SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK: COMMERCIAL PART 53

--------------------------------------X

TRAVERS O'KEEFE & ASSOCIATES, INC.,

Plaintiff,

-against-

                        Index No. 604463/99

OXFORD HEALTH PLANS,INC. and OXFORD

HEALTH INSURANCE, INC.,

Defendants.

--------------------------------------X

OXFORD HEALTH PLANS, INC. and OXFORD

HEALTH INSURANCE, INC.,

Counterclaim and

Third-party Plaintiffs,

-against-

TRAVERS O'KEEFE & ASSOCIATES, INC.

and ERIC WURZEL,

Counterclaim and

Third-Party Defendants.

--------------------------------------X

CHARLES EDWARD RAMOS, J.S.C.:

Counterclaim and third-party defendants Travers O'Keefe & Associates, Inc. ("Travers") and Eric Wurzel ("Wurzel") move for dismissal of the counterclaims and third-party complaint. The causes of action that make up the third-party complaint against Wurzel allege the same claims as the counterclaims against Travers.

I. History

Travers, a New York corporation, is an employee benefits firm. Defendants Oxford Health Plans ("OHP"), a Delaware corporation, and Oxford Health Insurance ("OHI"), a New York corporation (together, "Oxford"), sell health insurance policies. OHI is a subsidiary of OHP. Third-party defendant Wurzel is a former employee of Oxford who now works for Travers.

In 1993, Travers and OHI entered into a Brokerage Contract, terminable by either party at any time, with or without cause. The Brokerage Contract provided that Travers would act as broker to solicit applications for group health insurance policies and administrative services for insurance claims, said policies and claims to be provided by Oxford. Travers earned commissions by finding buyers for Oxford' policies and services.

In 1997, Travers and Oxford entered into another nearly identical Brokerage Contract. The relationship eventually soured, and Travers sued Oxford in 1999, alleging that Oxford had increased its revenues by illegally increasing premiums for group health insurance policies, and that when Travers objected to these illegal business practices, Oxford retaliated by terminating the Brokerage Contract.

Travers' complaint alleged three causes of action: a deliberate plan to destroy Travers' reputation and business, causing a loss of commissions for Travers; tortious interference with contract; and breach of contract by terminating the contract.

Oxford answered and counterclaimed against Travers, and added a third-party defendant, Wurzel, who from 1991 through approximately December 1998, was Oxford's employee, and who thereafter went to work for Travers.

The complaint was dismissed on Oxford's motion by order dated March 15, 2000; the Settled Order was dated April 11, 2000, and filed on April 12, 2000; the Judgment, which awarded costs and disbursements, was filed April 27, 2000. However, these orders and judgment failed to provide for the continuation of the counterclaims and third-party complaint. Said orders and judgment shall therefore be modified by severing the complaint and specifying that the counterclaims and third-party complaint shall continue. Oxford shall submit a proposed order to that effect.

In June 1995, Wurzel and Oxford entered into a Confidentiality and Non-Competition Agreement ("Confidentiality Agreement"), which listed the kinds of information which Oxford deemed to be confidential, and provided that Wurzel would hold all confidential information in a fiduciary capacity for Oxford's benefit, and that he would safeguard such information.

The Confidentiality Agreement also provided that Wurzel would not compete with Oxford or solicit its clients during his employment with Oxford, and for one year after the termination of his employment.

Oxford alleges that, in the fall of 1998, it was engaged in a dispute with a client, the United Service Workers of America ("USWA"), regarding the rate for renewing insurance policies. In November 1998, Wurzel, at that time Oxford's employee, who had direct dealings with USWA, allegedly passed to Travers confidential information about Oxford's and USWA's negotiating positions in said dispute.

As of December 8, 1998, Oxford and USWA had settled their dispute about insurance rates, and were about to enter into an agreement, when, on December 10, 1998, USWA appointed Travers as its broker. According to Oxford, Travers was able to gain this appointment by dint of the confidential information that Wurzel had passed to it. Oxford maintains that Travers proceeded to disrupt the planned settlement; caused Oxford's eventual contract with USWA to be significantly less favorable for Oxford than had been previously negotiated with USWA; and that Travers paid Wurzel a portion of the fee which it received from USWA, in return for Wurzel's divulging the confidential information.

