The following papers numbered 1 to 7 were read on the motion (seq. no. 1) by plaintiff/counterclaim-defendant Neshama Carlebach ("plaintiff") for an Order pursuant to CPLR §§ 3211(a)(1) and (7) dismissing the Verified Counterclaims dated November 1, 2024 (the "Counterclaims") of defendant/counterclaim-plaintiff Sojourn Records, Inc. ("defendant"):

This action arises from a dispute in connection with defendant's agreement to license for distribution various of plaintiff's previously released music albums and recordings. In sum and substance, the Verified Complaint dated September 22, 2024 (the "Complaint") alleges that [*2]plaintiff is a recording artist, musician, and songwriter that entered into a licensing agreement dated March 26, 2010 with defendant (the "2010 Agreement"). See NYSCEF Doc. No. 1 at ¶¶ 1-21. It alleges that pursuant to the 2010 Agreement, plaintiff agreed to license to defendant for commercial distribution six albums for a specific period of time, during which time defendant would make regular payments and accountings to plaintiff. Id. It alleges that during this timeframe, which ended no later than 2020, defendant materially breached and failed to live up to its reporting and payment obligations under the 2010 Agreement to plaintiff's substantial monetary detriment. Id. Based upon the foregoing general allegations as detailed in the Complaint, plaintiff asserts: (1) a first cause of action for breach of contract in connection with the 2010 Agreement; (2) a second cause of action for unjust enrichment; and (3) a third cause of action seeking a declaratory judgment that the term of the 2010 Agreement, and defendant's related rights thereunder, ended no later than 2020. Id. at ¶¶ 22-52.

In its Verified Answer dated November 1, 2024 (the "Answer"), defendant, inter alia, denied the material allegations of the Complaint, raised 18 affirmative defenses in response thereto, and asserted the Counterclaims. See NYSCEF Doc. No. 3. In sum and substance, the Counterclaims allege that this lawsuit, and a simultaneously filed companion lawsuit bearing Index No. 69945/2024 (the "Related Action") represent the second and third cases before this Court, respectively, in which plaintiff has unlawfully tried to set aside her various binding contractual agreements with defendant.^[FN1] Id. at ¶¶ 1-30. The Counterclaims allege that defendant is a small, independent record label that has been damaged by plaintiff's failure to promote defendant's releases of her albums and by plaintiff's interference with and undermining of defendant's ability to monetize the music of plaintiff and her father, the late Rabbi Shlomo Carlebach ("Rabbi Carlebach"). They further allege that in a prior action before this Court bearing Index No. 59209/2019 (the "Prior Action"), defendant withdrew its claims against plaintiff in connection with a settlement agreement by which the parties agreed to work jointly to identify third parties interested in licensing or acquiring the rights to the music of Rabbi Carlebach, who was one of the most famous Jewish religious songwriters in history. Id. The Counterclaims allege that plaintiff breached this agreement by not making any efforts to locate such a third party; that plaintiff steadfastly refused to consent to the involvement of highly interested and motivated third parties that defendant had identified; and that plaintiff instead chose to commence this lawsuit and the Related Action. Id. Based upon the foregoing general allegations as detailed in the Counterclaims, defendant asserts: (1) a first counterclaim for breach of the implied covenant of good faith and fair dealing in connection with the 2008 Agreement, the 2009 Agreement, and the 2010 Agreement; and (2) a second counterclaim for promissory estoppel arising from those same agreements. Id. at ¶¶ 31-42.

Plaintiff moves (seq. no. 1) to dismiss the Counterclaims pursuant to CPLR §§ 3211(a)(1) and/or (7), arguing, inter alia, that the two Counterclaims fail to state causes of action and are inconsistent with the terms of the parties' various agreements. See NYSCEF Doc. Nos. 4-10. Defendant opposes the motion, contending, inter alia, that plaintiff's documentary evidence does not fatally undercut the Counterclaims, which respectively set forth validly stated [*3]claims for breach of the implied covenant of good faith and fair dealing and promissory estoppel. See NYSCEF Doc. Nos. 23-27. The motion was deemed to be fully submitted in connection with plaintiff's furnishing of her reply papers. See NYSCEF Doc. No. 28.^[FN2]

It is well-settled that "[a] motion to dismiss a cause of action pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a matter of law." BCI Constr., Inc. v Board of Educ., Washingtonville Cent. Sch. Dist., 203 AD3d 794, 795 (2d Dept 2022). "For the purpose of CPLR 3211(a)(1), judicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence." Oparaji v ABN Amro Mtge. Group, Inc., 202 AD3d 985, 986-987 (2d Dept 2022).

