Defendant moves to dismiss the verified complaints first claim for breach of a contract and second claim for retaliation, based on plaintiffs failure to state a cause of action and to state plaintiffs claims with sufficient particularity. C.P.L.R. §§ 3013, 3211(a)(7). Defendant also moves to dismiss a claim for violation of the New York False Claims Act (NYFCA), NY State Fin. Law § 191, but the verified complaint does not plead such a claim, which plaintiff confirmed at oral argument. Finally, defendant seeks attorneys’ fees and expenses. For the reasons explained below, the court grants defendants motion to dismiss plaintiffs retaliation claim, but otherwise denies defendants motion, including its request for attorneys’ fees and expenses.
I. THE ALLEGED FACTS
Upon a motion to dismiss a complaint pursuant to C.P.L.R. § 3211(a)(7), the court considers the facts alleged in the complaint and presumes them to be true. Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender & Co., Inc., 37 N.Y.3d 169, 175, 150 N.Y.S.3d 79, 171 N.E.3d 1192 (2021); Connaughton v. Chipotle Mexican Grill, Inc., 29 N.Y.3d 137, 141, 53 N.Y.S.3d 598, 75 N.E.3d 1159 (2017); Seaman v. Schulte Roth & Zabel LLP, 176 A.D.3d 538, 538, 111 N.Y.S.3d 266 (1st Dept 2019). According to the verified complaint, defendant owns Co-op City, a cooperative housing development publicly subsidized under the Mitchell-Lama Program, in Bronx County. NY Priv. Hous. Law §§ 10-37. Defendant and plaintiff entered a contract dated November 5, 2013, for plaintiff to perform both an American Society of Heating, Refrigerating, and Air-Conditioning Engineers Level II energy audit and a retro-commissioning audit of Co-op Citys common areas. During plaintiffs work, plaintiff uncovered structural deficiencies throughout Co-op City, which plaintiff believed would violate both New York Private Housing Finance Law § 32-a(7) and New York City Administrative Code §§ 28-308.2, 308.3.1, and 308.4.1, if not ameliorated by the end of 2021. After plaintiff reported its preliminary findings to defendant, it terminated the contract and refused to pay plaintiff for its further services.
Defendant continued to ignore the deficiencies after it terminated the contract. Plaintiff contends that defendant purposely concealed the deficiencies and, by doing so, falsely certified defendants compliance with Private Housing Finance Law § 32-a(7) and Administrative Code §§ 28-308.2, 308.3.1, and 308.4.1 to its supervising agency, New York State Homes and Community Renewal (HCR), so that defendant would continue to receive tax benefits and subsidies under the Mitchell-Lama Program. Plaintiff now sues for breach of the contract, to recover payment for its work, and for retaliation under the NYFCA.
II. DEFENDANTS MOTION TO DISMISS THE VERIFIED COMPLAINT
Defendant bears the burden to establish that plaintiffs verified complaint “fails to state a viable cause of action.” Connolly v. Long Island Power Auth., 30 N.Y.3d 719, 728, 70 N.Y.S.3d 909, 94 N.E.3d 471 (2018). In evaluating defendants motion, the court must accept plaintiffs allegations as true, liberally construe the verified complaint, and draw all reasonable inferences in plaintiffs favor. Doe v. Bloomberg L.P., 36 N.Y.3d 450, 454, 143 N.Y.S.3d 286, 167 N.E.3d 454 (2021); Connolly v. Long Island Power Auth., 30 N.Y.3d at 728, 70 N.Y.S.3d 909, 94 N.E.3d 471; JF Capital Advisors, LLC v. Lightstone Group, LLC, 25 N.Y.3d 759, 764, 16 N.Y.S.3d 222, 37 N.E.3d 725 (2015); M & E 73-75 LLC v. 57 Fusion LLC, 189 A.D.3d 1, 5, 128 N.Y.S.3d 200 (1st Dept 2020).
The court will not give such consideration, however, to allegations that consist of only bare legal conclusions. Myers v. Schneiderman, 30 N.Y.3d 1, 14, 62 N.Y.S.3d 838, 85 N.E.3d 57 (2017); Simkin v. Blank, 19 N.Y.3d 46, 52, 945 N.Y.S.2d 222, 968 N.E.2d 459 (2012); M & E 73-75 LLC v. 57 Fusion LLC, 189 A.D.3d at 5, 128 N.Y.S.3d 200. Instead, the court accepts as true only plaintiffs factual allegations that set forth the elements of a legally cognizable claim and from them draws all reasonable inferences in plaintiffs favor. Dismissal is warranted if the verified complaint fails to allege facts that fit within any cognizable legal theory against defendant. Sassi v. Mobile Life Support Servs., Inc., 37 N.Y.3d 236, 239, 154 N.Y.S.3d 290, 175 N.E.3d 1246 (2021); Faison v. Lewis, 25 N.Y.3d 220, 224, 10 N.Y.S.3d 185, 32 N.E.3d 400 (2015).
