Lattanzio v Lattanzio

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[*1] Lattanzio v Lattanzio 2006 NY Slip Op 52209(U) [13 Misc 3d 1241(A)] Decided on November 24, 2006 Supreme Court, New York County Fried, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 24, 2006
Supreme Court, New York County

Fred A. Lattanzio and Michael Ambrose, Plaintiffs,

against

Nicholas Lattanzio, Live Oak Capital, LLC, and Sherman & Peabody, Inc., Defendants.



603791/04



For Plaintiffs:

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

(Tom Stein)

For Defendants:

Porzio, Bromberg & Newman, P.C.

156 West 56th Street, Suite 803

New York, New York 10019

(Joseph Maddaloni, Jr., Michael Rowan)

Bernard J. Fried, J.

Motion Sequence Numbers 005 and 006 are consolidated for disposition and are disposed [*2]of in accordance with the following decision and order.

Plaintiffs Fred Lattanzio and Michael Ambrose move for summary judgment on their breach of contract claims against defendant Nicholas Lattanzio, in the principal amount of $500,000.00, plus interest from April 29, 2004, the date of the breach. Defendants Nicholas Lattanzio and Live Oak Capital, LLC (Live Oak) cross-move for summary judgment, dismissing the breach of contract claims as well as the third (fraud), eighth (failure to honor demand note) and tenth (fraud) causes of action against them. These defendants also move for leave to further amend the Amended Answer, pursuant to CPLR 3025 (b).

In this action, plaintiffs essentially are seeking to recover an amount due on a short-term loan made by plaintiff Michael Ambrose, through his investment manager, plaintiff Fred Lattanzio (Fred), that was obtained by defendant Nicholas Lattanzio (Nicholas), and was used to purchase Meredith Financial Group, a registered investment advisor and broker/dealer. The parties agree that the loan was in the principal amount of $500,000, with 20% interest in an amount no less than $100,000, which was to be repaid in 30 days. According to plaintiffs, Nicholas agreed to be responsible for repaying this money, but has not done so, in breach of their oral agreement. Defendants Nicholas and Live Oak contend that the loan was made to defendant Sherman & Peabody, Inc. to enable it to buy Meredith, and not to either Nicholas or Live Oak, and, thus, there is no breach by them.

Both plaintiffs Ambrose and Fred live in Massachusetts, and Fred is Ambrose's money manager (Affidavit of Michael Ambrose, dated June 16, 2006, ¶ 2). Defendant Nicholas, Fred's nephew, resides in New Jersey, and works at 712 Fifth Avenue, New York, New York (Complaint, ¶ 3). He owns and is president of a hedge fund, defendant Live Oak (Affidavit of Nicholas Lattanzio, dated June 28, 2006, ¶ 1), which also has an office at 712 Fifth Avenue, New York, New York (Complaint, ¶7).

In November 2003, Nicholas formed a Delaware corporation, Sherman & Peabody, LLC, in order to facilitate the private investment of funds from outside sources (id., ¶ 2). Defendant Sherman & Peabody, Inc., with an office at 712 Fifth Avenue, New York, New York (Complaint, ¶ 9), is the successor company to Sherman & Peabody, LLC ( id., ¶ 3).

In February 2004, third-party defendant William Potter approached Nicholas about acquiring Meredith (id., ¶ 4). Meredith was indebted to PB Capital, which debt was secured by a $5 million demand note (the Meredith Note) (id., ¶ 4). PB Capital agreed to assign that note to Nicholas and Potter for $1 million. Potter and Nicholas then sought to raise the $1 million to purchase the Meredith Note from PB Capital (id., ¶ 5).

In mid-March 2004, Nicholas contacted Fred, and inquired whether any of Fred's clients would be interested in making a short-term loan (Exhibit C to Notice of Motion, Deposition of Nicholas Lattanzio, at 89). Nicholas indicated to Fred that he and a group of investors were seeking to purchase a company, and needed additional short-term capital (id.; see also N. Lattanzio Aff., ¶ 6). Nicholas offered that if a client of Fred's could loan $500,000, Nicholas would return the principal within one month, with interest of $100,000, along with a 10% equity in the new company (N. Lattanzio Dep., at 106-07, 123).

