry publications, or
peer-reviewed materials to support his claims about ‘industry standards,’” (id. at 21–22).
Plaintiff argues that Balzer: (1) does not offer impermissible legal conclusions, as he
“opines on the standard practices and expectations within the sales representative [ ] industry
regarding the loyalty expected of sales representatives,” (Pl.’s Exclude Opp’n 18); (2) is
qualified to offer expert testimony because he has “over [forty] years of relevant experience in
the consumer good and brokerage industries,” including “negotiating and reviewing hundreds of
contracts between brokers and suppliers across a wide range of industries,” (id. at 19); (3) bases
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his opinion on sufficient facts and data, as his “opinions are based on his decades of personal
experience working with brokers and suppliers,” (id. at 20); and (4) applied appropriate
principles and methods to his analysis, as “he reached his conclusions by identifying consistent
patterns across hundreds of broker agreements and drawing from his years of participation in the
industry,” (id. at 21).
For the reasons explained below, the Court grants Defendants’ motion to strike Balzer’s
report and preclude him from testifying.
1. 	Balzer’s background and expert opinion
Balzer is a forensic and management consultant focused on marketing and sales. (Expert
Report of Glen Balzer (“Balzer Report”) 4, annexed in Weisbrod Exclude Decl. 75–102 as Ex.
5.) Since 1973, Balzer has “created, upgraded, managed, and merged sales and marketing
organizations throughout North America and Asia” and has “advise[d] parties involved in
relationships and contracts between suppliers, manufacturers’ representatives, customers, and
distributors.” (Id.) Since 2000, Balzer has “operated as a management and forensic consultant to
manufacturers, distributors, and manufacturers’ representatives.” (Id.) He has been the
President of New Era Consulting since 1998, where he “[c]reate[s] and upgrade[s] distribution
and representative agreements” and “[t]estif[ies] at trial, arbitration, and deposition as an expert
witness in cases between global suppliers, manufacturers’ representatives, and industrial
distributors.” (Id. at 20.) Plaintiff’s counsel retained Balzer as an expert to assist in the litigation
against Defendants. Balzer prepared a report determining that “Maierhoffer has real and
continuing obligations to [Plaintiff].” (Id. at 16.) First, based on “industry custom and practice
observed over [his] decades of work in many industries,” Balzer states that “Maierhoffer took on
obligations to [Plaintiff], including obligations to remain loyal and, relatedly, to maintain the
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confidentiality of confidential information.” (Id. at 16–17.) In addition, Balzer states that while
he has “not been asked to interpret the [Non-Compete and Non-Solicitation] Agreement,” it
“appears consistent” with this understanding. (Id.) Second, “based on general industry custom
and practice,” Balzer states that Maierhoffer “had a duty to keep confidential information
confidential even after the relationship ended,” which “appears to be consistent with the [Non-
Compete and Non-Solicitation] Agreement.” (Id. at 17.)
2. 	Impermissible legal conclusions
Defendants persuasively argue that Balzer offers impermissible legal conclusions. The
Court is not convinced by Balzer’s argument that his conclusion regarding Maierhoffer’s owed
duties of loyalty and confidentiality does not constitute an interpretation of the Non-Compete
and Non-Solicitation Agreement because his conclusion is based on “industry custom and
practice.” First, Balzer does not detail the industry customs or practices on which he relies;
instead, he merely states that his conclusion is based on “industry custom and practice observed
over [his] decades of work in many industries.” (Id. at 16–17.) Second, Balzer’s conclusion is a
recitation of the central issue in this action — whether Defendants owed Plaintiff a duty of
loyalty and confidentiality — and Balzer’s report opining on the existence of a contractual duty
is a legal question to be decided by the Court. See In re Thilman, 557 B.R. 294, 302 (Bankr.
E.D.N.Y. 2016) (“[D]espite [the] plaintiff’s argument to the contrary, the [r]eport lacks any
reference to industry customs and practices. It simply recites [the expert’s] own subjective legal
view of one of the central issues before the [c]ourt — whether [the defendants] had a duty to
inquire.”); SEC v. Rorech, 673 F. Supp. 2d 217, 227 (S.D.N.Y. 2009) (“The issue of the
existence of a duty of confidentiality is one that can be decided by a court as a matter of law.”).
Because the central issue in this action is whether Defendants owed Plaintiff duties of loyalty
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and confidentiality, Balzer’s report and intended testimony opining on whether Maierhoffer
owed Plaintiff these duties constitute an impermissible legal conclusion. See United States v.
Chastain, 145 F.4th 282, 299 (2d Cir. 2025) (“The meaning of [the employer’s] confidentiality
agreement is a legal question to which a witness cannot provide an answer.”); Seaman v. Nat’l
Collegiate Student Loan Tr. 2007-2, No. 18-CV-1781, 2026 WL 2075999, at *10 (S.D.N.Y. July
17, 2026) (“[A]n expert may not . . . testify about the meaning of legal terms.” (alteration in
original) (quoting Levinson v. Westport Nat’l Bank, Nos. 09-CV-269, 09-CV-1955, 10-CV-261,
2013 WL 3280013, at *4 (D. Conn. June 27, 2013))); Day to Day Imps., 2025 WL 2117897, at
*7 (“[A]n expert should not be permitted to opine on the proper construction of contract, which
is a question of law to be ‘interpreted according to general rules of contract interpretation.’”
(quoting Navigators Ins. Co. v. Goyard, Inc., 608 F. Supp. 3d 44, 48 (S.D.N.Y. 2022))); PRCM
Advisers LLC v. Two Harbors Inv. Corp., No. 20-CV-5649, 2025 WL 1276513, at *7 (S.D.N.Y.
May 2, 2025) (“It is not the province of an expert witness to interpret the [m]anagement
[a]greement, nor to apply the legal standard set out in that contract to the facts.”); Mirkin v.
XOOM Energy, LLC, No. 18-CV-2949, 2025 WL 16333, at *2 (E.D.N.Y. Jan. 2, 2025) (“[A]n
expert may not ‘provide legal opinions, legal inclusions, or interpret legal terms.’” (quoting
Highland Cap. Mgmt., L.P. v. Schneider, 379 F. Supp. 2d 461, 469 (S.D.N.Y. 2005))); Romanelli
v. Long Island R.R. Co., 898 F. Supp. 2d 626, 634 (S.D.N.Y. 2012) (“Whether there was a duty
and what that duty consisted of is a matter of law. Therefore, no expert . . . can testify as to the
existence of a duty.”).20
20 Given that Balzer’s report and intended testimony constitute an impermissible legal
conclusion, the Court declines to discuss Defendants’ remaining challenges to Balzer’s report
and intended testimony, which are: (1) Balzer’s qualifications; (2) the sufficiency of facts or
data; (3) the sufficiency of principles or methods; and (4) prejudice. (See generally Defs.’
Exclude Mem.)
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The Court therefore grants Defendants’ motion to strike Balzer’s report and preclude him
from testifying.
c. 	The Court grants in part and denies in part Defendants’ motion for
summary judgment
Defendants argue that they are entitled to summary judgment and that the Court should
dismiss the Complaint because: (1) res judicata bars this action; (2) there are additional reasons
why Plaintiff’s claims for misappropriation of trade secrets, breach of contract, tortious
interference with prospective business relations, breach of fiduciary duty, negligence, faithless
servant, and unjust enrichment fail; and (3) Mustang and Maierhoffer are not alter egos.
i. 	Res judicata
Defendants argue that Plaintiff’s claims are barred by res judicata. First, Defendants
contend that the Third State Court Action bars this action because both actions “arise from the
parties’ broker relationship.” (Defs.’ Mem. 11.) Second, Defendants argue that the Fourth State
Court Action bars this action because the action was dismissed, and Plaintiff’s claims for breach
of contract, breach of fiduciary duty, and tortious interference with contracts and business
relationships (1) are alleged in this action, (2) arise from the same broker relationship as in this
action, and (3) arise from the same Non-Compete and Non-Solicitation Agreement as in this
action.21 (Defs.’ Supp. Submission 2.)
Plaintiff argues that its claims are not barred by res judicata. First, Plaintiff contends that
the Third State Court Action does not preclude this action because it was vacated, and res
21 In addition, Defendants argue that Plaintiff’s discontinuance as to Danielowicz in the
Third State Court Action precludes this action pursuant to res judicata. (See Defs.’ Sur-Reply.)
However, Defendants’ claim as to the Third State Court Action fails because the stipulation of
discontinuance explicitly states that the discontinuance does not apply to Maierhoffer. Stip. of
Discontinuance as to Danielowicz, N.Y. Packaging II LLC, No. 604169/2024 (filed Feb. 25,
2026), Docket Entry No. 172.
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judicata does not apply to vacated orders. (Pl.’s Opp’n 11.) Second, Plaintiff argues that the
Fourth State Court Action does not preclude this action because the Settlement Agreement and
Release preserved Plaintiff’s claims in this action, as the parties agreed that the discontinuance of
the Second State Court Action would not have preclusive effect in this action. (Pl.’s Sur-Reply
2.) In support, Plaintiff contends that Defendants’ reliance on the dismissal of the Fourth State
Court Action fails because the dismissal is “based solely on the prior [discontinuance] of the
[Second State Court Action].” (Id. at 3–4.)
Federal courts have “consistently accorded preclusive effect to issues decided by state
courts.” Allen v. McCurry, 449 U.S. 90, 95 (1980). Under the doctrine of res judicata, or claim
preclusion, “a final judgment on the merits of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in [the previous] action.” Kern v. Joyce,
857 F. App’x 691, 692 (2d Cir. 2021) (quoting Giannone v. York Tape & Label, Inc., 548 F.3d
191, 193 (2d Cir. 2008)); Brown Media Corp. v. K&L Gates, LLP, 854 F.3d 150, 157 (2d Cir.
2017) (quoting Monahan v. N.Y.C. Dep’t of Corr., 214 F.3d 275, 284 (2d Cir. 2000)); Proctor v.
LeClaire, 715 F.3d 402, 411 (2d Cir. 2013) (quoting SEC v. First Jersey Secs., Inc., 101 F.3d
1450, 1463 (2d Cir. 1996)); see also Worthy-Pugh v. Deutsche Bank Nat’l Tr. Co., 664 F. App’x
20, 22–23 (2d Cir. 2016) (affirming a district court’s decision granting a defendant’s motion to
dismiss where the district court found that the plaintiff’s action for mortgage fraud was precluded
by a prior state court foreclosure action).
“Congress has specifically required all federal courts to give preclusive effect to state-
court judgments whenever the courts of the [s]tate from which the judgments emerged would do
so . . . .” Allen, 449 U.S. at 96. To prove claim preclusion under New York law, a defendant
must show that “(1) the previous action involved an adjudication on the merits; (2) the previous
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action involved the [same adverse parties] or those in privity with them; and (3) the claims
asserted in the subsequent action were, or could have been, raised in the prior action.” Marcel
Fashions Grp., Inc. v. Lucky Brand Dungarees, Inc., 779 F.3d 102, 108 (2d Cir. 2015) (alteration
in original) (quoting TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 499 (2d Cir. 2014)); see
also Hereford Ins. v. Shelly, 243 N.Y.S.3d 495, 496 (App. Div. 2025) (“One linchpin of res
judicata is an identity of parties actually litigating successive actions against each other: the
doctrine applies only when a claim between the parties has been previously brought to a final
conclusion.” (quoting Simmons v. Trans Express Inc., 37 N.Y.3d 107, 111 (2021))); Pawling
Lake Prop. Owners Ass’n v. Greiner, 897 N.Y.S.2d 729, 732 (App. Div. 2010) (noting that a
stipulation of discontinuance with prejudice is subject to res judicata).
This action is not barred by res judicata. First, the Third State Court Action has no
preclusive effect because the state court vacated its dismissal and reinstated all other claims it
dismissed in the Third State Court Action in its entirety. See Cayuga Nation v. Tanner, 6 F.4th
361, 374 (2d Cir. 2021) (“[A] judgment vacated or set aside has no preclusive effect.” (quoting
Stone v. Williams, 970 F.2d 1043, 1054 (2d Cir. 1992)); Xu v. City of New York, 612 F. App’x
22, 26 (2d Cir. 2015) (quoting Sheldon v. Khanal, 396 F. App’x 737, 739 (2d Cir. 2010)); see
Harris Tr. & Sav. Bank v. John Hancock Mut. Life Ins. Co., 970 F.2d 1138, 1146 (2d Cir. 1992)
(“It is well-settled in this circuit that a vacated order has no collateral estoppel effect.”); Robbins
v. Candy Digit. Inc., No. 23-CV-10619, 2025 WL 2391039, at *7 (S.D.N.Y. Aug. 18, 2025) (“A
judgment that has been vacated, reversed, or set aside on appeal is thereby deprived of
conclusive effect, both as res judicata and as collateral estoppel.” (quoting Universal City
Studios, Inc. v. Nintendo Co., 578 F. Supp. 911, 919 (S.D.N.Y. 1983))); Leung v. Town of Oyster
Bay, No. 16-CV-4356, 2019 WL 5309995, at *4 (E.D.N.Y. Oct. 21, 2019) (“Indeed, a vacated
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judgment has no preclusive force either as a matter of collateral or direct estoppel or as a matter
of the law of the case.” (quoting Schwartz v. Chan, 142 F. Supp. 2d 325, 330 (E.D.N.Y. 2001)));
Philogene v. Duckett, No. 17-CV-7224, 2018 WL 3946447, at *8 (S.D.N.Y. Aug. 16, 2018) (“A
judgment vacated or set aside has no preclusive effect.” (quoting Zheng v. Liberty Apparel Co.,
556 F. Supp. 2d 284, 294 (S.D.N.Y. 2008))).
Second, the Fourth State Court Action does not have preclusive effect because the
Settlement Agreement and Release from the Second State Court Action specifically preserved
Plaintiff’s claims in this federal action, as the parties agreed that the dismissal of the Second
State Court Action “
” (Settlement Agreement and Release 2 ¶ 2.) The discontinuance of the Second
State Court Action was the basis of the dismissal of the Fourth State Court Action pursuant to res
judicata. See Decision and Order 6, N.Y. Packaging II LLC, No. 615114/2025 (filed Dec. 29,
2025). Therefore, res judicata does not preclude this action because (1) the Settlement
Agreement and Release provides that the discontinuance of the Second State Court Action
and (2) the dismissal of the Fourth State Court Action was based on the
discontinuance of the Second State Court Action. See Detouche v. JTR Transp. Corp., No. 17-
CV-7719, 2020 WL 7364116, at *7 n.5 (S.D.N.Y. Dec. 14, 2020) (rejecting the defendant’s
argument that res judicata barred the action where the settlement agreement “does not
demonstrate [the p]laintiff’s intent to abdicate his right to pursue his present claims, which were
pending at the time the [s]ettlement [a]greement was executed”); Leviton Mfg. Co. v. Pass &
Seymour, Inc., 264 F. Supp. 3d 421, 424 (E.D.N.Y. 2017) (“[I]t is of course common for
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contracting parties or settling litigants to prohibit the assertion of one, some, or all affirmative
defenses should there be subsequent litigation between them.”); Safflane Holdings, Ltd. v.
Gagosian Gallery, Inc., No. 11-CV-1679, 2011 WL 7561258, at *1 (S.D.N.Y. Nov. 7, 2011)
(“Parties are of course free, when settling a lawsuit, to include in their agreement specific
provisions either preserving or waiving the assertion in future litigation not only of claims
already asserted in the case being settled, but also of claims that, while not yet asserted, existed
at the time of the settlement.”); Gentile v. Potter, 509 F. Supp. 2d 221, 232 (E.D.N.Y. 2007)
(“[T]he ‘preclusive effect of a settlement is measured by the intent of the parties to the
settlement, which is to be determined from the language of the agreement itself.’” (quoting White
v. U.S. Postal Serv., No. 04-CV-602, 2005 WL 408047, at *3 (E.D.N.Y. Feb. 16, 2005))); Krol v.
Yager-Krol, 43 N.Y.S.3d 577, 578 (App. Div. 2016) (“[W]hen a party’s right to maintain a cause
of action has been expressly reserved in a prior action, ‘[i]t would be inequitable to preclude
[the] party from asserting [the] claim under the principle of res judicata.’” (second, third, and
fourth alterations in original) (quoting Landau, P.C. v. LaRossa, Mitchell & Ross, 862 N.Y.S.2d
316, 320 (2008))); Bluebird Partners, L.P. v. First Fid. Bank, N.A., N.J., 671 N.Y.S.2d 7, 11
(App. Div. 1998) (concluding that the plaintiff was not precluded from pursuing action where the
plaintiff reserved the right to pursue the action in a negotiated settlement agreement).
