SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

---------------------------------------x
:
MARY ANNE SCHMITT-CAREY, : Index No. ______/2020
:
Plaintiff, :
:
– against – : VERIFIED COMPLAINT
:
SAY YES TO EDUCATION, INC., DALIO :
FOUNDATION, INC. d/b/a DALIO :
PHILANTHROPIES, ELIZABETH CARLOCK :
PHILLIPS, and RACHEL FLAX, :
:
Defendants. :
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Plaintiff Mary Anne Schmitt-Carey, by and through her attorneys, Zeisler PLLC, for her

Verified Complaint against Defendants Say Yes to Education, Inc. (“Say Yes”), Dalio Foundation,

Inc. d/b/a Dalio Philanthropies (“Dalio Philanthropies”), Elizabeth Carlock Phillips and Rachel

Flax (collectively, “Defendants”), hereby alleges as follows:

NATURE OF THE ACTION

1. This suit stems from Defendants’ coordinated disparagement of Ms. Schmitt-Carey

after she stepped down as Chief Executive Officer (“CEO”) of Defendant Say Yes on December

31, 2018, and Defendants’ subsequent interference with her employment in 2020 as the President,

Chief Executive Officer and Director of The Partnership for Connecticut (“The Partnership”), an

education not-for-profit venture that was to be funded by Defendant Dalio Philanthropies, taxpayer

dollars and other grants and donations. Defendants’ wrongful acts involve abuses of wealth and

power, misuse of a not-for-profit public-private partnership for private purposes, a chronic lack of

transparency, a disregard for the reputations of others, and clear breaches of contractual duties.
 2. On or about March 23, 2019, The Partnership’s board appointed Ms. Schmitt-Carey

to serve as The Partnership’s President, CEO, and a member of the board of directors. As

representatives of The Partnership made clear in statements to the media, Ms. Schmitt-Carey was

selected on the basis of her thirty-plus years of experience in education public policy and

community development; indeed, one board member described Ms. Schmitt-Carey as “near perfect

in fulfilling the experience and character requirements each member of the board was looking for.”

3. Ms. Schmitt-Carey promptly began advancing The Partnership’s goals by sharing

her experience with evidence-based programs, including investments in educational attainment

and strategic opportunities offering students the skills, support, experience and credentials

necessary for post-graduate employment.

4. Regrettably, it soon became apparent that representatives of Defendant Dalio

Philanthropies had no desire for The Partnership to be led by a professional President and CEO as

the board of directors intended. Within weeks of her appointment, Ms. Schmitt-Carey was

informed that her job was not to develop and implement the strategic plan approved by The

Partnership’s board. Instead, she had been hired to rubberstamp the silver-bullet programs chosen

unilaterally by Dalio Philanthropies figureheads Ray and Barbara Dalio – despite those policies’

dubious efficacy.

5. In short, Ms. Schmitt-Carey’s plans and efforts to advance The Partnership’s goals

based on her extensive experience in education policy and community development ran up against

the Dalios’ insistence that their financial contribution had bought them the right to dictate The

Partnership’s agenda unilaterally, behind closed doors.

6. In one notable exchange, Barbara Dalio’s husband, Ray Dalio (on behalf of Dalio

Philanthropies), commandeered an April 30, 2020 conference call to inform Ms. Schmitt-Carey

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that, notwithstanding the detailed action plans developed by Ms. Schmitt-Carey as the final step

in the hiring process with the board of directors, she instead was to take direction from Ms. Dalio

and implement whatever policies the Dalios wanted. As Mr. Dalio bluntly stated during that April

30 call, “If my wife wants to distribute 10,000 coats, your job is to figure out how to do that.”

7. Following the April 30 call with Mr. Dalio, Ms. Schmitt-Carey expressed her

concerns to The Partnership board Chair Erik Clemons. Incredibly, mere days later, Dalio

Philanthropies representatives attempted to pressure, if not extort, Ms. Schmitt-Carey, ordering

her to resign from her leadership position with The Partnership within hours or face public

humiliation.

