| Deerin v Ocean Rich Foods, LLC |
| 2018 NY Slip Op 00820 [158 AD3d 603] |
| February 7, 2018 |
| Appellate Division, Second Department |
[*1]
| Patricia Deerin, Appellant, v Ocean Rich Foods, LLC,et al., Respondents. |
Law Offices of Michael H. Joseph, PLLC, White Plains, NY (Clifford S. Nelson of counsel),for appellant.
Ryan Brennan & Donnelly LLP, Floral Park, NY (John E. Ryan and John B. Telesca ofcounsel), for respondents.
In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals, aslimited by her brief, from (1) so much of an order of the Supreme Court, Nassau County(Driscoll, J.), dated February 6, 2015, as granted those branches of the defendants' convertedmotion which were for summary judgment dismissing the first, third through fifth, and eighthcauses of action and denied her cross motion pursuant to CPLR 3025 for leave to amend hercomplaint and to disqualify the defendants' counsel, and (2) so much of an order of the samecourt dated August 6, 2015, as denied that branch of her motion pursuant to CPLR 2221 (e)which was for leave to renew her opposition to that branch of the defendants' converted motionwhich was for summary judgment dismissing the fifth cause of action.
Ordered that the order dated February 6, 2015, is modified, on the law, (1) by deleting theprovision thereof granting that branch of the defendants' converted motion which was forsummary judgment dismissing the fifth cause of action, and substituting therefor a provisiondenying that branch of the motion, and (2) by deleting the provision thereof denying that branchof the plaintiff's cross motion which was to disqualify the defendants' counsel, and substitutingtherefor a provision granting that branch of the plaintiff's cross motion; as so modified, the orderis affirmed insofar as appealed from, without costs or disbursements; and it is further,
Ordered that the appeal from the order dated August 6, 2015, is dismissed as academic,without costs or disbursements, in light of our determination on the appeal from the order datedFebruary 6, 2015.
In 2006, the defendants Richard Marino and Dean Berman, along with the plaintiff'sdecedent, Douglas Deerin (hereinafter collectively the members), formed Ocean Rich Foods,LLC (hereinafter Ocean Rich), in which they were equal members. In 2008, Ocean Richpurchased three $1.5 million life insurance policies, each of which insured the life of one of thethree members. Ocean Rich was the beneficiary of each of these policies.
[*2] In January 2013, the plaintiff's decedent died, and theplaintiff was appointed as executor of his estate. The proceeds of the policy insuring thedecedent's life (hereinafter the subject insurance policy) were paid to Ocean Rich. The plaintiffthen commenced this action, inter alia, to recover damages for breach of contract, breach of theimplied covenant of good faith and fair dealing, tortious interference with contract, unjustenrichment, and for a distribution upon withdrawal pursuant to Limited Liability Company Law§ 509. She alleged in the complaint that in 2009, the members had entered into a"cross-purchase agreement" (hereinafter the agreement), in which they agreed that, inter alia,upon the death of a member, Ocean Rich would pay the proceeds of the policy insuring thatmember's life to that member's estate "as part payment or payment in full, as the case may be, onaccount of the purchase price of the interest of the deceased member." The plaintiff alleged that,after the decedent's death, Ocean Rich had failed to pay the proceeds of the subject insurancepolicy to his estate.
The defendants moved pursuant to CPLR 3211 (a) to dismiss the complaint. They submittedwith their motion an unexecuted copy of the agreement, and asserted that the members haddecided not to execute the agreement. Pursuant to CPLR 3211 (c), the Supreme Court convertedthe motion to one for summary judgment and directed the parties to submit any additionalevidence they wished it to consider. The defendants submitted affidavits from Marino andBerman in which they stated that the members had decided not to execute the agreement.Thereafter, the plaintiff cross-moved pursuant to CPLR 3025 for leave to amend her complaintand to disqualify the defendants' counsel on the basis of conflict of interest.
In an order dated February 6, 2015, the Supreme Court, inter alia, granted those branches ofthe defendants' converted motion which were for summary judgment dismissing the causes ofaction to recover damages for breach of contract, breach of the implied covenant of good faithand fair dealing, tortious interference with contract, and unjust enrichment, and for a distributionupon withdrawal pursuant to Limited Liability Company Law § 509. The court alsodenied the plaintiff's cross motion in its entirety. The plaintiff then moved, inter alia, for leave torenew her opposition to that branch of the defendants' converted motion which was for summaryjudgment dismissing the cause of action for a distribution upon withdrawal pursuant to LimitedLiability Company Law § 509. In an order dated August 6, 2015, the court deniedthat motion. The plaintiff appeals from both orders.
