FILED: NEW YORK COUNTY CLERK 12/29/ :49 PM INDEX NO /2014 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 12/29/2014

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1 FILED: NEW YORK COUNTY CLERK 12/29/ :49 PM INDEX NO /2014 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 12/29/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK The Clementine Company, LLC, -against- plaintiff, Eco-Life Holdings Corporation; Yuxiang Jiang; and Gemstone Assets Management, LLC, Eco-Life Holdings Corporation, -against- defendants. third party-plaintiff, Cathy Russell, Andrew Hyatt, William Q. Brothers III, and Interactive Development Association, third-party defendants. Index No /2014 I.A.S. Part 63 (Coin, J.) Index No /2014 I.A.S. Part 63 (Coin, J.) MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS PURSUANT TO CPLR 3211(a)(7) THE LAW OFFICE OF IHSAN DOGRAMACI 1120 Avenue of the Americas, 4 th Floor New York, New York tel: (212) fax: (646) Attorneys for The Clementine Company, LLC, Catherine Russell and Armand Hyatt December 29, 2014

2 TABLE OF CONTENTS Preliminary Statement... 1 Factual and Procedural Background Argument... 4 I. LEGAL STANDARD... 4 II. ECO-LIFE S FRAUD CLAIMS AGAINST CLEMENTINE, MS. RUSSELL AND MR. HYATT MUST BE DISMISSED. 4 A. Eco-Life fails to allege with particularity a misrepresentation B. Eco-Life fails to allege with particularity the falsity of any statement C. Eco-Life fails to allege with particularity either Clementine s or Ms. Russell s or Mr. Hyatt s deceptive intent D. Eco-Life fails to allege with particularity any justifiable reliance... 9 E. Eco-Life fails to allege with particularity an injury III. IV. ECO-LIFE S CONVERSION CLAIM AGAINST CLEMENTINE MUST BE DISMISSED 11 ECO-LIFE S PROMISSORY ESTOPPEL CLAIM AGAINST MS. RUSSELL AND MR. HYATT MUST BE DISMISSED V. ECO-LIFE S UNJUST ENRICHMENT CLAIM AGAINST CLEMENTINE, MS. RUSSELL AND MR. HYATT MUST BE DISMISSED Conclusion. 16 i

3 TABLE OF AUTHORITIES Cases Casso v. Kaplan, 16 Misc. 3d 1130(A), 2007 WL (Sup. Ct., Kings County 2007)... 9 CIFG Assurance N. Am., Inc. v. Bank of America, N.A., 41 Misc. 3d 1203(A), 2013 WL (Sup. Ct., N.Y. County Sept. 23, 2013)... 6 Colavito v. N.Y. Organ Donor Network, Inc., 8 N.Y.3d 43 (2006) Corona Treasures LLC v. Star Home Designs, LLC, 42 Misc. 3d 1224(A), 2013 WL (Sup. Ct., Kings County 2013) Danaan Realty Corp. v. Harris, 5 N.Y.2d 317 (1959)... 9 Ferreyr v. Soros, 116 A.D.3d 407 (1st Dep t 2014) FNF Touring LLC v. Transform Am. Corp., 111 A.D.3d 401 (1st Dep t 2013)... 5 Gregor v. Rossi, 120 A.D.3d 447 (1st Dep t 2014),... 6 IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132 (2009) Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413 (1996) LaSalle Nat l Bank v. Ernst & Young, 285 A.D.2d 101 (1st Dep t 2001)... 4 Leon v. Martinez, 84 N.Y.2d 83 (1994)... 4 Lucker v. Bayside Cemetery, 114 A.D.3d 162 (1st Dep t 2013) Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173 (2011)... 5 MatlinPatterson ATA Holdings LLC v. Federal Express Corp., 87 A.D.3d 836 (1st Dep't 2011) Mooney v. Tanabe, 19 Misc. 3d 1115(A), 2008 WL (Sup. Ct., N.Y. County 2008) Nat l Westminster Bank v. Weksel, 124 A.D.2d 144 (1st Dep t 1987)... 8 NYCTL Trust v. 573 Jackson Ave. Realty Corp., 55 A.D.3d 454 (1st Dep t 2008)... 5 Riverbay Corp. v. Thyssenkrupp Northern Elev. Corp., 116 A.D.3d 487 (1st Dep t 2014)... 6, 9 Rogowsky v. McGarry, 55 A.D.3d 815 (2d Dep t 2008) Stuart Lipsky P.C. v. Price, 215 A.D.2d 102 (1st Dep t 1995)... 4 Tourneau, LLC v. 53rd and Madison Tower Dev. LLC, 27 Misc. 3d 953 (Sup. Ct., N.Y. County 2010) Villacorta v. Saks Inc., 32 Misc.3d 1203(A), 2011 WL (Sup. Ct., N.Y. County 2011) Weinstein v. City of New York, 103 A.D.3d 517 (1st Dep t 2013)... 6 Zanett Lombardier, Ltd. v. Maslow, 29 A.D.3d 495 (1st Dep t 2006)... 8 Zutty v. Rye Select Broad Market Prime Fund, L.P., 33 Misc. 3d 1226(A), 2011 WL (Sup. Ct., N.Y. County 2011)... 7 Statutes N.Y. CPLR 3016(b)... 4 N.Y. LLC Law ii

