Opinion
No. 501184/12.
2013-05-15
Dr. Jonathan MAWERE, Plaintiff, v. Joel LANDAU, Jack Basch, Leibel Rubin, Marvin Rubin, Solomon Rubin, Judith Eisen, Garfunkel Wild, P.C. and John Does 1–10,, Defendants, and Alliance Health Associates, Inc. and Alliance Health Property, LLC, Nominal, Defendants.
The Bellantoni Law Firm, Scarsdale, NY, for Plaintiff. Theresa Harris, Esq., Garfunkel Wild PC, Great Neck, NY, for Defendant.
The Bellantoni Law Firm, Scarsdale, NY, for Plaintiff. Theresa Harris, Esq., Garfunkel Wild PC, Great Neck, NY, for Defendant.
DAVID I. SCHMIDT, J.
The following papers numbered 1 to 10 read herein: Papers Numbered
Notice of Motion/Order to Show Cause/Petition/Cross Motion and Affidavits (Affirmations) Annexed 1–3, 4–6, 7
Opposing Affidavits (Affirmations) 8–9, 9–10
Reply Affidavits (Affirmations)
Affidavit (Affirmation)
Other Papers
Upon the foregoing papers, defendants Joel Landau, Jack Basch, Leibel Rubin, Marvin Rubin, Solomon Rubin (collectively referred to as the Purchasing Defendants) and the nominal defendants Alliance Health Associates, Inc. (AHA) and Alliance Health Property, LLC (AHP) move for an order: (1) pursuant to CPLR 3211(a)(1) and (a)(7), dismissing the complaint, and (2) pursuant to 22 NYCRR 130.1–1, awarding costs and attorneys' fees. By way of a separate motion, defendants Garfunkel Wild, P.C. (Garfunkel) and Judy Eisen move for the same relief (Garfunkel and Eisen are collectively referred to as the Law Firm defendants).
Defendants' motions are granted to the extent that the complaint, with the exception of the declaratory judgment cause of action, is dismissed. With respect to the declaratory judgment cause of action, it is declared that plaintiff does not have title or the right to title or other such interest in any property or entities that own the assets and profits of Ruby Weston Manor and the Marcus Garvey Residential Rehab Pavilion, Inc. Defendants' motions are denied to the extent that they seek the imposition of costs and attorneys' fees pursuant to 22 NYCRR 130.1–1.
THE VERIFIED COMPLAINT
Plaintiff Dr. Jonathan Mawere's primary contentions in this action are that the Purchasing Defendants squeezed him out of business transactions involving the purchase of Ruby Weston Manor (RWM) and the Marcus Garvey Residential Rehab Pavilion, Inc., (Marcus Garvey), both financially troubled nursing homes, and that Garfunkel, a law firm, and Eisen, a partner/director of Garfunkel, breached their obligations owed to plaintiff in assisting the Purchasing Defendants consummate the purchase. In the complaint, plaintiff alleges that at some point in during 2010 he learned of an opportunity to purchase the assets of RWM and Marcus Garvey, and in or around July 2010, discussed with Landau the possibility of jointly pursuing the purchase of the nursing homes and operating them on a for-profit basis (Complaint ¶¶ 1, 2, 41). Landau represented to plaintiff that he had access to a substantial portion of financing needed to make the purchases, and suggested that he and plaintiff, “form a joint venture with the object of pooling their efforts and resources in order to obtain” (Complaint ¶ 3; see also Complaint ¶ 59) and operate the facilities, and that he and plaintiff “would share equally in the equity and income generated from the venture” (Complaint ¶ 4; see also Complaint ¶ 43).
Shortly after plaintiff and Landau reached such an agreement, plaintiff and Landau engaged a CPA firm to analyze the first of the entities that would be available for purchase, RWM, which analysis was paid for by plaintiff (Complaint ¶¶ 44 to 46). In November 2010, plaintiff and Landau spoke with Eisen about engaging her and her firm, Garfunkel, “to represent them with the acquisition of RWM's assets” (Complaint ¶ 51), and upon Landau and plaintiff's agreement to engage Eisen and her firm, Eisen sent an engagement letter addressed to plaintiff, “Landau and a corporation established by Landau” regarding the services Garfunkel would provide (Complaint ¶¶ 52 and 53).
Later in November 2010, Landau suggested that plaintiff and he should establish a corporation to take title to RWM's assets should the sale be consummated. Landau proceeded to file a certificate of incorporation on November 22, 2010, in order to reserve the corporate name “Alliance Health Associates,” but nothing in the filing identified the shareholders or corporate officers or directors. Plaintiff asserts that the other corporate formalities, including the execution of a shareholder's agreement, were to be deferred until the deal was successfully concluded (Complaint ¶¶ 54–58).
