Opinion
Index No. 651955/2023 Motion Seq. No. 002 003
10-08-2024
DENA K. WEINER, Plaintiff, v. RANDY ABEND and RUTH ABEND Defendants RANDY ABEND, Counterclaim Plaintiff, v. DENA K. WEINER and DAVID ROZENHOLC, Counterclaim Defendants RANDY ABEND, Cross-claim Plaintiff, v. RUTH ABEND, Cross-claim Defendant
Unpublished Opinion
DECISION /ORDER ON MOTION
HON. MICHAEL L. KATZ JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 002) 41,42, 43, 44, 45, 46, 55, 57, 58, 59, 60, 61,62, 63, 73, 74, 75, 76 were read on this motion to/for DISMISS
The following e-filed documents, listed by NYSCEF document number (Motion 003) 47, 48, 49, 50, 5152, 53, 54, 56, 64, 65, 66, 67, 68, 69, 70, 71,72, 77 were read on this motion to/for _DISMISS_,
Motion sequence numbers 002 and 003 are consolidated for disposition.
In this action for breach of contract, plaintiff Dena K. Weiner seeks to recover damages in the principal amount of $2,922,500, together with interest to be calculated at the rate of 6% per annum from November 1, 2007, a late charge in the amount of $233,800.00, and costs and expenses, including reasonable attorneys' fees, based on a promissory note allegedly executed by defendants Randy Abend and Ruth Abend (plaintiffs daughter) on November 1, 2007 in connection with a purported loan allegedly made by plaintiff to defendants.
Defendant Randy Abend has asserted affirmative defenses alleging that: (i) the Complaint fails to state a claim or cause of action that is either legally sufficient or upon which relief can be granted (first affirmative defense); (ii) Mr. Abend did not breach any obligation or duty allegedly owed to Ms. Weiner (second affirmative defense); (iii) there was no meeting of the minds required to form a binding contract between Mr. Abend and Ms. Weiner (third affirmative defense); (iv) there was no binding contract between Mr. Abend and Ms. Weiner (fourth affirmative defense); (v) Ms. Weiner is estopped by her own conduct, and the conduct of those acting under her authority, from any relief claimed in the Complaint (fifth affirmative defense); (vi) the acts, omissions and conduct of plaintiff, and those acting under her authority, prevented, precluded or otherwise interfered with any acts or conduct allegedly required to be performed by Mr. Abend (sixth affirmative defense); (vii) the relief sought in the Complaint is precluded by ratification (seventh affirmative defense); (viii) plaintiffs request for relief is barred, in whole or in part, by the applicable statute of limitations and/or the equitable doctrine of laches (eighth affirmative defense); (ix) plaintiff is precluded by fraud, including fraudulent misrepresentation and/or inducement, by herself and/or other individual(s) acting on her behalf (ninth affirmative defense); (x) plaintiff is precluded by the equitable doctrine of unclean hands (tenth affirmative defense); (ix) plaintiff s claim is barred as any alleged contract is unconscionable (eleventh affirmative defense); (xii) plaintiffs claim is barred as any alleged contract was entered into for an illegal purpose (twelfth affirmative defense); (xiii) plaintiffs claim is barred as any alleged contract was the result of undue influence (thirteenth affirmative defense); (xiv) plaintiff has waived the right to assert the claim set forth in the Complaint (fourteenth affirmative defense); and (xv) this action is fatally flawed pursuant to CPLR § 321 l(a)(10) for failure to join necessary parties, including but not limited to David Rozenholc (plaintiffs husband and defendant Ruth Abend's father) and those acting on his behalf (fifteenth affirmative defense).
