OPINION AND ORDER
Viоlet Elizabeth Grayson (“Plaintiff” or “Grayson”) brings this action against Res-sler & Ressler, a law firm, Ellen Werther (“Werther”), and Bruce Ressler (“Res-sler”) (together, “Defendants”). Before this Court is Defendants’ motion to dismiss the Amended Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6), and Defendants’ motion for sanctions pursuant to Rule 11.
For the reasons set forth below, Defendants’ motion to dismiss is GRANTED in part and DENIED in part, and their motion for sanctions is DENIED without prejudice.
I. BACKGROUND
A. Factual Background
As relevant to the instant motions, Gray-son, an attorney, represented TradeWinds Airlines Inc. (“TW Airlines”) in a veil piercing case in the Southern District of New York (“TW Airlines Action”). Am. Compl. ¶¶ 2, 13. Werther, and Ressler, partners in the law firm Ressler & Ressler, represented Coreolis Holdings (“Co-reolis”) and TradeWinds Holdings (“TW Holdings”) in a separate but parallel veil piercing case in the Southern District of New York (“Coreolis Action”). Id. at ¶¶ 3-5, 27. Coreolis wholly owned TW Holdings, which in turn was the former corporate parent of TW Airlines. Id. at ¶ 15. Grayson invokes diversity jurisdiction in the instant action as she is a citizen of California, all Defendants are citizens of New York, and the amount in controversy exceeds $75,000. Id. at ¶¶ 2-5, 7.
In 2005, prior to Grayson’s representation of TW Airlines, Grayson represented Jet Star Airlines in a different veil piercing action against George Soros (“Soros”) and Purnendu Chatterjee (“Chatterjee”) (“Jet Star Action”). Id. at ¶¶ 9-11. Jet Star sought to recover the amount of a default judgment it had obtained against the defunct C-S Aviation Corporation (“C-S Aviation”) by piercing C-S Aviation’s corporate veil and reaching its principals, Soros and Chatterjee. Id. at ¶ 10. The parties settled shortly thereafter, executing a settlement agreement and a confidentiality agreement. Id. at ¶¶ 11, 16, 50.
Separately, two years later, on June 27, 2008, TW Airlines’ North Carolina- counsel, Tuggle Duggins P.A. • (“Tuggle Duggins”), obtained a default judgment of approximately $54 million against C-S Aviation in North Carolina state court.
On July 25, 2008, TW Airlines filed a petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Florida. Id. at ¶ 14. It was subsequently converted to a Chapter 7 bankruptcy on October 30, 2008. Id. at ¶ 17, On October 31, 2008, Barry E. Muka-mal was appointed as the Chapter 7 trustee (the “Trustee”) and Grayson sought to be retained as special litigation counsel for TW Airlines. Id. at ¶¶ 17, 21.
Grayson faced several objections to her continuing as counsel fоr TW Airlines. In late September 2008, Soros’ counsel told Grayson that she had violated the terms of the Jet Star confidentiality agreement and/or the settlement agreement by representing TW Airlines in the TW Airlines Action. Id. at ¶ 16.
On November 26, 2008, the Defendants, acting as counsel for Coreolis and TW Holdings, opposed the Trustee’s motion to retain Grayson as special litigation counsel for the TW Airlines Action, which he had filed in the bankruptcy case. Id. ¶ 21; see Objection to Trustee’s Application, In re TradeWinds Airlines Inc., No. 08-bk-20394 (AJC) (Bankr. S.D. Fla. Nov. 26, 2008), Doc. 231. Coreolis and TW Holdings argued that Grayson should not be retained because Soros was attempting to disqualify her from representing TW Airlines. Am. Compl. ¶21. On January 7, 2009, the bankruptcy court granted Gray-son’s retention over this objection. Id.; see Order Granting Application to Employ J Nathan Duggins III and Violet Elizabeth Grayson as Special Litigation Counsel, In re TradeWinds Airlines Inc., No. 08-bk-20394 (AJC) (Bankr. S.D. Fla. Jan. 7, 2009), Doc. 258. However, Grayson alleges that Defendants’ opposition to her appointment gave the Trustee “leverage” to lower Grayson’s contingency fee. Am. Compl. at ¶22. Prior to the opposition, the agreed upon contingency fee was 50% of the first $15 million recovered, and 33% of any recovery in excess of $15 million.