Once appointed as USWA's broker, Travers allegedly began to threaten Oxford that Travers "would attempt to cause Oxford difficulty" with the New York State Department of Insurance ("DOI"), unless Oxford submitted to Travers's demands, including the demand to pay Travers commissions against USWA's wishes, USWA having already paid Travers a consulting fee. Oxford states that, typically, if the broker is paid a consulting fee, it is not also paid a commission. Oxford maintains that when it refused to pay the commission, Travers made baseless complaints to the DOI, solely to damage Oxford.

It is also alleged that Travers and Wurzel engaged in a similar pattern of threats against Oxford in regard to clients other than USWA, and made repeated false statements to the DOI, to Oxford's insureds, and to the press, falsely stating that Oxford's rating practices were illegal.

Oxford alleges that the pattern of interfering with Oxford's clients, as set by Travers in its dealings with USWA, continued thus: Travers, often through Wurzel, would approach an Oxford insured when it was time for a policy to be renewed, said knowledge being confidential information obtained through Wurzel. Travers would then procure an appointment as broker of record for the insured by divulging confidential information about the insured's current broker and about Oxford's own internal procedures and negotiating procedures, also confidential information obtained from Wurzel; and once appointed as broker, Travers would threaten Oxford that if it did not submit to Travers' various demands, including demands about commissions, Travers would take steps to injure Oxford, including reporting to the DOI.

In this way, Travers allegedly damaged Oxford's relationships with its insureds and with those of Oxford's brokers who were replaced by Travers.

After Wurzel ceased being Oxford's employee, which took place sometime around or in December 1998, Wurzel and Oxford entered into a Settlement Agreement, dated February 16, 1999. The Settlement Agreement confirmed the voluntary separation of Wurzel from Oxford, and terminated his employment in accordance with the Settlement Agreement.

The Settlement Agreement forgave loans made to Wurzel, provided that Wurzel complied with said agreement, released Wurzel from any claims that arose from his conduct before and including the date of February 16, 1999, and provided that Wurzel would not make any disparaging remark to any person which could adversely affect Oxford's good standing or ability to do business.

By letter dated August 19, 1999, Oxford informed Wurzel that he had violated the Settlement Agreement. On the same date, Oxford terminated the Brokerage Contract with Travers. Oxford alleges that, ever since then, Travers has been threatening to injure Oxford if it does not reinstate Travers as its broker, and pay it money.

Oxford's counterclaims and third-party complaint posit eight causes of action against Travers and Wurzel, who move to dismiss the counterclaims and third-party complaint, pursuant to CPLR 3211(a)(1), (5), and (7), 3211(g), 3016(a), and Civil Rights Law §§ 70-a and 76-a.

II. Discussion

On a motion pursuant to CPLR 3211(a), the court is limited to ascertaining whether the pleadings state any cause of action, not whether there is evidentiary support for the complaint (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). The court accepts all factual allegations as true, and determines if the facts alleged fit within any cognizable legal theory (Morone v Morone, 50 NY2d 481, 484 [1980]). Affidavits may be received for the limited purpose of remedying defects in the complaint, thus preserving inartfully pleaded, but potentially meritorious claims (Rovello v Orofino Realty Co., 40 NY2d 633, 635 [1976]). The affidavits submitted in this motion to dismiss have been so received.

A. Whether The Counterclaims And Third-Party Complaint Should Be Dismissed Pursuant To The SLAPP Statute

Travers and Wurzel maintain that some of Oxford' claims should be dismissed pursuant to Civil Rights Law §§ 70-a and 76-a (the "SLAPP Statute").

The SLAPP Statute provides a cause of action for alleged victims of SLAPPs (Strategic Lawsuits Against Public Participation).

Civil Rights Law § 70-a provides, in relevant part:

1. A defendant in an action involving public petition and participation ... may maintain an action, claim, cross claim or counterclaim to recover damages, including costs and attorney's fees, from any person who commenced or continued such action; provided that:

(a) costs and attorney fees may be recovered upon a demonstration that the action involving public petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification or reversal or existing law[.]

