Ohama v. Markowitz

434 F.Supp.3d 303

Jennifer OHAMA

v.Alan M. MARKOWITZ

CIVIL ACTION NO. 19-2150

United States District Court, E.D. Pennsylvania.

Filed January 21, 2020

Mary Elizabeth Bogan, Bogan Law Group, Philadelphia, PA, FOR Plaintiff.

Eric J. Schreiner, Shohin Hadizadeh Vance, Steven J. Engelmyer, Kleinbard LLC, Stephanie C. Chomentowski, Blank Rome LLP, Philadelphia, PA, for Defendant.

MEMORANDUM RE: MOTION TO DISMISS AMENDED COMPLAINT

Baylson, J.

I. Introduction

Jennifer Ohama ("Plaintiff") alleges that Alan Markowitz ("Defendant"), her former romantic partner, is liable in tort and contract for failing to comply with the terms of a settlement agreement that was drafted after the parties ended their relationship.¹ Plaintiff asserts five counts against Defendant: (I) Breach of Contract; (II) Breach of Oral Contract; (III) Intentional Misrepresentation; (IV) Negligent Misrepresentation; and (V) Palimony.

Presently before the Court is Defendant's Motion to Dismiss the Amended Complaint. For the reasons that follow, Defendant's Motion is GRANTED as to Counts III and IV, and DENIED as to Counts I, II, and V.

II. Factual Background²

After meeting in 2004, Plaintiff and Defendant developed a "romantic, marital-type relationship and conducted themselves accordingly, both privately and publicly." (ECF 13, Am. Compl. ¶ 45.) Plaintiff and Defendant, along with their respective children, eventually moved in together at 210 Glenn Road in Ardmore, Pennsylvania (the "Glenn Road property"). (Id. ¶¶ 5, 8.) Plaintiff alleges that from the beginning of their cohabitation, Defendant "assured Plaintiff that he would provide security and care for Plaintiff and [Plaintiff's] daughter financially for the rest of their respective lives." (Id. ¶ 9.) As examples of Defendant's professed commitment, Plaintiff discusses Defendant's assurance that he would "always take care of Plaintiff and that she would never have to worry about anything, (id. ¶ 33(a)); Defendant's marriage proposal, (id. ¶ 33(b)); and Defendant's fulfillment of his promise to maintain a $2.5 million life insurance policy naming Plaintiff as beneficiary, (id. ¶ 33(c).) In exchange for the support Defendant pledged to provide, Plaintiff "devoted herself to making a home, providing companionship, and otherwise fulfilling Defendant's emotional, physical, and social needs." (Id. ¶ 47.) Plaintiff alleges that she "handled the custody schedules with [Defendant's] then estranged children; ... ran Defendant's household and took care of Defendant's children on a daily basis; ... assimilate[d] into [Defendant's] way of life; ... [and] provide[d] [Defendant] with constant companionship." (Id. ¶ 7.)

Approximately ten years after Defendant and Plaintiff moved in together, their relationship deteriorated, leading Plaintiff and her daughter to move out of the Glenn Road property. (Id. ¶ 11.) Plaintiff and her daughter relocated to California and maintain an apartment there. (Id. ¶ 37.) Following the dissolution of the romantic union between Plaintiff and Defendant, Defendant engaged counsel to prepare an agreement that would "provide certain financial benefits to Plaintiff, in exchange for Plaintiff's agreement to ... relinquish all claims against Defendant or his estate." (Id. ¶ 12.) The agreement, which went through several rounds of revision between the parties, was finalized on July 21, 2017 and transmitted to Plaintiff for signature (the "Settlement Agreement," attached as Exhibit A to Plaintiff's Amended Complaint³ ). (Id. ¶ 13.) Plaintiff sent the executed copy of the Settlement Agreement to Defendant's counsel on August 17, 2017. (Id. ¶ 14.) The Settlement Agreement does not contain Defendant's signature, and Plaintiff does not allege that Defendant signed.

The Settlement Agreement includes the following terms:

• Plaintiff's release of "any and all rights and obligations which she may have or at any time hereafter have for past, present or future support or maintenance, property distribution, counsel fees, costs, expenses, and any other right or obligation, economic or otherwise, arising out of her relationship with [Defendant]." (Settlement Agreement ¶ A(4)(a).)

• Plaintiff's agreement to "vacate the [Glenn Road property]" by September 1, 2017, subject to her right to "remove all of her personal possessions." (Id. ¶ B(1)(a)(i).)

• Defendant's agreement to "pay the monthly lease cost for [Plaintiff's] BMW" through the end of 2017. (Id. ¶ B(2).)

