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STREIT v. BUSHNELL
424 F.Supp.2d 633 (2006)
United States District Court, S.D. New York.
March 23, 2006.
Applying these rules, the Court finds that a fair reading of Streit's First Amended Complaint reveals that it sets forth numerous allegations, already summarized in the factual recitation above, that sufficiently describe an agreement for services broadly extending beyond a role as an intermediary relating only to Bushnell's Sex and the City, and that claim monetary damages attributable to professional services larger than the promotion of a single literary work. Streit explicitly states that Bushnell agreed that Streit "would be employed" (First Amended Compl. ¶ 15) under an oral "employment agreement" (id. ¶ 13) to serve as her "manager" (id.), and characterizes the contract as a "Management Agreement" (id.). The services Streit provided under the agreement encompassed selling and promoting Bushnell's "work and career including, without limitation," the television production of Sex and the City. (Id. (emphasis added).) Acting as Bushnell's manager under the agreement, Streit states that "among other efforts" he made to advance Bushnell's career, he introduced Bushnell to HBO and played a role in the negotiation of the television series of Sex and the City. (Id. ¶ 17 (emphasis added).) He also claims he initiated other meetings with members of the entertainment industry to "promote [Bushnell's] career." (Id. ¶ 18.) As the damages he claims having suffered by reason of Bushnell's breach, Streit specifies the non-payment of the Episode and Royalty Fees "or any other monies due and owing" under the Management Agreement that constituted Streit's "employment compensation." (Id. ¶ 21.) These allegations are distinctly at odds with Bushnell's contention that the parties' transaction embodied merely an agency relationship requiring payment of a finder's fee solely pertaining to the promotion of Sex and the City. To this extent, Bushnell's reliance on the New York case law she cites is misplaced. Each of those cases entailed an agency relationship under an alleged oral contract
limiting its services to procuring or promoting a particular business transaction or creative work. See, e.g., Sporn v. Suffolk Mktg., Inc.,56 N.Y.2d 864, 453 N.Y.S.2d 393, 438 N.E.2d 1108 (1982) (a music album); Freedman v. Chem. Constr. Corp.,43 N.Y.2d 260, 401 N.Y.S.2d 176, 372 N.E.2d 12 (1977) (a construction contract to build a chemical plant); Stephen Penner, Inc. v. Ensler,309 A.D.2d 722, 766 N.Y.S.2d 183 (App. Div. 1st Dep't 2003) (a book). In Freedman the New York Court of Appeals explained that NYGOL § 5-701(a)(10) "applies to various kinds of intermediaries who perform limited services in the consummation of certain kinds of commercial transactions." 401 N.Y.S.2d 176, 372 N.E.2d at 16 (emphasis added). By contrast, liberally read, Streit's pleadings describe services that are neither those of an intermediary, nor limited to one business transaction. Rather, the complaint suggests that the parties had maintained an employment relationship that began in 1995 under what in form and substance may be properly deemed an employment contract that New York courts have held are not subject to NYGOL § 5-705(a)(10). See Riley v. N.F.S. Servs., Inc.,891 F.Supp. 972, 977 (S.D.N.Y.1995) ("[W]here the plaintiff's function transcends the limited role of serving as an intermediary, the Statute of Frauds does not apply."); Super v. Abdelazim,108 A.D.2d 1040, 485 N.Y.S.2d 612, 614 (App. Div. 3rd Dep't 1985) (noting that the plaintiff's allegations of an oral joint venture agreement demonstrated a role more extensive than negotiating a particular business opportunity and contemplated rendering "a wide variety of services, making his claim broad enough to survive the limitations of [NYGOL] § 5-701(a)(10)"); see also Rooney v. Tyson,91 N.Y.2d 685, 674 N.Y.S.2d 616, 697 N.E.2d 571, 575 (1998) (treating oral agreement between trainer and boxer for training/management services that would last "for as long as the boxer fights professionally" as an employment contract). The Court concludes that the conflicting accounts of the parties' understandings evident in the record of the instant motion raise genuine disputes as to material facts that require discovery to resolve by motion for summary judgment or at trial, and that thus cannot properly be decided in a determination on a Rule 12(b)(6) motion to dismiss. A. STATUTE OF LIMITATIONS The statute of limitations for breach of contract actions in New York is six years. See N.Y.C.P.L.R. 213(2). The claim accrues and the period of limitations begins to run when the breach occurs. See Ely-Cruikshank Co., Inc. v. Bank of Montreal,81 N.Y.2d 399, 599 N.Y.S.2d 501, 615 N.E.2d 985, 986 (1993). While conceding that Streit does not expressly say so, Bushnell nonetheless insists that "it is absolutely clear . . . that [] Streit contends [] Bushnell failed to pay him the fee he was owed before 1999." (Def.'s Mem. at 15). The Court cannot ground a ruling on a motion to dismiss on the defendant's speculation as to what the plaintiff believes constituted a termination of the contract and when the breach occurred. The Court is bound to give credence only to the plaintiff's actual pleadings as stated in the complaint, not to the defendant's characterization of what the plaintiff may or may not have intended. In the First Amended Complaint Streit states that Bushnell purported to terminate the Management Agreement "Mil or about 1999." (First Amended Compl. ¶ 22.) Streit commenced the instant action on May 31, 2005. Thus, there is factual uncertainty as to when in 1999 the alleged breach occurred. Nonetheless, reading
the complaint in the light most favorable to Streit and drawing all reasonable inferences in his favor, and absent evidence refuting a finding otherwise, it is entirely conceivable that Streit can establish through discovery that Bushnell's termination of the contract took place at some point in 1999 within six years of May 31, 2005. Moreover, without a more detailed factual record establishing all of the relevant terms of the parties' alleged agreement, it is impossible for the Court to determine at this point what other action Bushnell may have taken, particularly relating to non-payment of the management fees at issue, that may have constituted a breach of a material provision of the alleged contract. Accordingly, the Court finds no sufficient basis to dismiss Streit's contract claims on statute of limitations grounds.
