Belluomo v. Tiger Schulmann's Mixed Martial Arts et al

Filing 32

MEMORANDUM & ORDER denying 13 Motion to Dismiss for Lack of Jurisdiction; denying 13 Motion to Dismiss for Failure to State a Claim; finding as moot Motion to Disqualify Counsel. For the foregoing reasons, Plaintiff's motion to disqualify is DENIED AS MOOT, and Defendants' motion to dismiss (Docket Entry 13) is DENIED. So Ordered by Judge Joanna Seybert on 9/30/2015. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------X
JOSEPH BELLUOMO, and all other
individuals similarly situated,
Plaintiff,
-against-

MEMORANDUM & ORDER
14-CV-4402(JS)(AKT)

TIGER SCHULMANN’S MIXED MARTIAL
ARTS, and DANIEL SCHULMANN a/k/a
TIGER SCHULMANN,
Defendants.
-----------------------------------X
APPEARANCES
For Plaintiff:
Saul D. Zabell, Esq.
Zabell & Associates, P.C.
1 Corporate Drive, Suite 103
Bohemia, NY 11716
For Defendants:

Scott Craig Levenson, Esq.
485 Boulevard
Elmwood Park, NJ 07407
David M. Fish, Esq.
3 Park Avenue, 28th Floor
New York, NY 10016

SEYBERT, District Judge:
Plaintiff Joseph Belluomo (“Plaintiff”) commenced this
diversity

action

on

July

21,

2014

against

defendants

Tiger

Schulmann’s Mixed Martial Arts (“Tiger Schulmann”) and Daniel
Schulmann (“Mr. Schulmann,” and together with Tiger Schulmann,
“Defendants”),

alleging

claims

of

breach

of

contract,

unjust

enrichment and quantum meruit, partnership oppression, breach of
fiduciary duty, and conversion. Currently pending before the Court
are: (1) Defendants’ motion to dismiss the Complaint for lack of

subject matter jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(1), for lack of personal jurisdiction over Mr.
Schulmann pursuant to Federal Rule of Civil Procedure 12(b)(2),
and for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6), (Docket Entry 13); and (2) Plaintiff’s motion
to disqualify Tiger Schulmann’s in-house counsel and Defendants’
attorney in this action, Scott Craig Levenson (“Mr. Levenson”), on
the ground that he is a critical fact witness.

For the following

reasons, Defendants’ motion to dismiss is DENIED and Plaintiff’s
motion to disqualify Mr. Levenson is DENIED AS MOOT.
BACKGROUND
Defendants operate a chain of martial arts schools.

In

1994, Defendants hired Plaintiff as a manager of their school in
Massapequa, New York (the “School”).

(Compl. ¶ 10.)

According to

Plaintiff, he and Mr. Schulmann subsequently entered into an oral
partnership

agreement

pursuant

to

which

Plaintiff

invested

approximately $30,000 in exchange for a seven-and-one-half percent
ownership interest in the School.

(Compl. ¶¶ 11, 13.)

Plaintiff

alleges that within five years, he had invested approximately
$270,000 in the School in exchange for a forty-nine percent
ownership interest.

(Compl. ¶¶ 14-15.)

In 2012, the School was

relocated to Seaford, New York. (Compl. ¶ 24.) Plaintiff contends
that the relocation did not affect his ownership interest in the
School.

(Compl. ¶ 25.)
2

The
Plaintiff

parties’

alleges

discussion”

that

with

Plaintiff’s

relationship

deteriorated

on

2014,

Tiger

alleged

July

17,

Schulmann’s

entitlement

to

he

thereafter.

“engaged

accountant

profits

in

a

regarding

generated

by

a

different school in Manhasset, New York. (Compl. ¶ 30.) According
to

Plaintiff,

Mr.

Schulmann,

who

apparently

overheard

the

conversation, then “interjected, accosted Plaintiff, verbally and
physically threatened him and falsely accused [him] or unspecified
impropriety.” (Compl. ¶ 34.) Later that day, Defendants allegedly
changed the locks to the School and sold Plaintiff’s ownership
interest without compensating him.

(Compl. ¶¶ 36, 38.)

Plaintiff then filed this action, alleging breach of
contract,

unjust

enrichment

and

quantum

meruit,

oppression, breach of fiduciary duty, and conversion.

partnership
Defendants

dispute Plaintiff’s contention that the relocation of the School
from Manhasset to Seaford did not affect Plaintiff’s ownership
interest.

