Antongiovanni Obtains Appellate Victory Affirming Dismissal of Unfair Competition Claim

Michael J. Antongiovanni, serving as co-counsel to a New York City hotel, recently obtained an appellate victory, affirming a lower court decision dismissing a plaintiff’s claim for unfair competition based on the doctrine of res judicata (i.e., claim preclusion). The plaintiff, a Caribbean resort, had previously sued the hotel in a prior action alleging a breach of the parties’ license agreement. Michael succeeded in obtaining summary judgment on behalf of the hotel in the prior action, dismissing the resort’s claims. Several years later, the resort commenced a new action against the hotel, alleging a claim of unfair competition. The resort claimed that the hotel had retained control of the resort’s internet domain and, thereby, infringed on its trademark after the resort had terminated the parties’ license agreement that was at issue in the prior litigation.

Michael successfully argued before the lower court, and again on appeal, that the doctrine of res judicata precluded the resort from bringing the new action because it required the resort to assert all claims arising from the same transaction (i.e., the license relationship) in the prior action, which had been dismissed on the merits. Michael further argued that, even though some events giving rise to the unfair competition claim allegedly had not occurred at the time of the commencement of the prior action, the resort could have amended its complaint in the prior action to assert the unlawful competition claim.

The appellate division agreed and affirmed the lower court’s order in the new action, dismissing the unlawful competition claim based on res judicata. The appellate division found that the allegations in the prior action and the new action arose out of the same transaction concerning the license relationship, and that the resort should have amended its complaint in the prior action to add the unfair competition claim but failed to do so. Thus, the resort is precluded from bringing the new action.