| Rabos v R&R Bagels & Bakery, Inc. |
| 2012 NY Slip Op 07974 [100 AD3d 849] |
| November 21, 2012 |
| Appellate Division, Second Department |
| Vassilia Rabos, Appellant, v R&R Bagels & Bakery, Inc.,et al., Defendants, and David Rakhminov et al., Respondents. |
—[*1] Mischel & Horn, P.C., New York, N.Y. (Scott T. Horn and Naomi M. Taub of counsel), forrespondents David Rakhminov and Larisa Rakhminov. Paul Eisenstein, Woodbury, N.Y., for respondents Shirley J.W. Kotcher and Lawrence T.Choy. Norman Landres, New York, N.Y., for respondent Samir Kohan.
In an action, inter alia, to recover damages for breach of contract and fraud, the plaintiffappeals, as limited by her brief, from (1) so much of an order of the Supreme Court, QueensCounty (McDonald, J.), dated July 13, 2011, as granted those branches of the motion of thedefendants David Rakhminov and Larisa Rakhminov which were pursuant to CPLR 3211 (a) (1)and (7) to dismiss the first and second causes of action insofar as asserted against them, andgranted the motion of the defendant Samir Kohan pursuant to CPLR 3211 (a) (7) to dismiss thefifth cause of action insofar as asserted against him, and (2) so much of an order of the samecourt dated November 23, 2011, as denied that branch of her motion which was for leave torenew her opposition to those branches of the motion of the defendants David Rakhminov andLarisa Rakhminov which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first andsecond causes of action insofar as asserted against them, and the motion of the defendant SamirKohan pursuant to CPLR 3211 (a) (7) to dismiss the fifth cause of action insofar as assertedagainst him, and those branches of her motion which were pursuant to CPLR 3211 (e) for leaveto replead the second and fifth causes of action.
Ordered that the order dated July 13, 2011, is modified, on the law, by deleting theprovisions thereof granting those branches of the motion of the defendants David Rakhminovand Larisa Rakhminov which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first andsecond causes of action insofar as asserted against them, and substituting therefor provisionsdenying those branches of the motion of the defendants David Rakhminov and LarisaRakhminov; as so modified, the order dated July 13, 2011 is affirmed insofar as appealed from;and it is further,
Ordered that the appeal from so much of the order dated November 23, 2011, as [*2]denied those branches of the plaintiff's motion which were for leaveto renew her opposition to those branches of the motion of the defendants David Rakhminov andLarisa Rakhminov which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first andsecond causes of action insofar as asserted against them is dismissed as academic in light of ourdetermination on the appeal from the order dated July 13, 2011; and it is further,
Ordered that the order dated November 23, 2011, is modified, on the law and in the exerciseof discretion, by deleting the provision thereof denying that branch of the plaintiff's motionwhich was pursuant to CPLR 3211 (e) for leave to replead the second cause of action, andsubstituting therefor a provision granting that branch of the plaintiff's motion; as so modified theorder dated November 23, 2011, is affirmed insofar as reviewed; and it is further,
Ordered that one bill of costs is awarded to the plaintiff, payable by the defendants DavidRakhminov and Larisa Rakhminov, and one bill of costs is awarded to the defendant SamirKohan and the defendants Shirley J.W. Kotcher and Lawrence T. Choy, appearing separately and filing separate briefs, payable by the plaintiff.
The plaintiff commenced this action, inter alia, to recover damages for breach of contract andfraud. The first cause of action alleged breach of contract against, among others, the defendantsDavid Rakhminov and Larisa Rakhminov (hereinafter the Rakhminov defendants). The secondcause of action alleged fraud against, among others, the Rakhminov defendants. The fifth causeof action alleged breach of contract against, among others, the defendant Samir Kohan,incorrectly sued herein as Sammy Cohen.
