Opinion
2020–00228 Index No. 525670/18
08-03-2022
Henry WEINSTEIN, et al., appellants, v. Jeffrey LEVITIN, et al., defendants, Bordeaux Capital, LLC, respondent.
Friedman Sanchez, LLP (Law Offices of Arnold E. DiJoseph, P.C., New York, NY [Arnold E. DiJoseph III ], of counsel), for appellants. Rubin LLC, New York, NY (Paul A. Rubin of counsel), for respondent.
Friedman Sanchez, LLP (Law Offices of Arnold E. DiJoseph, P.C., New York, NY [Arnold E. DiJoseph III ], of counsel), for appellants.
Rubin LLC, New York, NY (Paul A. Rubin of counsel), for respondent.
MARK C. DILLON, J.P., JOSEPH J. MALTESE, PAUL WOOTEN, LARA J. GENOVESI, JJ.
DECISION & ORDER In an action, inter alia, to recover damages for fraud and unjust enrichment, the plaintiffs appeal from an order of the Supreme Court, Kings County (Leon Ruchelsman, J.), dated December 16, 2019. The order granted the motion of the defendant Bordeaux Capital, LLC, pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it.
ORDERED that the order is affirmed, with costs.
The plaintiffs, Henry Weinstein and his company HPHW Realty Corp., Inc. (hereinafter HPHW), commenced this action, inter alia, to recover damages for fraud and unjust enrichment. The plaintiffs alleged, among other things, that the defendants Yechiel Shimon Sprei and Jeffrey Levitin deceived them into investing money in illegitimate real estate transactions, and induced Weinstein to sign loan documents while under sedation, by which HPHW borrowed the sum of $1,500,000 from the defendant Bordeaux Capital, LLC (hereinafter Bordeaux), to close on the purported transactions. Thereafter, Bordeaux moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it. In an order dated December 16, 2019, the Supreme Court granted Bordeaux's motion. The plaintiffs appeal. "On a motion to dismiss pursuant to CPLR 3211(a)(7), the complaint is to be afforded a liberal construction, the facts alleged are presumed to be true, the plaintiff is afforded the benefit of every favorable inference, and the court is to determine only whether the facts as alleged fit within any cognizable legal theory" ( Gruber v. Donaldsons, Inc., 201 A.D.3d 887, 888, 162 N.Y.S.3d 393 [internal quotation marks omitted]; see Gorbatov v. Tsirelman, 155 A.D.3d 836, 837, 65 N.Y.S.3d 71 ).
" ‘The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages’ " ( Emby Hosiery Corp. v. Tawil, 196 A.D.3d 462, 464, 151 N.Y.S.3d 406, quoting Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 ). Further, "[t]o sustain a cause of action alleging fraudulent concealment, the plaintiff must allege that the defendant had a duty to disclose the material information" ( Swartz v. Swartz, 145 A.D.3d 818, 823, 44 N.Y.S.3d 452 ; see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at 562, 883 N.Y.S.2d 147, 910 N.E.2d 976 ). In addition, "[t]o recover for aiding and abetting fraud, the plaintiff must plead the existence of an underlying fraud, knowledge of the fraud by the aider and abettor, and substantial assistance by the aider and abettor in the achievement of the fraud" ( Fox Paine & Co., LLC v. Houston Cas. Co., 153 A.D.3d 678, 679, 59 N.Y.S.3d 759 ; see Matter of Woodson, 136 A.D.3d 691, 693, 24 N.Y.S.3d 706 ). "Where a cause of action is based upon fraud, the circumstances constituting the alleged wrong must be stated in detail" ( Gruber v. Donaldsons, Inc., 201 A.D.3d at 888–889, 162 N.Y.S.3d 393 ; see CPLR 3016[b] ; Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 ).
Here, the Supreme Court properly determined that the plaintiffs failed to state a cause of action for fraud against Bordeaux, since the plaintiffs did not allege any specific misrepresentation made by Bordeaux to them (see Oppedisano v. D'Agostino, 196 A.D.3d 497, 500, 151 N.Y.S.3d 150 ; High Tides, LLC v. DeMichele, 88 A.D.3d 954, 958, 931 N.Y.S.2d 377 ). The plaintiffs also failed to state a cause of action for fraudulent concealment, since they did not allege that Bordeaux had a "special or privity-like relationship" with them so as to impose a duty of disclosure upon Bordeaux ( High Tides, LLC v. DeMichele, 88 A.D.3d at 960, 931 N.Y.S.2d 377 [internal quotation marks omitted]; see Swartz v. Swartz, 145 A.D.3d at 824, 44 N.Y.S.3d 452 ). In addition, the plaintiffs failed to state a cause of action for aiding and abetting fraud against Bordeaux, since they did not allege that Bordeaux had knowledge of the alleged fraudulent real estate scheme by Sprei and Levitin (see Fox Paine & Co., LLC v. Houston Cas. Co., 153 A.D.3d at 679, 59 N.Y.S.3d 759 ; Matter of Woodson, 136 A.D.3d at 693, 24 N.Y.S.3d 706 ). Moreover, neither the plaintiffs’ allegations nor the surrounding circumstances were sufficient to give rise to a reasonable inference that Bordeaux possessed such knowledge (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at 560, 883 N.Y.S.2d 147, 910 N.E.2d 976 ).
Furthermore, the Supreme Court properly determined that the plaintiffs failed to state a cause of action for unjust enrichment against Bordeaux. An unjust enrichment claim is not available where, as here, " ‘it simply duplicates, or replaces, a conventional contract or tort claim’ " ( Scifo v. Taibi, 198 A.D.3d 704, 706, 156 N.Y.S.3d 40, quoting Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777, 790, 944 N.Y.S.2d 732, 967 N.E.2d 1177 ).
The plaintiffs’ remaining contentions either need not be reached in light of our determination or are without merit.
Accordingly, the Supreme Court properly granted Bordeaux's motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it.
DILLON, J.P., MALTESE, WOOTEN and GENOVESI, JJ., concur.