Opinion
INDEX NO. 654501/2018
09-27-2019
EVANGELIA ZACHARIOU Plaintiff, v. VASSILIOS MANIOS, Defendant.
NYSCEF DOC. NO. 61 PRESENT: HON. ANDREA MASLEY Justice MOTION DATE __________ MOTION SEQ. NO. 001
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 53, 54, 55, 56, 57, 58, 59 were read on this motion to/for DISMISSAL.
MASLEY, J.:
In motion sequence number 001, defendant Vassilios Manios moves, pursuant to CPLR 3211, to dismiss plaintiff Evangelia Manios Zachariou's complaint.
BACKGROUND
The following factual allegations are taken from the complaint, unless other noted and, for the purposes of this motion, are accepted as true.
Plaintiff Evangelia Manios Zachariou and defendant Vassilios Manios are sister and brother and both Greek citizens (see NYSCEF Doc. No. [NYSCEF] 54, Complaint, ¶¶ 1-2). Plaintiff currently resides in Cyprus and defendant currently resides in Greece (id., 2). In 1995, their brother Dimitri Manios (Dimitri) died without a will (id., ¶ 1). After Dimitri's death, plaintiff and defendant became co-owners of the family business, a worldwide shipping business (id., ¶ 1).
In addition to the shipping business, Dimitri also purchased and managed real estate in the United States which was owned by various companies (US Companies) (NYSCEF 10, Emmanuel aff, ¶¶ 6, 11, 12). One of these companies, Decana, Inc. (Decana), was a New York Corporation that owned an apartment building in Manhattan located at 10 East 62nd Street, New York, New York (the NY Apartment) (NYSCEF 54, Complaint, ¶ 5). The other US Companies owned three office buildings in Houston, Texas (id., ¶ 5).
In March 1999, the parties executed a settlement agreement in Greece, memorializing the joint ownership of Dimitri's businesses and property (Greek Agreement) (see NYSCEF 12, Greek Agreement). The Greek Agreement acknowledged plaintiff's right to 50% of the inherited business interests (the estate) (id.). The parties also agreed that defendant would continue to manage all the family businesses and properties for the benefit of himself and plaintiff (id.).
On March 13, 2002, the parties entered into another agreement in London "to complete the process of disentangling their business relationship by dividing and distributing certain jointly-held assets between them, including [the US Companies]" (London Agreement) (NYSCEF 54, Complaint, ¶ 5; see also NYSCEF 13, London Agreement). Pursuant to the London Agreement, plaintiff agreed to convey her 50% shareholdings in the US Companies to defendant in exchange for $6.5 million (NYSCEF 13, London Agreement, ¶ 4.1). The $6.5 million represented 50% of the value of the US companies' only remaining asset, the New York apartment building (id.). Pursuant to the London Agreement, the parties appointed Charalambos V. Sioufas, defendant's personal attorney, as trustee for the purpose of receiving and distributing the estate's assets in accordance with the London Agreement (NYSCEF 54, Complaint, ¶ 7). The parties set forth the specific duties of the Trustee by executing a Letter of Instruction to the Trustee (Trustee Letter) (NYSCEF 15, Trustee Letter).
On March 13, 2002, the parties also entered into an agreement providing for an accounting of the finances of the US Companies while they were under defendant's control (US Agreement) (NYSCEF 54, Complaint, ¶ 6 and ex A, US Agreement). The US Agreement permitted for the appointment of an arbitrator to determine if either plaintiff or defendant should receive additional funds, termed a "Party Distribution" (id., ¶ 7). The US Agreement is referenced in and annexed 5 to the London Agreement (NYSCEF 13, London Agreement, ¶ 4.3).
The president and manager of the US Companies, Spyro Contogouris and the accountant for those companies, Ray Rekuc, allegedly engaged in embezzlement (see NYSCEF 18, Grand Jury Indictments). Defendant sought relief from New York and Delaware courts when Contogouris refused to resign as president and manager of the US Companies (see NYSCEF 16, 17, 19).
In September 2003, plaintiff filed a lawsuit in federal court against defendant, Sioufas, the Trustee, defendant's Greek lawyer, Constantinos Emmanuel, and the Theo V. Sioufas Law Firm (NYSCEF 20, SDNY Decision). On January 6, 2006, the action was dismissed for lack of subject matter jurisdiction (id.).
