Abraham v. Leigh et al

Filing 319

OPINION AND ORDER re: 101 MOTION to Dismiss Defendant Abby Leigh's Counterclaim filed by Robyn Abraham. Given the foregoing reasons, Plaintiff's motion to dismiss Defendant Leigh's Amended Counterclaims is DENIED. The Clerk of Court is directed to terminate the motion at docket entry 101. The parties are hereby ORDERED to provide a joint letter regarding the status of outstanding discovery concerning the counterclaims on or before September 26, 2019. (Signed by Judge Katherine Polk Failla on 9/9/2019) (rro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ROBYN ABRAHAM,
Plaintiff,
-v.ABBY LEIGH as Executrix of the
ESTATE OF MITCH LEIGH, THE
VIOLA FUND, ABBY LEIGH LTD.,
MARTHA WASSERMAN in her
individual capacity and as Executrix
of the ESTATE OF DALE
WASSERMAN, and ALAN HONIG,

17 Civ. 5429 (KPF)
OPINION AND ORDER

Defendants.
KATHERINE POLK FAILLA, District Judge:
Plaintiff Robyn Abraham claims that Defendants — Abby Leigh (in her
individual capacity, as Executrix of the Estate of Mitch Leigh, and as Trustee of
the Viola Fund and Abby Leigh Ltd.), Martha Wasserman (in her individual
capacity and as Executrix of the Estate of Dale Wasserman), Hellen Darion (in
her individual capacity and as Executrix of the Estate of Joseph Darion), and
Alan Honig — breached a contract (the “Talent Agreement”) that entitled
Plaintiff to exclusive production rights to a revival of the musical, Man of La
Mancha. In response, Defendant Leigh filed counterclaims against Plaintiff,
alleging that she breached her fiduciary duties when she drafted and entered
into the Talent Agreement. Plaintiff now moves to dismiss these counterclaims
for failure to state a claim. For the reasons set forth below, Plaintiff’s motion is
denied.

BACKGROUND 1
A.

Factual Background
1.

The Communications Between January 6 and 20, 2014

Mitch Leigh was a composer of the Tony-award winning musical Man of
La Mancha (“MOLM”). (Am. Countercl. ¶¶ 3-5). Plaintiff is an attorney licensed
to practice law in, among other places, New York and the United Kingdom. (Id.
at ¶ 2). On January 6, 2014, Plaintiff and Mr. Leigh met in person to discuss a
revival of MOLM (the “January 6 Meeting”). (Id. at ¶ 12). Plaintiff claims that
she and Mr. Leigh reached an agreement in principle that she would be given
exclusive rights to a revival production of MOLM. (Am. Compl. ¶¶ 1-2).
Defendant Leigh goes further, claiming that during the January 6 Meeting, Mr.
Leigh hired Plaintiff as his attorney for the revival. (Am. Countercl. ¶ 13).
On January 9, 2014, three days after the meeting, Plaintiff sent Mr.
Leigh’s assistant an email titled “Draft Six Month Agreement — January 6th

1

This Opinion draws its facts from Defendant Leigh’s Answer (“Leigh Answer” (Dkt. #86)),
her Amended Counterclaims (“Am. Countercl.” (Dkt. #105)), and several exhibits
attached to the Amended Counterclaims.
The Court also draws on facts pleaded in the Amended Complaint (“Am. Compl.” (Dkt.
#41)), and the Talent Agreement attached thereto as Exhibit 1. The Court may consider
the Amended Complaint and the Talent Agreement because the Leigh Answer and the
Amended Counterclaims incorporate them by reference. See, e.g., Goel v. Bunge, Ltd.,
820 F.3d 554, 559 (2d Cir. 2016) (finding that district courts may consider “documents
appended to the complaint or incorporated in the complaint by reference” when
assessing the sufficiency of a pleading (quoting Concord Assocs., L.P. v. Entm’t Props.
Tr., 817 F.3d 46, 51 n.2 (2d Cir. 2016))); Chambers v. Time Warner, Inc., 282 F.3d 147,
152-53 (2d Cir. 2002) (holding that documents that may be considered in determining a
motion to dismiss are those that are “integral” to the claims alleged even if not
incorporated in the complaint by reference).
For convenience, the Court refers to Plaintiff’s Memorandum of Law in Support of the
Motion to Dismiss the Amended Counterclaims as “Pl. Br.” (Dkt. #103), Defendant
Leigh’s Memorandum of Law in Opposition to the Motion to Dismiss as “Leigh Opp.”
(Dkt. #111), and Plaintiff’s Reply Memorandum of Law in Support of the Motion to
Dismiss as “Pl. Reply” (Dkt. #131).