On February 2; 2009, Soros moved to disqualify Grayson as counsel in the TW Airlines Action for violating her confidentiality obligations arising from the Jet Star Action. Id. at ¶ 23; Tradewinds Airlines, Inc. v. Soros, No. 08 Civ. 5901 (JFK),
On October 28, 2010, Coreolis and TW Holdings filed the Coreolis Action, seeking to recover on the default judgment they obtained against C-S Aviation in North Carolina state court against Soros and Chatterjee. Id. at ¶ 27. Judge Keenan subsequently consolidated this action with the TW Airlines Action (together, the “Consolidated Actions”). Id.
1, Consolidated Actions
In the autumn of 2010, Grayson and Defendants allegedly reached an oral agreement to work together, “forming , a special confidential relationship of trust.” Id. at ¶¶ 28, 30. The oral agreement provided that the parties would “work together cooperatively to successfully prosecute their parallel veil piercing cases, and each benefit from their respective contingency fee.” Id. at ¶ 101. This agreement was “developed by [the parties’] subsequent conduct and dealing” and was “to some degree evidenced by, but not fully embodied by,.the Joint Prosecution, Common Interest, and Confidentiality Agreement” executed by the parties and other lawyers in June 2013. Id. at ¶ 30.
The Consolidated Actions were subject to a partial stay over the course of three years because Soros and Chatterjee, acting on behalf of C-S Aviation, had appealed the two North Carolina default judgments.
On July 10, 2013, the partial stay of discovery was lifted. Id. at ¶ 35. Grayson immediately suggested that Werther subpoena all the deposition transcripts Gray-son had from the Jet Star Action. Id. Grayson thereafter delivered the original deposition transcripts to Werther pursuant to those subpoenas with the express understanding that they would be copied and returned. Id. However, Werther never returned either the originals or copies. Id.
Grayson further states that Werther was determined to have as co-counsel a law firm that would be able to finance her “lavish and unnecessary expert witness
On or about August 10, 2013, Ressler and Werther stopped answering Grayson’s e-mails and telephone calls. Id. at ¶ 39. At approximately the' same time, the Trustee’s counsel, Robert Mayer (“Mayer”), informed' Gráyson that he wished to meet with her, Werther and Ressler. Id. at ¶ 40. Mayer subsequently informed Grayson that Werther .and Ressler had told him that they would only meet with him without Grayson, and thus, he arranged'two separate meetings for August 15, 2013. Id. аt ¶¶ 40-41. Grayson states that Werther and Ressler’s refusal to conduct a joint meeting demonstrates that they intended to-make statements- that they did not want Grayson to hear, sought to prevent her from refuting their statements, and wished to impede her ability to repeat them false statements in a court of law. Id. at ¶ 40.
2. August 15, 2013'Meetings
Ón the morning of August 15, 2013, Grayson met with Mayer at his law firm, Gordon & Rees, in downtown Manhattan. Id. at ¶¶ 41-42. During the meeting, they discussed substantive issues in the Consolidated Actions, Id. at ¶ 42. Although at one point Mayer indicated that he had obtained her credit or financial information, Grayson claims that the tone of the entire meeting was “highly cordial.” Id.
After Mayer ended his meeting with Grayson, he immediately went to Ressler & Ressler’s office to.meet with Werther and Ressler.. Id. Werther and Ressler made the following statements to Mayer:
• Grayson neglected her responsibilities by failing to do her fair share of ■ the work in the Consolidated Actions, leaving Defendants to do the “lion’s share” of the work; .
• Grayson could not take a leading role in depositions because she was representing TW Airlines subject to a conflict of interest, violating her ethical obligations as an attorney;
• Grayson had not reimbursed Defendants for half of certain modest expenses, and that Grayson could not pay for an expert -witness they wished to engage, which they supported by presenting her credit and/or financial infоrmation to Mayer; and
• Grayson was unresponsive.