8. Specifically, on May 4, 2020, Ms. Schmitt-Carey was asked to join an early

morning conference call with Barbara Dalio and Andrew Ferguson, a Dalio Philanthropies

employee, as well as Mr. Clemons. During this call, Ms. Dalio, Mr. Clemons and Mr. Ferguson

asserted a raft of false allegations relating to Ms. Schmitt-Carey’s tenure at Defendant Say Yes.

When Ms. Schmitt-Carey categorically denied these claims, she was ordered to “stop talking,” and

threatened that, unless she voluntarily resigned by noon – within hours – the false allegations

would become “much more public.”

9. Adamant that the accusations against her were false, Ms. Schmitt-Carey refused to

step down. Three days later, Mr. Clemons informed Ms. Schmitt-Carey that she had been placed

on “administrative leave” and was “not to have contact with any Partnership member or consultant,

or Board member.”

10. This constructive termination was made without The Partnership’s board’s

knowledge, approval or authorization, in violation of The Partnership’s By-Laws and its governing

documents. Instead, representatives of Defendant Dalio Philanthropies unilaterally determined

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that Ms. Schmitt-Carey should be placed on leave and effected that decision without board

consultation or approval. Dalio Philanthropies representatives and The Partnership then carried

through with the threat to publicly disparage Ms. Schmitt-Carey by informing the media that she

had been placed on leave for “disciplinary” reasons.1

11. Knowing that the accusations against her were patently false, Ms. Schmitt-Carey

invoked the process set forth in The Partnership’s By-Laws and within her powers as CEO, calling

for a Special Meeting of the board of directors. When her request went unanswered, Ms. Schmitt-

Carey wrote to the board to request that The Partnership investigate the baseless allegations against

her.

12. No investigation took place. Had The Partnership’s board properly followed its

fiduciary duties or conducted even a cursory investigation, they would have learned that the

accusations against Ms. Schmitt-Carey were based on nothing more than false, defamatory and

disparaging statements made by individuals affiliated with Say Yes – Ms. Schmitt-Carey’s former

employer.

13. Specifically, Defendant Elizabeth Carlock Phillips, then a Say Yes board member,

and Defendant Rachel Flax, of Say Yes benefactor the Weiss Family Foundation, contacted

representatives of the Dalio Philanthropies and The Partnership on or about April 22, 2020 to

convey a series of malicious lies regarding Ms. Schmitt-Carey. These statements were not only

false and defamatory, but also violated the clear and unequivocal terms of Ms. Schmitt-Carey’s

separation agreement with Say Yes.

1
See, e.g., Kaitlyn Krasselt, As First Laptops Delivered, CEO on Paid Leave at Partnership for Connecticut,
CONNECTICUT POST (May 18, 2020 at 5:06 pm), https://www.ctpost.com/politics/article/As-first-laptops-delivered-
CEO-on-paid-leave-at-15278223.php; Jon Lender, Dalio, State to Disband Venture, HARTFORD COURANT (May 20,
2020) https://www.pressreader.com/usa/hartford-courant/20200520/281479278610735

4
 14. The baseless accusations made by Defendants fueled the Dalio Philanthropies’ and

its supporters’ thinly-veiled pretext for sidelining Ms. Schmitt-Carey after she made clear she

would put her duties as The Partnership’s CEO before the preferences of Dalio Philanthropies

representatives.

15. Ms. Schmitt-Carey now brings this action to recover the damages caused by

Defendants’ wrongful acts, and herein asserts claims for breach of contract, tortious interference

with contract and defamation.

PARTIES

16. Plaintiff Mary Anne Schmitt-Carey is an individual and a resident of Fairfield

County, Connecticut, who was the CEO of Defendant Say Yes until December 2018 and was the

President and CEO of The Partnership, and a member of its Board of Directors, until May 2020.

17. Defendant Say Yes is an IRS Code Section 501(c)(3) non-profit organization with

its headquarters at 320 Park Avenue, 21st Floor, New York, New York 10022.

