Court Decides Whether/ Which of a Dozen Claims Survives Motion to Dismiss

Andrea Coulter entered into an intimate relationship with Carl Sorenson, eighteen years her senior, in 2008 when she was 25 years old. Sorenson was a businessman who owned Nanz Custom Hardware, LLC., a substantial enterprise which manufactured and sold high-end custom-made metal hardware products used in the construction of residential and commercial properties. During the course of their decade-long relationship, Coulter and Sorenson lived together at more than one of Sorenson’s homes. At some point during the course of the relationship, Coulter started working, allegedly without compensation, for Sorenson both as his personal assistant and at Nanz.

In or about 2013, Coulter allegedly proposed that Sorensen utilize a Tribeca co-op apartment Sorenson owned through the Carl Sorenson IV Revocable Trust as a short-term rental space using the Airbnb platform, and claimed to have been responsible for fully managing the Airbnb initiative, including overseeing the apartment’s renovation and decoration, servicing the apartment, as well as managing the business’s account and the greeting of guests.

Coulter alleged that the apartment was regularly rented between 2014 and 2018 and during that time allegedly generated a net income of approximately $450,000. The purpose of the Airbnb arrangement “was to give Coulter a way to make money so that she could build up her savings and eventually purchase an apartment of her own…” and “also was a way for Sorenson to financially compensate Coulter for all of the personal and business services that she had provided to him and his company by being available 24/7 to meet all of Sorenson’s needs and requests.”  That included helping Sorenson’s children with their homework.

Coulter alleged she was promised that all of the money generated from operating the business, which was deposited in a Chase bank account belonging to Sorenson, would be for her exclusive benefit, and that one-half of the apartment would be gifted to her as well. The apartment was ultimately sold for $2.5 million, one half of which Coulter claimed to be entitled. Sorenson’s promises were allegedly covered by oral and written contracts between the two parties and explicated by multiple contemporaneous e-mails. The alleged Airbnb arrangement was at least partially memorialized in the Operating Agreement of Walker 37 LLC, which reflected Coulter’s involvement in the Airbnb initiative.

Coulter asserted that Sorenson impermissibly withdrew $357,000 from the Chase bank account in December of 2017. Thereafter, she claimed she negotiated and entered into agreements addressing the repayment of the $357,000 to the Chase bank account, all of which Sorenson allegedly promised to return to her so that she could purchase an apartment of her own, and alleged the parties memorialized the terms of certain agreements, but that Sorenson either reneged on the agreements or signed documents that failed to reflect what the parties agreed. The relationship between the parties eventually broke down in September 2018.

In addition to the financial damages, Coulter alleged she suffered physical and emotional damages at the hands of Sorenson, and that she was physically and emotionally abused by Sorenson on multiple occasions, including allegations that: on October 11, 2017, Sorenson grabbed her by the neck and slammed her head into a desk; on July 30, 2018, in an allegedly videotaped incident, Sorenson threw a chair and a sledgehammer at her; and, in August or September 2018, Sorenson allegedly swung a heavy brass prototype faucet at her head. She further alleged that, in on September 27, 2018, Sorenson threatened to throw a 35-pound urn at her and also went to grab a hunting rifle with which to threaten Coulter, causing her to leave his home in fear for her life.

Following the end of the relationship, Sorenson allegedly had Coulter forcibly removed from his home by the police, threatened to put her in jail, made false and derogatory statements about her to others, and removed Coulter’s dog from her custody. A few days after the breakup, Sorenson allegedly drove “6 hours with the dog ‘Stella’ to where Coulter was working at an event, showed her the dog, and said ‘I thought you might want to see your dog one last time.’”

Coulter sued Sorenson and his various entities, who moved to dismiss the complaint.

The motion to dismiss the first cause of action for breach of contract was granted as to Nanz and Walker  LLC, and denied as to Sorenson and the Sorenson Revocable Trust. Coulter alleged the existence of multiple oral and written contracts entered into between herself and Sorenson. There appeared to have been a clear understanding that Sorenson would return $357,000 he withdrew from the Airbnb bank account to pay his taxes as reflected in contemporaneous e-mails. Therefore, the documentary evidence did not irrefutably rebut Coulter’s breach of contract claims.