Because the state court actions do not bar this claim, the Court denies Defendants’
motion for summary judgment based on res judicata.
ii. 	Alleged alternative reasons to dismiss Plaintiff’s claims
Defendants argue that the Court should dismiss Plaintiff’s claims for “alternative
reasons.” (Defs.’ Mem. 12.) First, Defendants contend that that Plaintiff’s misappropriation of
trade secrets claim should be dismissed because Plaintiff (1) has not shown that it possessed
trade secrets, (2) did not take reasonable measures to protect its trade secrets, and (3) has not
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identified any misappropriation of trade secrets by Defendants. (Id. at 12–15.) Second,
Defendants argue that Plaintiff’s claim for breach of the Non-Compete and Non-Solicitation
Agreement should be dismissed because Plaintiff has not shown that Mustang sold competitive
products. (Id. at 15–16.) Third, Defendants contend that Plaintiff’s claim for breach of contract
regarding unsold inventory should be dismissed because (1) there is no common-law burden for
a broker to buy unsold inventory, and (2) the claim fails pursuant to the statute of frauds. (Id. at
18.) Fourth, Defendants argue that Plaintiff’s claim for tortious interference with prospective
business relations fails because (1) Plaintiff has not shown that Defendants have committed a
crime or act solely to harm it, and (2) Defendants had an economic interest in pursuing sales.
(Id. at 19.) Fifth, Defendants contend that Plaintiff’s claim for breach of fiduciary duty should
be dismissed because (1) it is duplicative of its claims for breach of the Non-Compete and Non-
Solicitation Agreement and (2) they did not make any decisions for Plaintiff. (Id. at 19–20.)
Sixth, Defendants argue that Plaintiff’s claim for negligence fails because no cause of action
exists for negligent performance of a contract. (Id. at 20.) Seventh, Defendants contend that
Plaintiff’s claim for faithless servant should be dismissed because they neither were agents of
Plaintiff nor had an employment relationship with Plaintiff. (Id. at 21.) Finally, Defendants
argue that Plaintiff’s claim for unjust enrichment should be dismissed because it is barred by
their contractual relationship. (Id. at 22.)
Plaintiff argues that the Court should not dismiss its claims because they are supported by
evidence. First, Plaintiff contends that it has (1) shown that it possessed pricing information,
sales data, and technical product specifications, which constitute trade secrets, (2) taken
reasonable measures to protect its trade secrets, and (3) identified misappropriation of trade
secrets by Defendants because they sent trade secrets to competitors. (Pl.’s Opp’n 11–13.)
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Second, Plaintiff argues that it has shown that Defendants breached the Non-Compete and Non-
Solicitation Agreement by proffering evidence that Defendants sold competitive products prior
to and after February of 2019. (Id. at 13–16.) Third, Plaintiff contends that (1) Defendants
orally agreed to sell unsold inventory, and (2) the statute of limitations does not bar its claim for
breach of this oral agreement. (Id. at 16.) Fourth, Plaintiff argues that Defendants’
misappropriation of trade secrets constitutes interference with prospective business relations.
(Id. at 16–17.) Fifth, Plaintiff contends that Defendants’ role as Plaintiff’s agents imposed on
them a fiduciary duty. (Id. at 17–18.) Sixth, Plaintiff argues that its negligence claim is not
barred because it arises from an independent legal duty. (Id. at 18.) Seventh, Plaintiff contends
that its “paradigmatic agency relationship” with Defendants supports its faithless servant claim.
(Id. at 19.) Finally, Plaintiff argues that its unjust enrichment claim is not barred because this
action involves disputes about the applicability and terms of a contract. (Id.)
1. 	The applicability of the Non-Compete and Non-Solicitation
Agreement
Plaintiff’s claims for (1) misappropriation of trade secrets, (2) breach of contract, (3)
tortious interference with prospective business relations, (4) fiduciary duty, (5) negligence, and
(6) faithless servant all arise under the Non-Compete and Non-Solicitation Agreement. The
parties disagree as to when the Non-Compete and Non-Solicitation Agreement terminated, and
therefore, when Defendants’ two-year post-termination liability period began to run.
Defendants contend that the two-year restriction was triggered in February of 2019, when
Maierhoffer resigned from his position as sales manager with Plaintiff. (See Feb. 2019
Resignation Ltr. and Response.) Plaintiff contends that the Non-Compete and Non-Solicitation
Agreement suggests that the two-year restriction was triggered in March of 2021, when Mustang
terminated its broker relationship with Plaintiff. (See Mar. 2021 Resignation.)
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Under New York law, a court must first decide “whether the contract is unambiguous
with respect to the question disputed by the parties.” Flynn v. McGraw Hill LLC, 120 F.4th
1157, 1165 (2d Cir. 2024) (quoting Int’l Multifoods Corp. v. Com. Union Ins. Co., 309 F.3d 76,
83 (2d Cir. 2002)); Valtus Cap. Grp., LLC v. Parq Equity Ltd. P’ship, No. 21-184, 2022 WL
190755, at *1 (2d Cir. Jan. 21, 2022) (summary order) (quoting L. Debenture Tr. Co. of N.Y. v.
Maverick Tube Corp., 595 F.3d 458, 465 (2d Cir. 2010)). “‘[T]he key inquiry at the initial stage
of interpreting a contract’ is therefore ‘whether it is ambiguous with respect to the issue disputed
by the parties.’” Glob. Reins. Corp. of Am. v. Century Indem. Co., 22 F.4th 83, 94 (2d Cir. 2021)
(alteration in original) (quoting Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 914 (2d Cir.
2010)); Gary Friedrich Enters. v. Marvel Characters, Inc., 716 F.3d 302, 313 (2d Cir. 2013)
(“At the outset, the court must determine whether the language the parties have chosen is
ambiguous, after giving all ‘words and phrases . . . their plain meaning.’” (alteration in original)
(citations omitted)).
“A contract is unambiguous if its language has ‘a definite and precise meaning,’
providing ‘no reasonable basis for a difference of opinion.’” Revitalizing Auto Cmtys. Env’t
Response Tr. v. Nat’l Grid USA, 92 F.4th 415, 441 (2d Cir. 2024) (quoting Greenfield v. Philles
Recs., Inc., 98 N.Y.2d 562, 569 (2002)); Lockheed Martin Corp. v. Retail Holdings, N.V., 639
F.3d 63, 69 (2d Cir. 2011) (recognizing that a contract provision is unambiguous “if the language
it uses has a definite and precise meaning, as to which there is no reasonable basis for a
difference of opinion” (citing White v. Cont’l Cas. Co., 9 N.Y.3d 264, 267 (2007))). “The
language of a contract is not made ambiguous simply because the parties urge different
interpretations.” Glob. Reins., 22 F.4th at 94 (quoting Seiden Assocs., Inc. v. ANC Holdings,
Inc., 959 F.2d 425, 428 (2d Cir. 1992)). Rather, a contract term is ambiguous if it “suggest[s]
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more than one meaning when viewed objectively by a reasonably intelligent person.” In re
World Trade Ctr. Disaster Site Litig., 754 F.3d 114, 122 (2d Cir. 2014) (quoting Maverick Tube
Corp., 595 F.3d at 466); see also Glob. Reins., 22 F.4th at 94 (“[A]n ambiguity exists where the .
. . contract could suggest more than one meaning when viewed objectively by a reasonably
intelligent person who has examined the context of the entire integrated agreement and who is
cognizant of the customs, practices, usages and terminology as generally understood in the
particular trade or business.” (second alteration in original) (internal quotation marks omitted)
(quoting Morgan Stanley Grp. Inc. v. New Eng. Ins. Co., 225 F.3d 270, 275 (2d Cir. 2000)));
Lockheed Martin, 639 F.3d at 69 (“[T]he language of a contract is ambiguous if it is capable of
more than one meaning when viewed objectively by a reasonably intelligent person who has
examined the context of the entire integrated agreement.” (citing Krumme v. WestPoint Stevens
Inc., 238 F.3d 133, 138–39 (2d Cir. 2000))). In determining whether a contract provision is
unambiguous, a court must consider the contract as a whole. See Flynn, 120 F.4th at 1165–66
(“The contract should be ‘read as a whole,’ with every part ‘interpreted with reference to the
whole’ in order, inter alia, ‘to give effect to its general purpose,’ ‘to safeguard against adopting
an interpretation that would render any individual provision superfluous,’ and to ensure that
particular words and phrases do not receive ‘undue emphasis.’” (citations omitted)); Glob.
Reins., 22 F.4th at 95 (“When ascertaining the meaning of contractual language, ‘it is important
for the court to read the integrated agreement as a whole.’” (internal quotation marks omitted)
(quoting Lockheed Martin, 639 F.3d at 69)). “If the document as a whole ‘makes clear the
parties’ over-all intention, courts examining isolated provisions should then choose that
construction which will carry out the plain purpose and object of the agreement.” Glob. Reins.,
22 F.4th at 95 (quoting Lockheed Martin, 639 F.3d at 69); see also Westmoreland Coal Co. v.
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Entech, Inc., 100 N.Y.2d 352, 358 (2003) (stating contracts should be read “as a harmonious and
integrated whole” and each part should be “interpreted with reference to the whole . . . to give
effect to its general purpose” (quoting Empire Props. Corp. v. Mfrs. Tr. Co., 288 N.Y. 242, 248
(1942))).
Construing the evidence in Plaintiff’s favor, the Court finds a genuine dispute of material
fact as to when the parties terminated the Non-Compete and Non-Solicitation Agreement. First,
the Non-Compete and Non-Solicitation Agreement is ambiguous as to how it applies when the
parties terminate and subsequently continue to engage in a business relationship. The Non-
Compete and Non-Solicitation Agreement provides that it “shall remain in effect throughout the
term of [Defendants’] relationship with [Plaintiff] as an independent contractor and for a period
of two years thereafter.” (Non-Compete and Non-Solicitation Agreement ¶ 1.) It also provides
that this period of two years is triggered upon Defendants’ voluntary termination of “[their]
relationship with [Plaintiff] as an independent contractor.” (Id. ¶ 5B (emphasis added).)
However, the Non-Compete and Non-Solicitation Agreement does not address whether
Defendants’ two-year post-termination liability period is delayed when Maierhoffer terminated
his business relationship with Plaintiff as a sales manager in February of 2019 but maintained a
brokerage relationship with Plaintiff until March of 2021.
Second, the record is unclear as to whether Maierhoffer intended to terminate his
relationship with Plaintiff as an “independent broker” when he resigned as Plaintiff’s sales
manager in February of 2019. Maierhoffer testified at his deposition that he terminated his
relationship with Plaintiff as an “independent contractor” on two occasions: (1) on February 8,
2019, (Maierhoffer Dep. 60:11–15, 1/16/25, annexed to Weisbrod Opp’n Decl. as Ex. 2 and
appended in Pl.’s 56.1 Resp. 81–103); and (2) “in early 2021,” (id. at 62:1–4). However,
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Maierhoffer’s communications with Plaintiff appear to show that he left open the possibility of
continuing a relationship as an independent contractor with Plaintiff. For example, Maierhoffer
stated in the February 2019 Resignation Letter that he would “be happy to continue representing
[Plaintiff] as an ‘independent broker,’” which may not constitute a termination of his relationship
with Plaintiff as an independent contractor because he left open the possibility of continuing an
independent broker relationship. (Feb. 2019 Resignation Ltr. and Response.) In addition,
(Feb. 2019 Resignation Email, annexed to Weisbrod Opp’n
Decl. as Ex. 3 and appended in Pl.’s 56.1 Resp. 104–08.)
Moreover, Plaintiff’s Chief Executive Officer, Jeffrey Rabiea, testified at his deposition
that the two-year post-termination provisions would have begun to run effective February 9,
2019 “[u]nless [Defendants] continued with the company,” and as a result, the provisions “would
be ongoing” until Defendants’ “noncontinuing date.” (Rabiea Dep. 70:19–24, annexed in Defs.’
56.1 Reply 15–18 as Ex. A.) In addition, Rabiea stated that “Defendants continuously sold
products for [Plaintiff] throughout the transition from Maierhoffer serving as sales manager to
Defendants serving as an independent sales representative, without interruption.” (Rabiea Feb.
13, 2025 Decl. ¶ 14.) Similarly, Plaintiff’s Chief Financial Officer, Michael Zapf, testified at his
deposition that Maierhoffer continued the parties’ relationship following February of 2019 and
stated that he “[thought] that [Maierhoffer] was representing us as negotiations were ongoing.”
(Zapf Dep. 12:7–10, 13:18–22, annexed to Defs.’ 56.1 Reply 19–23 as Ex. B.)
Based on the record, the Court concludes that genuine issues of material fact exist as to
the terms of the Non-Compete and Non-Solicitation Agreement, and therefore, when the two-
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year post-termination restrictions period applies. This dispute of material fact must be decided
by a jury. See Dish Network Corp. v. Ace Am. Ins. Co., 21 F.4th 207, 212 (2d Cir. 2021)
(“Where ‘resolution of a dispute turns on the meaning of an ambiguous term or phrase,’
summary judgment should usually be denied.” (quoting Fed. Ins. Co. v. Am. Home Assurance
Co., 639 F.3d 557, 567 (2d Cir. 2011))).
2. 	Misappropriation of trade secrets claim
Defendants argue first, that the Court should grant their summary judgment motion on
Plaintiff’s claim for misappropriation under the DTSA and state law because Plaintiff has not
shown that it possessed trade secrets. In support, Defendants contend that Plaintiff: (1) fails to
identify a trade secret with particularity, as Plaintiff “continues to assert vague and conclusory
allegations about pricing and product specifications,” (Defs.’ Mem. 12 (citing Town & Country
Linen Corp. v. Ingenious Designs LLC, 556 F. Supp. 3d 222, 271 (S.D.N.Y. 2021)), and the
Non-Compete and Non-Solicitation Agreement only protects the “names and addresses of any of
the customers or clients of [Plaintiff] or any other information pertaining to them,” (id. at 14
(quoting Non-Compete and Non-Solicitation Agreement ¶ 5B)); and (2) fails to show that it took
reasonable measures to keep its sales information secret, as Plaintiff “regularly exchanges sales
information with clients and vendors,” (Defs.’ Reply 5–6). Second, Defendants argue that even
if Plaintiff has shown that it possessed trade secrets, Plaintiff has not identified that Defendants
misappropriated any of its trade secrets. (Defs.’ Mem. 12–15.)
Plaintiff argues first, that it has shown that it possessed trade secrets, which are pricing
information, sales data, and technical product specifications. Plaintiff contends that: (1) for
example, its customer lists are a trade secret, as “it would be difficult to duplicate a customer list
because it reflected individual customer preferences,” (Pl.’s Opp’n 12 (quoting General Security,
Inc. v. Commercial Fire & Security, Inc., No. 17-CV-1194, 2018 WL 3118274, at *5 (E.D.N.Y.
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June 25, 2018)); and (2) it took reasonable measures to protect its trade secrets, as its “pricing
and customer information was maintained securely” through a dual-authentication system, and it
revoked Defendants’ access when the parties ended their independent contractor relationship,22
(id. at 7 (citing Pl.’s 56.1 ¶ 13)). Second, Plaintiff argues that it has identified that Defendants
misappropriated its trade secrets when (1) Maierhoffer sent Plaintiff’s information to a
competitor, Acorn East, and (2) Retail Business Services began buying paper bags through
Defendants from a competitor, Barnes Paper, for which the bags were 	than with
Plaintiff. (Id. at 6–7.)
“A plaintiff claiming misappropriation of a trade secret must prove that (1) ‘it possessed a
trade secret,’ and (2) the trade secret was used by defendant ‘in breach of an agreement,
confidence, or duty, or as a result of discovery by improper means.’” Universal Instruments
Corp. v. Micro Sys. Eng’g, Inc., 924 F.3d 32, 49 (2d Cir. 2019) (quoting Integrated Cash Mgmt.
Servs., Inc. v. Digit. Transactions, Inc., 920 F.2d 171, 173 (2d Cir. 1990)). “The elements for a
misappropriation claim under New York law [and federal law] are fundamentally the same.”