The statute also provides that other compensatory damages and punitive damages may be recovered upon an additional demonstration that the action involving public petition and participation was commenced for the purpose of harassing, intimidating, punishing, or otherwise maliciously inhibiting the free exercise of speech, petition or association rights (Civil Rights Law § 70-a[1][b], [c]).

An "action involving public petition and participation" is one that is brought by a "public applicant or permittee, and is materially related to any efforts of the defendant to report on, comment on, rule on, challenge or oppose such application or permission" (Civil Rights Law § 76-a[1][a]).

A "public applicant or permittee" is a person who has applied for or obtained a license or other entitlement for use or permission to act from any government body (Civil Rights Law § 76-a[1][b]).

A motion to dismiss based on the SLAPP Statute, in which the moving party has demonstrated that the action subject to the motion is an action involving public petition and participation as defined in Civil Rights Law § 76-a(1), shall be granted unless the party responding to the motion demonstrates that the cause of action has a substantial basis in law or is supported by a substantial argument for an extension or modification of existing law (CPLR 3211[g]).

The purpose of the SLAPP Statute was stated thus:

The legislature hereby declares it to be the policy of the state that the rights of citizens to participate freely in the public process must be safeguarded with great diligence. The laws of the state must provide the utmost protection for the free exercise of speech, petition and association rights, particularly where such rights are exercised in a public forum with respect to issues of public concern

(Allan and Allan Arts Ltd. v Rosenblum, 201 AD2d 136, 143-144 [2^nd Dept 1994], quoting L 1992, ch 767, § 1).

The SLAPP legislation, which had its genesis in actions by land developers against citizens objecting to the developers' plans, has also been thus characterized:

In recent years, there has been a rising concern about the use of civil litigation, primarily defamation suits, to intimidate or silence those who speak out at public meetings against proposed land use development and other activities requiring approval of public boards. ... [S]uch actions are characterized as having little legal merit but are filed nonetheless to burden opponents with legal defense costs and the threat of liability and to discourage those who might wish to speak out in the future [citation omitted]. In response, NY State enacted a law specifically aimed at broadening the protection of citizens facing litigation arising from their public petition and participation [citation omitted]

(600 West 115^th Street Corp. v Von Gutfeld, 80 NY2d 130, 138 n.1, rearg denied 81 NY2d 759 [1992], cert denied 508 US 910 [1993]).

In this case, Oxford is allegedly the public applicant/permittee, and Travers and Wurzel are allegedly those commenting on its permission to sell insurance. Oxford does not deny that, as a seller of insurance policies, it is a permittee, as defined by Civil Rights Law § 76-a(1)(b).

Travers' and Wurzel's argument is that the counterclaims and third-party complaint constitute an action that involves public petition and participation, and that it is materially related to Travers' and Wurzel's reports on Oxford's business practices, and that this action affects Oxford's license to sell insurance policies.

Generally, for an action to be characterized as a SLAPP suit, it must involve a challenge to a license or permit (Long Island Association for AIDS Care v Greene, ___ AD2d ___, 702 NYS2d 914 [2^nd Dept 2000]; OSJ, Inc. v Work, 180 Misc 2d 804, 811-812 [Sup Ct, Madison County 1999], affd ___ AD2d ___, 2000 WL 863204 [3^rd Dept 2000]; Harfenes v Sea Gate Assn., 167 Misc 2d 647, 653 [Sup Ct, NY County 1995]; and see, Entertainment Partners Group, Inc. v Davis, 198 AD2d 63, 64 [1^st Dept 1993]).

SLAPP suits have also been found in the context of public hearings or administrative determinations, e.g., an action for defamation based on statements made at a zoning board hearing was dismissed as being a SLAPP suit (Allan and Allan Arts Ltd. v Rosenblum, supra, 201 AD2d, at 143-144); and a landowner's suit against a tax assessor to contest an administrative decision awarding a real property tax exemption to a not-for-profit corporation was dismissed as a SLAPP suit (Gordon v Marrone, 155 Misc 2d 726, 737 [Sup Ct, Westchester County 1992], affd 202 AD2d 104 [2^nd Dept 1994], lv denied 84 NY2d 813 [1995]).

