Opinion
651354/2017
11-15-2019
610 PARK 8E LLC, Plaintiff, v. BEST & COMPANY CONSTRUCTION SERVICES, LLC, Design Development NYC, Inc., Michael S. Daddio and Earl Brian, Defendants.
Plaintiff: 610 Park 8E LLC, LePatner & Associates LLP, 10 East 40th Street, 17th Floor, New York, NY 10016, By: Barry Bruce Lepatner, Esq., Tuttle Yick LLP, 220 E 42nd St., Fl. 29, New York, NY 10017, By: David Gregory Skillman. Defendant: Best & Company Construction Services, LLC, Rosalyn Maldonado P.C., 108 S. Franklin Ave. Ste. 11, Valley Stream, NY 11580, By: Rosalyn Maldonado, Esq. Defendant: Best & Company, Inc., No Attorney of Record. Defendant: Design Development NYC, Inc., No Attorney of Record. Defendant: Michael S. Daddio, No Attorney of Record. Defendant: Earl Brian, No Attorney of Record.
Plaintiff: 610 Park 8E LLC, LePatner & Associates LLP, 10 East 40th Street, 17th Floor, New York, NY 10016, By: Barry Bruce Lepatner, Esq., Tuttle Yick LLP, 220 E 42nd St., Fl. 29, New York, NY 10017, By: David Gregory Skillman.
Defendant: Best & Company Construction Services, LLC, Rosalyn Maldonado P.C., 108 S. Franklin Ave. Ste. 11, Valley Stream, NY 11580, By: Rosalyn Maldonado, Esq.
Defendant: Best & Company, Inc., No Attorney of Record.
Defendant: Design Development NYC, Inc., No Attorney of Record.
Defendant: Michael S. Daddio, No Attorney of Record.
Defendant: Earl Brian, No Attorney of Record.
Robert R. Reed, J.
Defendants Design Development NYC, Inc. (Design), Michael S. Daddio (Daddio) and Earl Brian (Brian) move, pursuant to CPLR 3211 (a) (1) and (7), to dismiss plaintiff's amended complaint against them for failure to state a claim and Best & Company Construction Services, LLC (Best LLC) moves, pursuant to CPLR 3211 (a) (1) and (7) to dismiss the fifth and sixth causes of action against it. The court heard oral argument on the motion on June 20, 2019 (the Hearing).
Underlying Background
The court previously resolved Best LLC's motion to dismiss plaintiff's complaint by dismissing plaintiff's causes of action for conversion, fraud, negligent misrepresentation, rescission and violation of General Business Law § 349 and denying dismissal of plaintiff's contractual claims and claims under Lien Law Article 3-A in an order dated December 5, 2018 (the December 2018 Order). As noted in the December 2018 Order, the dispute involves alleged renovation (the Project) to apartments 8D and 8E in a building located at 610 Park Avenue, New York, New York. Plaintiff is the owner of the apartments and it asserts that it entered into a series of agreements (the Contracts) with Best & Company, Inc. (Best & Co.) to perform the Project but that Best & Co. delayed and eventually abandoned the Project. The Contracts were signed by Brian, on behalf of Best & Co., and plaintiff.
In the instant motion, Design, Brian and Daddio seek dismissal of the amended complaint against them, based upon their not being signatories of the Contracts and deficiencies in plaintiff's amended complaint, and Best LLC seeks dismissal of the fraud and rescission claims against it, based upon the December Order's dismissal of these claims against it. In the moving papers, defendants note that Daddio never signed the Contracts, that Brian signed on behalf of Best & Co., that Design was an assumed name for Best & Co. and that Design and Best & Co. were used interchangeably (Brian affidavit, ¶¶ 9-11; Daddio affidavit, ¶¶ 10-11). Plaintiff contends that Best & Co. was not a genuine entity and that, therefore, it can seek contractual damages against Brian and Daddio (December Hearing at 4-8). It further states that, under defendants' theory that Design is an assumed name for Best & Co., Design is a contracting party. Plaintiff also states that it has made additional factual assertions that cure the deficiencies in its fraud and rescission claims against Best LLC. Plaintiff contends that defendants' showing has not utterly refuted the allegations in the amended complaint and that, consequently, their motion should be denied.
Dismissal Standard
In determining a motion to dismiss pursuant to CPLR 3211, "the court must accept the facts as alleged in the complaint as true, accord [them] the benefit of every possible favorable inference, and determine ... whether the facts as alleged fit within any cognizable legal theory" ( Goldman v. Metropolitan Life Ins. Co. , 5 NY3d 561, 570-571 [2005] [internal quotation marks and citation omitted]; Goshen v. Mutual Life Ins. Co. of NY , 98 NY2d 314, 326 [2002] ). Dismissal based upon documentary evidence is appropriate only where the "documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" ( Leon v. Martinez , 84 NY2d 83, 88 [1994] ). However, allegations that are bare legal conclusions or are inherently incredible or that are flatly contradicted by the documentary evidence are not accorded such favorable inferences and need not be accepted as true ( Biondi v. Beekman Hill House Apt. Corp. , 257 AD2d 76, 81 [1st Dept 1999], affd 94 NY2d 659 [2000] ). Also, "[w]hether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss" ( EBC I, Inc. v. Goldman, Sachs & Co. , 5 NY3d 11, 19 [2005] ).