Fred contacted Ambrose who agreed to loan the $500,000 to Nicholas out of the Ambrose Family Trust (N. Lattanzio Aff., ¶ 7; see also N. Lattanzio Dep., at 91). Fred contacted Nicholas, and they agreed that Ambrose would loan $500,000, and would get a 20% return of $100,000 which would be paid in 30 days (N. Lattanzio Dep., at 123, 201-02). On March 29, [*3]2004, $500,000 was wired from an account in the name of the Ambrose Family Trust to PB Capital, the company that held the Meredith Note (Exhibit A to Notice of Motion, Answer, ¶ 17; Exhibit C to Notice of Motion, N. Lattanzio Dep., at 128; N. Lattanzio Aff., ¶ 9). In addition to this $500,000, Nicholas provided $100,000 towards the purchase of Meredith through Live Oak (N. Lattanzio Aff., ¶ 10). The remaining $400,000 was provided by an entity connected with third-party defendant Lee J. Cole (id., ¶ 11). Nicholas and his co-investors used the money to purchase a holding company known as Ascent Meredith Asset Management, which held two companies, Robert R. Meredith and Ascent Meredith Portfolio Management (N. Lattanzio Dep., at 116-17). The purchased companies were folded into Sherman & Peabody, LLC (id. at 112-13). Sherman & Peabody, LLC eventually was succeeded by defendant Sherman & Peabody, Inc.

In e-mails after the 30 days had passed, beginning on April 26, 2004, Fred inquired about how Nicholas was doing with getting Ambrose's $500,000 back to him (Exhibit D to Notice of Motion, PL 006). In response, Nicholas continually promised to "get the 500 back to you (with interest 600)," that "I realize we said 30 days," that "[y]ou will make 100,000 for a short term loan," "stay with me a little longer," and that the money was on the way (id. at PL 006, PL 008, PL 009, PL 010, PL 012, PL 013, PL 014).

In August 2004, Nicholas sent several promissory notes, confirming the terms of the agreement and the debt (Exh. E to Notice of Motion; Affirmation of Thomas Stein, dated July 10, 2006, Exhibit A; Affidavit of William J. Potter, dated July 7, 2006, Exhibits A, B, and C). In the first promissory note, dated August 11, 2004, Nicholas promised to pay to Fred or his assigns the principal amount of $500,000 together with interest at a rate of 20% per annum, from March 31, 2004 to the date the principal is repaid, and that "until repaid, this note shall have a first priority lien on the house of [Nicholas Lattanzio]"(Exhibit A to Stein July 10, 2006 Affirm.). By letter dated September 15, 2004, Nicholas sent a second note to Ambrose, which was entitled "Demand Note Due September 30, 2004," and which provided that Nicholas promised to pay Fred or his assigns, the same principal with interest at 20% per annum "not to be less than $100,000," but which did not provide for a lien on Nicholas' house (Exhibit B to Affidavit of William Potter In Opposition to Cross Motion, PL 021). Sometime thereafter, another demand note, entitled "Demand Note Due March 31, 2005," provided that Nicholas promised to pay the same principal and interest to Ambrose and his assigns (Exhibit C to Potter Aff., NLAT 044).

During this same time period, on August 19, 2004, Potter sent a letter to Fred on Sherman & Peabody stationery, stating that Sherman & Peabody, as the owner of Ascent Meredith Portfolio Management and Robert R. Meredith, was aware that "you made a personal loan to Nicholas Lattanzio," and that Nicholas had assured him that he was intending to repay Fred as quickly as possible (Exhibit K to N. Lattanzio Aff., dated June 28, 2006).

On November 12, 2004, plaintiffs commenced this action seeking recovery of the amounts due on the loan. The first cause of action is for breach of contract by Ambrose against Live Oak (Complaint, ¶¶ 38-43). The second and seventh causes of action, which are not being challenged on this motion, are also for breach of contract, and are asserted by Ambrose against Sherman & Peabody (id., ¶¶ 44-49). The third claim is for fraud by Ambrose against Nicholas for Nicholas's misrepresentations that he was arranging for a loan between Ambrose and Live Oak, such that Live Oak would repay the money in 30 days as agreed in the contract, that Ambrose would get a 10% stake in the new company, and that Fred would get a $50,000 finder's [*4]fee (id., ¶¶ 50-54). The fourth and fifth causes of action are identical to the first and second with Fred as the plaintiff (id., ¶¶ 55-65). The sixth cause of action is for breach by Fred against Nicholas for the $50,000 finder's fee (id., ¶¶ 67-72). The eighth claim is asserted by Fred against Nicholas for failure to pay the demand note due September 30, 2004 (id., ¶¶ 80-83). The ninth cause of action, asserted by Ambrose, is against Nicholas for breach of contract in failing to repay the loan (id., ¶¶ 84-89). Finally, the tenth claim, asserted by Fred, alleges fraud by Nicholas in misrepresenting that he would pay Fred a finder's fee if Fred procured an investor to invest $500,000 in Live Oak (id., ¶¶ 90-95).