4 Preliminary Statement This action is to collect unpaid rent for billboard space in the Times Square district. Defendant Eco-Life Holdings Corporation sublet the space from plaintiff The Clementine Company, LLC and now owes $1.32 million under the sublease. Previously Eco-Life argued to this Court that the sublease is really a nullity, and even that the $220,000 rent already paid by Eco-Life to Clementine should be returned to it. On October 8, 2014, the Court rejected Eco-Life s argument and held that, according to the sublease s unambiguous wording, Eco-Life is plainly in breach of the sublease. Now Eco-Life is attempting once again to put forward the same position previously rejected by this Court, but under a new guise. 1 Based on inadequately alleged claims of fraud, Eco-Life once again insists on what this Court has already rejected: that the sublease is a nullity and that Eco-Life s old $220,000 in rent payments should be undone. Demonstrating its willingness to use heavy-handed tactics in its effort to avoid its obligations, Eco-Life has also sued individual officers of Clementine Catherine Russell and Armand Hyatt (incorrectly and inexplicably named by Eco-Life as Andrew Hyatt) on essentially the same claims fabricated against Clementine. By this motion, Clementine, Ms. Russell and Mr. Hyatt move to dismiss all of Eco-Life s claims against them. 1 Eco-Life also continues to put forward the same false allegation that Clementine has already strenuously denied by affidavit in another proceeding between the parties: Eco- Life falsely claims that Clementine made some sort of promise to compensate Eco-Life s advisor William Brothers (or Brothers company) if Eco-Life sublet Clementine s billboard space. (Compare Affirmation of Ihsan Dogramaci, Esq. in Supp. of Mot. to Dismiss Pursuant to CPLR 3211(a)(7) [hereafter Dogramaci Aff. ], Exhibit 7 (Eco- Life s Third Party Compl.) 20 with Dogramaci Aff., Exhibit 2 (Clementine s Ver. Pet.), 35.) This allegation is without any basis whatsoever and if necessary Clementine will prove it to be false.