When, in December 2010, Landau told plaintiff that he did not have the funds to purchase RWM, plaintiff agreed to allow Landau to bring Basch into the venture (Complaint ¶¶ 5, 59–63). With the entry of Basch into the “venture,” plaintiff and Landau agreed that they would split equally the equity and profits of the venture after accounting for Basch's share (Complaint ¶ 110). As of December 22, 2010, Landau and Basch acknowledged that they had reached an agreement with respect to Basch's share of the “venture,” but Landau refused to disclose the terms of his agreement with Basch (Complaint ¶¶ 112–114).
At around the same time, plaintiff continued to have a central role in negotiations and discussions with RWM's board regarding the transaction. Plaintiff reviewed RWM's due diligence material and proposed agreements to act as RWM's receiver and the asset purchase agreement, and participated in the governmental approval process of the sale (Complaint ¶¶ 64–90). On the Department of Health application form that was prepared by Garfunkel and executed by plaintiff, plaintiff was identified as the president and chief executive officer and a shareholder (Complaint ¶¶ 84–85), and, with respect to AHA's formal purchase proposal letter dated January 31, 2011, that was sent to RWM under AHA letterhead, plaintiff signed the letter on behalf of AHA and was identified as CEO (Complaint ¶¶ 92–98). RWM's board approved the acceptance of the offer on or around February 1, 2011 (Complaint ¶ 100).
Although plaintiff, Landau, and Basch were successful with RWM's board, plaintiff asserts that Landau essentially repudiated their prior agreement to split the equity and profits of the venture when, on or around January 26, 2011, Landau and Basch forwarded a draft letter agreement in which they proposed that plaintiff would receive, based on Landau's discretion, between 7 and 10 percent equity interest in RWM's operational, but not real property, assets (Complaint ¶ 115). Plaintiff rejected the terms of the proposed letter agreement, but countered that he would accept a 10 percent stake in RWM's operating and real property assets (Complaint ¶¶ 118–119). Landau responded to this proposal by stating that they would agree to plaintiff's terms only if plaintiff and an associate agreed to make a large investment in another entity controlled by Landau (Complaint ¶ 120). When plaintiff declined this offer, Landau told plaintiff he would go no higher than 7 percent (Complaint ¶ 121). A letter agreement prepared by Garfunkel on or around March 14, 2011, contained the 7 percent figure for both RWM's real property and operational assets (Complaint ¶ 125). However, in an April 14, 2011 e-mail, Landau retreated from those figures, and offered plaintiff a 7 percent share of RWM's operational assets and 5 percent of RWM's real estate (Complaint ¶ 130). A draft shareholder's agreement prepared by Garfunkel and appended to Landau's April 14, 2011 e-mail only provided plaintiff a 7 percent share of RWM's operational assets and was silent with respect to plaintiff's interest in the entity that would own RWM's real estate (Complaint ¶ 131). The parties did not reach an agreement regarding these terms, and, in a letter dated May 13, 2011, which plaintiff asserts was ghost written by Garfunkel, Basch stated that he was unwilling to proceed with plaintiff as part of the purchase of RWM and that he (Basch) would walk away from the deal unless plaintiff agreed to accept a cash payment of 3 percent of the net value of the RWM transaction (Complaint ¶¶ 132–135).
Ultimately, plaintiff was not included in AHA, the company set up to operate RWM, and AHP, the company set up to own the real estate, and plaintiff asserts that neither Landau nor Basch told plaintiff that they had set up AHP or that they had excluded plaintiff from those entities (Complaint ¶¶ 140–146). In June 2011, Landau and Basch, through AHA and AHP, entered into asset purchase agreements with RWM's owner (Complaint ¶¶ 162–165). The deal closed in December 2011, and the Department of Health ultimately approved AHA's application to run RWM (Complaint ¶¶ 199, 196). Finally, with regard to Landau and Basch, plaintiff asserts that they are currently attempting to purchase Marcus Garvey, the other nursing home owned by the former owner of RWM, despite plaintiff's agreement with Landau and Basch regarding any prospective sale of the this other nursing home (Complaint ¶¶ 198–204).
