In Westcon Grp., Inc. v. CCC Technologies, Inc., 7:19-cv-02303 (PMH) (S.D.N.Y. Sep. 12, 2022), the court granted summary judgment dismissing a conversion claim as duplicative of a cause of action for breach of contract.
Westcon and CCC were parties to a computer reseller agreement under which Westcon provided CCC with computer equipment for resale to CCC’s end-user customers. CCC accrued an outstanding balance with Westcon, the amount of which was disputed. Negotiated plans for repayment of the outstanding balance broke down after CCC decided to stop sourcing equipment from Westcon and to use a different distributor instead. Westcon sued CCC for conversion and breach of contract, alleging that CCC had wrongfully taken possession of Westcon product for which it refused to pay.
On summary judgment, the court granted CCC’s motion to dismiss the conversion claim as duplicative of the breach of contract claim. Holding that “[i]t is beyond cavil that “an action for conversion cannot lie where damages are merely sought for breach of contract,” the court held that the claims were “indistinguishable…or at least redundant,” since they were based on the same wrongful conduct and alleged the same injury. Id at *8.
Westcon argued that its conversion claim was not duplicative because it sought punitive damages that were unavailable under a breach of contract theory. The court acknowledged that punitive damages may constitute a unique recovery rendering the claims nonduplicative, but here “the record…is devoid of proof of the type of behavior warranting an award of punitive damages.” Id. at *9. Thus, the conversion claim was duplicative and was dismissed.
Westcon is a useful reminder that the assertion of duplicative contract and tort causes of action is an exercise in futility. Unless the two causes of action arise from distinct sets of facts—or properly seek distinct damages—a plaintiff must stand on its breach of contract claim.
If you have questions about summary judgment or the relationship between contract and tort claims, please contact Michael Rakower or Travis Mock.Westcon