In addition, defendant Randy Abend has asserted claims: (i) against Ms. Weiner and Mr. Rozenholc for fraudulent misrepresentation and/or inducement (first counterclaim and crossclaim); (ii) against Ms. Weiner for intentional infliction of emotional distress (second counterclaim); (iii) against Mr. Abend, Ms. Weiner and Mr. Rozenholc for unjust enrichment (third counterclaim and cross-claim); (iv) against Ms. Abend, Ms. Weiner and Mr. Rozenholc for undue influence/duress (fourth counterclaim and cross-claim); (v) against Ms. Abend, Ms. Weiner and Mr. Rozenholc for breach of fiduciary duty (fifth counterclaim and cross-claim); (vi) against Ms. Abend, Ms. Weiner and Mr. Rozenholc for aiding and abetting fraud and/or breach of fiduciary duty (sixth counterclaim and cross-claim); (vii) against Ms. Weiner and Ms. Abend for abuse of process (seventh counterclaim and cross-claim); and (viii) against Ms. Abend for common law indemnification (eighth cross-claim).
Defendant Ruth Abend now moves, under motion sequence number 002, for an order:
(1) pursuant to CPLR § 3211(a)(5) and (7), dismissing the cross-claims against her with prejudice for failure to comply with the applicable statute of limitations (see, CPLR § 213 [8]) and failure to state a claim upon which relief may be granted;
(2) dismissing the claims against her for punitive damages;
(3) denying defendant Randy Abend's demand for attorneys' fees; and
(4) directing the Clerk of the Court to enter judgment accordingly.
Plaintiff and counterclaim defendant Rozenholc move, under motion sequence number 003, for an order pursuant to CPLR § 3211(a)(1), (5) and (7), dismissing the counterclaims against them with prejudice on the grounds that they fail to allege any damages or to state a claim upon which relief may be granted.
First counterclaim/cross-claim for fraudulent misrepresentation and/or inducement
In the first counterclaim and cross-claim, defendant Randy Abend seeks: (a) a declaration voiding the collection of any monies from him, or, in the alternative, a direction that Ms. Abend indemnify him for any monies that he may be required to pay; and (b) to recover compensatory and punitive damages against Ms. Weiner and Mr. Rozenholc for fraudulent misrepresentation and/or inducement.
Specifically, he claims that Ms. Weiner and/or Mr. Rozenholc made statements to him on or about 2007, prior to the signing of the alleged promissory note, assuring him that they were gifting the cost of a home in Westport, Connecticut to him and their daughter. He contends Ms. Weiner and/or Mr. Rozenholc "both knew their statements were false and knew or should have known that Mr. Abend, at the time he was asked to sign the alleged promissory note, believed the note was a sham and not binding upon him."
Mr. Abend further claims that "Ms. Weiner and/or Mr. Rozenholc intended to induce [him] into signing the note through their fraudulent misrepresentations, and given their familial position of trust, [he] justifiably relied upon their fraudulent misrepresentations." These misrepresentations, according to Mr. Abend, "included, without limitation, that the monies were being gifted with no strings attached, that the monies would not ever have to be repaid and that the parents/in-laws were happy to give the Abends this money."
Mr. Abend also alleges that during conversations he had with Ms. Abend on unspecified dates "in 2007 and until the divorce proceedings were commenced, Ms. Abend made material representations of fact characterizing the money from her parents in 2007 as a gift." He claims that "Ms. Abend knew, or should have known, that Mr. Abend justifiably relied upon them in believing that the money identified in the alleged note was actually a gift and the alleged note was not binding upon him."
Mr. Abend contends that he "would not have signed the sham promissory note but for his reliance upon statements and representations made by Mr. Rozenholc and subsequently by Ms. Weiner and Ms. Abend."
By Decision/Order dated November 22, 2023, this Court previously denied plaintiff's motion for summary judgment in lieu of complaint, finding that there were triable issues of fact as to whether Mr. Abend was fraudulently induced to sign the note and whether the funds memorialized in the note were intended as a gift rather than a loan.
However, pursuant to CPLR § 213(8), the time within which an action for damages based upon fraud must be commenced "shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it."
