FILED: NEW YORK COUNTY CLERK 01/30/ :02 PM INDEX NO /2015 NYSCEF DOC. NO. 53 RECEIVED NYSCEF: 01/30/2017

Similar documents
FILED: NEW YORK COUNTY CLERK 01/30/ :59 PM INDEX NO /2015 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 01/30/2017

FILED: NEW YORK COUNTY CLERK 10/07/ :54 PM INDEX NO /2015 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 10/07/2016

Michael Alan Group, Inc. v Rawspace Group, Inc NY Slip Op 30055(U) January 3, 2019 Supreme Court, New York County Docket Number: /2017

Lee v Dow Jones & Co., Inc NY Slip Op 30535(U) January 15, 2014 Supreme Court, Bronx County Docket Number: /13 Judge: Wilma Guzman Cases

Outdoor Media Corp. v Del Mastro 2011 NY Slip Op 33922(U) November 16, 2011 Sup Ct, NY County Docket Number: /11 Judge: Eileen Bransten Cases

FILED: NEW YORK COUNTY CLERK 03/29/ :57 PM INDEX NO /2016 NYSCEF DOC. NO. 48 RECEIVED NYSCEF: 03/29/2017

Roberts v Dependable Care, LLC 2019 NY Slip Op 30013(U) January 3, 2019 Supreme Court, New York County Docket Number: /2017 Judge: Barbara

Onilude v City of New York 2015 NY Slip Op 32176(U) October 8, 2015 Supreme Court, Bronx County Docket Number: /2009 Judge: Wilma Guzman Cases

FILED: NEW YORK COUNTY CLERK 12/22/ :53 PM INDEX NO /2014 NYSCEF DOC. NO. 310 RECEIVED NYSCEF: 12/22/2017 EXHIBIT 11.

The Wallack Firm, P.C. v Nacos 2013 NY Slip Op 30161(U) January 14, 2013 Supreme Court, New York County Docket Number: /2012 Judge: Joan A.

State of New York v Credit Suisse Sec NY Slip Op 32031(U) July 17, 2015 Supreme Court, New York County Docket Number: /2013 Judge: Kelly

Aspen Am. Ins. Co. v 35 1/2 Crosby St. Realty Corp NY Slip Op 33277(U) December 18, 2018 Supreme Court, New York County Docket Number: Judge:

Atria Retirement Props., L.P. v Bradford 2012 NY Slip Op 33460(U) August 22, 2012 Supreme Court, New York County Docket Number: /11 Judge:

FILED: NEW YORK COUNTY CLERK 08/27/ :37 PM INDEX NO /2014 NYSCEF DOC. NO. 67 RECEIVED NYSCEF: 08/27/2015. Exhibit

Ovsyannikov v Monkey Broker, LLC 2011 NY Slip Op 33909(U) August 12, 2011 Supreme Court, New York County Docket Number: /2010 Judge: Eileen

FILED: NEW YORK COUNTY CLERK 04/20/ :16 PM INDEX NO /2016 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 04/20/2018

Siegal v Pearl Capital Rivis Ventures LLC 2018 NY Slip Op 30256(U) February 13, 2018 Supreme Court, New York County Docket Number: /2013 Judge:

FILED: NEW YORK COUNTY CLERK 12/22/ :37 PM INDEX NO /2014 NYSCEF DOC. NO. 318 RECEIVED NYSCEF: 12/22/2017 DEFENDANTS EXHIBIT B.

FILED: NEW YORK COUNTY CLERK 09/18/ :02 PM INDEX NO /2013 NYSCEF DOC. NO. 170 RECEIVED NYSCEF: 09/18/2015. Deadline.com. Defendants.

Matter of Goyal v Vintage India NYC, LLC 2018 NY Slip Op 31926(U) August 7, 2018 Supreme Court, New York County Docket Number: /2017 Judge: O.