With respect to Garfunkel, plaintiff asserts that it was Garfunkel that prepared the documents establishing the structure and ownership of AHA in April 2011, and that these documents were backdated to November 22, 2010, the date the certificate of incorporation was filed (Complaint ¶¶ 140–146). Plaintiff states that Garfunkel did not tell him about the preparation or the backdating of the documents relating to AHA (Complaint ¶ 146). In May, 2011, counsel for plaintiff, who had been retained by plaintiff in April 2011, wrote to Eisen stating that plaintiff wanted to make sure that no changes had been made to the application forms submitted to the Department of Health (Complaint ¶ 153). According to plaintiff, Eisen replied that none had been made with respect to the receivership application, but that the “certificate of need” (CON) application had not been submitted (Complaint ¶¶ 154–156). Within two weeks, Eisen, without telling plaintiff, informed the Department of Health that plaintiff had withdrawn from the receivership application (Complaint ¶¶ 158–161). When the formal CON application was submitted to the Department of Health, it contained no mention of plaintiff, and listed the parties with an interest in the purchase as Landau, Basch, Leibel Rubin, Marvin Rubin and Solomon Rubin (collectively referred to as the Rubins) (Complaint ¶¶ 167–172).
When plaintiff and his counsel learned that plaintiff's name had been withdrawn from the receivership application and that he was not listed as part of the acquisition of RWM, plaintiff asserts that Eisen made misrepresentations to the Department of Health regarding the ownership and formation of AHA and plaintiff's role in the “venture” (Complaint ¶¶ 173–194).
Plaintiff asserts that Landau and Basch later acknowledged that the Rubins had entered into the venture in early 2011, and that they thus took title to and/or control over partnership assets rightfully belonging to plaintiff.
Based on these factual allegations, plaintiff has alleged 18 causes of action against the various defendants, with the first nine alleged as follows:
1. Common Law Fraud against Landau and Basch. In this first cause of action, plaintiff alleges that, not only did Landau and Basch's repudiate their agreements to share in the operational and real property assets of RWM and Marcus Garvey, and Landau and Basch, through their misstatements and misrepresentations, “schemed” from the beginning to appropriate for themselves and their “confederates” the opportunities to acquire the assets of RWM and Marcus Garvey (denominated “Count I” by plaintiff).
2. Common Law Fraud against Eisen and Garfunkel based on Eisen and Garfunkel's “false representation” that they would not alter the RWM regulatory applications, and Eisen and Garfunkel's failure to disclose the submission of the regulatory applications omitting plaintiff, their creation of the backdated documents relating to AHA, and their failure to disclose the call to the Department of Health in which they informed the Department of Health that plaintiff had withdrawn from AHA (“Count II”).
3. Aiding and Abetting Fraud against all of the defendants based on all of the defendants having knowledge of the above noted “primary” acts of fraud by Landau, Basch, Eisen and Garfunkel, and, based on this knowledge, as with respect to the Rubins, providing capital and other assistance that was instrumental allowing defendants to consummate the “scheme” (“Count III”).
4. Conspiracy to Defraud against all defendants based on the defendants entering into an agreement or understanding to defraud plaintiff (“Count IV”).
5. Negligent Misrepresentation against Landau and Basch based on their breach of fiduciary and/or contractual duties in making material misstatements and failing to disclose material facts to plaintiff (“Count V”).
6. Negligent Misrepresentation against Eisen and Garfunkel based on their breach of fiduciary and/or contractual duties in making material misstatements and failing to disclose material facts to plaintiff (“Count VI”).
7. Breach of Contract against Landau based on Landau's repudiation of his agreement to enter into a partnership with plaintiff and to share equally in the equity and assets of RWM and Marcus Garvey upon their purchase (“Count VII”).
8. Breach of Contract against Landau and Basch based on their repudiation of their agreement to enter into a partnership with plaintiff and to share equally in the equity and assets of RWM and Marcus Garvey upon their purchase (“Count VIII”).
9. Tortious Interference with Contract against all defendants. In this cause of action, plaintiff alleges that all of the defendants had knowledge of plaintiff's agreements with Landau and Basch, and that they intentionally induced Basch and Landau to breach their agreements (“Count IX”).
Based on the same factual allegations alleged in the fraud, negligent misrepresentation, aiding and abetting fraud and conspiracy to defraud causes of action, plaintiff alleges a Breach of Fiduciary Duties cause of action against Landau and Basch (“Count X”), a Breach of Fiduciary Duties cause of action against Eisen and Garfunkel (“Count XI”), an Aiding and Abetting Breach of Fiduciary Duties cause of action against all defendants (“Count XII”), Conspiracy to Breach Fiduciary Duties against all defendants (“Count XIII”), Professional Negligence against Eisen and Garfunkel (“Count XIV”), Conversion and Misappropriation against Landau, Basch, and the Rubins (“Count XV”), Unjust Enrichment and Constructive Trust against Landau, Basch, the Rubins, AHA, and AHP (“Count XVI”), Accounting against Landau, Basch, the Rubins, AHA, and AHP (“Count XVII”) and Declaratory Judgment against all defendants (“Count XVIII”).
Finally, plaintiff contends that he is entitled to damages in the amount of $10,000,000, pre- and post-judgment interest, attorney's fees and costs, an accounting, the imposition of a constructive trust in his favor, and a judicial declaration in his favor.
MOTION TO DISMISS
It is in this context that defendants have made their motions to dismiss based on documentary evidence (CPLR 3211[a][1] ) and for failure to state a cause of action (CPLR 3211[a][7] ). In considering a motion to dismiss for failing to state a cause of action under CPLR 3211(a)(7), the pleading is to be afforded a liberal construction (CPLR 3026), and the court should accept as true the facts alleged in the complaint, accord plaintiff the benefit of every possible inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory ( see Hurrell–Harring v. State of New York, 15 NY3d 8, 20 [2010];Leon v. Martinez, 84 N.Y.2d 83, 87–88 [1995] ). Although evidentiary material may be considered in determining the viability of a complaint, the complaint should not be dismissed unless defendant has established “that a material fact alleged by the plaintiff is not a fact at all and that no significant dispute exists regarding it” (Stewart v. New York City Tr. Auth., 50 AD3d 1013, 1014 [2d Dept 2008] [internal quotation marks and citations omitted]; see also Lawrence v. Miller, 11 NY3d 588, 595 [2008];Nunez v. Mohamed, 104 AD3d 921, 922 [2d Dept 2013] ). Similarly, a motion to dismiss pursuant to CPLR 3211(a)(1) may be granted “only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law” (Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326 [2002];Harris v. Barbera, 96 AD3d 904, 905 [2d Dept 2010] ). To qualify as documentary evidence, printed materials “must be unambiguous and of undisputed authenticity” (Fontanetta v. John Doe 1, 73 AD3d 78, 86 [2d Dept 2010]; see Flushing Sav. Bank, FSB v. Siunykalimi, 94 AD3d 807, 808 [2d Dept 2012] ).
JOINT VENTURE—BREACH OF CONTRACT
Given that the issue of whether plaintiff has sufficiently pled the existence of a joint venture will also determine the viability of many of plaintiff's causes of action, the court will address this issue first. Initially, the statute of frauds does not generally render void an oral joint venture agreement, even one relating to the purchase of real property ( see Malaty v. Malaty, 95 AD3d 961, 962–963 [2d Dept 2012]; Mendelovitz v. Cohen, 66 AD3d 849, 850 [2d Dept 2009] ). As such, the issue turns on whether plaintiff has adequately pled the existence of an oral joint venture agreement. The essential elements of a joint venture are an “an agreement manifesting the intent of the parties to be associated as joint venturers, a contribution by the joint venturers to the undertaking, some degree of joint proprietorship and control over the enterprise, and an understanding with regard to the sharing of profits and losses” (Mendelovitz, 66 AD3d at 850;see Kaufman v. Torkan, 51 AD3d 977, 979 [2d Dept 2008]; Richbell Information. Servs. v. Jupiter Partners L.P., 309 A.D.2d 288, 298 [1st Dept 2003] ).
The Purchasing Defendants argue that no joint venture was created because plaintiff never reached a definite agreement with them with respect to the sharing of profits and losses ( see Langer v. Dadabhoy, 44 AD3d 425, 426 [1st Dept 2007], lv denied10 NY3d 712 [2008];Schnur v. Marin, 285 A.D.2d 639, 639–640 [2d Dept 2001]; Foster v. Kovner, 2012 N.Y. Slip Op 30125[U] [Sup Ct, New York County 2012] ). This argument is supported to some extent by plaintiff's allegations with respect to the parties' continued negotiations on the issue noted in the complaint, and the e-mails between the parties submitted and relied upon by both the plaintiff and the defendants. However, this issue of whether or not plaintiff has sufficiently alleged that he reached a definitive agreement with Landau or Basch need not be resolved in the context of this motion, as plaintiff makes no express allegation in the complaint or his sworn affirmation submitted in opposition to the motion that he agreed to share the losses of the venture with Landau and/or Basch. Rather, plaintiff, in the complaint, merely states that he and Landau agreed share in the equity and income from the venture, and, in his sworn affirmation submitted in opposition, that they “agreed to share everything
Although sharing “everything,” if taken out of the context of plaintiff's complaint and sworn affirmation in opposition, could be read as including sharing in the losses, in reading the entirety of the complaint and sworn affirmation, plaintiff only talks about sharing in the equity and profits and he makes no mention anywhere suggesting that sharing the losses was discussed or agreed upon.
