FILED: NEW YORK COUNTY CLERK 06/02/2015 09/15/2016 10:56 02:55 AM PM INDEX NO. 651899/2015 NYSCEF DOC. NO. 149 RECEIVED NYSCEF: 06/02/2015 09/15/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------------------------------------------------------------------X HERCULES KONTOS, THERESE KONTOS a.k.a MARIE THERESE HENDRON Plaintiffs, -against- 278 WEST 11, LLC, GEORGE AGIOVLASITIS Defendants. -----------------------------------------------------------------------------------------X Index No.: SUMMONS To the above named Defendants: YOU ARE HEREBY SUMMONED to answer the Complaint in this action and to serve a copy of your answer, or, if the Complaint is not served with this summons, to serve a Notice of Appearance, on the Plaintiff s attorney(s) within 20 days after the service of this summons, exclusive of the day of the service (or within 30 days after the service is completed if this summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. Dated: June 1, 2015 South Salem, NY MARGARITA RUBIN, ESQ. Rubin & Rubin, P.C. Attorneys for the Plaintiff 212 Elmwood Road South Salem, NY 10590 (347) 68-RUBIN
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------------------------------------------------------------------X HERCULES KONTOS, THERESE KONTOS a.k.a MARIE THERESE HENDRON Plaintiffs, -against- 278 WEST 11, LLC, GEORGE AGIOVLASITIS Defendants. -----------------------------------------------------------------------------------------X Index No.: SUMMONS 1. HERCULES KONTOS, THERESE KONTOS a.k.a MARIE THERESE HENDRON ( Plaintiffs ) by and through their attorney Margarita Rubin, Esq. for the firm of Rubin & Rubin, P.C, as and for his Complaint against defendants 278 WEST 11, LLC ( LLC ), GEORGE AGIOVLASITIS ( Agio ), (hereinafter collectively Defendants ), alleges as follows: The Parties 2. At all times hereinafter mentioned Plaintiffs are individuals residing at 24 5 th Avenue, Apt. 730, New York, NY 10011. 3. At all times hereinafter mentioned, Defendant 278 WEST 11 LLC is a limited liability company, authorized to do business in New York and having offices at 51 West 76 th St., New York, NY 10024. 4. At all times hereinafter mentioned, GEORGE AGIOVLASITIS was and is an individual residing at 51 West 76 th St., New York, NY 10024. Jurisdiction and Venue 5. This Court has personal jurisdiction over Defendants in that Defendants
regularly conduct business in New York, making the assertion of general jurisdiction proper. Additionally, Plaintiff is domiciled in New York, and the events and circumstances which gave rise to the action took place in New York. Factual Background 6. The subject action arises from a purchase money mortgage ( Loan ) issued to Agio by Plaintiffs. The principal amount of this loan was $3,000,000.00. The loan was secured by a commercial property located at 278 West 11 th St., New York, NY (the Premises ). 7. In addition to the Loan, on July 27, 2011, Plaintiffs and Defendants executed a contract of sale (the Agio Contract ) wherein Agio promised to equally split any monies or consideration that Agio received from the sale of the Premises, in excess of Fifteen Million Two Hundred and Fifty Thousand ($15,250,000.00) Dollars. The parties further agreed that Seller 1 shall be responsible for their share of NYC & NYS transfer gains taxes and capital gains taxes, as well as their proportion of Real Estate Brokers Commission. 8. Plaintiffs agreed to pay those taxes which were outlined in the Loan and Agio Contract. 9. On January 30, 2015, Defendants entered into a contract of sale with a Purchaser ( Third Party Contract ) wherein Defendants agreed to sell the Premises for Twenty Five Million ($25,000,000.00) Dollars to Purchaser. 1 In this transaction, the Seller was Plaintiff.
