Opinion
7795/04.
Decided September 25, 2007.
Motion by defendants for an order granting them summary judgment and cross-motion by plaintiff for an order striking defendants' affirmative defenses are consolidated for the purpose of this decision and are decided as follows:
Plaintiff Florita Moreschi (Moreschi) commenced this action against defendants Michael DiPasquale (DiPasquale) and American Sirloin Meat Co. Inc. a/k/a American Sirloin Meat and Poultry Co. Inc. (American Sirloin) in 2004, seeking to impose a constructive trust on American Sirloin's assets as well as on DiPasquale's real and personal property.
There are four requirements that must be met for the imposition of a constructive trust: a confidential or fiduciary relationship; a promise; a transfer in reliance on the promise; and unjust enrichment.
The events leading up to this action date back to the mid-1970's, when Moreschi and DiPasquale began their personal and business relationship. Defendant DiPasquale acknowledges that, during a 26-year period, he and plaintiff lived together, but also had periods when they lived apart. According to plaintiff, she and DiPasquale started American Sirloin in the mid-70's, and they were partners until DiPasquale discontinued both their business relationship and their personal relationship.
Defendants now seek to dismiss plaintiff's action pursuant to CPLR 3211, based on their affirmative defenses, and pursuant to CPLR 3212. Plaintiff seeks, in her cross-motion, to dismiss each of defendants' affirmative defenses, pursuant to CPLR 3211(b), on the ground that they have no merit.
In that portion of defendant's motion which seeks summary judgment pursuant to CPLR 3212, if plaintiff shows facts sufficient to require a trial of an issue of fact, summary judgment must be denied.
In this case, plaintiff's cause of action for a constructive trust is based on plaintiff's contention that defendant had promised, over the course of their personal and business relationship, to share equally with her, the income, profits and assets of American Sirloin. Defendant denies that plaintiff's funds were used to fund the company and denies that he promised to share the company with her. In fact, he argues that he is a victim of his generosity to plaintiff.
Plaintiff claims that, over the course of their relationship, defendant made promises that the company belonged equally to each of them. The stock of the company was originally owned entirely by plaintiff and plaintiff's daughter, an arrangement apparently made for defendant's convenience. Although plaintiff and her daughter transferred all of the stock in the company to defendant in 1980, defendant promised, according to plaintiff, that, at some future time, he would transfer 50% of the stock back to her.
Plaintiff also points to a "will" that defendant wrote in 1986, when they were separating temporarily (Exhibit M). In this document, which is handwritten and signed by defendant, he proposes that plaintiff can have a number of his assets, "if she will give me American." This was at a time when he owned 100% of American Sirloin's stock.
In addition, there is an affidavit from Shelly Kaplan, a person who states that she was a friend of plaintiff and defendant in the early 1990's. Ms. Kaplan claims that defendant spoke of American Sirloin as being owned by both defendant and his plaintiff "wife", and that he often said that he and plaintiff had worked together to make the business successful.
Based on the above, the court finds that plaintiff has raised a triable issue of fact. Therefore, that portion of defendant's motion seeking summary judgment pursuant to CPLR 3212 is denied.
As regards defendant's motion to dismiss the complaint, pursuant to CPLR 3211, and plaintiff's cross-motion for an order striking the affirmative defenses, the court will treat each ground individually.
The defendants' affirmative defenses in their Answer, dated March 16, 2004, are as follows: first, "unclean hands and in addition, [plaintiff] was married to another individual during most of this period of time"; second, "plaintiff has been guilty of laches"; third, "no writings sufficient to satisfy the requirements of the statute of frauds (General Obligations Law)"; fourth, "(t)he complaint should be dismissed . . . as time barred by the statue of limitations"; fifth, "(p)laintiff ratified all actions done by the defendants" and; sixth, "(t)he complaint does not state a cause of actions (sic)."
Defendant's affirmative defense that plaintiff had unclean hands, to the extent that it is based on her marriage to someone else for most of the period of the relationship between plaintiff and defendant, is not relevant to plaintiff's action for a constructive trust. The confidential relationship between plaintiff and defendant is not negated by plaintiff's marriage, which was known to defendant. To the extent that there are other facts supporting this defense, the viability of the affirmative defense turns on the credibility of the parties.
The affirmative defense of laches is not a basis for dismissing the complaint. In order to support the defense of laches, defendant must show that the plaintiff has been guilty of undue delay and that the delay has been prejudicial (see Siegel's New York Practice § 36). In this case, plaintiff claims that, as of 2000, and after a separation, again in 2002, defendant said that he would share American Sirloin with plaintiff. The court finds that plaintiff's commencement of this action in 2004 does not constitute undue delay. In any event, defendant has not shown that the delay in the commencement of the action has been prejudicial. Thus, laches is unavailable as an affirmative defense, as a matter of law.
The defense of statute of frauds is not applicable to this action for a constructive trust. By its very nature, a constructive trust does not require a writing (see Crow Realty Co., v. Crown Heights Jewish Community Council, 175 AD2d 151 [2nd Dept, 1991]).
Whether or not the defense of statute of limitations is applicable to this case is a question of fact. According to plaintiff's testimony, as noted earlier, defendant promised, in both 2000 and 2002, to share American Sirloin with her. These dates are well within the six year statute of limitations, for a constructive trust.
As regards the defense of ratification, its viability is dependant on questions of credibility, i.e., whether one believes plaintiff that she relied on a promise by defendant to share American. As a result, this is a question of fact and cannot be decided as a matter of law (see Brunetti v. Musallam , 11 AD3d 280 [1st Dept 2004]).
As regards defendant's affirmative defense that the complaint does not state a cause of action, the court will treat this affirmative defense in the context of the motion for summary judgment. As has already been noted, the court finds that there are questions of fact which preclude granting summary judgment to defendants.
In sum, defendants' motion to dismiss the complaint is denied. As regards the cross-motion by plaintiff, only those affirmative defenses as to which there is no question of fact may be dismissed. Therefore, based on the above, plaintiff's motion to dismiss the affirmative defenses is granted only to the extent of dismissing defendants' affirmative defenses of laches and statute of frauds.
Accordingly, defendants' motion to dismiss the complaint and for summary judgment is denied and plaintiff's motion to dismiss the defendants' affirmative defenses is granted only to the extent stated above.
This constitutes the Decision and Order of the Court.