Opinion
2014-04-17
RAFFERTY SAND & GRAVEL, LLC, Respondent, v. Willi KALVAITIS et al., Appellants.
O'Connell & Aronowitz, PC, Plattsburgh (Benjamin S. Barry of counsel), for appellants. Fischer, Bessette, Muldowney & Hunter, Malone (Matthew H. McArdle of counsel), for respondent.
O'Connell & Aronowitz, PC, Plattsburgh (Benjamin S. Barry of counsel), for appellants. Fischer, Bessette, Muldowney & Hunter, Malone (Matthew H. McArdle of counsel), for respondent.
Before: LAHTINEN, J.P., McCARTHY, GARRY and EGAN JR., JJ.
GARRY, J.
Appeal from that part of an order of the Supreme Court (Muller, J.), entered September 18, 2012, which denied defendants' motion to dismiss the amended complaint.
Plaintiff, a supplier of sand and gravel, commenced this action alleging that it entered into a partnership with defendant Willi Kalvaitis (hereinafter defendant) in 2004, for the purpose of developing a limestone quarry on defendant's property in the Town of Chazy, Clinton County, and that in 2011, after plaintiff had expended significant efforts and resources developing and managing the quarry business, defendant changed the locks to the property and refused plaintiff further access. The complaint sought dissolution and an accounting of the partnership, the imposition of a constructive trust on the quarry business and property and, in the alternative, recovery in quantum meruit.
As pertinent here, defendants moved to dismiss the amended complaint in its entirety on several grounds ( seeCPLR 3211[a][1], [3], [5], [7] ). Supreme Court denied the motion, and defendants appeal.
Plaintiff amended the complaint as of right to add defendant Barbara Kalvaitis, defendant's wife and a co-owner of the business.
While this appeal was pending, defendants moved for leave to reargue the order denying their motion to dismiss. In November 2013, Supreme Court granted leave to reargue, determined that it had erred in its prior order by refusing to dismiss the causes of action for dissolution and an accounting of the partnership, and dismissed those causes of action. Accordingly, defendants have received the relief requested with respect to these causes of action, and that part of their appeal has been rendered moot ( see Njoku v. City of New York, 280 A.D.2d 283, 719 N.Y.S.2d 858 [2001];see generally Matter of Neeley v. Town of Colonie, 79 A.D.3d 1560, 1561, 914 N.Y.S.2d 735 [2010] ). As Supreme Court adhered to its original determination relative to the causes of action for imposition of a constructive trust and quantum meruit, however, that aspect of defendants' appeal is unaffected ( seeCPLR 5517[a][1] ).
Supreme Court correctly denied the motion to dismiss the cause of action seeking to impose a constructive trust on the business property. This equitable remedy may be imposed “when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest” ( Sharp v. Kosmalski, 40 N.Y.2d 119, 121, 386 N.Y.S.2d 72, 351 N.E.2d 721 [1976] [internal quotation marks, brackets and citation omitted]; see Matter of Jacobs, 93 A.D.3d 917, 918, 939 N.Y.S.2d 639 [2012] ). To prove entitlement to this relief, a plaintiff must establish “a confidential or fiduciary relationship, a promise, a transfer in reliance thereon and unjust enrichment” ( Enzien v. Enzien, 96 A.D.3d 1136, 1137, 946 N.Y.S.2d 291 [2012];see Cinquemani v. Lazio, 37 A.D.3d 882, 882, 829 N.Y.S.2d 265 [2007] ). The element of transfer has been interpreted to include the expenditure of effort and resources in reliance upon a promise to share in a property interest ( see Moak v. Raynor, 28 A.D.3d 900, 902, 814 N.Y.S.2d 289 [2006];Henness v. Hunt, 272 A.D.2d 756, 757, 708 N.Y.S.2d 180 [2000] ).
Here, the complaint alleges that plaintiff had a confidential or fiduciary relationship with defendant, that defendant made promises that plaintiff and defendant had a partnership and that plaintiff had vested rights and interests in the quarry business and property, that plaintiff relied on these promises and the fiduciary relationship in contributing resources to develop the business, and that defendant breached these promises and would be unjustly enriched in the absence of a constructive trust. Deeming these allegations to be true, construing them liberally, and granting plaintiff the benefit of every favorable inference, as we must ( see Delaware County v. Leatherstocking Healthcare, LLC, 110 A.D.3d 1211, 1213, 973 N.Y.S.2d 817 [2013] ), we find that the amended complaint adequately states a cause of action for the imposition of a constructive trust ( see Vopelak v. Tedeschi, 281 A.D.2d 809, 810, 722 N.Y.S.2d 125 [2001];Henness v. Hunt, 272 A.D.2d at 756–757, 708 N.Y.S.2d 180;Maynor v. Pellegrino, 226 A.D.2d 883, 884–885, 641 N.Y.S.2d 155 [1996] ).
The cause of action in quantum meruit requires a showing of “a plaintiff's performance of services in good faith, acceptance of those services by a defendant, an expectation of compensation and proof of the reasonable value of the services provided” ( DerOhannesian v. City of Albany, 110 A.D.3d 1288, 1292, 975 N.Y.S.2d 188 [2013],lv. denied 22 N.Y.3d 862, 2014 WL 642724 [2014];see Thomas J. Hayes & Assoc., LLC v. Brodsky, 101 A.D.3d 1560, 1561, 957 N.Y.S.2d 473 [2012],lv. denied21 N.Y.3d 851, 2013 WL 1300638 [2013] ). The complaint alleges that plaintiff acted in good faith and in the expectation of compensation in making the previously-discussed contributions to the business, that defendant accepted its services and contributions, and that plaintiff has been damaged in the amount of the reasonable value of its contributions. Plaintiff further submitted the affidavit of its principal ( seeCPLR 3211[a][7]; Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ), alleging that plaintiff contributed more than $200,000 toward the business as well as all of the knowledge, labor, equipment and other resources necessary for its development, that a substantial amount of processed material that it had paid to create remained on the property when plaintiff was locked out in 2011, and that defendants have continued to benefit from plaintiff's contributions thereafter by selling materials from the business without compensating plaintiff accordingly. Thus, despite defendants' contention that plaintiff's services were performed primarily for its own benefit, we agree with Supreme Court that the complaint states a cause of action in quantum meruit ( see Venture Silicones, Inc. v. General Elec. Co., 14 A.D.3d 924, 925, 788 N.Y.S.2d 479 [2005];see also Goldstein v. Derecktor Holdings, Inc., 85 A.D.3d 728, 728–729, 924 N.Y.S.2d 804 [2011] ).
ORDERED that the appeal from that part of the order denying defendants' motion to dismiss the first and second causes of action is dismissed, as moot, without costs.
ORDERED that the part of the order denying defendants' motion to dismiss the third and fourth causes of action is affirmed, without costs.
LAHTINEN, J.P., McCARTHY and EGAN JR., JJ., concur.