The SLAPP Statute creates a new right of action for victims of SLAPP suits; it places new restrictions on the ability of public applicants to seek redress from the courts by requiring them to demonstrate that their claims contain a substantial, rather than a merely reasonable, basis in law or fact (Harfenes v Sea Gate Assn., supra, 167 Misc 2d, at 652-653). As such, the statute is in derogation of common law, and it is well established that such statutes are to be construed narrowly (id.).

The counterclaims and third-party complaint are a SLAPP action, insofar as they concern complaints to government agencies. Only the statements to DOI and other government agencies, complaining that Oxford was unlawfully overcharging for insurance, are protected by the SLAPP Statute. Those statements were made to public agencies that oversee insurance sellers, and are comments on or reports on Oxford's business practices, which impact on Oxford's permit or license to sell insurance. The statements made to other parties are not so protected, as they were not made in the context of commenting on such permit or license, or in the context of any public proceeding.

Thus, the claims alleging that Travers and Wurzel made false statements about Oxford's insurance rates to government agencies constitute an action involving public petition and participation, and are materially related to efforts to report on the alleged illegality of Oxford' business practices (see, Civil Rights Law § 76-a[1][a]). As such, these claims are barred.

Oxford asserts that the statements about its insurance rates are false; however, that in itself cannot be a substantive reason to sue the parties who made those statements. Citizens have the right to complain to public agencies, even if the charges are later proved to be wrong (see, OSJ, Inc. v Work, 180 Misc 2d 804, supra). Furthermore, DOI has not taken any action against Oxford based on those allegedly false statements.

Oxford itself points out that the complaints to DOI are "relevant background" and are not the focus or basis of Oxford's claims, which arise primarily from the alleged use of confidential information.

To conclude, none of Oxford's claims shall be dismissed on the ground that they are SLAPP suits, except to the extent that Oxford may not complain of statements made by Travers or Wurzel to governmental agencies regarding its business practices.

B. The Extent To Which This Action Can Be Maintained Against Wurzel

1. Notice And Demand

Paragraph 3(c) of the Settlement Agreement between Wurzel and Oxford provided that if Wurzel breached it and did not cure said breach within 20 days of notice and demand, Oxford could bring an action against him for failing to comply with the agreement.

On August 19, 1999, OHP wrote to Wurzel's attorneys, stating that Wurzel had violated his obligations under the Settlement Agreement, that he had made numerous disparaging remarks about Oxford, and demanding that he "immediately cease all such comments and communications."

This letter gave notice to Wurzel that he was in breach of the Settlement Agreement, and demanded that he comply with its terms. Contrary to Wurzel's assertions, the letter satisfied the contractual provision for notice and demand before commencing an action.

2. Release

Wurzel claims that the release provisions of the Settlement Agreement between him and Oxford bars Oxford from maintaining causes of action two, four, five, six, seven and eight against him. These causes of action allege that Wurzel breached the Settlement Agreement and his fiduciary duty to Oxford, tortiously interfered with the contemplated contract between Oxford and USWA, misappropriated Oxford's trade secrets, engaged in unfair competition, and defamed Oxford.

Paragraph 4 of the February 16, 1999 Settlement Agreement contained a clause releasing Wurzel from:

any and all rights, claims, liabilities, obligations, damages, actions, causes of action, damages and expenses which [Oxford] ha[s] or yet may have against [Wurzel] based upon or relating in any way to his employment ... or to the termination of his employment (other than claims arising out of or related to this Agreement) including without limitation any claim arising out of or in connection with communications between Mr. Wurzel and John Van Wei [vice-president of Travers] and/or Travis O'Keefe [sic] ... . This Release is limited to claims or rights which arose during [Wurzel's] employment with [Oxford] up to and including the date this Agreement is executed.

Oxford's memorandum of law interprets the Settlement Agreement to mean that Oxford is precluded from asserting claims for Wurzel's actions through February 16, 1999; that the only claim against Wurzel that concerns conduct occurring solely before February 16, 1999 is the fourth cause of action; that "that claim is hereby abandoned as against Wurzel"; that Oxford's remaining claims against Wurzel survive to the extent that the conduct at issue occurred after February 16, 1999; and that Oxford may maintain claims based on violations of the Settlement Agreement.