Devlin v Mendes & Mount, LLP 2011 NY Slip Op 33823(U) July 1, 2011 Sup Ct, Queens County Docket Number: 31433/10 Judge: Denis J. Butler Cases posted

FILED: NEW YORK COUNTY CLERK 07/19/ :58 PM INDEX NO /2016 NYSCEF DOC. NO. 53 RECEIVED NYSCEF: 07/19/2016

FILED: NEW YORK COUNTY CLERK 10/25/ :19 PM INDEX NO /2017 NYSCEF DOC. NO. 43 RECEIVED NYSCEF: 10/25/2017

FILED: NEW YORK COUNTY CLERK 10/27/ :11 PM INDEX NO /2016 NYSCEF DOC. NO. 43 RECEIVED NYSCEF: 10/27/2017

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF NORMA LOREN'S MOTION TO DISMISS DEFENDANTS' COUNTERCLAIMS

FILED: NEW YORK COUNTY CLERK 02/27/ :20 PM INDEX NO /2010 NYSCEF DOC. NO. 103 RECEIVED NYSCEF: 02/27/2017

Meister Seelig & Fein, LLP v Hornick 2013 NY Slip Op 31325(U) June 19, 2013 Sup Ct, New York County Docket Number: /2012 Judge: Carol R.

Beys v MMM Group, LLC 2016 NY Slip Op 30619(U) April 11, 2016 Supreme Court, New York County Docket Number: Judge: George J.

Island Tennis, L.P. v Varilease Fin., Inc NY Slip Op 30296(U) January 29, 2013 Sup Ct, Suffolk County Docket Number: 9838/2012 Judge: Thomas F.

Swezey v Michael C. Dina Co., Inc NY Slip Op 31098(U) June 13, 2016 Supreme Court, New York County Docket Number: /14 Judge: Robert R.

Justy v Carlson 2011 NY Slip Op 30474(U) March 3, 2011 Supreme Court, Greene County Docket Number: Judge: Joseph C. Teresi Republished from

U.S. Bank Nat l Ass n v. Countrywide Home Loans, Inc. Index No /2011 Page 2 of 12

FILED: NEW YORK COUNTY CLERK 07/27/ :37 PM INDEX NO /2015 NYSCEF DOC. NO. 66 RECEIVED NYSCEF: 07/27/2018

Garnett v Fox Horan & Camerini LLP 2010 NY Slip Op 32163(U) August 11, 2010 Supreme Court, New York County Docket Number: /08 Judge: Jane S.

Rhodes v Presidential Towers Residence, Inc NY Slip Op 33445(U) November 20, 2018 Supreme Court, New York County Docket Number: /2017

Weinberg Holdings LLC v Ruru & Assoc. LLC 2013 NY Slip Op 30402(U) February 25, 2013 Supreme Court, New York County Docket Number: /12 Judge:

Shi v Shaolin Temple 2011 NY Slip Op 33821(U) July 1, 2011 Sup Ct, Queens County Docket Number: 20167/09 Judge: Denis J. Butler Cases posted with a

New York Law Journal Volume 245 Copyright 2011 ALM Media Properties, LLC. Thursday, February 17, 2011

FILED: NEW YORK COUNTY CLERK 05/11/ :52 PM INDEX NO /2016 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/11/2018

Rosenberg v Hedlund 2016 NY Slip Op 30191(U) February 3, 2016 Supreme Court, New York County Docket Number: /2015 Judge: Eileen A.

Lewis & Murphy Realty, Inc. v Colletti 2017 NY Slip Op 31732(U) July 25, 2017 Supreme Court, Queens County Docket Number: /2017 Judge: Robert

FILED: NEW YORK COUNTY CLERK 06/19/ :27 PM INDEX NO /2017 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 06/19/2017

Matter of Daudier v City of New York Commn NY Slip Op 30176(U) January 24, 2013 Supreme Court, New York County Docket Number: /2012

LG Funding, LLC v Filton LLC 2018 NY Slip Op 33289(U) December 14, 2018 Supreme Court, Nassau County Docket Number: /17 Judge: Jack L.

Benavides v Chase Manhattan Bank 2011 NY Slip Op 30219(U) January 26, 2011 Sup Ct, New York County Docket Number: /09 Judge: Debra A.

FILED: NEW YORK COUNTY CLERK 02/27/ :15 PM INDEX NO /2010 NYSCEF DOC. NO. 101 RECEIVED NYSCEF: 02/27/2017

FILED: WESTCHESTER COUNTY CLERK 04/28/ :35 PM INDEX NO /2017 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/28/2017

Obsessive Compulsive Cosmetics, Inc. v. Sephora USA, Inc., 2016 BL (Sup. Ct. Aug. 18, 2016) [2016 BL ] New York Supreme Court

DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT

FILED: NEW YORK COUNTY CLERK 04/22/2014 INDEX NO /2014 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 04/22/2014

Tarantino v Queens Ballpark Co., L.L.C NY Slip Op 31126(U) April 3, 2013 Supreme Court, Queens County Docket Number: 8674/12 Judge: Timothy J.