18. Defendant Dalio Philanthropies is an IRS Code Section 501(c)(3) exempt private

foundation with its headquarters at 1 Glendinning Place, Westport, Connecticut 06880.

19. Defendant Elizabeth Carlock Phillips is a former board member of Say Yes who at

the time of the breaches alleged herein was a Say Yes board member, and a resident of Texas.

20. Defendant Rachel Flax is the executive director of non-party Weiss Family

Foundation, a benefactor of Defendant Say Yes, and a resident of New York, New York.

JURISDICTION AND VENUE

21. This court has jurisdiction pursuant to CPLR 301 and 302(a) because Defendants

Say Yes and Rachel Flax reside in New York and non-resident Defendants Elizabeth Carlock

Phillips and Dalio Philanthropies regularly transact business within New York state and committed

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tortious acts in the state, and because Defendant Dalio Philanthropies has contacts with this forum

that are so extensive as to support general jurisdiction notwithstanding its foreign domicile.

22. Venue is proper in the County of New York pursuant to CPLR 503(a) because

Defendant Say Yes and Defendant Rachel Flax reside in New York County.

FACTUAL ALLEGATIONS

Ms. Schmitt-Carey’s Career in Education Public Policy

23. Ms. Schmitt-Carey has devoted the past thirty years of her career to working in

youth and community development. Prior to her appointment as President and CEO of The

Partnership in March 2020, Ms. Schmitt-Carey spent over twelve years as the CEO of Say Yes, a

nonprofit focused on helping public high school students graduate from postsecondary institutions

well-prepared for life after graduation; as a senior fellow for the Woodrow Wilson Foundation;

and as the CEO of New American Schools, a pioneer in venture capital education initiatives.

24. In connection with her voluntary departure from Say Yes in December 2018, Ms.

Schmitt-Carey entered into a confidential agreement setting forth the terms of her separation (the

“Separation Agreement”). (A true and correct copy of the Separation Agreement is annexed hereto

as Exhibit 1).

25. Pursuant to paragraph 14 of the Separation Agreement, Say Yes agreed, on behalf

of its board members (including Defendant Elizabeth Carlock Phillips), not to make or publish –

or encourage or induce others to make or publish – any critical, denigrating, or disparaging written

or oral statements about Ms. Schmitt-Carey.

26. Say Yes also agreed to instruct officers and employees of the Weiss Family

Foundation – including Defendant Rachel Flax – that they were subject to the same restrictions.

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The Partnership

27. In an April 5, 2019 press release, the Office of Connecticut Governor Ned Lamont

announced that “Ray and Barbara Dalio of Dalio Philanthropies today joined Connecticut

Governor Ned Lamont, First Lady Annie Lamont, leaders in the General Assembly, students and

other stakeholders to announce the launch of a partnership strengthening public education and

promoting greater economic opportunity in Connecticut.”2 According to the announcement, the

Partnership “will benefit residents of Connecticut’s under-resourced communities, with a specific

focus on communities where there is both a high poverty rate and a high concentration of youth

(14-24) who are showing signs of disengagement or disconnection from high school.” Id.

28. As set forth in the legislation establishing The Partnership, the corporation’s

purpose included strengthening public education in the state and supporting financial inclusion,

social entrepreneurship, and economic development in under-resourced communities. Conn.

Public Act 19-117, § 183(b).

29. Although Dalio Philanthropies pledged to contribute $100 million to the

Partnership over five years, the organization’s initial budget also reportedly included tens of

millions of dollars of public funds, and Dalio Philanthropies’ contribution was to be matched by

$100 million from the state.

30. Dalio Philanthropies reportedly conditioned its contribution, however, on the

requirement that The Partnership be exempted from state disclosure and ethics rules. Accordingly,

the Connecticut state legislature voted in June 2019 to exempt The Partnership from state

disclosure and ethics rules, including disclosure requirements under the Connecticut Freedom of

Information Act, Conn. Gen. Stat. §§ 1-200, et seq. See PA 19-117, § 183(c).