Oxford makes the above assertions despite the fact that paragraph 5 of the Settlement Agreement provided that the Confidentiality Agreement would remain in effect only until January 31, 1999, except that Wurzel was released from the post-employment non-competition and non-solicitation provisions of paragraphs 8 and 11 of the Confidentiality Agreement as of May 31, 1999.

Therefore, claims against Wurzel involving his conduct before February 16, 1999 may not be maintained. Any claim based upon those parts of the Confidentiality Agreement, which are not the non-competition and non-solicitation provisions, could accrue until January 31, 1999, but not after. Any claim based upon the non-competition and non-solicitation parts of the Confidentiality Agreement, could accrue only up to May 31, 1999, and not after.

The claims against Wurzel and Travers are discussed one by one below.

C. Causes Of Action

1. First Cause Of Action Against Travers

Oxford concedes that its first cause of action, for breach of the Brokerage Contract, is brought on behalf of OHI, not OHP. Two Brokerage Contracts, attached to the motion, show that they were entered into only on behalf of OHI. Thus, the first cause of action, which sufficiently alleges breach of contract, may be maintained by OHI only and shall be dismissed as on behalf of OHP.

2. Second Cause Of Action Against Wurzel

The allegation is that Wurzel breached the Settlement Agreement by (1) disclosing confidential information, (2) competing with Oxford while still employed by it and during the term of his non-competition obligations, and (3) by disparaging Oxford.

The allegation of disclosing confidential information is effective only until January 31, 1999, as the release provides that the Confidentiality Agreement shall remain in effect only until that date.

The allegation that Wurzel competed with Oxford after he was no longer its employee, during the period of his non-competition obligations, is effective only until May 31, 1999, as the release provides that the portion of the Confidentiality Agreement regarding post-employment non-competition remained in effect only until that date. Oxford has no claim against Wurzel for competing while he was still in its employ.

The allegation of disparagement implicates the Settlement Agreement, as that document provided that Wurzel would not make disparaging remarks about Oxford. Claims based on the Settlement Agreement are specifically not barred by the release.

Wurzel argues that OHI cannot complain of a breach of the Settlement Agreement as it was not a party thereto. However, the Settlement Agreement recites that it "is made and entered into ... by and between Oxford Health Plans, Inc. and its subsidiaries." OHI is a subsidiary of OHP. Thus, the second cause of action is on behalf of both OHI and OHP.

The second cause of action shall continue, to the extent limited above, and shall otherwise be dismissed.

3. Third Cause of Action Against Travers

The third claim asserts that Travers tortiously interfered with the Confidentiality Agreement between Oxford and Wurzel by inducing Wurzel to disclose Oxford's confidential business information to Travers.

The elements of tortious interference with contract are: (1) the existence of a contract between a plaintiff and a third party; (2) defendant's knowledge of the contract; (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff (William Kaufman Organization v Graham & James LLP, ___ AD2d ___, 703 NYS2d 439, 442 [1^st Dept 2000]; KSL Recreation Corp. v Boca Raton Hotel and Club Limited Partnership, 168 Misc 2d 18, 23 [Sup Ct, NY County 1995]).

Travers argues that the claim of tortious interference with contract requires that Oxford allege that "but for" Travers, the contract would not have been breached (see, Washington Ave. Assocs. v Euclid Equipment, 229 AD2d 486, 487 [2^nd Dept 1996]). However, the Court of Appeals has not applied that standard (see, Foster v Churchill, 87 NY2d 744, 749-750 [1996]). Nor need Oxford plead that Travers' actions were without economic justification (id.).

There is no denial regarding the first two elements of tortious interference with contract: existence of a contract between Oxford and Wurzel, and Travers' knowledge thereof. The third requirement, that Travers intentionally induced a breach of the contract, has been sufficiently pleaded, as has the fourth requirement of injury. Oxford maintains that Travers induced Wurzel to breach the Confidentiality Agreement by relaying confidential information to Travers, and that Travers used this information to injure Oxford in its negotiations with USWA.

The third cause of action may be maintained on behalf of OHP and OHI, as the Confidentiality Agreement states that it is between OHP and its subsidiaries.

Therefore, the third cause of action shall not be dismissed.