FILED: NEW YORK COUNTY CLERK 01/31/ :33 AM INDEX NO /2017 NYSCEF DOC. NO. 42 RECEIVED NYSCEF: 01/31/2018

Emigrant Bank v Greene 2015 NY Slip Op 31343(U) February 24, 2015 Supreme Court, Queens County Docket Number: /2014 Judge: Allan B.

PH-105 Realty Corp. v Elayaan 2017 NY Slip Op 30952(U) May 3, 2017 Supreme Court, New York County Docket Number: /2016 Judge: Gerald Lebovits

Battaglia v Tortato 2016 NY Slip Op 31791(U) September 29, 2016 Supreme Court, New York County Docket Number: /2016 Judge: Carol R.

Signature Bank v Atlas Race LLC 2016 NY Slip Op 32366(U) November 28, 2016 Supreme Court, New York County Docket Number: /15 Judge: Kathryn E.

V.C. Vitanza Sons Inc. v TDX Constr. Corp NY Slip Op 33407(U) March 30, 2012 Sup Ct, New York County Docket Number: /11 Judge: Carol R.

NEW YORK SUPREME COURT - QUEENS COUNTY

Nelson v Patterson 2010 NY Slip Op 31799(U) July 12, 2010 Sup Ct, NY County Docket Number: /09 Judge: Joan A. Madden Republished from New York

Orlinsky v GEICO Ins. Co NY Slip Op 30905(U) February 25, 2011 Supreme Court, Nassau County Docket Number: /10 Judge: F.

Worldhomecenter.com, Inc. v Quoizel, Inc NY Slip Op 34017(U) October 7, 2011 Sup Ct, New York County Docket Number: /10 Judge: Charles E.

FILED: NASSAU COUNTY CLERK 12/22/ :59 AM

46th St. Dev., LLC v Marsh USA Inc NY Slip Op 33888(U) August 15, 2011 Supreme Court, New York County Docket Number: /2010 Judge: Eileen

FILED: NEW YORK COUNTY CLERK 06/12/2013 INDEX NO /2012 NYSCEF DOC. NO. 65 RECEIVED NYSCEF: 06/12/2013

FILED: NEW YORK COUNTY CLERK 08/24/ :27 PM INDEX NO /2016 NYSCEF DOC. NO. 65 RECEIVED NYSCEF: 08/24/2016

Kahlon v Creative Pool and Spa Inc NY Slip Op 30075(U) January 6, 2014 Sup Ct, New York County Docket Number: /12 Judge: Paul Wooten

FILED: KINGS COUNTY CLERK 01/27/ :45 PM INDEX NO /2015 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 01/27/2016

Bloostein v Morrison Cohen LLP 2017 NY Slip Op 31238(U) June 7, 2017 Supreme Court, New York County Docket Number: /2012 Judge: Anil C.

Rosenberg v Hedlund 2016 NY Slip Op 30201(U) February 4, 2016 Supreme Court, New York County Docket Number: /2015 Judge: Eileen A.

Wells Fargo Bank N.A. v Webster Bus. Credit Corp NY Slip Op 33850(U) April 13, 2010 Sup Ct, NY County Docket Number: /2009 Judge: Richard

Private Capital Funding Co., LLC v 513 Cent. Park LLC 2014 NY Slip Op 32004(U) July 29, 2014 Sup Ct, NY County Docket Number: /2012 Judge: Anil

FILED: NEW YORK COUNTY CLERK 11/01/ :57 PM INDEX NO /2016 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/01/2016

FILED: NEW YORK COUNTY CLERK 08/31/ :48 PM INDEX NO /2016 NYSCEF DOC. NO. 8 RECEIVED NYSCEF: 08/31/2016

FILED: BRONX COUNTY CLERK 03/27/ :27 PM INDEX NO /2016E NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 03/27/2018

FILED: BRONX COUNTY CLERK 06/06/ :24 PM INDEX NO /2016E NYSCEF DOC. NO. 40 RECEIVED NYSCEF: 06/06/2016

IsZo Capital LLP. v Bianco 2018 NY Slip Op 33384(U) December 26, 2018 Supreme Court, New York County Docket Number: /2018 Judge: Eileen

December 6, 2016 VIA NYSCEF AND HAND DELIVERY

Jemrock Enter. LLC v Konig 2013 NY Slip Op 32884(U) October 24, 2013 Sup Ct, Queens County Docket Number: /2013 Judge: Orin R.

