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1 SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK - COUNTY OF NASSAU PRESENT: HON. JOHN W. BURKE J.S.C. ~_~~~~~~~_~~~ ~ ~~~~~~~ ~~ ~~~_~~~~_~~_ X HARVEY SCHLACKMAN, ABBY RIDGE, INC., d/b/a DYNAMIC MEDICAL COMMUNICATIONS CO., and HARRIET SCHLACKMAN, - against - Plaintiffs, Sequence #Ol, 02,03,04 Motion Date: 10/28/02 Index # /01 ROBIN S. WEINGAST & ASSOCIATES, INC., ROBIN S. WEINGAST, MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, JOHN HANCOCK FINANCIAL SERVICES, POINTE BENEFIT CONSULTANTS, LLC, and MICHAEL SONNENBERG, Defendants. ~~~~~~~ ~~ ~ ~~_~~~~~~~ ~~~_~~ ~~ X NoticesofMotion l-4 Affidavits in Opposition , Reply Affirmations Plaintiffs Memorandums of Law Defendants Memorandums of Law Upon the foregoing papers, these four motions by defendants seeking, inter alia, to dismiss plaintiffs complaint or to compel plaintiffs to re-plead, are disposed of as hereinafter provided. The plaintiffs have asserted six causes of action: 1. Fraudulent Misrepresentation; 2. Rescission of Contract; 3. Negligence; 4. Breach of Fiduciary Duty; S.Violation of the New York General Business Law 5349; and 6. Negligence in Rendering Advice. Plaintiffs complaint alleges that Robin S. Weingast & Associates, Inc., and Robin S. Weingast,(Weingast defendants) were financial planners, retirement planning specialists and financial consultants for the plaintiffs, Harvey and Harriet Schlackman. The complaint avers that in 1997 plaintiffs consulted with Weingast to achieve certain estate planning objectives. Funds from plaintiff Abby Ridge Inc., an entity controlled by the Schlackmans, were used to pay for certain life insurance policies. At the end of five years, it is claimed, the plan was
2 Index #016609/O 1 Page 2 to throw off eight or nine million in insurance, and also provide other retirement benefits. The Schlackmans allege they were induced to cancel and replace their existing policies. It is alleged that the plaintiffs paid $942,000 in premiums to John Hancock Financial Services (John Hancock) and Massachusetts Mutual (Mass.. Mutual) over a three year period. Plaintiffs claim they expected the insurance to be self-funding after four or five years. Instead, after three years, upon the termination of contributions, the coverage lapsed and there was no excess provision in the contract to carry the policies thereafter. Plaintiffs instituted this litigation to recoup their losses. Motion B Y Massachusetts Mutual Life Defendant Mass. Mutual moves pursuant to CPLR $3211 (a)(7) to dismiss the complaint for failure to state a cause of action, or, in the alternative for an order pursuant to CPLR $4024 (a), CPLR $301-3,3016(b) and 3014, for a more definite and certain statement of the first through sixth causes of action of the complaint, requiring the plaintiffs to re-plead in separate causes of action and in separately numbered paragraphs each negligent, deceptive and/or unlawful act alleged by the plaintiffs to have been made by the defendants and to require plaintiffs to allege any such claims separately as to each plaintiff and defendant. The only time defendant Mass. Mutual is mentioned in the 1 19-paragraph complaint is as the issuer of some of the policies in question and as the recipient of $227;835 in premiums. Other than certain references to an agent/principal relationship between the Weingasts and Mass. Mutual, the complaint is bereft of any specific allegations against this defendant. Paragraph 82 of the complaint clearly states that the defendant Robin Weingast was acting outside of the scope of proper corporate activity. This is permissible as an alternative form of pleading and is not dispositive of the case against Mass. Mutual. The plaintiffs have withdrawn the sixth cause of action as against Mass. Mutual. The gravamen of the remainder of the complaint against Mass. Mutual is that Weingast was acting as the insurance company s agent. With no discovery having been conducted, the motion to dismiss the complaint is premature. Since Mass. Mutual received a benefit in the form of premiums paid, the ratification of a previously unauthorized agency may be claimed. (Labelle Heights v. Stone, 227 AD 65; Rocks & Jeans, Inc. v. Lakeview Auto Sales & Service, Inc., 184 AD2d 502.) A principal s acceptance of benefits from a contract, even if unauthorized originally, may constitute an affirrnance of the agency and
