United States District Court, S.D. New York
the Plaintiff: Claudius O. Sokenu James Lee Shearman &
the Defendants: Jeffrey M. Eilender Vitali S. Rosenfeld
Schlam Stone & Dolan LLP.
OPINION AND ORDER
COTE UNITED STATES DISTRICT JUDGE.
Ekaterina Rapay (“Rapay”), a Russian citizen,
brings this action premised on diversity jurisdiction against
the defendants Michael Chernov (“Chernov”),
Gelsey Kirkland (“Kirkland”) and their company,
the Gelsey Kirkland Academy of Classical Ballet Inc.
(“GKA”) for breach of contract, fraud, quantum
meruit, unjust enrichment, and promissory estoppel. The
defendants have moved to dismiss the First Amended Complaint
(“FAC”) pursuant to Fed.R.Civ.P. 12(b)(6) and
12(b)(1). The defendants also move to strike the request for
punitive damages and attorneys' fees from the pleadings
pursuant to Fed.R.Civ.P. 12(f). For the reasons set forth
below, the defendants' motion to strike is granted, and
the motion to dismiss is granted in part.
following facts are drawn from the FAC and are construed in
favor of the plaintiff. See Keiler v. Harlequin Enters.
Ltd., 751 F.3d 64, 68 (2d Cir. 2014).
is a professional ballet costume designer. Chernov and his
wife Kirkland are the founders of GKA, a New York dance
education center. In December 2011, Chernov and Kirkland
orally offered to employ Rapay as a costume and set designer
for GKA's upcoming production of “The
Nutcracker” at a “reasonable rate” and
reimburse all her expenses. There was no written contract.
began working for GKA in January 2012, but the parties
continued to negotiate the terms and scope of her employment
through April 2012. According to Rapay, GKA agreed that she
would design costumes and sets for “The
Nutcracker” and other productions in exchange for
compensation at “a rate commensurate with her
experience.” Rapay claims such compensation would range
from $50, 000 to $75, 000 per year.
2012 and 2013, Rapay provided at least 51 separate costume
design sketches and traveled on three separate occasions to
GKA's offices in New York to oversee costume design and
construction. During Rapay's first trip to New York in
April 2012, Chernov took her to the law offices of Frenkel
Hershkowitz & Safran LLP (“Frenkel”) to help
her obtain a work permit. A Frenkel representative described
the documents required to obtain an “O-1” work
visa, which is a nonimmigrant visa for certain individuals in
the arts and other fields. Chernov informed Rapay that once
she assembled the required documents, he would provide the
employment information necessary to complete her O-1 visa
March 2013, during her final visit to New York, Rapay
informed Chernov that she had compiled the necessary
documents. Accordingly, on March 13, 2013, Chernov's
assistant sent Rapay an email containing specific
instructions on how to complete the O-1 visa application (the
“March 2013 email”). The March 2013 email stated
that Rapay would be employed as a full-time “Costume
Designer, ” whose job included “designing, sewing
and creating various costumes for [GKA's] upcoming
Nutcracker” production for “$25, 000.”
contacted Chernov and demanded that he pay her $50, 000, not
$25, 000. Chernov provided Rapay a “small
payment” and, according to the FAC, assured her
“that the rest of her compensation would be forthcoming
and that they would sign a written contract” on a
subsequent visit in the fall of 2013.
17, 2013, Chernov sent Rapay an email terminating her
employment (the “June 2013 email”). In the email,
Chernov wrote “I need to clarify for you the reality of
GKA's situation in moving forward, ” and explained
that GKA would not be using Rapay's designs “except
for Arabian girls and Russian lead girl for which [GKA] will
credit you of course.” He added that Rapay's
designs “for the most part did not fall in with
[GKA's] vision” and that “[t]his also means
[GKA] will not be able to process your work visa
application.” Chernov noted that he was “sure
that this will impact our friendship.”
production of “The Nutcracker” commenced in
December 2013. According to Rapay, videos of the performance
reveal that GKA used not only the costumes for the Arabian
girls and the Russian lead girl, but also various other
costumes designed by Rapay. Rapay sent Chernov a demand
letter on January 31, 2014 seeking payment for her work for
GKA. Chernov never responded.
filed a complaint on June 24, 2016, seeking to recover her
unpaid compensation under several contract and quasi-contract
theories of liability, including breach of contract, quantum
meruit, unjust enrichment, and promissory estoppel, as well
as fraud. An amended complaint was filed on August 2, 2016.