2

Follow Up.” (Am. Countercl., Ex. A). Plaintiff’s email stated: “Since we did not
discuss fees or costs during our January 6 meeting, we can address this as a
discussion point for final comments in the Agreement.” (Id. at ¶ 15). Plaintiff
also included her hourly rate. (Id.). The email attached “a simple draft one
page agreement memorializing that which we discussed with [Mr.] Leigh.” (Id.).
The attached document is titled “SIX (6) MONTH EXCLUSIVE CONTRACT RE:
LONDON STAGE PRODUCTION OF MAN OF LA MANCHA (‘MOLM’)” (the “Draft
Agreement”). (Id. at ¶ 16). This document appears to be a first draft of the
Talent Agreement. (Id.).
The next day, January 10, 2014, Plaintiff sent Mr. Leigh’s assistant an
email stating that “during our Monday meeting, [Mr. Leigh] specifically did
agree to hire me as his lawyer and solicitor for a period of six (6) months[.]”
(Am. Countercl. ¶ 17; id., Ex. B). On the same day, Plaintiff purportedly
dictated a letter to her assistant to be sent to Mr. Leigh to “recap [Plaintiff]’s
understanding of [the] January 6, 2014 meeting.” (Id. at ¶ 18; id., Ex. C). In
that letter, Plaintiff wrote that she was “optimistic that if authorized to proceed
as [Mr. Leigh’s] London exclusive counsel, she could deliver” the desired
results. Plaintiff went on to claim that “during the meeting ... [Mr. Leigh]
advised [Plaintiff that he] would hire [her] on [his] behalf for 6 months as [his]
attorney/solicitor.” (Id., Ex. C).
On January 20, 2014, Plaintiff revised the Draft Agreement and sent a
new draft to Mr. Leigh via fax. (Am. Countercl. ¶ 22; id., Ex. D). In the fax,

3

Plaintiff stated that she had attached a “revised six month London contract,
with references to fees and costs eliminated.” (Id.).
2.

The Talent Agreement

Plaintiff alleges that she and Mr. Leigh entered into the Talent Agreement
on January 23, 2014. (Am. Compl., Ex. 1). To the extent this is accurate,
Defendant Leigh claims that it evidences a breach of Plaintiff’s fiduciary duty to
Mr. Leigh, insofar as Plaintiff drafted the final Talent Agreement without
affording Mr. Leigh “the opportunity[] to seek independent legal advice from
other counsel with respect to the Talent Agreement.” (Am. Countercl. ¶¶ 3132).
The Talent Agreement “grants [Plaintiff] the sole and exclusive legal and
business rights for six months to represent [MOLM] in England and United
Kingdom for the purpose of obtaining initial professional interest[.]” (Am.
Compl., Ex. 1). Upon successful performance of the Agreement, Plaintiff would
be entitled to receive an exclusive license to stage a MOLM revival, with 1.5%
royalties to the owners and no further negotiation. (Am. Countercl. ¶ 30; Am.
Compl. ¶¶ 56-60, 76).
3.

The Attempted Enforcement of the Talent Agreement

Mr. Leigh died on March 16, 2014, during the six-month term of the
Talent Agreement. (Am. Countercl. ¶ 8). Defendant Leigh was duly appointed
Executrix of his estate (the “Estate”). (Id. at ¶¶ 1, 8). After Mr. Leigh’s death,

4

Plaintiff attempted, without success, to enforce the Talent Agreement by
sending a demand letter to the Estate. (Id. at ¶ 36; Am. Compl., Ex. 14).
B.