Rather, Defendants claim that Plaintiff “did not invest

any capital in the Seaford location, and thus, never acquired an
ownership interest therein.”
at 11.)
relocation

(Defs.’ Opp. Br., Docket Entry 17,

In other words, Defendants appear to argue that the
of

the

School

from

Massapequa

to

Seaford

reset

Plaintiff’s prior ownership interest.

Page numbers of Defendants’ briefs reference herein refer to
the page numbers supplied by the Electronic Case Filing system.
1

3

On September 29, 2014, Defendants filed a motion to
dismiss this action on several grounds, including improper service
of the Summons and Complaint.

(Docket Entry 13.)

That same day,

Plaintiff filed a letter requesting: (1) a pre-motion conference
to

discuss

a

proposed

motion

to

disqualify

Mr.

Levenson

as

Defendants’ attorney; and (2) a traverse hearing to challenge
Defendants’ improper service argument.

(Docket Entry 12.)

In his

letter, Plaintiff claimed that Mr. Levenson is a necessary fact
witness based on an audio recording of a conversation between
Plaintiff and Mr. Levenson during which Mr. Levenson stated that
Plaintiff had an ownership interest in the School.
On October 17, 2014, the Court held a conference to
address Plaintiff’s letter.

The Court listened to Plaintiff’s

audio recording of his conversation with Mr. Levenson and directed
Plaintiff’s counsel to provide the Court with a transcript of the
recording. (Docket Entry 15.) The Court also directed the parties
to return for a traverse hearing on October 29, 2014.
Entry 15.)

(Docket

At the conclusion of the traverse hearing, the Court

found that service of the Summons and Complaint was proper.
(Docket Entry 16.)

Additionally, the Court permitted Plaintiff’s

counsel to make an oral motion to disqualify Mr. Levenson and also
set a briefing schedule for the motion.

Defendants filed their

opposition on November 12, 2014, and Plaintiff filed a reply on

4

November 19, 2014.

The motion to disqualify and the motion to

dismiss are fully briefed.
DISCUSSION
I.

Motion to Disqualify
On June 25, 2015, Plaintiff’s counsel filed a letter on

the docket stating that Mr. Levenson “expect[ed] to withdraw as
counsel of record in this case in the immediate future.”
Entry 25, at 2.)

(Docket

On July 20, 2015, a new attorney, David M. Fish,

entered his notice of appearance on behalf of Defendants, (Docket
Entry 26), and there has been no activity on the docket by Mr.
Levenson

since.

Thus,

as

it

appears

that

Mr.

Levenson

has

withdrawn from this case, Plaintiff’s motion to disqualify is
DENIED AS MOOT.

Mr. Levenson is ORDERED to file a formal notice

of withdrawal within seven (7) days of this Memorandum and Order.
II.

Motion to Dismiss
Defendants advance the following arguments in their

motion to dismiss: (1) the Court lacks subject matter jurisdiction
over this case because Plaintiff cannot satisfy the amount-incontroversy requirement of 28 U.S.C. § 1332; (2) the Court lacks
personal jurisdiction over Mr. Schulmann; (3) the Complaint fails
to state a claim against Tiger Schulmann’s Mixed Martial Arts
because Tiger Schulmann’s Mixed Martial Arts is a trade name and
not a cognizable legal entity; and (4) Plaintiff’s causes of action
based on the alleged oral partnership agreement should be dismissed
5

because the oral agreement is unenforceable under the statute of
frauds.

(Defs.’ Br., Docket Entry 13-4.)

The Court rejects each

of these arguments for the reasons explained below.
A.

Subject Matter Jurisdiction
As noted, Defendants argue that the Court lacks subject

matter

jurisdiction

over

this

case

because

Plaintiff

cannot

satisfy the amount-in-controversy requirement of 28 U.S.C. § 1332.
(Defs.’ Br. at 1-2.)
1.

The Court disagrees.

Legal Standard

“A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court lacks the
statutory or constitutional power to adjudicate it.”

Makarova v.

United States, 201 F.3d 110, 113 (2d Cir. 2000).

“The party

invoking federal jurisdiction bears the burden of proving facts to
establish that jurisdiction.”
947 (2d Cir. 1998).

Linardos v. Fortuna, 157 F.3d 945,

In resolving a motion to dismiss for lack of

subject matter jurisdiction, the Court may consider affidavits and
other materials beyond the pleadings to resolve jurisdictional
questions.