2
See https://portal.ct.gov/Office-of-the-Governor/News/Press-Releases/2019/04-2019/State-of-Connecticut-
Partners-With-Dalio-Philanthropies

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 31. As commentators then noted, this exemption risked allowing an entity created by

state legislation, with one-third of its budget coming from public funds, and with a board of

directors including five elected officials, to operate in large part behind closed doors.

32. The Partnership’s exemption from FOIA requests also stood in sharp contrast to the

so-called “radical transparency” principles Dalio Philanthropies figurehead Ray Dalio publicly

espoused for the hedge fund he managed, Bridgewater Associates, and for others to follow in his

2017 book, Principles: Life and Work.

33. For these and other reasons, The Partnership courted controversy long before Ms.

Schmitt-Carey’s appointment as President and CEO.

Ms. Schmitt-Carey’s Appointment as President and CEO of The Partnership

34. On March 23, 2020, The Partnership’s board of directors appointed Ms. Schmitt-

Carey to serve as The Partnership’s first President and CEO, and a member of its board of directors.

35. Prior to hiring Ms. Schmitt-Carey, The Partnership conducted a search through an

executive placement firm to fill its top leadership position.

36. Ms. Schmitt-Carey had three decades of experience in education, youth and

community development, including her prior tenure as CEO of Defendant Say Yes, an education

non-profit organization.

37. According to contemporaneous media coverage of Ms. Schmitt-Carey’s

appointment, the search committee selected Ms. Schmitt-Carey from over 260 candidates, and

cited her “experience, enthusiasm and passion for the goals of [T]he Partnership.”3

3
Kaitlyn Krasselt, Partnership for CT Hires CEO Amid Coronavirus Crisis, MDDLETOWN PRESS (March 23, 2020
at 10:02am), https://www.middletownpress.com/middletown/article/Partnership-for-CT-hires-CEO-amid-
coronavirus-15150426.php

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 38. One board member’s assessment of Ms. Schmitt-Carey was that she was “near

perfect in fulfilling the experience and character requirements each member of the board was

looking for.” Id.

39. The Partnership board members’ endorsement of Ms. Schmitt-Carey’s detailed,

100-day plan for her first months at The Partnership was critical not only to her selection as the

organization’s first President and CEO, but to her acceptance of The Partnership’s offer of

employment.

40. Ms. Schmitt-Carey began her tenure at The Partnership on April 1, 2020.

Ms. Schmitt-Carey’s Tenure at The Partnership

41. Ms. Schmitt-Carey hit the ground running in her month of employment with The

Partnership, taking steps to implement the detailed and time-tested plans she had presented to

board members even before her appointment had been finalized.

42. Unfortunately, Ms. Schmitt-Carey’s initial efforts exposed what should have been

made clear all along: The Partnership was not the public-private “partnership” it claimed to be.

Instead, it was a vehicle for Dalio Philanthropies to privately enact its figureheads’ own public

policy agenda behind closed doors.

43. From the very beginning of her tenure, Ms. Schmitt-Carey provided updates

regarding her planned strategies and progress in bi-weekly “sync” conference calls with Barbara

Dalio. As contemporaneous communications with Ms. Schmitt-Carey reflect, her effectiveness as

The Partnership’s first President and CEO was never called into question during these meetings.

44. On April 30, 2020, Ray Dalio joined a “sync” meeting for the first time, along with

Dalio Philanthropies employee Andrew Ferguson.

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 45. During this April 30 meeting, Mr. Dalio praised Mr. Clemons, Chair of The

Partnership’s board of directors, as “his brother.”

46. Mr. Dalio explained that he would not be regularly involved in The Partnership’s

work, as his primary philanthropic interest is ocean exploration. He also stated that his wife had

been interested in public education in Connecticut for years, and that The Partnership was “her

program.”

47. Mr. Dalio went on to instruct Ms. Schmitt-Carey that her job was not to draw on

the experience and knowledge she had accumulated during her long career, but to take direction

from Ms. Dalio regarding which programs should be implemented. As stated above, Mr. Dalio

informed Ms. Schmitt-Carey, “If my wife wants to distribute 10,000 coats, your job is to figure

out how to do that.”

