Opinion
No. 2023-50132 Index No. 651111/2019
02-21-2023
Regal Jewelry and Gift Shop LLC, Plaintiff, v. Lloyd Klein, Defendant.
Lazarus & Lazarus, P.C., New York, NY (Yvette J. Sutton of counsel), for plaintiff. Duane Morris LLP, New York, NY (Anthony L. Gallia of counsel), for defendant.
Unpublished Opinion
Lazarus & Lazarus, P.C., New York, NY (Yvette J. Sutton of counsel), for plaintiff.
Duane Morris LLP, New York, NY (Anthony L. Gallia of counsel), for defendant.
Gerald Lebovits, J.
This action arises from the purchase of fine jewelry by defendant, Lloyd Klein, from plaintiff, Regal Jewelry and Gift Shop LLC. Regal claims that Klein and nonparty Jocelyn Wildenstein agreed to pay $268,000 for the jewelry, that Klein and Wildenstein's checks bounced, and that Klein and Wildenstein refused to return the jewelry. Regal has asserted claims against Klein for breach of contract, goods sold and delivered, conversion, fraud, and unjust enrichment.
Regal previously moved for summary judgment on all its claims. Regal contended that it had previously purchased the jewelry from a company known as Adar Enterprises Inc. Regal supported this contention with an Adar Enterprises memo referencing the jewelry. (See NYSCEF No. 58 [reproducing memo].) That memo, though, contained language indicating that the referenced jewelry was being "delivered... for EXAMINATION AND INSPECTION only," that it remained the property of Adar Enterprises, and that "NO RIGHT OR POWER IS GIVEN TO YOU TO SELL" the jewelry absent agreement from Adar and "a bill of sale rendered therefore." (Id. [capitalization in original].) No separate bill of sale was provided. Additionally, the memo gave an address for Adar in the Diamond District of Manhattan. But, as defendant contended, the records of the New York Secretary of State indicated that Adar Enterprises had been dissolved as a corporation in 2016, before the putative sale of the jewelry from Adar to Regal.
This court concluded, in a decision delivered on the record in March 2022, that these two issues sufficed to create a dispute of material fact about whether Regal had rightful ownership or custody of the jewelry, as required to support its breach-of-contract and goods-sold-and-delivered claims against Klein. (See NYSCEF No. 99 at Tr. 10-15 [transcript of decision delivered on the record].) With respect to the conversion, fraud, and unjust enrichment claims, this court denied Regal's motion, and granted summary judgment to Klein as the nonmoving party, on the ground that these claims each duplicated the breach-of-contract cause of action, and were subject to dismissal on that basis. (See id. at Tr. 15-19.) These motion dispositions were set down in a short-form order. (NYSCEF No. 98.)
Regal now moves for leave to reargue that order under CPLR 2221 (d) with respect to Regal's breach-of-contract claim, and to renew under CPLR 2221 (e) with respect to that claim. On the branch of the motion seeking leave to renew, Regal contends that it has submitted new evidence that fully addresses both grounds relied on by this court in denying summary judgment. This court agrees. The branch of Regal's motion for leave to renew is granted. On renewal, Regal's motion for summary judgment on its breach-of-contract claim is granted. The branch of Regal's motion seeking leave to reargue is denied as academic.
Given this disposition, the court need not reach Klein's argument that the reargument branch of the motion is untimely. Regardless, that argument is without merit. Reargument motions must be brought within 30 days of service of notice of entry of the underlying order, not within 30 days of entry. (See CPLR 2221[d] [3].) Neither party served notice of entry of this court's summary-judgment order. The 30-day reargument period thus never began to run.
DISCUSSION
Renewal motions "generally should be based on newly discovered facts that could not be offered on the prior motion." (Mejia v Nanni, 307 A.D.2d 870, 871 [1st Dept 2003].) And, as defendant contends, the evidence offered by Regal-an affirmation from the owner of Adar Enterprises and supporting exhibits-could have been offered on the prior motion.
Plaintiff asserts that it was not on notice of the need to obtain this evidence because defendant did not raise doubts about Adar's legal status and the language of the Adar memo until its sur-reply papers. (See NYSCEF No. 108 at ¶ 10 & n 1.) This court finds that assertion unpersuasive. The basic question of the ownership and custody of the jewelry had been central throughout consideration of Regal's summary-judgment motion. Indeed, an earlier decision by this court, directing supplemental discovery while the summary-judgment motion was pending, emphasized the importance of this question to the litigation. (See Regal Jewelry & Gift Shop LLC v Klein, 2021 NY Slip Op 50790[U], at *2 [Sup Ct, NY County Aug. 15, 2021].) Additionally, Regal had an opportunity in surrebuttal papers to respond to the arguments raised by Klein in his sur-reply, including the arguments about Adar's legal status and the Adar memo. Regal could have, but did not, include in that sur-reply the documents it offers on this motion.
This court granted the parties leave to file sur-reply and surrebuttal papers that took into account the additional discovery provided under this court's August 2021 order. (See 2021 NY Slip Op 50790[U], at *3.)
