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Miller v. Holtzbrinck Publishers

March 3, 2009

DIANNE MILLER, PLAINTIFF,
v.
HOLTZBRINCK PUBLISHERS, LLC, MACMILLAN PUBLISHERS, INC., SAINT MARTIN'S PRESS, HEATHER HUNTER AND MICHELLE VALENTINE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., United States District Judge

OPINION & ORDER

Plaintiff Diane Miller ("Plaintiff") filed an Amended Complaint alleging fraudulent inducement and misrepresentation against Defendant Heather Hunter ("Hunter"). Hunter now moves this Court to dismiss Plaintiff's Amended Complaint pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. Hunter raises two arguments in support of her motion to dismiss: (1) that Plaintiff has not pled the claim of fraudulent inducement with sufficient particularity under the Federal Rules of Civil Procedure; and (2) that Plaintiff has failed tostate a cause of action for fraudulent inducement and misrepresentation because she has attempted improperly to convert a claim for breach of contract into a claim of fraudulent inducement. For the reasons set forth below, Hunter's motion is granted and the Amended Complaint is dismissed.

I. FACTUAL BACKGROUND

Plaintiff, an author, alleges that she agreed to write a book for Hunter, with an understanding that if a publisher showed interest, Miller would be paid an amount to be negotiated at that time. Amended Complaint ("Am. Compl.") ¶ 6. Hunter, a former adult-film star, wasthe first African-American woman to be chosen for the somewhat dubious honor ofinduction into the Adult Film Hall of Fame. Sheallegedly contacted Plaintiff to ghost-write Hunter's memoirs and to tell the story of her shimmying up the pole of success inthe porn profession. After being contacted by Hunter's literary agent in approximately January 2004, Plaintiff reviewed Hunter's notes and allegedly agreed to write the book. Id. ¶ 7. Plaintiff alleges that Hunter told Plaintiff that she would be paid at least $25,000 fromHunter's advance royalties once the manuscript had been accepted for publication, and also agreed to pay Plaintiff further royalties after the book was published.*fn1 Id. ¶ 8. The agreement between Plaintiff and Hunter regarding royalties for the manuscript was apparently not reduced to writing. Plaintiff alleges that in April 2005 she delivered a completed manuscript, with the enticing title"Insatiable Desires," to Hunter and her agent. Id. ¶ 10. Although Plaintiff alleges that she continued to communicate with Hunter and her agent throughout 2004 and to approximately October 2005 regarding possible publishers for Plaintiff's manuscript, she asserts that on or about July 24, 2007, a book that was substantially similar to the manuscript Plaintiff delivered to Hunter, entitled "Insatiable: The Rise of a Porn Star" and written by Michelle Valentine, was published. See id. ¶¶ 11-12.

Plaintiff filed her initial complaint in this matter in October 2007. The initial complaint brought a claim for tortious interference with business relations against several defendants, including Hunter, Valentine and various publishing companies, as well as a claim for conversion against the publisher Defendants and Valentine, and a claim for fraudulent inducement and misrepresentation against Hunter. On November 12, 2008, this Court granted the Defendants' motion to dismiss, finding that Plaintiff's conversion and tortious interference claims were preempted by the Copyright Act of 1976 and that Plaintiff's fraudulent inducement claim against Hunter lacked the requisite specificity for fraud claims under Rule 9(b). See Miller v. Holtzbrinck Publishers, LLC, 08 Civ. 3508 (HB), 2008 U.S. Dist. LEXIS 92038, at *4-12 (S.D.N.Y. Nov. 12, 2008). However, this Court granted Plaintiff leave to amend her complaint with respect to her fraudulent inducement cause of action. Id. at *12-13. Plaintiff filed her Amended Complaint on December 2, 2008, and this motion to dismiss followed.