See Morrison v. Nat’l Australia Bank, Ltd., 547 F.3d

167, 170 (2d Cir. 2008).
Under 28 U.S.C. § 1332, federal courts have diversity
jurisdiction only when there is complete diversity between the
parties and the amount in controversy exceeds $75,000, exclusive
of interest and costs.

28 U.S.C. § 1332(a).
6

The “party invoking

the jurisdiction of the federal court has the burden of proving
that it appears to a ‘reasonable probability’ that the claim is in
excess of the statutory jurisdictional amount.

Tongkook Am., Inc.

v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994) (quoting
Moore v. Betit, 511 F.2d 1004, 1006 (2d Cir. 1975)).

“This burden

is hardly onerous, however,” because there is “‘a rebuttable
presumption

that

the

face

of

the

complaint

is

a

representation of the actual amount in controversy.’”

good

faith

Scherer v.

Equitable Life Assurance Soc’y of U.S., 347 F.3d 394, 397 (2d Cir.
2003) (quoting Wolde–Meskel v. Vocational Instruction Project
Cmty. Servs., Inc., 166 F.3d 59, 63 (2d Cir. 1999)).
“To overcome the face-of-the-complaint presumption, the
party opposing jurisdiction must show ‘to a legal certainty’ that
the

amount

threshold.”

recoverable

does

not

meet

the

jurisdictional

Id. (quoting Wolde–Meskel, 166 F.3d at 63).

a very high bar:

This is

“The legal impossibility of recovery must be so

certain as virtually to [negate] the plaintiff’s good faith in
asserting the claim.

Even where the allegations leave grave doubt

about the likelihood of a recovery of the requisite amount,
dismissal is not warranted.”

Id. (internal quotation marks and

citations omitted).
2.

Analysis

Here, the Complaint alleges that the Court has diversity
jurisdiction over Plaintiff’s state law claims pursuant to 28
7

U.S.C. § 1332 and that the amount in controversy exceeds $75,000.
(Compl. ¶ 2.)

In support of this jurisdictional allegation, the

Complaint alleges (1) that Plaintiff contributed approximately
$270,000 in exchange for a forty-nine percent ownership interest
in the School, (2) that he was entitled to fifty percent of the
School’s profits under his partnership agreement with Defendants;
and

(3)

without

that

Defendants

compensating

him.

sold

Plaintiff’s

(Compl.

¶¶

ownership

15,

19,

interest

38.)

These

allegations easily exceed the amount-in-controversy requirement,
and Defendants have failed to rebut the presumption that the
Complaint asserts a good faith representation of the amount in
controversy.

Defendants simply reiterate their argument that

Plaintiff is not entitled to an ownership interest in the School
because he never invested in it after it was relocated to Seaford.
But this has to do with the merits of Plaintiff’s claim, not
whether Plaintiff has alleged that he is entitled to damages in
excess of $75,000.

Accordingly, Plaintiff has satisfied the

amount-in-controversy requirement.

Defendants’ motion to dismiss

for lack of subject matter jurisdiction is therefore DENIED.
B.

Personal Jurisdiction
Defendants next argue that this Court lacks personal

jurisdiction over Mr. Schulmann because he is not a domiciliary of
the State of New York.

(Defs.’ Br. at 2.)

The Court disagrees.

As explained below, based on Plaintiff’s allegations, the Court
8

may exercise personal jurisdiction over Mr. Schulmann under New
York’s long-arm statute, which provides for personal jurisdiction
over an out-of-state defendant who transacts business within New
York and where the cause of action at issue arises from that
transaction of business.
1.

See N.Y. C.P.L.R. 302(a)(1).

Legal Standard

“A plaintiff bears the burden of demonstrating personal
jurisdiction over a person or entity against whom it seeks to bring
suit.”

Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d

Cir. 2010).

The Court has “considerable procedural leeway” in

resolving a pretrial motion to dismiss for lack of jurisdiction:
“It may determine the motion on the basis of affidavits alone; or
it may permit discovery in aid of the motion; or it may conduct an
evidentiary hearing on the merits of the motion.”

Marine Midland

Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981) (citations
omitted).

A plaintiff’s precise burden depends on how the Court

elects to address the jurisdictional issue. Id. Short of “a fullblown evidentiary hearing on the motion, the plaintiff need make
only

a

prima

facie

showing

of

jurisdiction

affidavits and supporting materials.”

