Qiu v. Diamond, Jr.

Background

Atlas Merchant Capital LLC allegedly obtained a $200 million investment from an undisclosed Chinese investor after Zhi Zhong Qiu introduced the investor to Robert Diamond, Jr., helped facilitate discussions, and advised Diamond about securing the investment. Qiu alleged that Diamond and Qiu agreed by telephone in February 2016 that Atlas would pay Qiu for these services.

Diamond then sent Qiu an email with the subject line “Our Agreement.” The email stated that Atlas would pay $3.5 million for Qiu’s services after a $100 million investment and an additional $4.5 million for each additional $100 million investment, with later payments divided into three installments. Qiu alleged that he secured a $200 million investment and was owed $8 million, but received no payment. He brought claims for breach of contract, unjust enrichment, and quantum meruit, which seeks payment for the reasonable value of services.

Motion to Dismiss Standard

Atlas moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Qiu’s claims were barred by New York’s Statute of Frauds and contradicted by the record. On such a motion, the court accepts the complaint’s allegations as true, draws reasonable inferences for the plaintiff, and asks only whether the complaint states a legally plausible claim—not whether the plaintiff is likely to prevail.

New York Statute of Frauds

The applicable New York law requires a written agreement or memorandum for a contract to pay compensation for negotiating the purchase or sale of a business opportunity. The writing must be signed by the party to be charged, identify the parties, identify the subject matter, and state the essential terms with reasonable certainty. The court explained that an email can qualify as the required writing.

The court found that the email satisfied the first three requirements. It was sent from Diamond’s company email and included his name, identified Atlas and Qiu, and described an agreement involving Qiu’s solicitation of investment funds from the investor.

The court also found that the email adequately described the essential terms. Read as a whole, the email showed that Qiu’s services involved securing investment funds for Atlas. It identified the initial $100 million investment, the $3.5 million payment, the additional $4.5 million payment for each additional $100 million investment, and the payment timing. The phrase “in accordance with all applicable rules” did not add an undefined essential term; it could reasonably be understood as requiring compliance with applicable law.

The court rejected Atlas’s argument that words such as “proposed” and the reference to documenting a future consulting agreement showed that the parties had not reached an agreement. The subject line “Our Agreement” and the email’s other language supported Qiu’s reading. The court also explained that anticipating a later, more formal document does not by itself invalidate an otherwise sufficient writing. The email did not state that the parties would be bound only after signing a formal contract or that essential terms remained open for future negotiation.

Quasi-Contract Claims

Atlas argued that because the Statute of Frauds barred Qiu’s contract claim, it also barred his unjust-enrichment and quantum-meruit claims. The court recognized that the Statute of Frauds can apply to such claims involving brokers’ or finders’ fees. But because Atlas’s motion failed as to the contract claims, and Atlas did not separately challenge the basic requirements of the quasi-contract claims, the court found no remaining basis for dismissing them at that stage.

June Letter Agreement

Atlas separately relied on a June letter agreement stating that no broker or finder was entitled to a fee. The court declined to consider that document on the motion to dismiss because it was not included in Qiu’s complaint and was not incorporated into the complaint by reference or reliance. The court found no sufficient basis to conclude that Qiu knew of or relied on that document.

Disposition

The court denied Atlas’s motion to dismiss. The parties were directed to appear for a status conference on April 8, 2020. The opinion did not decide whether Qiu was ultimately entitled to the claimed $8 million or whether he would prevail on any claim.