No. 5486/ March 21, 2012

Scaglione v Castle Restoration & Constr., Inc NY Slip Op 33727(U) April 27, 2010 Sup Ct, Queens County Docket Number: /09 Judge: Orin R.

Oberman v Textile Mgt. Global Ltd NY Slip Op 31863(U) July 11, 2014 Supreme Court, New York County Docket Number: /2013 Judge: Joan A.

Patapova v Duncan Interiors, Inc NY Slip Op 33013(U) November 27, 2013 Sup Ct, New York County Docket Number: /2010 Judge: Joan A.

Layton v Layton 2010 NY Slip Op 31381(U) June 4, 2010 Supreme Court, Suffolk County Docket Number: 31853/2007 Judge: Paul J., Jr. Baisley Republished

State Farm Mut. Auto. Ins. Co. v Austin Diagnostic Med., P.C NY Slip Op 30917(U) April 18, 2016 Supreme Court, Queens County Docket Number:

Pielet Bros. Contr. v All City Glass'n Mirro-1964UA, LLC 2015 NY Slip Op 31045(U) June 18, 2015 Supreme Court, New York County Docket Number:

Mascis Inv. Partnership v SG Capital Corp NY Slip Op 30813(U) April 21, 2017 Supreme Court, New York County Docket Number: /2016 Judge:

FILED: NEW YORK COUNTY CLERK 05/02/ :08 PM INDEX NO /2016 NYSCEF DOC. NO. 34 RECEIVED NYSCEF: 05/02/2017

Diaz v 142 Broadway Assoc. LLC NY Slip Op 33111(U) December 6, 2018 Supreme Court, New York County Docket Number: /2017 Judge: William

Katehis v Sacco & Fillas, LLP 2011 NY Slip Op 31134(U) March 31, 2011 Supreme Court, Queens County Docket Number: 27063/2010 Judge: David Elliot

Mousaw v Stasior 2013 NY Slip Op 31917(U) August 14, 2013 Sup Ct, Albany County Docket Number: Judge: Joseph C. Teresi Republished from New

Smith v Proud 2013 NY Slip Op 33509(U) December 24, 2013 Supreme Court, New York County Docket Number: /2010 Judge: Lucy Billings Cases posted

McGraw-Hill Global Educ. Holdings, LLC v NetWork Group, LLC 2019 NY Slip Op 30004(U) January 3, 2019 Supreme Court, New York County Docket Number:

FILED: NEW YORK COUNTY CLERK 08/26/ :25 PM INDEX NO /2014 NYSCEF DOC. NO. 10 RECEIVED NYSCEF: 08/26/2014

EPF Intl. Ltd. v Lacey Fashions Inc NY Slip Op 32326(U) October 29, 2017 Supreme Court, New York County Docket Number: /2016 Judge:

Bank of Am., N.A. v Sigo Mfr. L.L.C NY Slip Op 33538(U) January 12, 2011 Supreme Court, Albany County Docket Number: 7002/10 Judge: Joseph C.

FILED: NEW YORK COUNTY CLERK 07/14/ :43 AM INDEX NO /2016 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 07/14/2016

Supreme Court, Kings County. Al-Bawaba.com, Inc., Plaintiff, against. Nstein Technologies Corp., Defendant.

Unitrin Advantage Ins. Co. v Better Health Care Chiropractic, P.C NY Slip Op 30837(U) May 4, 2016 Supreme Court, New York County Docket Number:

CF Notes, LLC v Johnson 2014 NY Slip Op 31598(U) June 19, 2014 Sup Ct, New York County Docket Number: /2013 Judge: Saliann Scarpulla Cases

Axa Equit. Life Ins. Co. v 200 E. 87th St. Assoc., L.P NY Slip Op 30069(U) January 4, 2019 Supreme Court, New York County Docket Number:

Transcription:

