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MOSES v. MARTIN

December 3, 2004.

SUSAN MOSES, Plaintiff,
v.
DEBORAH MARTIN & DEBORAH MARTIN AGENCY, INC., Defendants.



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

OPINION AND ORDER

I. INTRODUCTION

Susan Moses, a celebrity wardrobe stylist, brings this action against Deborah Martin Agency, Inc. ("DMA") and its principal Deborah Martin ("Martin") (collectively, "defendants"). Moses alleges that, after entering into an agreement (the "Agreement") with DMA, under which DMA would act as her manager, DMA failed to remit payments owed her that were collected by DMA from Moses's customers, and that on multiple occasions Martin lied about whether DMA was paid, and if so, how much. Moses alleges breach of contract, negligent misrepresentation, unjust enrichment, conversion, fraud and violations of the Racketeering Influenced and Corrupt Organizations Act ("RICO").*fn1 Defendants now move under Rules 12(b)(1), 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure to dismiss the breach of contract, conversion, fraud, negligent misrepresentation and unjust enrichment claims against Martin, the conversion and fraud claims against DMA and the RICO claims against both defendants.*fn2 For the reasons that follow, defendants' motion is granted in part and denied in part.

  II. FACTS

  A. The Agreement

  Susan Moses, a California resident, provides wardrobe styling services to celebrities.*fn3 In or about 1997, Moses entered into an agreement with DMA, a New York corporation owned and operated by Martin.*fn4 The Agreement provided that DMA would handle all of the logistical aspects of Moses's celebrity styling business, including directly communicating with plaintiff's celebrity clients in order to negotiate fees and other terms for services, billing and processing revenues received by DMA from plaintiff's clients, and arranging for plaintiff's transportation and accommodations.*fn5 In exchange for these services, DMA was to keep twenty percent of the revenue that DMA collected from Moses's clients as payment for each job, and was to remit the remaining eighty percent to Martin.*fn6

  DMA entered into "deal memos" with Moses's and other stylists' celebrity clients, via U.S. mail and facsimile, using interstate telephone wires, "establishing the fees (daily or per job rates) for the stylists (third party beneficiaries to these contracts), the dates and other terms of the services to be provided by the DMA stylists, wardrobe or other expenses, transportation and accommodation costs."*fn7 Moses did not participate in the deal making process, nor was she privy to the terms of the deal memos.*fn8 Moses was thus "entirely dependent on defendants" as her agent "to deal fairly and honestly by (1) reporting the true terms of the styling contracts they negotiate; (2) reporting the receipt of payments from the clients; and (3) remitting full and correct payments timely" to her.*fn9

  B. The Alleged Scheme

  Moses alleges, however, that Martin and DMA "failed to perform their obligations and breached the Agreement, took and stole plaintiff's money, lied and cheated plaintiff and engaged in a pattern of fraudulent behavior in furtherance of defendants' efforts to steal money from plaintiff."*fn10 Martin and DMA allegedly perpetrated the scheme in order to steal from Moses and other celebrity stylists.*fn11

  After Moses or another stylist completed a job, DMA would bill the client via U.S. mail or facsimile lines. The client would remit payment to DMA, at which point, pursuant to the Agreement, DMA was to retain twenty percent of the collected fee and to remit the remaining portion to the stylist. "Instead, defendants diverted the proceeds of plaintiff's and other stylists' jobs to defendant Martin's personal use and excessive lifestyle."*fn12 In other instances, DMA "would pay the stylists far less than the eighty percent portion the stylist was entitled to receive."*fn13 When the stylists spoke with Martin to inquire about the job, Martin "falsely claimed that DMA had not been paid by clients as an excuse for not paying plaintiff and other stylists. Instead, defendants claimed that they were `advancing' moneys to plaintiff and other stylists, deceitfully claiming that the stylist owed DMA money for ostensibly un-reimbursed `advances.'"*fn14 By offering the advance, "Martin would gain the confidence of the stylists so that she could continue to further swindle them."*fn15 The Amended Complaint also alleges that Martin routinely "invoiced clients for inflated and false charges for wardrobe and other related expenses beyond the proper fees" and "directed her employees to submit (via U.S. mail and facsimile, using interstate telephone wires) bogus receipts to the celebrity clients for items intended for Martin's own personal wardrobe. . . ."*fn16

  C. Moses Discovers the Scheme

  In late 2003, after Moses had not received payments for some time, Moses began contacting clients herself to inquire why they had not paid DMA for her work.*fn17 These clients informed Moses that they had in fact remitted payment to DMA shortly after having received DMA's invoices.*fn18 Then, on or about December 4, 2003, Moses visited the DMA office in Manhattan where she demanded copies of her invoices, and DMA employees Clarence Hall and Millicent Williams provided her with some of her outstanding invoices along with a list of invoices for which plaintiff was owed money.*fn19 Moses alleges that this list "corroborates that DMA had been paid for these jobs by clients" and "catalogues the deceit of defendant Martin, who continued, up until March, 2004 to assert that DMA had not been paid by these clients for these jobs and continued to deny she owed plaintiff any money."*fn20 Moses also alleges that "DMA employees further indicated that they did not know why defendant Martin was keeping plaintiff's money and are well aware that defendant Martin has been stealing in order to support her extravagant lifestyle."*fn21 D. Moses Files Suit

  Moses filed her Complaint on February 24, 2004 and an Amended Complaint on May 19, 2004. In her Amended Complaint and accompanying Amended RICO Statement ("ARS"),*fn22 plaintiff provides the dates and details of "dozens of separate acts of mail and wire fraud commencing in March, 2001 and extending to the present," perpetrated against Moses, other stylists and their celebrity clientele.*fn23 Moses asserts that these "acts collectively constitute a `pattern of racketeering activity'"*fn24

  III. LEGAL STANDARD

  "Given the Federal Rules' simplified standard for pleading, `[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'"*fn25 Thus, a plaintiff need only plead "`a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests."*fn26 Simply put, "Rule 8 pleading is extremely permissive."*fn27

  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.'"*fn28

  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."*fn29 When deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must accept all factual allegations in ...


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