DENISE COTE, District Judge.
Defendant Ayse Giray ("Giray") has moved to dismiss the Second, Eighth, and Tenth Causes of Action asserted against her in the first amended complaint ("FAC"). Defendants Lewis Sassoon and Sassoon & Cymrot, LLP (collectively, "the Sassoon Defendants") have moved to dismiss the claims against them in their entirety. For the reasons that follow, both motions are granted.
The following facts are alleged in the FAC. In 2006, plaintiff Steven Lebetkin ("Lebetkin") entered into a romantic relationship with defendant Giray. Giray is the former spouse of non-party Hamdi Ulukaya ("Ulukaya"), who is the founder of the successful Chobani yogurt brand. During the course of their relationship, Lebetkin became aware that Giray had, during her marriage to Ulukaya, invested capital in Euphrates, Inc., which was apparently a predecessor to Chobani, Inc. Drawing upon his experience as a former certified public accountant, Lebetkin determined that Giray might have a legal claim to part ownership of Euphrates, Inc. and Chobani, Inc. (collectively, "the Chobani Entities," and together with Ulukaya, "the Chobani Defendants").
Lebetkin discussed Giray's legal options with her. In May 2012, Giray promised Lebetkin that, in exchange for working on her behalf to analyze her potential claims, to assess the value of her potential stake in the Chobani Entities, and to "support the lawsuit, including selecting and managing the appropriate legal counsel," he would be compensated for his services.
In June 2012, Lebetkin contacted defendant Lewis Sassoon to discuss Giray's potential lawsuit. Lewis Sassoon had been a personal friend of Lebetkin's for more than ten years, and the two had worked together previously on various business transactions and litigation. Also in June 2012, Lewis Sassoon introduced Lebetkin and Giray to attorneys Richard B. Feldman ("Feldman") and Michael H. Smith at the New York firm of Rosenberg Feldman Smith LLP, where Lewis Sassoon's son, Stephen J. Sassoon, was also an associate (collectively, "the RFS Attorneys"). Discussions began for Giray to retain the RFS Attorneys and the Sassoon Defendants (collectively, "the Giray Attorneys") to represent her in her contemplated litigation against the Chobani Defendants ("the Chobani Litigation"). This included discussions about Lebetkin's role as a "litigation consultant." It was agreed that the Giray Attorneys would produce a complaint based on Lebetkin's valuation of the Chobani Entities.
On July 16, 2012, Lebetkin and Giray entered into a formal written contract delineating Lebetkin's role in the Chobani Litigation ("the Consulting Agreement").
The Consulting Agreement provided that Lebetkin would perform various services in relation to a potential lawsuit "in connection with establishing Giray's ownership interest to a portion of the shares of stock" of the Chobani Entities. These services were to include "business consultation, review of business records, and working with attorneys and accountants."
Giray insisted that the Consulting Agreement with Lebetkin be executed prior to the execution of two engagement letters between her and the Giray Attorneys. Those engagement letters were executed on the same day. On Giray's behalf, Lebetkin negotiated a thirty percent contingency fee arrangement with the Giray Attorneys. Lebetkin alleges that this reduction from the "standard" 33 1/3 percent contingency fee was agreed to in order to account for his 3 percent consulting fee. Lebetkin further alleges that Lewis Sassoon, after conferring with Feldman, orally agreed on behalf of the Giray Attorneys to cap their fee at $10 million.
Lebetkin alleges that he fully performed all of the services contemplated under the Consulting Agreement, as well as "other critical nondelineated services beyond the written scope of work set forth in the Agreement." He valued Giray's equity claim in Chobani and provided his analysis to the Giray Attorneys. The Giray Attorneys prepared a complaint and sent it to Lebetkin for review and comments.
During the course of preparing for the litigation, a series of disputes arose between Lebetkin and the Giray Attorneys. He repeatedly urged the Giray Attorneys to contact attorneys for the Chobani Defendants to attempt to negotiate a settlement prior to the filing of a complaint. The Giray Attorneys declined to do so. Lebetkin apparently warned Giray that her attorneys "may be motivated to enter into a sustained process to justify egregious legal fees." In July 2012, a dispute arose between Lebetkin and the Giray Attorneys over the use in the litigation of an affidavit of Adile Batuk, a personal friend of Giray, which Lebetkin believed to be perjurious. Lebetkin alleges that the perjurious affidavit was procured by Giray's promise to pay Batuk $3 million from Giray's recovery from the lawsuit. This was changed to five percent of the recovery at some unspecified later date. Lebetkin also disagreed with the Giray Attorneys over "wrongful statements by Giray and Ulukaya regarding the validity of their 1997 marriage," and the omission of certain information from the complaint regarding a Small Business Administration loan made to Chobani.
