Opinion
INDEX 654108/2021
12-30-2021
ROZMIN LALANI, Plaintiff, v. SUNITA SHRESTHA, TOTAL LOOKS THREADING SALON, OM JAI MATA DI, INC., and MATA RANI, INC., Defendants. MOTION SEQ. No. 001
HON. LOUIS NOCK, JUSTICE
Unpublished Opinion
MOTION DATE 08/05/2021
DECISION + ORDER ON MOTION
HON. LOUIS NOCK, JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12 were read on this motion for DISMISSAL.
Upon the foregoing documents, the motion to dismiss is granted in part, in accord with the following memorandum decision.
Background
Plaintiff Rozmin Lalani ("Plaintiff") commenced this action by filing a summons and verified complaint on June 29, 2021 (NYSCEF Doc Nos. 1-2). The complaint alleges that Plaintiff and defendant Sunita Shrestha ("Shrestha") entered into a partnership agreement (the "Agreement") on or about September 2014, pursuant to which Plaintiff invested a total of $63,000.00 in the three entity defendants (the "businesses") and whereupon business profits would be shared every month (NYSCEF Doc No. 2 ¶ 8-10). In an affidavit submitted in opposition to the present motion, Plaintiff attests that she also contributed "sweat equity" and "help operating the businesses daily" pursuant to the Agreement (NYSCEF Doc No. 11 ¶ 6). The complaint further alleges that, in September 2020, Shrestha "ousted the Plaintiff from the businesses without proper recompense" and has "reaped all of the benefits of the business profits since [Plaintiff] was evicted from the business" NYSCEF Doc No. 2 ¶ 11). The complaint interposes causes of action for (1) breach of contract, (2) conversion, (3) unjust enrichment, and (4) promissory estoppel. By this pre-answer motion, all defendants ("Defendants") move to dismiss the complaint in its entirety. Defendants argue that the breach of contract claim fails because Plaintiff failed to allege her own performance of the Agreement and moves to dismiss the remaining causes of action as duplicative of the breach of contact claim. Plaintiff opposes the motion.
Discussion
On a motion to dismiss brought under CPLR 3211 (a) (7), the court must "accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 N.Y.2d 83, 87-88 [1994] [citations omitted]). Ambiguous allegations must be resolved in the plaintiff's favor (see JF Capital Advisors, LLC v Lightstone Group, LLC, 25 N.Y.3d 759, 764 [2015]). "The motion must be denied if the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" (511 West 232 Owners Corp. v Jennifer Realty Co., 98 N.Y.2d 144, 152 [2002] [internal citations omitted]). "Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss" (Cortlandt St. Recovery Corp. v Bonderman, 31 N.Y.3d 30, 38 [2018]), but a pleading consisting of "bare legal conclusions" is insufficient (Leder v Spiegel, 31 A.D.3d 266, 267 [1st Dept 2006], affd 9 N.Y.3d 836 [2007], cert denied sub nom Spiegel v Rowland, 552 U.S. 1257 [2008]) and "the court is not required to accept factual allegations that are plainly contradicted by the documentary evidence or legal conclusions that are unsupportable based upon the undisputed facts" (Robinson v Robinson, 303 A.D.2d 234, 235 [1st Dept 2003]).
A. Breach of Contract
To state a cause of action for breach of contract, a plaintiff must plead the existence of a contract between the parties, plaintiff's performance, the defendant's breach, and damages (Belle Lighting LLC v Artisan Construction Partners LLC, 178 A.D.3d 605, 606 [1st Dept 2019]). The verified complaint in this action adequately pleads a cause of action by alleging that the parties entered in to a partnership agreement (NYSCEF Doc No. 2 ¶¶ 8-9, 13), that Plaintiff performed by contributing capital to the business pursuant to the agreement (id. ¶ 17), that Shrestha breached the agreement by "ousting" Plaintiff from the business and failing to share profits (id. ¶ 18), and that she was damaged as a result (id. ¶ 19). Plaintiff's allegations regarding her own performance are further amplified by the affidavit submitted in opposition to the motion in which she attests that she performed by contributing "sweat equity" and "help operating the businesses daily" pursuant to the Agreement (NYSCEF Doc No. 11 ¶ 6) (Nonnon v City of New York, 9 N.Y.3d 825, 827 [2007] [Affidavits may be considered on motion to dismiss to remedy pleading defects]). Therefore, this portion of the motion to dismiss is denied.
