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May 3, 2004.

THE DWECK LAW FIRM, L.L.P., Plaintiff, -against- CYNTHIA ALLEN MANN, Defendant

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge


The Dweck Law Firm, L.L.P.*fn1 ("Dweck") is suing Cynthia Alien Mann ("Mann"), a former client, alleging breach of the covenant of good faith and fair dealing. Mann now moves to dismiss the complaint, and Dweck cross moves for summary judgment. I. BACKGROUND

  A. Procedural History

  On October 23, 2002, Dweck filed an action against Mann for breach of contract and libel. The complaint alleged that (1) Dweck and Mann entered into a written contingency fee contract, (2) pursuant to its obligations under the contract, Dweck negotiated a settlement between Mann and her former employer, and (3) Mann breached her contract with Dweck by refusing to execute the settlement with her former employer. According to Dweck, it performed all of its obligations under the contract, and was therefore entitled to payment in the form of a percentage of the amount of the settlement that Mann had rejected. Dweck further alleged that Mann defamed the Dweck Law Firm's reputation by suing the firm for legal malpractice in state court.

  In Dweck I, I dismissed Dweck's breach of contract claim because under New York law, "where the attorney in a contingency fee case is discharged but the client makes no recovery in the underlying action, [] the attorney's fees are limited to disbursements . . ." Dweck I, 2003 WL 22480042, at *3. I also dismissed Dweck's libel claim on the grounds that "[i]t is a long-standing principle of New York law that a statement made in the course of judicial proceedings is absolutely privileged so long as pertinent to the controversy, and may not be the basis for a libel action." Id. at 4. However, I did note that Dweck might be able to pursue a claim against Mann for breach of the covenant of good faith and fair dealing. See id. at n. 6. Thereafter, Dweck filed this action against Mann.

  B. The New Complaint

  In its new complaint ("Compl"), Dweck alleges the following facts, all of which are deemed true for purposes of Mann's motion to dismiss.*fn2 Prior to September 23, 1998, Mann engaged Dweck on an hourly basis to advise her with respect to various issues involving her employer, First Union National Bank. These issues included claims of gender discrimination, harassment, failure to promote, and age discrimination. See Compl. ¶ 7.

  Mann eventually became concerned about her accumulating legal bills, and requested that her fee arrangement with the firm be changed from an hourly rate to a contingency agreement. See id. Thus, on September 23, 1998, the parties entered into a written retainer agreement, whereby the firm agreed to prosecute, negotiate, adjust or settle a claim for wrongful discharge, age and gender discrimination, harassment and mental anguish against First Union National Bank, on Mann's behalf.*fn3 See id. ¶ 8. Pursuant to the retainer agreement, Mann was to pay $12,500 upon execution of the agreement, and, "[s]hould the action or proceeding result in a recovery, whether by suit, settlement or otherwise, [] thirty-three and one-third (33 1/3%) percent of all sums recovered against which [] shall be credited the Twelve Thousand Five Hundred ($12,500) Dollars advanced [] hereunder." See Retainer Agreement Between Cynthia Alien Mann and the Dweck Law Firm L.L.P. ("Retainer Agreement"), Ex. E to the Affidavit of Aegis Frumento, Mann's counsel, in support of defendant's motion to dismiss.

  In connection with its obligations under the Retainer Agreement, Dweck rendered legal services on Mann's behalf, negotiating and attempting to settle Mann's claims against First Union National Bank. See Compl. ¶ 10. Sometime during the course of the negotiations, Mann stated that she did not want to pursue any further actions against First Union, and that she wished to "go on with her life." Id. ¶ 11. Nonetheless, Mann accepted two settlement offers from First Union, the first for $1,035,000, and the second for $1,350,000. See id. ¶ 12. However, Mann refused to execute either settlement agreement, and as a result, no settlement was ever consummated. According to Dweck, Mann's refusal to execute the settlement agreements with First Union was driven by her desire to deprive Dweck of the fees to which it was entitled pursuant to the terms of the Retainer Agreement. See id. ¶ 13.


  A. Standard On a Motion to Dismiss

  Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a motion to dismiss should be granted only if "`it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief.'" Weixel v. Board of Educ. of New York, 287 F.3d 138, 145 (2d Cir. 2002) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (alterations omitted)). At the motion to dismiss stage, the issue "`is not whether a plaintiff is likely to prevail ultimately, but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleading that a recovery is very remote and unlikely but that is not the test.'" Phelps v. Kapnolas, 308 F.3d 180, 184-85 (2d Cir. 2002) (quoting Chance v. Armstrong, 143 F.3d 698, 701 (2d Cir. 1998)); see also In re Initial Public Offering Securities Litig., 241 F. Supp.2d 281, 322-24 (S.D.N.Y. 2003).

  The task of the court in ruling on a Rule 12(b)(6) motion is "merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Pierce v. Marano, No. 01 Civ. 3410, 2002 WL 1858772, at *3 (S.D.N.Y. Aug.13, 2002) (quotation marks and citations omitted). When deciding a motion to dismiss, courts must accept all factual allegations in the ...

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