5 Factual and Procedural Background This case is still in the pleading stage. It was commenced by Clementine on April 28, At that time, the only parties were plaintiff Clementine and defendant Eco-Life. The allegations were simple: Eco-Life had sublet from Clementine the space for a billboard in the Times Square district, and Eco-Life had breached the sublease by failing to pay the rent. (See Dogramaci Aff., Exhibit 1 (Summons and Compl.) and Exhibit A thereto (a copy of the sublease).) Under the sublease, Eco-Life promised to pay $110,000 per month for 14 months. Eco-Life also promised to pay the last four months rent, $440,000, in advance. But Clementine had never received anything more than $220,000 (half of which was delivered to Clementine not by Eco-Life but by another company at the direction of Eco- Life s controlling shareholder). Clementine s Complaint therefore sought the balance of the $440,000 advance plus the monthly rent that had already accrued, and a declaration that the remaining months rent would be due at the appropriate time. On June 12, 2014, Eco-Life moved to dismiss the Complaint, arguing that the sublease between Clementine and Eco-Life contains a condition precedent according to which (allegedly) no obligations are triggered unless Eco-Life pays the $440,000 deposit to Clementine. According to Eco-Life s motion, Clementine s receipt of only $220,000 for Eco-Life s rent, and Eco-Life s failure to pay the remainder of the $440,000 deposit, left the sublease a nullity and required Clementine to return to Eco-Life the $220,000. (See Dogramaci Aff., Exhibit 3.) On October 8, 2014, the Court denied Eco-Life s motion entirely. (See Dogramaci Aff., Exhibits 5 & 6.) The Court held that the written sublease unambiguously 2

6 does not contain a condition precedent. The Court held that, to the contrary, Eco-Life s failure to complete payment of the $440,000 deposit was a breach by Eco-Life of the sublease. As stated by the Court: Defendant [Eco-Life] concedes that it transferred $220,000 to plaintiff at the time of the execution of the sublease or shortly thereafter but contends that its failure to deliver the balance voids the contract. As plaintiff [Clementine] notes, the sublease provides the rights and obligations of the parties became effective immediately upon both parties execution of it. While [Eco-Life] s failure to complete its deposit would be a breach permitting [Clementine] to suspend its performance, [Eco-Life] cannot argue that its own breach renders the sublease a nullity. (Dogramaci Aff., Exhibit 6 (Oct. 8, 2014, Tr.) 10:8-17 (emphasis supplied).) 2 Following the Court s denial of Eco-Life s motion, Eco-Life, on November 7, 2014, answered the Complaint and asserted three counterclaims against Clementine: (1) for fraud, alleging that Clementine induced Eco-Life s execution of the sublease by a misrepresentation; (2) for conversion, by Clementine s having accepted and held $220,000 given to it for Eco-Life s rent; and (3) for unjust enrichment, again by Clementine s having accepted and held $220,000 given to it for Eco-Life s rent. The next business day November 10, 2014 Eco-Life filed a third-party complaint asserting nearly the same claims against Clementine s agents Catherine Russell and Armand Hyatt. 2 A separate proceeding between Clementine and Eco-Life was commenced and concluded following Eco-Life s declaration of itself to be judgment proof: Clementine sought pre-action disclosure to identify the owners of Eco-Life. See In the Matter of the Application of The Clementine Company, LLC to Compel Disclosure Pursuant to CPLR 3102(c) from Eco-Life Holdings Corporation and Yuxiang Jiang, Index No /2014. On October 8, 2014, the Court, exercising its discretion, declined to order pre-action disclosure, on the ground that an action had already been commenced against Eco-Life. (See Dogramaci Aff., Exhibit 4.) Since then, Clementine has filed an Amended Complaint in this action naming two additional defendants as Eco-Life s alter ego. (See Dogramaci Aff., Exhibit 9.) 3

7 In the third-party complaint, the claims are for (1) fraud; (2) promissory estoppel, and (3) unjust enrichment. From these individuals, Eco-Life seeks its $220,000 in rent payments as well as punitive damages that Eco-Life precisely spells out to ensure there is no mistake: punitive damages in the sum of one million dollars ($1,000,000.00). Argument I. LEGAL STANDARD Under the usual pleading standard (which does not apply to fraud claims), a court deciding a CPLR 3211(a)(7) motion must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Leon v. Martinez, 84 N.Y.2d 83, (1994). Even under this liberal pleading standard, however, allegations consisting of bare legal conclusions... are not entitled to such consideration. Stuart Lipsky P.C. v. Price, 215 A.D.2d 102, 103 (1st Dep t 1995). Fraud claims have a heightened pleading standard: They must be pleaded with particularity. See CPLR 3016(b) ( Where a cause of action... is based upon... fraud..., the circumstances constituting the wrong shall be stated in detail. ). That means each element must be pleaded with particularity. LaSalle Nat l Bank v. Ernst & Young, 285 A.D.2d 101, 109 (1st Dep t 2001) (emphasis supplied). II. ECO-LIFE S FRAUD CLAIMS AGAINST CLEMENTINE, MS. RUSSELL AND MR. HYATT MUST BE DISMISSED Eco-Life s fraud claims require that Eco-Life allege, for each of Clementine, Ms. Russell and Mr. Hyatt, a misrepresentation or a material omission of fact which was false and known to be false by [Clementine, Ms. Russell and Mr. Hyatt], made for the purpose of inducing 4

