Kwan v. Schlein

• Decision Date: 14 July 2006
• Docket Number: No. 05 Civ. 459(SHS).,05 Civ. 459(SHS).
• Citation: 441 F.Supp.2d 491
• Parties: Shirley Y. KWAN, Plaintiff, v. Alan M. SCHLEIN, Michael L. Sankey, Carl R. Ernst, J.J. Newby, Peter J. Weber, Business Resources Bureau Inc., BRB Publications, Facts on Demand Press, Schlein News Bureau, And John/Jane Doe Defendants.
• Court: U.S. District Court — Southern District of New York

441 F.Supp.2d 491

Shirley Y. KWAN, Plaintiff, v. Alan M. SCHLEIN, Michael L. Sankey, Carl R. Ernst, J.J. Newby, Peter J. Weber, Business Resources Bureau Inc., BRB Publications, Facts on Demand Press, Schlein News Bureau, And John/Jane Doe Defendants.

No. 05 Civ. 459(SHS).

United States District Court, S.D. New York.

July 14, 2006.

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COPYRIGHT MATERIAL OMITTED

Shirley Y. Kwan, New York City, pro se.

Scott Christopher Paton, McNamee, Lochner, Titus & Williams, P.C., Albany, NY, for Michael Sankey, BRB Publications, Business Resource Bureau, Inc., Peter J. Weber, defendants.

Scott Christopher Paton, Glen P. Doherty, McNamee, Lochner, Titus & Williams, P.C., Albany, NY, for Carl R. Ernst, defendant.

Lawrence D. Bernfeld, Graubard Miller, New York City, for Schlein News Bureau, defendant.

OPINION & ORDER

STEIN, District Judge.

Plaintiff Shirley Y. Kwan brings this action pro se for, among other claims, breach of contract, unfair competition and copyright infringement in connection with the publication of "Find it Online," a book designed to assist internet users in conducting web searches. Kwan, who contends that she co-authored the book with defendant Alan Schlein, is suing both Schlein and Business Resource Bureau, Inc. ("BRB"), the book's publishing company, as well as various individuals associated with the book project. Kwan asserts that Schlein and BRB CEO Michael Sankey promised her co-author credit and appropriate compensation for her work in helping to author the book, and that to date she has received neither. In addition to various claims stemming from that allegedly broken promise, Kwan alleges that Schlein and BRB infringed her copyright in "Find it Online" and wrongfully filed their own copyright for the book.

The defendants—Schlein separately— have moved to dismiss the complaint pursuant to Fed.R.Civ.P. 4 and 12(b)(6),¹ contending that (i) they were improperly served; (ii) Kwan cannot satisfy the elements of each of her claims; and (iii) most of Kwan's claims, having as their genesis a date in 1998, are barred by the applicable statutes of limitation. As discussed below, Kwan's complaint is dismissed without prejudice for improper service as to each of the defendants except Schlein. As to Schlein, Kwan has stated a claim for racial discrimination and unfair competition. However, her breach of contract claim is barred by the New York Statute of Frauds; her copyright claim is barred by the Copyright Act's statute of limitations; and her remaining claims also fail, some on the merits and some because they fall outside of the relevant statutes of limitation.

I. BACKGROUND

The facts as alleged in the complaint are as follows:

In August 1998, Kwan signed a contract with defendant Business Resources Bureau, Inc.² ("BRB") to serve as an editor for "Find it Online," a guide to internet searching that was to be principally authored by defendant Alan M. Schlein. Complaint ("Compl.") ¶ 2. In accordance with that contract, Kwan contends that she was to receive $2,000 as well as 20 percent of royalties for the book. Id. However, despite having agreed to perform only a limited editorial task, Kwan's role expanded as the project continued. According to Kwan, she helped Schlein draft an outline; composed the book's table of contents; targeted a niche market for the book; and wrote and rewrote large portions of the manuscript. Id. ¶¶ 3, 6.

To reflect this unexpectedly enhanced role, Kwan claims, Schlein and BRB President Michael Sankey promised her "cover credit commensurate with [her] contributions," as well as increased compensation. Id. ¶¶ 4, 5. Schlein allegedly informed her that his own contract with BRB was being amended to accommodate the heightened responsibilities and credit accorded to Kwan. Id. ¶ 5. No written contract was signed between Kwan and either Schlein or BRB, however, and Kwan continued to work on the book through the fall of 1998 while repeatedly requesting that their agreement be reduced to writing. Id. ¶ 6.

In December, Sankey sent Kwan a copy of the allegedly revised contract between Schlein and BRB, which did not contain any new provisions encompassing the oral agreement she claims she had with the parties. Id. ¶ 10. Still, Kwan asserts, Sankey confirmed on more than one occasion thereafter—by phone and by e-mail— that she would receive the co-author credit she had been promised. Id. ¶10, 12. But that promise was short-lived; on December 23, Sankey informed Kwan that he wanted Schlein to be sole author. Id. ¶ 13. Accordingly, the book was published in February 1999 with Schlein listed as the only author; Kwan was recognized as one of three editors. Id. ¶ 15. Additionally, one month before its publication, BRB and Schlein filed copyright registrations for "Find it Online" and listed themselves as joint authors. Id. ¶ 14.