Iacovacci v. Brevet Holdings, LLC, 437 F. Supp. 3d 367, 380 (S.D.N.Y. 2020); see Turret Labs
USA, Inc. v. CargoSprint, LLC, No. 21-952, 2022 WL 701161, at *3 (2d Cir. Mar. 9, 2022)
(concluding that because the plaintiff failed to plausibly allege a misappropriation of trade
secrets claim under the DTSA, its “common-law misappropriation claim is inadequately pled for
the same reason”); Aptargroup, Inc. v. ARS Pharms., Inc., No. 25-CV-2545, 2026 WL 866954, at
*3 (S.D.N.Y. Mar. 30, 2026) (quoting Rocket Pharms., Inc. v. Lexeo Therapeutics, Inc., No. 23-
CV-9000, 2024 WL 3835264, at *3 (S.D.N.Y. Aug, 14, 2024))); Stone Point Advisory, LLC v.
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S&P Glob. Mkt. Intel., Inc., No. 25-CV-773, 2026 WL 866848, at *4 (S.D.N.Y. Mar. 30, 2026)
(quoting Catalyst Advisors, L.P. v. Catalyst Advisors Invs. Glob., Inc., 602 F. Supp. 3d 663, 671
(S.D.N.Y. 2022)). “Because of this similarity, the [c]ourt addresse[s] the trade secret
misappropriation claims under federal and state law together at the summary judgment phase.”
Town & Country Linen Corp. v. Ingenious Designs LLC, No. 18-CV-5075, 2022 WL 2757643,
at *13 (S.D.N.Y. July 14, 2022).
Under the DTSA, a plaintiff must show that it is (1) “[a]n owner of a trade secret;” (2) the
trade secret was “misappropriated”; and (3) “the trade secret is related to a product or service
used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1);
CargoSprint, 2022 WL 701161, at *1; Mason v. Amtrust Fin. Servs., Inc., 848 F. App’x 447, 450
(2d Cir. 2021); Kairam v. W. Side GI, LLC, 793 F. App’x 23, 28 (2d Cir. 2019); Aptargroup,
2026 WL 866954, at *2 (quoting Adomni Inc. v. Cleartrust Media, LLC, No. 23-CV-10338, 2026
WL 658446, at *7 (S.D.N.Y. Mar. 9, 2026)). Under New York law, “a plaintiff must show (1)
that it possessed a trade secret, and (2) that the defendants used that trade secret in breach of an
agreement, confidential relationship or duty, or as the result of discovery by improper means.”
Pauwels v. Deloitte LLP, 83 F.4th 171, 181 (2d Cir. 2023) (quoting Faiveley Transp. Malmo AB
v. Wabtec Corp., 559 F.3d 110, 117 (2d Cir. 2009)); Stone Point Advisory, 2026 WL 866848, at
*4 (quoting Pauwels, 83 F.4th at 181).
In addition, the DTSA defines “misappropriation” as the “acquisition of a trade secret of
another by a person who knows or has reason to know that the trade secret was acquired by
improper means,” or the “disclosure or use of a trade secret of another without express or
implied consent” in specified circumstances. 18 U.S.C. § 1839(5). “Improper means” includes
“breach or inducement of a breach of a duty to maintain secrecy.” Id. § 1839(6); Kairam, 793 F.
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App’x at 28 (quoting id.); TileBar v. Glazzio Tiles, 723 F. Supp. 3d 164, 193 (E.D.N.Y. 2024)
(quoting same); Harley Marine NY, Inc. v. Moore, 716 F. Supp. 3d 21, 30 (N.D.N.Y. 2024)
(quoting ExpertConnect, L.L.C. v. Fowler, No. 18-CV-4828, 2019 WL 3004161, at *6 (S.D.N.Y.
July 10, 2019)). The DTSA “contemplates three theories of liability: (1) acquisition, (2)
disclosure, or (3) use.” Better Holdco, 666 F. Supp. 3d at 389 (internal quotation marks omitted)
(citing AUA Priv. Equity Partners, LLC v. Soto, No. 17-CV-8035, 2018 WL 1684339, at *4
(S.D.N.Y. Apr. 5, 2018)); see Multi-State P’ship for Prevention, LLC v. Deloitte Consulting,
LLP, No. 24-CV-9013, 2026 WL 1146003, at *9 (S.D.N.Y. Apr. 28, 2026) (quoting Better
Holdco, 666 F. Supp. 3d at 389); eShares, Inc. v. Talton, 727 F. Supp. 3d 482, 493 (S.D.N.Y.
2024) (quoting same).
A. 	Possession of a trade secret
“A trade secret may consist of 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.” Chastain, 145 F.4th at 293 n.2 (quoting Restatement
(First) of Torts § 757 cmt. b (1939)); Wabtec Corp., 559 F.3d at 117 (quoting N. Atl. Instruments,
Inc. v. Haber, 188 F.3d 38, 43–44 (2d Cir. 1999)); Haber, 188 F.3d at 44 (quoting Softel, Inc. v.
Dragon Med. & Sci. Commc’ns, Inc., 118 F.3d 955, 968 (2d Cir. 1997)); Softel, 118 F.3d at 968
(quoting Restatement (First) of Torts § 757 cmt. b (1939)).
The DTSA defines a “trade secret” to include “all forms and types of financial, business,
scientific, technical, economic, or engineering information, including patterns, plans,
compilations, program devices, formulas, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes” if “(A) the owner thereof has taken reasonable measures to keep
such information secret” and “(B) the information derives independent economic value, actual or
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potential, from not being generally known to, and not being readily ascertainable through proper
means by, another person who can obtain economic value from the disclosure or use of the
information.” 18 U.S.C.A. § 1839(3); Kairam, 793 F. App’x at 27–28 (quoting id.); Artisan
Techs. LLC, v. Interlude U.S., Inc., No. 25-CV-7214, 2026 WL 2283056, at *3 (S.D.N.Y. Aug.
7, 2026) (quoting same); Zebra Strategies, Inc. v. Gonzalez-Nazario, 764 F. Supp. 3d 144, 153
(S.D.N.Y. 2025) (quoting same); PleasrDAO v. Shkreli, 804 F. Supp. 3d 362, 376 (E.D.N.Y.
2025) (quoting same); Better Holdco, 666 F. Supp. 3d at 384 (quoting same).
To determine whether information is a trade secret, New York courts consider:
(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.
Pauwels, 83 F.4th at 181, n.2 (quoting Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 407
(1993)); Plug Power v. Shokrian, --- F. Supp. 3d ---, ---, 2026 WL 2137614, at *9 (N.D.N.Y.
July 24, 2026) (quoting Iacovacci, 437 F. Supp. 3d at 380), appeal filed, No. 26-2057 (2d Cir.
July 28, 2026); Shkreli, 804 F. Supp. 3d at 376 (quoting same); IME Watchdog, Inc. v. Gelardi,
732 F. Supp. 3d 224, 239 (E.D.N.Y. 2024) (quoting Serling, 492 F. Supp. 2d at 148); Zabit v.
Brandometry, LLC, 540 F. Supp. 3d 412, 421 (S.D.N.Y. 2021) (quoting Integrated Cash Mgmt.
Servs., 920 F.2d at 173).
Construing the evidence in Plaintiff’s favor, the Court finds that Plaintiff’s price
information, sales data, and technical product specifications are trade secrets.
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Ltd. v. E.I. DuPont De Nemours & Co., 1 F. Supp. 3d 224, 257 (S.D.N.Y. 2014) (“Before
analyzing whether [the p]laintiff had a trade secret, the [c]ourt first considers whether [the
p]laintiff has described its trade secret with sufficient particularity, both at the time of disclosure
and throughout the litigation.”), aff’d, 610 F. App’x 69 (2d Cir. 2015).
Pricing information, sales data, and technical product specifications constitute trade
secrets. See Cont’l Indus. Grp., Inc. v. Altunkilic, 788 F. App’x 37, 40–41 (2d Cir. 2019)
(concluding that, inter alia, a “cost analysis sheet,” “customer and supplier lists,” “pricing and
payment terms” is “routinely afforded trade secret protection”); In re Dana Corp., 574 F.3d 129,
152 (2d Cir. 2009) (“Confidential proprietary data relating to pricing, costs, systems, and
methods are protected by trade secret law.”); Haber, 188 F.3d at 44 (concluding that a “client
(1) Specificity
“Under both the DTSA and New York law, a claimant bears the burden of identifying a
purported trade secret with sufficient specificity.” Syntel Sterling Best Shores Mauritius Ltd. v.
TriZetto Grp., Inc., 68 F.4th 792, 800 (2d Cir. 2023); Sound Around, Inc. v. Friedman, No. 24-
CV-986, 2026 WL 972984, at *16 (S.D.N.Y. Apr. 10, 2026) (quoting id.), appeal filed, No. 26-1301
(2d Cir. May 11, 2026); Precision Med. Grp., LLC v. Blue Matter, LLC, No. 20-CV-2974, 2026 WL
772907, at *6 (S.D.N.Y. Mar. 19, 2026) (quoting same). Therefore, to survive summary judgment,
“the party opposing summary judgment must be able to identify the alleged trade secret with
sufficient specificity to make the moving party aware of what information it has allegedly
misappropriated.” Next Commc’ns, Inc. v. Viber Media, Inc., 758 F. App’x 46, 49 (2d Cir. 2018);
Beyond the Dog, LLC v. Salzer, No. 24-CV-1439, 2026 WL 884140, at *5 (D. Conn. Mar. 31, 2026)
(quoting id.); Catalyst Advisors, LP v. Catalyst Advisors Invs. Glob. Inc., No. 21-CV-4855, 2024 WL
522751, at *18 (S.D.N.Y. Feb. 9, 2024) (quoting same); Big Vision Priv.
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list, which contains the identities and preferences of its client contacts, constitutes a protectable
trade secret”); Hudson Hotels Corp. v. Choice Hotels Int’l, 995 F.2d 1173, 1176–77 (2d Cir.
1993) (“Compilations of information, traditionally viewed and protected under trade secret law,
are items like customer and supplier lists and pricing and cost information.”), abrogated on other
grounds, Nadel v. Play-by-Play Toys & Novelties, Inc., 208 F.3d 368 (2d Cir. 2000); Defiance
Button Mach. Co. v. C & C Metal Prods. Corp., 759 F.2d 1053, 1063 (2d Cir. 1985) (concluding
that a “customer list developed by a business through substantial effort and kept in confidence
may be treated as a trade secret”); Wollner v. PearPop Inc., No. 26-CV-3207, 2026 WL
1382956, at *2 (S.D.N.Y. May 18, 2026) (“Courts have found documents such as client or
customer lists to warrant trade secret protection.”); Stone Point Advisory, 2026 WL 866848, at
*6 (“[A] customer contact list that required substantial time, effort and money to compile may be
deemed a trade secret where it contains information that is not readily available.” (quoting
Intrepid Fin. Partners, LLC v. Fernandez, No. 20-CV-9779, 2020 WL 7774478, at *3 (S.D.N.Y.
Dec. 30, 2020))); BakeMark USA LLC v. Negron, No. 23-CV-2360, 2024 WL 1075280, at *19
(S.D.N.Y. Jan. 12, 2024) (“The courts routinely protect similar customer lists, as well as
customer order history and pricing and cost information, as trade secrets.”), report and
recommendation adopted, 2024 WL 3385641 (S.D.N.Y. July 12, 2024); Medidata Sol., Inc. v.
Veeva Sys., Inc., No. 17-CV-589, 2021 WL 467110, at *8 (S.D.N.Y. Feb. 9, 2021) (“Data
relating to pricing and costs are protectable.”); Kraus USA, Inc. v. Magarik, No. 17-CV-6541,
2020 WL 2415670, at *5 (S.D.N.Y. May 12, 2020) (concluding that “information on upcoming
designs, sales data, e-commerce data, and other commercially sensitive information including
customer lists, vendor relationships, the identity of contractual counterparties, internal cost
structure and operating expenses, and e-commerce knowledge” constituted protectable trade
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secrets); Free Country Ltd v. Drennen, 235 F. Supp. 3d 559, 569 (S.D.N.Y. 2016) (concluding
that “customers sales information, design packages, and production packages for past, present,
and future business . . . taken as a whole is a trade secret critical to plaintiff's business” (citation
omitted)).
Plaintiff has described its trade secret with sufficient particularity because it alleges that
its price information, sales data, and technical product specifications are trade secrets, and courts
have held that price information, sales data, and technical product specifications are protectable
trade secrets. See In re Dana Corp., 574 F.3d at 152; Haber, 188 F.3d at 44; Wollner, 2026 WL
1382956, at *2; Negron, 2024 WL 1075280, at *19; Magarik, 2020 WL 2415670, at *5. In
addition, Plaintiff has described its trade secret with sufficient particularity because it states that
“the parties’ relationship was governed primarily by oral agreements and common industry
standards,” and its “understanding and common industry understanding” shows that Defendants
had an obligation to keep Plaintiff’s information confidential. (Pl.’s Opp’n 2.) Rabiea states that
sales representatives are supposed to (1) “be loyal to sellers they represent, not to the potential
buyers” and (2) “preserve the confidentiality of confidential information.” (Rabiea Feb. 13, 2025
Decl. ¶ 21.)
Defendants’ argument that Plaintiff fails to identify a trade secret with particularity is
unpersuasive because alleging “pricing information, sales data, and technical product
specifications” is sufficient to “identify the alleged trade secret with sufficient specificity to
make the moving party aware of what information it has allegedly misappropriated.” Viber
Media, 758 F. App’x at 49; cf. Salzer, 2026 WL 884140, at *8 (granting summary judgment in
favor of the defendants where the plaintiff alleged its trade secret was a questionnaire but “failed
to provide the specificity necessary to assess its trade secret, including but not limited to
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clarifying what is unique about its alleged trade secret” and, therefore, “there [was] no genuine
issues of material fact to be tried as to these claims”); Hayden v. Machs., No. 21-CV-2485, 2025
WL 1697021, at *13 (S.D.N.Y. June 17, 2025) (concluding that the plaintiff did not have a
protectable trade secret where the plaintiff “fail[ed] to define the exact elements that comprise
his trade secret . . . [and] how these various components combine to form a trade secret”);
Capricorn Mgmt. Sys., Inc. v. Gov’t Emps. Ins. Co., No. 15-CV-2926, 2020 WL 1242616, at *9
(E.D.N.Y. Mar. 16, 2020) (granting summary judgment in favor of the defendants where the
plaintiff alleged its trade secret was a medical bill review software but presented evidence that
“merely list[ed] the functions of [its software]” and, therefore, failed to “present evidence of how
[the software] function[s] together in a unique way”); Benitez v. Valentino U.S.A., Inc., No. 19-
CV-11463, 2024 WL 1347725, at *19 (S.D.N.Y. Mar. 29, 2024) (declining to grant summary
judgment in the plaintiff’s favor where the plaintiff’s “descriptions of the documents certainly
suggest that they are confidential” because “‘confidential information’ is not equivalent to ‘trade
secrets’” (quoting Elsevier Inc. v. Dr. Evidence, LLC, No. 17-CV-5540, 2018 WL 557906, at *5
(S.D.N.Y. Jan. 23, 2018))).
Based on the evidence proffered by Plaintiff, the Court concludes that Plaintiff’s pricing
information, sales data, and technical product specifications are trade secrets. See Catalyst
Advisors, 2024 WL 522751, at *23 (finding the plaintiff established trade secrets where the
record showed customer lists reflecting specific preferences of the plaintiff’s client companies);
Roller Bearing Co. of Am., Inc. v. Multicut N. Am., Inc., No. 18-CV-1212, 2023 WL 7277244, at
*17 (D. Conn. Sep. 29, 2023) (concluding that the plaintiff has described its trade secret with
sufficient particularity where the plaintiff described how the drawings were unique and contained
a “novel combination of design features”); Iacovacci v. Brevet Holdings, LLC, No. 18-CV-8048,
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2023 WL 2631966, at *12 (S.D.N.Y. Mar. 24, 2023) (concluding that trade secrets were “clearly
defined” where forty-one categories of trade secrets were identified in deposition, which
included “investor lists, presentation materials, valuation methodologies, and underwriting
documentation”); see also Friedman, 2026 WL 972984, at *16 (concluding that there were
triable issues as to the existence of a trade secret where the plaintiff proffered pricing
information, profit calculations, and “confidential reports identifying its top-selling and highest-
profit products” as trade secrets); Precision Med. Grp., LLC v. Blue Matter, LLC, No. 20-CV-
2974, 2025 WL 2695689, at *32 (S.D.N.Y. Sep. 22, 2025) (concluding that there was a triable
issue as to the existence of a trade secret where the documents at issue “contain[ed] proprietary
methodologies and frameworks . . . developed after spending many years working on hundreds
of market access projects and cultivating relationships with valuable sources of information”);
Henessey Food Consulting LLC v. Prinova Sols., LLC, No. 20-CV-806, 2024 WL 4291312, at *7
(N.D.N.Y. Sep. 24, 2024) (concluding that there was a triable issue as to the existence of a trade
secret where the plaintiff identified “information which, individually and in combination,
constitute trade secrets,” including the company’s “pricing strategy” and “target customers”);
Poller v. BioScrip, Inc., 974 F. Supp. 2d 204, 235 (S.D.N.Y. 2013) (concluding that there was a
triable issue as to the existence of a trade secret regarding client and sales data).