Id. at ¶¶ 43-46. Grayson claims that these statements were' false or misleading because:
• Grayson did the vast majority of thé . work by submitting multiple oppositions to Rule 12(b)(6) motions, obtaining leave for-necessary interim discovery while the default judgment appeals .were pending, proposing that Werther subpoena the Jet Star transcripts and ensuring that the -subpoenas were not quashed, and taking the lead role in the Bhise deposition;
• Grayson successfully traced ownership and control of C-S Aviation toSoros and Chatterjee in the Jet Star Action, laying the foundation for the subsequent Consolidated Actions, wrote the veil piercing complaint for TW Airlines which Defendants adopted for their veil piercing complaint, and provided legal authority and briefing on an issue for the North Carolina damages trial;
• Grayson was not conflicted in her representation of TW Airlines;
• Defendants had only recently requested payment for half of the litigation expenses from Grayson;
• Grayson promptly responded to all of Ressler and Werther’s communications, questions and issues.
Id. at ¶¶ 43, 45, 48-51, 83.
Mayer telephoned Grayson later that same day and told her, “[Werther] wants you gone.” Id. at ¶ 47. He also related to Grayson what Werther and Ressler told him during their meeting. Id.
3. Termination of Grayson
On August 19, 2013, the Trustee dismissеd Grayson as TW Airline’s special litigation counsel via email. Id. at ¶ 53. In the email,.he stated that Werther was a reason for Grayson’s dismissal. Id. Gray-son subsequently asked the Florida bankruptcy court to overrule the Trustee’s decision, arguing that her dismissal occurred late in the case, after Grayson had served as counsel for nearly five years, and would likely produce adverse results for the bankruptcy estate. Id. at ¶ 54. The bankruptcy court denied her application, deferring to the Trustee’s choice of counsel. Id.
Grayson then moved to withdraw as counsel in the Consolidated Actions in accordance with Local Civil Rule 1.4, which was granted. Id. at ¶¶ 54-55, 57. The Trustee moved in the Florida bankruptcy court to enforce Grayson’s termination, and also sought to impose sanctions and a gag order against Grayson. Id. at ¶ 58. The bankruptcy court granted the Trustee’s- motion to enforce Grayson’s termination but declined to impose sanctions or a gag order. Id. It also noted that Grayson might be entitled to some compensation for her representation. Id.
At Werther’s recommendation, the law firm Susman Godfrey LLP (“Susman God-frey”) replaced Grayson in the Consolidated Actions on September 18, 2013. Id. at ¶ 59. Grayson avers that neither the attorneys from'Susman Godfrey nor'Werther were able to “master[ ] the pertinent facts,” and unnecessarily accumulated litigation expenses for expert witnesses, including Bienenstock. Id. at ¶ 60. She further criticizes Susman Godfrey and Werther’s opposition to Sorbs and Chat-terjee’s motion for summary judgment in the Consolidated Actions, Id. at ¶¶ 61-62. Specifically, she states that their representation was grossly ineffective because they left out highly probative evidence, certain helpful arguments and pertinent legal citations. Id. at ¶¶ 61-65. On March 31, 2015, Judge Keenan granted Soros and Chatter-jee’s motion for summary judgment, which Grayson claims would not have occurred had she remained in the litigation. Id, at ¶ 65.
4. Grayson’s Application for Compensation
Grayson subsequently applied to the bankruptcy .court, seeking hourly compensation for the work she performed on the Consolidated Actions. Id. at ¶ 67. On March 16, 2016, the bankruptcy court held a hearing during which one of Trustee’s attorneys, Lynn Gollin (“Gollin”), argued that Grayson was not entitled to any compensation because TW Airlines lost the TW Airlines Action. Id.
On May 10, 2016, a settlement conference was h.eld, which was attended by
On May 26, 2016, the Trustee and Res-sler. & Ressler,.on behalf..of Coreolis, commenced a new veil piercing suit against Soros Fund Management, Soros’ corporation, in North. Carolina state court (the “2016 Action”). Id. at ¶¶ 64, 72, 74. In the Amended Complaint, Grayson alleges that the Trustee and Ressler <⅞ Ressler moved forward with plans for the 2016 Action “clandestinely,” and filed it after she had settled with the TW Airlines bankruptcy estate in order to deprive her of any potential compensation for that action. Id. at ¶ 72. Thereafter, Grayson filed an interim fee application in which she requested a share of any recovery against Soros Fund Management, should the 2016 Action succeed, in addition to hourly compensation for her work on the Consolidated Actions since there would be considerable overlap in discovery. Id. at ¶¶ 73-75. Coreolis and TW Holdings opposed Grayson’s revised fee application, urging not only that she should not share in any recovery from Soros Fund Management, but that she should disgorge the $90,000 interim fee as well. Id. ¶76. Grayson asserts that this opposition is at odds with the already agreed upon and approved settlement agreement between herself and the Trustee. Id. at ¶ 77.