Id.

through

its

own

Although a plaintiff

will still have to establish jurisdiction by a preponderance of
the evidence at trial or a pretrial evidentiary hearing, “until
such

a

hearing

notwithstanding

is
any

held,

a

prima

controverting
9

facie

showing

presentation

by

suffices,
the

moving

party, to defeat the motion.”

Id. (citations omitted).

considering

motion,

a

Rule

12(b)(2)

the

Court

Thus, in

construes

the

pleadings and affidavits in the light most favorable to the
plaintiff

and

resolves

all

doubts

in

the

plaintiff’s

favor.

DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 85 (2d Cir. 2001).
2.

Analysis

Whether a defendant is subject to personal jurisdiction
involves a two-part analysis by a federal district court sitting
in diversity.

“First, a district court must determine whether,

under the laws of the forum state (New York in this case), there
is jurisdiction over the defendant.”

Grand River Enters. Six

Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005) (emphasis
added) (internal quotation marks and citation omitted).

“‘Second,

[it] must determine whether an exercise of jurisdiction under these
laws is consistent with federal due process requirements.’”

Id.

(emphasis added) (alteration in original) (quoting Bank Brussels
Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d
Cir. 1999)).

As discussed below, Plaintiff has met both prongs

for establishing personal jurisdiction over Mr. Schulmann.
a.

New York’s Long-Arm Statute

As noted, Plaintiff contends that the Court may exercise
personal

jurisdiction

over

Mr.

Schulman

under

N.Y.

C.P.L.R.

302(a)(1), which provides for jurisdiction over an out-of-state
defendant if “[1] that party ‘transacts any business within the
10

state’ and [2] if the claim arises from these business contacts.”
D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2d. Cir. 2006)
(quoting CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d
Cir. 1986)).

The Court agrees with Plaintiff.

“New York courts define ‘transact[ing] business’ as
purposeful activity--‘some act by which the defendant purposefully
avails itself of the privilege of conducting activities within the
forum State, thus invoking the benefits and protections of its
laws.’”

Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d

Cir. 2007) (quoting McKee Elec. Co. v. Rauland–Borg Corp., 20
N.Y.2d 377, 382, 229 N.E.2d 604, 607, 283 N.Y.S.2d 34, 37–38
(1967)). An out-of-state defendant “need not be physically present
in New York to transact business” under C.P.L.R. 302(a)(1).

Chloé

v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 169 (2d Cir.
2010).

With respect to the second prong of C.P.L.R. 302(a)(1), a

claim “‘aris[es] from’ a particular transaction when there is ‘some
articulable nexus between the business transacted and the cause of
action sued upon.’”

Sole Resort, S.A. de C.V. v. Allure Resorts

Mgmt., LLC, 450 F.3d 100, 103 (2d Cir. 2006) (alteration in
original) (quoting McGowan v. Smith, 52 N.Y.2d 268, 272, 419 N.E.2d
321, 323, 437 N.Y.S.2d 643 (1981)).
Here, construing Plaintiff’s allegations in a light most
favorable to him, Mr. Schulmann unequivocally transacted business
within the meaning of C.P.L.R. 302(a)(1) by owning and operating
11

a chain of martial arts schools within the State of New York and
entering into an agreement with Plaintiff to manage one of the
schools.

Additionally, Plaintiff’s claims arise directly from

this transaction of business, as he claims that Mr. Schulmann
breached their agreement by locking Plaintiff out of his School
and failing to pay him his ownership interest in the School.
b.

Due Process

Having found that Mr. Schulmann’s transactions fall
within the reach of New York’s long-arm statute, the next issue is
whether the Court’s exercise of jurisdiction over him comports
with the Constitution’s due process guarantees. Asahi Metal Indus.
Co. v. Cal. Super. Ct., Solano Cnty., 480 U.S. 102, 108-09, 107 S.
Ct. 1026, 1030, 94 L. Ed. 2d (1987).

These guarantees are

satisfied when a defendant has certain minimum contacts with the
forum state such that maintenance of the suit would not “offend
traditional notions of fair play and substantial justice.”

Int’l

Shoe Co. v. Washington Off. of Unemployment Comp. & Placement, 326
U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945) (internal
quotation marks and citation omitted).
related

inquiries:

the

“reasonableness” inquiry.

“minimum

The analysis involves two

contacts”

inquiry

and

the

Chloé, 616 F.3d at 171.

To establish that a defendant has the requisite minimum
contacts with the forum, the plaintiff must show that the defendant
“purposefully avail[ed]” itself of the privilege of doing business
12

in the forum such that the defendant “should reasonably anticipate
being haled into court there.”