Procedural Background
Plaintiff filed this action on July 18, 2017. (Dkt. #1). She then filed the

Amended Complaint on September 15, 2017, after receiving leave to do so from
the Court. (Dkt. #40). In an oral decision issued on June 14, 2018, the Court
granted in part and denied in part Defendants’ several motions to dismiss the
Amended Complaint. (Dkt. #65 (order memorializing decision); Dkt. #78
(transcript of decision)).
On August 3, 2018, Defendant Leigh filed an answer to the Amended
Complaint, and asserted counterclaims against Plaintiff. (Dkt. #86). On
August 23, 2018, the Court granted Plaintiff leave to file a motion to dismiss
Defendant Leigh’s counterclaims. (Dkt. #90). On October 11, 2018, Plaintiff
moved to dismiss Defendant Leigh’s counterclaims for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6). (Dkt. #101). In response, on
October 18, 2018, Defendant Leigh amended her counterclaims against
Plaintiff. (Dkt. #105). The Amended Counterclaims allege, in relevant part,
that: (i) Plaintiff breached a fiduciary duty owed to Mr. Leigh by negotiating and
entering into the Talent Agreement; and (ii) in the event Plaintiff receives an
award of damages from her suit against Defendants, Defendant Leigh should
receive a setoff as a result of Plaintiff’s misconduct. (Am. Countercl. ¶¶ 38-53).
On October 25, 2018, the Court granted Plaintiff’s request that her
motion to dismiss apply to Defendant Leigh’s Amended Counterclaims. (Dkt.

5

#107). Defendant Leigh filed an opposition to the motion to dismiss on
November 9, 2018. (Dkt. #111). The motion was fully submitted after Plaintiff
filed her reply brief on December 10, 2018. (Dkt. #131).
On March 11, 2019, Plaintiff’s original counsel, who had prepared
Plaintiff’s motion to dismiss the Amended Counterclaims, withdrew from the
case with the permission of the Court. (Dkt. #213). After Plaintiff retained new
counsel, that counsel adopted the prior motion papers. (Dkt. #272).
DISCUSSION
A.

Motions to Dismiss Under Rule 12(b)(6)
A court evaluates a motion to dismiss a counterclaim under Federal Rule

of Civil Procedure 12(b)(6) using the same standard as a motion to dismiss a
complaint. A.V.E.L.A., Inc. v. Estate of Marilyn Monroe, 131 F. Supp. 3d 196,
203 (S.D.N.Y. 2015) (internal citations omitted). When evaluating a motion to
dismiss counterclaims for failure to state a claim, a court “must accept the
material facts alleged in defendants’ answer and counterclaims as true and …
construe all reasonable inferences in favor of the defendants.” Meridien Int’l
Bank Ltd. v. Gov’t of the Republic of Liberia, 23 F. Supp. 2d 439, 445 (S.D.N.Y.
1998); Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995).
A counterclaim defendant prevails on a motion to dismiss if the
counterclaim “contain[s] sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). And
while a court should accept the counterclaim-plaintiff’s allegations as true, it

6

need not follow that course for any of counterclaim-plaintiff’s legal conclusions.
See id. “Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Id. Nor must a court “accept as
truth conflicting pleadings . . . that are contradicted either by statements in the
complaint itself or by documents upon which its pleadings rely, or by facts of
which the court may take judicial notice.” In re Livent, Inc. Noteholders Sec.
Litig., 151 F. Supp. 2d 371, 405-06 (S.D.N.Y. 2001). In sum, “[a] motion to
dismiss should be granted ‘where the well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct.’” Nielsen v. AECOM
Tech. Corp., 762 F.3d 214, 218 (2d Cir. 2014) (quoting Iqbal, 556 U.S. at 679).
B.