B. Procedural History
On August 14, 2015, Plaintiff commenced this action in the Supreme Court of the State of New York, County of New York against Defendants via summons and notice. Doc. 1 at ¶4. On November 6, 2015, the action was removed to this Court. See id. generally. From November 11,' 2015 to February 24, 2016, the instant action was stayed pending the Florida bankruptcy court’s decision on Defendants’ emergency motion to compel Plaintiff to voluntarily dismiss the instant action. Docs. 5, 11, 24. When the Court lifted the stay, it also granted Plaintiff leave to file a complaint that includes a federal cause of action. Doc. 24.
On April 29, 2016, Plaintiff filed the Complaint that included a federal 'cause of action
On December 15, 2016, Defendants filed the instant motion for sanctions pursuant to Rule 11, asserting that , the Complaint was frivolous and without any evidentiary support. Doc. 48. On March 30, 2017, Defendants filed their first motion to dismiss the Complaint. Doc. 84. On April 10, 2017, the Court extended Plaintiffs deadline to respond to the first motion to dismiss to April 27, 2017. Doc. 96.
On April 21, 2017, Defendants argued that the Amended Complaint was untimely, Doc. 100, and on April 24, 2017, Plaintiff requested leave to file another amended complaint should the Court strike the Amended Complaint as untimely, Doc. 103. On April 25, 2017, the Court noted that Plaintiff was permitted to file the Amended Complaint as of right and pursuant to the Court’s order on April 10, 2017, and denied Defendants’ first motion to dismiss the Complaint as moot. Doc. 104.
On June 1, 2017, Defendants filed the instant motion to dismiss the Amended Complaint in its entirety pursuant to Rule 12(b)(6). Doe. 121. The instant motion for sanctions also remains pending as the factual allegations at issue in that motion are largely repeated in the Amended Complaint.
II. DISCUSSION
A. Rule 12(b)(6) Motion to Dismiss
Under Rule 12(b)(6), a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6),- the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiffs favor. Koch v. Christie’s Int’l PLC,
In determining the motion to dismiss, the Court may “consider documents that are referenced in the complaint, documents that .the plaintiffs relied on in bringing suit and that are either in the plaintiffs’ possession or that the plaintiffs knew of when bringing suit, or matters of which judicial notice may be taken.” Silsby v. Icahn,
1. Defamation
To establish a claim of defamation under New York law, a- plaintiff must plead “(1) a defamatory statement of fact; (2) that is false; (3) published to a third party; (4) ‘of and concerning1’ the plaintiff; (5) made with the applicable level of fault on the part of the speaker; (6) either causing special harm or constituting slander per se; and (7) not'protected by privilege.” FTA Mkt. Inc. v. Vevi, Inc., No. 11 Civ. 4789 (VB),
a. Common Interest Privilege
Defendants argue that the allegedly defamatory statements are protected by the common interest privilege. Otherwise defamatory statements may be protected under this qualified privilege if they are made to persons who have some common interest in the subject matter, such as when co-workers discuss an employee’s
“Malice includes spite, ill will, knowledge that the statements are false or reckless disregard as to whether they are false ... Spite and ill will refer to the spеaker’s motivation for making the allegedly defamatory comments, not to the defendant’s general feelings about the plaintiff.” Broyles v. J.P. Morgan Chase & Co., No. 08 Civ. 3391 (WHP),
The gravamen, of Grayson’s defamation claim is that Werther and Ressler made the allegedly defamatory statements to Mayer with the malicious intent to injure Grayson’s reputation and have her replaced with a law firm that would fund their “expert witness hiring plan.” The Court finds that Grayson has pled sufficient facts to suggest that Defendants made the statements knowing them to be false, that is to say, solely with malice. Although Defendants point to pleaded allegations and raise other, facts suggesting that their statements were true and that they were motivated by reason^ other thаn malice towards Grayson — for example; the fact that Judge Keenan found Grayson to be representing TW Airlines subject to a conflict of interest — the Court must .draw all inferences in Grayson’s favor on a motion to dismiss. Furthermore, “[t]he nature and extent of defendants’ mens rea is a question of fact not appropriate for disposition under Rule 12(b)(6).” Flaherty v. All Hampton Limousine, Inc., No. 02 Civ. 4801 (DRH) (WDW),