8 [Eco-Life] to rely upon it, justifiable reliance of [Eco-Life] on the misrepresentation or material omission, and injury. FNF Touring LLC v. Transform Am. Corp., 111 A.D.3d 401, 401 (1st Dep t 2013) (quoting Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 178 (2011)). Against each of Clementine, Ms. Russell and Mr. Hyatt, Eco-Life s Answer and its Third Party Complaint fails to allege any of these elements. A. Eco-Life fails to allege with particularity a misrepresentation Regarding the first element of a fraud claim a misrepresentation or a material omission Eco-Life plainly has opted for the affirmative misrepresentation theory of fraud rather than a material omission theory. If Eco-Life s fraud claim were based on allegations of a material omission rather than an affirmative misrepresentation, then Eco-Life would have had to include an allegation of a confidential or fiduciary relationship. FNF Touring, 11 A.D.3d at 401 (quoting NYCTL Trust v. 573 Jackson Ave. Realty Corp., 55 A.D.3d 454, 454 (1st Dep t 2008)). But Eco-Life makes no suggestion of a confidential or fiduciary relationship. In support of its affirmative misrepresentation theory, however, Eco- Life fails to identify the alleged misrepresentation with particularity. Against Clementine, Eco-Life s only allegation of a misrepresentation is as follows: [P]laintiff [Clementine] materially misrepresented that more than one hundred companies were willing to advertise space from the defendant [Eco-Life] if the defendant leased the premises from the plaintiff. (Dogramaci Aff., Exhibit 7 (Ans.) 20.) There is no further allegation. And against Ms. Russell and Mr. Hyatt, Eco-Life s allegation of a misrepresentation is no better. Eco-Life merely alleges: 5

9 Russell and Hyatt had made false representations to Jiang and Eco-Life.... Those representations included, but were not limited to, that well over one hundred corporations who[m] Russell had spoken with, would be eager to purchase advertising on the sign that Eco-Life would be installing at the premises. (Dogramaci Aff., Exhibit 8 (Third Party Compl.) ) This is the sum total of the allegations concerning a supposed misrepresentation. This sort of paraphrase of an otherwise unidentified statement does not meet the CPLR s and the First Department s requirement of pleading the affirmative misrepresentation with particularity. The rule is that a plaintiff must allege specific facts with respect to the time, place, [and] manner in which [the defendants] made the purported misrepresentations. Riverbay Corp. v. Thyssenkrupp Northern Elev. Corp., 116 A.D.3d 487, 488(1st Dep t 2014) (emphasis supplied) (reversing trial court s denial of motion to dismiss fraud claim, because plaintiff had pleaded neither the time, nor the place, nor the manner of the alleged misrepresentation). Just as in Riverbay, similarly in Gregor v. Rossi, 120 A.D.3d 447 (1st Dep t 2014), the First Department reversed the Supreme Court s denial of a motion to dismiss, explaining that [f]raud and fraudulent inducement are not pleaded [by the plaintiff] with the requisite particularity..., because the words used by defendants and the date of the alleged false representations are not set forth. Id. at 447 (emphasis supplied). 3 3 See also Weinstein v. City of New York, 103 A.D.3d 517, 518 (1st Dep t 2013) (dismissing fraudulent inducement claim because plaintiff s pleading alleges only that plaintiff was led to believe that defendants would not interfere with his subsequent job search, and fails to identify any statement by defendants or any speaker ); CIFG Assurance N. Am., Inc. v. Bank of America, N.A., 41 Misc. 3d 1203(A), 2013 WL , at *4 (Sup. Ct., N.Y. County Sept. 23, 2013) (holding that complaint failed to identify specific statements in support of fraud claim). 6