In general, the existence of a contract can be proven even if there is not a writing signed bythe party to be charged (see Geha v 55Orchard St., LLC, 29 AD3d 735, 736 [2006]; see also Stonehill Capital Mgt. LLC v Bank of the W., 28 NY3d439, 451 [2016]). "There is sufficient evidence that a contract has been made if. . . [t]here is a note, memorandum or other writing sufficient to indicate that acontract has been made, signed by the party against whom enforcement is sought" (GeneralObligations Law § 5-701 [b] [3] [d]; see Scheck v Francis, 26 NY2d 466,472 [1970]). Nevertheless, "[w]here it is clear from the writings themselves that they do notconstitute a memorandum sufficient to satisfy the statute, it is immaterial . . .whether or not they accurately reflect and contain all of the pertinent terms of a prior alleged oralagreement" (Scheck v Francis, 26 NY2d at 472 [internal quotation marks and citationomitted]; see I.S. Design v Gasho of Japan, Intl., 269 AD2d 150, 151 [2000]). Further,General Obligations Law § 5-701 (a) (1) renders unenforceable, inter alia, any oralagreement which "is not to be completed before the end of a lifetime."
Here, the defendants demonstrated their prima facie entitlement to judgment as a matter oflaw dismissing the causes of action to recover damages for breach of contract, breach of theimplied covenant of good faith and fair dealing, and tortious interference with contract, bysubmitting evidence that the agreement was never executed by the members of Ocean Rich, andtherefore does not satisfy the statute of frauds. Although the plaintiff contends that, pursuant toCPLR 3212 (f), she should have been permitted an opportunity to obtain discovery so that shecould prove the existence of the agreement via other documents, she offered only "mere hope orspeculation that evidence sufficient to defeat a motion for summary judgment may be uncoveredduring the discovery process[, which] is insufficient to deny the [defendants'] motion" (Pierre v Demoura, 148 AD3d 736,737 [2017]; see Lynn v McCormick,153 AD3d 688, 689 [2017]; HSBCBank USA, N.A. v Armijos, 151 AD3d 943, 944 [2017]; Bentick v Gatchalian, 147 AD3d890, 892 [2017]). Since the alleged [*3]promise upon whichthe plaintiff relied—that Ocean Rich would purchase the decedent's interest in it from hisestate with the proceeds of the subject insurance policy—could not, by its terms, "becompleted before the end of a lifetime," the Supreme Court properly granted those branches ofthe defendants' converted motion which were for summary judgment dismissing the first, third,and fourth causes of action (General Obligations Law § 5-701 [a] [1]; see DeThomasis v Viviano, 148 AD3d1338, 1340 [2017]; Klein v Jamor Purveyors, 108 AD2d 344, 347 [1985]; Dreherv Levy, 67 AD2d 438, 439-440 [1979]; see also General Obligations Law§ 5-701 [a] [9]).
"The elements of a cause of action to recover for unjust enrichment are (1) the defendant wasenriched, (2) at the plaintiff's expense, and (3) that it is against equity and good conscience topermit the defendant to retain what is sought to be recovered" (Travelsavers Enters., Inc. v AnalogAnalytics, Inc., 149 AD3d 1003, 1006 [2017] [internal quotation marks omitted]; see Swartz v Swartz, 145 AD3d818, 829 [2016]; GFRE, Inc. v U.S.Bank, N.A., 130 AD3d 569, 570 [2015]). Since Ocean Rich purchased the subjectinsurance policy, it was not enriched at the plaintiff's expense, nor is it against equity and goodconscience to permit Ocean Rich to retain the proceeds of the policy. Accordingly, the SupremeCourt also properly granted that branch the defendants' converted motion which was for summaryjudgment dismissing the eighth cause of action.
Pursuant to Limited Liability Company Law § 509, unless otherwise providedin an operating agreement, upon withdrawing as a member of a limited liability company, awithdrawing member "is entitled to receive, within a reasonable time after withdrawal, the fairvalue of his or her membership interest in the limited liability company as of the date ofwithdrawal." Here, the only evidence supporting the defendants' claim that they offered theplaintiff the fair value of the decedent's interest in Ocean Rich as of the date of withdrawal wastheir attorney's affirmation, which had no probative or evidentiary value (see Onewest Bank, FSB v Michel, 143AD3d 869, 871 [2016]). Accordingly, the defendants failed to demonstrate their prima facieentitlement to judgment as a matter of law dismissing the fifth cause of action, which sought adistribution upon withdrawal pursuant to Limited Liability Company Law § 509.The Supreme Court should therefore have denied that branch of the defendants' converted motionwithout regard to the sufficiency of the papers submitted in opposition (see Winegrad v NewYork Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).