Mr. Abend contends that Ms. Abend and her parents continued to lull him into believing that the money was a gift until January 27, 2023, when he received a notice of default from Ms. Weiner's counsel. He contends that he had no way to discover the alleged fraud prior to that date.
However, it is undisputed that Ms. Abend filed a statement of net worth on October 28, 2021 in the context of her action for divorce against Mr. Abend, in which she listed the alleged debt. Mr. Abend thus possessed sufficient knowledge on said date from which he could have reasonably inferred the alleged fraud. See, New York State Workers' Compensation Bd. v Consolidated Risk Services, Inc., 125 A.D.3d 1250, 1254 (2nd Dep't 2015).
The first cross-claim/counterclaim, which was not filed until after October 28, 2023, is, therefore, time barred and must be dismissed against all parties.
Said dismissal is without prejudice to Mr. Abend's affirmative defenses which are not the subject of the instant motion.
Second Counterclaim - Intentional Infliction c f Emotional Distress
In the second counterclaim, Mr. Abend seeks to recover compensatory and punitive damages against Ms. Weiner for intentional infliction of emotional distress.
He alleges that Ms. Weiner, in concert with Mr. Rozenholc and Ms. Abend, (a) instituted the instant action "without factual or legal foundation to do so, for the purpose of causing, or with disregard of a substantial probability of causing, severe emotional distress" to him, and (b) has no other legitimate purpose for pursuing this action, "other than to gain an improper advantage in the equitable distribution of marital assets and deprive Mr. Abend of his fair share."
It is well settled that "the elements of a claim for intentional infliction of emotional distress are (i) extreme and outrageous conduct, (ii) an intent to cause-or disregard of a substantial probability of causing-severe emotional distress, (iii) a causal connection between the conduct and the injury, and (iv) the resultant severe emotional distress (Howell v New York Post Co., 81 N.Y.2d 115, 121 [1993])." Lau v S&M Enters., 72 A.D.3d 497, 498 (1st Dep't 2010).
The alleged conduct must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency and to be regarded as atrocious, and utterly intolerable in a civilized community (citations omitted)." Ratto v Oliva, 195 A.D.3d 870, 873 (2nd Dep't 2021).
Accepting the allegations in the counterclaim as true, this Court finds that defendant Randy Abend has failed to allege conduct that is sufficiently extreme and outrageous as to meet the threshold requirement pleading for a claim for intentional infliction of emotional distress. See, Oluwo v Mills, 228 A.D.3d 879. 881 (2nd Dep't 2024); Grasso v Guarino, 227 A.D.3d 872, 874 (2nd Dep't 2024); Hammond v Equinox Holdings LLC, 193 A.D.3d 586, 586 (1st Dep't 2021).
Third counterclaim and cross-claim - unjust enrichment
In the third counterclaim and cross-claim, Mr. Abend seeks a declaration that alleged loan is null and void.
He alleges that Ms. Weiner's history of financial generosity and close family relationship with Ms. Abend portends a likelihood that any financial benefit to Ms. Weiner will ultimately accrue to Ms. Abend as well. He further contends that it is "against equity and good conscience to permit Ms. Abend, Ms. Weiner and/or Mr. Rozenholc to be unjustly enriched by this Action seeking collection of monies individually and severally against Mr. Abend."
'"The essential inquiry in any action for unjust enrichment... is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered' (citation omitted). A plaintiff must show "that (1) the other party was enriched, (2) at that party's expense, and (3) that 'it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered' (Citibank, N.A. v Walker, 12 A.D.3d 480, 481 [2d Dept 2004]; Baron v Ifizer, Inc., 42 A.D.3d 627, 629-630 [3d Dept 2007])." Mandarin Trading Ltd. v Wildenstein, 16 N.Y.3d 173, 182 (2011).
