| Center for Rehabilitation & Nursing at Birchwood, LLC v S & LBirchwood, LLC |
| 2012 NY Slip Op 01204 [92 AD3d 711] |
| February 14, 2012 |
| Appellate Division, Second Department |
| Center for Rehabilitation and Nursing at Birchwood, LLC, et al.,Respondents, v S & L Birchwood, LLC, Defendant, and S & L Birchwood Realty, LLC,et al., Appellants. |
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In an action, inter alia, to recover damages for breach of contract, the defendants S & LBirchwood Realty, LLC, and Zalman Oberlander appeal, as limited by their brief, from (1) somuch of an order of the Supreme Court, Nassau County (Bucaria, J.), dated June 10, 2010, as, ineffect, denied those branches of the defendants' motion which were pursuant to CPLR 3211 (a)(7) to dismiss the causes of action alleging conversion and for an accounting insofar as assertedagainst the defendants S & L Birchwood Realty, LLC, and Zalman Oberlander, and (2) so muchof an order of the same court dated September 23, 2010, as, in effect, upon reargument, adheredto the original determination, in effect, denying those branches of the defendants' motion whichwere pursuant to CPLR 3211 (a) (7) to dismiss the causes of action alleging conversion and foran accounting insofar as asserted against the defendants S & L Birchwood Realty, LLC, andZalman Oberlander.
Ordered that the appeal from the order dated June 10, 2010, is dismissed, as the portion ofthe order appealed from was superseded by the order dated September 23, 2010, made, in effect,upon reargument; and it is further,
Ordered that the order dated September 23, 2010, is modified, on the law, by deleting theprovision thereof, in effect, upon reargument, adhering to the determination in the order datedJune 10, 2010, denying that branch of the defendants' motion which was pursuant to CPLR 3211(a) (7) to dismiss the cause of action for an accounting insofar as asserted against the defendantsS & L Birchwood Realty, LLC, and Zalman Oberlander, and substituting therefor a provision,upon reargument, vacating the determination in the order dated June 10, 2010, denying thatbranch of the defendants' motion, and thereupon granting that branch of the defendants' motion;as so modified, the order dated September 23, 2010, is affirmed insofar as appealed from,without costs or disbursements.
The Center for Rehabilitation and Nursing at Birchwood, LLC (hereinafter the RehabCenter), a plaintiff in this action, operated a nursing facility in Huntington Station. On August 27,2004, the Rehab Center entered into a contract to sell its assets—the nursingfacility—to the defendant S & L Birchwood, LLC (hereinafter S & L Birchwood). Thedefendant Zalman [*2]Oberlander executed this contract as amember of S & L Birchwood. As part of this agreement, S & L Birchwood agreed to hold any ofthe Rehab Center's accounts receivable that accrued prior to the closing and remit them to theRehab Center. That same day, the plaintiff Steffens Family Limited Partnership (hereinafterSteffens) entered into a contract to sell to S & L Birchwood Realty, LLC, the real property uponwhich the nursing facility was situated.
Following the closing of both contracts, the plaintiffs commenced this action to recover,among other things, the sum of $840,170, representing allegedly outstanding accounts receivable,as well as a closing credit of $109,000 allegedly given to S & L Birchwood at closing. Theplaintiffs asserted a cause of action alleging breach of contract solely against S & L Birchwoodand causes of action alleging conversion, unjust enrichment, fraud, and for an accounting againstall of the defendants. In an order dated June 10, 2010, the Supreme Court, among other things,granted those branches of the defendants' motion which were pursuant to CPLR 3211 (a) (7) todismiss the plaintiffs' causes of action alleging fraud and unjust enrichment, but, in effect, deniedthose branches of their motion which were pursuant to CPLR 3211 (a) (7) to dismiss the causesof action alleging conversion and for an accounting insofar as asserted against S & L BirchwoodRealty, LLC, and Oberlander (hereinafter together the appellants). In an order dated September23, 2010, made, in effect, upon reargument, the Supreme Court adhered to the originaldetermination, in effect, denying those branches of the motion.
Upon, in effect, granting reargument, the Supreme Court properly adhered to its originaldetermination, in effect, denying that branch of the defendants' motion which was pursuant toCPLR 3211 (a) (7) to dismiss the cause of action alleging conversion insofar as asserted againstthe appellants. "On a motion to dismiss pursuant to CPLR 3211 (a) (7), the court must determine,accepting as true the factual averments of the complaint and according the plaintiff the benefit ofall favorable inferences, whether the plaintiff can succeed upon any reasonable view of the factsas stated" (Schneider v Hand, 296 AD2d 454, 454 [2002]). Here, insofar as assertedagainst the appellants, the complaint successfully pleaded a cause of action alleging conversion(see Schwartz v Schwartz, 55 AD3d897, 898 [2008]; Nolfi Masonry Corp. v Lasker-Goldman Corp., 170 AD2d 363[1991]; Plechavicius v Mendoza, 128 AD2d 763 [1987]). The pleading was sufficientlyparticular to give the appellants notice of the transactions or occurrences intended to be proved(see CPLR 3013; Weiss vDeloitte & Touche, LLP, 63 AD3d 1045, 1048 [2009]).
However, the Supreme Court should have, upon reargument, granted that branch of thedefendants' motion which was pursuant to CPLR 3211 (a) (7) to dismiss the cause of action foran accounting insofar as asserted against the appellants. "The right to an accounting is premisedupon the existence of a confidential or fiduciary relationship and a breach of the duty imposed bythat relationship respecting property in which the party seeking the accounting has an interest"(Palazzo v Palazzo, 121 AD2d 261, 265 [1986]; see Weinstein v Natalie Weinstein Design Assoc., Inc., 86 AD3d641, 643 [2011]). Here, the plaintiffs failed to allege any facts as to a fiduciary relationshipbetween the plaintiffs and either Oberlander or S & L Birchwood Realty, LLC. Neither appellantentered into the contract which was the basis for the alleged fiduciary relationship. Oberlander, asa member of S & L Birchwood, a limited liability company, cannot be held liable for S & LBirchwood's obligations solely "by virtue of his [or her] status as a member thereof" (Matias v Mondo Props. LLC, 43 AD3d367, 367-368 [2007] [internal quotation marks omitted]; see Limited LiabilityCompany Law §§ 609, 610). Similarly, a fiduciary duty did not attach to S & LBirchwood Realty, LLC, by virtue of the fact that its affiliate, S & L Birchwood, executed therelevant contract (see Barrett vFreifeld, 64 AD3d 736, 739 [2009]; Town of Smithtown v National Union Fire Ins.Co., 191 AD2d 426, 428 [1993]; Computersearch Corp. v ECL Indus., 142 AD2d961, 962 [1988]). Accordingly, the plaintiffs failed to state a cause of action for an accountingagainst the appellants (see East EndLabs., Inc. v Sawaya, 79 AD3d 1095, 1096-1097 [2010]). Dillon, J.P., Florio, Chambersand Miller, JJ., concur.