TRIAL/IS, PART 22 NASSAU COUNTY

Transcription

1 I. 2, L-H Short Form Order SUPREME COURT - STATE OF NEW YORK Present: HON. JOSEPH COVELLO Justice JACOB HAY TRIAL/IS, PART 22 NASSAU COUNTY Plaintiff, Index No.: 06669/04 -against- Motion Seq. No.: 01, 02 WAYNE DUPREE, JOHN LlERE and JUSTIN DUPREE Motion Date: 12/15/04 Defendants. The following paper read on this motion: Notice of Motion """",,,,,,,,,,,,,,,,,,,,,,,,,,, Notice of Cross Motion... Affidavits in Opposition and Reply... Briefs....Plaintiff... Defendant..... Upon the foregoing papers the motion by plaintiff, Jacob Hay, for an Order, pursuant to CPLR 3212, granting paral summar judgment to the plaintiff as to the first and third causes of action set forth in the plaintiffs complaint herein, is denied and the cross-motion by defendants, John Liere and Justin, for an Order, pursuant to CPLR 3212, granting summar judgment in favor of defendants, John Liere and Justin, dismissing the plaintiff s complaint against them, is granted. The plaintiff's complaint in this action contains five (5) causes of action: The first cause of action, based upon a claim of fraud, seeks money damages in the sum of $ against the defendants premised on "... representations made by defendant, Wayne,..., were false, fraudulently made, and were made on behalf of all the defendants for the purpose of deceiving plaintiff into sellng plaintiffs property at an artificially low price.... The second cause of action, based upon a claim of fraud, seeks money damages, in a sum to be determned by the Court, against the defendant, Wayne, premised on "...

2 defendant, Wayne, procured defendant, John Liere, as a purported purchaser for plaintiffs property for the price of $250, Defendant, Wayne, knew that plaintiff's property was wort substantially more than $250, The third cause of action, based upon a claim of breach of fiduciar duty, seeks money damages, in the sum of $50, against the defendants premised on "... defendant Wayne, acted in violation of his duty to plaintiff in makng the secret profit for himself and his Co-Defendants, John Liere and Justin for the assignment of plaintiff' s property. The fourth cause of action, based upon a claim of breach of fiduciar duty, seeks money damages, in a sum to be determned by the Court, premised on "... Defendant, Wayne, failed to advise plaintiff that plaintiff s property was worth substantially more than $250,000. because defendant, Wayne, intended to acquire plaintiff's property in secret, along with his co-defendants, John Liere and Justin, in order to make a secret profit at plaintiffs expense. Defendants, Wayne, John Liere and Justin, acted in concert as either a parnership, j oint venture, or association with respect to plaintiffs property. The fifth cause of action seeks an accounting, based upon a separate plenar lawsuit brought by the defendants herein against the plaintiff herein, premised on "Any interest that defendants may acquire in plaintiff s property, defendants hold in trust for plaintiff as involuntar or constructive trustees, and plaintiff demands that defendants account for the proceeds of such interest. Based upon all of the papers submitted for this Court' s consideration, the Court makes the following findings of undisputed facts: On or about July 10, 1998, the plaintiff, Jacob Hay, owned real property known and designated as 200 Majors Path, Southampton, New York; On or about July 10, 1998, the plaintiff, contract vendor, entered into a written contract

3 of sale with defendant, contract vendee, John Liere, for the sale of approximately twenty-two (22) acres of vacant land of the aforesaid real property of the plaintiff to the said defendant; R. Siwicki Jr. Real Estate, Inc., was the real estate broker that brought the parties to the herein above described contract of sale together and as such was entitled to a real estate broker commssion upon the consummation of the subject sale; At all times relevant to the instant action, the defendant, Wayne, was a licensed salesperson employed by lr. Siwicki Jr. Real Estate, Inc. and as such was entited to a sales commssion from lr. Siwicki Jr. Real Estate, Inc., upon the consummation of the subject sale for his paricipation in the brokering of the subject sale; On September 17, 1998, the defendant, John Liere, as Assignor, assigned his interest in the subject July 10, 1998, contract of sale to Wide Awake Fars, LLC, by Kenneth Lerer managing member, assignee for the sum of FIFTY THOUSAND ($ ) dollars as consideration for the said assignment; The aforesaid sum of FIFY THOUSAND ($50,000.00) dollars were paid by Wide Awake Fars, LLC, in the form of two (2) checks each in the sum of TWNTY -FIVE THOUSAND ($25,000.00) dollars, one payable to the defendant, Justin, and one payable to the defendant, John Liere, pursuant to unmemorialized parnership agreements entered into between the defendants, "Wayne and John Liere, and "Wayne and Justin " at some time prior to July 10, 1998, the date of the subject contract of sale; The $25, check payable to the defendant, Justin, was endorsed by the defendant, Wayne, and deposited in a bank account maintained by the defendant, Wayne. On September 17, 1998, title to the herein above described real property was conveyed by the plaintiff, Jacob Hay, to Wide Awake Farms, LLC, pursuant to the terms of the then