10 Here, Eco-Life s allegation of an affirmative misrepresentation leaves one guessing as to when and where these alleged misrepresentations were made, and what, in particular, was said. Of the three persons against whom fraud is claimed Clementine, Ms. Russell, and Mr. Hyatt one cannot even tell which of them was the speaker of the alleged misrepresentation. By disregarding CPLR 3016(b), Eco-Life improperly avoids having to confront questions that might arise about the alleged statement. If Eco-Life were to comply with CPLR 3016(b) by identifying particular words stated at a particular time and place, then the Court may find, as a matter of law, that the words amount[] to no more than an expression of hope and future expectation or opinion and puffery, rather than an affirmative misrepresentation. See, e.g., JJM Sunrise Auto., LLC v. Volkswagen Group, Index No /2014, 2014 WL , at *17 (Sup. Ct., Nassau County Nov. 6, 2014). Dismissal of the claim would then be warranted on that ground. Eco-Life cannot spare itself from addressing such questions by vaguely alleging a misrepresentation without identifying who said what and when and how. Eco-Life s attempt to allege a misrepresentation without particularity is prohibited by CPLR 3016(b). B. Eco-Life fails to allege with particularity the falsity of any statement Because Eco-Life fails even to identify an alleged statement with particularity, it is impossible to consider whether Eco-Life has adequately alleged the falsity of the purported statement. Regardless, Eco-Life must plead with particularity that the statement was false. A mere conclusory allegation that there was a misrepresentation does not satisfy the requirement. See Zutty v. Rye Select Broad Market Prime Fund, L.P., 33 Misc. 3d 1226(A), 2011 WL , at *14 (Sup. Ct., N.Y. County 2011) ( Plaintiff s fraud claim... must also be dismissed on the ground that plaintiffs fail to 7

11 allege the falsity of any representation. Plaintiff s assertion that these representations... were false at the time such representations were made... merely restate[s] the legal requirement of alleging falsity. This is insufficient to support a fraud claim. ). C. Eco-Life fails to allege with particularity either Clementine s or Ms. Russell s or Mr. Hyatt s deceptive intent As emphasized by the First Department: [P]lainly no cause of action for fraud is made out, nor can one be effectively answered and defended, when the subjective element of fraud is summarily alleged without supporting factual detail. Nat l Westminster Bank v. Weksel, 124 A.D.2d 144, 149 (1st Dep t 1987). Thus, the requirement of particularity is not satisfied if it is merely alleged that a defendant knew his or her statement to be false: A single allegation of scienter, standing bare like that merely asserting that the defendant had knowledge without additional detail concerning the facts constituting the alleged fraud, is insufficient under the special pleading standards required under CPLR 3016(b). Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536, 554 (1985). Here, Eco-Life s pleadings set forth nothing but a bare allegation that all three of Clementine, Ms. Russell and Mr. Hyatt knew that the alleged (vaguely described) misrepresentation was false. (Dogramaci Aff., Exhibit 7 (Ans.) 21; Exhibit 8 (Third Party Compl.) 53.) Eco-Life s purported basis for inferring such knowledge on the part of any of them is left entirely stated. Hence, this is yet another reason to dismiss the fraud claim against all three of them. As in National Westminster Bank and in Credit Alliance, so here, the pleadings inadequately allege deceptive intent. See Zanett Lombardier, Ltd. v. Maslow, 29 A.D.3d 495, (1st Dep t 2006) ( The conclusory statement of intent did not adequately plead sufficient details of scienter. ). 8

