Opinion
No. 15799/11.
08-06-2014
Michael RICATTO, Plaintiff, v. Frank ALMONA, Thomas Almona and Advance Fleet Maintenance, Inc., Defendant(s).
Robert Rotman, Esq., New York City, attorney for plaintiff. Leonard Falcone, Esq., Hempstead, attorney for defendants.
Robert Rotman, Esq., New York City, attorney for plaintiff.
Leonard Falcone, Esq., Hempstead, attorney for defendants.
Opinion
CAROLYN E. DEMAREST, J.
The defendants Frank Almona (“Frank”) and Thomas Almona (“Thomas”) move pursuant to Civil Practice Law and Rules §§ 3211(a)(7) and 3211(a)(1) for an order dismissing the complaint alleging the breach of an oral partnership agreement and seeking the dissolution of the partnership, an accounting and money damages, and for an order granting summary judgment, pursuant to CPLR § 3212.
The complaint fails to separately identify any cause of action, but is merely a recitation of plaintiff's grievances, the alleged partnership terms and plaintiff's contributions thereto (see CPLR § 3014, requiring separate causes of action to be separately stated and numbered).
BACKGROUND
Plaintiff alleges in the complaint that in or about 2003, Plaintiff and Frank entered into an oral agreement establishing a partnership for the operation of a vehicle maintenance business located at 391 Leonard Street and 75 Frost Street in Brooklyn, New York. Plaintiff alleges that he was a partner of Frank Almona in the operation of Frank's corporate business, Advanced Fleet Maintenance, Inc. (“Advance Fleet Maintenance”). In the complaint, Plaintiff claims that Frank ran the partnership through Frank's corporation, co-defendant Advance Fleet Maintenance, and that between 2003 and March 2011, Plaintiff contributed cash, gold coins, and foregone and unpaid rent in furtherance of the partnership agreement, and that all of the profits were to be divided equally between Plaintiff and Frank. While plaintiff alleges that payments were made to him when the business profited, plaintiff claims that in April 2011, after the defendants moved out of the plaintiff's premises in March 2011, Frank stopped making such payments. Plaintiff claims damage to Plaintiff's real property in the course of the move and that defendants stole unidentified property. Plaintiff contends that profits from the partnership were extracted by the defendants, which were not shared with him. Plaintiff seeks an accounting, dissolution of the partnership, sale of the property of the partnership, with the surplus divided between Plaintiff and Defendants, and damages of $2,731,000 for fraud, misrepresentation, and negligence.
In support of their motion to dismiss pursuant to CPLR § 3211(a)(7) , Defendants argue that assuming such partnership existed, the contributions Plaintiff alleges he made to the partnership are at best capital contributions which Plaintiff placed at risk in forming the partnership. Since Advance Fleet Maintenance is now in bankruptcy, Defendants argue that, pursuant to New York Partnership Law § 40(1) , no cause of action exists because capital contributions cannot be repaid if there is no asset or profit. Further, Defendants argue that Thomas could not be liable for the alleged partnership's debts since he is not alleged to have been a partner in the alleged partnership.
CPLR § 3211(a)(7) provides that a party may move for judgment dismissing one or more causes of action asserted against him on the ground that the pleading fails to state a cause of action.
New York Partnership Law § 40(1) states, in pertinent part, that each partner shall be repaid his contributions and share in the profits and surplus remaining after all liabilities are satisfied.