4 assigned July 10, 1998 contract of sale; After the consummation of the subject sale of real property, the plaintiff, Jacob Hay, paid a TWNTY-FIVE THOUSAND ($25,000.00) dollar real estate broker s commssion to lr. Siwicki Jr. Real Estate, Inc. Thereafter, lr. Siwicki Jr. Real Estate, Inc., paid a commssion to the defendant, Wayne, for his brokering of the subject sale. The rule in motions for summar judgment has been stated by the Appellate Division, Second Dept., in Stewart Title Insurance Company Equitable Land Services, Inc. 207 AD2d 880,881: It is well established that a party moving for summar judgment must make a prima facie showing of entitlement as a matter of law offering sufficient evidence to demonstrate the absence of any material issues of fact (Winegrad New York Univ. Med. Center 64 NY2d 851, 853; Zuckerman City of New York 49 NY2d 557, 562). Of course, summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a trable issue (State Bank McAulife, 97 AD2d 607), but once a prima facie showing has been made, the burden shifts to the pary opposing the motion for summar judgment to produce evidentiar proof in admissible form sufficient to establish material issues of fact which require a trial of the action (Alvarez Prospect Hosp., 68 NY2d 320, 324; Zuckerman City of New York, supra, 562). Relying upon Dubbs Stribling Associates, 96 NY2d 337, the Plaintiff postures: As Hay s real estate salesperson, Wayne owed him a fiduciar duty of loyalty. As such, he was required to inform him of any personal interest he (Wayne) had in the transaction that might interfere with his abilty to achieve the best possible deal for Hay. As set forth in the plaintiff s moving papers, the plaintiff's argument on this motion is summarzed as follows:

5 Hay listed a parcel of real property... for sale with a real estate broker, J.R. Siwicki Jr Real Estate, Inc..... Defendant Wayne..., a real estate sales agent for Siwicki, breached his fiduciary duty to Hay by brokering the sale on Hay s behalf while failing to reveal that he and defendant John Liere had formed a partnership to purchase the property for themselves and resell it for a profit. In failng to disclose his personal interest in the transaction Wayne also commtted fraud against Hay. Wayne and Liere subsequently transferred their right to purchase plaintiff s property to Wide Awake Fars, LLC, for $50,000. Wayne and Liere partnership extended to this transfer, and defendant Justin... and Wayne also had a partnership with respect to this transfer. This $ represents secret profits which Wayne must disgorge to Hay. In addition, because Liere and Justin were Wayne s parners in the contract's transfer, they are vicariously liable, jointly and severally, for Wayne s misconduct." In opposition to the plaintiff's motion, the defendant, Wayne, under oath, avers: In or about April or May, 1998, I personally met with someone whom I believed to be the Plaintiff at the office of Siwicki..... An associate salesperson of Siwicki' s was also present at the meeting.... At the meeting with the person I believed to be Hay, I informed him that I had a buyer for the premises and that I would be his parner. The person I met with expressed no concern about personal involvement in the transaction or that a commssion would be paid on the transaction, The person that I met with introduced himselfto me as ' Mr. Hay Hay was always aware of my personal interest in the transaction and he never relied on me to establish the purchase price. As recited in the plaintiff's Memorandum of Law in support of the instant motion, in Dubbs Stribling Associates, supra, , the New York Court of Appeals set forth the applicable law herein: In New York, it is well settled that a real estate broker is a fiduciar with a duty and an obligation to act in the best interests of the principal.... The broker/principal relationship and accompanying fiduciary duty can be severed by agreement of the paries or by unilateral action of the principal..,. Where a broker s interests or