48. Mr. Dalio made clear that the roadmap for giving away The Partnership’s funds

was set forth in the Bell Creek consultant recommendations, which the Dalios had commissioned

before Ms. Schmitt-Carey’s appointment. According to Mr. Dalio, the Bell Creek “strategy” was

the plan to be executed.

49. When Ms. Schmitt-Carey highlighted that, in every interview with The Partnership,

she had spoken clearly about a strategy that focused on quality, evidence-based programs that

would go to scale and become sustainable, Mr. Dalio made clear that those programs were not

what he cared about. Instead, he directed Ms. Schmitt-Carey to review the programs listed in the

Bell Creek report and to execute them – not to study, analyze, or create a strategy in accordance

with The Partnership’s stated goals.

50. When Ms. Schmitt-Carey asked Mr. Dalio if The Partnership was going to focus

solely on symptoms rather than, as she suggested, attempt to address root causes, Mr. Dalio said

10
that he had no interest in having this conversation. Mr. Dalio commented about wanting a

“McDonald’s” – a fast, easy, “plug-and-play” approach – not a comprehensive plan. Mr. Dalio

stated that programs such as Ready, Willing, and Able – a twelve-month residential program for

previously homeless men with a history of incarceration or addiction – was a prime example of a

program he thought that should be implemented. In particular, Mr. Dalio noted that the uniforms

worn by the “Men in Blue” participants in Ready, Willing, and Able “were very effective in

building character.” Mr. Dalio’s comments seemed to ignore that The Partnership’s initiatives

were focused on children and youth ages 14 to 24 years old.

51. Mr. Dalio’s dismissive directives to an accomplished executive woman fit a

longstanding pattern of devaluing women: Mr. Dalio’s hedge fund, Bridgewater Associates, LP,

has been publicly accused twice in the past two months of paying women executives less than men

with equal or lesser responsibilities.

52. Following this conference call, Ms. Schmitt-Carey expressed her concerns about

this conversation to Mr. Clemons.

Ms. Schmitt-Carey’s Disparagement and Defamation by Say Yes Affiliates

53. Three days after this conversation, Ms. Schmitt-Carey was instructed to join an

early morning conference call on May 4.

54. Ms. Schmitt-Carey joined the call as directed to find Ms. Dalio, Mr. Clemons and

Mr. Ferguson of Dalio Philanthropies on the line.

55. Mr. Clemons greeted Ms. Schmitt-Carey by informing her that there had been

discussions about her “ineffective tenure” for “some time.” This was patently false: Ms. Schmitt-

Carey had been employed by The Partnership for just over one month.

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 56. Mr. Clemons then stated that Dalio Philanthropies had been made aware of a series

of accusations against Ms. Schmitt-Carey, which Mr. Ferguson proceeded to detail.

57. Specifically, Mr. Ferguson accused Ms. Schmitt-Carey of “wildly inappropriate

behavior,” including combining personal and professional financial interests, having family travel

paid for by Say Yes, and receiving kickbacks from hired consultants. Mr. Ferguson also stated

that Ms. Schmitt-Carey lied in describing herself as a “recognized leader,” and said that she instead

“took Say Yes from good shape to bad shape.”

58. Ms. Schmitt-Carey immediately stated that the accusations were completely and

utterly false. In addition, these false allegations about Ms. Schmitt-Carey’s supposed bad acts

prior to her departure from Say Yes in 2018 are antithetical to Say Yes’s high praise of Ms.

Schmitt-Carey in its July 31, 2018 Press Release about her departure. (A true and correct copy of

the Press Release from Say Yes’s website is annexed hereto as Exhibit 2).

59. In response, Mr. Clemons interrupted Ms. Schmitt-Carey and ordered her to “stop

talking,” as the others on the call did “not want to hear from” her.