A. Plaintiffs First Claim for Breach of the Contract
Defendant insists that plaintiff fails to plead breach of a contract, but plaintiff alleges a binding contract that plaintiff performed and defendant breached when it failed to pay plaintiff the balance due. Magliocco v. MKB Family, LLC, 199 A.D.3d 576, 576, 159 N.Y.S.3d 7 (1st Dept 2021); Pavich v. Pavich, 189 A.D.3d 548, 549, 133 N.Y.S.3d 814 (1st Dept 2020); Meer Enters., LLC v. Kocak, 173 A.D.3d 629, 630-31, 105 N.Y.S.3d 415 (1st Dept 2019); Second Source Funding, LLC v. Yellowstone Capital, LLC, 144 A.D.3d 445, 445-46, 40 N.Y.S.3d 410 (1st Dept 2016). These allegations provide defendant “sufficient notice of the transactions” and claims that plaintiff intends to prove at trial. C.P.L.R. § 3013; Second Source Funding, LLC v. Yellowstone Capital, LLC, 144 A.D.3d at 446, 40 N.Y.S.3d 410. Therefore the court denies defendants motion to dismiss plaintiffs breach of contract claim.
B. Plaintiffs Second Claim for Retaliation
The NYFCA authorizes two private rights of action. Under State Finance Law § 190, “any person may bring a qui tam civil action for a violation of [State Finance Law § 189] on behalf of the person and the people of the state of New York or a local government.” A plaintiff that brings a qui tam claim must follow procedural requirements delineated under the statute, including filing under seal for at least 60 days and not serving the complaint on the defendant until so ordered. NY State Fin. Law § 190. State Finance Law § 191 provides an aggrieved employee a separate cause of action for retaliation. This section prevents employers from engaging in retaliatory conduct against an employee for the employees efforts to stop a violation of the NYFCA.
Defendant maintains that plaintiffs retaliation claim fails on procedural grounds, since plaintiff did not comply with the NYFCAS requirements for filing a qui tam claim before commencing this action. Yet defendant points to no authority to support this position. Federal courts, applying the parallel federal False Claims Act (FCA), 31 U.S.C. §§ 3729-33, provide guidance in interpreting the NYFCA, since it tracks the FCA. Comptroller of City of NY v. Bank of NY Mellon Corp., 200 A.D.3d 58, 60, 158 N.Y.S.3d 10 (1st Dept 2021); Weiner v. City of New York, 190 A.D.3d 517, 518, 141 N.Y.S.3d 9 (1st Dept 2021); State of NY ex rel. Willcox v. Credit Suisse Sec. (USA) LLC, 140 A.D.3d 622, 623 n.2, 36 N.Y.S.3d 89 (1st Dept 2016); State of New York ex rel. Seiden v. Utica First Ins. Co., 96 A.D.3d 67, 71, 943 N.Y.S.2d 36 (1st Dept 2012). The federal courts have held that a claim for retaliation under the FCA is not subject to the qui tam procedural requirements. E.g., Parris v. New York City Hous. Auth., 364 F. Supp. 3d 284, 289-90 (S.D. N.Y. 2019); Ping Chen ex rel. U.S. v. EMSL Analytical, Inc., 966 F. Supp. 2d 282, 305 (S.D. N.Y. 2013). No court has held to the contrary. Therefore the court denies defendants motion to dismiss plaintiffs retaliation claim on procedural grounds.
Defendant also contends that plaintiff fails to state a claim for retaliation because plaintiff does not allege an underlying NYFCA violation. Plaintiff insists that the verified complaint states a claim for retaliation, since plaintiff alleges that defendant discharged plaintiff and terminated their contract because plaintiff prepared a draft report that revealed Co-op Citys deficiencies and potential violations of Private Housing Finance Law § 32-a(7) and Administrative Code §§ 28-308.2, 308.3.1, and 308.4.1.