b.. True Statements or Opinions
Defendants further argue that the alleged statements are substantially true or non-actionable opinions and thus cannot constitute defamation. Statements that are substantially true are not defamatory because “when the truth is so near to the facts as published that fine and shaded distinctions must be drawn and words pressed out of their ordinary usage to sustain a charge of libel, no legal-harm has been done.” Tucker v. Wyckoff Heights Med. Ctr.,
Statements of pure opinion are also not defamatory. Small Bus. Bodyguard Inc. v. House of Moxie, Inc.,
The Court finds that, taking the Amended Complaint as true, three of the four statements are actionable. First, the statement that Grayson was violating rules of professional ethics and conduct by representing TW Airlines subject to a conflict of interest is not pure opinion. It is true that courts have found general statements that someone acted unprofessionally or unethically are opinions. See Small Bus. Bodyguard Inc.,
Second, whether Grayson was unable to handle documents and take a leading role at depositions due to the conflict of interest is not an opinion but a faсtual statement. Like the prior statement, that statement’s truth or falsity can be determined. Grayson alleges that this statement is false because she was not conflicted and was able to act as the lead attorney for the Bhise deposition and handle the documents related to that deposition. Id. at ¶¶ 48-49.
Third, the statement that Defendants did the “lion’s share” or a majority of the work is also arguably objectively verifiable, and thus, not merely an opinion. Indeed, courts are frequently called upon to assess not only the amount of time, but the value an attorney has contributed to particular cases. The parties can submit evidence to show their respective contributions in order to prove the truth or falsity of this statement.
However, the Court finds that the last allegedly defamatory statement, that Grayson was unresponsive, is a non-aetionable opinion. If Defendants said that Gray-son never responded, or failed to respond within an hour, or a day, or a week, such statement would be verifiable. Whether someone is “unresponsive” is not. It also does not further imply that it is based on false undisclosed facts because the statement merely expresses. that whatever Grayson’s response time or rate was, Defendants were dissatisfied with it. Thus, “unresponsive” has no objectively discernible meaning.'
c. Defamatory Meaning
A statement must have a reasonably susceptible defamatory meaning for it to be actionable defamation. A statement is defamatory if it “exposes an individual to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation, or disgrace, or ... induces an evil opinion of one in the minds of right-thinking persons, and ... deprives one of ... confidence and friendly intercourse in society.” Croton Watch Co. v. Nat’l Jeweler Magazine, Inc., No. 06 Civ. 662 (GBD),
d. Special Damages
Defendants assert that the defamation claim should, nonetheless, fail because Grayson failed to plead special damages. However, Grayson alleges defamation per se for injury to her profession as an attorney. Defamation per se absolves a plaintiff of the requirement, to plead special damages. Kforce, Inc. v. Alden Pers., Inc.,
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Consequently, Defendants’ motion to dismiss Grayson’s defamation claim is GRANTED in part and DENIED in part. The claim may proceed with respect to the first three allegedly defamatory statements, but not with respect to the statement that Grayson was “unresponsive,” which the Court finds is non-actionable opinion.
2. Injurious Falsehood
The tort of injurious falsehood “consists of the knowing publication of false matter derogatory to.the plaintiffs business of a kind calculated to prevent others from dealing with the business or otherwise interfering with its relations with others, to its detriment.” Kasada, Inc. v. Access Capital, Inc., No. 01 Civ. 8893 (GBD), 2004 WL 2903776, at *15 (S.D.N.Y. Dec. 14, 2004) (quoting Waste Distillation Tech., Inc. v. Blasland & Bouck Engineers, P.C.,
Here, Grayson states that the same allegedly defamatory statements also give rise to her injurious falsehood claim.