The defendants filed the present motion to dismiss pursuant
to Rules 12(b)(6) and 12(b)(1) on August 17. The motion
became fully submitted on November 16.
deciding a motion to dismiss, a court must “accept all
allegations in the complaint as true and draw all inferences
in the non-moving party's favor.” LaFaro v.
N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d
Cir. 2009) (citation omitted). “To survive a motion to
dismiss under Rule 12(b)(6), a complaint must allege
sufficient facts which, taken as true, state a plausible
claim for relief.” Keiler, 751 F.3d at 68. A claim has
facial plausibility when “the factual content” of
the complaint “allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Tongue v. Sanofi, 816 F.3d 199, 209
(2d Cir. 2016) (citation omitted).
Individual Liability of Chernov and Kirkland
and Kirkland contend that the contract and quasi-contract
claims alleged against them in their personal capacities must
be dismissed because the FAC does not allege any personal
wrongdoing by either Chernov or Kirkland. It is
well-established under New York law that “[p]ersons may
not be held personally liable on contracts of their
corporations, provided they did not purport to bind
themselves individually under such contracts.”
Stern v. H. DiMarzo, Inc., 909 N.Y.S.2d 480, 480-81
(App.Div. 2010) (citation omitted). Put differently,
“[w]hen an officer or director acts on behalf of his or
her corporation, he or she may not be held liable for
inducing the corporation to violate its contractual
obligations unless his or her activity involves separate
tortious conduct or results in personal profit.”
Id. at 481 (citation omitted).
does not include facts suggesting that Chernov and Kirkland
engaged in tortious conduct or intended to bind themselves
individually under the contract. Accordingly, the breach of
contract and quasi-contract claims against Chernov and
Kirkland are dismissed.
argues that Chernov and Kirkland benefitted personally from
GKA's production of “The Nutcracker” through
the advancement of their careers and receipt of salary and
benefits from GKA. This is insufficient to support a claim
against these individuals due to the alleged breach by their
employer of its contract with Rapay.
Breach of Contract
defendants argue that the alleged contract is unenforceable
for two reasons. First, the defendants contend that it
violates New York's statute of frauds because the oral
contract was never reduced to writing even though Rapay's
employment extended beyond one year. Second, the defendants
allege that the contract is unenforceable for lack of
Statute of Frauds
York's statute of frauds renders void an agreement that
has not been reduced to writing if “[b]y its terms [it]
is not to be performed within one year from the making
thereof.” N.Y. Gen. Obl. Law § 5-701(a)(1).
“New York courts generally construe the statute of
frauds narrowly, voiding only those oral contracts which by
their very terms have absolutely no possibility in fact and
law of full performance within one year.” Kroshnyi
v. U.S. Pack Courier Servs., Inc., 771 F.3d 93, 110 (2d
Cir. 2014) (citing D&N Boening, Inc. v. Kirsch
Beverages, Inc., 63 N.Y.2d 449, 454 (1984)).
“[W]herever an agreement has been found to be
susceptible of fulfillment within that time, in whatever
manner and however impractical, the New York Court of Appeals
has held the one-year provision of the Statute to be
inapplicable, a writing unnecessary, and the agreement not
barred.” Id. (citation omitted).
York law presumes that an employment agreement that lacks a
fixed duration is a “hiring at will, terminable at any
time by either party.” Id. (citation omitted).
Such agreements are “not covered by the statute of
frauds, because they could theoretically be terminated by
either party within one year of their making.”
alleged oral agreement between Rapay and GKA is not void
under the statute of frauds. Nothing in the alleged contract
required that Rapay's employment extend beyond a year.
She was not required, for example, to continue working for
GKA up to and until the production of “The
Nutcracker.” She was required to design costumes and
sets -- a service which could theoretically have been
completed within the course of a year and in advance of the
contends that the parties contemplated that the work would
occur over the course of the 23 months preceding “The
Nutcracker” performance. Even if this were the
parties' expectation, that is insufficient to void a
contract. It remained possible that Rapay's work ...