Defendant Leigh States a Claim for Breach of Fiduciary Duty
Defendant Leigh counterclaims that Plaintiff breached a fiduciary duty

owed to Mr. Leigh when she drafted and entered into the Talent Agreement —
an agreement that was equal parts unreasonably disadvantageous to Mr. Leigh
and windfall to Plaintiff. (See Am. Countercl.). To establish a prima facie case
of breach of fiduciary duty in New York, a plaintiff must allege “(i) a duty; (ii) a
knowing breach of that duty; and (iii) damages resulting therefrom.” Johnson
v. Nextel Commc’ns, Inc., 660 F.3d 131, 138 (2d Cir. 2011); see also Spinelli v.
Nat’l Football League, 903 F.3d 185, 207 (2d Cir. 2018); Burry v. Madison Park
Owner LLC, 924 N.Y.S.2d 77, 78 (1st Dep’t 2011). 2

2

New York law governs this dispute, per the choice-of-law provision in the Talent
Agreement. (See Am. Compl., Ex. 1).

7

Plaintiff does not challenge the sufficiency of the pleadings as to the
second and third elements of the claim, and the Court therefore does not
address them in this Opinion. Instead, Plaintiff argues that Defendant Leigh
does not plausibly allege the first element of the breach claim, i.e., that Plaintiff
owed Mr. Leigh a fiduciary duty. As set forth in the remainder of this section,
the Court concludes that Defendant Leigh has stated a claim for breach of
fiduciary duty.
1.

Applicable Law

“A fiduciary relationship exists under New York law when one . . . is
under a duty to act for or give advice for the benefit of another upon matters
within the scope of the relation.” Flickinger v. Harold C. Brown & Co., Inc., 947
F.2d 595, 599 (2d Cir. 1991) (internal quotations omitted); Eurycleia Partners,
LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 561 (2009). “At the heart of the
fiduciary relationship lies reliance, and de facto control and dominance.”
N. Shipping Funds I, LLC v. Icon Capital Corp., 921 F. Supp. 2d 94, 101
(S.D.N.Y. 2013) (internal quotation marks omitted) (applying New York law).
“[A] court will [also] look to whether a party reposed confidence in another and
reasonably relied on the other’s superior expertise or knowledge.” Wiener v.
Lazard Freres & Co., 672 N.Y.S.2d 8, 14 (1st Dep’t 1998); see also People ex rel.
Cuomo v. Coventry First LLC, 13 N.Y.3d 108, 115 (2009) (noting that a fiduciary
relationship “exists only when a person reposes a high level of confidence and
reliance in another, who thereby exercises control and dominance over him”).

8

Attorney-client relationships are “sufficiently rooted in trust and
confidence to trigger” fiduciary duties. World Wrestling Entm’t, Inc. v. Jakks
Pacific, Inc., 530 F. Supp. 2d 486, 503 (S.D.N.Y. 2007) (quoting Ross v. FSG
PrivatAir Inc., No. 03 Civ. 7292 (NRB), 2004 WL 1837366, at *5 (S.D.N.Y.
Aug. 17, 2004)); accord Greene v. Greene, 56 N.Y.2d 86, 92 (1982). It is wellsettled that “a fiduciary duty arises when a lawyer deals with persons who,
although not strictly [the lawyer’s] clients, [the lawyer] has or should have
reason to believe rely on [the lawyer].” Koppel v. 4987 Corp., No. 96 Civ. 7570
(HB), 2001 WL 47000, at *11 (S.D.N.Y. Jan. 19, 2001) (quoting Croce v. Kurnit,
565 F. Supp. 884, 890 (S.D.N.Y. 1982), aff’d, 737 F.2d 229 (2d Cir. 1984)),
aff’d sub nom. Greenberg v. Malkin, 39 F. App’x 633 (2d Cir. 2002) (summary
order). Thus, “a court must look to the words and actions of the parties to
ascertain the existence of a [fiduciary] relationship.” Moran v. Hurst, 822
N.Y.S.2d 564, 566 (2d Dep’t 2006) (citing Tropp v. Lumer, 806 N.Y.S.2d 599,
600 (2d Dep’t 2005)). “[C]ourts cannot determine the existence of a fiduciary
relationship by recourse to rigid formulas.” Kottler v. Deutsche Bank AG, 607
F. Supp. 2d 447, 465 (S.D.N.Y. 2009) (internal quotation marks omitted). For
this reason, “[a] claim alleging the existence of a fiduciary duty usually is not
subject to dismissal under Rule 12(b)(6).” Abercrombie v. Andrew Coll., 438 F.
Supp. 2d 243, 274 (S.D.N.Y. 2006).
2.