At the same time, the Appellate Division, First Department, has repeatedly held that a motion court may properly relax the renewal requirement that new evidence have been previously unavailable, where doing so would be "'in the interest of justice.'" (BLDG ABI Enters., LLC v 711 Second Ave Corp., 116 A.D.3d 617, 518 [1st Dept 2014], quoting Mejia, 307 A.D.2d at 871.) Here, if Regal is correct that the affirmation and exhibits submitted on this motion establish Regal's right to sell the jewelry at issue, that evidence, combined with the other evidence already in the record, would establish Regal's entitlement to summary judgment. In that scenario, it would be unfair and a waste of resources (both those of the parties and of this court) to force Regal to go to trial to prove an already-established claim. Conversely, if the affirmation and exhibits do not dispel the concerns raised by this court in its prior summary-judgment decision, the parties can proceed as they would have anyway absent the motion. This court therefore concludes that considering the evidence now submitted by Regal would be in the interest of justice. Leave to renew is granted.
On renewal, this court agrees with Regal that its new evidence fully addresses the two ownership-related issues identified by this court in its summary-judgment ruling.
First, the question of Adar Enterprises's corporate status. The point that Klein raised on sur-reply, and that this court found persuasive, was that a New York corporation called Adar Enterprises Inc. had been dissolved before Adar (assertedly) sold the jewelry to Regal. That dissolution, in turn, raised a factual question about the legitimacy of the Adar-to-Regal sale. Regal now provides an affirmation from the owner of a New Jersey corporation called Adar Enterprises Inc. This affirmation represents that it was Adar New Jersey, not Adar New York, that maintained a New York place of business in the Diamond District, generated the memo referencing the jewelry, and sold the jewelry to Regal. (See NYSCEF No. 103.) The affirmation also attaches a certificate of good standing from the New Jersey Secretary of State, attesting that Adar New Jersey was formed in 2002 and was in good standing as of June 2022. (NYSCEF No. 104.)
Klein does not attempt to provide a reason still to believe that Regal had purchased (or purported to purchase) the jewelry from the dissolved Adar New York, rather than from Adar New Jersey, as Regal now maintains. At most, Klein contends that Regal's new evidence is not sufficient because Regal has not shown that Adar New Jersey was a corporation in good standing as of 2017 and 2018, as opposed to June 2022. (See NYSCEF No. 107 at ¶ 7.) But, unlike with Adar New York, Klein has not provided a reason to doubt that Adar New Jersey was then in business as a corporation. Put differently: Regal has put forward evidence that it properly purchased the jewelry from a New Jersey corporation called Adar Enterprises. Given that evidence, it is on Klein to submit evidence raising a question of fact about whether that New Jersey corporation was in business. Klein has not done so.
Second, the question of the proper interpretation of the Adar Enterprises memo. At summary judgment, this court found persuasive Klein's argument that it was unclear, given the preprinted language of the memo, whether Regal had the legitimate right to sell the jewelry to third parties (e.g., Klein). Regal has emphasized, then and now, that the memo also contains handwritten notations stating that the price of the jewelry was "200000.00" and "Paid in Full-1-5-2017 CK 1480." (NYSCEF No. 58.) Contrary to Regal's argument (NYSCEF No. 101 at 7), these notations alone are insufficient to show as a matter of law that Regal had properly bought the jewelry from Adar. To the contrary, the conflict between the preprinted restrictions and the handwritten notes would, in isolation, raise precisely the sort of factual dispute that a jury should resolve.
But on this motion, Regal shows through the affirmation of Adar's owner that this conflict does not exist in isolation. The affirmation represents that under the affiant's usual business practice at the time, a "Paid in Full" notation on an Adar memo would reflect that Adar had sold the item described in the memo to a purchaser and received payment for the item. (See NYSCEF No. 103 at ¶¶ 11-12.) The affirmation further represents that in the particular case of the jewelry at issue here, Adar received full payment for the jewelry from Harry Adjmi, acting on Regal's behalf; and that the "Paid in Full" notation on the memo was added after Adar received that payment. (Id. at ¶¶ 13-15.) The affirmation also attaches an image of a January 5, 2017, check (No. 1480) for $200,000 from Harry Adjmi to Adar for a "necklace set." (NYSCEF No. 106.) Taken together, this evidence-which Klein does not attempt to rebut-sufficiently shows that that the handwritten notation on the memo takes precedence over the memo's preprinted restrictive language. Regal has thus demonstrated that it properly purchased from Adar the jewelry that Regal later sold to Klein. And Regal has already established as a matter of law that Klein failed to pay for his purchase.
Accordingly, it is
ORDERED that the branch of Regal's motion seeking leave to renew under CPLR 2221 (e) is granted, and on renewal Regal's motion under CPLR 3212 seeking summary judgment on Regal's breach-of-contract claim is granted; and it is further
ORDERED that the branch of Regal's motion seeking leave to reargue under CPLR 2221 (d) is denied as academic; and it is further
ORDERED that Regal is awarded a judgment against Klein for $250,000, with interest running at the statutory rate from April 7, 2018; and it is further
ORDERED that Regal serve a copy of this order with notice of its entry on Klein and on the office of the County Clerk, which shall enter judgment accordingly.