III. DISCUSSION

A. Legal Standard on a Motion to Dismiss

To survive a motion to dismiss, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (retiring previous pleading standard, under Conley v. Gibson, 355 U.S. 41 (1957), that required denial of a Rule 12(b)(6) motion "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief"). A court must accept the facts alleged in the complaint as true, even if doubtful, and draw all reasonable inferences in favor of the nonmoving party. Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir. 2008); Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989). However, "[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to [defeat] a motion to dismiss." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 227 (2d Cir. 2006). In deciding a motion to dismiss, the Court must apply a "flexible 'plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007). This standard requires "factual allegations sufficient 'to raise a right to relief above the speculative level.'" Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir. 2008) (quoting Twombly, 550 U.S. at 555).

Additionally, in considering the sufficiency of the allegations of a claim for fraud, the Court must examine the allegations in the complaint with an eye toward the heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) provides: "In alleging fraud or mistake, the party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Although Rule 9(b) must be read in conjunction with Rule 8(a), which requires only a "short and plain statement" of the claim asserted, the fraud allegations must nonetheless be sufficiently specific to "give the defendant adequate information to allow the defendant to frame a response" and "to allow the defendant a reasonable opportunity to answer the complaint." Kermanshah v. Kermanshah, 580 F. Supp. 2d 247, 257 (S.D.N.Y. 2008) (citing Ross v. H.H. Robins Co., 607 F.2d 545, 557-58 (2d Cir. 1979), cert. denied, 446 U.S. 946 (1980)) (internal quotation marks omitted). Thus, the Second Circuit has recognized that "[t]he specificity required by Rule 9(b) is distinct from Rule 8(a)'s liberal 'plain statement' rule." IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1057 (2d Cir. 1993). This distinction serves several important policies, including (1) to afford defendants fair notice of claims against them and the factual ground upon which such claims are based; (2) to safeguard defendants' reputations and goodwill from improvident charges of wrongdoing; and (3) to prevent the filing of strike suits. See id. (citing Ross v. Bolton, 904 F.2d 819, 823 (2d Cir. 1990)). The Second Circuit "recognize[s] and rigorously enforce[s] these salutary purposes of Rule 9(b)." Ross, 904 F.2d at 823.

B. Miller's Fraudulent Inducement Claim Fails To State a Cause of Action

1. Miller's Fraudulent Inducement Claim Fails to Plead with Sufficient Particularity

The basis of Plaintiff's fraudulent inducement claim is that Hunter induced Plaintiff to author Hunter's memoirs without the intentionto pay Plaintiff for her work. See Am. Compl. ¶ 8, 14. Hunter argues that the Amended Complaint does little, if anything, to remedy the deficiencies that this Court noted in Plaintiff's initial complaint. Namely, Hunter argues that the Amended Complaint should be dismissed because Plaintiff has failed to plead fraud with particularity as required by Federal Rule 9(b). See Memorandum of Law in Support of Motion to Dismiss ("Hunter's Mem.") at 3-4.

To withstand a motion to dismiss, as for all claims sounding in fraud, a claim for fraudulent inducement must comply withthe requirements of Rule 9(b), which requires that allegations of fraud be pled with particularity. Fed. R. Civ. P. 9(b). The Second Circuit has held that "[t]o satisfy the particularity requirement of 9(b), a complainant must adequately specify the statements it claims were false or misleading, give particulars as to the respect in which plaintiff contends the statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements." Cosmas, 886 F.2d at 11; see also Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (finding that 9(b) requires a plaintiff to "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent").

In addition to stating the "where, when, who or how" of the allegedly fraudulent statements, a plaintiff alleging fraudulent inducement must also show that the defendant exhibited scienter, or fraudulent intent. Although scienter need not be pled with great specificity, see Fed. R. Civ. P. 9(b), "there must be some factual basis for conclusory allegations of intent." Ouknine v. MacFarlane, 897 F.2d 75, 80 (2d Cir. 1990). Thus, "plaintiffs must allege facts that give rise to a strong inference of fraudulent intent." Acito v. IMCERA Group, Inc., 47 F.3d 47, 52 (2d Cir. 1995); see also Bangkok Crafts Corp. v. Capitolo Di San Pietro in Vaticano, 331 F. Supp. 2d 247, 253 (S.D.N.Y. 2004). The requisite "strong inference" of fraud may be shown by alleging either (1) facts to show that the defendant had both ...


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