Analysis

Defendant Leigh alleges that a fiduciary relationship existed between
Plaintiff and Mr. Leigh, because Mr. Leigh hired Plaintiff to be his attorney

9

during the January 6 Meeting. (See Am. Countercl. ¶¶ 38-47; Leigh Opp. 710). This assertion is bolstered by exhibits to the Amended Counterclaims,
representing communications between and among Plaintiff, Mr. Leigh, and Mr.
Leigh’s staff in the days following the January 6 Meeting (the “2014
Communications”). (See Am. Countercl., Ex. A-D). In those communications,
Plaintiff claimed to Mr. Leigh that he had hired her as his attorney during the
January 6 Meeting. (See id., Ex. B (“[Mr. Leigh] specifically did agree to hire
[Plaintiff] as his lawyer and solicitor for a period of six (6) months”); id., Ex. C
(Mr. Leigh “advised [he] would hire [Plaintiff] on [his] behalf for 6 months as
[his] attorney/solicitor to secure [his] list of initial UK and US talent interest”)).
Read in the light most favorable to Defendant Leigh, these communications
indicate that Plaintiff was Mr. Leigh’s counsel, or that she at the very least had
given Mr. Leigh reason to believe she was, and that she consequently owed Mr.
Leigh a fiduciary duty. See Koppel, 2001 WL 47000, at *11 (a lawyer owes a
fiduciary duty to a non-client that the lawyer has reason to believe relies on his
or her advice); compare Almazan v. Almazan, No. 14 Civ. 311 (AJN), 2015 WL
500176, at *12 (S.D.N.Y. Feb. 4, 2015) (finding that a lawyer must accept the
trust reposed in him or her by another person to create a fiduciary relationship
with that person). 3
Plaintiff is thus left with the unenviable task of arguing that the
Amended Counterclaims do not plausibly allege that she acted as Mr. Leigh’s

3

For these reasons, the Court disagrees with Plaintiff’s repeated claim that the Amended
Counterclaims are devoid of any facts to support a conclusion that an attorney-client
relationship existed. (See Pl. Br. 5-7; Pl. Reply 1-4).

10

attorney, even though they contain Plaintiff’s own contemporaneous
declarations that she had been hired to act as Mr. Leigh’s attorney. Plaintiff
turns a blind eye to those declarations, and instead draws the Court’s attention
to: (i) a statement in the 2014 Communications that indicates that the
attorney-client relationship was not finalized; and (ii) the absence of evidence
that a fee arrangement was entered into by the parties. (See Pl. Br. 5-7). The
Court is unpersuaded by these arguments.
Plaintiff first points the Court to a single sentence in one of the 2014
Communications, in which Plaintiff related that “she was optimistic that if
authorized to proceed as [Mr. Leigh’s] London exclusive counsel, she could
deliver the preliminary interest, subject to your funding, and talent terms and
conditions.” (Pl. Br. 6 (quoting Am. Countercl., Ex. C)). According to Plaintiff,
this statement forecloses an inference that an attorney-client relationship had
been finalized. And read in a vacuum, it does suggest that Plaintiff was
seeking to be hired as Mr. Leigh’s attorney, but had not yet received the job.
But this suggestion is undercut by multiple other assertions contained in
the 2014 Communications, in which Plaintiff explicitly states that Mr. Leigh
“specifically did agree to hire [her] as his lawyer[.]” (Am. Countercl., Ex., B).
And Defendant Leigh need not prove that Plaintiff was in fact Mr. Leigh’s
attorney to survive the motion to dismiss; she need only plausibly allege that a
fiduciary relationship existed. See Askew v. Lindsey, No. 15 Civ. 7496 (KMK),
2016 WL 4992641, at *3 (S.D.N.Y. Sept. 16, 2016) (“A plaintiff need not prove
these elements at the motion-to-dismiss stage, but he must still plead enough