Regarding a motion to dismiss pursuant to CPLR § 3211(a)(7), it is well-established that "the complaint must be liberally construed, giving the plaintiff the benefit of every favorable inference." Cunningham v Nolte, 188 AD3d 806, 807 (2d Dept 2020), citing Leon v Martinez, 84 NY2d 83, 87-88 (1994). "Such a motion should be granted only where, even viewing the allegations as true, the plaintiff still cannot establish a cause of action." Cunningham, 188 AD3d at 807, citing Hartman v Morganstern, 28 AD3d 423, 424 (2d Dept 2006). "The motion must be denied if from the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law." 511 West 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152 (2002).

With respect to the first counterclaim, it is well-settled that "[t]he implied covenant of good faith and fair dealing is a pledge that neither party to the contract shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruit of the contract, even if the terms of the contract do not explicitly prohibit such conduct." East Ramapo Cent. Sch. Dist. v New York Schs. Ins. Reciprocal, 199 AD3d 881, 884 (2d Dept 2021).

Without opining regarding whether defendant may ultimately prevail on the merits, the Court agrees with defendant that it has validly stated a first counterclaim for breach of the implied covenant of good faith and fair dealing. Specifically, defendant alleges that the parties entered into the 2008 Agreement, the 2009 Agreement, and the 2010 Agreement. See NYSCEF Doc. No. 3 at ¶¶ 31-36. It further alleges that defendant performed all of its obligations thereunder by, inter alia, producing the albums to be released (including by recording some new tracks and new songs) and by then releasing the albums. Id. Defendant alleges that in so doing, it incurred hundreds of thousands of dollars in expenses, which were to be recouped through sales of the albums; and that it incurred those expenditures based on defendant's anticipation that it could recoup its expenses, and make a profit, through sales of the albums. Id. Defendant [*4]further alleges that plaintiff had a duty to promote the releases by defendant; and that plaintiff knew that her support of the albums through live performances and other promotional activities was critical to the albums' success. Id. Defendant alleges that plaintiff was also aware of defendant's expenditures on the albums, and knew that unless she promoted defendant's releases through live performances, defendant would not be made whole on its investment; and that accordingly, plaintiff agreed to perform to promote the albums. Id. Defendant further alleges, however, that beginning in 2012 and into 2013, plaintiff began cutting back on her performances; and that by late-2013, plaintiff had completely stopped performing and had cut off communication with defendant. Id. Defendant alleges that plaintiff's ongoing failure to promote the albums has caused defendant to suffer damages of at least $1,125,000, including over $600,000 in estimated unreimbursed expenses alone. Id.

Accordingly, defendant has stated a valid counterclaim for breach of the implied covenant of good faith and fair dealing such that it should not be dismissed pursuant to CPLR § 3211(a)(7). See, e.g., Frydman v Endurance Am. Ins. Co., 235 AD3d 848, 848 (2d Dept 2025) (holding that "[t]he Supreme Court properly denied dismissal of the cause of action alleging breach of the implied covenant of good faith and fair dealing insofar as asserted against Alliant pursuant to CPLR 3211(a)(7)" where "the plaintiff alleged facts tending to show that [defendant] sought to prevent performance of an agreement with the plaintiff or to withhold the benefits of that agreement from the plaintiff"); East Ramapo Cent. Sch. Dist., 199 AD3d at 885 (finding that the Supreme Court "erred in granting the defendant's motion pursuant to CPLR 3211(a)(7) to dismiss the cause of action to recover damages for breach of the implied covenant of good faith and fair dealing" given that "[t]he plain language of the complaint reflects the plaintiff's allegation that the defendant breached the implied covenant of good faith and fair dealing"); Ahmed Elkoulily, M.D., P.C. v New York State Catholic Healthplan, Inc., 153 AD3d 768, 770-771 (2d Dept 2017) (holding that "[t]he allegations in the complaint that the defendants acted in bad faith by terminating the agreement without justification . . . . were sufficient to state a cause of action to recover damages for breach of contract based upon the alleged breach of the implied covenant of good faith and fair dealing. Accordingly, the Supreme Court erred in granting that branch of the defendants' motion which was pursuant to CPLR 3211(a)(7) to dismiss [that claim]").