(2) 	Reasonable measures
Reasonable measures can include “the use of confidentiality agreements, password-
protection, sharing information with employees only on a need-to-know basis, emphasizing the
need to keep the information confidential in an employee handbook, and frequently reminding
employees of the need to maintain confidentiality.” Catalyst Advisors, 602 F. Supp. 3d at 675
(citation omitted). Economic value “lies in the competitive advantage over others that [the
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plaintiff] enjoys by virtue of its exclusive access to the data, and disclosure or use by others of
the data would destroy that competitive edge.” Ruckelshaus v. Monsanto Co., 467 U.S. 986,
1012 (1984). New York law defines a trade secret as “any formula, pattern, device or
compilation of information which is used in one’s business, and which gives [one] an
opportunity to obtain an advantage over competitors who do not know or use it.” E.J. Brooks
Co. v. Cambridge Sec. Seals, 31 N.Y.3d 441, 453 (2018) (quoting Ashland Mgmt., 82 N.Y.2d at
407); Premium Prods., Inc. v. O’Malley, 251 N.Y.S.3d 296, 304 (App. Div. 2026) (quoting
same); Schroeder v. Pinterest Inc., 17 N.Y.S.3d 678, 690–91 (App. Div. 2015) (quoting same);
see Shokrian, 2026 WL 2137614, at *9 (quoting EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299,
312 (S.D.N.Y. 1999)); Gelardi, 732 F. Supp. 3d at 239 (quoting Cardiocall, Inc. v. Serling, 492
F. Supp. 2d 139, 148 (E.D.N.Y. 2007)).
Plaintiff sufficiently shows that it took reasonable measures to protect trade secrets. As a
general matter, “a plaintiff need only point to evidence of protective measures” to defeat a
motion for summary judgment. See McKeon Rolling Steel Door Co. v. U.S. Smoke & Fire
Corp., No. 23-CV-8720, 2026 WL 865699, at *8 (S.D.N.Y. Mar. 30, 2026) (“[T]o defeat a
motion for summary judgment, a plaintiff need only point to evidence of protective measures,
and then it becomes the jury’s task to evaluate whether they were reasonable.” (quoting Better
Holdco, 666 F. Supp. 3d at 385)), appeal dismissed, No. 26-1184, 2026 WL 2211176 (2d Cir.
May 15, 2026); Kairam v. W. Side GI, LLC, No. 18-CV-1005, 2025 WL 2935321, at *13
(S.D.N.Y. June 21, 2025) (quoting same), report and recommendation adopted, 2025 WL
2778915 (S.D.N.Y. Sep. 30, 2025); Hayden v. Int’l Bus. Machs. Corp., No. 21-CV-2485, 2025
WL 1697021, at *17 (S.D.N.Y. June 17, 2025) (quoting same); Henessey Food Consulting, 2024
WL 4291312, at *7 (quoting Better Holdco, 666 F. Supp. 3d at 385).
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First, Plaintiff proffers evidence that it does not make its trade secrets publicly available.
Regarding pricing information, Rabiea states in a declaration that Plaintiff does not publicly
disclose its pricing information on its website. (Rabiea Feb. 13, 2025 Decl. ¶ 80.) In addition,
Rabiea disputes Defendants’ proffered evidence showing Plaintiff’s public disclosure of its
pricing information, which is a screenshot from a website listing the prices of Plaintiff’s
products. (Id. ¶¶ 78–81; Website Screenshot, annexed to Fix Decl. 57–60 as Ex. H.) In his
declaration, Rabiea stated that this exhibit is not a screenshot from Plaintiff’s website; instead,
this exhibit is a screenshot from Clark Products, Plaintiff’s customer, which resells Plaintiff’s
products. Rabiea states that the prices listed on the Clark Products’ website are not the same as
Plaintiff’s prices. (Rabiea Feb. 13, 2025 Decl. ¶¶ 78–79.) In his deposition, Rabiea testified that
this was not a confidentiality violation because Clark Products is a reseller and, therefore, it
“ha[s] a right to put [Plaintiff’s products] on their website and sell it.” (Rabiea Dep. 54:1–3,
12/17/24, annexed in Fix Decl. 31–47 as Ex. F; see id. at 52:17–54:3.) Regarding customer
information, Rabiea stated that Plaintiff’s website “does not list proprietary customer
specifications, only generic products that [Plaintiff] sells.” (Rabiea Feb. 13, 2025 Decl. ¶ 81.)
Rabiea testified that product specifications were made publicly available for items that “anyone
can buy.” (Rabiea Dep. 54:9–20, 12/17/24.)
Second, Plaintiff has proffered evidence that it expended effort in protecting its pricing
information, sales data, and technical product specifications, including (1) requiring “two layers
of user credentials to access” Plaintiff’s database and (2) requiring employees to sign
confidentiality agreements. (Pl.’s 56.1 Resp. ¶¶ 56, 79; Pl.’s 56.1 ¶ 13.) In addition, Zapf states
in his declaration that Plaintiff protects the confidentiality of its trade secrets by storing them on
a software program, for which access is limited and requires dual authentication. (Zapf Decl. ¶
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13.) See Friedman, 2026 WL 972984, at *16 (concluding that there was a triable issue as to
reasonable measures where the plaintiff “introduced evidence of such efforts, including its
[p]olicy and [p]ractice [g]uide — which requires company information, pricing, and proprietary
data to be kept strictly confidential — and the data privacy procedures it employs to protect its
business information”); Precision Med. Grp., 2025 WL 2695689, at *32 (concluding that there
was a triable issue as to reasonable measures where the plaintiffs required employees to “use
user IDs and passwords to access the information” and limiting access to employees who “had a
need to know”), appeal withdrawn, No. 26-1093, 2026 WL 2138546 (2d Cir. July 17, 2026);
Kairam, 2025 WL 2935321, at *14 (concluding that there was a triable issue as to reasonable
measures where the plaintiff “limit[ed] the [trade secret] to necessary personnel and only
disclos[ed] elements to people who understood that the [trade secret] must be kept confidential
and that ‘each person working in the process [was] told not to share any of the information with
anyone outside the office and are given unique logins and passwords’” (fifth alteration in
original)); Roller Bearing Co. of Am., 2023 WL 7277244, at *21 (concluding that there was a
triable issue as to reasonable measures where the plaintiff “required employees to sign standard
employment agreements containing confidentiality provisions and trained employees on
identifying and maintaining trade secrets”); Better Holdco, 666 F. Supp. 3d at 385 (concluding
that there was a triable issue as to reasonable measures where the plaintiff (1) protected the
information with two-factor authentication and (2) required its employees to sign an agreement
affirming that they will not disclose the company’s “proprietary information or trade secrets”).
Plaintiff’s proffered evidence of two-factor authentication and confidentiality agreements
as protective measures is sufficient to defeat summary judgment as to reasonable measures. See
McKeon Rolling Steel Door Co., 2026 WL 865699, at *8 (“[T]o defeat a motion for summary
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judgment, a plaintiff need only point to evidence of protective measures . . . .” (quoting Better
Holdco, 666 F. Supp. 3d at 385)). Therefore, the determination of whether Plaintiff’s proffered
protective measures are reasonable is a question for the jury. See id. (stating that the question of
whether protective measures are reasonable is for the jury); Kairam, 2025 WL 2935321, at *13
(same); Hayden, 2025 WL 1697021, at *17; Catalyst Advisors, 2024 WL 522751, at *21 (same);
Better Holdco, 666 F. Supp. 3d at 385 (same).
Because Plaintiff specified trade secrets and proffered evidence of protective measures,
Plaintiff has sufficiently shown that it possessed trade secrets, constituting of pricing
information, sales data, and technical product specifications.
B. 	Misappropriation
When viewing the evidence in Plaintiff’s favor, there is a triable issue as to whether
Defendants misappropriated Plaintiff’s trade secrets, because there is a triable issue as to when
the Non-Compete and Non-Solicitation Agreement became effective, as discussed supra Section
II.c.ii.1. Defendants’ obligations ran until either (1) at the earliest, February 9, 2021, which is
two years after Maierhoffer resigned from his position as Plaintiff’s sales manager or (2) at the
latest, March 2, 2023, which is two years after Defendants’ second termination of their
relationship with Plaintiff. The Court therefore considers whether Defendants misappropriated
trade secrets between August of 2016, the Non-Compete and Non-Solicitation Agreement’s
effective date, and March of 2023, the latest date when the two-year post-termination restriction
period could have ended.
First, Plaintiff produced several emails between Maierhoffer and competitor Acorn East,
where Maierhoffer provides Plaintiff’s pricing information, sales information, and invoices to
Acorn East. For example: (1) on March 18, 2021, Maierhoffer sent pricing information, sales
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information, and invoices stating, “thank you [Plaintiff] for the information,” (Mar. 18, 2021
Acorn East Email, annexed to Pl.’s Ltr. as Ex. 7, Docket Entry No. 106-2); (2) on June 14, 2021,
Maierhoffer sent pricing information, (June 14, 2021 Acorn East Email, annexed to Pl.’s Ltr. as
Ex. 18, Docket Entry No. 106-6); (3) on June 23, 2021, Maierhoffer sent pricing, sales, and
inventory information, (June 23, 2021 Acorn East Email, annexed to Pl.’s Ltr. as Ex. 8, Docket
Entry No. 106-3); and (4) on October 1, 2021, Maierhoffer sent sales information, which
Plaintiff contends was used to undercut and take business away from it.23 Fourth, Plaintiff
argues that in February of 2021, Retail Business Services copied Rabiea on an email, which was
Plaintiff’s customer, indicating that Retail Business Services, “which previously had been buying
paper bags from [Plaintiff] through Defendants, now was purchasing them from a competitor,
Barnes Paper, through Defendants,” and
.” (Pl.’s Opp’n 7; Retail Business
Services Purchase Orders, annexed to Weisbrod Opp’n Decl. as Ex. 9 and appended in Pl.’s 56.1
Resp. 118–132.)
Defendants’ argument that Plaintiff cannot rely on speculation to allege that Defendants
disclosed trade secrets is unpersuasive because Plaintiff has presented circumstantial evidence
and “‘circumstantial evidence [ ] may be used to prove misappropriation’ at the summary
judgment stage.” Catalyst Advisors, 2024 WL 522751, at *24 (alteration in original) (quoting
Medidata Sol., 2021 WL 467110, at *11)); see GlobalFoundries U.S. Inc. v. Int’l Bus. Machs.
Corp., No. 23-CV-3348, 2024 WL 4452146, at *5 (S.D.N.Y. Oct. 9, 2024) (“[I]t is ‘well-
recognized’ that plaintiffs need not rely on direct evidence and can instead ‘construct a web of
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perhaps ambiguous circumstantial evidence from which the trier of fact may draw inferences [of
misappropriation].’” (second alteration in original) (quoting ScentSational Techs., LLC v.
PepsiCo, Inc., No. 13-CV-8645, 2017 WL 4403308, at *13 (S.D.N.Y. Oct. 2, 2017))); BakeMark
USA LLC v. Negron, No. 23-CV-2360, 2024 WL 3385641, at *4 (S.D.N.Y. July 12, 2024)
(“Misappropriation can often only be proven by circumstantial evidence.”); Medidata Sol., 2021
WL 467110, at *11 (stating that circumstantial evidence “may be used to prove
misappropriation”).
Plaintiff establishes a genuine issue of material fact as to whether Defendants
misappropriated trade secrets by proffering emails between Defendants and Plaintiff’s
competitors where Defendants shared Plaintiff’s trade secrets. Because Plaintiff (1) possessed a
trade secret and (2) establishes a genuine issue of material fact as to whether Defendants
misappropriated Plaintiff’s trade secrets, the Court denies Defendants’ motion for summary
judgment as to Plaintiff’s misappropriation of trade secrets claim.
3. 	Breach of the Non-Compete and Non-Solicitation Agreement
claim
Defendants argue that the Court should grant their summary judgment motion on
Plaintiff’s claim for breach of the Non-Compete and Non-Solicitation Agreement because
Plaintiff has failed to establish that Mustang breached the Non-Compete and Non-Solicitation
Agreement by disclosing information and/or selling competing products. First, Defendants
contend that Plaintiff’s claim is barred by its prior breach of the parties’ commission agreements,
which is Plaintiff’s failure to pay Mustang $200,000 in commissions. (Defs.’ Mem. 15.)
Second, Defendants argue that Mustang did not breach the Non-Compete and Non-Solicitation
Agreement because, from February 9, 2019 to February 9, 2021, “all Mustang sales were pre-
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existing clients,” which was carved out by the Non-Compete and Non-Solicitation Agreement.
(Id. at 16.)
Plaintiff argues first, that there is a triable dispute as to which party breached an
agreement first. In support, Plaintiff contends that “Defendants were selling competing products
for [Plaintiff]’s competitors before the parties’ commission disputes arose.” (Pl.’s Opp’n 13.)
Moreover, Plaintiff argues that its alleged failure to pay commissions “cannot excuse
Defendants’ breach of the Non-Compete [and Non-Solicitation] Agreement because
commissions were not material to, or even addressed in, [the Non-Compete and Non-
Solicitation] Agreement.” (Id. at 14.) Third, Plaintiff contends that it has evidence that
Defendants sold competing products for Plaintiff’s competitors “before February 8, 2019, within
the next two years, and for two years following March 2, 2021.” (Id. at 14–15.) In support,
Plaintiff argues that Defendants terminated their relationship with Plaintiff on March 2, 2021,
because Defendants “expressly continued the relationship after February 8, 2019 without
interruption or changes to the relationship bearing on the obligations set forth in the Non-
Compete [and Non-Solicitation] Agreement.” (Id. at 15.) Fifth, Plaintiff contends that it has
evidence of its damages.
“Under New York law, to make out a viable claim for breach of contract, a plaintiff must
prove (1) ‘the existence of a contract,’ (2) ‘adequate performance of the contract by [the
plaintiff],’ (3) ‘breach of the contract by [the defendant],’ and (4) ‘damages.’” N.A. Photon
Infotech Ltd. v. ZoomInfo LLC, Nos. 22-1979, 22-2074, 2024 WL 4799843, at *1 (2d Cir. Nov.
15, 2024) (summary order) (alterations in original) (quoting 24/7 Recs., Inc. v. Sony Music Ent.,
Inc., 429 F.3d 39, 41–42 (2d Cir. 2005)); see Up State Tower Co. v. Town of Cheektowaga, No.
24-165, 2025 WL 444207, at *1 (2d Cir. Feb. 10, 2025) (summary order) (“A breach of contract
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claim under New York law has four elements: ‘(i) the formation of a contract between the
parties; (ii) performance by the plaintiff; (iii) failure of defendant to perform; and (iv)
damages.’” (quoting Johnson v. Nextel Commc’ns, Inc., 660 F.3d 131, 142 (2d Cir. 2011)));
Hernandez v. Kwiat Eye and Laser Surgery, PLLC, No. 23-7679, 2024 WL 5116365, at *5 (2d
Cir. Dec. 16, 2024) (summary order) (“To sustain a breach-of-contract claim under New York
law, a plaintiff must show: (1) a valid contract; (2) adequate performance of the contract by the
plaintiff; (3) breach of contract by the defendant; and (4) damages.” (citing Eternity Glob.
Master Fund Ltd. v. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004))).
When viewing the evidence in Plaintiff’s favor,24 there is a triable issue as to whether
Defendants violated the Non-Compete and Non-Solicitation Agreement. Picone’s Report states
24 The Court notes that Defendants argue that Plaintiff has failed to provide actual
evidence that Defendants engaged in competitive conduct in violation of the Non-Compete and
Non-Solicitation Agreement. In response, Plaintiff filed a motion in limine pursuant to Rule 37
of the Federal Rules of Civil Procedure, asking for the Court to sanction Defendants for their
alleged failure to produce evidence of competitive conduct by precluding Defendants from
offering evidence that Defendants did not engage in competitive conduct. (See Pl.’s Mot. in
Limine.) Plaintiff argues that the Court should impose sanctions pursuant to Rule 37(b) because
Defendants failed to produce Plaintiff’s requested documents, including invoices for transactions
between Defendants and Plaintiff’s competitors. (See id.) However, Defendants’ alleged failure
to produce the requested documentation should have been addressed during discovery.