However, the Court finds that the claim cannot proceed because she does not adequately allege special damages to survive a motion to dismiss. To establish special damages, a plaintiff must plead facts demonstrating that actual losses were caused by the alleged tortious act. Murphy-Higgs v. Yum Yum Tree, Inc.,
Grayson claims that Defendants caused her to suffer special damages in the sum of $9,730,000 — an amount reached by applying the percentages contained in her contingent fee agreement to the default judgment entered against C-S Aviation-plus statutory interest accruing from July 2010 forward. Am,. Compl, ¶89. Even taking the Amended Complaint as true, this amount is based wholly on speculation as to what her fee might have been if she was not terminated, if Soros and .Chatterjee had not prevailed on their summary judgment motion, if TW Airlines obtained the full amount of default judgment as opposed to, for example, settling for a lesser amount, and if her contingent fee agreement was not further modified. Accordingly, the Court finds that the alleged special damages are too speculative to allow her injurious falsehood claim to proceed. However, -the Court permits Grayson to re-plead her injurious falsehood claim.
3. Tortious Interference With Contract and Tortious Interference With Prospective Business Advantage
“Under New York law, the elements of tortious interference with contract are (1) the existence of a vаlid contract between the plaintiff and a third party; (2) the defendant’s knowledge of the contract; (3) the defendant’s intentional procurement of the third-party’s breach of the contract without justification; (4) actual breach of the contract; and (5) damages resulting therefrom.” See Kirch, 449
Defendants assert that the' tortious interference claims should be dismissed because they are merely duplicative of the defamation claim. In Chao v. Mount Sinai Hospital, the Second Circuit observed that “ ‘New York law considers claims sounding in tort to be defamation claims ... where those causes of action seek damages only for injury to reputation, [or] where the entire injury complained of by plaintiff flows from the effect on his reputation’ ”
Here, Grayson bases her tortious interference claim on the allegations that Defendants made defamatory statements and “fomented] discord” between Grayson and her client. Am. Compl. ¶¶ 91-99. Gray-son argues that her tortious. interference claims are not duplicative of the defamation claim because Defendants induced the Trustee to breach his engagement agreement with Grayson not only by defaming Grayson but also by refusing to work with her. The Amended Complaint insufficiently establishes that Defendants refused to work with her. The alleged facts’- from which she draws this conclusion merely indicate that there was discord between the two parties and that Defendants did not want to work Grayson, which they largely expressed by making the alleged defamatory statements. Accordingly, as in Chao, the entire injury pleaded in relation to the tortious interference claims flows from the effect on Plaintiffs’ reputation resulting from Defendants’ statements.
5. Breach of Contract
Grayson further claims that Defendants breached the oral contract that existed between the parties when they (1) unlawfully sought to oust Grayson as TW Airline’s special litigation counsel, (2) caused her to be replaced by attorneys who were unfit to familiarize themselves with the Consolidated Actions within the requisite
In order to survive motion to dismiss on a breach of contract claim, a plaintiff must allege the existence of a contract, performance of that contract by one party, breach by the other party, and resulting damages. See Rexnord Holdings, Inc. v. Bidermann,
Grayson plainly fails to set forth the material terms of the agreement with the requisite specificity, preventing ■ the Court from ascertaining what was promised and whether Defendants’ alleged actions breached' such promises. She only provides that the parties entered into an agreement to “work together” to “cooperatively [and] successfully prosecute their parallel veil piercing cases, and each benefit from their respective contingency fee.” Am. Compl. ¶¶28, 30 101. She does not indicate what such cooperation entailed— what tasks each party agreed to perform— what the parties understood to be “successful prosecution,” and whether the parties had particular obligations to ensure that they received compensation from their respective clients, beyond seeking successful resolution of the cases. See e.g. In re Adelphia Commc’ns Corp. Sec. & Derivative Litig., No. 03 MDL 1529,
Grayson suggests that she can further amend her pleadings to allege the following terms of the oral contract: (1) the parties would contribute effort based on their respective areas of knowledge, expertise, and skill, (2) the parties would do their fair share of the work to produce the best possible product and to avoid duplication, and (3) the parties would split joint expenses. Opp. Mot. to Dismiss at 13. However, it is unclear how Defendants’ alleged actions would constitute breach of these terms. Grayson does not claim that Defendants' failed to fairly contribute effort or pay for their half of the joint ex
Furthermore, even if the’Court were to find that Grayson adequately pled the essential terms of the oral contract, it is unenforceable under1 'the Statute of Frauds. Under New York’s Statute of Frauds, if a contract by its terms cannot be performed within one year of its consummation, it must be made in writing. N.Y. Gen. Oblig. Law § 5-701(a)(1). Contracts that have indefinite durations are considered incapable of рerformance within a year and fall within the' ambit of the Statute of Frauds. See In re Bayou Hedge Fund Litig.,
Grayson argues that the Statute of Frauds is inapplicable because the Consolidated Actions could have concluded within a year of the contract’s formation, at which point the parties would be relieved of their contractual obligations. The Court disagrees. Although the exact terms of the oral contract are unclear, Grayson appears to suggest that Defendants have an, on-going contractual, obligation ,t,o forever refrain from interfering with her compensation from the TW Airlines bankruptcy estate for the Consolidated Actions and any subsequent action that uses her work product, such as the 2016 Action. This suggests that at.least some of the contractual performance obligations have indefinite durations that extend past the conclusion‘of the Consolidated Actions, which theoretically (though highly improbably) might have been concluded within one year. Hence, the purported contract must have been made in writing.
