Opinion
603654/09.
March 18, 2011.
Decision/Order
Recitation, as required by CPLR 2219 [a], of the papers (these) motion(s):
Papers Numbered
Pltfs n/m [ § 3215] w/MAB affirm, DT affid, exhs . . . . . . . . . 1 Upon the foregoing papers, the decision and order of the court is as follows:This is an action for breach of fiduciary duty, conversion, account stated, and unjust enrichment. Plaintiffs now move, pursuant to CPLR § 3215, for an order directing the Clerk of Court to enter a default judgment in their favor and against defendants, Westland Insurance Brokers ("Westland") and James H. Sim ("Sim"), as President of Westland.
This motion has been submitted to the court on default, though due proof of service has been filed. Plaintiffs served the summons and complaint on Westland through the secretary of state on December 15, 2009. BCL § 306(b). Plaintiffs then mailed a copy of the summons and complaint to Westland on December 29, 2009 and January 25, 2011. BCL § 306(b); CPLR § 3215[g][4][i]. Pursuant to an order dated August 24, 2010, plaintiffs' time to serve Sim was extended by ninety (90) days. Order, Hon. Judith J. Gische, 8/24/10. Plaintiffs attempted service on five different occasions at Sim's residence. Service was completed by nail and mail, pursuant to CPLR § 308(4), by affixing a copy of the summons and complaint on Sim's door on November 10, 2010 at 1:00 p.m. and mailing a copy to Sim on the same date. An additional copy was mailed to Sim on January 25, 2011. CPLR § 3215[g][3][i].
Despite such notice and additional notice, defendants have not appeared, answered the complaint, or moved. Their time to do so has expired and this motion is brought within one year of defendants' default.
Discussion
Plaintiffs are entitled to a default judgment, provided they otherwise demonstrate that they have a prima facie cause of action. Gagen v. Kipany Productions Ltd.. 289 A.D.2d 844 (3d Dept. 2001). A default in answering the complaint constitutes an admission of the factual allegations therein and the reasonable inferences which may be made therefrom. Rokina Optical Co. Inc. v. Camera King, Inc., 63 N.Y.2d 728 (1st Dept. 1984). An application for a default judgment must be supported by either an affidavit of facts made by one with personal knowledge of the facts surrounding the claim [Zelnickv. Biderman Industries U.S.A., Inc., 242 A.D.2d 227 (1st Dept. 1997); and CPLR § 3215 (f)] or a complaint verified by a person with actual knowledge of the facts surrounding the claim. Hazim v. Winter. 234 A.D.2d 422 (2d Dept. 1996); and CPLR § 105 (u).
Plaintiffs provide the sworn affidavit of Denise Traína, who states she is the Assistant Vice President of plaintiffs. Plaintiffs assert causes of action against defendants for breach of fiduciary duty (COA 1 and COA 2), conversion (COA 4), account stated (COA 5), and unjust enrichment (COA 6). Plaintiffs allege that on January 1, 1987, Westland and plaintiffs entered into an insurance agency agreement (the "Agreement"). Pursuant to the Agreement, Westland, as a broker for plaintiffs, collected money from plaintiffs' policyholders, and held the money in trust as plaintiffs' fiduciary. Plaintiffs contend that by failing to remit the premiums in accordance with the Agreement, defendants have forfeited their right to a commission. Plaintiffs therefore allege that, beginning in 2007, Westland has failed to remit the sum of $236,830.55 to plaintiffs, with interest from July 10, 2008. Plaintiffs allege that Sim is liable due to his capacity as President of Westland, at the time the conversion occurred.
Plaintiffs' complaint does not contain a 3rd cause of action.
An account stated represents an agreement between the parties reflecting amounts due on prior transactions. Jim-Mar Corp. v. Aquatic Constr., 195 A.D.2d 868 (3d Dept. 1993), Iv. denied 82 N.Y.2d 660 (1993). Where either no account has been presented or there is any dispute regarding the correctness of the account, the cause of action fails. M A Const. Corp. v. McTaaue. 21 A.D.3d 610 (3d Dept. 2005).
To establish a breach of fiduciary duty, the pleader must show the existence of a fiduciary relationship, misconduct that induced the pleader to engage in the transaction in question, and damages directly caused by that misconduct. Barrett v. Freifeld. 64 A.D.3d 736, 739 (2d Dept. 2009).
In order to establish conversion, the plaintiffs must establish that they owned an identifiable piece of property and that defendants exercised dominion over or interfered with the property in defiance of plaintiffs' rights. See State v. Seventh Regiment Fund, Inc. 98 N.Y.2d 249 (2002); Ahles v. Aztec Enterprises. Inc.. 120 A.D.2d 903 (1986). Conversion can be established even where one comes into lawful possession of the property, but then wrongfully detains or uses the property. A refusal to return the property can form the basis for a claim of conversion. Employers' Fire Ins. Co. v. Cotten, 245 N.Y. 102 (1927). Additionally, a corporate officer or director who commits a fraud or another tortious act may be held personally liable for his acts and may be sued in his individual capacity by the person or persons injured by those acts. Corso v. Byron, 11 Misc.3d 1072(A) (N.Y.Sup. 2006).
Based on the foregoing, plaintiffs have established a prima facie cause of action for breach of fiduciary duty and conversion against defendants. However, plaintiffs' 6th cause of action for unjust enrichment must fail, since there is a valid agreement Clark-Fitzpatrick v. LI.R.R.. 70 N.Y.2d 382 (2d Dept. 1987). Plaintiffs' 5th cause of action for accounts stated is also denied, as plaintiffs have not provided the court with accounts allegedly mailed to defendants.
Although plaintiffs allege that the sum is due and owing since 2007, the spreadsheet shows that sums are due and owing from July 31, 2008 through October of 2008. Plaintiffs also seek 236,830.55, however, the spreadsheet provides that the amount owed is $250,212.72. Additionally, plaintiffs seek interest from July 10, 2008, yet have not explained why they chose this date.
Accordingly, plaintiffs' motion is granted against defendants on the issue of liability only. Since the court is unable to ascertain plaintiffs' damages, this case is hereby referred to a special referee to hear anddetermine. Plaintiffs are hereby directed to serve a copy of this decision and order upon the Office of the Special Referee so that this reference can be assigned.
Conclusion
In accordance herewith, it is hereby:
ORDERED that plaintiff CHUBB SON, INC., FEDERAL INSURANCE COMPANY, and GREAT NORTHERN INSURANCE COMPANY'S motion for entry of a default judgment against defendants, WESTLAND INSURANCE BROKERS and JAMES H. SIM, is granted on the 1st, 2nd and 4th causes of action; and it is further
ORDERED that plaintiffs' 5th and 6th causes of action for account stated and unjust enrichment are hereby severed and dismissed; and it is further
ORDERED that the issue of what plaintiffs may recover from defendants is hereby referred to a Special Referee to hear and determine: and it is further
ORDERED that any requested relief not expressly addressed herein has nonetheless been considered by the court and is denied; and it is further
ORDERED that this shall constitute the decision and order of the court.