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
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.
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 ...