Contract Claim
"[A] party seeking to recover under a breach of contract theory must prove that a binding agreement was made as to all essential terms ... [, there must be] sufficiently definite terms and the parties must express their assent to those terms" ( Silber v. New York Life Ins. Co. , 92 AD3d 436, 439 [1st Dept 2012] ; see also Carione v. Hickey , 133 AD3d 811, 811 [2d Dept 2015] ).
Contract Interpretation
Generally, "when parties set down their agreement in a clear, complete document, their writing should ... be enforced according to its terms ... [and extrinsic evidence] is generally inadmissible to add to or vary the writing" ( W.W.W. Assoc. v. Giancontieri , 77 NY2d 157, 162 [1990] ). It is improper for the court to rewrite the parties' agreement and the best evidence of the parties' agreement is their written contract ( Greenfield v. Philles Records, 98 NY2d 562, 569 [2002] ). Put another way, "[c]ourts will give effect to the contract's language and the parties must live with the consequences of their agreement [and] [i]f they are dissatisfied ..., the time to say so [is] at the bargaining table" ( Eujoy Realty Corp. v. Van Wagner Communications, LLC , 22 NY3d 413, 424 [2013] [internal quotation marks and citation omitted]; see also McFarland v. Opera Owners, Inc. , 92 AD3d 428, 428-429 [1st Dept 2012] ; Crane, A.G. v. 206 W. 41st St. Hotel Assoc., L.P. , 87 AD3d 174, 180 [1st Dept 2011] ).
"To be found ambiguous, a contract must be susceptible of more than one commercially reasonable interpretation ... by examining the entire contract ... as a whole [and] in deciding the motion, [t]he evidence will be construed in the light most favorable to the one moved against" ( Perella Weinberg Partners LLC v. Kramer , 153 AD3d 443, 446 [1st Dept 2017] [internal quotation marks and citations omitted] ).
Non-Signatory
Where a party "was not a signatory to [a Contract], no cause of action for breach of contract can be asserted against it" ( Hampton Hall Pty Ltd. v. Global Funding Servs., Ltd. , 82 AD3d 523, 524 [1st Dept], lv denied 17 NY3d 707 [2011] ; Balk v. 125 W. 92nd St. Corp. , 24 AD3d 193, 193 [1st Dept 2005] ; see also Dragon Head LLC v. Elkman , 102 AD3d 552, 552 [1st Dept 2013] ).
However, where "the individual defendant admits that he signed on behalf of a nonexistent principal, he is individually liable" ( Imero Fiorentino Assoc. v. Green , 85 AD2d 419, 420-421 [1st Dept 1982] ; see also Grutman v. Katz , 202 AD2d 293, 294 [1st Dept 1994] ; cf. Lansco Corp. v. Kampeas , 87 AD3d 421, 422 [1st Dept 2011], holding that the complaint should be dismissed against the individual defendant where the corporate signatory was misnamed).
Fraud
A cause of action for fraud requires that a plaintiff must "prove a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" ( Lama Holding Co. v. Smith Barney , 88 NY2d 413, 421 [1996] ; Ross v. Louise Wise Servs., Inc. , 8 NY3d 478, 488 [2007] ; Small v. Lorillard Tobacco Co. , 94 NY2d 43, 57 [1999] ). However, "an ‘insincere promise of future performance’ of the contract" is duplicative of a breach of contract claim ( Arnon Ltd (IOM) v. Beierwaltes , 125 AD3d 453, 453 (1st Dept 2015], quoting First Bank of Ams. v. Motor Car Funding , 257 AD2d 287, 292 [1st Dept 1999] ; see also Beta Holdings, Inc. v. Goldsmith , 120 AD3d 1022, 1023 [1st Dept 2014] ).
Duplicative Claims
"Where all of the damages are remedied through the contract claim, the fraud claim is duplicative and must be dismissed" ( MBIA Ins. Co. v. Credit Suisse Sec. (USA) LLC , 165 AD3d 108, 114 [1st Dept 2018] ; see also Empire Outlet Bldrs. LLC v. Construction Resources Corp. of NY , 170 AD3d 582, 583 [1st Dept 2019] ; Triad Intl. Corp. v. Cameron Indus., Inc. , 122 AD3d 531, 531-532 [1st Dept 2014] ).