• Defendant's agreement to "contribute up to 50% of [Plaintiff's daughter's] remaining college tuition and room and board expenses at college," conditioned on Plaintiff's daughter's father contributing at least 50% of the costs. (Id. ¶ B(5).)

• Defendant's agreement to make the following payments to Plaintiff: $700 per month for health insurance for one year, (id. ¶ B(6)(i)); $3,000 per month for rental or mortgage expenses, (id. ¶ B(6)(ii)); $5,000 per month to support Plaintiff's other living expenses, (id. ¶ B(6)(iii)); and a lump sum payment of $300,000, (id. ¶ B(7).) Defendant also agreed to maintain a $1 million life insurance policy naming Plaintiff as beneficiary until Plaintiff's death, cohabitation, or remarriage. (Id. ¶ B(8).)

• Plaintiff's agreement to confidentiality and nondisparagement clauses. (Id. ¶ C.)

• Plaintiff's agreement to resolve by arbitration "any dispute or any claim of a breach of this Agreement by [Plaintiff]." (Id. ¶ D.)

Around the time of the circulation of the finalized agreement, Plaintiff alleges that both parties took actions in contemplation of the settlement. On June 29, 2017, Defendant transferred $300,000 to Plaintiff's bank account. (Id. ¶ 15.) Additionally, Defendant continued to maintain the $2.5 million life insurance policy with Plaintiff named as beneficiary, paid for Plaintiff's monthly health insurance (until January 2018), and paid for a storage unit for Plaintiff's personal items (until May 2019). (Id. ¶¶ 15, 18.) On July 22, 2017, the day after the Settlement Agreement was transmitted to Plaintiff for signature, Plaintiff vacated the Glenn Road Property. (Id. ¶ 16.)

III. Procedural History

Plaintiff filed her first complaint in this Court against Defendant on May 17, 2019 seeking continued financial support, attorney's fees, and costs. (ECF 1.) Defendant moved to dismiss for failure to state a claim on July 11, 2019. (ECF 12.) Defendant's motion was mooted by Plaintiff's filing of an Amended Complaint on August 1, 2019. (ECF 13.) Thereafter, Defendant filed a motion to dismiss Plaintiff's Amended Complaint on August 15, 2019. (ECF 15.) Plaintiff responded in opposition to Defendant's Motion on August 27, 2019. (ECF 17.) On September 3, 2019, Defendant replied in support of the Motion to Dismiss. (ECF 18.)

IV. Legal Standard

The pleading standard set forth in Federal Rule of Civil Procedure ("Rule") 12(b)(6) governs the breach of contract; breach of oral contract; negligent misrepresentation; and palimony claims. Plaintiff's intentional misrepresentation claim, which relies on fraud, is governed by Rule 9(b).

A. Pleading Standard Under Rule 12(b)(6)

In considering a motion to dismiss under Rule 12(b)(6), the Court "accept[s] all factual allegations as true [and] construe[s] the complaint in the light most favorable to the plaintiff." Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (internal quotation marks and citations omitted). The Supreme Court has instructed that, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

The Court in Iqbal explained that, although a court must accept as true all of the factual allegations contained in a complaint, that requirement does not apply to legal conclusions; therefore, pleadings must include factual allegations to support the legal claims asserted. 556 U.S. at 678, 684, 129 S.Ct. 1937. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678, 129 S.Ct. 1937. Accordingly, to survive a motion to dismiss, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

B. Pleading Standard Under Rule 9(b)

All allegations of fraud must meet Rule 9(b)'s heightened pleading standard—the "particularity" requirement. Rule 9(b)'s pleading standard not only gives the defendant notice of the claims against them, but also provides an increased measure for protection for their reputation and reduces the number of frivolous lawsuits brought solely to extract settlements. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1418 (3d Cir. 1997).

Rule 9(b) may be satisfied by describing "the circumstances of the alleged fraud with precise allegations of date, time, or place, or by using some means of injecting precision and some measure of substantiation into [the] allegations of fraud." Bd. of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 172 n.10 (3d Cir. 2002) (internal quotation marks and citation omitted). Stated differently, the plaintiff must plead the "who, what, when, where, and how" of the fraud. Institutional Inv'rs Grp. v. Avaya, Inc., 564 F.3d 242, 253 (3d Cir. 2009) ; see Bonavitacola Elec. Contractor, Inc. v. Boro Developers, Inc., No. 01-5508, 2003 WL 329145, at *6 (E.D. Pa. Feb. 12, 2003) (Baylson, J.) ("While a complaint need not set out ‘precise words,’ it should adequately describe the nature and subject of an alleged misrepresentation.").

However, "courts should be sensitive to the fact that application of [Rule 9(b) ] prior to discovery may permit sophisticated defrauders to successfully conceal the details of their fraud. Accordingly, the normally rigorous particularity rule...