12 D. Eco-Life fails to allege with particularity any justifiable reliance A claim for fraud requires not just reliance by the allegedly defrauded party, but justifiable reliance. The general rule is: [I]f the facts represented are not matters peculiarly within the [defendant's] knowledge, and the [plaintiff] ha[d] the means available to him of knowing, by the exercise of ordinary intelligence, the truth, or the real quality of the subject of the representation, he must make use of those means, or he will not be heard to complain that he was induced to enter into the transaction by misrepresentations. Danaan Realty Corp. v. Harris, 5 N.Y.2d 317, 322 (1959) (internal quotation marks omitted). As with all the elements of fraud, this element must be pleaded with particularity, and failure to do so is a ground for dismissal. See, e.g., Riverbay Corp. v. Thyssenkrupp Northern Elev. Corp., 116 A.D.3d 487, (1st Dep t 2014) (dismissing fraud claim and explaining that plaintiff fails to allege any facts to explain why it could not, with reasonable diligence, have discovered the alleged fraud.... ). Faced with inadequate allegations of justifiable reliance, New York courts have not hesitated to grant motions to dismiss fraud claims. For example, in Casso v. Kaplan, 16 Misc. 3d 1130(A), 2007 WL (Sup. Ct., Kings County 2007), the Supreme Court, granting a motion to dismiss, held: In regards to plaintiff's claim for fraud in the inducement, plaintiff has failed to allege any facts sufficient to establish justifiable reliance.... Aside from the conclusory statement that [plaintiff s] reliance was justifiable under the circumstances, plaintiff has not alleged any facts to suggest that there was a relationship of trust or confidence between [defendant] and [plaintiff] or any facts to suggest exactly why any alleged reliance on the part of [plaintiff] was justified. 9

13 2007 WL , at *4 (reading plaintiff for the court s references to the deceased person whose estate was administered by the named plaintiff); see also Tourneau, LLC v. 53rd and Madison Tower Dev. LLC, 27 Misc. 3d 953, 961 (Sup. Ct., N.Y. County 2010) ( In the absence of any allegations that [plaintiff] attempted to verify the representations by which it was allegedly misled during the negotiations for the lease, the claim for fraudulent inducement fails to adequately allege [plaintiff s] justifiable reliance, as a matter of law, and must be dismissed. ); Mooney v. Tanabe, 19 Misc. 3d 1115(A), 2008 WL , at *4 (Sup. Ct., N.Y. County 2008) (dismissing fraud claim under CPLR 3211 because, on plaintiff s own allegations, any reliance [by plaintiff]... was unreasonable ). Here, Eco-Life s pleadings do nothing to explain why Eco-Life would have justifiably relied on an alleged misrepresentation by Clementine, an alleged misrepresentation by Ms. Russell, or an alleged misrepresentation by Mr. Hyatt. Eco- Life s failure to allege justifiable reliance is yet one more reason to dismiss its fraud claims against Clementine, Ms. Russell and Mr. Hyatt. E. Eco-Life fails to allege with particularity an injury Even the allegation of injury is inadequately pleaded by Eco-Life. Under New York law, a plaintiff s recovery for entering a contract induced by fraud is computed by ascertaining the difference between the value of the bargain which [the] plaintiff was induced by fraud to make and the amount or value of the consideration exacted as the price of the bargain. Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421 (1996). Questions about what might have been, had there been no contract, are not relevant. Id. ( [T]here can be no recovery of profits which would have been realized in the absence of [the transaction]. ). 10

14 According to the Third Party Complaint, Eco-Life was injured in the amount of two hundred twenty thousand dollars ($220,000.00) [that] Eco-Life gave to Clementine. (Dogramaci Aff., Exhibit 8 (Third Party Compl.) 35.) But, on the other side of the equation, Eco-Life entered a valuable sublease. Eco-Life s pleadings provide no basis for speculating that the value of the sublease was less than the rent Eco-Life paid. Hence this element of the fraud claim is pleaded no better than the other elements. Furthermore, half of the $220,000 that Eco-Life alleges as its injury is money that was given to Clementine not by Eco-Life but by another company: Gemstone Assets Management, LLC. Copies of the checks are found in Exhibit 2 to the Dogramaci Affirmation, as Exhibit H to Clementine s Verified Petition in the pre-action disclosure proceeding. Eco-Life must admit that Gemstone is its alter ego if Eco-Life wishes to claim Gemstone s out of pocket expense as its own. III. ECO-LIFE S CONVERSION CLAIM AGAINST CLEMENTINE MUST BE DISMISSED Eco-Life s failure adequately to allege its fraud claim requires the dismissal of Eco-Life s counterclaim against Clementine for conversion. For without the fraud claim, the sublease between Clementine and Eco-Life necessarily governs Eco- Life s and Clementine s relations. The $220,000 rent payment that Eco-Life seeks to recoup under its conversion counterclaim was made to Clementine only because the sublease obligates Eco-Life to pay rent. Hence Clementine s acceptance and retention of the $220,000 cannot be a conversion. To the contrary, Eco-Life still owes all the rest of the rent for the 14-month term. More specifically, [t]wo key elements of conversion are (1) plaintiff s possessory right or interest in the property and (2) defendant s dominion over the 11