In the instant case, Mr. Abend's claim is based solely on a hypothetical scenario that he may lose the instant action for breach of contract and that Ms. Weiner may decide to share the money she recovers from Mr. Abend with Ms. Abend. To the extent that Ms. Weiner is able to meet her burden of showing the existence of a bona fide loan, it would not be against equity and good conscience to permit her to retain any monies that she recovers in this action. Moreover, under the circumstances, Ms. Weiner would be free to spend or distribute any monies she recovers as she sees fit.
Therefore, this Court finds that the third counterclaim fails to state a claim upon which relief may be granted.
Fourth counterclaim and cross-claim - undue influence/duress
In fourth counterclaim and cross-claim, Mr. Abend seeks a declaration that the alleged promissory note is void or, in the alternative, an order directing Ms. Abend to indemnify him for any monies that he is required to pay.
Specifically, Mr. Abend alleges that Ms. Abend, Ms. Weiner and Mr. Rozenholc "used their position of superior knowledge, power and/or influence over [him] to induce and/or coerce him to sign the alleged promissory note, telling him he need never worry about this."
He claims that his decision to sign the note was a direct result of the undue influence "which led [him] to fear that his failure to do as they required would result in imminent and substantial harm to his marriage and the security and stability of his family."
"The elements of undue influence are motive, opportunity, and the actual exercise of that undue influence" (Matter of Nofal, 35 A.D.3d 1132, 1134 [3d Dept 2006] [internal quotation marks omitted])." Matter cf Kotick v Shvacho, 130 A.D.3d 472, 473 (1st Dep't 2015). See also, Salitsky v Attanasio, 214 A.D.3d 567, 568 (1st Dept 2023).
"A finding of undue influence requires 'that the influence exercised amounted to a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity which could not be resisted, constrained the testator to do that which was against his free will and desire, but which he was unable to refuse or too weak to resist' (citations and internal quotations omitted)." Matter cf Albert, 137 A.D.3d 1266, 1267 (2nd Dep't 2016). "Economic duress exists when a party is forced to agree to a contract by means of a wrongful threat which precludes the exercise of its free will (citations omitted)." Finserv Computer Corp. v. Bibliographic Retrieval Servs., Inc., 125 A.D.2d 765, 766 (3rd Dep't 1986).
Mr. Abend has failed to allege sufficient facts to show that he signed the note because he was under a moral coercion or wrongful threat which restrained his independent action and destroyed his free agency. To the contrary, Mr. Abend apparently signed the note because he wished to obtain sufficient funds to purchase a luxury home in Connecticut.
Therefore, this Court finds that the fourth counterclaim and cross-claim fails to state a claim for undue influence and/or duress.
Fifth counterclaim and cross-claim -breach of fiduciary duly
In the fifth counterclaim and cross-claim, Mr. Abend seeks to void any alleged note, if otherwise valid, or, in the alternative, an order directing Ms. Abend to indemnify him for any monies that he is required to pay. He also claims that he has incurred unspecified damages.
Mr. Abend alleges that Ms. Weiner, Mr. Rozenholc, and Ms. Abend breached their fiduciary duty to him by, inter alia, (a) inducing him to believe that the money purportedly "loaned" to him was a gift; (b) failing to fully disclose at the time of signing the alleged promissory note and in the years subsequent that the payment that he and Ms. Abend received was not a gift; and (c) knowing at the time of signing the alleged promissory note that he did not have the financial means to repay the "loan" or any basis upon which to reasonably believe that he would have the funds in the future to repay the alleged debt.
He contends that Ms. Weiner, Mr. Rozenholc, and Ms. Abend "have and continue to benefit financially, through tax and estate advantages, as well as the inequitable distribution of marital assets" in the pending matrimonial action.
"The elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct (citations omitted)." Nachbar v Cornwall Yacht Chib, 160 A.D.3d 972, 973 (2nd Dep't 2018). "Such a claim must be pleaded with particularity (see CPLR § 3016[b])." Stang LLC v Hudson Square Hotel, LLC, 158 A.D.3d 446, 446 (1st Dep't 2018).