World–Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567, 62 L. Ed. 2d 490
(1980) (internal quotation marks and citation omitted); Kernan v.
Kurz–Hastings, Inc., 175 F.3d 236, 242–43 (2d Cir. 1999).2
As

noted

above,

Mr.

Schulmann

purposefully

availed

himself of the privilege of transacting business in New York.

He

owns and operates a chain of martial arts stores and entered into
an agreement with Plaintiff to operate one of those schools.
Consequently, Mr. Schulmann purposefully availed himself of the
laws and privileges of New York, and could have reasonably foreseen
being “haled” into court in New York in the event of a breach of
their agreement.

Accordingly, Mr. Schulmann’s activities satisfy

the minimum contacts prong of the due process analysis.

The Second Circuit has noted that New York courts “tend to
conflate the long-arm statutory and constitutional analyses by
focusing on the constitutional standard: whether the defendant’s
conduct constitutes ‘purposeful[] avail[ment]’ ‘of the privilege
of conducting activities within the forum State, thus invoking
the benefits and protections of its laws.’” See, e.g., Best Van
Lines, 490 F.2d at 247 (quoting Hanson v. Denckla, 357 U.S. 235,
353, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283 (1958)); see also
Thorsen v. Sons of Norway, 996 F. Supp. 2d 143, 158 (E.D.N.Y.
2014) (“Generally, the minimum contacts inquiry overlaps
significantly with the ‘transaction of business’ inquiry under
CPLR Section 302(a)(1).”). “However, because New York’s longarm statute encompasses a wider range of activity than the
minimum-contacts doctrine, the Court must undertake an
additional analysis under the due process clause.” Thorsen, 996
F. Supp. 2d at 158 (citation omitted).
2

13

The exercise of jurisdiction over Mr. Schulmann also
must not “offend traditional notions of fair play and substantial
justice.”

Asahi, 480 U.S. at 113, 107 S. Ct. at 1028 (internal

quotation marks and citation omitted).

A court must consider five

factors in determining whether the exercise of jurisdiction is
reasonable: (1) the burden on defendant, (2) the interests of the
forum state, (3) the plaintiff’s interest in obtaining relief, (4)
“the interstate judicial system’s interest in obtaining the most
efficient
interest

resolution
of

the

of

controversies,”

several

States

substantive social policies.”

in

and

(5)

“the

furthering

shared

fundamental

Id.; accord Chloé, 616 F.3d at 173.

“Where a plaintiff makes the threshold showing of the
minimum contacts . . . , a defendant must present ‘a compelling
case that the presence of some other considerations would render
jurisdiction unreasonable.’”

Bank Brussels, 305 F.3d at 129

(quoting Metro. Life Ins. Co. v. Robertson–Ceco Corp., 84 F.3d
560, 567 (2d Cir. 1996)).
the

five

factors

for

Here, Defendant does not even address
determining

jurisdiction is reasonable.

whether

the

exercise

of

Mr. Schulmann therefore has failed to

meet his burden of demonstrating that it would be unreasonable to
exercise
Plaintiff

jurisdiction
has

in

this

demonstrated

case.

that

the

Accordingly,
Court

has

because
personal

jurisdiction over Mr. Schulmann under C.P.L.R. 302(a)(1) and that
the exercise of such jurisdiction does not offend due process,
14

Defendants’ motion to dismiss for lack of personal jurisdiction
over Mr. Schulmann is DENIED.
C.

Plausibility
Finally, Defendants argue that (1) the Complaint fails

to state a claim against Tiger Schulmann’s Mixed Martial Arts
because Tiger Schulmann’s Mixed Martial Arts is a trade name and
not a cognizable legal entity; and (2) Plaintiff’s causes of action
based on the alleged oral partnership agreement should be dismissed
because the oral agreement is unenforceable under the statute of
frauds.

The Court rejects both of these arguments.
1.

Legal Standard

In deciding a Rule 12(b)(6) motion to dismiss, the Court
applies a “plausibility standard,” which is guided by “[t]wo
working principles.”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.

Ct. 1937, 173 L. Ed. 2d 868 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L.Ed.2d 929 (2007);
accord Harris v. Mills, 572 F.3d 66, 71–72 (2d Cir. 2009).

First,

although the Court must accept all allegations as true, this
“tenet”

is

“inapplicable

to

legal

conclusions;”

thus,

“[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”
556 U.S. at 678; accord Harris, 572 F.3d at 72.