6 loyalties are divided due to a personal stake in the transaction or representation of multiple parties, the broker must disclose to the principle the nature and extent of the broker s interest in the transaction or the material facts iluminating the broker s divided loyalties. ' The disclosure to be effective must lay bare the trth without ambiguity or reservation, in all its stark significance (citations omitted). The decisive consideration upon a motion for summar judgment is the existence of issues of fact (Werfel Zivnostenka Banka, 287 NY 91; Ugarriza Schmeider, 46 NY2d 471). Issue finding, rather than issue-determination, is the key to the procedure. Esteve Abad, 271 AD 725. Furthermore, the Court is not authorized to tr the issues; its function is merely to determne whether any issue exists (Silman Twentieth Century-Fox Film Corp. 3 NY2d 395). If material facts are in dispute or different inferences may reasonably be drawn from facts themselves undisputed, the motion for summar judgment must be denied (Supan Michelfeld, 97 AD2d 755). On a motion for ummar judgment, the facts are to be constred in a light most favorable to the non-moving party and summary judgment must be denied where there is any significant doubt whether material issues of fact exist or if there is even arguably such an issue (Bulger Tri- Town Agency, Inc., 148 AD2d 44 app. dism. 75 NY2d 805). Upon a motion for summar judgment, the credibilty of the Affants is for the trer of the facts (Bernstein Kritzer, 224 AD 387; Air Flow Taxi Corp., C.LT. Corp., 258 AD 857). Based upon all the papers submitted for this Court' s consideration and applying the principles of law set forth herein above, this Court finds and determnes that genuine issues of material fact exist with respect to whether the defendant, Wayne, informed the plaintiff that he, Wayne, would be a parner with the ultimate purchaser in the purchase of plaintiffs property that is the subject matter of the instant action. Accordingly, the plaintiff's motion for summar judgment must be denied.

7 With respect to the cross-motion of the defendants, John Liere and Justin, it is conceded by the plaintiff at pages 6 and 7 of the Affidavit of Stephen R. Angel, Esq., in support of the plaintiff's motion for summar judgment that: The defendant, John Liere, could not have informed the plaintiff of the personal interest of the defendant, Wayne, in purchasing the plaintiff's real property that is the subject matter of the instant action as he (John Liere) never communicated with the plaintiff, Marin R. Gilmarin, Esq. (the attorney who represented the Plaintiff at all times pertinent to the instant action), or anyone else acting on the Plaintiffs behalf; and The defendant, Justin, never met the plaintiff or Marin R. Gilmartin, Esq. and, in fact, did not even know who the owner of the plaintiff' s property was at the time he, Justin, formed his partnership with the defendant, Wayne. Furtermore, the plaintiffs claims against the defendants, John Liere and Justin, are based upon an alleged breach of a fiduciary duty that the defendant, Wayne, as a real estate salesperson, owed to the plaintiff. The plaintiff does not allege that there existed any fiduciar duty owed to him by the defendants, John Liere or Justin. The plaintiff' claims against the defendants, John Liere and Justin, premised upon a theory of vicarous liabilty, fail to set forth a knowing paricipation by the defendants, John Liere and Justin, with the defendant, Wayne, in a breach of any fiduciary duty owed to the plaintiff by the defendant, Wayne. Accordingly, the plaintiffs third and fourth causes of action, based upon a claim of breach of a fiduciar duty, must be and are herewith dismissed as to the defendants, John Liere and Justin (see, Wechsler Bowman, 285 N. Y. 284, 291). With respect to the plaintiff s second cause of action, this Court' s fair reading of the said cause of action finds no claim set forth against the defendants John Liere and Justin

8 therein. Therefore, the plaintiff's second cause of action is herewith dismissed as to the crossmoving defendants, John Liere and Justin. With respect to the plaintiff's fifth cause of action, based upon this Court s findings of fact herein and this Court' s Januar 29, 2004 decision in a related action entitled John Liere. Wayne and Justin v. Wide Awake Farms and Jacob Hay, Nassau County Index No. 2799/03, the cross-moving defendants herein, John Liere and Justin, have no right, title or interest in the premises that are the subject matter of this action and the aforesaid related action. Therefore, the plaintiff's fifth cause of action is herewith dismissed as to the crossmoving defendants, John Liere and Justin. Accordingly, the plaintiff's Complaint herein is herewith severed as to the defendants, John Liere and Justin, and dismissed as to these defendants. This constitutes the decision and order of the court. Dated: Januar 3! ' 2005 EN" Ef\EO reb G ' 1(JC0': UN1'l \ N 'S OFF\Ca count" Cl.E