This Court finds that Mr. Abend has failed to adequately plead the damages that flow from the alleged breach of fiduciary duty. See, Besen v Farhadian, 195 A.D.3d 548, 550 (1st Dep't 2021). See also, Mohinani v Charney, 208 A.D.3d 404, 405 (1st Dep't 2022).
Moreover, Mr. Abend's claim for breach of fiduciary duty is based on allegations of actual fraud and is thus time barred for the reasons set forth with respect to the first counterclaim and cross-claim. See Continental Industries Group, Inc. v Ustuntas, 211 A.D.3d 601, 603 (1st Dep't 2022); Cusimano v Schnurr, 137 A.D.3d 527, 529 (1st Dep't 2016).
Sixth counterclaim and cross-claim - aiding and abetting fraud and/or breach of fiduciary duty
In the sixth counterclaim and cross-claim, Mr. Abend alleges that: (a) Ms. Weiner committed multiple acts of fraud, including but not limited to fraudulently inducing him to sign the alleged promissory note and entering into the alleged promissory note for the purpose of avoiding tax payments which would otherwise be due were the monies rightfully declared a gift; and (b) Mr. Rozenholc and/or Ms. Abend knew of this intent to defraud the federal government and fraudulently induced him to enter into the alleged promissory note, but nonetheless provided substantial assistance to Ms. Weiner by misrepresenting to him that it was a sham document without true legal significance.
The instant claim is time barred pursuant to CPLR § 213(8) for the reasons discussed in connection with the first counterclaim and cross-claim.2
Seventh counterclaim and cross-claim - abuse of process
In the seventh counterclaim and cross-claim against Ms. Weiner and Ms. Abend for abuse of process, Mr. Abend alleges that "Ms. Weiner, with the assistance of Ms. Abend, intends improperly to use this legal proceeding to collect monies on behalf of her daughter, which monies Ms. Abend is not otherwise entitled to in the divorce proceeding."
Mr. Abend further alleges that he has suffered actual damages as a result of Ms. Weiner's 'vexatious lawsuit,' including but not limited to, legal costs and expenses, mental anguish, emotional distress and financial harm arising from damage to his reputation.
"Abuse of process has three essential elements: (1) regularly issued process, either civil or criminal, (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective (citation omitted)." Curiano v Suozzi, 63 N.Y.2d 113 (1984).
However, "the institution of a civil action by summons and complaint is not legally considered process capable of being abused (citation omitted)." Espinoza v A S K Std. Tr. Corp., 226 A.D.3d 564, 565 (1st Dep't 2024).
Moreover, the damages sought in connection with this claim are impermissibly speculative. See, Norcast S.ard. v Castle Harlan, Inc., 147 A.D.3d 666, 667 (1st Dep't 2017).
Therefore, the seventh counterclaim and cross-claim fails to state a claim upon which relief can be granted.
Eighth cross-claim - common law indemnification
In the eighth cross-claim, Mr. Abend alleges that Ms. Abend owed a duty to him "to correct and/or not perpetuate any misimpressions he may have held regarding the 2007 monies given by her parents to purchase the [Abends'] Westport home." He claims that Ms. Abend was negligent in failing to do so and thus responsible for his decision to enter into any promissory note for the benefit of her mother and/or father.
Mr. Abend contends that Ms. Abend should be required to indemnify him for the full amounts this Court may find due and owing or, in the alternative, that "Ms. Abend's voluntary undertaking of an alleged debt solely for the purpose of deliberately reducing and dissipating the value of the marital estate must be accounted for in the ultimate distribution of marital assets." See, DRL §236(B)(5) and §236(B)(6)."
The cross-claim is premature, since there has been no finding what amounts, if any, are due and owing to plaintiff.
Accordingly, it is hereby
ORDERED that the counterclaims and cross-claims are dismissed for the reasons set forth herein; and it is further
ORDERED that a preliminary conference shall be held in Part 24 on November 20, 2024 at 9:30 a.m. This constitutes the decision and order of this Court.