Without any express assertion that he, Landau and Basch agreed to share the losses, plaintiff has failed to plead or show the existence of a joint venture agreement. Notably, an agreement to share the losses of a joint venture is an indispensable element of finding the existence of a joint venture (Matter of Steinbeck v. Gerosa, 4 N.Y.2d 302, 317 [1958],appeal dismissed358 U.S. 39 [1958];Moses v. Savedoff, 96 AD3d 466, 470 [1st Dept 2012]; Kaufman, 51 AD3d at 979;Davella v. Nielsen, 208 A.D.2d 494, 494 [2d Dept 1994]; De Vito v. Pokoik, 150 A.D.2d 331, 331 [2d Dept 1989] ), and a complaint does not state a cause of action based on a joint venture agreement “if the plaintiff does not allege a mutual promise or undertaking to share the burden of the losses of the alleged enterprise” (Rocchio v. Biondi, 40 AD3d 615, 616 [2d Dept 2007]; see also First Keystone Consultants, Inc. v. DDR Constr. Servs., 74 AD3d 1135, 1137 [2d Dept 2010]; Latture v. Smith, 1 AD3d 408, 408–409 [2d Dept 2003]; Ginsberg v. Schron, 288 A.D.2d 146, 146 [1st Dept 2001] ).
While there are cases that state that the absence of an express agreement to share losses is not fatal to a joint venture ( see e.g. Don v. Singer, 92 AD3d 576, 577 [1st Dept 2012]; Cobblah v. Katende, 275 A.D.2d 637, 639 [1st Dept 2000]; Eagle Comtronics v. Pico, Inc., 89 A.D.2d 803, 804 [4th Dept 1982], lv denied58 N.Y.2d 601 [1982];Penato v. George, 52 A.D.2d 939, 942 [2d Dept 1976], appeal dismissed42 N.Y.2d 908 [1977];Dundes v. Fuersich, 6 Misc.3d 882, 885 [Sup Ct, New York County 2004] ), these case are inconsistent with more recent Appellate Division, Second Department authority. Namely, the Second Department, at least in cases decided after Penato, has consistently held, in the context of motions to dismiss pursuant to CPLR 3211(a)(7), that the failure to plead an agreement to share losses precludes finding a legally cognizable joint venture (First Keystone Consultants, Inc., 74 AD3d at 1137 [2d Dept 2010]; Rocchio, 40 AD3d at 616 [2d Dept 2007]; Latture, 1 AD3d at 408–409 [2d Dept 2003]; Accent Assoc. v. Wheatley Constr. Corp., 268 A.D.2d 494, 494 [2d Dept 2000], lv denied95 N.Y.2d 754 [2000] ). Moreover, to the extent that an agreement to share losses may be inferred or implied (Penato, 52 A.D.2d at 942;Dundes, 6 Misc.3d at 885), the only real risk that plaintiff has alleged he would lose here is the loss of the value of his services in negotiating or arranging the deal.
Courts, however, have generally held that the risk of losing the value of one's services is not sufficient to constitute sharing in the losses of a joint venture ( see Foster v. Kovner, 2012 N.Y. Slip Op 30125[U] [Sup Ct, New York County 2012]; Impastato v. De Girolamo, 117 Misc.2d 786, 789 [Sup Ct, Kings County 1983], affd95 A.D.2d 845 [2d Dept 1983]; Cosy Goose Hellas v. Cosy Goose USA Ltd., 581 F Supp 2d 606, 620–625 [SD N.Y.2008]; Artco, Inc. v. Kidde, Inc., 1993 WL 962596 * 10 [SD N.Y.1993] [“if (plaintiff) were correct that simply expending efforts to set up a venture were sufficient to satisfy the essential element of sharing of losses, the requirement could nearly always be satisfied”]; see also Rocchio, 40 AD3d at 616 [plaintiff worked for years on project to obtain subdivision approval]; De Vito, 150 A.D.2d at 331–332;but see Don, 92 AD3d at 577 [as evident from a decision by the trial court (2011 N.Y. Slip Op 31993), the only risks plaintiffs faced were losing the value of plaintiffs' services in arranging a real estate/business deal from which plaintiffs were later excluded] ).
Plaintiff has alleged not alleged that he made any direct monetary investment in the joint venture. Other than the value of his services, the only expenditure plaintiff alleged was the payment for the CPA's evaluation of RWM.
There are cases from the Appellate Division, First Department, holding that the absence of an express agreement regarding losses does bar finding a joint venture were there is no reasonable expectation of losses (Don, 92 AD3d at 577 [1st Dept 2012]; Cobblah, 275 A.D.2d at 639 [1st Dept 2000]; see also Dundes, 6 Misc.3d at 885–886 [Sup Ct, New York County 2004] ). These cases, however, are also readily distinguishable. Here, in light of plaintiff's allegation that the nursing homes were financially troubled (Complaint ¶ 34), a court cannot infer or imply that there would have been no reasonable expectations of losses. Accordingly, even assuming plaintiff's allegations are sufficient to make out the other elements of a joint venture ( see Roper v. Heller–Miller Realty Corp. of NY, 167 A.D.2d 457, 457 [2d Dept 1990] ), plaintiff's failure to allege any agreement to share in the losses in the complaint or in his sworn affirmation submitted in opposition to the motion precludes finding that there was any joint venture agreement.