Rescission
"As a general rule, rescission of a contract is permitted where there is a breach of contract that is ‘material and willful, or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract’ " ( Lenel Sys. Intl., Inc. v. Smith , 106 AD3d 1536, 1538 [4th Dept 2013] [citation omitted]; see also Matter of Kassab v. Kasab , 137 AD3d 1138, 1140 [2d Dept 2016] ; RR Chester, LLC v. Arlington Bldg. Corp. , 22 AD3d 652, 654 [2d Dept 2005] ). "A contract may be voided on the ground of a unilateral mistake of fact only where the enforcement of the contract would be unconscionable, the mistake is material and made despite the exercise of ordinary care by the party in error" ( William E. McClain Realty v. Rivers , 144 AD2d 216, 218 [3d Dept 1988], app dismissed 73 NY2d 995 [1989] ). A party may also establish a claim to rescission "based on ... the parties' mutual mistake" ( Silver v. Gilbert , 7 AD3d 780, 781 [2d Dept 2004] ; see also Almap Holdings v. Bank Leumi Trust Co. of NY , 196 AD2d 518, 519 [2d Dept 1993], lv denied 83 NY2d 754 [1994] ). "Moreover, the party seeking rescission has the burden of establishing these elements by clear and convincing evidence" ( Executive Risk Indem. Inc. v. Pepper Hamilton LLP , 56 AD3d 196, 206 [1st Dept 2008], affd as mod 13 NY3d 313 [2009] ; see also Silver , 7 AD3d at 781 ). Also, the remedy of rescission is not available where there is "an adequate remedy at law [in form of monetary damages]" ( Ellington v. Sony/ATV Music Pub. LLC , 85 AD3d 438, 439 [1st Dept 2011] ; see also Lantau Holdings Ltd. v. General Pac. Group Ltd. , 163 AD3d 407, 409 [1st Dept 2018] ; Loreley Fin. (Jersey) No. 28, Ltd. v. Merrill, Lynch, Pierce, Fenner & Smith, Inc. , 117 AD3d 463, 468 [1st Dept 2014] ).
Discussion
Defendants have sought dismissal of the amended complaint against Daddio, Brian and Design on the basis that they were non signatories of the Contract, or in the case of Brian, that he did not sign on his own behalf. Plaintiff has asserted that Best & Co. was a non-existent entity and that, hence, it can pursue the contract claims against these defendants. As noted above, defendants have presented evidence that Best & Co. was an assumed name for Design and that it was an existing entity. Accepting, for the purposes of resolving the motion, the allegations of the amended complaint as true, the portion of defendants' motion that seeks dismissal of the amended complaint against Design must be denied, since there is contractual liability for a misnamed entity (see Lansco , 87 AD3d at 422 ). The fraud cause of action is duplicative of the contractual claims, since the same purported damages are sought for fraud as for the purported contractual breaches (see Empire Outlet , 170AD3d at 583; MBIA Ins. Co. , 165 AD3d at 114 ) and, therefore, this cause of action must be dismissed. Similarly, since there is a remedy of monetary damages for breach of contract, the equitable remedy of rescission must be dismissed (see Lantau , 163 AD3d at 409 ; Ellington , 85 AD3d at 439 ).
Finally, the documentary evidence defendants submitted require dismissal of the amended complaint against Daddio, since he was a non-signatory of the Contracts (see Dragon Head , 102 AD3d at 552 ; Hampton Hall , 82 AD3d at 524 ), and against Brian, since he signed the Contracts on behalf of a misnamed entity (see Lansco , 87 AD3d at 422 ).
Order
It is, therefore,
ORDERED that defendants' motion, pursuant to CPLR 3211 (a) (1) and (7), to dismiss plaintiff's amended complaint against Design Development NYC, Inc., Michael S. Daddio and Earl Brian and to dismiss the fifth and sixth causes of action against Best & Company Construction Services, LLC is granted to the extent of dismissing plaintiff's amended complaint against Michael S. Daddio and Earl Brian, and the amended complaint is dismissed in its entirety as against said defendants, with costs and disbursements to said defendants as taxed by the Clerk of the Court, upon submission of an appropriate bill of costs, and the Clerk is directed to enter judgment accordingly in favor of said defendants; dismissing the fifth and sixth causes of action against Design Development NYC, Inc.; and dismissing the fifth and sixth causes of action against Best & Company Construction Services, LLC; and is otherwise denied; and it is further
ORDERED that the action is severed and continued against the remaining defendants; and it is further
ORDERED that the caption be amended to reflect the dismissal and all future papers filed with the court reflect the amended caption; and it is further
ORDERED that counsel for the moving party shall serve a copy of this order with notice of entry upon the Clerk of the Court (60 Centre Street, Room 141B) and the Clerk of the General Clerk's Office (60 Centre Street, Room 119), who are directed to mark the court's records to reflect the change in caption herein; and it is further
ORDERED that such service upon the Clerk of the Court and the Clerk of the General Clerk's Office shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases .