| Parekh v Cain |
| 2012 NY Slip Op 04725 [96 AD3d 812] |
| June 13, 2012 |
| Appellate Division, Second Department |
| Nikhlesh Parekh, Appellant, v Niall Cain et al.,Respondents. |
—[*1] Lyons McGovern LLP, White Plains, N.Y. (Kyle C. McGovern and Diane B. Cavanaugh ofcounsel), for respondents Niall Cain, Cynthia Caracta, and Orissa DF, LLC. Housman & Associates, P.C., Tarrytown, N.Y. (Brian J. Divney of counsel), for respondentJoseph Locascio, Jr.
In an action, inter alia, to recover damages for fraud, breach of contract, breach of fiduciaryduty, trademark infringement, unfair competition, conversion, and tortious interference withbusiness relations, the plaintiff appeals (1), as limited by his brief, from so much of an order ofthe Supreme Court, Westchester County (Bellantoni, J.), entered December 2, 2010, as grantedthose branches of the motion of the defendants Niall Cain, Cynthia Caracta, and Orissa DF, LLC,which were pursuant to CPLR 3211 (a) (1) to dismiss the first, third, ninth, tenth, twelfth, andthirteenth causes of action insofar as asserted against those defendants based upon documentaryevidence, and pursuant to CPLR 3211 (a) (7) to dismiss the fourth, seventh, eighth, and eleventhcauses of action insofar as asserted against those defendants for failure to state a cause of action,and (2) from an order of the same court (Lefkowitz, J.), entered December 14, 2010, whichgranted the motion of the defendant Joseph Locascio, Jr., pursuant to CPLR 3211 (a) (1) and (7)to dismiss the complaint insofar as asserted against him.
Ordered that the order entered December 2, 2010, is modified, on the law, (1) by deleting theprovisions thereof granting those branches of the motion of the defendants Niall Cain, CynthiaCaracta, and Orissa DF, LLC, which were pursuant to CPLR 3211 (a) (1) to dismiss the first,third, ninth, tenth, twelfth, and thirteenth causes of action insofar as asserted against them, andsubstituting therefor provisions denying those branches of the motion, and (2) by deleting theprovision thereof granting that branch of the motion of the defendants Niall Cain, CynthiaCaracta, and Orissa DF, LLC, which was pursuant to CPLR 3211 (a) (7) to dismiss so much ofthe eighth cause of action as alleged unfair competition, and substituting therefor a provisiondenying that branch of the motion; as so modified, the order entered December 2, 2010, isaffirmed insofar as appealed from, without costs or disbursements; and it is further,
Ordered that the order entered December 14, 2010, is modified, on the law, by [*2]deleting the provision thereof granting that branch of the motion ofthe defendant Joseph Locascio, Jr., which was pursuant to CPLR 3211 (a) (1) to dismiss thecomplaint insofar as asserted against him, and substituting therefor a provision denying thatbranch of the motion; as so modified, the order entered December 14, 2010, is affirmed insofar asappealed from, without costs or disbursements.
The complaint alleged that the plaintiff, Nikhlesh Parekh, operated an Indian restaurantnamed Orissa in Dobbs Ferry. In December 2007 the plaintiff considered expanding his businessand sought out investors. The defendants Niall Cain and Cynthia Caracta allegedly orally agreedwith the plaintiff (hereinafter the oral agreement) that they would all form a joint venture to openan Indian restaurant and boutique in Dobbs Ferry (hereinafter the restaurant). The plaintiff'sinterest in the restaurant would start at only one percent, but as he paid off a business loan usingthe restaurant's profits, his ownership interest would increase until it reached 49 percent. Theplaintiff did most of the work to establish the restaurant, and closed his existing restaurant inAugust 2008.
On February 25, 2009, Cain and Caracta formed the defendant Orissa DF, LLC (hereinafterOrissa DF), to own the restaurant. The plaintiff alleged that he was a member and manager ofOrissa DF. The complaint alleges, inter alia, that Cain, Caracta, and Orissa DF(hereinafter collectively the Orissa defendants) breached the oral agreement by locking theplaintiff out of the business in January 2010. The complaint also alleged that the defendantJoseph Locascio, Jr., had an attorney-client relationship with the plaintiff, and that Locascioviolated his fiduciary duty to the plaintiff.
The Orissa defendants moved, inter alia, pursuant to CPLR 3211 (a) (1) and (7) to dismissthe complaint insofar as asserted against them. In support of the motion, they submitted, amongother things, the purported operating agreement for Orissa DF, which listed only Cain andCaracta as members. In opposition, the plaintiff submitted, inter alia, e-mails from Cain andCaracta, which were sent months after the purported operating agreement was signed, and whichindicated that no agreement had yet been signed, and that Cain and Caracta intended the plaintiffto be a partner in the business. Locascio also moved pursuant to CPLR 3211 (a) (1) and (7) todismiss the complaint insofar as asserted against him on the ground, inter alia, that the plaintifffailed to properly allege the existence of an attorney-client relationship.
In an order entered December 2, 2010, the Supreme Court determined that the plaintiff hadsufficiently pleaded a cause of action alleging unjust enrichment, but granted those branches ofthe Orissa defendants' motion which were to dismiss the remainder of the complaint insofar asasserted against them. In an order entered December 14, 2010, the Supreme Court grantedLocascio's motion to dismiss the complaint insofar as asserted against him.
