Opinion
Index No. CV-8866-21
10-28-2021
SELLAS LIFE SCIENCES GROUP, INC., Plaintiff, v. 38TH STREET SUITES, LLC Jay Suites I, LLC Jay Suites II, LLC, Defendants
McMAHON, MARTINE & GALLAGHER, LLP, Attorneys for Plaintiff, By: Siobhain A. McSweeney, Esq., 55 Washington Street, Suite 720, Brooklyn, New York 11201 JEFFREY S. DWECK, ESQ, Attorney for Defendants, 43 West 43rd Street, Suite 304, New York, New York 10001, 212.967.0500
McMAHON, MARTINE & GALLAGHER, LLP, Attorneys for Plaintiff, By: Siobhain A. McSweeney, Esq., 55 Washington Street, Suite 720, Brooklyn, New York 11201
JEFFREY S. DWECK, ESQ, Attorney for Defendants, 43 West 43rd Street, Suite 304, New York, New York 10001, 212.967.0500
PROCEDURAL HISTORY
Sabrina B. Kraus, J.
Plaintiff commenced this action pursuant to a summons and complaint filed on April 8, 2021, seeking $9,312.31 for failure to return a security deposit and related claims.
Defendants appeared by counsel and filed an answer and counterclaim dated June 1, 2021. The answer asserts six affirmative defenses including: failure to mitigate damages; failure to name a necessary party; unjust enrichment; and failure to state a cause of action. The answer also asserts a counterclaim for attorneys’ fees.
THE PENDING MOTIONS
On August 19, 2021, plaintiff moved for an order dismissing defendants’ counterclaim. On October 19, 2021, defendants moved for summary judgment and related relief. On October 19, 2021, the motions were marked fully submitted. On October 22, 2021, the motions were assigned to this court for determination. The motions are consolidated herein for determination. Both motions are denied for the reasons set forth below.
DISCUSSION
Plaintiff's Motion to Dismiss the Counterclaim for Attorneys’ Fees is Premature
Plaintiff seeks to dismiss, pursuant to CPLR § 3211(a)(1), the counterclaim asserted by defendants for legal fees. Plaintiff argues that the license agreement between the parties only allows for attorneys’ fees in the event plaintiff had defaulted on the agreement and there is no allegation before the court asserting a default by plaintiff.
Defendants argue that the language of the fees provision is broad enough to encompass this litigation. Paragraph 6 (c) of the parties license agreement provides in pertinent part:
Licensee agrees to pay all costs and expenses, including reasonable attorney's fees, expended or incurred by Licensor in connection with the enforcement of the Agreement, the collection of any sums due hereunder, any action for declaratory relief in anyway related to this Agreement, or the protection or preservation of any rights of Licensor hereunder.
Notwithstanding the fact that this provision is included under the heading of "DEFAULT", the language of the provision would entitle defendants to attorneys’ fees, if defendants successfully defend this lawsuit, as the successful defense of the law suit would constitute protection and preservation of defendants’ rights under the agreement. In order to make a determination on the attorneys’ fees claim. the court must determine whether defendants are the prevailing party [see eg Paramount Leasehold, L.P. v. 43rd St. Deli, Inc. , 173 AD3d 421, 422 (2019) ].
At this juncture, whether defendants will be a prevailing party in this action and thus entitled to legal fees has not yet been determined. Based on the foregoing, plaintiff's motion to dismiss the counterclaim for attorneys’ fees is denied. For the same reasons, defendants’ cross-motion for summary judgment on the counterclaim is also denied.
Defendants motion to dismiss as against Jay Suites I LLC and Jay Suites II LLC is Denied
It is well settled that a CPLR § 3211(a)(1) motion to dismiss on the ground that the action is barred by documentary evidence may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law [ Goshen v. Mut. Life Ins. Co. of New York, 98 NY2d 314, 326 (2002) ]. Defendants’ motion is based on the fact that the Jay Suites LLCs were not parties to the license agreement, however the cause of action based on conversion is not dependent on the license agreement, and the check pursuant to which a portion of the security deposit was returned was issued by all three defendants in this action.