"A party seeking disqualification of its adversary's counsel based on counsel's purported priorrepresentation of that party must establish (1) the existence of a prior attorney-client relationshipbetween the moving party and opposing counsel, (2) that the matters involved in bothrepresentations are substantially related, and (3) that the interests of the present client and formerclient are materially adverse" (Gjoni vSwan Club, Inc., 134 AD3d 896, 897 [2015] [internal quotation marks omitted]; seeTekni-Plex, Inc. v Meyner & Landis, 89 NY2d 123, 131 [1996]; Sharifi-Nistanak v Coccia, 119 AD3d765 [2014]). "A party's entitlement to be represented in ongoing litigation by counsel of hisor her own choosing is a valued right which should not be abridged absent a clear showing thatdisqualification is warranted" (Kelleherv Adams, 148 AD3d 692, 692 [2017] [internal quotation marks omitted]; see Matter of Rovner v Rantzer, 145AD3d 1016 [2016]; Lipschitz vStein, 65 AD3d 573, 576 [2009]; Gulino v Gulino, 35 AD3d 812 [2006]). "The party seeking todisqualify a law firm or an attorney bears the burden to show sufficient proof to warrant such adetermination" (Kelleher v Adams, 148 AD3d at 692-693 [internal quotation marksomitted]; see Matter of Rovner v Rantzer, 145 AD3d at 1016; Lipschitz v Stein,65 AD3d at 576; Gulino v Gulino, 35 AD3d at 812). However, doubts as to the existenceof a conflict of interest are resolved in favor of disqualification in order to avoid even theappearance of impropriety (see Gjoni v Swan Club, Inc., 134 AD3d at 897; Matter ofFleet v Pulsar Constr. Corp., 143 AD2d 187, 188 [1988]).
" 'One who has served as attorney for a corporation may not represent an individualshareholder in a case in which his interests are adverse to other shareholders' "(Morris v Morris, 306 AD2d 449, 452 [2003], quoting Matter of Greenberg [MadisonCabinet & Interiors], 206 AD2d 963, 965 [1994]; see Gordon v Ifeanyichukwu Chuba Orakwue Obiakor, 117 AD3d681, 683 [2014]). Here, the plaintiff alleged in an affidavit that the defendants' counsel wasinvolved in the formation of Ocean Rich, and the defendants' counsel admitted that he hadrepresented Ocean Rich in "various past matters." Counsel's prior representation of Ocean Rich"was in fact represent[ation of] its [three] shareholders," whose competing interests are at issue inthis action (Matter of Fleet v Pulsar Constr. [*4]Corp.,143 AD2d at 189). Likewise, counsel's involvement in the formation of Ocean Rich and hisrepresentation of it against third parties was "substantially related" to the present action(Gjoni v Swan Club, Inc., 134 AD3d at 897 [internal quotation marks omitted]; seeTekni-Plex, Inc. v Meyner & Landis, 89 NY2d at 131; Sharifi-Nistanak vCoccia, 119 AD3d at 765). Since the defendants' counsel was "in a position to receiverelevant confidences" from the decedent, whose estate's interests "are now adverse to thedefendant[s'] interests," the Supreme Court should have granted that branch of the plaintiff'scross motion which was to disqualify the defendants' counsel (Gordon v IfeanyichukwuChuba Orakwue Obiakor, 117 AD3d at 683; see Tekni-Plex, Inc. v Meyner &Landis, 89 NY2d at 131; Gjoni v Swan Club, Inc., 134 AD3d at 897;Sharifi-Nistanak v Coccia, 119 AD3d at 765).
The plaintiff's remaining contention, that the Supreme Court erred in denying that branch ofher cross motion which was for leave to amend her complaint, is without merit (see Grant v Brooklyn Ctr. forRehabilitation & Residential Health Care, LLC, 153 AD3d 798 [2017]; Epstein v Fried, 150 AD3d 691,692-693 [2017]; Strunk v Paterson,145 AD3d 700, 701 [2016]; Markowits v Friedman, 144 AD3d 993, 995 [2016]). Balkin, J.P.,Hall, Hinds-Radix and Christopher, JJ., concur. [Prior Case History: 2015 NY Slip Op32746(U).]