| Ehrlich v Froehlich |
| 2010 NY Slip Op 03401 [72 AD3d 1010] |
| April 27, 2010 |
| Appellate Division, Second Department |
| Mel Ehrlich et al., Appellants, v Randolph Froehlich et al.,Respondents, et al., Defendant. |
—[*1] Certilman Balin Adler & Hyman, LLP, Hauppauge, N.Y. (Glenn B. Gruder of counsel), forrespondent Randolph Froehlich. Craco & Ellsworth, LLP, Huntington, N.Y. (Andrew C. Ellsworth of counsel), forrespondent Paul V. Craco. L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, N.Y. (William T. McCaffery ofcounsel), for respondent Mark Mermel.
In an action, inter alia, to recover damages for fraud, conversion, and unjust enrichment, theplaintiffs appeal from an order of the Supreme Court, Nassau County (Austin, J.), dated May 6,2008, which granted the respective motions of the defendants Randolph Froehlich, Paul V.Craco, and Mark Mermel for summary judgment dismissing the complaint insofar as assertedagainst each of them.
Ordered that the order is affirmed, with one bill of costs.
The plaintiff Mel Ehrlich paid a $10,000 loan commitment fee to a commercial lender, andwired the sum of $145,000 to the escrow account of the defendant attorney Mark Mermel at therequest of his son, the plaintiff Daniel Ehrlich, and the defendant Michael Loturco, infurtherance of their plan to form an entity to purchase a parcel of real property (hereinafter theproperty) owned by the defendant Randolph Froehlich. By the time this payment and transferwere made, a nominee of the defendant Christopher Companies, Ltd. (hereinafter CCL), hadcontracted with Froehlich to purchase the property, CCL had deposited the sum of $100,000 withFroehlich as a down payment towards the purchase of the property, and CCL had commenced anaction against Froehlich for specific performance of that contract. Mel Ehrlich wired the$145,000 to Mermel, as the attorney for CCL, in settlement of that action, with the intention thatthe entity to be formed by Daniel Ehrlich and Loturco would step into the shoes of CCL aspurchaser of the property. The evidence shows that Mel Ehrlich made the payments of $10,000and $145,000, respectively, as loans to the entity to be formed by Daniel Ehrlich and Loturco topurchase the property, and that Loturco promised to provide security for the loans, but that hedid not sign any security agreements before the loans were actually made.[*2]
Upon exchange of settlement documents and releaseswith Froehlich in connection with the pending action, Mermel disbursed the $145,000 that MelEhrlich had wired to his escrow account, drawing a check in the sum of $125,000 in favor of hisclient, CCL, and paying the remainder to himself for his legal fee. Froehlich retained the$100,000 down payment deposited by CCL. Loturco never signed the security agreements forthe loans from Mel Ehrlich, which the attorney for the plaintiffs forwarded to Loturco's attorney,the defendant Paul V. Craco, after the fact. Moreover, although a proposed contract for the saleof the property was forwarded by Froehlich to Craco, it was never executed, and the sale of theproperty to an entity formed by Daniel Ehrlich and Loturco did not occur.
Mel Ehrlich and Daniel Ehrlich commenced this action against, among others, Loturco, hisattorney Craco, CCL, its attorney Mermel, and Froehlich, seeking to recover the $145,000 wiredto Mermel and the $10,000 loan commitment fee. After completion of discovery, the defendantsFroehlich, Craco, and Mermel separately moved for summary judgment dismissing thecomplaint insofar as asserted against each of them. The motions were granted, and the plaintiffsappeal. We affirm.
Froehlich established that he could not be held liable for fraud, since it is undisputed that henever made any representations to the plaintiffs and, contrary to the plaintiffs' contention, hecannot be held liable for the purported misrepresentations of Loturco. Froehlich also establishedthat he could not be held liable for conversion, as it is undisputed that he never exerciseddominion or control over the $145,000 wired to Mermel's escrow account (see Bankers TrustCo. v Cerrato, Sweeney, Cohn, Stahl & Vaccaro, 187 AD2d 384 [1992]). Finally, Froehlichestablished that he could not be held liable on theory of unjust enrichment, as it was establishedthat the loans in question were made at the behest of Daniel Ehrlich and Loturco, and notFroehlich (see Fountoukis vGeringer, 33 AD3d 756 [2006]; JLJ Recycling Contrs. Corp. v Town ofBabylon, 302 AD2d 430 [2003]; Kagan v K-Tel Entertainment, 172 AD2d 375[1991]). In response to these showings, the plaintiffs failed to raise a triable issue of fact.
Craco established, with documentary evidence, that he could not be held liable for fraud,since he did not make the false representation which the plaintiffs attribute to him (see Cape Vincent Milk Producers Coop.,Inc. v St. Lawrence Food Corp., 43 AD3d 606 [2007]; Great Neck Car Care Ctr. vArtpat Auto Repair Corp., 107 AD2d 658 [1985]). Craco further established that he couldnot be held liable for conversion, since he never had dominion or control over the funds loanedby Mel Ehrlich (see National Bank ofGeneva v Case Credit Corp., 37 AD3d 1169 [2007]). In response to these showings, theplaintiffs failed to raise a triable issue of fact.
The cause of action to recover damages for breach of fiduciary duty asserted against Mermelwas based on his alleged breach of an agreement to hold, in escrow, the $145,000 wired to himby Mel Ehrlich, pending the receipt of security agreements signed by Loturco and a contract topurchase the property executed by an entity formed by Daniel Ehrlich and Loturco. Mermelmade a prima facie showing that no such escrow agreement existed, and the plaintiffs'unsubstantiated allegations to the contrary were insufficient to raise a triable issue of fact (see Mortgage Elec. Registration Sys., Inc.v Maniscalco, 46 AD3d 1279, 1281-1282 [2007]). Moreover, Mermel established thatthe plaintiffs never made a demand for the return of the $145,000 wired to the escrow account,either before or after he disbursed those funds, thus requiring the summary dismissal of theconversion cause of action insofar as asserted against him, since, in opposition to that showing,the plaintiffs failed to raise a triable issue of fact (see United Credit Corp. v J.L.E.Indus., 251 AD2d 69 [1998]).
Accordingly, the Supreme Court properly granted the respective motions of Froelich, Craco,and Mermel for summary judgment dismissing the complaint insofar as asserted against each ofthem. Prudenti, P.J., Fisher, Roman and Sgroi, JJ., concur. [Prior Case History: 19 Misc 3d1130(A), 2008 NY Slip Op 50952(U).]