Giray's complaint was filed in the New York Supreme Court on August 14, 2012. Lebetkin's disagreements with the Giray Attorneys continued after the filing of the complaint. Lebetkin engaged in "extremely heated" discussions and emails with the Giray Attorneys over whether to request production of documents related to certain Small Business Administration loans from the Chobani Defendants. The Giray Attorneys did eventually request these documents in response to Giray's demand that they do so. The Supreme Court ultimately ordered the Chobani Defendants to produce these documents.
Lebetkin's ongoing conflict with the Giray Attorneys led attorney Feldman to send Lebetkin an email in August 2012 threatening him with a restraining order if he did not cease and desist advising and directing Giray with regard to the Chobani Litigation. During this time, Lebetkin's relationship with Giray apparently deteriorated, culminating in the end of their romantic relationship in September 2012. During August 2012, defendant Lewis Sassoon allegedly "consoled" Lebetkin and told him that he "had his (Lebetkin's) back," although he took no action to interfere with Feldman on Lebetkin's behalf. He specifically promised Lebetkin that he would travel to New York from Boston once a week and would "make sure the case stayed on track" and that Lebetkin would "stay informed."
On September 6, 2012, Feldman delivered to Lebetkin a letter signed by Giray unilaterally terminating the Consulting Agreement. Lebetkin alleges that this letter was procured by Feldman through unspecified "tortious communications with Giray," and that defendant Lewis Sassoon, "either subsequently tacitly or overtly joined" in Feldman's tortious interference, in an unspecified way. Lebetkin alleges that the Sassoon Defendants made "private assurances to Lebetkin that they would protect his contract and fees," but nonetheless failed to intercede on his behalf.
Settlement discussions between Giray and the Chobani Defendants took place from 2012 through 2014, and apparently deadlocked in July 2014. Despite having received the September 6, 2012 termination letter and the deterioration of his relationship with both Giray and her attorneys, Lebetkin apparently continued to perform work related to the Chobani Litigation. He alleges that after July 2014 he "was instrumental in bringing the parties together by focusing their attention on litigation reality," but does not provide further details as to his role, or how he came to be involved in settlement discussions.
Lebetkin thereafter made repeated demands to Giray, Lewis Sassoon, and Feldman for payment of his fees pursuant to the Consulting Agreement. As of the time of filing, he has not received any payment.
The complicated procedural history of this case is laid out in more detail in an Opinion and Order of October 26, 2018. In short, Lebetkin has raised several claims against Giray, the Sassoon Defendants, the RFS Attorneys, and Adile Batuk in various state and federal actions. The original action (18cv2211) in this dispute was filed in this Court by Lebetkin on March 12, 2018, against Giray and the Sassoon Defendants. On March 26, a related action was filed in the New York Supreme Court against Adile Batuk and the RFS Attorneys, asserting claims for tortious interference with the Consulting Agreement, among others. On August 27, Lebetkin voluntarily dismissed his initial action in this Court. On September 6, Lebetkin re-filed his complaint against Giray and the Sassoon Defendants in the New York Supreme Court. The defendants removed the case to this Court the following day based on diversity of citizenship, and it was accepted as related to Lebetkin's original action in this Court. On September 27, Lebetkin amended his complaint to add as defendants the RFS Attorneys and Adile Batuk, who are citizens of New York, and moved to remand the case to the New York Supreme Court. An Opinion and Order of October 26 denied the motion to remand, severed the non-diverse defendants Adile Batuk and the RFS Attorneys, and dismissed Lebetkin's claims against them without prejudice.
The operative complaint asserts nine causes of action against the remaining defendants. Against Giray, Lebetkin has asserted claims for breach of contract, breach of fiduciary duty, unjust enrichment, quantum meruit, and prima facie tort. Against the Sassoon Defendants, Lebetkin has asserted claims for breach of fiduciary duty, professional malpractice, tortious interference with existing contract, aiding and abetting breach of fiduciary duty, unjust enrichment, and quantum meruit.
On October 12, Giray moved to dismiss Lebetkin's breach of fiduciary duty, unjust enrichment, and prima facie tort claims against her for failure to state a claim under Rule 12(b)(6), Fed. R. Civ. P. On the same date, the Sassoon Defendants moved to dismiss the claims against them in their entirety, also pursuant to Rule 12(b)(6). Those motions became fully submitted on November 14 and November 19, respectively.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face."
Giray has moved to dismiss Lebetkin's claims for breach of fiduciary duty, unjust enrichment, and prima facie tort. She has not moved to dismiss Lebetkin's claims for breach of contract and quantum meruit.