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK THE PEOPLE OF THE STATE OF NEW YORK ex rel. Qui tam The Bayrock Qui tam Litigation Partnership, Plaintiff, v. Part 45 (Hon. Anil C. Singh) Index No. 101478/15 Motion Sequence No. 004 BAYROCK GROUP LLC; TEVFIK ARIF; JULIUS SCHWARZ; FELIX SATER; BRIAN HALBERG; ALEX SALOMON; JERRY WEINRICH, SALOMON & COMPANY P.C.; AKERMAN SENTERFITT LLP; DUVAL & STACHENFELD LLP; KRAMER LEVIN NAFTALIS AND FRANKEL LLP; BRUCE STACHENFELD; NIXON PEABODY LLP; ADAM GILBERT; ROBERTS & HOLLAND LLP; ELLIOT PISEM; BAYROCK SPRING STREET LLC; BAYROCK WHITESTONE LLC; BAYROCK CAMELBACK LLC: BAYROCK MERRIMAC LLC; and BAYROCK GROUP INC., Defendants. SUPPLEMENTAL MEMORANDUM OF LAW OF JULIUS SCHWARZ AND BRIAN HALBERG IN SUPPORT OF MOTION TO DISMISS THE COMPLAINT AS AGAINST THEM PURSUANT TO 189(4)(a) OF THE NEW YORK FALSE CLAIMS ACT 1 of 9

TABLE OF CONTENTS PRELIMINARY STATEMENT...1 ARGUMENT...2 THE COMPLAINT SHOULD BE DISMISSED WITH RESPECT TO THE INDIVIDUAL DEFENDANTS...2 A. The Relevant Standards...2 B. The Affirmations of The Individual Defendants Are Documentary Evidence...3 C. The Affirmations of the Individual Defendants Conclusively Show They Are Not Proper Defendants Under the New York State False Claims Act...5 CONCLUSION...5 i 2 of 9

TABLE OF AUTHORITIES Page(s) Cases Biondi v. Beekman Hill House Apartment Corp., 257 A.D.2d 76 [1st Dept 1999] affd on other grounds, 94 N.Y.2d 659 [1st Dept 2000]...3, 4 Duration Mun. Fund, L.P. v. J.P. Morgan Sec. Inc., 25 Misc. 3d 1203(A) [Sup Ct NY County 2009], affd, 77 A.D.3d 474 [1st Dep t 2010]...3 Fontanetta v John Doe 1, 73 A.D.3d 78 [2d Dept 2010]...3 Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314 [2002]...2 Johnson v. Proskauer Rose LLP, 129 A.D.3d 59 [1st Dept 2015]...3 Lleshanaku v. Kenmore Assocs., L.P., 4 Misc. 3d 143(A) [App. Term 1st Dept 2004]...3 McGuire v. Sterling Doubleday Enterprises, L.P., 19 A.D.3d 660 [2d Dept 2005]...3 Simkin v. Blank, 19 N.Y.3d 46 [2012]...3 Taylor v. Pulvers, Pulvers, Thompson & Kuttner, P.C., 1 A.D.3d 128 [1st Dept 2003]...3 Tsimerman v. Janoff, 40 A.D.3d 242 [1st Dep t 2007]...3 Wilhelmina Models, Inc. v. Fleisher, 19 A.D.3d 267 [1st Dep t 2005]...3 Statutes New York Civ. Prac. Law & Rules 3211...1, 2, 3, 5 New York Finance Law (False Claims Act)...1, 2, 4, 5 ii 3 of 9

This memorandum of law is submitted on behalf of individual defendants Julius Schwarz and Brian Halberg (the Individual Defendants ) and as a supplement to Defendants Joint Memorandum of Law in Support of Their Motion to Dismiss the Complaint and for Other Relief filed contemporaneously on behalf of all defendants (the Master Brief ). The Individual Defendants respectfully submit this memorandum of law to address that portion of the joint motion to dismiss on behalf of all defendants (the Joint Motion ) which requests dismissal of the complaint in this action (Docket No. 3) (the qui tam Complaint or Complaint ) against them pursuant to CPLR 3211(a) and/or CPLR 3211(c) and Finance Law 189(4)(a) (the False Claims Act ) on the additional ground that Plaintiff Bayrock Qui Tam Litigation Partnership cannot maintain a claim for violation of the False Claims Act against them because their net income did not satisfy the statutory threshold set forth in Finance Law 189(a)(4)(i) in any relevant year. The relevant facts are set forth in the Affirmation of Julius Schwarz, dated January 27, 2017 (the Schwarz Aff. ) and the Affirmation of Brian Halberg, dated January 27, 2017 (the Halberg Aff. and with the Schwarz Aff., the Affirmations ). 1 PRELIMINARY STATEMENT As set forth below, the Individual Defendants should be dismissed from this qui tam action because they do not meet the threshold income requirement to be defendants in a False Claims Act suit: neither of them had net income which equaled or exceeded $1 million for any 1 Contemporaneously with the filing of the Joint Motion, a motion to file personal financial information under seal is also being filed. Copies of relevant parts of the Individual Defendants personal tax returns and other personal financial information have not been filed as exhibits to their Affirmations pending a decision on the motion to seal. As stated in their Affirmations, the Individual Defendants are prepared to supplement their filings by submitting relevant parts of their federal income tax returns upon entry by this Court of an order permitting filing under seal. In the alternative, the Individual Defendants are prepared to provide relevant parts of their personal financial information to the Court for in camera inspection. 1 4 of 9