15 property or interference with it, in derogation of plaintiff s rights. Colavito v. N.Y. Organ Donor Network, Inc., 8 N.Y.3d 43, 50 (2006). The validity of the sublease means that the first of these two elements necessarily is not satisfied. Since Eco-Life fails to allege that it paid anything to Clementine other than as rent that Eco-Life owed under a valid sublease, Eco-Life fails to allege its possessory right or interest in the property. Nor is the second element satisfied, because Clementine merely accepted what was offered to it. Hence, the conversion counterclaim against Clementine must be dismissed together with the fraud counterclaim. A separate and additional ground for dismissing the counterclaim is that, as a matter of law, money cannot be converted unless the money is a specific, identifiable fund. Lucker v. Bayside Cemetery, 114 A.D.3d 162, 174 (1st Dep t 2013). Eco-Life does not allege, however, that the $220,000 was kept in a segregated account or anything of the like. 4 Hence, the cause of action cannot be sustained, as plead, because the money alleged to have been converted is not sufficiently identifiable and is therefore not the proper subject of a conversion action. Corona Treasures LLC v. Star Home Designs, LLC, 42 Misc. 3d 1224(A), 2013 WL , at *3 (Sup. Ct., Kings County 2013). IV. ECO-LIFE S PROMISSORY ESTOPPEL CLAIM AGAINST MS. RUSSELL AND MR. HYATT MUST BE DISMISSED Eco-Life alleges: 4 In actuality, half of these rent payments were not even made by Eco-Life: As alleged in Clementine s Amended Complaint, filed November 25, 2014, (Dogramaci Aff., Exhibit 9), and in Clementine s Verified Petition in the pre-action disclosure proceeding (Dogramaci Aff., Exhibit 2), half of this amount was paid by Eco-Life s alter ego, Gemstone Assets Management, LLC. 12

16 Hyatt and Russell promised that it they [sic] could facilitate the rental of advertising space for Eco-Life s video sign at the premises from more than one hundred companies whom they had spoken to and were willing to buy such advertising from Eco-Life. (Dogramaci Aff., Exhibit 8 (Third Party Compl.) 59.) Based on that allegation, Eco- Life asserts a claim against Ms. Russell and Mr. Hyatt individually for promissory estoppel, seeking to recover the $220,000 in rent payments made to Clementine. The elements of a claim for promissory estoppel are: (1) a promise that is sufficiently clear and unambiguous; (2) reasonable reliance on the promise by a party; and (3) injury caused by the reliance. MatlinPatterson ATA Holdings LLC v. Federal Express Corp., 87 A.D.3d 836, (1st Dep't 2011). The injury must be an unconscionable injury. Ferreyr v. Soros, 116 A.D.3d 407, (1st Dep t 2014). Here, Eco-Life has pleaded none of the three elements. Regarding the first element, Eco-Life does not allege a clear and unambiguous promise. To the contrary, Eco-Life s allegations leave entirely unclear who was supposed to do what, precisely, in order for the promise to be performed. See Rogowsky v. McGarry, 55 A.D.3d 815, 817 (2d Dep t 2008) (affirming dismissal of promissory estoppel claim under CPLR 3211(a)(7) because there was no clear and unambiguous promise ). Regarding the second element, Eco-Life does not allege any reasonable reliance. Indeed, it defies all common sense that Eco-Life would enter a written agreement with Clementine (1) including provisions not only for Eco-Life to use the billboard space but also for Eco-Life s occasional use of the theater space (see 13

