Rebecca L. Tsai | Bloomberg Law Verizon New York, Inc. v. Optical Communications Group, Inc., No. 4598, 2011 NY Slip Op 08685, 2011 BL 302181 (App. Div. Dec. 1, 2011) Verizon New York, Inc., owns an underground conduit network beneath New York City. Pursuant to the New York Public Service Law, Verizon is required to allow other companies to lease space in the conduits. Optical Communications Group, Inc. (OCG), a telecommunications service provider and Verizon competitor, entered into an agreement with Verizon in July 1998 under which it would lease space in the network for a monthly rental fee. The agreement provided that if the conduit area desired by OCG was not available, then Verizon would provide OCG with an estimate of the cost to have that space made available. Any work done to make the conduit available to OCG (i.e. "Make-Ready" work) would be done by Empire City Subway Company (Limited) (ECS), a corporate affiliate of Verizon. The parties' relationship deteriorated when Verizon allegedly misrepresented the availability of the requested conduit space in such a way that OCG would have no choice but to bear the cost of the Make-Ready work. OCG also alleged that Verizon overcharged it and blocked its access to the conduit when it refused to pay the inflated fees. Verizon and ECS filed the instant suit in New York state court, alleging that OCG breached its contract by failing to pay the monthly fees and the cost of the Make-Ready work. OCG asserted a number of counterclaims, including breach of contract, fraud, and fraudulent inducement. Verizon and ECS moved to dismiss the fraud-based counterclaims, and the trial court granted their motion, finding that these claims were redundant of the breach of contract claim. OCG appealed to the Appellate Division of the Supreme Court of New York, First Department.
Dismissal of Fraud and Fraudulent Inducement Counterclaims Affirmed
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