11

facts to make out a plausible claim for relief.”). To the extent that Plaintiff
argues that a single sentence, which casts the attorney-client relationship as
unfinalized, should be credited over multiple representations that an attorneyclient relationship had been formed, she acknowledges that a dispute of fact
exists. Such a dispute cannot be resolved at the motion to dismiss stage. See
Abercrombie, 438 F. Supp. 2d at 274 (noting that claims of breach of fiduciary
duty are typically not amenable to resolution on motions to dismiss because
they involve fact-specific inquiries).
Nor is the Court persuaded by Plaintiff’s argument that any fiduciary
relationship that had formed was terminated immediately, due to an
unresolved dispute regarding the legal fees Plaintiff would be paid. (See Pl.
Br. 6-7). The 2014 Communications do suggest that some disagreement
occurred after the January 6 Meeting regarding whether and how much
Plaintiff would be paid. For example, on January 10, 2014, Plaintiff disagreed
with Mr. Leigh’s assistant’s message that “Mr. Leigh is not willing to pay legal
fees.” (Am. Countercl., Ex. B). But the limited evidence of a dispute over fees
does not automatically defeat Defendant’s Leigh’s claim. To the contrary, the
pleadings support two distinct inferences that the dispute did not result in a
termination of the attorney-client relationship.
First, the 2014 Communications show that Plaintiff disagreed with Mr.
Leigh’s assistant’s representation that Mr. Leigh would not pay legal fees.
Plaintiff stated that Mr. Leigh had specifically agreed to pay Plaintiff during the
January 6 Meeting, and Plaintiff then manifested an intent to continue

12

performing the legal work that she had been hired to do. (See Am. Countercl.,
Ex. B). This supports a reasonable inference that Plaintiff and Mr. Leigh had
reached an agreement concerning compensation, and that the attorney-client
relationship had not terminated.
Second, the pleadings support an inference that the disagreement over
payment terms led Plaintiff to drop her demand for payment in exchange for
her legal work. Though early drafts of the Talent Agreement included language
indicating that Plaintiff would receive legal fees in exchange for her work, later
drafts removed references to payment. (See, e.g., Am. Countercl. ¶ 22; id.,
Ex. D). This suggests that Plaintiff eventually withdrew her demand for
payment of legal fees, instead contenting herself with payment for her legal
work in the form of the benefits she would receive under the Talent
Agreement. 4 And even if Plaintiff and Mr. Leigh never finalized an agreement
concerning payment of legal fees, it would not necessarily mean that no
attorney-client relationship existed. “[A]n attorney-client relationship does not
depend on the existence of a formal retainer agreement or upon payment of a
fee.” Moran, 822 N.Y.S.2d at 566 (citing Hansen v. Caffry, 720 N.Y.S.2d 258,
259 (3d Dep’t 2001); Jane St. Co. v. Rosenberg & Estis, 597 N.Y.S.2d 17, 18
(1st Dep’t 1993)).

4

Plaintiff argues that this and other edits made to later drafts of the Talent Agreement
indicate that Plaintiff and Mr. Leigh had determined not to enter into an attorney-client
relationship. (See Pl. Reply 6-7). While this may be one permissible interpretation of
the edits to the Talent Agreement, the Court must make all reasonable inferences in
favor of the non-movant at this stage in the proceedings. See Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007).

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At a minimum, Defendant Leigh has plausibly alleged that: (i) Mr. Leigh
hired Plaintiff as his attorney during the January 6 Meeting; (ii) Plaintiff
understood that she was acting as Mr. Leigh’s attorney following that meeting;
and (iii) Plaintiff gave Mr. Leigh reason to believe that she was acting as his
attorney in drafting the Talent Agreement, such that he could rely upon her
advice. If Defendant Leigh’s allegations are accepted as true, a factfinder could
plausibly infer that Plaintiff owed Mr. Leigh a fiduciary duty when she drafted
and entered into the Talent Agreement. Accordingly, Defendant Leigh has
plausibly alleged that Plaintiff owed Mr. Leigh a fiduciary duty. As Plaintiff has
elected not to challenge the sufficiency of the pleadings as to the other two
elements of a breach of fiduciary duty claim, i.e., knowing breach and
damages, the Court concludes that Defendant Leigh has stated a claim for
breach of fiduciary duty.
C.