4. Fourth Cause Of Action Against Travers And Wurzel

The fourth cause of action claims that Travers and Wurzel tortiously interfered with Oxford's proposed agreement with USWA. It has been withdrawn as against Wurzel because his complained-of conduct in that regard took place before February 16, 1999.

A claim for interference with prospective contractual relations is actionable when the contract would have been entered into had it not been for the defendant's conduct and the means employed to induce termination of the relationship were dishonest, unfair, or in any other way improper (CBS Corp. v Dumsday, 268 AD2d 350 [1st Dept 2000]).

Oxford has sufficiently alleged that its agreement with USWA would have gone through if not for Travers' interference, and that Travers improperly used confidential and proprietary information to so interfere.

According to Oxford, it and USWA had agreed on a certain renewal rate for USWA's insurance policies, when Travers, armed with confidential information from Wurzel, used this information to induce USWA to abjure the agreement. Oxford then agreed to a lower renewal rate for USWA's policies. Travers alleges that, since Oxford voluntarily agreed to a lower rate, such rate could not have resulted from any interference by Travers. However, this voluntary agreement came after the alleged interference by Travers which made the higher rate impossible. Thus, Oxford's agreement to a lower renewal rate does not prove that Travers did not tortiously interfere with USWA's and Oxford's contract.

Travers also maintains that OHI cannot maintain this cause of action, as only OHP was involved with USWA. The complaint indicates otherwise; both OHI and OHP may maintain the fourth cause of action.

The fourth cause of action shall not be dismissed as to Travers, and has been withdrawn as to Wurzel.

5. Fifth Cause Of Action Against Wurzel

The fifth cause of action alleges that Wurzel breached his fiduciary duty to Oxford by using its confidential and proprietary information to its detriment during and after his employment.

"A fiduciary relation exists between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation" (Restatement [Second] of Torts, § 874, comment a). It is well settled that an employee 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 this duties ... " (CBS Corp. v Dumsday, supra, 268 AD2d, at 350, quoting Lamdin v Broadway Surface Adv. Corp., 272 NY 133, 138 [1936]).

Oxford establishes that Wurzel owed it a fiduciary duty when he was an employee; in fact, the Confidentiality Agreement explicitly states so. However, the release in the Settlement Agreement prevents Oxford from maintaining claims against Wurzel for his conduct while he was an employee. After Wurzel ceased being in Oxford's employ, he owed no fiduciary duty to Oxford.

Therefore, the fifth cause of action shall be dismissed.

6. Sixth Cause of Action against Travers and Wurzel

The sixth cause of action is for unfair competition.

In order to sustain a claim for unfair competition, plaintiff must show that defendant misappropriated plaintiff's labors or expenditures, and that defendant displayed some element of bad faith in doing so (Davis & Co. Auto Parts, Inc. v Allied Corp., 651 F Supp 198 [SD NY 1986]).

The Complaint states that Oxford owns certain confidential information or trade secrets, including without limitation: information about Oxford's underwriting practices, rate structures, its profit and loss parameters, and its relationship with its insured and its regulator; and that Wurzel wrongfully passed this information to Travers, both of whom used said information to their advantage and Oxford's detriment.

Trade secrets are any device which is used in one's business and which gives one an opportunity to gain an advantage over competitors who do not know or use it (Eagle Comtronics, Inc. v Pico, Inc., 89 AD2d 803 [4^th Dept], appeal denied 58 NY2d 601 [1982]). A trade secret can consist of a formula, pattern, compilation of data, computer program, device, method, technique, process, or other form or embodiment of economically valuable information; it can also relate to pricing and marketing techniques or the identity or requirements of customers (Restatement [Third] of Unfair Competition § 39, comment a[d]).

The law of unfair competition does not require actual competition between the parties; the law does not rest solely on the ground of direct competitive injury, but on the broader principle that property rights of commercial value are to be protected from any form of commercial immorality (National Basketball Assn. v Sports Team Analysis and Tracking Systems, Inc., 939 F Supp 1071, 1099-1100 [SD NY 1996], affd in part, vacated in part on other grounds 105 F3d 841 [2^nd Cir 1997]). That Oxford is an insurer, while Travers acts as a broker for those seeking insurance, as does Wurzel in his capacity as Travers' employee, and does not market its own insurance policies, does not bar the unfair competition claim.