Yet there was a question of fact as to the existence and/or validity of the various contracts alleged by Coulter such that it was premature at this juncture to dismiss the claim. Even the claim for half the value of the apartment survived due to the apparent existence of contemporaneous evidence reflecting that agreement and because Coulter sufficiently alleged that enforcement of the statute of frauds would be unconscionable due to the manner in which Sorenson allegedly manipulated her. The issue of promissory estoppel/unconscionability as respected Coulter’s claim to an ownership interest in one-half of the apartment raised a question of fact that could not be decided at the pre-answer motion to dismiss stage. That claim would otherwise have been dismissed on the basis of the statute of frauds.

The motion to dismiss the second cause of action for a constructive trust was granted as to defendants Walker LLC and Nanz and denied as to Sorenson and the Sorenson Revocable Trust. Coulter had pled the existence of a confidential and fiduciary relationship between herself and Sorenson which satisfied the elements of a claim for a constructive trust against Sorenson and the Trust at the pleading stage. There was no basis for that claim as against Walker LLC and Nanz. The cause of action for constructive trust was not duplicative of the breach of contract claim because Sorenson denied the existence and the validity of all of the contracts Coulter alleged. There were clearly disputed issues of fact relating to the contract claims that could not be resolved at the pre-answer motion to dismiss stage of the case. Consequently, the alternative constructive trust claim survived at the pleading stage.

The motion to dismiss the third cause of action for unjust enrichment was similarly denied. The quasi-contract claim was pled in the alternative to the breach of contract claim and as such was not duplicative.

The motion to dismiss the fourth cause of action for conversion of the funds that were held in the Chase bank account was granted. That claim was duplicative of both the breach of contract claim and the alternative quasi-contract claims. The motion to dismiss the fifth cause of action for breach of fiduciary duty was granted for the same reason. The motion to dismiss the sixth cause of action for fraud was also granted as duplicative of the surviving claims in the case. Parties may not assert a fraud claim seeking damages that are duplicative of those recoverable on a cause of action for breach of contract. While a claim for fraud might not be duplicative if Coulter had pled the misrepresentation of a “then-present fact collateral to the contract,” she failed to do so here. The only “then-present fact” relied on by Coulter was that Sorenson did not intend to comply with the promises he allegedly made at the time the parties entered into the agreements, which was a mere misrepresentation of a future intent to perform.

The motion to dismiss the seventh cause of action for tortious interference with actual and prospective business relations was granted. That cause of action required (1) an actual or prospective business relationship, (2) that defendant interfered with, (3) with a wrongful purpose, and (4) that interference injured the relationships. Coulter alleged in her complaint that Sorenson interfered with her employment at Mark Cunningham’s design firm, where she worked from 2017 up until some point shortly after the parties’ break-up in late 2018. But Coulter conceded in her opposition to the motion that because the business relationship between herself and Mark Cunningham was at-will, that the seventh cause of action be only considered for interference with prospective business relationships.

However, to support a cause of action for tortious interference with prospective contractual relations, Coulter was required to show more culpable conduct on Sorenson’s part and was required to assert either an independent tort or underlying crime. Coulter failed to do so. Coulter alleged that “Sorenson got Coulter fired from her job at Mark Cunningham’s design firm by giving Mr. Cunningham free hardware,” but “persuasion alone” does not amount to “wrongful means.” Sorenson also offered a sworn affidavit by Mark Cunningham denying that he had any involvement or influence towards Coulter’s termination. Her claim also failed as to the other purported prospective business relationships because Coulter offered no information as to those other prospective business relationships with which Sorenson allegedly interfered.

The motion to dismiss the eighth and ninth causes of action, for intentional infliction of emotional distress and battery/assault, respectively, was granted.  New York courts have long had the power, both in law and equity, to bar the assertion of the affirmative defense of the Statute of Limitations where it is the defendant’s affirmative wrongdoing, which produced the long delay between the accrual of the cause of action and the institution of the legal proceeding. Nevertheless, those claims arose in 2018 and the one-year statute of limitations on such claims could not extend to the filing of this case in 2021.

The motion to dismiss the tenth cause of action for conversion of plaintiff’s dog was denied. Coulter properly alleged a legal right of ownership or a superior right of possession in the dog and that Sorenson exercised unauthorized dominion over the dog to the exclusion of her rights that was a continuing conversion.

The motion to dismiss the eleventh cause of action for breach of the partnership agreement was granted as duplicative of the breach of contract claim.

The motion to dismiss the twelfth cause of action for quantum meruit was denied because it was pled in the alternative to the breach of contract claim.