Iqbal,

Second, only

complaints that state a “plausible claim for relief” can survive
a Rule 12(b)(6) motion to dismiss.
15

Iqbal, 556 U.S. at 679.

Determining whether a complaint does so is “a context-specific
task that requires the reviewing court to draw on its judicial
experience and common sense.”

Id.; accord Harris, 572 F.3d at 72.

The Court is confined to “the allegations contained
within the four corners of [the] complaint.”

Pani v. Empire Blue

Cross Blue Shield, 152 F.3d 67, 71 (2d Cir. 1998).

However, this

has been interpreted broadly to include any document attached to
the complaint, any statements or documents incorporated in the
complaint by reference, any document on which the complaint heavily
relies, and anything of which judicial notice may be taken.

See

Chambers v. Time Warner, Inc., 282 F.3d 147, 152–53 (2d Cir. 2002)
(citations omitted); Kramer v. Time Warner Inc., 937 F.2d 767, 773
(2d Cir. 1991).
2.

Tiger Schulmann as a Defendant

The Court summarily rejects Defendants’ argument that
Tiger Schulmann is a trade name and therefore not a cognizable
legal entity capable of being sued.
intends

to

sue

the

entity

that

Schulmann martial arts schools.

It is obvious that Plaintiff
owns

and

operates

the

Tiger

Plaintiff may take discovery to

ascertain the accurate party being sued and later amend the
caption.

See Darby v. Compagnie Nat. Air France, 132 F.R.D. 354,

355 (S.D.N.Y. 1990).

16

3.

Statute of Frauds

Finally, Defendants also argue that Plaintiff’s claims
based on the alleged oral partnership agreement are not plausible
because the partnership agreement violates New York’s Statute of
Frauds and is therefore unenforceable.

(Defs.’ Br. at 3.)

The

Court disagrees.
Under New York’s Statute of Frauds, an oral agreement is
unenforceable if “[b]y its terms[, it] is not to be performed
within one year from the making thereof.”
401.

N.Y. GEN. OBLIG. LAW § 5-

“The statute encompasses ‘only those contracts which, by

their terms, have absolutely no possibility in fact and law of
full performance within one year.’”

BPP Wealth, Inc. v. Weiser

Capital Mgmt., LLC, --- F. App’x ----, 2015 WL 4999524, at *4 (2d
Cir. 2015) (quoting Guilbert v. Gardner, 480 F.3d 140, 151 (2d
Cir. 2007)); accord Foster v. Kovner, 44 A.D.3d 23, 26, 840
N.Y.S.2d 328, 331 (1st Dep’t 2007).

It is irrelevant “that

completion of performance within one year may be unlikely or
improbable.”

Foster, 44 A.D.3d at 26, 840 N.Y.S.2d at 331.

Generally speaking, “[m]ost agreements terminable at will are not
subject to the Statute of Frauds because performance could be
completed in less than one year if either party were to exercise
its termination option within that time period.” BPP Wealth, Inc.,
2015 WL 4999524, at *4.
“generally

inapplicable”

Moreover, the Statute of Frauds is
to

a
17

partnership

agreement

because

“absent any definite term of duration, an oral agreement to form
a partnership or joint venture for an indefinite period creates a
partnership or joint venture at will.”

Foster, 44 A.D.3d at 27,

840 N.Y.S.2d at 331.
The Statute of Frauds does not bar Plaintiff’s claims at
this stage of the litigation.

“An affirmative defense, such as

the Statute of Frauds, may be raised by a motion to dismiss under
Rule 12(b)(6) without resort to summary judgment proceedings only
if the defense appears on the face of the complaint.”

Seldon v.

Magedson, No. 11-CV-6218, 2012 WL 4475274, at *20 (S.D.N.Y. July
10, 2012), report and recommendation adopted by, No. 11-CV-6218,
2012 WL 4475020 (S.D.N.Y. Sept. 28, 2012).

Here, there is no

indication in the Complaint that the alleged partnership agreement
could not possibly be performed within a year, and Defendants
provide no evidence that would justify converting the motion to
dismiss into one for summary judgment.

Accordingly, Defendants’

motion to dismiss the Complaint on the ground that the partnership
agreement violates the Statute of Frauds is DENIED.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

18

CONCLUSION
For

the

foregoing

reasons,

Plaintiff’s

motion

to

disqualify is DENIED AS MOOT, and Defendants’ motion to dismiss
(Docket Entry 13) is DENIED.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

September
30 , 2015
Central Islip, New York

19