Courtelis v. Rosenberg

Background

Kiki Courtelis alleged that she paid $250,000 for a matchmaking contract with Kailen Rosenberg and later paid an additional $327,030.54 for related services and expenses. The contract disclaimed warranties about the matchmaking’s suitability, success, or outcome and required disputes relating to the contract to be resolved through binding arbitration.

Courtelis also alleged that Rosenberg persuaded her to invest in the Lodge App, which was later rebranded as the Love Shopping App. Courtelis claimed Rosenberg made false statements about the app, delayed its development, made unilateral changes, excluded Courtelis from communications, and used business funds for personal expenses. The operating agreement gave Courtelis a 37.5% ownership interest in the dating app.

Courtelis originally sued in Kentucky, asserting claims related to the dating-app investments and matchmaking services. She also initiated arbitration concerning the matchmaking contract. The arbitration issued an award on January 18, 2022. The case was later transferred to the District of Minnesota.

Motion to dismiss

Rosenberg and Global Love Mergers, Inc., doing business as Kailen’s Love and Life Architects, moved to dismiss under Rule 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Rosenberg divided the claims into dating-app claims, Counts I–IV, and matchmaking claims, Counts V–VI.

For the dating-app claims, Rosenberg argued that the operating agreements required arbitration and that Courtelis lacked standing to bring the claims. Courtelis responded that she was not a signatory to those agreements and that her claims concerned conduct occurring before the agreements were signed or after the parties had abandoned the relevant entities.

The operating agreements incorporated the JAMS Streamlined Arbitration Rules. The court held that this incorporation clearly delegated threshold questions about whether the arbitration agreement applied to the dispute to the arbitrator. The court therefore left the scope question to the arbitrator. It expressly did not decide the dating-app claims’ merits or Rosenberg’s standing arguments.

For the matchmaking claims, Rosenberg relied on collateral estoppel, also called issue preclusion. This doctrine can prevent parties or their legally connected counterparts from relitigating issues already resolved in a prior proceeding. The court found that the arbitration had resulted in a final decision concerning the same issues raised in the matchmaking claims. It also found that Rosenberg had controlling participation in the arbitration and was legally connected to Global Love Mergers, Inc. for purposes of applying the prior decision. The court further found that Courtelis had a full and fair opportunity to be heard, even though she had voluntarily dismissed claims against Rosenberg individually.

Disposition

Judge Katherine Menendez granted Defendant Rosenberg’s motion to dismiss. The court dismissed the amended complaint without prejudice as to Counts I–IV and with prejudice as to Counts V–VI. The opinion did not decide the merits of the dating-app claims; it left the arbitration-scope question, and potentially related issues, to the arbitrator.