The Court does not credit plaintiff's contention that this counterclaim is "inconsistent" with the parties' agreements such that it should be dismissed pursuant to CPLR § 3211(a)(1). See NYSCEF Doc. No. 5 at pp. 4-8. Rather, the 2008 Agreement, the 2009 Agreement, and the 2010 Agreement, which require plaintiff to promote the albums, is not inconsistent with and does not negate plaintiff's distinct and implied obligation to cooperate with defendant's promotional efforts and proceed with her own promotion of the albums. See NYSCEF Doc. Nos. 7-10.

Nor does the Court agree with plaintiff that the first counterclaim is an impermissibly "disguised" breach of contract claim. See NYSCEF Doc. No. 5 at pp. 4-8. Indeed, the first counterclaim is properly pleaded as a quasi-contractual claim, as "[t]echnically complying with the terms of a contract while depriving the plaintiff of the benefit of the bargain may constitute a breach of the covenant of good faith and fair dealing." See Ahmed Elkoulily, M.D., P.C., 153 AD3d at 770; see also Elmhurst Dairy, Inc. v Bartlett Dairy, Inc., 97 AD3d 781, 784 (2d Dept 2012) (noting that "[e]ven if a party is not in breach of its express contractual obligations, it may be in breach of the implied duty of good faith and fair dealing"); Atlas El. Corp. v United El. [*5]Group, Inc., 77 AD3d 859, 861 (2d Dept 2010) (stating that the implied covenant extends not only to express contractual provisions but also "encompasses any promises which a reasonable person in the position of the promisee would be justified in understanding were included in the agreement").

The Court further disagrees with plaintiff's assertion that the first and/or second counterclaims should be dismissed to the extent that they relate to the 2009 Agreement, which is at issue in the Related Action. See NYSCEF Doc. No. 5 at pp. 3-4. Plaintiff's argument is grounded in the wholly unsupported notion that because the Related Action, which was filed by plaintiff mere moments before the instant action, involves plaintiff's claims regarding the 2009 Agreement, defendant is somehow precluded from asserting any counterclaims herein that pertain to the 2009 Agreement. Setting aside that these two actions involve the same parties and the same central dispute and are both pending before this Court, plaintiff's argument is fatally undercut by the well-settled law that any counterclaims may be asserted by a defendant against a plaintiff even when they bear no relationship to the claims that plaintiff has asserted in the action. See CPLR 3019(a) (stating that "[a] counterclaim may be any cause of action in favor of one or more defendants or a person whom a defendant represents against one or more plaintiffs . . . " (emphasis added); W. Joseph McPhillips Inc. v Ellis, 278 AD2d 682, 683 (3d Dept 2000) (noting that "counterclaims may be asserted against any 'other persons alleged to be liable' to a defendant (CPLR 3019[a]), even if such claims do not arise out of the transaction or occurrence from which the plaintiff's claim arises"); Platil v Corbett, 2011 NY Misc. LEXIS 2749, *14 (Sup. Ct. Suffolk Cty. May 31, 2011) (citing CPLR § 3019[a] and stating that "[a] counterclaim, by contrast, need not be related to the plaintiff's claim in any way").

Regarding defendant's second counterclaim, it is well-established that "[t]he elements of promissory estoppel are a clear and unambiguous promise, reasonable and foreseeable reliance by the party to whom the promise is made, and an injury sustained in reliance on that promise." Odonata Ltd. v Baja 137 LLC, 206 AD3d 567, 569 (1st Dept 2022).