Under New York law,
Lebetkin has not adequately pleaded that Giray owed him a fiduciary obligation. The FAC makes clear that Giray and Lebetkin had a contractual relationship. The fact of their romantic involvement does not convert their contractual relationship into a fiduciary obligation. Nothing on the face of the Consulting Agreement or the circumstances surrounding its adoption suggests that Giray owed Lebetkin any legal duties independent of her obligations under the Consulting Agreement. If anything, the facts alleged in the FAC indicate that Giray was the weaker party, over whom Lebetkin exercised "control and dominance." Because Lebetkin has failed to adequately plead that Giray owed him a fiduciary duty, his claims against her for breach of that duty are dismissed.
"To prevail on a claim for unjust enrichment in New York, a plaintiff must establish (1) that the defendant benefitted; (2) at the plaintiff's expense; and (3) that equity and good conscience require restitution."
Lebetkin has alleged that he fully performed his obligations under the Consulting Agreement, no defendant disputes the existence of the Agreement, and the scope of the agreement covers the dispute here. Accordingly, Lebetkin's unjust enrichment claim against Giray is dismissed.
"To state a legally cognizable claim for prima facie tort, a plaintiff must allege (1) the intentional infliction of harm, (2) which results in special damages, (3) without any excuse or justification, (4) by an act or series of acts which would otherwise be lawful."
Lebetkin has not plausibly alleged that Giray's sole motive in terminating the Consulting Agreement was "disinterested malevolence." The FAC alleges that Giray terminated the agreement after her romantic relationship with Lebetkin ended and after he repeatedly contradicted and challenged her attorneys' legal advice. Although Lebetkin has made conclusory allegations that Giray "determined to engage in intentional infliction of harm," he has not pled any facts to support that inference. The facts Lebetkin has pled indicate that Giray's termination of the Consulting Agreement was motivated by selfinterest rather than a bare desire to harm Lebetkin.
Further, Lebetkin has failed to plead special damages as required to sustain a cause of action for prima facie tort.
Lebetkin's prima facie tort claim is additionally barred by the statute of limitations. Lebetkin does not dispute that the statute of limitations for prima facie tort in New York is three years.
"Under New York law, where a claim for breach of fiduciary duty is premised on the same facts and seeking the identical relief as a claim for legal malpractice, the claim for fiduciary duty is redundant and should be dismissed."
In any event, both claims are barred by the applicable three year statute of limitations.
Additionally, Lebetkin has not pleaded sufficient facts to state a plausible claim for breach of fiduciary duty or professional malpractice. "In order to prevail on a claim of legal malpractice under New York law, a client must demonstrate that the attorney was negligent, that the negligence was a proximate cause of the injury and that the client suffered actual and ascertainable damages."
Lebetkin has not plausibly alleged that he had an attorneyclient relationship with the Sassoon Defendants. He admits that part of his role as "litigation consultant" was to introduce Giray to attorneys to represent her in contemplated litigation against the Chobani Defendants. He introduced her to the Sassoon Defendants. As described in the FAC, his interaction with the Sassoon Defendants was in connection with the Chobani Litigation and in his capacity as Giray's representative. The fact that the Sassoon Defendants reviewed the Consulting Agreement with Lebetkin beforehand does not establish that they "represented" him in the negotiation of that Agreement. Although a written retainer agreement is not strictly necessary to establish an attorney-client relationship, it is telling that the Sassoon Defendants executed a letter of engagement with Giray, but not with Lebetkin, and that Giray's letter of engagement was executed on the same day as the Consulting Agreement. Nor did Lebetkin pay any fee to the Sassoon Defendants. The facts alleged in the FAC indicate that Giray was the Sassoon Defendants' client, and that the Sassoon Defendants did not also have an attorney-client relationship with Lebetkin, who was Giray's boyfriend and consultant.
Additionally, Lebetkin has not adequately explained what the Sassoon Defendants did — or failed to do — that constitutes a breach of whatever duty they might have owed him. He has alleged that they failed to intercede on his behalf with Giray and with their co-counsel in the Chobani Litigation, and that they failed to "protect" his fees. These general, conclusory allegations fall short of Lebetkin's pleading burden. Accordingly, his claims for breach of fiduciary duty and professional malpractice are dismissed.
To establish tortious interference with an existing contract under New York law, "a plaintiff must show (1) the existence of a valid contract between plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional procuring of the breach, and (4) damages."
Under New York law, the three elements of aiding and abetting a breach of fiduciary duty are: (i) "a breach by a fiduciary of obligations to another, of which the aider and abettor had actual knowledge," (ii) "that the defendant knowingly induced or participated in the breach," and (iii) "that plaintiff suffered damage as a result of the breach."
Unjust enrichment and quantum meruit are not separate causes of action, and may be analyzed together as a single quasi contract claim.
Both October 12, 2018 motions to dismiss are granted. All of the claims in the FAC against defendants Lewis Sassoon and Sassoon & Cymrot LLP are dismissed. Counts two, eight, and ten of the FAC against defendant Ayse Giray are dismissed.