10. Pursuant to the Loan and Agio Contract, $4,250,000.00 was due and payable to Plaintiffs as and for their equal share of the proceeds of the sale. 11. Upon information and belief, Agio resented having to pay such a large sum to Plaintiffs and insisted that the amount owed Plaintiffs be reduced in order to pay taxes and to recover for the cost overruns he encountered when renovating the Premises. Specifically, Agio insisted that Plaintiffs pay taxes as and for a 1031 Exchange that Agio decided to participate in or he threatened he would not sell the Premises at all. Kontos, believing Agio s threats and fearful of the loss of the entire sum due him, reluctantly agreed to pay the monies Agio was demanding. 12. On or about March 26, 2015, a closing was held (the Closing ) wherein Plaintiff and Defendants entered into an agreement (the Agreement ). The Agreement stipulated that: As further consideration for the making of this loan, maker agrees that any monies or consideration received in excess of Fifteen Million Two Hundred Fifty Thousand ($15,250,000.00) Dollars upon or from the sale of the premises 278 West 11 th St., New York, NY shall be split equally between maker and payee at the time of the sale, transfer or closing of the premises. Accordingly, and as below described, Kontos shall be responsible for, and debited, the NYC & NYS transfer taxes attributable to the sum due him; and furthermore, Kontos shall be responsible for and debited the projected capital gains tax, which are due and payable by 278 West 11/Agio. There shall be no deduction for income or capital gains taxes, if any, which may be due by Kontos with respect to his below described net payment. 13. The Agreement included a provision that Kontos was responsible for Defendant s capital gains taxes, when in fact Plaintiff had no such responsibility. The Agreement was entered into by Kontos only after Agio,
knowing that Kontos was in need of the monies that the sale would provide, threatened Kontos with cancellation of the sale. Accordingly, the Agreement was obtained by fraud and by economic duress and coercion. 14. In the Agreement, Defendants represented that $77,562.50 was payable by Plaintiffs as and for NYC & NYS Transfer Taxes; $534,486.00 was payable by Plaintiffs as and for NYS & NYC Tax and $843,107.00 was payable by Plaintiffs as and for Federal Income Tax excluding Medicare Supplement. In total, $1,455,155.50 was withheld from Plaintiffs proceeds in order to purportedly pay taxes. 15. Upon information and belief, Defendants intentionally misrepresented to Plaintiffs that these monies were being collected to pay taxes that were due and owing from Plaintiff. In fact, other than the $77,562.50 payable as and for NYC & NYS Transfer Taxes Plaintiff did not owe these other taxes. 16. Upon information and belief, Defendants intentionally misrepresented to Plaintiffs that these monies were going towards the payment of taxes that were due and owing from Plaintiff. In fact, upon information and belief, Defendants did not pay these monies to any taxing authorities. 17. Upon information and belief, Defendants deducted monies from the Plaintiffs proceeds in contravention of the Loan, Agio Contract and Agreement. 18. Upon information and belief, Defendants forced Plaintiffs to sign the Agreement or face the cancellation of the sale of the Premises.
19. Upon information and belief, Defendants unlawfully forced Plaintiffs to agree to pay the capital gains taxes owed by Defendants. 20. Upon information and belief, Defendants have failed to produce any documentation, despite due demand, that any monies were paid to the taxing authorities or that these monies were, in fact, due to any taxing authorities. 21. Pursuant to agreements induced by Agio's fraud and economic duress and coercion, the Plaintiffs were forced to give up monies that they were entitled to. FIRST CAUSE OF ACTION (Fraud Intentional Misrepresentation) 22. Plaintiffs alleges and incorporates by reference, as though fully set forth herein, Paragraphs 1 through 19. 23. Commencing in or about July 27, 2011,the Defendants falsely and fraudulently represented to Plaintiffs: a. that they would equally divide the proceeds of the sale of the Premises in excess of $15,250,000.00; b. that they would only deduct those taxes and costs outlined in the Agio Contract and Loan; 24. The foregoing representations made by the Defendants were in fact false. When the Defendants in this cause of action made the foregoing representations, they were aware that said representations to be false. The Defendants made the foregoing representations with the intent to deceive and to defraud Plaintiffs by inducing them to execute the Loan(s). 25. At all times during the Loan(s) process and at the time Plaintiffs executed the
Loan(s), Plaintiffs was ignorant of the falsity of the representations of Defendants and could not in the exercise of reasonable diligence have discovered said Defendants' fraud. 26. Plaintiffs would have not agreed to the Loan(s), nor would he have executed the Loan(s), had the foregoing representations not been made. 27. Plaintiffs justifiably relied on the representations of Defendants because of Plaintiffs personal relationship with them. 28. Plaintiffs did not discover the fraud of Defendants until on or about March 26, 2015, when Plaintiffs were forced to enter into a new Agreement which forced them to agree to accept less monies than what they were originally entitled to. 29. As a proximate result of the false and fraudulent representations of the Defendants, Plaintiffs have incurred general damages in a sum according to proof at trial, together with interest thereon. 30. The Defendants conduct constitutes a series of intentional acts committed by said Defendants with the intention of depriving Plaintiffs of property or legal rights or otherwise causing Plaintiffs injury. Such conduct was despicable and has subjected Plaintiffs to unjust hardship in conscious disregard of their rights, so as to justify an award of punitive damages against such Defendants, in a sum according to proof at trial. 31. Plaintiffs is further entitled to reasonable attorney's fees and costs pursuant, to common law and statute. SECOND CAUSE OF ACTION (Fraud - Negligent Misrepresentation) 32. Plaintiffs alleges and incorporates by reference, as though fully set forth herein,