1. Pursuant to a stipulation among the parties, Streit withdrew his fraudulent conveyance claim in response to Star's declaration, sufficiently documented, that he is a resident of California, which would have removed the Court's subject matter jurisdiction over the action under diversity of citizenship rules. 2. To cite just one example among many, in her reply papers Bushnell notes that in taking issue with Bushnell's reference to Streit's role as that of a literary agent, Streit "screams" about the alleged mischaracterization. (Def.'s Reply Mem. at 2 n. 2.) Bushnell then asserts that Streit "is completely incorrect," and denies that she ever claimed that Streit was her agent, literary or otherwise. Id. She then declares that Streit "is also incorrect" in stating that Bushnell never disputed that she paid him $10,000 as his percentage fee for placing Sex and the City with HBO. Bushnell's matter-of-fact remarks that Streit is "incorrect" in his account of the events serve only to confirm that these differences manifest quintessential disputes as to issues of material fact that the Court cannot properly adjudicate at this stage of the proceedings. 3. Attached to his response to the motion at hand, Streit includes his own affidavit clarifying or elaborating on several aspects of his pleadings as set forth in the First Amended Complaint. (See Pl.'s Mem. of Law in Opp'n to Def.'s Mot. to Dismiss, dated December 14, 2005.) A complaint cannot be modified by a party's affidavit or by papers filed in response to a dispositive motion to dismiss or for summary judgment. See Wright v. Ernst & Young LLP,152 F.3d 169, 178 (2d Cir.1998). Because Streit's Affidavit was not a document relied upon, attached to or incorporated by reference in the First Amended Complaint, the Court has given no consideration to its content. 4. Bushnell expends considerable energy analyzing differences between the Original and the First Amended Complaint. She points to a number of alleged inconsistencies between them, and urges the Court to disregard changes in factual statements Streit made in the amended pleadings in response to Bushnell's first motion to dismiss. (See Def's Mem. at 3-5 and Def.'s Reply Mem. at 3-5.) The Court declines this invitation, as it runs against the letter and spirit of the flexible pleading standards embodied in Federal Rules of Civil Procedure 8(a) and 8(e) with regard to original complaints and Rule 15 as to amended pleadings.
It is not uncommon for litigants to amend pleadings in response to deficiencies pointed out by an adversary or even by the Court, either before a dispositive motion is filed or in response to a ruling on a motion that grants leave to replead and offers specific guidance as to how any flaws in the pleadings may be cured to survive dismissal. Some such corrective amendments serve a useful purpose in avoiding unnecessary motion practice. Not surprisingly, some later pleadings made in this context necessarily may be at odds with allegations the party asserted in the original pleadings. It would be a harsh rule of law indeed if a litigant were to change a statement in an amended pleading to repair a weakness cited by an adversary or by the Court, only to have the case dismissed because the conforming change in some way may conflict with an allegation in the earlier pleadings. Contrary to such a result, Rule 8(e) explicitly permits litigants, even within the same pleadings, to "state as many separate claims or defenses as the party has regardless of consistency." Fed. R.Civ.P. 8(e) (emphasis added). And Rule 15, after authorizing amendments of pleadings as-of-right within a specified period, provides for amendments with permission of the court and instructs that "leave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). In support of her request, Bushnell cites Wallace v. New York City Dep't of Corrections, No. 95 Civ. 4404, 1996 WL 586797, at *2 (E.D.N.Y. Oct.9, 1996). There, the court noted that in an amended complaint the plaintiff had "blatantly" changed his statement of the facts in response to the defendants' motion to dismiss and "directly contradict[ed]" allegations set forth in the original complaint. Id. The court accepted the factual account in the original complaint and dismissed the action. This Court finds the circumstances of the instant case distinguishable and thus declines to follow Wallace. The factual change at issue in Wallace was "blatant" and directly contradictory of the earlier allegations because it entailed an essential element of plaintiff's cause of action without which plaintiff could not make out a prima facie case. The Court does not read the modifications of the pleadings at issue here to implicate such dispositive effect. 5. NYGOL § 5-701(a)(10) provides in pertinent part:
a. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith . . . if such agreement, promise or undertaking: . . . . 10. Is a contract to pay compensation for services rendered . . . in negotiating the purchase [or] sale . . . of a business opportunity. . . . N.Y. Gen. Oblig. Law § 5-701(a)(10) (McKinney 2006).
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