60. Mr. Clemons then told Ms. Schmitt-Carey that she had until noon – approximately

three and a half hours later – to voluntarily resign. If she did not do so, Mr. Clemons threatened,

the accusations against her would be made “much more public.”

61. Before ending the call, Mr. Clemons ordered Ms. Schmitt-Carey not to contact any

other members of The Partnership’s board of directors.

Ms. Schmitt-Carey Responds to the False Accusations

62. Ms. Schmitt-Carey immediately contacted her personal attorney, Donald Sapir. In

a telephone conversation that same day, Mr. Sapir informed counsel for The Partnership that the

12
accusations leveled against Ms. Schmitt-Carey were categorically false. Counsel for The

Partnership responded that the claims “were brought to the Dalios by one of their consultants.”

63. On information and belief, the accusations presented by Dalio Philanthropies were

based on false and defamatory statements made by Defendant Elizabeth Carlock Phillips, then a

Say Yes board member, and from Defendant Rachel Flax of the Weiss Family Foundation, a Say

Yes benefactor.

64. Specifically, Ms. Schmitt-Carey subsequently learned that Ms. Phillips and Ms.

Flax contacted Dalio Philanthropies representatives to convey false, disparaging and defamatory

statements regarding Ms. Schmitt-Carey, after Ms. Schmitt-Carey’s effective resignation from Say

Yes.

65. Tellingly, recognizing that she had disparaged and defamed Ms. Schmitt-Carey in

April and May 2020, Ms. Phillips asked Say Yes whether she would still be covered by Say Yes’s

director and officer insurance liability policy.

Dalio Philanthropies’ Further Interference With Ms. Schmitt-Carey’s Contract

66. On May 7, Ms. Schmitt-Carey received an email from Mr. Clemons stating that she

had been “placed on administrative leave.”

67. Mr. Clemons further stated that, during Ms. Schmitt-Carey’s “leave,” she “will not

have access to the Partnership computer network, [] will not perform any work for or on behalf of

the Partnership, and [] are not to have contact with any Partnership member or consultant, or Board

member.”

68. Mr. Clemons informed Ms. Schmitt-Carey that the length of her “leave” would “in

large part, be driven based on the direction that the Board determines is in the best interest of the

Partnership.”

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 69. In response, Ms. Schmitt-Carey forwarded Mr. Clemons’s email to Yvette

Melendez, The Partnership board Secretary, to request a special meeting of the board. As Ms.

Schmitt-Carey explained, “it appears that this decision was made without authorization of the

Board as required by the by-laws of [The Partnership].”

70. Ms. Melendez responded immediately and made clear that, not only had The

Partnership board not authorized placing Ms. Schmitt-Carey on leave, but Ms. Melendez and other

board members had no knowledge of any plans to do so.

71. On information and belief, Dalio Philanthropies representatives unilaterally

ordered that Ms. Schmitt-Carey should be “placed on administrative leave,” without The

Partnership’s board’s consultation or approval.

72. The decision to place Ms. Schmitt-Carey on “administrative leave” was

unauthorized and improper under The Partnership’s By-Laws and its governing documents

because, among other reasons, it was made without board approval or authorization.

73. The decision to place Ms. Schmitt-Carey on “administrative leave” indefinitely,

along with removing her access to email and documents, constituted a constructive termination.

74. Critically, The Partnership’s board of directors never voted to approve placing Ms.

Schmitt-Carey on “administrative leave.” Similarly, The Partnership board of directors never

voted to take any “disciplinary action” against Ms. Schmitt-Carey, or to constructively terminate

her by cutting off her access to The Partnership’s computer network and ordering her not to contact

any Partnership member, consultant or board member.

75. On May 12, Ms. Schmitt-Carey wrote to The Partnership board to reiterate her

request for a board meeting. After detailing the May 4 conference call with Dalio Philanthropies

representatives and Mr. Clemons, Ms. Schmitt-Carey noted that she had “been given no formal,

14
written notification of the reasons for my ‘paid administrative leave’” and again invited The

Partnership to investigate the accusations against her.