In support of their motion to dismiss, pursuant to CPLR § 3211(a)(1) , Defendants presented two leases: one between Plaintiff and Allboro Engine, dated March 28, 2004, and a second between Plaintiff and Advance Fleet Maintenance, dated May 16, 2004. Defendants argue that these leases require dismissal of Plaintiff's allegation that he contributed $1.9 million in foregone and unpaid rent to the partnership because the lease to Advance Fleet Maintenance, executed by Frank as President of Advance Fleet Maintenance, for a period of five years at a monthly rent, created a contractual relationship between Plaintiff and Advanced Fleet Maintenance and does not mention a partnership and does not contain a personal guarantee by Frank. Therefore, the only party involved in this case that could be liable for rent is Advance Fleet Maintenance, which is in bankruptcy. With regard to Plaintiff's allegation that Defendants damaged Plaintiff's real property, Defendants argue that Advance Fleet Maintenance is the only party that may be liable for the alleged damage because Thomas was acting as an employee and officer of Advanced Fleet Maintenance during the move. Again, Defendants assert that Plaintiff must seek their remedy in the Bankruptcy Court since Advance Fleet Maintenance is in bankruptcy. Reiterating their argument for dismissal pursuant to CPLR 3211, defendants Frank and Thomas also move for summary judgment in this matter, contending that there are no material facts in dispute. Regarding the alleged rents due, Defendants argue that summary judgement should be granted as to Frank and Thomas since they were not parties to the leases. Further, Defendants assert that Plaintiff has not produced a “single shred” of evidence to prove that a partnership ever existed between Frank and Plaintiff, and that Plaintiff has failed to even plead all necessary elements of a partnership.Plaintiff opposes the motion, reiterating that beginning in 2003, he injected capital and provided premises rent free to the partnership. Plaintiff argues that there is material evidence that would lead a trier of fact to conclude that Plaintiff and Frank did enter into a partnership agreement, including Frank's admission at deposition that Plaintiff had input into the financial transactions of Advanced Fleet Maintenance, that Plaintiff injected capital and covered expenses of Advanced Fleet Maintenance, that Plaintiff and Frank shared profits of the business, and that Plaintiff contributed to the rent of Advanced Fleet Maintenance. However, in a deposition held on August 12, 2009, given in an action brought by Atlantic Express Transportation Corp against defendant Advanced Fleet Maintenance (Kings County Index No. 30630/06), plaintiff testified that he was an employee of Advanced Fleet Maintenance (Exhibit B to Reply Affidavit of Frank Almona), as defendants contend. Advance Fleet Maintenance filed for chapter 11 bankruptcy protection, pursuant to Chapter 11 of the United States Bankruptcy Code (11 USC § 101, et seq ), on July 8, 2013 in the United States Bankruptcy Court for the Eastern District of New York, triggering the automatic stay of all judicial proceedings against it (see 11 USC § 362 [a] ).
CPLR § 3211(a)(1) provides that a party may move for judgment dismissing one or more causes of action asserted against him on the ground that a defense is found upon documentary evidence.
By Order of Judge Ann Pfau dated July 11, 2013, this action was severed and stayed as against defendant Advanced Fleet Maintenance.
DISCUSSION
A. Motion to Dismiss
Under CPLR § 3211(a)(7), dismissal is warranted if the pleading fails to state a cause of action. In considering such a motion, “the court must accept the facts alleged by the plaintiff as true and liberally construe the complaint, according it the benefit of every possible favorable inference” (Dee v. Rakower, 112 AD3d 204 [2d Dept 2013], citations omitted). “The role of the court is to determine only whether the facts as alleged fit within any cognizable legal theory” (id. ). “Therefore, a complaint is legally sufficient if the court determines that a plaintiff would be entitled to relief on any reasonable view of the facts stated” (id. ). “Whether a plaintiff can ultimately establish his or her allegations is not part of the calculus” (id. ).
CPLR § 3014 provides that separate causes of action shall be separately stated and numbered. Since Plaintiff does not separately state a cause of action for damages to his real property and for stolen property or for dissolution and an accounting, these claims are dismissed without prejudice (cf. Matter of Dekom v. Trani, 109 AD3d 769, 770 [2d Dept 2013] ). The only remaining cause of action set forth in the complaint is the breach of the oral partnership agreement.
Accepting the facts alleged in the complaint as true and according the Plaintiff the benefit of every possible inference, the complaint sufficiently alleges the elements of a breach of contract cause of action to survive a motion to dismiss pursuant to CPLR § 3211(a)(7). “The essential elements for pleading a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach” (id. ). With regard to Frank, Plaintiff alleges that there was an oral partnership agreement between them, that Plaintiff contributed to the partnership, and that Frank withheld Plaintiff's share of the profits from the partnership. However, since the gravamen of plaintiff's complaint is the alleged partnership, plaintiff must also allege the necessary elements of such relationship, including a mutual promise to share in profits and “submit to the burden of making good the losses” (Community Capital Bank v. Fischer & Yanowitz, 47 AD3d 667, 668 [2d Dept 2008] ).