Additionally, plaintiff has alleged that the Jay Suites LLCs acted as agents for the landlord and participated in the surrender and delivery of the subject premises. An agent may be liable for breach of contract, where as here, the agent is alleged to have made a payment due under the contract, and the agent becomes subrogated to the rights of the principal, with which plaintiff had a contractual relationship [ Horn v. Toback, 44 Misc 3d 42, 46 (App. Term 2014) ].
Based on the foregoing, defendants motion for dismissal pursuant to CPLR§ 3211(a)(1) against the Jay Suites defendants is denied.
Defendants Cross-Motion for Summary Judgment is denied
To obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing judgment’ in his favor ( CPLR 3212, subd. (b) ), and he must do so by tender of evidentiary proof in admissible form.
Zuckerman v. City of New York , 49 NY2d 557, 562 (1980).
In this action, defendants’ summary judgment motion is supported by an unsworn statement of Juda Srour. This is not an affidavit in admissible form and this defect alone warrants denial of the summary judgment motion. However, even if the affidavit had been submitted in proper form, summary judgment would still be denied, as there are questions of fact pertaining to the issue of whether the deductions taken by defendants were warranted.
Based on the foregoing, defendants’ motion for summary judgment is denied.
The Balance of the Relief Sought in Defendants’ Motion Has Been Considered and Is Also Denied
Defendants seek to dismiss three causes of action in the complaint, based on failure to state a cause of action. Only two causes of action have been asserted in the complaint.
A motion to dismiss for failure to state a cause of action assumes the truth of the material allegations and everything reasonably to be implied therefrom. See Foley v. D'Agostino, 21 AD2d 60, 65, 248 N.Y.S.2d 121. In determining such a motion, it is not the function of the court to evaluate the merits of the case, Carbillano v. Ross , 108 AD2d 776, 777, 485 N.Y.S.2d 110, or express an opinion as to plaintiff's ability to ultimately establish the truth of the averments. 219 Broadway Corp. v. Alexander's, Inc. , 46 NY2d 506, 509, 414 N.Y.S.2d 889, 387 N.E.2d 1205. Rather, the plaintiff must be "given the benefit of every possible favorable inference", Rovello v. Orofino Realty Co. , 40 NY2d 633, 634, 389 N.Y.S.2d 314, 357 N.E.2d 970, and the motion to dismiss will fail if, "from [the pleading's] four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law". Guggenheimer v. Ginzburg, 43 NY2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17.
Khan v. Newsweek, Inc. , 160 AD2d 425, 426 (1990).
Both causes of action are sufficiently stated to withstand the motion.
Plaintiff has established the existence of a contract, and alleged its own performance under the contract as well as defendants breach and damages. These allegations set forth a cause of action for breach of contract. a contract ( Harris v. Seward Park Hous. Corp., 79 AD3d 425, 426 [1st Dept. 2010] ; Markov v. Katt , 176 AD3d 401, 401—02 [2019] ).
A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession (State of New York v. Seventh Regiment Fund , 98 NY2d 249, 746 N.Y.S.2d 637, 774 N.E.2d 702 [2002] ). Two key elements of conversion are (1) plaintiff's possessory right or interest in the property ( Pierpoint v. Hoyt , 260 NY 26, 182 N.E. 235 [1932] ; Seventh Regiment Fund, 98 NY2d at 259, 746 N.Y.S.2d 637, 774 N.E.2d 702 ) and (2) defendant's dominion over the property or interference with it, in derogation of plaintiff's rights ( Employers’ Fire Ins. Co. v. Cotten , 245 NY 102, 156 N.E. 629 [1927] ; see also Restatement [Second] of Torts §§ 8A, 223, 243 ; Prosser and Keeton, Torts § 15, at 92, 102 [5th ed.]).
Colavito v. New York Organ Donor Network, Inc. , 8 NY3d 43, 49—50 (2006)
The security deposit of plaintiff was allegedly held in a joint account by all three defendants and was not returned after the parties contractual relationship had ended. These allegations are sufficient to plead a cause of action for conversion.
Based on the foregoing the motion to dismiss based on failure to state a cause of action is denied.
WHEREFORE IT IS HEREBY ORDERED that both plaintiff's motion and defendants’ cross-motion are denied in their entirety.
This constitutes the decision and order of this court.