Defendants argue that the documents produced by Defendants and the competitor-supplier
“identify every product that Mustang sold,” and “[a] motion in limine cannot serve as ‘a
substitute for motions to compel discovery or for discovery sanctions that should have been
brought earlier.’” (Defs.’ Opp’n to Pl.’s Mot. in Limine 4, 9 (citation omitted).) In support,
Defendants contend that Plaintiff “subpoenaed [the competitor-supplier] documents in 2021 and
had ample time to gather [the competitor-supplier’s] evidence, depose [the competitor-
supplier’s] agents, and litigate disputes over production.” (Id. at 9.) In addition, Defendants
contend that the court’s order extending discovery by sixty days cannot be the basis for the Court
to impose sanctions pursuant to Rule 37(b) because the order “does not declare Defendants in
violation of a prior order,” and Plaintiff did not: (1) “file a Rule 37 motion addressing the
[competitor-supplier] production”; or (2) “ask to reopen or extend discovery after Maierhoffer’s
January [of] 2025 deposition.” (Id. at 10.)
Because Plaintiff’s motion for sanctions pursuant to Rule 37 does not arise from
Defendants’ violation of any court order, the Court dismisses Plaintiff’s motion. See Jennette v.
United Parcel Serv., Inc., No. 22-CV-10783, 2024 WL 3318120, at *2 (S.D.N.Y. June 25, 2024)
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that between February of 2019 and March of 2023, Defendants engaged in “competitive sales of
at least $42 million,” (Picone Report 8; see Rabiea Feb. 13, 2025 Decl. ¶ 72 (stating that he
obtained information from Picone that “Defendants sold many millions of dollars’ worth of
products on behalf of [Plaintiff]’s competitors”)), which may constitute a breach if Defendants
engaged in prohibited competitive sales during the liability period.
Based on the Court’s determination that Plaintiff has proffered sufficient evidence to
establish a genuine issue of material fact as to whether Defendants breached the Non-Compete
and Non-Solicitation Agreement by engaging in competitive sales, the Court rejects Defendants’
argument that Plaintiff fails to plead causation and damages. (See Defs.’ Mem. 23–24.) Plaintiff
proffers evidence that Defendants engaged in “competitive sales of at least $42 million,” (Picone
Report 8), which is sufficient to establish a genuine issue of material fact as to whether Plaintiff
incurred damages resulting from Defendants’ breach of the Non-Compete and Non-Solicitation
Agreement.
4. 	Breach of the oral agreement claim
Defendants argue that the Court should grant their motion for summary judgment on
Plaintiff’s claim for breach of oral agreement because there is no common-law burden “on a
(denying the plaintiff’s motion for sanctions under Rule 37 because “it does not stem from [the
d]efendant’s violation of any court order” and “[a] district court may impose sanctions under
Rule 37(b) for noncompliance with ‘a clearly articulated order of the court requiring specified
discovery’” (quoting Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1363 (2d Cir.
1991))); Carmody v. N.Y. Univ., No. 21-CV-8186, 2023 WL 5622867, at *4 (S.D.N.Y. Aug. 31,
2023) (concluding that the plaintiff “does not identify” any order that the defendants defied “that
would trigger mandatory sanctions under Rule 37(b)”); Smith v. Cordero, No. 21-CV-2712, 2023
WL 3511294, at *3 (S.D.N.Y. Apr. 19, 2023) (“[The p]laintiff has not identified any [c]ourt
order that [the d]efendants have violated; accordingly, Rule 37(b) does not apply as a basis for
[the p]laintiff’s motion for sanctions.”); Susana v. N.Y. Waterway, 662 F. Supp. 3d 477, 493
(S.D.N.Y. 2023) (denying the defendants’ motion for sanctions under Rule 37 because it did “not
stem from the violation of any court order”).
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sales agent to buy products he could not sell.” (Defs.’ Mem. 18.) Defendants also argue that
Plaintiff’s unsold inventory claim fails under the statute of frauds.25 (Id.)
Plaintiff argues that Defendants orally agreed to sell Plaintiff’s unsold inventory to other
customers. (Pl.’s Opp’n 16.)
When viewing the evidence in Plaintiff’s favor, there is a triable issue as to whether the
parties orally agreed that Defendants would sell Plaintiff’s unsold inventory. As Defendants
argue, the record contains no evidence of communication between the parties indicating whether
they intended to be bound by an oral agreement. Moreover, it is undisputed that the parties
entered into the Non-Compete and Non-Solicitation Agreement, which suggests that the parties
would have similarly done so for the alleged oral contract.
However, Plaintiff raises a genuine issue of material fact as to the existence of an oral
agreement to sell unsold inventory. First, Rabiea states that “[t]he parties’ contractual
relationship was generally governed by oral agreements,” (Rabiea July 16, 2025 Decl. ¶ 8), and
that “Defendants entered into an oral agreement with [Plaintiff] to sell the inventory to
25 Plaintiff argues that the statute of frauds is inapplicable because (1) it seeks
compensation arising from Defendants’ breach of oral agreement and, therefore, is not asking
Defendants to “‘buy’ unsold inventory” and (2) the parties had a “service contract[], not a
contract to buy goods.” (Pl.’s Opp’n 16 (citing Rielly Co. v. Lisa B. Inc., 586 N.Y.S.2d 668
(App. Div. 1992)).) The Court finds that Defendants cannot raise a statute of frauds defense
because they failed to raise it in their answer, and therefore, Defendants waived this defense.
Rule 8(c)(1) provides that “[i]n respon[se] to a pleading, a party must affirmatively state any . . .
affirmative defense, including . . . statute of frauds.” “[A] failure to plead an affirmative defense
as required by [Rule] 8(c) results in the waiver of that defense and its exclusion from the case.”
Tereshchenko v. Karimi, 102 F.4th 111, 128 (2d Cir. 2024) (second alteration in original)
(citation omitted); Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165, 176 (2d Cir.
2014) (“[F]ailure to plead an affirmative defense in the answer results in the waiver of that
defense and its exclusion from the case.” (quoting Satchell v. Dilworth, 745 F.2d 781, 784 (2d
Cir. 1984)); Berris v. Choi, No. 23-CV-4305, 2025 WL 2548743, at *5 (S.D.N.Y. Sep. 4, 2025)
(quoting Cont’l Ill. Nat. Bank & Tr. Co. of Chi., 889 F.2d at 1253)). The Court therefore rejects
Defendants’ statute of frauds argument.
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[Plaintiff]’s customers but did not,” (Rabiea Feb. 13, 2025 Decl. ¶ 75). Second, Rabiea testified
at his deposition that Maierhoffer directed Rabiea to not contact a customer regarding unsold
inventory because Maierhoffer “would handle it or sell it to someone else.” (Rabiea Dep. 44:20–
45:1, 12/17/24; see id. at 45:16–23.) Rabiea’s testimony creates a genuine issue of material fact.
See Knox v. CRC Mgmt. Co., 134 F.4th 39, 49 (2d Cir. 2025) (concluding non-movant may rely
on his own testimony, including “sworn statements made in depositions or declarations under
penalty of perjury,” to create a genuine issue of material fact); Padmore v. SDH Servs. W., LLC,
No. 24-CV-6872, 2025 WL 2783191, at *4 (E.D.N.Y. Sep. 30, 2025) (“Declarations are properly
considered as evidence on a motion for summary judgment when they set forth specific facts
based on a party’s personal knowledge.” (quoting Abu Dhabi Comm. Bank v. Morgan Stanley &
Co., 888 F. Supp. 2d 431, 464 n.208 (S.D.N.Y. 2012))); Kramer v. Remley, No. 01-CV-303,
2002 WL 31323823, at *2 (S.D.N.Y. Oct. 16, 2002) (concluding that an affidavit attesting to the
existence of an oral agreement was sufficient to create a genuine issue of material fact).
Because Plaintiff establishes a genuine issue of material fact as to whether Defendants
orally agreed to sell Plaintiff’s unsold inventory, the Court denies Defendants’ motion for
summary judgment as to Plaintiff’s breach of oral agreement claim.
5. 	Tortious interference with prospective business relations claim
Defendants argue that the Court should grant their summary judgment motion on
Plaintiff’s claim for tortious interference with prospective business relations because (1) Plaintiff
does not show that Defendants committed a crime or act solely to harm it and (2) Defendants had
an economic interest in pursuing sales, which are commissions. (Defs.’ Mem. 18–19.)
Plaintiff argues that it has established tortious interference with its business relations
because “Defendants used improper means by misappropriating trade secrets and violating other
duties.” (Pl.’s Opp’n 17.)
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Under New York law, to state a claim for tortious interference with business relations, “a
plaintiff must show that (1) the plaintiff had business relations with a third party; (2) the
defendant interfered with those business relations; (3) the defendant acted for a wrongful purpose
or used dishonest, unfair, or improper means; and (4) the defendant’s acts injured the
relationship.” Pride Techs., LLC v. Khublall, No. 21-2225, 2022 WL 17587755, at *1 (2d Cir.
Dec. 13, 2022) (summary order) (quoting 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 261 (2d
Cir. 2015)); Grifols, S.A. v. Yu, No. 24-CV-576, 2025 WL 1531713, at *21 (S.D.N.Y. May 29,
2025) (quoting JPMorgan Chase Bank, N.A. v. 29-33 Ninth Ave., LLC, 710 F. Supp. 3d 259, 280
(S.D.N.Y. 2024)); see also Fika Midwifery PLLC v. Indep. Health Ass’n., Inc., 173 N.Y.S.3d
761, 765 (App. Div. 2022) (identifying the same four requirements (quoting Amaranth LLC v.
J.P. Morgan Chase & Co., 888 N.Y.S.2d 489, 494 (App. Div. 2009))). A defendant must have
engaged in “conduct directed not at the plaintiff itself, but at the party with which the plaintiff
has or seeks to have a relationship.” Valley Lane Indus. Co. v. Victoria’s Secret Direct Brand
Mgmt., L.L.C., 455 F. App’x 102, 107 (2d Cir. 2012) (quoting Carvel Corp. v. Noonan, 3 N.Y.3d
182, 192 (2004)); Blast Off Media, Inc. v. Downtown Music Cap., LLC, No 25-CV-9363, 2026
WL 2254614, at *14 (S.D.N.Y. Aug. 5, 2026) (quoting same); Rose Leaf Cleaning, Inc. v.
Sonder Hosp. USA, Inc., No. 22-CV-7462, 2024 WL 3937600, at *12 (S.D.N.Y. Aug. 26, 2024)
(quoting same). “New York courts have placed some limits on what constitutes ‘business
relations’ by rejecting, for example, a claim containing ‘only a general allegation of interference
with customers without any sufficiently particular allegation of interference with a specific . . .
business relationship.’” 16 Casa Duse, 791 F.3d at 262 (quoting McGill v. Parker, 582 N.Y.S.2d
91, 95 (App. Div. 1992)); Bullion Trading LLC v. J.P. Morgan Chase Bank, N.A., No. 25-CV-
5980, 2026 WL 1786445, at *7 (S.D.N.Y. June 22, 2026) (collecting cases); Espinoza v. CGJC
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Holdings LLC, No. 23-CV-9133, 2025 WL 459913, at *4 (S.D.N.Y. Feb. 11, 2025) (quoting
McGill, 582 N.Y.S.2d at 95). “[T]he plaintiff must allege a specific business relationship with an
identified third party with which the defendants interfered.” Mehrhof v. Monroe-Woodbury
Cent. Sch. Dist., 91 N.Y.S.3d 503, 505 (App. Div. 2019) (first citing N.Y. Tile Wholesale Corp.
v. Thomas Fatato Realty Corp., 61 N.Y.S.3d 136, 141 (App. Div. 2017); then citing Bus.
Networks of N.Y., Inc. v. Complete Network Sols., Inc., 696 N.Y.S.2d 433, 435 (App. Div. 1999);
and then citing Burns Jackson Miller Summit & Spitzer v. Lindner, 452 N.Y.S.2d 80, 93 (App.
Div. 1982), aff’d, 59 N.Y.2d 314 (1983)); see SlackPass, Inc. v. Frosted, Inc., No. 23-CV-6393,
2025 WL 1004854, at *17 (S.D.N.Y. Mar. 31, 2025) (quoting Influx Cap., LLC v. Pershin, 131
N.Y.S.3d 712, 715 (App. Div. 2020)); JoySuds, LLC v. N.V. Labs, Inc., 668 F. Supp. 3d 240, 258
n.4 (S.D.N.Y. 2023) (same).
In addition, the New York Court of Appeals has explained that “‘a defendant’s conduct
must amount to a crime or an independent tort’ in order to amount to tortious interference with a
prospective economic advantage.” Hernandez, 2024 WL 5116365, at *4 (quoting Carvel, 3
N.Y.3d at 190). “A defendant who has not committed a crime or independent tort or acted solely
out of malice may nevertheless be liable if he has employed ‘wrongful means,’” which include
“physical violence, fraud or misrepresentation, civil suits and criminal prosecutions” and
“extreme and unfair economic pressure.” Friedman v. Coldwater Creek, Inc., 321 F. App’x 58,
60 (2d Cir. 2009) (first quoting Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 N.Y.2d
183, 191 (1980); and then quoting Carvel, 3 N.Y.3d at 190); Kohler Co. v. Signature Plumbing
Specialties LLC, No. 23-CV-9686, 2024 WL 4880069, at *5 (S.D.N.Y. Nov. 25, 2024) (same).
If the defendant’s “motive in interfering . . . was normal economic self-interest,” the defendant
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did not use unlawful means. See Carvel, 3 N.Y.3d at 190; Cartiga, LLC v. Aquino, No. 24-CV-
1014, 2025 WL 388804, at *11 (S.D.N.Y. Feb. 4, 2025).
The Court grants Defendants’ motion for summary judgment and dismisses Plaintiff’s
tortious interference with prospective business relations claim because Plaintiff does not proffer
evidence that establishes the first element — that it had a “reasonable probability” of entering
into a business relationship with a third party. See Gym Door Repairs, Inc. v. Young Equip.
Sales, Inc., 331 F. Supp. 3d 221, 239 (S.D.N.Y. 2018) (“To establish the first element of a claim
for tortious interference with a prospective business relationship, the plaintiffs must demonstrate
that they had a reasonable probability of entering into a business relationship with a third
party.”). Plaintiff claims that Defendants interfered with Plaintiff’s sales of private-label
products. Therefore, to establish the first element, Plaintiff is required to show that it had a
“reasonable probability” of selling private-label products to a third-party. However, Plaintiff
fails to demonstrate, and has only speculated, that it would have sold private-label products. For
example, Rabiea stated multiple times in his declarations that, “[h]ad Defendants brought
requests for bids to [Plaintiff] for products that compete with [Plaintiff’s], as they were supposed
to, [Plaintiff] could have and would have fulfilled the orders.” (Rabiea Feb. 13, 2025 Decl. ¶¶
25, 64, 72; see Rabiea July 16, 2025 Decl. ¶ 25.) Rabiea also stated in his declaration that
“[Plaintiff] could have competed successfully on price, quality, and product specifications for
private label bags” based on its (1) successful competition on “price, quality, and product
specifications for industrial products sold in bulk” and (2) “experience selling bags . . . [and] a
variety of private label products,” but Rabiea does not proffer evidence that Plaintiff even
engaged in competition for private-label products. (Rabiea July 16, 2025 Decl. ¶ 26.)
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Plaintiff’s statements are insufficient to show business relations because Plaintiff does
not present any evidence of interference with a specific business relationship. See 16 Casa Duse,
791 F.3d at 262 (“New York courts have placed some limits on what constitutes ‘business
relations’ by rejecting, for example, a claim containing ‘only a general allegation of interference
with customers without any sufficiently particular allegation of interference with a specific . . .
business relationship.’” (quoting McGill, 582 N.Y.S.2d at 95)); Gym Door Repairs, 331 F. Supp.