In the absence of a joint venture agreement, the facts, as alleged in the complaint and plaintiff's sworn affirmation in opposition, are insufficient to make out an enforceable contract. Without a joint venture, the only form of contract that would appear to apply is one compensating plaintiff for finding and negotiating a business opportunity. However, in the absence of a written contract, this is precisely the kind of contract that is barred by the portion of the statute of frauds addressing compensation for negotiating the purchase of real estate or business opportunities ( seeGeneral Obligations Law § 5–701[a][10]; Snyder v. Bronfman, 13 NY3d 504, 508–510 [2009] ). As plaintiff has failed to identify another factual or legal basis for finding an enforceable contract, plaintiff has failed to show that he has a cause of action for breach of contract (Counts VII and VIII) ( cf. B. Lewis Productions, Inc. v. Angelou, 99 Fed Appx 294, 297 [2d Cir2004] ).
OTHER CAUSES OF ACTION—PURCHASING DEFENDANTS
Plaintiff does not have a fraud cause of action (Count I), because he has failed to allege any fraud collateral or extraneous to the alleged joint venture agreement ( see Kaufman v. Torkan, 51 AD3d 977, 980 [2d Dept 2008]; Weitz v. Smith, 231 A.D.2d 518, 518–519 [2d Dept 1996] ). Plaintiffs general allegation that Landau and Basch entered into the venture lacking the intention to perform is insufficient to state a cause of action for fraud ( see McGee v. J. Dunn Constr. Corp., 54 AD3d 1010, 1010 [2d Dept 2008] ).
In addition, the only damages plaintiff really alleges for the alleged fraudulent conduct is the “value of the fruits of Landau's and Basch's wrongful conduct.” Fraud damages, however, are to compensate a plaintiff for what he has lost, not what a plaintiff might of gained ( Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 421 [1996];Princes Point, LLC v. AKRF Eng'g, P.C., 94 AD3d 588, 588–589 [1st Dept 2012] ). Here, absent allegations of damages relating to actual losses by plaintiff, he has failed to state a cause of action for fraud.
One group of fraud allegations that might be deemed extraneous to the alleged joint venture agreement are plaintiff's allegations that Landau and Basch (through or with the aid of Eisen and Garfunkel) made misrepresentations in the Department of Health application materials and in the backdating of the corporate documents. It would appear that any fraud in such actions/representations would be aimed at the Department of Health and/or the Department of State. In any event, plaintiff cannot have reasonably relied upon any of such representations in light of the negotiations relating to plaintiff's role in the venture that began in November 2010 and ended with Basch's letter dated May 13, 2011. In the May 13, 2011 letter to plaintiff (the existence and receipt of which plaintiff concedes in his papers), Basch informed plaintiff that he was essentially ending negotiations regarding any role plaintiff would have in the “venture” other than providing for the payment of a “finders fee.”
To the extent that plaintiff's allegation that Landau misrepresented that he had “access” to substantial financing is an allegation that may be deemed collateral or extraneous to the alleged joint venture agreement, plaintiff has failed to plead this allegation with the specificity required for a fraud allegation (CPLR 3116[b] ). Plaintiff's complaint does not detail when Landau purportedly made this representation about financing. In addition, Landau's statement that he had “access” to financing could reasonably be understood to mean that he thought he would have be able to arrange financing when the deal came into fruition, and thus the statement may constitute a statement of future intention that is not actionable as fraud ( see Deutsche Bank Nat. Trust Co. v. Sinclair, 68 AD3d 914, 916 [2d Dept 2009]; Goldman v. Strough Real Estate, Inc., 2 AD3d 677, 678 [2d Dept 2003] ). Alternatively, the statement could mean that Landau had contacts with people such as Basch and the Rubins who would supply financing and appear to have actually provided the financing or arranged for it for the completed deal. Moreover, although plaintiff asserts that he relied on Landau's representations regarding his access to financing in allowing Landau to proceed with the venture with him, plaintiff has failed to plead any facts or circumstances suggesting that this reliance was reasonable (Colasacco v. Robert E. Lawrence Real Estate, 68 AD3d 706, 708 [2d Dept 2009]; see also Global Minerals & Metals Corp. v. Holme, 35 AD3d 93, 99–101 [1st Dept 2006], lv denied8 NY3d 804 [2007] ).