3 Index #016609/01~ Page 3 give rise to a ratification. (ColoPne Life Reinsurance America1 Inc., 286 AdD2d 118.) Comnanv v Zunch Reinsurance [North The motion by Mass. Mutual is granted to the extent that plaintiffs are directed to replead the first five causes of action alleging negligent, deceptive and/or unlawful acts, if any, and a principal/agent relationship between the Weingast defendants and Mass. Mutual. The plaintiffs are directed to serve the amended pleadings on all defendants within 30 days of the date of receipt of this order. Motion By Weingast Defendants Defendants Robin Weingast and Associates and Robin Weingast (Weingast) move pursuant to CPLR $3211 (a)(7), to dismiss plaintiffs claims based upon documentary evidence, asserting that plaintiffs have no cause of action against these defendants. The motion is denied. The court is bound to accept the factual allegations of the complaint as true. (Folev v. D Agostino, 21 AD2d 60.) In Weiner v. Lazard Freres & Co., 241 AD2d 114, the court held that a cause of action for unjust enrichment is stated where plaintiffs have properly asserted that a benefit was bestowed... by plaintiffs and that defendants will obtain such benefit without adequately compensating plaintiffs therefor (Tarrytown House Condominiums v Hainje, 161 AD2d 3 10,3 13). Where defendants have reaped such benefit, equity and good conscience may require that they make restitution. Further, the Weiner case held: It is well established that, on such a motion, the pleadings must be liberally construed and the facts alleged accepted as true; the court must determine only whether the facts as alleged fit within any cognizable legal theory (Leon v Martinez, NY2d 84 83, 87-88). So liberal is the standard under these provisions that the test is simply whether the proponent of the pleading has a cause of action, not even whether he has stated one (Leon v Martinez, supra, at 88, quoting, Guggenheimer v Ginzburg, 43 NY2d 268, 275; see also, Camnaign for Fiscal Equitv v State of New York, 86 NY2d 307,3 18; Tarrytown House Condominiums v Hainje, supra). Therefore, the motion by the Weingast defendants is denied.
4 Index #O 16609/O 1 Page 4 Motion Bv Sonnenberg Defendant Michael Sonnenberg moves to dismiss the complaint for failure to state a cause of action pursuant to CPLR 3211 and 3014 and to dismiss for lack of personal jurisdiction over said defendant pursuant to CPLR $3211 (a)(8) and (c). Other than identifying this defendant in paragraphs numbered of the complaint, there are no allegations of any wrongdoing against him. There are bare allegations that he was an agent and that he received cornmissions on the subject policies, but there are no further references to him in the complaint. Plaintiffs, in their opposing papers, withdraw the claims against Sonnenberg as set forth in the second and sixth causes of action. They acknowledge that the allegations against Sonnenberg are not made based on fraudulent action he may have directly taken, but rather, that liability arises through the relationship between Sonnenberg and defendants Weingast. The plaintiffs papers include a proposed amended complaint. The motion is granted to the extent that the plaintiffs are directed to re-plead with separate causes,of action against Sonnenberg. The plaintiffs are directed to serve the amended pleading on all defendants within 30 days of the date of receipt of this order. That branch of this motion alleging improper service is denied. Defendant acknowledges that he personally received a copy of the summons and complaint. Motion BY John Hancock Financial Services Defendant John Hancock Financial moves pursuant to CPLR $321 l(a)(7) to dismiss the complaint on the ground that plaintiffs have failed to state a cause of action. This motion by defendant John Hancock Financial Service (John Hancock) is similar to that of Mass. Mutual. It is alleged that this defendant received $714,152 in premiums over the same three-year period. Plaintiffs have withdrawn the sixth cause of action against this defendant.
5 Index #016609/O 1 Page 5 The motion by John Hancock is granted to the extent that plaintiffs are directed to replead the first five causes of action alleging negligent, deceptive and/or unlawful acts, a principle/agent relationship between the Weingast defendants and John Hancock. The plaintiffs are directed to servethe amended pleadings on all defendants within 30 days of the date of receipt of this order. Dated: nfc DEC t
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