To prevail on a motion to dismiss pursuant to CPLR 3211 (a) (1), the documentary evidencewhich forms the basis of the defense must be such that it resolves all factual issues as a matter oflaw, and conclusively disposes of the plaintiff's claim (see Goshen v Mutual Life Ins. Co. ofN.Y., 98 NY2d 314, 326 [2002]; Jesmer v Retail Magic, Inc., 55 AD3d 171, 180 [2008]; Prudential Wykagyl/Rittenberg Realty vCalabria-Maher, 1 AD3d 422 [2003]). "[T]o be considered 'documentary,' evidencemust be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d 78, 86 [2010]).
Here, the Supreme Court erred in granting those branches of the Orissa defendants' motionwhich were pursuant to CPLR 3211 (a) (1) to dismiss the causes of action alleging breach ofcontract (first cause of action) and breach of fiduciary duty (third cause of action), as well as thecauses of action seeking a judicial dissolution, an accounting, a receivership, and liquidation (theninth, tenth, twelfth, and thirteenth causes of action, respectively) insofar as asserted againstthem on the ground that the purported operating agreement constituted documentary evidencethat conclusively disposed of the plaintiff's claims. "Dismissal under CPLR 3211 (a) (1) iswarranted 'only if the documentary evidence submitted conclusively establishes a defense to theasserted claims as a matter of law' " (511 W. 232nd Owners Corp. v Jennifer Realty Co.,98 NY2d 144, 152 [2002], quoting Leon v Martinez, 84 NY2d 83, 88 [1994]). Here,there are disputed issues relating to the authenticity of the [*3]operating agreement. Accordingly, dismissal of these causes ofaction insofar as asserted against the Orissa defendants was not warranted pursuant to CPLR3211 (a) (1) (see Berenthal & Assoc. v Mechanical Plastics Corp., 288 AD2d 143 [2001];Paynter v Vishnia, 114 AD2d 404 [1985]; see generally Kurtzman v Bergstol, 40 AD3d 588, 590 [2007];Limited Liability Company Law § 702; Matter of 1545 Ocean Ave., LLC, 72 AD3d 121 [2010]).
On a motion to dismiss pursuant to CPLR 3211 (a) (7), the court should "accept the facts asalleged in the complaint as true, accord plaintiffs the benefit of every possible favorableinference, and determine only whether the facts as alleged fit within any cognizable legal theory"(Leon v Martinez, 84 NY2d at 87-88). Such a motion should be granted where, evenviewing the allegations as true, the plaintiff cannot establish a cause of action (see Morales v Copy Right, Inc., 28AD3d 440, 441 [2006]; Hartman vMorganstern, 28 AD3d 423, 424 [2006]).
Applying these principles, the Supreme Court properly granted those branches of the Orissadefendants' motion which were pursuant to CPLR 3211 (a) (7) to dismiss the causes of actionalleging fraud (fourth cause of action) and conversion (eleventh cause of action) insofar asasserted against them for failure to state a cause of action. Neither fraud nor conversion can bepredicated upon breach of contract (see Rocanova v Equitable Life Assur. Socy. of U.S.,83 NY2d 603, 614 [1994]; MBL Life Assur. Corp. v 555 Realty Co., 240 AD2d 375, 376[1997]). The Supreme Court also properly granted that branch of the Orissa defendants' motionwhich was pursuant to CPLR 3211 (a) (7) to dismiss the cause of action alleging tortiousinterference with business relations (seventh cause of action) insofar as asserted against them,since the complaint did not identify the third party with whom the plaintiff was engaging inbusiness relations (see Amaranth LLC vJ.P. Morgan Chase & Co., 71 AD3d 40, 47 [2009]).
However, the Supreme Court erred in granting that branch of the Orissa defendants' motionwhich was pursuant to CPLR 3211 (a) (7) to dismiss so much of the eighth cause of action asalleged unfair competition. Inasmuch as the complaint alleged that the Orissa defendantsmisappropriated the plaintiff's labor, skill, expenditures, or good will, and displayed someelement of bad faith in doing so, the allegations made out a legally viable claim for unfaircompetition (see Out of BoxPromotions, LLC v Koschitzki, 55 AD3d 575, 578 [2008]; Abe's Rooms, Inc. v Space Hunters,Inc., 38 AD3d 690, 692 [2007]).
Finally, Locasio was not entitled to dismissal of the complaint insofar as asserted against himbased upon CPLR 3211 (a) (1) since his submissions in support thereof did not constitutedocumentary evidence within the meaning of the statute (see Fontanetta v John Doe 1, 73 AD3d 78 [2010]). However, theSupreme Court properly granted that branch of Locasio's motion which was pursuant to CPLR3211 (a) (7) to dismiss the complaint insofar as asserted against him. The plaintiff alleges that hehad an attorney-client relationship with Locasio and that the latter breached his attendantfiduciary duty. To state a cause of action to recover damages for breach of fiduciary duty, aplaintiff must allege: "(1) the existence of a fiduciary relationship, (2) misconduct by thedefendant, and (3) damages directly caused by the defendant's misconduct" (Rut v Young Adult Inst., Inc., 74 AD3d776, 777 [2010]; see Kurtzman vBergstol, 40 AD3d 588, 590 [2007]). A breach of fiduciary duty cause of action must bepleaded with the requisite particularity under CPLR 3016 (b) (see Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 83 AD3d804, 808 [2011]; Chiu v Man ChoiChiu, 71 AD3d 621, 623 [2010]). Here, although the complaint made the bare allegationof the existence of an attorney-client relationship, the plaintiff has failed "to allege specific factsupon which the existence of an attorney-client relationship or privity between [these] partiescould be inferred" (Conti v Polizzotto, 243 AD2d 672, 673 [1997]; see Fredriksen v Fredriksen, 30 AD3d370, 371 [2006]).
The plaintiff's remaining contentions are without merit. Rivera, J.P., Eng, Lott and Sgroi, JJ.,concur.