A fiduciary or confidential relationship is a necessary element of plaintiff's causes of action for negligent misrepresentation (Count V) (Refreshment Mgt. Servs., Corp. v. Complete Off. Supply Warehouse Corp., 89 AD3d 913, 915 [2d Dept 2011] ), the imposition of a constructive trust and accounting (Counts XVI and XVII) (Rocchio, 40 AD3d at 616;Adam v. Cutner & Rathkopf, 238 A.D.2d 234, 242 [1st Dept 1997] ) and breach of fiduciary duty (Count X) (Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 83 AD3d 804, 807–808 [2d Dept 2011]; Rocchio, 40 AD3d at 616). Here, without a joint venture, plaintiff's allegations fail to show the existence of a confidential or fiduciary relationship necessary to establish those causes of action and the causes of action identified as Count V, Count X, Count XVI (to the extent requesting the imposition of a constructive trust) and Count XVII must thus be dismissed.
Plaintiff also does not have a conversion cause of action (Count XV). “[T]he subject matter of a conversion action must constitute identifiable tangible personal property;' real property and interests in business opportunities will not suffice” (ARB Upstate Communications, LLC v. R.J. Reuter, LLC, 93 AD3d 929 [3d Dept 2012], quoting Roemer & Featherstonhaugh v. Featherstonhaugh, 267 A.D.2d 697, 697 [3d Dept 1999], lv denied95 N.Y.2d 758 [2000];see also Thyroff v. Nationwide Mut. Ins. Co., 8 NY3d 283, 289 [2007];Rao v. Verde, 222 A.D.2d 569, 570 [2d Dept 1995] ). Plaintiff's alleged “interest” in the purchase of the nursing homes here is simply not identifiable personal property and plaintiff, as such, has failed state a conversion cause of action.
Although plaintiff uses the word “Misappropriation” in the heading of “Count XV,” he provides no basis to conclude that the word is intended as a separate cause of action.
In pleading his unjust enrichment cause of action, plaintiff relies upon the alleged fraud and breaches of fiduciary duty of Landau, Basch, and the Rubins. However, as the court has found plaintiff's fraud and breach of fiduciary duty causes of action to be insufficient or redundant, plaintiff's unjust enrichment cause of action also must fail. To the extent it may be premised on a quantum meruit theory based on plaintiff's work in finding and negotiating the deal with the owners of RWM, such a claim is barred by the statute of frauds ( see Snyder, 13 NY3d at 508–510).
LAW FIRM DEFENDANTS
In moving to dismiss, the Law Firm defendants have submitted a copy of the letter retainer agreement dated November 16, 2010 it entered into with respect to its work in this matter. The addressee of this agreement is “the Intelimed Group,” an entity plaintiff concedes in the complaint to be owned or controlled by Landau and the agreement is signed by Landau as President. Although the letter is also addressed to the attention of plaintiff and Landau, the portion of the letter agreement that addresses the scope of legal services and the identity of the client states that, “We understand that The Intelimed Group (the “Client” or “You”) has agreed to retain Garfunkel Wild, P.C. (“Firm” or “we”) to provide legal and related services” and that “Initially, you have asked us to provide you with legal advice regarding the purchase of a nursing home (the Matter').” Any ambiguity that may have been created by addressing the letter to the attention of plaintiff is eliminated by the section of the letter that unmistakably identifies the client as the Intelimed Group and indicates that any reference to “you” in the letter relates to this Intelimed Group.
This letter agreement constitutes documentary evidence that the Law Firm defendants represented the Interlimed Group, or Landau through the Interlimed Group, not plaintiff ( see Wells Fargo Bank, N.A. v. Zahran, 100 AD3d 1549, 1550 [4th Dept 2012], lv denied20 NY3d 861 [2013];Griffin v. Anslow, 17 AD3d 889, 892–893 [3d Dept 2005]; see also Moran v. Hurst, 32 AD3d 909, 911 [2d Dept 2006] ). Plaintiff's conclusory assertions to the contrary fail to show specific facts from which the existence of an attorney client relationship or other relationship approaching that of privity could be inferred ( see Nelson v. Kalathara, 48 AD3d 528, 529 [2d Dept 2008]; Fredriksen v. Fredriksen, 30 AD3d 370, 371–372 [2d Dept 2006] ). “Absent fraud, collusion, malicious acts, or other special circumstances, an attorney is not liable to third parties not in privity or near-privity for harm caused by professional negligence” (Fredriksen, 30 AD3d at 372;see Moran, 32 AD3d at 911). As such, plaintiff has failed to state causes of action for professional negligence (Count XIV), negligent misrepresentation (Count VI) and breach of fiduciary duty (Count XI) and fraud (to the extent that the alleged fraud involves non-disclosure rather than misrepresentations) (Count II) against the Law Firm defendants (Yuko Ito v. Suzuki, 57 AD3d 205, 207 [1st Dept 2008]; Nelson, 48 AD3d at 529;see also Refreshment Mgt. Servs., Corp ., 89 AD3d at 915;First Keystone Consultants, Inc., 74 AD3d at 1138).