To state a claim for retaliation under the NYFCA, plaintiff must show that (1) it engaged in conduct protected under State Finance Law § 191 to prevent a violation of the NYFCA, (2) defendant knew about plaintiffs conduct, and (3) defendant discharged plaintiff on that basis. Landfield v. Tamares Real Estate Holdings, Inc., 112 A.D.3d 487, 487-488, 976 N.Y.S.2d 381 (1st Dept 2013). See Anonymous v. Anonymous, 165 A.D.3d 19, 30, 83 N.Y.S.3d 472 (1st Dept 2018). Since plaintiff entered a contract to audit and report on Co-op Citys common areas, plaintiff also must show that its complaints of defendants noncompliance with the law exceeded the scope of plaintiffs contractual duties, to overcome the presumption that plaintiff merely performed the contract. Landfield v. Tamares Real Estate Holdings, Inc., 112 A.D.3d at 488, 976 N.Y.S.2d 381.
Plaintiff fails “to adequately plead actionable retaliatory activity.” State of NY ex rel. Solomon v. Siemens Elec., LLC, 202 A.D.3d 454, 163 N.Y.S.3d 15 (1st Dept 2022). Although plaintiff claims that its draft report amounts to protected conduct under the NYFCA, plaintiff fails to distinguish its disclosures through its draft report from its contractual obligations to defendant. Landfield v. Tamares Real Estate Holdings, Inc., 112 A.D.3d at 488, 976 N.Y.S.2d 381. Absent any additional alleged conduct or efforts by plaintiff to stop a violation of the NYFCA, plaintiffs failure to distinguish its report to defendant from performance of the parties’ contract is grounds alone to dismiss the retaliation claim.
Even if the court considered plaintiffs report apart from its contractual obligations, plaintiff still fails to identify a violation of the NYFCA. State of NY ex rel. Solomon v. Siemens Elec., LLC, 202 A.D.3d 454, 163 N.Y.S.3d 15 . Although plaintiff insists that defendant is liable under the NYFCA because, by concealing Co-op Citys deficiencies, defendant falsely certified its compliance with Private Housing Finance Law § 32-a(7) and Administrative Code §§ 28-308.2, 308.3.1, and 308.4.1 to HCR, plaintiff fails to specify when or how defendant so certified or how its alleged conduct violated the NYFCA. First, Private Housing Finance Law § 32-a(7) is inapplicable to the circumstances alleged in the complaint. This statutory provision required defendant in 1984 to certify to the supervising state agency, then the Division of Housing and Community Renewal, that defendant had implemented energy conservation measures identified in an earlier energy audit report. Administrative Code § 28-308.4.1 did require an energy report in 2021 as alleged in the complaint, but to the New York City Department of Buildings (DOB), not to HCR.
A violation of the NYFCA, moreover, requires that defendant present “a false or fraudulent claim for payment or approval.” NY State Fin. Law § 189(1)(a). State Finance Law § 188(1) defines a “claim” as a “request or demand ․ for money or property that (i) is presented to the state or a local government.” Plaintiff simply fails to point to any such request by defendant or even that it received payment, benefits, or approval as a participant in the Mitchell-Lama Program by making a false claim to HCR, DOB, or any other governmental agency. Although plaintiff maintains that Private Housing Finance Law § 32-a(7) and the Administrative Code provisions required defendant to submit an audit and report to HCR, plaintiff alleges neither that defendant failed to submit these documents nor that it submitted a false audit or report. See State of NY ex rel. Willcox v. Credit Suisse Sec. (USA) LLC, 140 A.D.3d at 623, 36 N.Y.S.3d 89. Nor does defendant allege that either document included a “request or demand ․ for money,” NY State Fin. Law § 188(1), or that defendant submitted either document in exchange for payment, benefits, or approval as a Mitchell-Lama Program participant. See Total Asset Recovery Servs. LLC v. Metlife, Inc., 189 A.D.3d 519, 521, 139 N.Y.S.3d 3 (1st Dept 2020); Anonymous v. Anonymous, 165 A.D.3d at 27, 83 N.Y.S.3d 472; State of New York ex rel. Seiden v. Utica First Ins. Co., 96 A.D.3d at 71-72, 943 N.Y.S.2d 36.