B. Conversion
"Conversion is an unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights" (Peters Griffin Woodward, Inc. v WCSC, Inc., 88 A.D.2d 883, 883 [1st Dept 1982]). "Money, if specifically identifiable, may be the subject of a conversion action" (id.). However, an action for conversion cannot be validly maintained where damages are merely being sought for breach of contract (id.; Liegey v Gadeh, 198 A.D.3d 460, 460 [ 1st Dept 2021]). Such is the case here, where Plaintiff alleges only that Defendants converted the initial $63,000.00 capital investment because Shrestha breached the Agreement and "treated said funds in a particular manner which is in contravention to the agreement between the parties" (NYSCEF Doc No. 2 ¶¶ 23-24). Moreover, "[i]t is a well-established principle that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated" (Dormitory Authority v Samson Construction Co., 30 N.Y.3d 704, 711 [2018]). "[W]here a party is merely seeking to enforce its bargain, a tort claim will not lie" (New York University v Continental Ins. Co., 87 N.Y.2d 308, 316 [1995]). The conversion claim interposed in the complaint fails because Plaintiff alleges no separate legal duty independent of the Agreement and seeks only to enforce the terms of the Agreement. Therefore, this portion of the motion to dismiss is granted and the second cause of action for conversion is dismissed.
C. Unjust Enrichment
Unjust enrichment arises when a defendant was enriched at plaintiff's expense and it is against equity and good conscience that defendant retain what is sought to be recovered (Travelsavers Enterprises, Inc. v. Analog Analystics, Inc., 149 A.D.3d 1003 [2d Dept 2017]). An unjust enrichment claim does not lie where there is an enforceable agreement between the parties (Accurate Copy Serv. of America, Inc. v. Fisk Bldg. Assocs. L.L.C., 72 A.D.3d 456 [1st Dept 2010] citing Singer Asset Fin. Co., LLC v. Melvin, 33 A.D.3d 355, 358 [2006]). Here, a copy of the purported Agreement was not attached to the complaint and it appears that Shrestha contests the existence of same (see NYSCEF Doc No. 5 at 6, mem in support ["Here, if there is no agreement, the partnership is at will"]). Therefore, it appearing that a bona fide dispute exists regarding the existence of the Agreement, dismissal of the cause of action for unjust enrichment is not appropriate on a motion to dismiss and this portion of the motion is denied.
D. Promissory Estoppel
To plead a cause of action for promissory estoppel, a plaintiff must allege "(i) a sufficiently clear and unambiguous promise; (ii) reasonable reliance on the promise; and (iii) injury caused by the reliance" (Castellotti v Free, 138 A.D.3d 198, 204 [1st Dept 2016]). In this action, Plaintiff has adequately pled a claim for promissory estoppel by alleging that the parties entered into an agreement where Plaintiff would contribute funds and work in the day to day operations of the businesses in exchange for a share of profits, on which she reasonably relied, which caused her to suffer financial losses. These allegations are sufficient to put Defendants on notice of the transactions or occurrences on which the claim is based (see CPLR 3013; CIP GP 2018, LLC v Koplewicz, 194 A.D.3d 639, 640 [1st Dept 2021] ["Since the terms of the partnership agreement were adequately alleged, plaintiffs promissory estoppel claim that it reasonably relied on the agreement to its detriment is also adequately pleaded")]. Where, as here, there is a bona fide dispute as to the existence of a contract between the parties, the Plaintiff may proceed upon a theory of quasi contract and proceed with both claims (see CIP GP 2018, 194 A.D.3d at 640 Plaintiff permitted to maintain claims for breach of contract, unjust enrichment, and promissory estoppel where bona fide dispute exists regarding the existence or enforceability of the contract]). Therefore, this portion of the motion to dismiss is denied.
Accordingly, it is
ORDERED that the motion to dismiss is granted in part and the second cause of action for conversion is dismissed; and it is further
ORDERED that the remainder of the motion is denied; and it is further
ORDERED that defendants are directed to serve an answer to the complaint within 20 days after service of a copy of this order with notice of entry; and it is further
ORDERED that the parties are directed, within 30 days of service of the answer, to meet and confer regarding discovery and submit a proposed preliminary conference order, in a form that substantially conforms to the court's form Commercial Division Preliminary Conference Order located at https://www.nycourts.gov/LegacyPDFS/courts/1jd/supctmanh/PC-CD.pdf, to the Part Clerk at SFC-Part38-Clerk@nycourts.gov.