Grayson also asserts that her partial performance removes the contract from the purview of the Statute of Frauds, This argument fails. While partial performance is an exception to Statute of Frauds under New York General Obligations Law’Section 5-703 for contracts concerning real property, it does not apply to Section 5-701 which governs' the alleged contract here. Duckett v. Hadley Engelhard, Esq., No. 15 Civ. 8645 (RJS),
In order to recover in quantum meruit under New York law, “a claimant must establish ‘(1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services.’” Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp.,
7. Unjust Enrichment
To state a claim for unjust enrichment under New York law, a plaintiff must plead facts showing that “(1) defendant was enriched, (2) at plaintiffs expense, and (3) equity and good conscience militate against permitting' defendant to retain what plaintiff is seeking to recover.” Diesel Props S.r.l. v. Greystone Bus. Credit II LLC,
8. Conversion
To withstand a motion to dismiss on a conversion claim, Grayson must allege “(1) the property subject to conversion is a specific identifiable thing; (2) plaintiff had ownership, possession or control over the property before its conversion; and (3) defendant exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiffs rights.” DeAngelis v. Corzine,
Grayson alleges Werther committed conversion by taking and failing to return her original Jet Star transcripts. However, Grayson concedes that Werther’s original possession of the Jet Star transcripts was both authorized by her and permitted through a court order. In fact, Grayson states that it was her idea for Werther to procure the transcripts from her through subpoenas, and that she further aided Werther in defeating Soros’ attempt to quash the subpoenas. Am. Comp. ¶35. Thus, in order to survive a motion to dismiss, Grayson must allege that she made a valid demand for the return of the transcripts and that Werther refused this demand. She fails to do so. Instead, she vaguely asserts that the transcripts were released upon an “express understanding” that they would be promptly copied and returned, but that Werther failed to return them. Am. Comp. ¶¶ 35, 115. This allegation is insufficient to make out a claim for conversion because it fails to establish whether and when a demand for the property was made and refused. See Marvel Worldwide, Inc. v. Kirby,
Moreover, conduct that would otherwise be conversion is generally permitted when it is done pursuant to a valid court order, unless the party procured the order through intentional misrepresentation.
9. Trespass to Chattel
Grayson’s claim of trespass to chattel is also based on Werther’s alleged retention of the Jet Star transcripts. A trespass to chattel occurs when a party intentionally, and without justification or consent, physically interferes with the use and enjoyment of personal property in another’s possession,' and causes harm such as depriving the use of the chattel from its rightful possessor for a substantial time. Bose v. Interclick, Inc., No. 10 Civ. 9183 (DAB),
10. Prima Facie Tort
To state a claim for prima facie tort under New York law, a plaintiff must plead the following elements: “(1) intentional infliction of harm; (2) resulting in special damages; (3) without excuse or justification; (4) by an act that would otherwise be lawful.” Twin Labs., Inc. v. Weider Health & Fitness,
Grayson argues in her opposition to the instant motion that the prima facie tort claim is based on Defendants’ efforts to unwind her $90,000 interim fee settlement -with the Trustee and requests leave to allege her damages with greater particularity. Defendants argue that her claim would still fail as she is unable to allege the necessary intent. “To prevail on a pri-ma facie tort claim, a plaintiff must plead that the only motivation for the act was ‘disinterested malevolence.’” Margrabe v. Sexter & Warmflash, P.C.,
B. Rule 11 Sanctions
By a separate motion, Defendants ask the Court to sanction Grayson under Rule 11 for making false and inadequately investigated allegations in her Complaint, which she largely repeats in the Amended Complaint and declaration opposing the sanctions motion. Rule 11 states that the court may impose sanctions “[i]f, after notice and a reasonable opportunity to re
“A pleading, motion or other paper violates Rule 11 either when it has been interposed for any improper purpose, or where, after reasonable inquiry, a com-petént attorney could not form* a reasonable belief that the pleading is well grounded in fact and is warranted by existing law or good faith argument for the extension, modification or reversal of existing law.” Robledo v. Bond No. 9,
Grayson argues that Rule i'l sanctions are not proper at this stage of the litigation. She is correct that resolution of a sanctions motion concerning pleadings is generally proper after discovery since it would otherwise end-run the principle that courts must take the plaintiffs pleading as true on a motion to dismiss. Luv N’Care, Ltd. v. Shiboleth LLP, No. 16-CV-3179 (AJN),
III. CONCLUSION
For the,reasons set forth above, Defendants’ motion to dismiss is GRANTED ⅛ part and DENIED in. part. Specifically,
Defendants’ motion for sanctions is DENIED without prejudice.