Plaintiff emphasizes that defendants false certification was in the form of an omission of information defendant was required to disclose to HCR or another governmental agency: the structural deficiencies that plaintiff had uncovered and consequent deficiencies in energy conservation. Again, plaintiff fails to specify when, where, or how defendant omitted to disclose that information; whether to HCR, DOB, or another governmental agency; or what law or contract required defendant to convey that information, which defendant violated by its omission. See State of NY ex rel. Willcox v. Credit Suisse Sec. (USA) LLC, 140 A.D.3d at 623, 36 N.Y.S.3d 89. The only energy audit or report required by the Administrative Code provisions was to DOB after plaintiff filed this action. N.Y.C. Admin. Code § 28-308.4.1.
Private Housing Finance Law § 32(2) requires defendant to file an annual report with HCR, but plaintiff similarly fails to specify what defendant was required to disclose that it omitted in an annual report. Plaintiff implies that defendant was required to certify its compliance with all laws and contractual obligations, but points to no source for such a requirement and, in any event, nowhere indicates what law or contractual obligation defendant falsely certified it complied with. Defendant concedes that HCR required defendant to disclose to HCR defendants contract with a new entity, instead of plaintiff, for energy services and to obtain HCRs approval, but again plaintiff alleges nothing about defendants noncompliance with any requirement to disclose structural deficiencies or energy inefficiencies in connection with that approval. Thus, drawing every inference in plaintiffs favor, its conclusory allegations fail to state a claim of retaliation. State of NY ex rel. Solomon v. Siemens Elec., LLC, 140 A.D.3d 622, 163 N.Y.S.3d 15 .
Finally, were the court to consider plaintiffs conclusory allegations, they are premised on the fact that defendant “was required to both disclose and implement the repairs by the end of year in 2021.” Aff. of Jeffrey D. Buss Ex. A, at 8-9. Defendant terminated the contract on January 31, 2020, however, almost two years before defendants time to cure any deficiencies was to expire. Therefore plaintiff fails to show how defendants termination of the contract qualified as retaliation, since plaintiffs draft report, at best, revealed only prospective violations, not an actual violation of the NYFCA when defendant terminated plaintiffs services.
III. DEFENDANTS REQUEST FOR ATTORNEYS’ FEES
Defendant also seeks an award of attorneys’ fees and expenses. Attorneys’ fees and expense are recoverable only when a statute, regulation, or the parties’ written contract authorizes them. Mt. Vernon City School Dist. v. Nova Cas. Co., 19 N.Y.3d 28, 39, 945 N.Y.S.2d 202, 968 N.E.2d 439 (2012); Flemming v. Barnwell Nursing Home & Health Facilities, Inc., 15 N.Y.3d 375, 379, 912 N.Y.S.2d 504, 938 N.E.2d 937 (2010); Reif v. Nagy, 175 A.D.3d 107, 131, 106 N.Y.S.3d 5 (1st Dept 2019); URS Corp.-N.Y. v. Expert Elec., Inc., 151 A.D.3d 520, 521, 53 N.Y.S.3d 830 (1st Dept 2017). Defendant points to no authority supporting an award of attorneys’ fees and expenses in this action. Even if the parties’ contract provides for attorneys’ fees to defendant, it did not present the contract in support of this motion. Therefore the court denies defendants request for attorneys’ fees and expenses.
IV. CONCLUSION
For the reasons explained above, the court grants defendants motion to dismiss the verified complaints second claim for retaliation without prejudice, but denies the motion to dismiss the first claim for breach of the parties’ contract. C.P.L.R. §§ 3013, 3211(a)(7). Although defendant seeks a dismissal with prejudice, plaintiffs failure to state a retaliation claim does not preclude plaintiff from bringing a timely and adequately supported retaliation claim again, based on an adequately supported false claim under the NYFCA, via an amended complaint or a separate action. 175 E. 74th Corp. v. Hartford Acc. & Indem. Co., 51 N.Y.2d 585, 590 n.1, 435 N.Y.S.2d 584, 416 N.E.2d 584 (1980); Little Rest Twelve, Inc. v. Zajic, 137 A.D.3d 540, 540, 27 N.Y.S.3d 142 (1st Dept 2016); Jacobson Dev. Group, LLC v. Grossman, 198 A.D.3d 956, 957, 156 N.Y.S.3d 363 (2d Dept 2021); Blum v. Pathstone Corp., 172 A.D.3d 1679, 1681-82, 102 N.Y.S.3d 134 (3d Dept 2019). The court further denies defendants request for attorneys’ fees and expenses. Defendant shall file its answer to the remainder of the verified complaint within 20 days after the date this Decision and Order is filed.
Lucy Billings, J.