Defendant Leigh’s Counterclaim for Breach of Fiduciary Duty Is Not
Barred by the Statute of Limitations
In the alternative, Plaintiff argues that even if a fiduciary duty existed

between Plaintiff and Mr. Leigh, Defendant Leigh’s breach of fiduciary duty
counterclaim is barred by a statute of limitations. According to Plaintiff, a
three-year statute of limitations governs Defendant Leigh’s counterclaim, which
began to accrue on January 23, 2014, when Plaintiff entered into the Talent
Agreement, and expired before the counterclaims were filed on August 3, 2018.
(See Pl. Br. 2, 7; Pl. Reply 7 (rejecting as well arguments that would tie the
accrual date of the claim to Mr. Leigh’s death in March 2014, or Plaintiff’s
demand letter in July 2014)). Defendant Leigh argues that Plaintiff has
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invoked the incorrect statute of limitations, and that a six-year limitations
period should apply to its counterclaim. (See Leigh Opp. 12-16). The Court
concludes that a six-year statute of limitations governs Defendant Leigh’s
counterclaim, and that the claim was filed well within that time period.
1.

Applicable Law

Under New York law, “the applicable statute of limitations for breach of
fiduciary duty claims depends on the substantive remedy sought. Where the
relief sought is equitable in nature, the six-year limitations period of CPLR
213(1) applies.” Kaufman v. Cohen, 760 N.Y.S.2d 157, 164 (1st Dep’t 2003)
(internal citations omitted). However, if a plaintiff seeks money damages,
“courts have viewed such actions as alleging ‘injury to property,’ to which a
three-year statute of limitations applies.” Id.; see also Carlingford Ctr. Point
Assocs. v. MR Realty Assocs., L.P., 772 N.Y.S.2d 273, 274 (1st Dep’t 2004) (“A
breach of fiduciary duty claim is governed by either a three-year or six-year
limitation period, depending on the nature of the relief sought. The shorter
time period applies where monetary relief is sought, the longer where the relief
sought is equitable in nature.” (internal citations omitted)).
If a plaintiff seeks both equitable and monetary relief, the Court should
“look[] to the reality, rather than the form, of [the] action.” IDT Corp. v. Morgan
Stanley Dean Witter & Co., 12 N.Y.3d 132, 139-40 (2009). If the plaintiff seeks
primarily equitable relief, the six-year statute of limitations applies, even if
damages are also sought. See, e.g., Omni Food Sales v. Boan, No. 06 Civ. 119
(PAC), 2007 WL 2435163, at *5-6 (S.D.N.Y. Aug. 24, 2007). In contrast, if the

15

equitable relief the plaintiff seeks is incidental to the monetary damages
sought, the three-year statute of limitations applies to plaintiff’s breach of
fiduciary duty claims. See IDT Corp., 12 N.Y.3d at 139-40.
2.

Analysis

The Court finds that the six-year statute of limitations applies to
Defendant Leigh’s counterclaim. Defendant Leigh seeks four types of relief in
connection with her breach of fiduciary duty counterclaim:
(i)

A declaratory order stating that the six-month exclusive
contract (the “Contract”) is unenforceable;

(ii)

An injunction prohibiting Plaintiff from further efforts to
enforce the Contract;

(iii)

An injunction directing Plaintiff to withdraw or
otherwise terminate any filings with the Copyright
Office, or with any other federal, state, or foreign court
or agency; and

(iv)

Other such relief as this Court may order and deem just
and equitable, including the award of attorneys’ fees
and costs incurred by Defendant Leigh in defending this
action.