The Rakhminov defendants moved, inter alia, pursuant to CPLR 3211 (a) (1) and (7) todismiss the first and second causes of action insofar as asserted against them, and Kohanseparately moved pursuant to CPLR 3211 (a) (7) to dismiss the fifth cause of action insofar asasserted against him. In an order dated July 13, 2011, the Supreme Court, among other things,granted those branches of the Rakhminov defendants' motion which were to dismiss the first andsecond causes of action insofar as asserted against them, and Kohan's motion pursuant to CPLR3211 (a) (7) to dismiss the fifth cause of action insofar as asserted against him.
The plaintiff subsequently moved, inter alia, for leave to renew her opposition to thosemotions, and pursuant to CPLR 3211 (e) for leave to replead the second and fifth causes ofaction. In an order dated November 23, 2011, the Supreme Court denied those branches of theplaintiff's motion.
A motion to dismiss based on documentary evidence pursuant to CPLR 3211 (a) (1) may beappropriately granted "only where the documentary evidence utterly refutes plaintiff's factualallegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual LifeIns. Co. of N.Y., 98 NY2d 314, 326 [2002]; see Norment v Interfaith Ctr. of N.Y., 98 AD3d 955 [2012]). Inorder to be considered documentary evidence within the meaning of CPLR 3211 (a) (1), theevidence "must be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d78, 86 [2010]), that is, it must be "essentially unassailable" (Suchmacher v Manana Grocery, 73AD3d 1017, 1017 [2010]; seeNorment v Interfaith Ctr. of N.Y., 98 AD3d 955 [2012]).
Here, the corporate minutes submitted by the Rakhminov defendants in support of theirmotion do not constitute "documentary evidence" within the meaning of CPLR 3211 (a) (1) (see Norment v Interfaith Ctr. of N.Y.,98 AD3d 955 [2012]; cf. Levine v Behn, 282 NY 120 [1940]). Moreover, thepurported documentary evidence failed to utterly refute the plaintiff's allegations (see Kappa Dev. Corp. v Queens Coll. PointHoldings, LLC, 95 AD3d 1178, 1179 [2012]; HSBC Bank, USA v Pugkhem, 88 AD3d 649, 651 [2011]). Indeed,the record contains evidence which directly contradicts the purported documentary evidence.Accordingly, those branches of the Rakhminov defendants' motion which were pursuant to CPLR3211 (a) (1) to dismiss the first and second causes of action insofar as asserted against themshould have been denied.
"On a motion to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state acause of action, the court must afford the pleading a liberal construction, accept all facts as [*3]alleged in the pleading to be true, accord the plaintiff the benefit ofevery possible inference, and determine only whether the facts as alleged fit within anycognizable legal theory" (Breytman vOlinville Realty, LLC, 54 AD3d 703, 703-704 [2008]; see Leon v Martinez, 84NY2d 83, 87 [1994]). Where evidentiary material is submitted and considered on a motion todismiss a complaint pursuant to CPLR 3211 (a) (7), and the motion is not converted into one forsummary judgment, the question becomes whether the plaintiff has a cause of action, not whetherthe plaintiff has stated one, and unless it has been shown that a material fact as claimed by theplaintiff to be one is not a fact at all and unless it can be said that no significant dispute existsregarding it, dismissal should not eventuate (see Guggenheimer v Ginzburg, 43 NY2d268, 274-275 [1977]; Norment vInterfaith Ctr. of N.Y., 98 AD3d 955 [2012]).
Here, the first cause of action contained sufficient factual allegations to state a cause ofaction for breach of contract against the Rakhminov defendants. The complaint alleged, amongother things, that the plaintiff entered into an agreement with the Rakhminov defendants pursuantto which she would make certain payments to them in return for 50% of the shares of acorporation they founded. The complaint alleged that the plaintiff made the payments and thatthe Rakhminov defendants failed to give her 50% of the shares of the corporation. Since theallegations in the complaint were sufficient to state a cause of action for breach of contract, andsince those allegations were not refuted by the corporate minutes submitted by the Rakhminovdefendants such that it can be said that the allegations were not facts at all, the Supreme Courtshould have denied that branch of the Rakhminov defendants' motion which was pursuant toCPLR 3211 (a) (7) to dismiss the first cause of action insofar as asserted against them (seeGuggenheimer v Ginzburg, 43 NY2d at 275; Norment v Interfaith Ctr. of N.Y., 98 AD3d 955 [2012]).
