| Rafferty Sand & Gravel, LLC v Kalvaitis |
| 2014 NY Slip Op 02656 [116 AD3d 1290] |
| April 17, 2014 |
| Appellate Division, Third Department |
| Rafferty Sand & Gravel, LLC, Respondent, v WilliKalvaitis et al., Appellants. |
—[*1] Fischer, Bessette, Muldowney & Hunter, Malone (Matthew H. McArdle of counsel),for respondent.
Garry, J. Appeal from that part of an order of the Supreme Court (Muller, J.), enteredSeptember 18, 2012, which denied defendants' motion to dismiss the amended complaint.
Plaintiff, a supplier of sand and gravel, commenced this action alleging that itentered into a partnership with defendant Willi Kalvaitis (hereinafter defendant) in 2004,for the purpose of developing a limestone quarry on defendant's property in the Town ofChazy, Clinton County, and that in 2011, after plaintiff had expended significant effortsand resources developing and managing the quarry business, defendant changed thelocks to the property and refused plaintiff further access. The complaint soughtdissolution and an accounting of the partnership, the imposition of a constructive trust onthe quarry business and property and, in the alternative, recovery in quantummeruit.[FN*]As pertinent here, defendants moved to dismiss the amended complaint in its entirety onseveral grounds (see CPLR 3211 [a] [1], [3], [5], [7]). Supreme Court denied themotion, and defendants appeal.
While this appeal was pending, defendants moved for leave to reargue the orderdenying their motion to dismiss. In November 2013, Supreme Court granted leave toreargue, determined [*2]that it had erred in its prior orderby refusing to dismiss the causes of action for dissolution and an accounting of thepartnership, and dismissed those causes of action. Accordingly, defendants have receivedthe relief requested with respect to these causes of action, and that part of their appeal hasbeen rendered moot (see Njoku v City of New York, 280 AD2d 283 [2001]; see generally Matter of Neeley vTown of Colonie, 79 AD3d 1560, 1561 [2010]). As Supreme Court adhered toits original determination relative to the causes of action for imposition of a constructivetrust and quantum meruit, however, that aspect of defendants' appeal is unaffected(see CPLR 5517 [a] [1]).
Supreme Court correctly denied the motion to dismiss the cause of action seeking toimpose a constructive trust on the business property. This equitable remedy may beimposed "when property has been acquired in such circumstances that the holder of thelegal title may not in good conscience retain the beneficial interest" (Sharp vKosmalski, 40 NY2d 119, 121 [1976] [internal quotation marks, brackets andcitation omitted]; see Matter ofJacobs, 93 AD3d 917, 918 [2012]). To prove entitlement to this relief, aplaintiff must establish "a confidential or fiduciary relationship, a promise, a transfer inreliance thereon and unjust enrichment" (Enzien v Enzien, 96 AD3d 1136, 1137 [2012]; see Cinquemani v Lazio, 37AD3d 882, 882 [2007]). The element of transfer has been interpreted to include theexpenditure of effort and resources in reliance upon a promise to share in a propertyinterest (see Moak vRaynor, 28 AD3d 900, 902 [2006]; Henness v Hunt, 272 AD2d 756,757 [2000]).
Here, the complaint alleges that plaintiff had a confidential or fiduciary relationshipwith defendant, that defendant made promises that plaintiff and defendant had apartnership and that plaintiff had vested rights and interests in the quarry business andproperty, that plaintiff relied on these promises and the fiduciary relationship incontributing resources to develop the business, and that defendant breached thesepromises and would be unjustly enriched in the absence of a constructive trust. Deemingthese allegations to be true, construing them liberally, and granting plaintiff the benefit ofevery favorable inference, as we must (see Delaware County v Leatherstocking Healthcare, LLC, 110AD3d 1211, 1213 [2013]), we find that the amended complaint adequately states acause of action for the imposition of a constructive trust (see Vopelak vTedeschi, 281 AD2d 809, 810 [2001]; Henness v Hunt, 272 AD2d at756-757; Maynor v Pellegrino, 226 AD2d 883, 884-885 [1996]).
The cause of action in quantum meruit requires a showing of "a plaintiff'sperformance of services in good faith, acceptance of those services by a defendant, anexpectation of compensation and proof of the reasonable value of the services provided"(DerOhannesian v City ofAlbany, 110 AD3d 1288, 1292 [2013], lv denied 22 NY3d 862 [2014];see Thomas J. Hayes & Assoc.,LLC v Brodsky, 101 AD3d 1560, 1561 [2012], lv denied 21 NY3d 851[2013]). The complaint alleges that plaintiff acted in good faith and in the expectation ofcompensation in making the previously-discussed contributions to the business, thatdefendant accepted its services and contributions, and that plaintiff has been damaged inthe amount of the reasonable value of its contributions. Plaintiff further submitted theaffidavit of its principal (see CPLR 3211 [a] [7]; Leon v Martinez, 84NY2d 83, 88 [1994]), alleging that plaintiff contributed more than $200,000 toward thebusiness as well as all of the knowledge, labor, equipment and other resources necessaryfor its development, that a substantial amount of processed material that it had paid tocreate remained on the property when plaintiff was locked out in 2011, and thatdefendants have continued to benefit from plaintiff's contributions thereafter by sellingmaterials from the business without compensating plaintiff accordingly. Thus, despitedefendants' contention that plaintiff's services were performed primarily for its ownbenefit, we agree with [*3]Supreme Court that thecomplaint states a cause of action in quantum meruit (see Venture Silicones, Inc. v General Elec. Co., 14 AD3d924, 925 [2005]; see alsoGoldstein v Derecktor Holdings, Inc., 85 AD3d 728, 728-729 [2011]).
Lahtinen, J.P., McCarthy and Egan Jr., JJ., concur. Ordered that the appeal from thatpart of the order denying defendants' motion to dismiss the first and second causes ofaction is dismissed, as moot, without costs. Ordered that the part of the order denyingdefendants' motion to dismiss the third and fourth causes of action is affirmed, withoutcosts.
Footnote *: Plaintiff amended thecomplaint as of right to add defendant Barbara Kalvaitis, defendant's wife and aco-owner of the business.