76. No investigation was ever conducted. Instead, in response to subsequent media

inquiries, representatives of Dalio Philanthropies falsely reported that Ms. Schmitt-Carey had been

placed on administrative leave for “disciplinary” reasons – further compounding the harm to her

reputation.

77. When press reporters sought clarification, The Partnership refused to correct its

false statements. Specifically, a May 13 article reported that Mr. Clemons provided a statement

only that “the Board must consider and resolve a confidential personnel issue and will treat the

matter in a manner that is consistent with the appropriate process and in the best interest of the

Partnership’s mission.”

78. Tellingly, members of the Connecticut state legislature publicly expressed alarm

over The Partnership’s treatment of Ms. Schmitt-Carey. As reported in a May 16 article,

Representative Vincent Candelora, deputy House Republican leader stated in an interview that The

Partnership’s alleged “threats and strong-arming” tactics could expose state and public officials to

liability. He also stated that he was troubled by The Partnership’s threat to publicize disparaging

statements about Ms. Schmitt-Carey unless she voluntarily resigned, saying, “As a business owner,

it struck a chord with me because that is not the way I treat my employees, and never would treat

my employees.”

79. Faced with mounting criticism over its misconduct, The Partnership’s board voted

to dissolve on June 5, 2020. Despite Ms. Schmitt-Carey’s repeated requests that The Partnership’s

board and the Defendants retract their disparaging statements and correct the record to state that

15
Ms. Schmitt-Carey was not placed on leave for disciplinary reasons or any other wrongful acts,

The Partnership’s board and Defendants refused to do so.

FIRST CAUSE OF ACTION

BREACH OF CONTRACT
(Against Defendants Say Yes and Elizabeth Carlock Phillips)

80. Plaintiff repeats and realleges each and every allegation set forth in the preceding

paragraphs of the Verified Complaint.

81. In connection with her voluntary departure from Say Yes in December 2018, Ms.

Schmitt-Carey entered into the Separation Agreement, which set forth the terms of her separation.

82. The Separation Agreement is a valid and enforceable contract.

83. Ms. Schmitt-Carey performed under the contract.

84. Pursuant to paragraph 14 of the Separation Agreement, Say Yes agreed, on behalf

of its board members, not to make or publish – or encourage or induce others to make or publish

– any critical, denigrating, or disparaging written or oral statements about Ms. Schmitt-Carey.

85. Say Yes also agreed to instruct officers and employees of the Weiss Family

Foundation – including defendant Rachel Flax – that they were subject to the same restrictions.

86. Paragraph 13 of the Separation Agreement provides in relevant part that, “in any

action to enforce Sections 13, 14, or 15 of this Agreement, the prevailing party shall be entitled to

recover its attorneys’ fees.”

87. In violation of the terms of the Separation Agreement, then-Say Yes board member

Elizabeth Carlock Phillips made, published, and/or encouraged or induced others to make or

publish, critical, denigrating, and disparaging statements about Ms. Schmitt-Carey, as detailed

above.

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 88. As a result of Say Yes’s breaches of contract, Ms. Schmitt-Carey has suffered

damages in an amount to be proven at trial.

SECOND CAUSE OF ACTION

TORTIOUS INTERFERENCE WITH CONTRACT
(Against Defendants Elizabeth Carlock Phillips, Rachel Flax and Dalio Philanthropies)

89. Plaintiff repeats and realleges each and every allegation set forth in the preceding

paragraphs of the Verified Complaint.

90. As President and CEO of The Partnership, Ms. Schmitt-Carey had an existing

employment contract with The Partnership dated March 23, 2020.

91. Defendants Elizabeth Carlock Phillips, Rachel Flax and Dalio Philanthropies knew

of Ms. Schmitt-Carey’s contract with The Partnership.

92. Defendants Elizabeth Carlock Phillips and Rachel Flax wrongfully interfered with

Ms. Schmitt-Carey’s contract by maliciously making knowingly false statements and

misrepresentations regarding Ms. Schmitt-Carey to representatives of The Partnership.