17 Memorandum of Agreement 5 II), and (2) including numerous representations and warranties by Clementine (see Memorandum of Agreement V), but that, despite obtaining these written commitments, Eco-Life would fail to include in the written agreement this particular alleged promise on which Eco-Life now, incredibly, claims to have relied. Regarding the third element, Eco-Life does not allege any injury. To the contrary, once the deficient fraud claim is disregarded, Eco-Life s own well-pleaded allegations are that Eco-Life entered a sublease and then promptly breached the sublease by failing to pay its rent. The promise that Eco-Life alleges a promise that some vague performance by Clementine would be forthcoming, to assist in effecting some ill-defined transactions between Eco-Life and unspecified third parties if such a promise were made, would have been part of the bargain between Eco-Life and Clementine. Eco-Life s material breach of the bargain by failing to pay the $440,000 advance relieved Clementine of any further performance on its part; hence any alleged failure by Clementine to perform the promise would not have constituted a cognizable injury to Eco-Life. Cf. Villacorta v. Saks Inc., 32 Misc.3d 1203(A), 2011 WL , at *3 (Sup. Ct., N.Y. County 2011) ( [S]ince plaintiff alleges valid written contracts, she cannot recover on quasi-contractual theory such as a theory of promissory estoppel). V. ECO-LIFE S UNJUST ENRICHMENT CLAIM AGAINST CLEMENTINE, MS. RUSSELL AND MR. HYATT MUST BE DISMISSED Unjust enrichment is an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties concerned. IDT Corp. v. 5 Exhibit A to Exhibit 1 to the Dogramaci Aff. Eco-Life s pleadings appear to presume the authenticity of the document. 14

18 Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 142 (2009). The presence of an actual agreement will preclude a claim for unjust enrichment. See Id. ( Where the parties executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded. ). In this case, there is an actual agreement: the sublease under which Eco- Life sublet the billboard space. As demonstrated above, Eco-Life s attempt, by asserting a fraud claim, to allege the invalidity of the sublease is deficient. Hence, no one could have been unjustly enriched by Eco-Life s payment of $220,000 as rent under the sublease. Furthermore, neither Ms. Russell nor Mr. Hyatt were the recipients of the rent payment. Eco-Life admits that the recipient was in fact Clementine not Ms. Russell or Mr. Hyatt but Eco-Life seeks to include Ms. Russell and Mr. Hyatt in this cause of action simply by alleging Clementine to be a company over which they [i.e., Ms. Russell and Mr. Hyatt] have dominion, control and ownership. (Third Party Compl. 64.) This is clearly insufficient to overcome the presumption of limited liability that is the very purpose of forming a limited liability company. See N.Y. LLC Law 609 ( Neither a member..., a manager..., nor an agent of a limited liability company... is liable for any debts, obligations or liabilities of the limited liability company or each other, whether arising in tort, contract or otherwise, solely by reason of being such member, manager or agent or acting (or omitting to act) in such capacities or participating... in the conduct of the business of the limited liability company. ). 15

19 Conclusion For the reasons set forth above, and based on the accompanying Affirmation of Ihsan Dogramaci, Esq. in Support of Motion to Dismiss Pursuant to CPLR 3211(a)(7) with its exhibits, and upon all the proceedings in this case to date, plaintiff The Clementine Company, LLC and third-party defendants Catherine Russell and Armand Hyatt respectfully request that the Court grant their motion and dismiss Eco-Life Holdings Corporation s counterclaims and third-party claims against them in all respects. Dated: New York, New York December 29, 2014 Respectfully submitted, /s/ Ihsan Dogramaci Ihsan Dogramaci idogramaci@idlawoffice.net THE LAW OFFICE OF IHSAN DOGRAMACI 1120 Avenue of the Americas, 4 th Floor New York, NY tel: (212) fax: (646) Attorneys for The Clementine Company, LLC, Catherine Russell and Armand Hyatt 16