The Supreme Court also erred when it granted that branch of the Rakhminov defendants'motion which was pursuant to CPLR 3211 (a) (7) to dismiss the second cause of action insofar asasserted against them. "In an action to recover damages for fraud, the plaintiff must prove amisrepresentation or a material omission of fact which was false and known to be false by [the]defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance ofthe other party on the misrepresentation or material omission, and injury" (Lama Holding Co.v Smith Barney, 88 NY2d 413, 421 [1996]; see Richmond Shop Smart, Inc. v Kenbar Dev. Ctr., LLC, 32 AD3d423, 424 [2006]).
Here, the complaint alleged that the Rakhminov defendants represented to the plaintiff thatshe was in fact an owner of 50% of the corporation, and that they would personally makeinvestments in the corporation in an amount equal to the sums that the plaintiff had given themfor business expenses. These representations were alleged to have been made for the purpose ofdeceiving the plaintiff into giving even more money to the Rakhminov defendants. Thecomplaint further alleged that the statements were false, were known by the Rakhminovdefendants to be false at the time they were made, and were intended to deceive, and that theplaintiff relied upon them to her detriment. Since the allegations in the complaint were sufficientto state a cause of action for fraud (seeScott v Fields, 92 AD3d 666, 668-669 [2012]; Dana v Shopping Time Corp., 76 AD3d 992, 994 [2010];Richmond Shop Smart, Inc. v Kenbar Dev. Ctr., LLC, 32 AD3d at 424), and since thoseallegations were not refuted by the corporate minutes submitted by the Rakhminov defendantssuch that it can be said that the allegations were not facts at all, the Supreme Court should havedenied that branch of the Rakhminov defendants' motion which was pursuant to CPLR 3211 (a)(7) to dismiss the second cause of action insofar as asserted against them (see Guggenheimerv Ginzburg, 43 NY2d at 275; Norment v Interfaith Ctr. of N.Y., 98 AD3d 955 [2012]).
However, the Supreme Court properly granted Kohan's motion pursuant to CPLR 3211 (a)(7) to dismiss the fifth cause of action insofar as asserted against him. The allegations in thecomplaint failed to state a cause of action for breach of contract against Kohan (see Leon vMartinez, 84 NY2d at 87-88).
Turning to those branches of the plaintiff's motion which were pursuant to CPLR 3211 (e)for leave to replead the second and fifth causes of action,"the standard to be applied on a motionfor leave to replead pursuant to CPLR 3211 (e) is consistent with the standard governing [*4]motions for leave to amend pursuant to CPLR 3025" (Janssen v Incorporated Vil. of RockvilleCtr., 59 AD3d 15, 27 [2008]). "Namely, motions for leave to amend pleadings should befreely granted absent prejudice or surprise to the opposing party, unless the proposed amendmentis devoid of merit or palpably insufficient" (id.).
Here, since the proposed amendment to the second cause of action was neither palpablyinsufficient nor patently devoid of merit, and there was no evidence that the amendment wouldprejudice or surprise the Rakhminov defendants, the Supreme Court should have granted thatbranch of the plaintiff's motion which was pursuant to CPLR 3211 (e) for leave to replead thesecond cause of action (see Fusca v A &S Constr., LLC, 84 AD3d 1155, 1157-1158 [2011]). However, since the proposedamendment to the fifth cause of action was palpably insufficient and patently devoid of merit, theSupreme Court properly denied that branch of the plaintiff's motion which was pursuant to CPLR3211 (e) for leave to replead the fifth cause of action (see Scott v Fields, 85 AD3d 756, 759 [2011]).
The plaintiff's remaining contentions either are without merit or have been renderedacademic in light of our determination. Florio, J.P., Dickerson, Sgroi and Miller, JJ., concur.
[As amended by unreported motion dated Apr. 15, 2013, see 2013 NY Slip Op 70293(U).]