Opinion
Index No. 514327/2013 Motion Seq. No. 1 NYSCEF Doc. No. 28
12-21-2023
ARTHUR SPITZER, individually and on behalf of J & M PROSPECT PLACE ENTERPRISES LLC, Plaintiff, v. MENDEL DEUTSCH, 1097 PROSPECT PLACE NY LLC, RELMO 1097 PROSPECT PLACE LLC, and J & M PROSPECT PLACE ENTERPRISES LLC, nominal defendant, Defendants,
Unpublished Opinion
DECISION AND ORDER
Hon. Leon Ruchelsman, JSC
The defendant Relmo 1097 Prospect Place LLC has moved pursuant to CPLR §3211 seeking to dismiss the complaint. The plaintiff opposes the motion. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination.
According to the complaint the plaintiff Arthur Spitzer and the defendant Mendel Deutsch are each half owners of an entity called J & M Prospect Place Enterprises LLC [hereinafter J & M]. On October 21, 2014 J & M purchased property located at 1097 Prospect Place in Kings County for $3,050,000.00. The parties obtained a loan in the form of a mortgage from Investors Bank in the amount of $2,287,500.00. The parties intended to renovate the premises, however, due to various factors, defaulted on the loan. According to the complaint, to avoid foreclosure Deutsch suggested to Investors Bank to sell the mortgage to a third party. Thus, on July 18, 2022 Investors assigned the mortgage to defendant. Relmo 1097 Prospect Place LLC. The complaint alleges that prior to the assignment Deutsch, without the consent of Spitzer, conveyed the deed to another entity called 1097 Prospect Place NY LLC. The complaint asserts that entity is owned by the same individuals that own Relmo 1097 Prospect Place LLC. Spitzer instituted this lawsuit and has asserted derivative and individual claims against Deutsch for a breach of fiduciary duty, claims for usurpation of corporate Opportunity, a declaratory judgement, a claim Under RPAPL Article 15 and unjust enrichment.
Relmo 1097 Prospect Place LLC has now moved seeking to dismiss the action against it on the grounds there are really no allegations of any wrongdoing against it contained in the complaint at all. As noted, the motion is opposed.
Conclusions of Law
It. is well settled that Upon a motion to dismiss the court must determine, accepting the allegations of the complaint as true, whether the party can succeed upon any reasonable view of those facts (Ripa v. Petrosyants, 203 A.D.3d 768, 160 N.Y.S.3d 658 [2d Dept., 2022]). Further, all the allegations in the complaint are deemed true and all reasonable inferences; may be drawn in favor of the plaintiff (BT Holdings, LLC v. Village of Chester, 189 A.D.3d 754, 137 N.Y.S.2d 458 [2d Dept., 2020]). Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a pre-discovery CPLR §3211 motion- to dismiss (see. Redwood Property Holdings, LLC, v. Christopher, 211 A.D.3d 758., 177 N.Y.S.3d 895 [2d Dept., 2022]).
A- review of the complaint reveals that, except for the last cause of action, it does not discuss or allege any wrongdoing by Relmo 1097 Prospect Place LLC at all. The only information the complaint contains in reference to Relmo 1097 Prospect Place LLC is the fact Investors Bank assigned the mortgage to that entity (see, Verified: Complaint, ¶14 [NYSCEF Doc. No. 1]) and that Deutsch improperly conveyed the deed to 1097 Prospect Place NY LLC which is wholly or jointly owned by Relmo 1097 Prospect Place LLC. The complaint does allege that the transfer caused damage to the plaintiff (see, Verified Complaint, ¶18 [NYSCEF Doc. No. 1]) however, none of the causes of action, except for the last cause of action, concern Relmo 1097 Prospect Place LLC. Thus, the first, fourth and fifth causes of action are all derivative: and only concern J a M. The second cause of action is an individual breach of fiduciary claim directed at Deutsch as a member of J &M. The third cause of action, usurpation of corporate opportunity, is based on the fact that Deutsch, as a member of J & M owed duties to the plaintiff. None of these causes of action even mention Relmo 1097 Prospect Place LLC and surely do not contain any valid claims against that entity.
The last cause of action alleges unjust enrichment. The elements of a cause of action to recover for unjust enrichment are that "(1) the defendant was enriched, (2) at the plaintiff's expense, .and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered" (see, GFRE, Inc., v. U.S. Bank., N.A., 130 A.D.3d 569, 13. N.Y.S.3d 452 [2d Dept,, 2015]). Thus, "the essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered" (see, Paramount Film Distributing Corp., 30 N.Y.2d 415, 344 N.Y.S.2d 388 [1972]). The complaint states that "Defendants New 1097 LLC and/or Relmo Prospect have been unjustly enriched by and through the fraudulent transfer of the Premises to Defendant New 1097 LLC for a mere payment or $10,000.00, though the Premises has a fair market value in the millions" (see, Verified Complaint, 5153 [NYSCEF Doc. No. 1]). While it is true that earlier the Complaint asserted that the deed had been improperly transferred to 1097 Prospect Place NY LLC and not to Relmo 1097 Prospect Place LLC, the complaint also asserted that 1097 Prospect Place NY LLC is "wholly owned by Relmo Prospect or is jointly owned by Relmo Prospect and Defendant Deutsch" (see, Verified Complaint, ¶15 [NYSCEF Doc. No, 1]). Thus, the complaint does assert allegations of potential improper conduct that must be explored. Relmo 1097 Prospect Place LLC argues that "there can be no dispute that an adequate remedy at law exists such that this Court, should, not entertain the equitable cause of action of unjust enrichment" (see. Memorandum of Law in Support, page 10 [NYSCEF Doc. No. 16]). However, it is not necessarily true that the plaintiff must confer a benefit but rather that a benefit has been conferred and that such benefit is improper. Therefore, the complaint has adequately alleged that Relmo 1097 Prospect Place LLC has obtained a benefit that is unjust. Of course, further discovery will narrow these issues: and will perhaps reveal the strength of the allegation. However, at this juncture, this cause of action has merit.
Therefore, the motion seeking to dismiss all the' causes of action except for the cause of action for unjust enrichment, there can be no dispute that an adequate remedy at law exists such that this Court should not entertain the equitable cause of action of unjust enrichment. ___ they are both ___. The complaint does not explain the nature of any misappropriation, the nature of the "company funds", what was misappropriated and the nature of any account information or key assets in defendant's possession. The vague and conclusory nature of facts fails to adequately support the allegation. Consequently, the motion seeking to dismiss the fourth cause of action is granted. Therefore, based on the foregoing the motion seeking to dismiss the lawsuit is granted.
So ordered.