In the intervening years, three further editions of "Find it Online" have been published, including the most recent, August 2004 edition. Id. ¶¶ 16, 18, 21. It is unclear which of these editions were actually copyrighted by any of the defendants. Kwan's name, listed as an editor for the second edition, was omitted entirely from the third and fourth editions. Id. ¶¶ 18, 21. She also stopped receiving royalty payments after the second edition. Id. According to Kwan, for the last several years Schlein has wrongfully touted his sole authorship of "Find it Online" at lectures and in workshops, and has received several accolades for his work on the book. Id. ¶ 23.

Frustrated at this sequence of events, Kwan did two things: she brought suit in January of 2005, and filed her own copyright registration for "Find it Online" shortly thereafter, claiming to be a joint author with Schlein. Id. ¶ 22. By an Order dated January 14, 2005, Chief Judge Mukasey dismissed Kwan's complaint pursuant to Fed.R.Civ.P. 8 for failure to plead the facts underlying her claims and granted Kwan leave to file an amended complaint. Kwan then filed a new complaint in March 2005, and the case was assigned to this Court. Kwan lists as defendants not only Schlein and BRB, but also individual defendants Sankey, Peter Weber and J.J. Newby (other editors of "Find it Online") and Carl R. Ernst (a minority shareholder in BRB). Each of the defendants except Newby have moved to dismiss the complaint.

Kwan's complaint alleges a host of wrongs. In addition to claims of copyright infringement, breach of contract and unfair competition, Kwan purports to state a claim for "fraudulent notice of copyright," "false representation on associated applications," sexual harassment, conspiracy, fraud, deceit and misrepresentation, debt, defamation, tortious interference with pre-contractual relations, race discrimination, and gender discrimination. Id. ¶ 26. For the reasons discussed below, Kwan's complaint is dismissed without prejudice as to each of the defendants except Schlein, and dismissed in part as to defendant Schlein. Schlein's motion to dismiss is granted in part, but it is denied with respect to Kwan's claims of racial discrimination and unfair competition.

II. DISCUSSION

A. Defendants' Motion to Dismiss for Improper Service

Each of the defendants has moved pursuant to Fed.R.Civ.P. 12(b)(5) to dismiss Kwan's complaint on the grounds that service was improper. Once challenged, the burden of establishing that service was proper lies with the plaintiff. See Darden v. DaimlerChrysler N. Am. Holding Corp., 191 F.Supp.2d 382, 387 (S.D.N.Y.2002).

1. Service upon BRB

For domestic corporate defendants, service must be made upon "an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process" or pursuant to the laws of the state in which the district court was located or in which service was effected. Fed.R.Civ.P. 4(h)(1). Both New York law (where the Court is located) and Arizona law (where service was effected) largely mirror federal law in requiring corporate service to be made upon an officer, director, agent, or similarly high-ranking corporate official. See N.Y. C.P.L.R. 311(a); Ariz. R. Civ. P. 4.1(k).

The U.S. Marshals effected service upon BRB³ by serving Annette Jackson, who in the "Process Receipt and Return" is listed as BRB's "Office Manager." Kwan offers no evidence that Jackson is an officer or other similarly high-ranking official at BRB. Nor is it clear whether Jackson is "invested with powers of discretion and must exercise judgment in his duties, rather than being under direct superior control as to the extent of his duty and the manner in which he executes it," Grammenos v. Lemos, 457 F.2d 1067, 1073 (2d Cir.1972), which would make her an agent. Indeed, Jackson herself purports to be BRB's director of customer services, see Affidavit of Annette Jackson dated July 21, 2005, at 1, a title that—unlike, for example, CEO—does not on its face suggest that she is an officer or agent of the company. Finally, Jackson claims that she has never been authorized to accept service on behalf of BRB and that she did not hold herself out as such to the process server. Id. at 2. Without offering any information to the contrary, Kwan cannot meet her burden of establishing proper service. See Kwon v. Yun, No. 05-Civ.-1142, 2006 WL 416375, *2, *4, 2006 U.S. Dist. LEXIS 7386 at *7, 15 (S.D.N.Y. Feb. 21, 2006) (noting that "[t]he burden on a motion to dismiss for insufficient service of process rests with the plaintiff, who must ... make a prima facie showing that service was proper" and concluding that plaintiff had not demonstrated that person served was a corporate agent of the defendant).⁴ Therefore Kwan's claims against BRB are dismissed without prejudice pursuant to Fed.R.Civ.P. 12(b)(5).

2. Service Upon the Individual Defendants Except Schlein

Service upon individuals must be made either personally or "pursuant to the law of the state in which the district court is located, or in which service is...