of the years which is the subject of the qui tam Complaint. Specifically, Plaintiff has failed to allege any factual basis to support its speculative allegation that the net income of the Individual Defendants satisfies the statutory threshold of the False Claims Act. (The history of this action is set forth in the Statement of Facts in the Master Brief and is not repeated herein.) The Complaint seeks judgment against all defendants pursuant to the False Claims Act, N.Y. State Finance Law, 187, et seq. (Complaint at 67), and alleges that each of the Individual Defendants had net income equaling or exceeding $1,000,000 in at least one of the years 2004 through 2010 inclusive (Id. at 19). The Complaint further states [a]s to Julius Schwarz and Brian Halberg, the fact that their salaries at Bayrock were, on information and belief and as at least partially confirmed by Schwarz as to himself at least in 2010, $720,000 and $500,000 per annum plus bonus, respectively, supports this allegation. (Id. at 19, note 3). As set forth in the Affirmations, neither Mr. Schwarz nor Mr. Halberg had income equal to or exceeding $1 million dollars in any of the years 2004 through 2010 (Halberg Aff. at 7, 9; Schwarz Aff. at 7, 9). Accordingly, the Complaint must be dismissed as to each of them. A. The Relevant Standards ARGUMENT THE COMPLAINT SHOULD BE DISMISSED WITH RESPECT TO THE INDIVIDUAL DEFENDANTS This motion is made under CPLR 3211(a)(1) and 3211(a)(7). To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence relied on by the defendant must refute the factual allegations in the complaint and conclusively establish a defense as a matter of law (Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 [2002] (citing Leon v. Martinez, 84 N.Y.2d 83, 88 [1994]); see Biondi v. Beekman Hill House Apartment Corp., 257 A.D.2d 76 [1st Dept 1999] affd on other grounds, 94 N.Y.2d 659 [1st Dept 2000]). 2 5 of 9

Under CPLR 3211(a)(7), the Court must accept the allegations of the complaint as true (Johnson v. Proskauer Rose LLP, 129 A.D.3d 59, 67 [1st Dept 2015], but factual claims which are flatly contradicted by documentary evidence are not entitled to such consideration and dismissal is warranted where documentary proof disproves an essential allegation (Simkin v. Blank, 19 N.Y.3d 46, 52 [2012] (citation and internal quotation marks omitted); McGuire v. Sterling Doubleday Enterprises, L.P., 19 A.D.3d 660, 661 62 [2d Dept 2005]). B. The Affirmations of The Individual Defendants Are Documentary Evidence The term documentary evidence is not explicitly defined in CPLR 3211(a)(1); as used in the statute it is a fuzzy term, and what is documentary evidence for one purpose, might not be documentary evidence for another (Fontanetta v John Doe 1, 73 A.D.3d 78, 84 [2d Dept 2010]. Indeed, there is nothing in CPLR 3211(a)(1) which specifies or limits the form or character of the documentary evidence upon which a motion to dismiss is based. Weinstein- Korn-Miller, NY Civ Prac 3211.06 [2d Ed. 2005] (internal quotations omitted)). Affidavits which conclusively establish that plaintiff has no cause of action are properly considered on motion to dismiss (Taylor v. Pulvers, Pulvers, Thompson & Kuttner, P.C., 1 A.D.3d 128 [1st Dept 2003]; Tsimerman v. Janoff, 40 A.D.3d 242, 242 [1st Dep t 2007] (citing Leon v. Martinez 84 N.Y.2d at 88); Lleshanaku v. Kenmore Assocs., L.P., 4 Misc. 3d 143(A) [App. Term 1st Dept 2004]). Allegations in a complaint which are presumed true may properly be negated by affidavits and documentary evidence (Wilhelmina Models, Inc. v. Fleisher, 19 A.D.3d 267, 269 [1st Dep t 2005] (citing Biondi, 257 A.D.2d at 81); Duration Mun. Fund, L.P. v. J.P. Morgan Sec. Inc., 25 Misc. 3d 1203(A) [Sup Ct NY County 2009], affd, 77 A.D.3d 474 [1st Dep t 2010]). The Affirmations of the Individual Defendants clearly establish that the Individuals Defendants net income in the years at issue never rose to the minimum $1-million threshold 3 6 of 9