Oxford has stated a cause of action for unfair competition against Travers, i.e., that Travers wrongfully obtained and used Oxford's trade secrets.

Regarding Wurzel, the Settlement Agreement provided that Wurzel was released from the terms of the Confidentiality Agreement as of January 31, 1999, except that he was not released from the non-competition provisions of the Confidentiality Agreement until May 31, 1999. The non-competition provision as applied to the period after Wurzel's employment at Oxford was terminated.

The rules governing the protection and ownership of trade secrets are generally subject to reasonable modification by the parties (Restatement [Third] of Unfair Competition § 42, comment g). Restrictive covenants limiting competition by former employees are enforceable (id., at comment b).

Therefore, Oxford may maintain a claim for unfair competition against Wurzel in regard to actions taking place from the time he left his employment with Oxford to May 31, 1999.

The sixth cause of action shall continue to the extent limited above, and shall otherwise be dismissed.

7. Seventh Cause Of Action Against Travers And Wurzel

The seventh cause of action for misappropriation of trade secrets, is grounded on the alleged misuse of said secrets to unfairly compete with Oxford. The law of misappropriation is a branch of the law of unfair competition (see, National Basketball Assn. v Sports Team Analysis and Tracking Systems, supra, 939 F Supp, at 1099), which involves the taking and use of plaintiff's property to compete against plaintiff's own use of the same property (id.).

A cause of action for misappropriation has been stated against Travers. Insofar as it is alleged against Wurzel, this claim is subject to the same date limitations as the cause of action for unfair competition, from the time at which his employment with Oxford ended to May 31, 1999.

The seventh cause of action shall continue to the extent limited above, and shall otherwise be dismissed.

7. Eighth Cause of Action Against Travers And Wurzel

Oxford's eighth cause of action for defamation alleges that Wurzel and Travers made defamatory statements of fact about Oxford that have the tendency to expose it to public hatred, ridicule, contempt or disgrace, including statements that Oxford engaged in illegal rating practices. Oxford names the individuals to whom these allegedly false statements were made and states the times as being "in or about" November and December 1998, February and March 1999, July and August 1999, and various other times in 1999.

Words having a tendency to harm one in his trade or profession are actionable per se, and when proved to have been spoken in relation thereto, the plaintiff is entitled to recover without an allegation or proof of special damages (44 NY Jur 2d, Defamation and Privacy, § 254). This rule is applicable to corporations as well as to individuals (id.; John Langenbacher Co. v Tolksdorf, 199 AD2d 64, 64-65 [1^st Dept 1993]).

CPLR 3016(b) requires that in a defamation action, "the particular words complained of ... be set forth in the complaint." The complaint need not put quote marks around the allegedly defamatory words (Taub v Amana Imports, Inc., 140 AD2d 687, 689 [2^nd Dept 1988]), but it must allege the time, place and manner of the false statement and specify to whom it was made (Dillon v City of New York, 261 AD2d 34, 38 [1^st Dept 1999]; Vardi v Mutual Life Insurance Co. of New York, 136 AD2d 453, 455 [1^st Dept 1988]).

The eighth cause of action is deficient in that Oxford has failed to name the place and manner of the allegedly false statements.

Hence, the eighth cause of action shall be dismissed.

Conclusion

Accordingly, it is

ORDERED that within 20 days after service of a copy of this order with notice of entry, Oxford shall submit corrected versions of the settled order and of the judgment dismissing the Complaint, such corrected versions to provide for the severance of the Complaint and the continuation of the counterclaims and third-party complaint; and it is further

ORDERED that the first cause of action shall be dismissed as against OHP; and it is further

ORDERED that the second, sixth, and seventh causes of action shall continue, to the extent limited above, and shall otherwise be dismissed; and it is further

ORDERED that the motion to dismiss the fourth cause of action as against Wurzel is denied as moot; and it is further

ORDERED that the fifth and eighth causes of action shall be dismissed; and it is further

ORDERED that Travers and Wurzel are directed to serve an answer to the complaint within 10 days after service of a copy of this order with notice of entry.

Dated: July 10, 2000 ENTER _______________

J.S.C.