93. Defendant Dalio Philanthropies wrongfully interfered with Ms. Schmitt-Carey’s

contract by ordering, through its representatives, that Ms. Schmitt-Carey be placed on

“administrative leave” – a constructive termination taken without board consultation, resolution or

approval.

94. Defendants’ tortious interference with Ms. Schmitt-Carey’s contract constituted

reckless indifference to, and an intentional violation of, her rights, entitling Ms. Schmitt-Carey to

punitive damages.

95. As a result of Defendants’ tortious interference with Ms. Schmitt-Carey’s contract

with The Partnership, Ms. Schmitt-Carey suffered actual losses, including loss of the benefits of

17
the contract, consequential damages, emotional distress and harm to reputation, in an amount to

be proven at trial.

THIRD CAUSE OF ACTION

DEFAMATION
(Against Defendants Elizabeth Carlock Phillips, Rachel Flax and Dalio Philanthropies)

96. Plaintiff repeats and realleges each and every allegation set forth in the preceding

paragraphs of the Verified Complaint.

97. Defendants Elizabeth Carlock Phillips and Rachel Flax made false and defamatory

statements – with knowledge of their falsity or with reckless disregard as to their truth – to Dalio

Philanthropies representatives in April and May 2020, as set forth herein.

98. Among other defamatory statements, Defendants falsely stated that Ms. Schmitt-

Carey had wrongfully combined personal and professional financial interests, received kickbacks

from hired consultants, and had caused Say Yes to be in financial bad shape while acting as its

CEO.

99. Dalio Philanthropies made and/or published false and defamatory statements – with

knowledge of their falsity or with reckless disregard as to their truth – to board members of The

Partnership in May 2020, repeating these defamatory statements and others as set forth herein.

100. Defendants made the defamatory statements willfully and with actual malice.

101. Defendants’ statements constitute slander per se, as they falsely charged Ms.

Schmitt-Carey with conduct or characteristics that would adversely affect her in her trade or

business, and injured Ms. Schmitt-Carey in her business, trade or profession.

102. As a result of Defendant’s defamation, Ms. Schmitt-Carey suffered harm, including

but not limited to injury to her reputation.

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 PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully requests that this Court:

a. Enter judgment in favor of Plaintiff on the First Cause of Action for breach of

contract against Defendants Say Yes and Elizabeth Carlock Phillips;

b. Enter judgment in favor of Plaintiff on the Second Cause of Action for tortious

interference with contract against Defendants Elizabeth Carlock Phillips, Rachel Flax and Dalio

Philanthropies;

c. Enter judgment in favor of Plaintiff on the Third Cause of Action for defamation

against Defendants Elizabeth Carlock Phillips, Rachel Flax and Dalio Philanthropies;

b. Award compensatory damages of not less than $2,500,000.00, as well as pre and

post-judgment interest, punitive damages, reasonable attorneys’ fees and costs; and

c. Award Plaintiff such other and further relief as the Court deems just and proper.

Dated: New York, New York

September 23, 2020
ZEISLER PLLC

By: /s/ Aaron M. Zeisler

Aaron M. Zeisler
Meghan H. Sullivan
Attorneys for Plaintiff
800 Third Avenue, 28th Floor
New York, New York 10022
Tel: (212) 671-1921

Of Counsel:

HOGAN LOVELLS US LLP

Jon Talotta
Attorneys for Plaintiff
8350 Broad Street, 17th Floor
Tysons, VA 22102
Tel: (703) 610-6100

19
 VERIFICATION

MARY ANNE SCHMITT-CAREY, being duly sworn, deposes and says:

1. I am the Plaintiff in this action.

2. I have read the foregoing Verified Complaint and its factual contents are true to my

personal knowledge, except as to matters therein stated to be alleged upon information and belief,

and as to those matters, I believe them to be true.

fY\'=''----~ C--..
Ma& Anne Schmitt-Carey - 0

S~m to before me this

t}Ji!!.day of September, 2020

. ,.,

Lynda Derenzis
Notary Public-Connecticut
My Commission Expires
November 30, 2024