On April 5, 2006, plaintiff filed the same action in Supreme Court, New York County (2006 Action) (NYSCEF 21, Emmanuel aff, ex K, 2006 Action Summons and Complaint). In the 2006 Action, plaintiff alleged that defendant was involved in the embezzlement with Contogouris to deprive plaintiff of her half of the estate (id.). Plaintiff brought claims for breach of the US Agreement, breach of the duty of good faith and fair dealing, breach of fiduciary duty, aiding and abetting in the breach of a fiduciary duty, fraud, negligent misrepresentation, conspiracy, and unjust enrichment (id.). Defendants in the 2006 Action moved to dismiss the complaint (see NYSCEF 22, Emmanuel aff, ex L, Decision and Order). Justice Lowe dismissed the action against Sioufas and Emmanuel in its entirety and dismissed all claims against defendant except the breach of contract claim (id.). Justice Lowe held that all of the claims fell under the London Agreement and should be litigated in Greece (id.).
In Zachariou v Manios (50 AD3d 257 [1st Dept 2008]), the Appellate Division, First Department affirmed the dismissal, awarding costs to defendants in the action (NYSCEF 23) The 2006 Action was discontinued in 2010.
In 2009, plaintiff commenced arbitration against defendant before the American Arbitration Association International Centre for Dispute Resolution (AAA) to determine the amount of Party Distributions (NYSCEF 54, Complaint, ¶ 10). On March 20, 2014, the arbitration panel issued an award, with corrections issued on June 17,2014, for a Party Distribution plus interest in a total amount of $10,855,452.75 (Award) (NYSCEF 25, 26, AAA Award and Corrections). On March 31, 2015, plaintiff confirmed the Award in the Southern District of New York (NYSCEF 54, Complaint, ¶ 10).
On September 12, 2014, plaintiff brought an action in Greece before the Athens Single-Member Court of First Instance (2014 Greek Action) seeking the recognition and a declaration of enforcement of the Award pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 in Greece (NYSCEF 27, 2014 Greek Action Petition). On February 9, 2018, the Greek court issued its judgment recognizing the Award as res judicata in Greek but refusing to declare the Award enforceable as a money judgment in Greece, because the Award does not contain any requirement that defendant, himself, directly pay plaintiff the Party Distribution (NYSCEF 27, 2014 Greek Action Petition).
On July 14, 2016, plaintiff brought another action in Greece before the Athens Multi-Member Court of First Instance (2016 Greek Action) seeking payment from defendant based upon the Award. Plaintiff asked the Greek Court to recognize that defendant was obligated to pay her the sum awarded by the Award (NYSCEF 30, 2016 Greek Action Decision at 8). However, plaintiff amended her relief to seek only a declaratory judgment declaring the recognition of the existence of her right to the Party Distribution as defendant received a disproportionate share of their jointly own US assets (id.). The Greek Court issued its decision that, while it had jurisdiction over plaintiff's claim seeking a declaration recognizing defendant's debt, the claim was rejected because the Award was a declaration of the amount due, and it could not grant any further relief "following the change of the claim from an action for performance to a request for declaratory judgment, the negative impact of res judicata applies and the same action may not be judged anew"; therefore, her claim was dismissed (NYSCEF 30, 2016 Greek Action Decision at 9). Plaintiff and defendant have also filed other claims relating to this dispute in Greece (see NYSCEF 31-34).
On September 11, 2018, plaintiff commenced this action seeking an order compelling defendant to specifically pay plaintiff the distribution per the Award to the Trustee. Defendant moves to dismiss the action.
DISCUSSION
The standard of review on a motion to dismiss pursuant to CPLR 3211 is well established. The court must assume the truth of the allegations in the pleading and "resolve all inferences which reasonably flow therefrom in favor of the pleader" (Sanders v Winship, 57 NY2d 391, 394 [1982]). In assessing a complaint, the court must "determine simply whether the facts alleged fit within any cognizable legal theory" (Morone v Morone, 50 NY2d 481, 484 [1980]). "[T]he allegations of a complaint, supplemented by a plaintiff's additional submissions, if any, must be given their most favorable intendment" (Arrington v New York Times Co., 55 NY2d 433, 442 [1982]). If the facts stated are sufficient to support any cognizable legal theory, the motion to dismiss should be denied (Campaign for Fiscal Equity v State of New York, 86 NY2d 307, 318 [1995]).