(Am. Countercl. ¶ 47). The first three requests seek equitable relief, while the
fourth seeks attorneys’ fees.
Defendant Leigh argues that the relief she seeks sounds primarily in
equity, to which money damages are merely incidental. (See Leigh Opp. 13-16).
Plaintiff does not appear to contest that point; instead, Plaintiff argues that
Defendant Leigh is not entitled to the equitable relief requested. (See Pl.
Reply 13-15). Because Defendant Leigh will not receive any equitable relief,
Plaintiff reasons, the breach of fiduciary duty claim should be subject to the

16

three-year statute of limitation applied to breach of fiduciary duty claims that
seek money damages. (Id.).
Of course, the Court is required to examine the types of relief sought, not
the types of relief that a claimant is likely to receive. See, e.g., IDT Corp., 879
N.Y.3d at 139-40. Defendant Leigh plainly seeks declaratory and injunctive
relief. This equitable relief is designed to redress the purported wrong
identified by the Amended Counterclaims — Plaintiff’s breach of fiduciary duty
in drafting and entering into the Talent Agreement — by invalidating the Talent
Agreement. The monetary damages demanded are purely incidental, and
would only allow Defendant Leigh to recoup the funds expended litigating this
suit, which she asserts is premised on a breach of fiduciary duty. See
Loengard v. Santa Fe Indus., Inc., 70 N.Y.2d 262, 266-67 (1987) (applying a sixyear statute of limitations where a complaint was “equitable in nature and . . .
a legal remedy would not be adequate”). Thus, equitable relief dominates the
Amended Counterclaims, and would invalidate the contract that is at the core
of the parties’ dispute. 5
Furthermore, even if the Court (i) were to discount the importance of
equitable remedies it believed were unlikely to be granted, and (ii) felt

5

In an effort to persuade the Court to conclude otherwise, Plaintiff conflates the
counterclaims for breach of fiduciary duty and for setoff. (See Pl. Reply 13-14). While
the former seeks equitable relief, the latter requests that, in the event Plaintiff receives
an award of damages through her Amended Complaint, Defendant Leigh receive a setoff
against any damages in excess of $75,000. (See Am. Countercl. ¶ 53). Even if the
Court were to consider the relief sought by the two counterclaims together, it would
conclude that requests for equitable relief predominate. The damages sought in the
setoff claim are hypothetical and would only diminish the amount of money Defendant
Leigh owes Plaintiff over $75,000, if Plaintiff were to succeed in her breach of contract
claims.

17

competent at this early stage in the proceedings to determine what relief was
likely to be granted, the three-year statute of limitations would not be
applicable. Plaintiff failed to advance any argument as to why Defendant Leigh
will not receive the declaratory relief requested in the Amended Counterclaims.
(See Pl. Reply 13-14). Thus, the Court has not been given any reason to believe
that Defendant Leigh’s only genuine claim for relief is for monetary relief.
Because Defendant Leigh seeks both equitable and monetary relief, with
equitable relief predominating, the claim is subject to a six-year statute of
limitations. See Omni Food Sales, 2007 WL 2435163, at *6 (“Here, Omni seeks
both equitable (injunctive) and legal (monetary) relief, therefore the claim is
subject to the six-year period.”). Because the breach of fiduciary duty cause of
action accrued, at the earliest, in January 2014, the counterclaims filed in
2018 are timely.
CONCLUSION
Given the foregoing reasons, Plaintiff’s motion to dismiss Defendant Leigh’s
Amended Counterclaims is DENIED. 6 The Clerk of Court is directed to
terminate the motion at docket entry 101.
The parties are hereby ORDERED to provide a joint letter regarding the
status of outstanding discovery concerning the counterclaims on or before
September 26, 2019.

6

In her reply brief, Plaintiff presents a cursory argument that the second claim in the
Amended Counterclaims, the setoff claim, is dependent upon the breach of fiduciary
duty claim, and should be dismissed for the same reasons. (See Pl. Reply 15). Because
the Court denies Plaintiff’s motion with respect to the breach of fiduciary duty
counterclaim, it also denies any request to dismiss the setoff counterclaim.

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SO ORDERED.
Dated:

September 9, 2019
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

19