Plaintiff alleges that his partnership with Frank operated through Frank's corporation, but that he was not a shareholder in Advanced Fleet Maintenance. There is clearly an inconsistency in such allegation, especially given the substantial evidence that Plaintiff was actually an employee of Advanced Fleet Maintenance. In his Statement of Material Facts, Plaintiff states that he “became the nominal chief financial officer” of Advanced Fleet Maintenance and “contributed to Advanced's expenses from time to time”. It appears that, assuming Plaintiff was actually a “partner” of Frank, Plaintiff is seeking to recoup contributions Plaintiff made to Advanced Fleet Maintenance as his capital investment in the partnership. As Defendants argue, since Plaintiff, as a “partner” is expected to share losses, as well as profits, the bankruptcy of Advanced Fleet Maintenance establishes that there is unlikely to be any assets from which Plaintiff might recover his capital investment under Partnership Law § 40(1). If Advanced Fleet Maintenance has been the beneficiary of Plaintiff's contributions or investment, as Plaintiff alleges (both as lessee of Plaintiff's property and as his apparent employer), Plaintiff's recourse is against Advanced Fleet Maintenance, which is in bankruptcy. The Court is advised that the instant suit has been scheduled as a disputed claim in the bankruptcy proceeding. At the very least, this action must be stayed pending the bankruptcy proceeding (see 11 USC § 362 [a]; Torre v. Fay's Inc., 259 A.D.2d 896, 897 [3d Dept 1999] ).
As to Thomas, Plaintiff does not allege in the complaint that the partnership agreement included Thomas. The complaint is therefore dismissed against Thomas. It is noted that, as Thomas' only role in Plaintiff's claims appears to be his negligence and/or larceny during Advanced's removal from Plaintiff's premises, again, Plaintiff's remedy lies against Thomas' employer, Advanced Fleet Maintenance.
On a motion to dismiss a complaint pursuant to CPLR § 3211(a)(1), the burden is on the movant to provide documentary evidence that “utterly refutes [the] plaintiff's factual allegations” and “conclusively establishes a defense to the asserted claims as a matter of law” (Goshen v. Mut. Life Ins. Co. of New York, 98 N.Y.2d 314, 326 [2002] ). Contrary to the defendants' contentions, the documentary evidence that they submitted does not conclusively establish, as a matter of law, a defense to the breach of contract cause of action insofar as asserted against Frank. Defendants provided leases between Plaintiff and Allboro Engine, Inc. and between Plaintiff and Advanced Fleet Maintenance for the period 2004 through March 2009. In his deposition, Frank stated that the leases were signed in 2007 or 2008, and that no payments of rent were made under the leases. The leases do not “utterly refute” the plaintiff's allegation that there was an oral agreement creating a partnership with Frank through which he provided space for Advanced Fleet Maintenance to operate the business of the partnership, and that Frank breached the agreement by failing to pay Plaintiff his portion of the profit while taking profit for himself. Therefore, the defendants have not provided documentary evidence that meets the requirements set forth in CPLR § 3211(a)(1).
Accordingly, the motion to dismiss the complaint against Frank is denied.
B. Motion for Summary Judgment
A motion for summary judgment may only be granted if, “upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party” (CPLR § 3212[b] ). The burden is on the party seeking summary judgment to “make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985] ). “Failure to make this showing requires denial of the motion, regardless of the sufficiency of the moving papers” (id. ). Once “the moving party has demonstrated its entitlement to summary judgment, the party opposing the motion must demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action” (Zuckerman v. City of New York, 49 N.Y.2d 557, 560 [1980] ). “A motion for summary judgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility (Lopez v. Beltre, 59 AD3d 683, 685 [2d Dept 2009] ). “Moreover, the parties' competing contentions must be viewed in a light most favorable to the party opposing the motion” (Marine Midland Bank, N.A. v. Dino & Artie's Automatic Transmission Co., 168 A.D.2d 610 [1990] ).
Regarding the alleged partnership between Plaintiff and Frank, Frank has not established that a judgment in his favor should be granted as matter of law as he has not met his burden of tendering sufficient evidence to eliminate any material issues of fact from the case. In his deposition testimony addressing the claim that a partnership existed, Frank stated that he and Plaintiff were not partners but that they shared the profits, that their businesses were intertwined, and that Plaintiff had some influence over the financial aspects of Frank's business. While Frank said he was the sole owner of Advanced Fleet Management, he also said that Plaintiff would pay bills from his own funds on behalf of Advance Fleet Management when Frank was unable to pay them. There are therefore issues of fact that cannot be conclusively resolved on the motion papers, thus precluding summary judgment. Moreover, the claims herein may be determined in the bankruptcy proceeding of Advanced Fleet Maintenance and it would be inappropriate to proceed to determine the issues before this Court until the outcome of the bankruptcy is known.
CONCLUSION
Accordingly, the defendants' motion to dismiss is granted as to Thomas and is denied as to Frank. The action continues to be stayed as against Advance Fleet Maintenance. The defendants' motion for summary judgment is denied. The parties are directed to appear at 11 AM on October 29, 2014 for a status conference.
The foregoing constitutes the decision and order of the court.