3d at 240 (“The plaintiffs have offered no evidence that they had a reasonable probability of
entering into maintenance or repair contracts with any school districts other than those for whom
they actually did such work.”); cf. Medacist Sols. Grp., LLC v. CareFusion Sols., LLC, No. 19-
CV-1309, 2021 WL 293568, at *12 (S.D.N.Y. Jan. 28, 2021) (finding that the plaintiff
demonstrated “a reasonable probability of entering into a business relationship with a third
party” where the defendant’s personnel “noted that a potential customer was going to purchase a
subscription to [the plaintiff’s product] unless [the defendant] was able to pitch its own
competing product” (quoting Gym Door Repairs, 331 F. Supp. 3d at 239)); SourceOne Dental,
Inc. v. Patterson Cos., 310 F. Supp. 3d 346, 368 (E.D.N.Y. 2018) (finding that the plaintiff
“demonstrated a . . . future contractual relationship” where it produced evidence that: (1) “it had
a reasonable assurance that” at least two dental associations “would have endorsed” the plaintiff
“but for [the] defendants’ interference”; and (2) a dental association “dropped its endorsement of
[the plaintiff] because of pressure from [the] defendants and related pressure from [the dental
association’s] members”); Schoolcraft v. City of New York, 103 F. Supp. 3d 465, 524 (S.D.N.Y.
2015) (finding a genuine issue of fact regarding the existence of a prospective promotion where
an employee was not considered for a promotion as a result of allegations made against him by a
party), on reconsideration in part, 133 F. Supp. 3d 563 (S.D.N.Y. 2015); Krasnyi Oktyabr, Inc.
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v. Trilini Imps., 578 F. Supp. 2d 455, 472 (E.D.N.Y. 2008) (granting the defendant’s motion for
summary judgment because the plaintiff failed to “present any specific instance of a prospective
client whose relations were interfered with by defendants”).
Because Plaintiff fails to establish a genuine issue of material fact as to whether
Defendants interfered with prospective business relations, the Court grants Defendants’ motion
for summary judgment and dismisses Plaintiff’s tortious interference with prospective business
relations claim.
6. 	Breach of fiduciary duty claim
Defendants first argue that the Court should grant their motion for summary judgment on
Plaintiff’s claim for breach of fiduciary duty because Plaintiff’s claim is duplicative of its
contract claims for (1) breach of the Non-Compete and Non-Solicitation Agreement and (2)
breach of the oral agreement. (Defs.’ Mem. 20.) Second, Defendants argue that they did not
have a fiduciary duty to Plaintiff because they did not make any decisions for Plaintiff. (Id. at
19–20.)
Plaintiff argues that Defendants had a fiduciary duty because they were agents and
“conducted critical business” for Plaintiff, therefore, Defendants’ status as independent
contractors “does not negate the fiduciary character of the relationship.” (Pl.’s Opp’n 17.)
To state a breach of fiduciary duty claim under New York law, a plaintiff must plead: “(i)
the existence of a fiduciary duty; (ii) a knowing breach of that duty; and (iii) damages resulting
therefrom.” Tesla v. Pelinkovic, No. 25-2246, 2026 WL 979940, at *1 n.1 (2d Cir. Apr. 13,
2026) (summary order) (quoting Nextel Commc’ns, 660 F.3d at 138); Blanton v. Educ. Affiliates,
Inc., No. 21-1221, 2022 WL 1505124, at *4 (2d Cir. May 12, 2022) (summary order) (quoting
same); Spinelli v. Nat’l Football League, 903 F.3d 185, 207 (2d Cir. 2018) (quoting same).
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The Court grants Defendants’ motion for summary judgment and dismisses Plaintiff’s
claim for breach of fiduciary duty. Plaintiff alleges that Defendants breached their fiduciary duty
by (1) selling competing products to Plaintiff’s customers and misappropriating Plaintiff’s trade
secrets, (Compl. ¶ 164), which Plaintiff alleges to be the basis for its breach of the Non-Compete
and Non-Solicitation Agreement claim and (2) “refusing to write to customers and require them
to pay for and take delivery of purchases,” (id.), which Plaintiff also alleges to be the basis for its
breach of the oral argument to sell unsold inventory claim. Because Plaintiff’s breach of
fiduciary duty claim arises from the Non-Compete and Non-Solicitation Agreement and the oral
agreement to sell unsold inventory, it is duplicative of the claims for breach of the Non-Compete
and Non-Solicitation Agreement and the oral agreement to sell unsold inventory. See Jones v.
Wells Fargo Bank, No. 24-CV-3013, 2025 WL 959022, at *5 (E.D.N.Y. Jan. 22, 2025) (“Where
‘a breach of fiduciary duty claim indeed arises from the duties imposed by [a contract], the claim
is duplicative of the breach of contract claim, and is . . . subject to dismissal.’” (alterations in
original) (quoting Res. Mine, Inc. v. Gravity Microsystem LLC, No. 09-CV-573, 2020 WL
7024379, at *5 (E.D.N.Y. Nov. 30, 2020))). Plaintiff’s claims are duplicative because (1) “they
arise from the same facts” as the breach of the Non-Compete and Non-Solicitation Agreement
claim and the breach of oral agreement to sell unsold inventory and (2) “do not allege distinct
damages” arising from the Non-Compete and Non-Solicitation Agreement and the breach of the
oral agreement to sell unsold inventory. NetJets Aviation, Inc. v. LHC Commc’ns, LLC, 537 F.3d
168, 175 (2d Cir. 2008); see Medequa LLC v. O’Neill & Partners LLC, No. 21-CV-6135, 2022
WL 3227814, at *6 (S.D.N.Y. Aug. 10, 2022) (stating that a breach of fiduciary duty claim is
duplicative of a breach of contract claim where it is “‘premised upon the same facts and seek[s]
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the same damages’ as the breach of contract claim” (alteration in original) (quoting N. Shipping
Funds I, LLC v. Icon Cap. Corp., 921 F. Supp. 2d 94, 106 (S.D.N.Y. 2013))).
Plaintiff argues that its fiduciary duty claim is not duplicative because it “addresses some
acts not subject to the parties’ Non-Compete [and Non-Solicitation] Agreement.” (Pl.’s Opp’n
18.) For example, “acts regarding unsold inventory and certain confidential information.” (Id.)
However, these are duplicative of the contract claims because: (1) as discussed above and supra
Section II.c.ii.4, Plaintiff claims a breach of oral agreement as to the “unsold inventory”; and (2)
as discussed supra Section II.c.ii.3, Plaintiff claims a breach of contract as to “certain
confidential information.” See Hous. & Redevelopment Ins. Exch. v. Guy Carpenter & Co., No.
24-CV-2412, 2026 WL 572941, at *6 (S.D.N.Y. Feb. 28, 2026) (“[The p]laintiff’s allegations
relating to the breach of fiduciary duty claim are identical to the breach of contract claim with
respect to ‘the nature of the injury, how the injury occurred, and the harm it caused[,]’ rendering
the fiduciary duty claim duplicative.” (second alteration in original) (citation omitted)); Gan v.
GSUIG Real Est. Member LLC, 797 F. Supp. 3d 69, 100 (E.D.N.Y. 2025) (“Because [the
defendants] did not violate any duty independent of the contract, [the p]laintiffs’ breach of
fiduciary duty claim, which stems from the same set of facts as their breach of contract claim, is
duplicative of their breach of contract claim.”), aff’d, No. 25-2313, 2026 WL 1145891 (2d Cir.
Apr. 28, 2026) (summary order); Jones, 2025 WL 959022, at *5 (concluding that the plaintiff’s
breach of fiduciary duty claim is duplicative of his contract claim because both claims arise from
the same contractual relationship and the plaintiff “alleges no facts to establish a fiduciary
relationship independent of the duties created by the alleged contract”); O’Neill & Partners,
2022 WL 3227814, at *6 (dismissing, on summary judgment, the plaintiff’s breach of fiduciary
claims because the “claims for breach of contract and breach of fiduciary duty are duplicative of
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one another” (quoting N. Shipping Funds I, 921 F. Supp. 2d at 106)); Res. Mine, 2020 WL
7024379, at *5 (dismissing the plaintiff’s breach of fiduciary duty claim where “[the p]laintiffs
failed to demonstrate the existence of a fiduciary relationship between [the p]laintiffs and [the
defendant] that is separate and apart from any duties created by contract”); 2497 Realty Corp. v.
Fuertes, 223 N.Y.S.3d 7, 12 (App. Div. 2024) (concluding that the breach of fiduciary duty
claim is duplicative of the contract claim where the plaintiff “alleges that [the] defendants had a
duty to distribute settlement proceeds in accordance with the provisions of the contract and seeks
the same damages as the contract claim”).
Because Plaintiff’s breach of fiduciary duty claim is duplicative of the claim for breach of
the Non-Compete and Non-Solicitation Agreement, and the alleged oral agreement, the Court
grants Defendants’ motion for summary judgment and dismisses Plaintiff’s breach of fiduciary
duty claim.
7. 	Negligence claim
Defendants argue that the Court should grant their motion for summary judgment on
Plaintiff’s claim for negligence because, under New York law, “negligent performance of a
contract [is not] a valid cause of action.” (Defs.’ Mem. 20 (quoting Verizon N.Y., Inc. v. ECSM
Util. Contractors, Inc., 935 N.Y.S.2d 766, 767 (App. Div. 2011)).)
Plaintiff argues that it is “not prohibited from seeking recovery for negligence alongside
its contract claim so long as there is a ‘legal duty independent of contract,’” (Pl.’s Opp’n 18
(quoting Joseph v. David M. Schwarz/Architectural Servs., P.C., 957 F. Supp. 1334, 1339
(S.D.N.Y. 1997))), and argues that its negligence claim concerns “conduct not governed by the
contract, including conduct regarding unsold inventory,” (id.).
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“Under New York law, a tort plaintiff seeking to prove a defendant’s negligence must
show: ‘(1) the existence of a duty on defendant’s part as to plaintiff; (2) a breach of this duty;
and (3) injury to the plaintiff as a result thereof.’” Union Mut. Fire Ins. Co. v. Ace Caribbean
Mkt., 64 F.4th 441, 445 (2d Cir. 2023) (quoting Borley v. United States, 22 F.4th 75, 78 (2d Cir.
2021)); see also Coyle v. United States, 954 F.3d 146, 148 (2d Cir. 2020) (“To establish liability
[for a negligence claim] under New York law, a plaintiff must prove (1) that the defendant owed
her a duty; (2) that the defendant breached that duty; and (3) that she suffered injuries
proximately resulting from that breach.” (citing Solomon ex rel. Solomon v. City of New York,
499 N.Y.S.2d 392, 392 (1985))).
However, “under New York law, ‘claims based on negligent or grossly negligent
performance of a contract are not cognizable.’” Fillmore E. BS Fin. Subsidiary LLC v. Capmark
Bank, 552 F. App’x 13, 19 (2d Cir. 2014) (quoting Pacnet Network Ltd. v. KDDI Corp., 912
N.Y.S.2d 178, 180 (App. Div. 2010)); Hadami, S.A. v. Xerox Corp., 272 F. Supp. 3d 587, 601
(S.D.N.Y. 2017) (quoting same); see Tsurenko v. WTA Tour, Inc., No. 24-CV-8518, 2026 WL
820629, at *9 (S.D.N.Y. Mar. 25, 2026) (“Under New York law, ‘no cause of action exists for
negligent performance of a contract[,]’ so ‘where a cause of action for negligence . . . allege[s]
no more than that [the] plaintiffs were injured by [the] defendant’s actions with respect to [an]
alleged contract, that cause of action should [be] dismissed[.]’” (fourth and fifth alterations
added) (quoting Singh v. PGA Tour, Inc., 992 N.Y.S.2d 161, 161 (Sup. Ct. 2014))); Sterling
Select II Advisory, LLC v. Argus Info. & Advisory Servs., Inc., No. 23-CV-2939, 2026 WL
734047, at *20 (S.D.N.Y. Mar. 16, 2026) (“[C]laims based on negligent or grossly negligent
performance of a contract are not cognizable[.]” (quoting Hadami, 272 F. Supp. 3d at 601)),
reconsideration denied, 2026 WL 2199730 (S.D.N.Y. July 30, 2026).
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The Court grants Defendants’ motion for summary judgment and dismisses Plaintiff’s
negligence claim because it is based on negligence performance of the (1) Non-Compete and
Non-Solicitation Agreement and (2) the alleged oral agreement to sell unsold inventory. See
Hadami, 272 F. Supp. 3d at 601 (concluding that the plaintiff’s negligence claim fails where the
duties were defined by oral and written contracts); 2006 Frank Calandra, Jr. Irrevocable Tr. v.
Signature Bank Corp., 816 F. Supp. 2d 222, 239 (S.D.N.Y. 2011) (granting summary judgment
on negligence claim where the plaintiff failed to “establish the existence of a duty owed by [the
defendant] independent of any contractual obligations”), aff’d, 503 F. App’x 51 (2d Cir. 2012);
Norman v. Trans World Airlines, Inc., No. 98-CV-7419, 2000 WL 1480367, at *6 (S.D.N.Y.
Oct. 6, 2000) (granting summary judgment on negligence claim where the plaintiff failed to
“articulat[e] [ ] an actionable duty sounding in negligence rather than in contract”); ABL Advisor
LLC v. Peck, 49 N.Y.S.3d 35, 37 (App. Div. 2017) (“The gross negligence claim should have
been dismissed as duplicative of the breach of contract claim.”).
Plaintiff argues that its negligence claim survives because its claims “conduct not
governed by the contract, including conduct regarding unsold inventory.” (Pl.’s Opp’n 18.)
However, as discussed supra Section II.c.ii.4, Plaintiff claims a breach of oral agreement as to
the “unsold inventory.” (Id.) Plaintiff does not otherwise proffer any evidence regarding any
additional conduct that is independent of Defendants’ alleged contractual duties, and the Court
therefore dismisses Plaintiff’s negligence claim.
8. 	Faithless servant claim
Defendants argue that the Court should grant their motion for summary judgment on
Plaintiff’s claim for faithless servant because the faithless servant doctrine is inapplicable, as
they are independent contractors who “have no agency or employment relationship with”
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Plaintiff. (Defs.’ Mem. 20 (quoting Fed. Ins. Co. v. Mertz, No. 12-CV-1529, 2015 WL 5769945,
at *5 (S.D.N.Y. Sep. 29, 2015)).)
Plaintiff argues that the parties had a “paradigmatic agency relationship,” (Pl.’s Opp’n
19), and “the usual ‘agent’ is generally an independent contractor as well,” (id. (quoting In re
Neptune World Wide Moving, Inc., 99 B.R. 584, 588 (Bankr. S.D.N.Y. 1989))).
Under the faithless servant doctrine, “[a]n agent is obligated ‘to be loyal to his employer
and 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.’”
Carco Grp., Inc. v. Maconachy, 383 F. App’x 73, 76 (2d Cir. 2010) (quoting Phansalkar v.
Andersen Weinroth & Co., 344 F.3d 184, 200 (2d Cir. 2003)); Melo v. Milagro Grocery Corp.,
No. 21-CV-4438, 2026 WL 366639, at *5, n.7 (E.D.N.Y. Feb. 10, 2026) (quoting same);
Robinson v. De Niro, 739 F. Supp. 3d 33, 121 (S.D.N.Y. 2023) (quoting CBRE, Inc. v. Pace
Gallery of N.Y., Inc., No. 17-CV-2452, 2021 WL 1198644, at *11 (S.D.N.Y. Mar. 30, 2021)).
“When a defendant is found liable under the faithless servant doctrine, a plaintiff is entitled to
recover some amount of that defendant’s compensation.” Yukos Cap. S.A.R.L. v. Feldman, 977
F.3d 216, 237 (2d Cir. 2020); see also Rubio v. BSDB Mgmt. Inc., No. 19-CV-11880, 2021 WL
102651, at *3 (S.D.N.Y. Jan. 12, 2021) (“One who owes a duty of fidelity to a principal and who
is faithless in the performance of his services is generally disentitled to recover his
compensation, whether commissions or salary.” (quoting Phansalkar, 344 F.3d at 200)); Ciulla
v. Xerox Corp., 136 N.Y.S.3d 696, 696 (Sup. Ct. 2021) (stating that an employee who is liable
under the faithless servant doctrine is not entitled to recovery of salary or commission).
The faithless servant doctrine is typically applied to the employer-employee relationship.
PRCM Advisers LLC v. Two Harbors Inv. Corp., No. 20-CV-5649, 2025 WL 1774171, at *24
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(S.D.N.Y. Apr. 18, 2025), report and recommendation adopted, 2025 WL 4477153 (S.D.N.Y.