"On a motion to dismiss pursuant to CPLR 3211 (a) (1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Morgenthow & Latham v Bank of N.Y. Co., 305 AD2d 74, 78 [1st 2003] [internal quotations and citations omitted]).
Here, plaintiff has an arbitral award against defendant, which arose out of the US Agreement, which gave plaintiff the right to seek a determination by the AAA regarding Party Distributions from the US Companies (NYSCEF 14, US Agreement, ¶ 10). The AAA awarded plaintiff over $10 million to be paid by defendant, which, pursuant to the US Agreement, defendant was to pay directly to the Trustee, who in turn was to distribute this payment to plaintiff (id., ¶ 11). Under the US Agreement, the Trustee was to distribute the money pursuant to the terms of the London Agreement (id.). There is no dispute that defendant has not paid the money awarded to the Trustee. What is disputed is where this action to enforce defendant to pay the money should be brought - New York or Greece. Defendant argues that plaintiff's claim should be dismissed because the documentary evidence demonstrates that the dispute falls under the London Agreement, which is governed by Greek law; plaintiff, on the other hand, contends that the dispute falls under the US Agreement in which defendant consented to New York jurisdiction.
"[T]he interpretation of an unambiguous contract is a question of law for the court, and the provisions of the contract delineating the rights of the parties prevail over the allegations set forth in the complaint" (Ark Bryant Park Corp. v Bryant Park Restoration Corp., 285 AD2d 143, 150 [1st Dept 2001] [citations omitted]).
The London Agreement provides:
"Any monies found to be due to [defendant] or [plaintiff] pursuant to the US Agreement are to be paid by Prestige and/or Decana (as the case may be) and/or by either [defendant] or [plaintiff] (if either of them have received in excess of 50% of the US income) to the Trustee to be held in trust for [plaintiff] and/or [defendant] (as the case may be) pursuant to Clause 15.1 (ii) hereof."(NYSCEF 13, London Agreement, ¶ 4.3). Clause 15.1 of the London Agreement states in pertinent part the following: "[T]he Trustee will collect from all sources available all monies payable to either [defendant] or [plaintiff] including monies payable to [plaintiff] pursuant to the US Agreement as per clause 4.3 hereof and will place same into a client account in accordance with the provisions of the [Trustee Letter]" (id., ¶ 15.1). The Trustee Letter provides:
"You [the Trustee] shall use all reasonable efforts to procure collection from all sources available of all monies payable to either [defendant] or [plaintiff] pursuant to the US Agreement and the London Agreement and will place same into a client account (the "Trust Account") which shall be maintained for the purpose, on the terms and subject to the conditions of this Agreement and the London Agreement. The Trust Account and funds therein shall not be encumbered or subject to lien or
attachment by any party or any creditor of any party hereto and shall be used solely for the purposes set forth in the London Agreement."(NYSCEF 15, Trustee Letter, ¶ 12). These provisions clearly require the Trustee to collect any monies owed pursuant to the US Agreement and use reasonable efforts to procure collection. This raises the issue of whether plaintiff has standing to bring this enforcement action or whether payment must be enforced by the Trustee, who is designated to collect such payment.
Plaintiff argues that she is not seeking to enforce a right that belongs to a trust, but rather, a promise that was made to her to deliver funds to the Trustee to be held in trust for her. Plaintiff asserts that she alone has the right to enforce this promise defendant made when they entered into the US Agreement. This argument is rejected. The US Agreement clearly provides that any Party Distributions shall be paid to the Trustee by the party owing the money and that those Party Distributions shall be distributed pursuant to the terms of the London Agreement (NYSCEF 14, US Agreement, ¶ 11. This is the procedure to be followed. The Trustee gets the funds and puts the funds into a Trust. If the procedure is not followed, the Trustee is required to "use all reasonable efforts to procure collection" (NYSCEF 15, Trustee Letter, ¶ 12). Pursuant to the London Agreement and the Trustee Letter, the Party Distributions are owed to the Trust, and it is up to the Trustee to enforce this pursuant to the procedures both parties agreed to. Plaintiff has standing to sue the Trustee to enforce these procedures, not defendant. Thus, the complaint is dismissed for lack of standing.
Accordingly, it is hereby
ORDERED that defendant's motion to dismiss is granted with costs and disbursements to defendant as taxed by the Clerk; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly. 9/27/19
DATE
/s/ _________
ANDREA MASLEY, J.S.C.