The Clerk of Court is respectfully directed to terminate the motions, Docs. 48, 100,103,121.
It is SO ORDERED.
Notes
. The following facts are drawn from allegations contained in the Amended Complaint (Doc. 97) that the Court accepts as true for purposes of the instant motion, documents incorporated by reference, and matters subject to judicial notice. See New York Pet Welfare Ass’n, Inc. v. City of New York,
. After TW Airlines obtained that default judgment, Coreolis and TW Holdings sought revision of the judgment, asserting that some or all of the funds belonged to them. Id. at ¶¶ 15, 19. After discovery and trial on the issue of damages, Coreolis and TW Holdings obtained a default judgment of approximately $38 million and TW Airlines obtained a modified judgment of $56 million. Id. ¶¶ 19, 26.
. This fee was to be shared equally by Gray-son and Tuggle Duggins. Id. at ¶¶ 12, 14.
. The stay was imposed on February 23, 2009. See Memorandum Opinion & Order, TradeWinds Airlines, Inc. v. Soros, No. 08 Civ. 5901 (JFK) (S.D.N.Y. Feb. 23, 2009), Doc. 36.
. The Complaint included a claim under the Fair Credit Reporting Act. Doc. 26 ¶ 62-64. Plaintiff voluntarily dismissed that claim on April 21, 2017. Doc. 97.
. Defendants rely on United States ex rel. Hayes v. Allstate Ins. Co.,
. Grayson • also makes a passing allegation that Werther sought to- foment discord between Grayson and the Trustee by disparag-mg Grayson to TW Airline's primary creditor, Am. Compl. ¶ 38, but fails to plead with sufficient particularity what Defendants are alleged to have said and to whom they said it, Germain v. M & T Bank Corp.,
. The first three allegedly defamatory statements are distinguishable from the cases Defendants rely on in arguing that the statements are pure opinion. In Goldberg v. Coldwell Banker,
. She further avers that Defendants circulated injurious falsehoods to the attorneys at Tuggle Duggins and "other persons,” and that they are continuing to do so, but does not indicate what these statements were and thus that claim is deficient.
. Cf. Cohen v. Cowles Media Co.,
. Although Grayson claims that the parties’ oral аgreement was partly evidenced by the written Joint Prosecution, Common Interest, and Confidentiality Agreement, Grayson does not argue that Defendants breached their con- ' fidentiality obligations arising from that written agreement. See Ressler Decl. Ex. 2.
. The claim is defective for the additional reason that Grayson has not alleged the reasonable value for her services. Grayson argues that her services on the coordinated veil piercing cases benefited Defendants by (1) freeing up their time to work on their, other matters, and (2) allowing them to foreseeably recover in the 2016 Action, which allegedly utilizes the work she did in the Consolidated Actions. However, this argument is unaccompanied by allegations concerning the reasonable value of such current or prospective benefit. This deficiency alone is enough to defeat her claim at this stage. See Hajny v. Best Roofing of New Jersey, Inc., No. 11 Civ. 00173 (LLS),
. Grayson does not argue that the subpoenas were obtained improperly, nor can she. Indeed, Grayson alleges that she was instrumental in advocating for the subpoenas in opposition to a motion to quash.