Again without opining concerning whether defendant may ultimately succeed on the merits, the Court credits defendant's assertion that it has stated a valid second counterclaim for promissory estoppel. In particular, defendant alleges that in the course of the parties' dealings, plaintiff repeatedly assured defendant that she would participate in promotional efforts for the albums that defendant would be releasing. See NYSCEF Doc. No. 3 at ¶¶ 37-42. Defendant alleges that plaintiff further specifically assured it that plaintiff would publicly perform her and her father's music if defendant invested its resources in creating, coordinating, and facilitating opportunities for her to do so and, more generally, in widening her audience and enhancing her brand. Id. Defendant further alleges that in reasonable reliance on plaintiff's assurances, defendant invested substantial resources in the production, release, and marketing of plaintiff's and her father's albums, facilitated live performance opportunities for plaintiff, worked tirelessly to help elevate the scope and prominence of concerts and other events where plaintiff could perform, and worked with its professional contacts to promote her music. Id. Defendant alleges that plaintiff nonetheless failed to assist with the promotion of the albums, stopped assisting with the organization of concerts, failed to support events organized by defendant that she had previously committed to support (at least two of which were ultimately cancelled due to her refusal to support the events), and, eventually, refused to communicate with defendant, causing it [*6]to lose time and money and to suffer reputational damage. Id. Defendant alleges that it has suffered damages of at least $1,125,000 resulting from plaintiff's failure to honor her promises to it. Id.

Based upon the foregoing, defendant has stated a valid counterclaim for promissory estoppel that is not subject to dismissal pursuant to CPLR § 3211(a)(7). See, e.g., Schmitt v Artforum Intl. Mag., Inc., 178 AD3d 578, 587-588 (1st Dept 2019) (holding that "[w]e reinstate the claim for promissory estoppel" where plaintiff's allegations "sufficiently set forth a cause of action for promissory estoppel so as to survive dismissal under CPLR 3211(a)(7)"); Lord v Marilyn Model Mgt., Inc., 173 AD3d 606, 607-608 (1st Dept 2019) (reversing the Supreme Court's dismissal of a promissory estoppel claim and stating that the complaint "sufficiently alleges causes of action for promissory estoppel"); Woodstock Constr. Group, Ltd. v State of New York, 130 AD3d 1018, 1018 (2d Dept 2015) (affirming the denial of defendant's CPLR 3211[a][7] motion and holding that in "[a]ffording the claim a liberal construction, accepting all facts as alleged in the claim to be true, according the cause of action the benefit of every possible favorable inference . . . the claim states a cause of action alleging promissory estoppel").

The Court does not credit plaintiff's contention that the second counterclaim should be dismissed because it is "plainly duplicative of" the first counterclaim. See NYSCEF Doc. No. 5 at pp. 8-11. Instead, a plain reading of the Counterclaims demonstrates that the first and second counterclaims set forth alternate theories of relief with different underlying elements, even if defendant seeks at least $1,125,000 in damages in connection with both claims. See NYSCEF Doc. No. 3 at ¶¶ 31-36; 37-42. Defendant is permitted to plead in the alternative, and any overlap between the two Counterclaims does not require dismissal of one of them. See CPLR § 3014 (providing that "[s]eparate causes of action or defenses shall be separately stated and numbered and may be stated regardless of consistency. Causes of action or defenses may be stated alternatively or hypothetically") (emphasis added); Gold v 29-15 Queens Plaza Realty, LLC, 43 AD3d 866, 867 (2d Dept 2007) (holding that "plaintiffs were entitled to plead alternative and inconsistent causes of action and to seek alternative forms of relief"); Perkins v Volpe, 146 AD2d 617, 618 (2d Dept 1989) (noting that "it is appropriate for the plaintiff to advance different theories of recovery regardless of their incompatibility"); see also Corsello v Verizon NY, Inc., 77 AD3d 344, 370-371 (2d Dept 2010) (finding that two causes of action are not duplicative where they "seek the same damages" but are grounded in "alternative theories of recovery").

Accordingly, based upon the foregoing, plaintiff's motion to dismiss the Counterclaims pursuant to CPLR §§ 3211(a)(1) and (7) is denied in its entirety.

The foregoing constitutes the decision and order of the Court.^[FN3]