which would make them subject to claims under the False Claims Act, thus conclusively establishing a defense as a matter of law (see Halberg Aff. at 7, 9; Schwarz Aff. at 7, 9). Additionally, as stated in their Affirmations, the Individual Defendants are prepared to submit relevant information from their federal tax returns upon entry by this Court of an order to file their personal financial information under seal, providing further documentary evidence to refute plaintiff s allegations (see Halberg Aff. at 10; Schwarz Aff. at 10). The question of fact at issue here is a straightforward one and is easily negated by the Individual Defendants documentary evidence. Plaintiff alleges that the Individual Defendants incomes were equal to or more than $1-million, i.e., at least in 2010, $720,000 and $500,000 per annum plus bonus, respectively, for Schwarz and Halberg. Complaint at 19, note 3. Based on information and belief plaintiff extrapolates from salaries which are well less than $1-million by means of some unknown bonus in an effort to reach the threshold which would permit claims against the Individual Defendants under the False Claims Act. Negating plaintiff s allegations, the Individual Defendants each a member of the Bar of the State of New York provide affirmations under penalty of perjury which state their net income for each of the years in question was below the $1-million threshold (see Halberg Aff. at 7, 9; Schwarz Aff. at 7, 9). Plaintiff s allegations which are either inherently incredible or flatly contradicted by documentary evidence should not be presumed to be true, nor accorded any favorable inference Biondi 257 A.D.2d at 81). Accordingly, while the Individual Defendants submit that their Affirmations standing alone should be treated as documentary evidence for the purposes of the motion to dismiss, the Affirmations plus the exhibits which will be filed upon entry of an order permitting them to be filed under seal, clearly show that their net income was at all times less than $1-million during the years 2004 through 2010, thus conclusively establishing their defense. 4 7 of 9

C. The Affirmations of the Individual Defendants Conclusively Show They Are Not Proper Defendants Under the New York State False Claims Act Section 189(4)(a) of the False Claims Act provides that [t]his section shall apply to claims, records, or statements made under the tax law only if (i) the net income or sales of the person against whom the action is brought equals or exceeds $1 million dollars for any taxable year subject to any action brought pursuant to this article (Finance Law 189(a)(4)). This income limitation was enacted so that government resources would be expended only on matters of potentially significant impact and with respect to taxpayers of considerable financial stature, Letter from Acting Comm'r Jamie Woodward to Governor David Paterson [Aug. 4, 2010], reprinted in Bill Jacket for ch. 379 [2010], at 13. As conclusively established by the Affirmations submitted by the Individual Defendants, their net incomes never exceeded $1 million dollars for any of the years at issue in this action (see Halberg Aff. at 7, 9; Schwarz Aff. at 7, 9). Plaintiff s unsupported speculation is insufficient to overcome the Individual Defendants Affirmations under penalty of perjury that their net income in any of those years did not meet the statutory threshold of $1 million. Accordingly, the qui tam Complaint must be dismissed as against the Individual Defendants. CONCLUSION WHEREFORE, for the foregoing reasons, Defendants Julius Schwarz and Brian Halberg request that their motion to dismiss the Complaint against them pursuant to CPLR 3211(a) and/or CPLR 3211(c) and Finance Law 189(4)(a) be granted. Dated: New York, New York January 30, 2017 SATTERLEE STEPHENS LLP By: /s/ Walter A. Saurack Walter A. Saurack, Esq. 5 8 of 9

Attorneys for Defendants Brian Halberg and Julius Schwarz 230 Park Avenue, Suite 1130 New York, New York 10169 Telephone: 212-818-9200 2635391v.6 6 9 of 9