Paragraphs 1 through 29, inclusive. 33. The Defendants in this cause of action made false and fraudulent representations including, but not limited to the representations a. that they would equally divide the proceeds of the sale of the Premises in excess of $15,250,000.00; b. that they would only deduct those taxes and costs outlined in the Agio Contract and Loan; and further as alleged heretofore, and had no reasonable grounds for believing the representations were true, and made these representations with the intent to induce Plaintiffs to act as alleged herein. 34. As a proximate result of the negligent misrepresentations of the Defendants, Plaintiffs have incurred general damages in a sum according to proof at trial, together with interest thereon. THIRD CAUSE OF ACTION (Breach of Contract) 35. Plaintiffs allege and incorporate by reference, as though fully set forth herein, Paragraphs 1 through 32, inclusive, of this complaint. 36. Under the provision of the Loan and the Agio Contract, Defendants made numerous representations, warranties and covenants regarding the Loan and the Agio Contract, including but not limited to the fact that they would equally divide the proceeds of the sale of the Premises in excess of $15,250,000.00; that they would only deduct those taxes and costs outlined in the Agio Contract and Loan; 37. Defendants failed to comply with numerous provisions of the Loan and the Agio
Contract. 38. Plaintiff made repeated demands at the closing to Defendants to cure their various breaches of the Loan and the Agio Contract. 39. In reliance upon Defendants' representations, warranties and covenants in the Loan and the Agio Contract and supporting documentation, Plaintiffs loaned Agio $3,000,000.00. 40. Plaintiff timely complied with its obligations under the Loan and the Agio Contract. 41. Defendants committed a series of material breaches of the Loan and the Agio Contract by refusing to cure their violations pursuant to their obligations under the Loan and the Agio Contract. 42. Defendant willfully and knowingly made false representations of fact and/or falsified documents and/or fraudulently misrepresented Defendants' compliance with all the terms of the Loan and the Agio Contract. 43. As a result of Defendants' breach of the Loan and the Agio Contract, Plaintiff suffered damages in an amount to be determined at trial plus prejudgment interest, attorneys' fees, expenses, costs and disbursements. FOURTH CAUSE OF ACTION (BREACH OF GOOD FAITH AND FAIR DEALING) 44. Plaintiffs allege and incorporate by reference, as though fully set forth herein, Paragraphs 1 through 41, inclusive, of this complaint. 45. Defendants' failure to abide by all laws, governmental rules, regulations, codes and statutes relating to the Loan and the Agio Contract, and its failure to comply with the Loan and the Agio Contract according to its terms deprived Plaintiff of
the benefits and protections to which it is entitled under the Loan and the Agio Contract. 46. As a result of the foregoing Defendants breached the implied covenant of good faith and fair dealing inherent in the Loan and the Agio Contract. 47. As a result of Defendants' breach of the Loan and the Agio Contract, Plaintiff suffered damages in an amount to be determined at trial plus prejudgment interest, attorneys' fees, expenses, costs and disbursements. FIFTH CAUSE OF ACTION (Economic Duress) 48. Plaintiffs allege and incorporate by reference, as though fully set forth herein, Paragraphs 1 through 47, inclusive, of this complaint. 49. In addition to failing to honor the clear and unambiguous written terms of their Loan(s) and Agio Contract with the Plaintiff, the Defendants herein have knowingly, intentionally, maliciously, and repeatedly threatened the Plaintiff in an effort to force him against his will to voluntarily agree to alter the clear and unambiguous written terms of the Loan(s) and Agio Contract. 50. Said threats made by the Defendants were improper and made with the purpose of intimidating the Plaintiff into voluntarily forfeiting monies owed to him under the terms of his Loan(s) and Agio Contract with the Defendants. 51. The Defendants' demand that the Plaintiff voluntarily agree to forfeit monies legally and properly owed to him under the clear and unambiguous terms of the Loan(s) and Agio Contract was improper. 52. As a direct and proximate result of the threats made by the Defendants, the Plaintiff acquiesced to their demands and voluntarily agreed to forfeit monies
owed to him under fear of economic duress and hardship that would result if he failed to comply with the Defendants' demands. 53. The Defendant' failure to return these improperly gotten monies has caused the Plaintiffs significant economic duress. 54. Plaintiffs have been left with no reasonable means of relief other than initiating the present lawsuit against the Defendants. 55. As a direct and proximate result of Defendants imposition of economic duress, Plaintiff suffered damages in an amount to be determined at trial plus prejudgment interest, attorneys' fees, expenses, costs and disbursements. SIXTH CAUSE OF ACTION (UNJUST ENRICHMENT) 56. Plaintiffs allege and incorporate by reference, as though fully set forth herein, Paragraphs 1 through 55, inclusive, of this complaint. 57. By receiving and retaining the monies that were due to Plaintiffs, Defendants have been unjustly enriched. 58. As a direct and proximate result of Defendants unjust enrichment, Plaintiff suffered damages in an amount to be determined at trial plus prejudgment interest, attorneys' fees, expenses, costs and disbursements. WHEREFORE, Plaintiffs prays judgment as follows a. For general damages according to proof; b. For punitive damages; c. For reasonable attorney's fees and costs; d. For interest on the foregoing damages. e. For costs of suit incurred herein; and
f. For such other and further relief as the Court may deem just and proper. Dated: June 1, 2015 South Salem, NY MARGARITA RUBIN, ESQ. Rubin & Rubin, P.C. Attorneys for the Plaintiff 212 Elmwood Road South Salem, NY 10590 (347) 68-RUBIN