May 23, 2025). However, “the terms ‘independent contractor’ and ‘agent’ are not mutually
exclusive,” therefore, “‘an independent contractor may also be an agent’ if the contractor is
subject to the principal’s control.” Burrell v. Sowers, No. 22-2687, 2023 WL 7320867, at *2 (2d
Cir. Nov. 7, 2023) (summary order) (quoting Marmolejo v. N.Y.C. Sch. Constr. Auth., 761
N.Y.S.2d 772, 775 (Sup. Ct. 2003))); see Skyline Risk Mgmt., Inc. v. Legakis, 733 F. Supp. 3d
316, 328 (S.D.N.Y. 2024) (“[F]or an independent contractor to have a fiduciary relationship to
an employer, it must be shown that the relationship was akin to an employer-employee
relationship.” (citation omitted)); Supreme Showroom, Inc. v. Branded Apparel Grp. LLC, No.
16-CV-5211, 2018 WL 3148357, at *9–10 (S.D.N.Y. June 27, 2018) (“But ‘it is only
colloquially that the terms independent contractor and agent are necessarily distinct.’ . . . The
Second Circuit has long held that such a relationship — i.e., that between a manufacturer and a
sales representative — gives rise to a fiduciary duty of loyalty.” (quoting CBS Inc. v. Stokeley-
Van Camp, Inc., 522 F.2d 369, 375 n.14 (2d Cir. 1975))); Gluco Perfect, LLC v. Perfect Gluco
Prods., Inc., No. 14-CV-1678, 2014 WL 4966102, at *22 (E.D.N.Y. Oct. 3, 2014) (“An
independent contractor may also be considered a fiduciary where the definition of a fiduciary is
met.”); Smith v. Ryder, 203 N.Y.S.3d 897, 899 (Sup. Ct. 2024) (“[The defendant’s] status
depends on who controlled ‘the method and means by which [he did his] work.’” (second
alteration in original) (quoting D’Allaird v. Markline Sales, Inc., 962 N.Y.S.2d 730, 732 (App.
Div. 2013))).
When viewing the evidence in Plaintiff’s favor, there is a triable issue as to whether
Defendants were agents of Plaintiff. See Supreme Showroom, 2018 WL 3148357, at *8 (“The
existence of an agency relationship is a mixed question of law and fact that should generally be
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decided by a jury.” (quoting Samba Enters., LLC v. iMesh, Inc., No. 06-CV-7660, 2009 WL
705537, at *7 (S.D.N.Y. Mar. 19, 2009))), aff’d, 390 F. App’x 55 (2d Cir. 2010); Ryder, 203
N.Y.S.3d at 899 (“[T]he question of control is generally a question of fact [for the jury].”
(alterations in original) (quoting Northacker v. Cnty. of Ulster, 181 N.Y.S.3d 709, 709 (App.
Div. 2022))). The record shows a triable issue as to whether the parties considered, at the very
least, that Maierhoffer was an employee during the time he was Plaintiff’s sales manager.
Defendants argue throughout their briefing that Maierhoffer was employed by Plaintiff as sales
manager, but Plaintiff repeatedly disputes Defendants’ use of employment-related terms when
discussing Maierhoffer’s role as Plaintiff’s sales manager, (see generally Pl.’s 56.1 Resp.),26 and
the Non-Compete and Non-Solicitation Agreement stated that it is “not a contract of
employment” and “[n]either [Defendants] nor [Plaintiff] are obligated to any specific term of
employment.” (Non-Compete and Non-Solicitation Agreement ¶ 2.) However, the parties
describe Maierhoffer as an employee during his role as sales manager. For example, as sales
manager, Maierhoffer received business cards identifying him as Plaintiff’s employee, (see Feb.
2019 Resignation Ltr. and Response 3 (stating in response to Maierhoffer’s resignation letter,
“please ensure that your company business cards, identifying you as [Plaintiff’s] employee, are
returned . . . .”).) Furthermore, Maierhoffer testified at his deposition that, in February of 2019,
he voluntarily terminated his relationship with Plaintiff as an “employee.” (Maierhoffer Dep.
60:1–10, 1/16/25.)
26 In addition to Plaintiff’s briefings disclaiming an employment relationship, Zapf
testified at his deposition that Maierhoffer was never paid through payroll when he was
Plaintiff’s sales manager; instead, Maierhoffer was “paid through a 1099 process,” which was
the same process for brokers. (Zapf Dep. 14:18–22.) Rabiea also testified in his deposition that
he believed the bid process “was in [Maierhoffer’s] hands” because “[h]e had the relationship
with the customers,” which could be construed as Plaintiff exhibiting limited control over
Maierhoffer’s decisions. (Rabiea Dep. 16:11–16, 12/17/24.)
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The record also demonstrates a triable issue as to whether Defendants were subject to
Plaintiff’s control, and, therefore, whether Defendants were agents of Plaintiff. A reasonable
jury could find that Defendants were subject to Plaintiff’s control because, for example: (1) the
Non-Compete and Non-Solicitation Agreement prohibited Defendants from competitive sales;
(2) as sales manager, Plaintiff expected Maierhoffer to “dedicate at least 80% of his time” to
Plaintiff, (Offer; see Zapf Dep. 15:1–8); and (3) following his resignation as sales manager, Zapf
stated that it would “begin the process of account analysis to determine which, if any, accounts
we wish [Defendants] to handle for us,” (Feb. 2019 Resignation Ltr. and Response 3).
Because Plaintiff establishes a genuine issue of material fact as to whether Defendants
were agents of Plaintiff, the Court denies Defendants’ motion for summary judgment as to
Plaintiff’s faithless servant claim.
9. 	Unjust enrichment claim
Defendants argue that the Court should grant their motion for summary judgment as to
Plaintiff’s unjust enrichment claim because it is “barred where the parties are operating under a
contractual relationship.” (Defs.’ Mem. 21–22 (citing PKO Television, Ltd. v. Time Life Films,
Inc., 564 N.Y.S.2d 434, 434 (App. Div. 1991)).)
Plaintiff argues that its unjust enrichment claim “can coincide with a contract claim when
there are disputes about a contract’s applicability or its terms.”27 (Pl.’s Opp’n 19 (first citing
27 Plaintiff provides no support for its argument that unjust enrichment claim “can
coincide with a contract claim when there are disputes about a contract’s applicability or its
terms.” (Pl.’s Opp’n 19.) While the parties dispute “a contract’s applicability or its terms,” (id.),
the parties do not disclaim that the Non-Compete and Non-Solicitation Agreement was a valid
enforceable contract. See John T. Hansford Jr. DMD Bd. Certified Pediatric Dental Specialist,
P.C. v. Corona 26 Dental Grp. PLLC, No. 24-CV-725, 2025 WL 3460948, at *6 (E.D.N.Y. Aug.
8, 2025) (concluding that the plaintiffs’ unjust enrichment claim was not precluded where the
plaintiffs did not allege that there was a valid enforceable contract).
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Freedom Holding, Inc. v. Haart, 172 N.Y.S.3d 873, 887 (Sup. Ct. 2022); and then citing
Milherst Constr., Inc. v. Natale Bldg. Corp., 193 N.Y.S.3d 539 (App. Div. 2023)).) Second,
Plaintiff seeks to “modify its original theory of relief stated in [the] [C]omplaint based on newly
discovered evidence.” (Pl.’s Opp’n 20 (citing Nissan Motor Acceptance Corp. v. Nemet Motors,
LLC, No. 19-CV-3284, 2022 WL 4651667 (E.D.N.Y. Sep. 29, 2022)).) In support, Plaintiff
contends that discovery “revealed far more substantial unjust enrichment in the form of
commissions Defendants received” from Plaintiff’s competitors.28 (Id.)
“An unjust-enrichment claim under New York law requires the plaintiff to show ‘that (1)
the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good
conscience to permit the other party to retain what is sought to be recovered.’” Delshah 60
Ninth, 175 F.4th at 200 (quoting Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 182
(2011)); Courchevel 1850 LLC v. Wisdom Equities LLC, 846 F. App’x 33, 36 (2d Cir. 2021)
(“To prevail on a claim for unjust enrichment in New York, a plaintiff must establish (1) that the
defendant benefitted; (2) at the plaintiff’s expense; and (3) that equity and good conscience
require restitution.” (quoting Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J.,
28 Plaintiff appears to modify its unjust enrichment claim. While the Complaint alleges
unjust enrichment arising from hand-sanitizer-related commissions, Plaintiff argues in its
opposition that its unjust enrichment claim arises from commissions Defendants received “from
[Plaintiff’s] competitors for selling competing products.” (Pl.’s Opp’n 19.) Defendants do not
oppose Plaintiff’s argument in their reply, and therefore, Defendants are deemed to have
conceded this point. See Chung v. Royal Care, Inc., No. 23-CV-7962, 2025 WL 1029432, at *10
(E.D.N.Y. Jan. 8, 2025) (“When a party’s memorandum of law does not respond to an
adversary’s argument, the party ‘effectively concedes [the] arguments by his failure to respond to
them.’” (alteration in original) (quoting Felske v. Hirchmann, No. 10-CV-8899, 2012 WL
716632, at *3 (S.D.N.Y. Mar. 1, 2012))), report and recommendation adopted, 2025 WL 809900
(E.D.N.Y. Mar. 14, 2025); Lion-Aire Corp. v. Lion Air Installation, Inc., 747 F. Supp. 3d 488,
514 n.7 (E.D.N.Y. 2024) (concluding that the plaintiff conceded an issue where it failed to
oppose it in its reply). The Court therefore considers Plaintiff’s unjust enrichment claim as
arising from Defendants’ commission payments by third parties.
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Inc., 448 F.3d 573, 586 (2d Cir. 2006))); Green Tree Servicing, LLC v. Christodoulakis, 689 F.
App’x 66, 70 (2d Cir. 2017) (quoting Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000)). An
unjust enrichment claim “may be premised on deceptive conduct.” Mancuso v. RFA Brands,
LLC, 454 F. Supp. 3d 197, 208 (W.D.N.Y. 2020); see also Cox v. Microsoft Corp., 778 N.Y.S.2d
147, 149 (App. Div. 2004) (“[The] plaintiffs’ allegations that [the defendant’s] deceptive
practices caused them to pay artificially inflated prices for its products state a cause of action for
unjust enrichment.”). “However, ‘unjust enrichment is not a catchall cause of action to be used
when others fail.’” Barton v. Pret A Manger (USA) Ltd., 535 F. Supp. 3d 225, 248 (S.D.N.Y.
2021) (quoting Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777, 790 (2012)); see also Hesse v.
Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 473 (S.D.N.Y. 2020) (same). “[A]n unjust
enrichment claim is not available where it simply duplicates, or replaces, a conventional contract
or tort claim.” Barton, 535 F. Supp. 3d at 248–49 (quoting Shane Campbell Gallery, Inc. v.
Frieze Events, Inc., 441 F. Supp. 3d 1, 6 (S.D.N.Y. 2020)). “[A] plaintiff may not ‘seek damages
in an action sounding in quasi contract where the suing party has fully performed on a valid
written agreement, the existence of which is undisputed, and the scope of which clearly covers
the dispute between the parties.’” Northwell Health, Inc. v. Grp. Hospitalization & Med. Servs.,
Inc., 183 F.4th 78, 99 (2d Cir. 2026) (quoting Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70
N.Y.2d 382, 389 (1987)); Delshah 60 Ninth, 175 F.4th at 200 (“Quasi-contract claims like unjust
enrichment, however, ‘are ordinarily precluded if a valid and enforceable written contract . . .
governs the relevant subject matter.’” (alteration in original) (quoting Goldberg v. Pace Univ., 88
F.4th 204, 214 (2d Cir. 2023))).
The Court grants Defendants’ motion for summary judgment and dismisses Plaintiff’s
unjust enrichment claim because it arises from the Non-Compete and Non-Solicitation
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Agreement and is duplicative of the breach of the Non-Compete and Non-Solicitation Agreement
claim. See Delshah 60 Ninth, 175 F.4th at 200 (“[A]n unjust[-]enrichment claim is not available
where it simply duplicates, or replaces, a conventional contract or tort claim.” (second alteration
in original) (quoting Corsello, 944 N.Y.S.2d at 790)); John T. Hansford Jr. DMD Bd. Certified
Pediatric Dental Specialist, P.C. v. Corona 26 Dental Grp. PLLC, No. 24-CV-725, 2025 WL
3460948, at *6 (E.D.N.Y. Aug. 8, 2025) (“[The p]laintiffs may not recover under quantum
meruit or unjust enrichment if there is a valid enforceable contract.”).
Plaintiff’s unjust enrichment claim arises from commissions Defendants received “from
[Plaintiff]’s competitors for selling competing products.” (Pl.’s Opp’n 19.) The claim therefore
arises from Defendants’ alleged breach of the Non-Compete and Non-Solicitation Agreement, as
Defendants would have received such commissions by breaching the Non-Compete and Non-
Solicitation Agreement, and unjust enrichment is not an available remedy for any alleged
damages arising from the Non-Compete and Non-Solicitation Agreement. See One World Filter
Corp. v. Koslow Techs. Corp., No. 21-CV-10769, 2025 WL 2720963, at *12 (S.D.N.Y. Sep. 24,
2025) (“Under New York law, unjust enrichment is a cause of action available when there is no
contract.”), appeal dismissed¸ No. 25-2697 (2d. Cir. Mar. 19, 2026); In re Christenson, 667 B.R.
770, 790 (Bankr. S.D.N.Y. 2025) (granting summary judgment to the defendants where the
plaintiff’s unjust enrichment claims duplicated the fraudulent transfer claims); Superb Motors
Inc. v. Deo, 776 F. Supp. 3d 21, 87 (E.D.N.Y. 2025) (“In New York, unjust enrichment is an
equitable remedy available in cases where there is no contract between the parties.”), adhered to
in part on reconsideration, No. 23-CV-6188, 2025 WL 2178194 (E.D.N.Y. Aug. 1, 2025), and
motion to certify appeal denied, 2026 WL 130912 (E.D.N.Y. Jan. 19, 2026); Forework, LLC v.
Cull, No. 22-CV-547, 2023 WL 2931845, at *8 (N.D.N.Y. Apr. 13, 2023) (“Under New York
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law, there can be no cause of action for unjust enrichment when there is a valid contract
governing the same subject matter between the parties.”); Dunham v. Sherwin-Williams Co., 636
F. Supp. 3d 308, 318 (N.D.N.Y. 2022) (“[A]n unjust enrichment claim is not available where it
simply duplicates, or replaces, a conventional contract or tort claim.” (quoting Ford v.
Rensselaer Polytechnic Inst., 507 F. Supp. 3d 406, 419–20 (N.D.N.Y. 2020))); In re Signature
Apparel Grp. LLC, No. 09-BR-15378, 2015 WL 1009452, at *14 (Bankr. S.D.N.Y. Mar. 4,
2015) (dismissing, on summary judgment, unjust enrichment claim where it “represented a
duplicative, ‘catchall’ cause of action asserted in case the [p]laintiff’s primary claims fail”).
Because Plaintiff’s negligence claim is duplicative of the claim for breach of the Non-
Compete and Non-Solicitation Agreement, the Court grants Defendants’ motion for summary
judgment and dismisses Plaintiff’s negligence claim.
iii. 	Alter ego claim
Defendants argue that the Court should grant their motion for summary judgment
dismissing all claims against Defendants because there is not sufficient evidence to conclude that
Mustang and Maierhoffer are alter egos of each other, and therefore, Plaintiff fails to distinguish
claims between Mustang and Maierhoffer. Defendants argue that Mustang and Maierhoffer are
not alter egos because: (1) the Complaint does not allege facts “establishing either domination or
fraud”; (2) “Defendants have presented evidence that Mustang is a legitimate business that has
operated for nearly twenty (20) years”; and (3) Plaintiff “suffered no harm as a result of
Mustang’s corporate form or Maierhoffer’s alleged mismanagement of same.” (Defs.’ Mem.
22–23.)
Plaintiff argues that a “reasonable trier of fact could find that [Mustang and Maierhoffer]
are alter egos of one another” because: (1) Maierhoffer does all of Mustang’s work, working out
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of his house, which is paid for by Mustang; (2) Maierhoffer “commingled his personal and
family assets with Mustang’s, using corporate funds to pay for personal and family expenses”;
and (3) “[m]oney destined for Mustang was sometimes paid to Maierhoffer or family members.”
(Pl.’s Opp’n 22.) Plaintiff also contends that it is not required to show that Mustang was (1)
formed to effect fraud or (2) used to commit fraud because “the corporate veil will be pierced to
achieve equity, even absent fraud, when a corporation has been so dominated by an individual . .