Even if the Law Firm defendants' client could be deemed to be the business venture involved in the purchase of GWM rather than just the Interlimed Group or Landau, the Law Firm defendants would still not owe any fiduciary duty to plaintiff in his individual capacity ( see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 NY3d 553, 562 [2009];Campbell v. McKeon, 75 AD3d 479, 481 [1st Dept 2010]; Omansky v. 64 N. Moore Assocs., 269 A.D.2d 336, 336 [1st Dept 2000] ).
Plaintiff has also failed to state a common-law fraud cause of action. Plaintiff has failed to indicate how the Law Firm defendants' Fraud in informing plaintiff that they would not alter RWM's regulatory application materials, the backdating of the AHA's corporate documents, and the omission of plaintiff from RWM's regulatory application materials proximately caused any loss or damage ( see Meyercord v. Curry, 38 AD3d 315, 316 [1st Dept 2007]; Friedman v. Anderson, 23 AD3d 163, 167 [2005] ). Nor has he detailed how any he could have detrimentally relied upon any such misrepresentations given that they appear to have occurred after Basch sent his May 16, 2011 letter in which he informed plaintiff that he was only willing to pay plaintiff a “finder's fee” and that he would not include plaintiff in any of the entities set up to purchase RWM ( see Meyercord, 38 AD3d at 316).
TORTIOUS INTERFERENCE WITH CONTRACT, CONSPIRACY, AIDING ABETTING, AND DECLARATORY JUDGMENT CAUSES OF ACTION
As this court has found plaintiff's fraud and breach of fiduciary duty causes of action insufficient, the aiding and abetting and conspiracy causes of action premised on fraud and breach of fiduciary duty must likewise be dismissed ( see Winkler v. Battery Trading, Inc., 89 AD3d 1016, 1017–1018 [2d Dept 2011]; Yuko Ito, 57 AD3d at 207).
The tortious interference cause of action must be dismissed against Landau and Basch because they cannot be charged with tortiously interfering with their own contract ( see Mackie v. La Salle Indus., 92 A.D.2d 821, 823 [1983],appeal dismissed in part59 N.Y.2d 750 [1983],appeal dismissed in part60 N.Y.2d 612 [1983] ). With respect to the other defendants, they may not be held liable for tortious interference with a contract in light of this court's finding that plaintiff has failed to allege the existence of an enforceable contract or agreement ( see Jajernauth v. Massey Knakal Realty Servs., Inc., 104 AD3d 564, 565 [1st Dept 2013]; Moulton Paving LLC v. Town of Poughkeepsie, 98 AD3d 1009, 1012 [2d Dept 2012] ) and given the absence of non-conclusory allegations that these other defendants intentionally procured a third-party's breach of that contract ( see Monex Financial Servs., Ltd. v. Dynamic Currency Conversions, Inc., 76 AD3d 515 [2d Dept 2010]; Schulman v. Continental Insur., 258 A.D.2d 639, 640 [2d Dept 1999]; see also NBT Bancorp v. Fleet/Norstar Fin. Group, 87 N.Y.2d 614, 620–623 [1996] ).
Finally, in the declaratory judgment cause of action, plaintiff alleges that he is entitled to a declaration that he is entitled to obtain title to the entities that own the assets and profits of RWM and Marcus Garvey. As plaintiff's grounds for this declaratory relief rest entirely on the causes of action that this court has found to be insufficient, plaintiff is not entitled to the requested declaration. In the context of a declaratory judgment action, however, the appropriate relief for defendants under such circumstances is not the dismissal of that cause of action, but rather, a declaration that plaintiff does not have title to any of the entities owning or having an interest in RWM or Marcus Garvey ( see Fucile v. L.C.R. Dev., Ltd., 102 AD3d 915, 920 [2d Dept 2013]; Jordan v. Schriro, 96 AD3d 574, 575 [1st Dept 2012]; see also Sweeney v. Cannon, 30 N.Y.2d 633, 634 [1972] ).
ATTORNEYS' FEES AND COSTS UNDER 22 NYCRR 130.1–1
Although this court has found that plaintiff does not have a cause of action against defendants, neither his conduct nor that of his attorneys in bringing this action was frivolous under 22 NYCRR 130.1–1. Accordingly, defendants are not entitled to costs or attorneys' fees.
This constitutes the decision, order and declaratory judgment of the court.