| Selinger Enters., Inc. v Cassuto |
| 2008 NY Slip Op 03191 [50 AD3d 766] |
| April 8, 2008 |
| Appellate Division, Second Department |
| Selinger Enterprises, Inc., Respondent, v David Cassuto etal., Appellants. |
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In an action, inter alia, to recover damages for fraud, the defendants appeal from an order ofthe Supreme Court, Nassau County (Winslow, J.), dated August 10, 2007, which denied theirmotion pursuant to CPLR 3211 (a) (1) and (7) to dismiss the complaint.
Ordered that the order is modified, on the law, by deleting the provision thereof denyingthose branches of the defendants' motion which were to dismiss the first, second, third, fourth,fifth, and sixth causes of action, and substituting therefor a provision granting those branches ofthe motion; as so modified, the order is affirmed, without costs or disbursements.
On November 28, 2005 the plaintiff Selinger Enterprises, Inc. (hereinafter Selinger) enteredinto an exclusive broker's agreement (hereinafter the agreement) with nonparty Premium CapitalFunding (hereinafter PCF), under which Selinger would receive a broker's commission in theevent PCF leased premises from a landlord introduced to it by Selinger. The defendant DavidCassuto executed the agreement on behalf of PCF. Two days later, Selinger showed Cassutocertain premises (hereinafter the premises). Within two months, however, Cassuto was employedby the defendant Franklin First Financial Ltd., doing business as Franklin First Mortgage Bankers(hereinafter Franklin First), which leased the premises from the landlord of that property a shorttime after Selinger showed them to Cassuto. When neither Cassuto nor Franklin First paidSelinger a commission, Selinger commenced this action against Cassuto and Franklin First torecover damages, inter alia, for breach of contract, unjust enrichment, conversion, and fraud, andbased on quantum meruit. The defendants moved to dismiss the complaint pursuant to CPLR3211 (a) (1) and (7). The Supreme Court denied [*2]the motion.We modify.
The agreement itself is documentary evidence that conclusively establishes a defense to thecontract and quasi contract causes of action (see CPLR 3211 [a] [1]; Sargent v New York Daily News, L.P.,42 AD3d 491, 493 [2007]; cf.Sullivan v State of New York, 34 AD3d 443, 445 [2006]; Nevin v LacledeProfessional Prods., 273 AD2d 453 [2000]). The parties to the agreement were Selinger andPCF. Although Cassuto signed the contract, he did so only as an agent of PCF, and he was notpersonally liable on it (see 150Broadway N.Y. Assoc., L.P. v Bodner, 14 AD3d 1, 6-7 [2004]; Limited LiabilityCompany Law § 609; see also 12 Lord, Williston on Contracts § 35.34, at351-352 [4th ed]). Franklin First was not a party to the agreement at all and thus had no liabilityunder it. Further, because the services were rendered to PCF under the agreement, and not toCassuto individually, or to Franklin First at all, Cassuto and Franklin First are not liable toSelinger under theories of quantum meruit or unjust enrichment (see Clark-Fitzpatrick, Inc. vLong Is. R.R. Co., 70 NY2d 382, 389 [1987]; Whitman Realty Group, Inc. v Galano, 41 AD3d 590, 591-592[2007]; Tesser v Allboro Equip. Co., 302 AD2d 589, 591 [2003]). The cause of actionalleging conversion should have been dismissed because Selinger did not allege "legal ownershipor an immediate right of possession to specifically identifiable funds and that the defendant[s]exercised an unauthorized dominion over such funds to the exclusion of the plaintiff's rights"(Whitman Realty Group, Inc. v Galano, 41 AD3d at 592). The mere right to paymentcannot be the basis for a cause of action alleging conversion; the essence of such a cause ofaction is the "unauthorized dominion over the thing in question" (Fiorenti v CentralEmergency Physicians, 305 AD2d 453, 454-455 [2003] [internal quotation marks omitted]).
Unlike the other causes of action, however, the seventh cause of action, alleging fraud,properly survived dismissal. The elements of a cause of action alleging fraud are "representationof a material existing fact, falsity, scienter, deception and injury" (New York Univ. vContinental Ins. Co., 87 NY2d 308, 318 [1995], quoting Channel Master Corp. vAluminium Ltd. Sales, 4 NY2d 403, 407 [1958]). A fraud claim does not lie where the onlyfraud alleged arises from the breach of a contract (see Tiffany at Westbury Condominium v Marelli Dev. Corp., 40 AD3d1073, 1076-1077 [2007]; Ross vDeLorenzo, 28 AD3d 631, 636 [2006]). "A present intent to deceive must be allegedand a mere misrepresentation of an intention to perform under the contract is insufficient toallege fraud . . . Conversely, a misrepresentation of material fact, [that] is collateralto the contract and serves as an inducement for the contract, is sufficient to sustain a cause ofaction alleging fraud" (WIT Holding Corp. v Klein, 282 AD2d 527, 528 [2001] [citationsomitted]).
Selinger adequately pleaded a cause of action alleging fraud. The defendants were not partiesto the agreement between Selinger and PCF, so they cannot be held liable for a breach of thatagreement. Thus, the fraud cause of action is not duplicative of the breach of contract causes ofaction. The complaint adequately alleges that, at the time Cassuto signed the agreement on behalfof PCF and utilized the services of Selinger, he was acting at the direction of Franklin First andthat he and Franklin First misrepresented the underlying situation to avoid paying a brokerage feeto Selinger.
The defendants' remaining contentions are without merit. Mastro, J.P., Ritter, Carni andMcCarthy, JJ., concur.