| Lebovits v Bassman |
| 2014 NY Slip Op 06061 [120 AD3d 1198] |
| September 10, 2014 |
| Appellate Division, Second Department |
[*1]
| Israel Lebovits, Also Known as George I. Lebovits,Appellant, v Gershon Bassman et al., Defendants, and Sovereign Bank,Respondent. |
Kaufman and Serota, Rockville Centre, N.Y. (Stuart Serota and Lila N. Serota ofcounsel), for appellant.
Schnader Harrison Segal & Lewis LLP, New York, N.Y. (Mathew B. West ofcounsel), for respondent.
In an action, inter alia, to set aside a recorded mortgage on the ground of fraud and torecover damages for fraud and unjust enrichment, the plaintiff appeals from an order ofthe Supreme Court, Orange County (Slobod, J.), dated August 29, 2012, which grantedthe motion of the defendant Sovereign Bank pursuant to CPLR 3211 (a) (7) to dismissthe complaint insofar as asserted against it.
Ordered that the order is affirmed, with costs.
"On a motion to dismiss, the complaint is to be afforded a liberal construction, thefacts alleged are presumed to be true, the plaintiff is afforded the benefit of everyfavorable inference, and the court is to determine only whether the facts as alleged fitwithin any cognizable legal theory" (Thomas v LaSalle Bank N.A., 79 AD3d 1015, 1017[2010]; see Leon v Martinez, 84 NY2d 83, 87-88 [1994]). Applying this standardhere, the plaintiff failed to state a cause of action against the defendant Sovereign Bank(hereinafter Sovereign) to set aside a recorded mortgage on the ground of fraud and torecover damages for fraud and unjust enrichment.
The plaintiff is a member of BLT Monroe, LLC (hereinafter BLT Monroe), a limitedliability company that is the lessee of a shopping center located in Orange County, ownedby Bassman Family, LLC (hereinafter Bassman). In the third cause of action, the plaintiffseeks to set aside a mortgage that was recorded in connection with the parcel of propertyon which the shopping center was erected, given by Bassman, as mortgagor, toSovereign, as mortgagee. The plaintiff contends that the mortgage should be set asidebecause Sovereign is not a bona fide encumbrancer for value, inasmuch as Bassmanallegedly committed a fraud upon Sovereign by failing to inform Sovereign of theleasehold interest in the subject property held by BLT Monroe and BLT Monroe's optionto purchase the subject property.
The elements of a cause of action based on fraud are "a representation of materialfact, the falsity of that representation, knowledge by the party who made therepresentation that it was false when made, justifiable reliance by the plaintiff, andresulting injury" (Global Mins.& [*2]Metals Corp. v Holme, 35 AD3d 93,98 [2006]). The misrepresentation may be in the form of an omission of a material fact(see Michaelson v Albora,12 AD3d 648, 650 [2004]). Although the question of what constitutes reasonablereliance is usually fact-intensive (see Schlaifer Nance & Co. v Estate ofWarhol, 119 F3d 91, 98 [2d Cir 1997]), where the plaintiff alleges only that thedefendant omitted a material fact when making a representation to another party, theplaintiff has failed to state a cause of action against either the representor or therepresentee (cf. DDJ Mgt., LLCv Rhone Group L.L.C., 15 NY3d 147 [2010]). Although a mortgagee such asSovereign is not a bona fide encumbrancer where, despite being aware of facts thatwould lead a reasonable, prudent lender to make inquiries of the circumstances of thetransaction at issue, it fails to make such inquiries (see Thomas v LaSalle BankN.A., 79 AD3d at 1017), here, the plaintiff did not and cannot allege that it relied onany misrepresentation or omission of fact made by Bassman to Sovereign, and theplaintiff did not allege that Sovereign itself committed a fraud. Accordingly, the SupremeCourt properly directed the dismissal of the third cause of action insofar as assertedagainst Sovereign Bank.
The Supreme Court also properly directed the dismissal of the fourth and fifth causesof action, which sought to recover damages in quasi-contract, insofar as asserted againstSovereign. Specifically, the fourth cause of action sought to recover money had andreceived, while the fifth cause of action alleged unjust enrichment.
"The essential elements of a cause of action for money had and received are (1) thedefendant received money belonging to the plaintiff, (2) the defendant benefitted fromreceipt of the money, and (3) under principles of equity and good conscience, thedefendant should not be permitted to keep the money" (Goel v Ramachandran, 111AD3d 783, 790 [2013]; see Matter of Witbeck, 245 AD2d 848, 850 [1997]).In his complaint, the plaintiff did not identify any corpus of funds that belonged to himor BLT Monroe, or which was supposed to be paid to him or BLT Monroe but wasinstead paid to Sovereign.
In a cause of action to recover damages for unjust enrichment, "[a] plaintiff mustshow that (1) the other party was enriched, (2) at that party's expense, and (3) that it isagainst equity and good conscience to permit [the other party] to retain what is sought tobe recovered" (MandarinTrading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011] [internal quotation marksomitted]). The plaintiff, in his complaint, did not identify any money that was retained bySovereign at his expense and, in any event, "[a]lthough privity is not required for anunjust enrichment claim, a claim will not be supported if the connection between theparties is too attenuated" (Mandarin Trading Ltd. v Wildenstein, 16 NY3d at182; see Georgia Malone &Co., Inc. v Rieder, 19 NY3d 511, 516-517 [2012]; Sperry v Crompton Corp., 8NY3d 204, 215 [2007]). In this case, the alleged connection between the parties, asset forth in the complaint, is too attenuated to support such a cause of action. Thus, theplaintiff failed to state a cause of action against Sovereign for money had and received,or to recover damages for unjust enrichment.
The plaintiff's remaining contentions are without merit.
Accordingly, the Supreme Court properly granted Sovereign's motion pursuant toCPLR 3211 (a) (7) to dismiss the complaint insofar as asserted against it. Rivera, J.P.,Leventhal, Austin and Roman, JJ., concur.