Catalogne v. Class Action Recovery, LLC

Summary

The New York Appellate Division, Second Department, affirmed an order granting the defendants summary judgment dismissing the plaintiff's claims and denying the plaintiff's motion to amend the complaint and for a preliminary injunction. The court held that the alleged oral agreement concerning compensation for procuring business opportunities was unenforceable under the statute of frauds, and that the related unjust enrichment and promissory estoppel claims failed. The court also concluded that the proposed amendments were patently devoid of merit and that the plaintiff could not establish entitlement to a preliminary injunction.

Holdings

1. An agreement to pay compensation for services involving the procurement of introductions to or assistance in negotiating or consummating business opportunities falls within General Obligations Law § 5-701(a)(10) and must be in writing and subscribed by the party to be charged. The alleged verbal agreement was therefore unenforceable.
2. A plaintiff may not maintain an unjust-enrichment claim to circumvent the statute of frauds.
3. When promissory estoppel is asserted to circumvent the statute of frauds, the plaintiff must allege unconscionable injury resulting from reliance on the alleged promise. Plaintiff failed to do so.
4. Leave to amend was properly denied because the proposed additional causes of action were all premised on the unenforceable verbal agreement and were therefore patently devoid of merit.
5. Plaintiff was not entitled to a preliminary injunction because he failed to demonstrate likelihood of success on the merits and alleged only economic loss, which is compensable by money damages and does not constitute irreparable harm.

Questions Presented

1. Whether the alleged verbal agreement was subject to and unenforceable under General Obligations Law § 5-701(a)(10).
2. Whether plaintiff's unjust-enrichment claim could proceed as a means of circumventing the statute of frauds.
3. Whether plaintiff adequately alleged unconscionable injury to support promissory estoppel based on a promise subject to the statute of frauds.
4. Whether the proposed amended claims were patently devoid of merit because they were premised on the unenforceable verbal agreement.
5. Whether plaintiff was entitled to a preliminary injunction despite the unenforceability of the alleged agreement and the alleged economic injury.

Disposition

affirmed