. that it primarily transacts the dominator’s business instead of its own and can be called the
other’s alter ego.” (Id. at 23 (alteration in original) (emphasis omitted) (quoting Goldberg v.
KOSL Bldg. Grp., LLC, 231 N.Y.S.3d 531, 531 (App. Div. 2025)).)
“Alter ego liability exists when a parent or owner uses the corporate form to achieve
fraud, or when the corporation has been so dominated by an individual or another corporation
(usually a parent corporation), and its separate identity so disregarded, that it primarily transacted
the dominator's business rather than its own.” OOO “Garant-S” v. Empire United Lines Co.,
557 F. App’x 40, 45 (2d Cir. 2014) (quoting Kiobel v. Royal Dutch Petroleum Co., 621 F. 3d
111, 195 (2d Cir. 2010)). A party seeking to pierce the corporate veil under New York law and
hold another entity or individual liable on a claim against a corporation must show: (1) the
alleged alter ego “exercised complete domination over the corporation with respect to the
transaction at issue; and (2) such domination was used to commit a fraud or wrong that injured
the party seeking to pierce the corporate veil.” MAG Portfolio Consult, GMBH v. Merlin Biomed
Grp., LLC, 268 F.3d 58, 63 (2d Cir. 2001) (quoting Am. Fuel Corp. v. Utah Energy Dev. Co.,
122 F.3d 130, 134 (2d Cir. 1997)); Savage v. Galaxy Media & Mktg. Corp., 526 F. App’x 102,
104 n.2 (2d Cir. 2013) (“To pierce the corporate veil and hold individuals or other entities liable
on claims against a corporation, New York . . . require[s] a showing that such entity has
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exercised influence or domination over the corporation such that the entity has effectuated a
fraud or injustice.”). Courts consider ten equitable factors in determining whether the first
requirement — domination — has been met. They are:
(1) the absence of the formalities and paraphernalia that are part and
parcel of the corporate existence, i.e., issuance of stock, election of
directors, keeping of corporate records and the like[;] (2) inadequate
capitalization[;] (3) whether funds are put in and taken out of the
corporation for personal rather than corporate purposes[;] (4)
overlap in ownership, officers, directors, and personnel[;] (5)
common office space, address and telephone numbers of corporate
entities[;] (6) the amount of business discretion displayed by the
allegedly 	dominated 	corporation[;] 	(7) 	whether 	the 	related
corporations deal with the dominated corporation at arms length[;]
(8) whether the corporations are treated as independent profit
centers[;] (9) the payment or guarantee of debts of the dominated
corporation by other corporations in the group[;] and (10) whether
the corporation in question had property that was used by other of
the corporations as if it were its own.
N.Y. State Elec. & Gas Corp. v. FirstEnergy Corp., 766 F.3d 212, 224 (2d Cir. 2014) (quoting
Wm. Passalacqua Builders, Inc. v. Resnick Devs. S. Inc., 933 F.2d 131, 139 (2d. Cir. 1991));
Weihai Lianqiao Int’l Coop Grp. Co. v. A Base IX Co., 799 F. Supp. 3d 195, 244 (S.D.N.Y.
2025) (quoting same); United States ex rel. Taylor v. GMI USA Corp., 774 F. Supp. 3d 645, 670
(S.D.N.Y. 2025) (quoting same). If the domination requirement is met, the plaintiff must then
fulfill the second requirement by showing (1) “the existence of a wrongful or unjust act toward
that party,” and (2) that “the act caused the party’s harm.” JSC Foreign Econ. Ass’n
Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 386 F. Supp. 2d 461, 465 (S.D.N.Y. 2005).
“[A] plaintiff need not prove that there was actual fraud but must show a mingling of the
operations of the entity and its owner plus an overall element of injustice or unfairness.” NetJets
Aviation, 537 F.3d at 176 (citation and internal quotation marks omitted); JSC Foreign Econ.
Ass’n Technostroyexport, 386 F. Supp. 2d at 465 (“The party seeking to pierce the corporate veil
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must establish that the owners of the corporation, through their dominance of the corporation,
‘abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice
against that party such that a court in equity will intervene.’” (quoting Morris v. N.Y. Dep’t of
Tax’n & Fin., 82 N.Y.2d 135, 141 (1993))); see also MAG Portfolio Consult, 268 F.3d at 64
(“Without a finding that the domination occurred for the purpose of committing a wrong, the
second element of a veil-piercing analysis has not been met.”).
When viewing the evidence in Plaintiff’s favor, the Court finds that Defendants are alter
egos because (1) Maierhoffer exercised influence or domination over Mustang and (2) contrary
to Defendants’ argument, Plaintiff is not required to show fraud to establish alter ego liability, as
Plaintiff has demonstrated harm.
First, Plaintiff has proffered evidence of domination because Mustang and Maierhoffer:
(1) intermingled funds; (2) overlapped in “ownership, officers, directors, and personnel”; and (3)
shared a “common office space, address and telephone number[].” See City View Blinds of N.Y.,
Inc. v. Trs. of N.Y.C., Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, &
Apprenticeship, Journeyman Retraining, Educ. & Indus. Fund, No. 21-1037, 2022 WL 1448205,
at *3 (2d Cir. May 9, 2022) (summary order) (affirming alter ego determination where the
defendant-owner failed to address allegations that he and the defendant-corporation (1) “shared a
place of business,” (2) “formerly shared a common address,” (3) “shared the same telephone
number,” and (4) completed financial transfers between each other).
Regarding intermingled funds, Maierhoffer testified at his deposition that (1)
(Maierhoffer Dep. 191:22–25, 10/14/22, annexed
to Weisbrod Opp’n Decl. as Ex. 1 and appended in Pl.’s 56.1 Resp. 64–80), including using
Mustang’s money to pay for 	id. at 192:23–193:4), and (2) he would
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"most likely" , (id. at 193:5-9).
Comis have found alter ego liability where defendants have, inter alia, intermingled fonds. See
United States v. LabQ Clinical Diagnostics, LLC, No. 22-CV-751, 2026 WL 787460, at *21
(S.D.N.Y. Mar.20, 2026) (detennining that the defendants were alter egos where, inter alia, they
intenningled fonds and used the same address); John Wiley & Sons, Inc. v. Nice Glob. LLC, No.
25-CV-2662, 2026 WL 880403, at *7 (S.D.N.Y.Mar.31, 2026) ("[T]he intenningling of
c01porate assets itself can support an allegation of alter ego liability where ... the dominating
c01poration is alleged to have taken fonds properly belonging to the dominated cmporation.")
(collecting cases); Thomas Indus., Inc. v. City ofBristol, 336 F.Supp.3d 28, 34 ( D. Conn.2018)
(determining, on summa1y judgment, the defendants were alter egos where, inter alia, they were
located at the same address, used the same phone nlllllber, and there was an intenningling of
fonds); In re Flutie N. Y Corp., 310 B.R.31, 60 (Banlcr. S.D.N.Y. 2004) (finding alter ego
liability where, inter alia, the defendant-owner used co1porate funds for his own personal use).
As to overlap in "ownership, officers, directors, and personnel," and sharing of office
space, address and telephone number, Maierhoffer testified that he is the sole principal of
Mustang, (Maierhoffer Dep.125:10-15, 1/16/25), and that (1) Mustang's listed address and
office location is (Maierhoffer Dep.53:11-18, 10/14/22); (2) other than
Mustang has not been located in a different house or an office, (id. at 189:17-
190:1); and (3) Mustang does not have a landline and he uses
Mustang, (id. at 190:14-191:3).
for
Defendants incoITectly asse1i that Plaintiff must show fraud to establish alter ego liability.
A plaintiff is not required to demonstrate fraud, as "[a] comi may pierce the cmporate veil 'when
the co1poration has been so dominated by an individual or another co1poration and its separate
96
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identity so disregarded, that it primarily transacted the dominator's business rather than its own
and can be called the other’s alter ego.’” PowX Inc. v. Performance Sols., LLC, No. 24-CV-
1389, 2026 WL 592251, at *10 (S.D.N.Y. Mar. 3, 2026) (quoting Miramax Film Corp. v.
Abraham, No. 01-CV-5202, 2003 WL 22832384, at *7 (S.D.N.Y. Nov. 25, 2003)); Saleh v.
Pretty Girl, Inc., No. 09-CV-1769, 2012 WL 4511372, at *8 (E.D.N.Y. Sep. 28, 2012) (quoting
Fernbach, LLC v. Calleo, 939 N.Y.S.2d 501, 503 (App. Div. 2012)).29
29 It is also possible that Plaintiff would be able to show “fraud” by Defendants because
it has established an issue of genuine fact as to whether Defendants misappropriated its trade
secrets. See John Wiley & Sons, Inc. v. Nice Glob. LLC, No. 25-CV-2662, 2026 WL 880403, at
*8 (S.D.N.Y. Mar. 31, 2026) (“Th[e] [fraud] prong ‘can be satisfied either by showing outright
fraud, or another type of wrong, such as a breach of a legal duty, or a dishonest and unjust act in
contravention of [the] plaintiff’s legal rights.’” (quoting Telenor Mobile Commc’ns A.S. v. Storm
LLC, 587 F. Supp. 2d 594, 620 (S.D.N.Y. 2008))); Giarla v. Coca-Cola Co., No. 17-CV-359,
2021 WL 1110397, at *5 (W.D.N.Y. Mar. 23, 2021) (“The party seeking to pierce the corporate
veil must establish that the owners, through their domination, abused the privilege of doing
business in the corporate form to perpetrate a wrong or injustice against that party such that a
court in equity will intervene.” (quoting Morris v. N.Y. State Dep’t of Tax’n & Fin., 82 N.Y.2d
135, 142 (1993))); HRA Grp. Holdings Ltd. v. Mark’s Majestic Diamonds, Inc., No. 13-CV-
8791, 2015 WL 5316404, at *10 (S.D.N.Y. Sep. 11, 2015) (“[T]he [p]laintiffs are not required to
prove fraud, but may satisfy this prong of their alter ego claim through evidence that [the
individual’s] domination of the corporate defendants resulted in ‘wrongdoing or some act of
injustice.’” (quoting Kasper Glob. Collection & Brokers, Inc. v. Glob. Cabinets & Furniture
Mfrs. Inc., 952 F. Supp. 2d 542, 578 (S.D.N.Y. 2013))); Kasper Glob. Collection & Brokers,
Inc., 952 F. Supp. 2d at 578 (“Under New York law, evidence of fraud or wrongdoing or some
act of injustice is sufficient to satisfy the second prong of the test for piercing the corporate
veil.”); see also Cohen v. Cohen, 250 N.Y.S.3d 482, 488 (App. Div. 2026) (“[W]hile fraud
certainly satisfies the wrongdoing requirement, other claims of inequity or malfeasance will also
suffice.” (quoting Baby Phat Holding Co. v. Kellwood Co., 997 N.Y.S.2d 67, 70 (App. Div.
2014))); Sweeney v. Waitz, 114 N.Y.S.3d 830, 833 (Sup. Ct. 2019) (“The mere claim that the
corporation was completely dominated by the defendant, or conclusory assertions that the
corporation acted as his ‘alter ego,’ without more, will not suffice to support the equitable relief
of piercing the corporate veil. Some showing of a wrongful or unjust act toward the plaintiff is
required.”) (collecting cases).
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Because Plaintiff establishes that Defendants are alter egos, the Court denies Defendants’
motion for summary judgment as to Plaintiff’s alter ego allegations and finds that Plaintiff has
established that Defendants are alter egos.30
d. 	Rule 11 sanctions
Plaintiff argues that the Court should impose sanctions under Rule 11 in addition to
sanctions under Rule 37, as discussed supra footnote 24, because Defendants “made a frivolous
res judicata argument” in support of its motion to dismiss all claims and subsequently “refused
to withdraw their frivolous arguments even after the Vacatur nullified the res judicata
arguments.” (Pl.’s Sanctions Mem. 4.)
Defendants argue that their res judicata argument is not frivolous because the state court
had no authority to vacate its dismissal of the state court action, (Defs.’ Sanctions Opp’n 17), and
Plaintiff offers no legal support for its sanctions motion, (id. at 16–17).
The Court denies Plaintiff’s motion for Rule 11 sanctions. First, while Defendants’
invocation of res judicata is unavailing, Plaintiff has not shown that Defendants advanced this
argument in bad faith, and “[t]he fact that a legal theory is a long-shot does not necessarily mean
it is sanctionable.” See Fishoff v. Coty Inc., 634 F.3d 647, 654 (2d Cir. 2011); Tounkara v.
Republic of Senegal, No. 21-CV-8027, 2022 WL 17826422, at *13 (S.D.N.Y. Dec. 20, 2022)
(denying motion for sanctions where there was no showing that the arguments were advanced in
bad faith), report and recommendation adopted, 2023 WL 2692434 (S.D.N.Y. Mar. 29, 2023).
Second, Defendants raised alterative arguments in support of their motion for summary
30 Because the Court finds that Mustang and Maierhoffer are alter egos, the Court denies
Defendants’ motion for summary judgment as to whether they are and declines to address
Defendants’ argument that the Court should grant Defendants summary judgment because the
Complaint fails to distinguish claims against each Defendant. (See Defs.’ Mem. 23.)
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judgment, which included that this action should be dismissed because the evidence does not
support Plaintiff’s claims. As Plaintiff has failed to sustain several of its underlying claims —
tortious interference with prospective business relations, breach of fiduciary duty, negligence,
and unjust enrichment — Defendants’ summary judgment motion is not frivolous. See Curto v.
Edmundson, 392 F.3d 502, 504 (2d Cir. 2004) (per curiam) (holding that the district court did not
abuse its discretion in denying the plaintiff’s request for sanctions against the defendant where
the district court dismissed the plaintiff’s claims); Bridgeton 396 Broadway Fee LLC v. Anthony
T. Rinaldi LLC, No. 20-CV-2052, 2020 WL 5983205, at *4 (S.D.N.Y. Oct. 8, 2020) (denying
sanctions where the court rejected the petitioner’s arguments because “sanctions are not
appropriate simply because a party is incorrect”); Colon v. Metro-N. Commuter R.R. Co., 242 F.
Supp. 3d 65, 82 (D. Conn. 2017) (“Because [the] plaintiff has successfully defended the motion
for summary judgment, [the court is] not convinced at this time that any other sanctions are
appropriate.”), aff’d, 778 F. App’x 7 (2d Cir. 2019); Booker v. Graham, No. 13-CV-1342, 2016
WL 11480150, at *1 (N.D.N.Y. Oct. 26, 2016) (recommending denial of the plaintiff’s motion
for sanctions where the court found that the defendants’ summary judgment motion was
appropriate), report and recommendation adopted, 2016 WL 7176607 (N.D.N.Y. Dec. 9, 2016),
aff’d, 974 F.3d 101 (2d Cir. 2020); Stoner v. Young Concert Artists, Inc., No. 11-CV-7279, 2012
WL 4471602, at *7–8 (S.D.N.Y. Sep. 26, 2012) (holding that sanctions were not warranted
against the defendant where the plaintiff’s claims were dismissed). Because Plaintiff has not
sufficiently shown that Rule 11 sanctions are warranted, the Court denies Plaintiff’s motion for
sanctions.
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III. 	Conclusion
For the reasons discussed, the Court grants Defendants’ motion for summary judgment as
to Plaintiff’s claims for: (1) tortious interference with prospective business relations; (2) breach
of fiduciary duty; and (3) unjust enrichment. The Court denies Defendants’ motion for summary
judgment as to Plaintiff’s claims for: (1) misappropriation of trade secrets; (2) breach of the Non-
Compete and Non-Solicitation Agreement; (3) breach of the alleged oral agreement; and (4)
faithless servant. The Court also denies Defendants’ motion to strike the report of and preclude
testimony from Plaintiff’s expert, Christopher Picone, and grants Defendants’ motion to strike
the report of and preclude testimony from Plaintiff’s expert, Glen Balzer. Finally, the Court: (1)
denies Plaintiff’s Rule 37 motion in limine to preclude Defendants’ evidence and testimony as to
competitive sales; (2) denies Plaintiff’s Rule 11 motion for sanctions; and (3) denies Plaintiff’s
request for leave to file a supplemental Rule 56.1 statement.
Dated: September 18, 2026
Brooklyn, New York
SO ORDERED:
_________s/MKB________
MARGO K. BRODIE
United States District Judge
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