In their motion for summary judgment, plaintiffs argue that the undisputed facts show that Nicholas breached his agreement with them, which he made on behalf of himself and his co-investors, to repay a short-term loan from the plaintiffs. They assert that the parties agree, and the evidence shows, that plaintiff Ambrose made a loan of $500,000 to Nicholas, for a term of one month, with interest in the amount of 20% or $100,000, and with a 10% equity interest in the new company for plaintiffs. They argue that in paragraph 68 of the Amended Answer, defendant Nicholas admitted that the "loan sought by him from plaintiff was a personal one and that Nicholas Lattanzio individually would be solely responsible for the repayment of the loan without recourse against any other party, individual or entity" (Answer, ¶ 68). Plaintiffs contend that Ambrose performed under the contract Nicholas and his co-investors received the $500,000 and that defendants Nicholas and Live Oak admitted this in their Answer and Amended Answer (Answer, ¶ 31; Amended Answer, ¶ 4). They further assert that it is undisputed that Nicholas has not paid back the loan, thereby breaching the contract.

Plaintiffs also argue that the loan was made to Nicholas and his co-investors, one of which was Live Oak. As such, they contend, Nicholas and Live Oak are both jointly and severally liable for the debt. They dispute Nicholas' and Live Oak's arguments that the contract was made between Ambrose and Sherman & Peabody, Inc. They assert that there is no evidence that the contract was made directly with Sherman & Peabody, Inc., or that Nicholas represented that he was just acting as an agent for others. Plaintiffs urge that various e-mails between Nicholas and Fred show that Nicholas understood that he was responsible for the loan. They further urge that the four promissory demand notes signed by Nicholas, and sent to them (Stein Aff., Exhibit A), also demonstrate that Nicholas was responsible for repaying the loan, and that the agreement was not with Sherman & Peabody, Inc.

In opposing plaintiffs' motion and in cross-moving for summary judgment, defendants Nicholas and Live Oak assert that the plaintiffs' motion must be denied because there is no evidence that the $500,000 was loaned to Nicholas personally. They point to Fred's deposition testimony in which Fred states that Nicholas did not say who the borrower of the loan was, and that he did not make a personal loan to Nicholas (Exhibit B to Affirmation of Joseph Maddaloni, Jr. In Opposition, dated June 30, 2006, Deposition of Fred Lattanzio, at 30, 58-59). They urge that they be granted summary judgment dismissing all claims against them (the first, second, fourth through seventh, and the ninth causes of action), because Fred's testimony read in conjunction with Nicholas' affidavit, and the documentary evidence, demonstrates that neither Nicholas nor Live Oak was intended to be the party responsible for repayment of the $500,000 provided by Ambrose, and that, instead, the loan was made to Nicholas as an officer of Sherman & Peabody, Inc. As proof that the loan was to Sherman & Peabody, Inc., the moving defendants point to documents connected with the merger of Sherman and Peabody, LLC with William [*5]Potter's company, Pennsylvania Eagle Distributors, LLC, purportedly identifying Sherman & Peabody, LLC as the borrower of the $500,000, as well as a July 30, 2004 letter from Potter to Fred expressing Sherman & Peabody, Inc.'s intent to repay the loan proceeds. Thus, they argue that there is no basis in law or fact to hold Nicholas or Live Oak liable for repayment of the loan proceeds to Ambrose.

Nicholas and Live Oak also move to dismiss the fraud claims (the third and tenth causes of action). They assert that the third claim for fraud fails because the evidence shows that Nicholas never represented that the loan was made to himself or to Live Oak. Thus, they contend that there was no false statement regarding the identity of the borrower, and no proof that Nicholas' statements were intentionally false. With regard to the tenth cause of action, alleging fraud upon Fred based on Nicholas' statement that Fred could receive a $50,000 finder's fee for arranging the loan, defendants contend that Fred's testimony that he believed it was unethical, and that he was not going to accept it because he expected to receive a fee from Ambrose, demonstrates that plaintiffs did not rely on any promise of a finder's fee in arranging the loan. Defendants contend that the eighth cause of action, seeking recovery for Nicholas' failure to pay on the demand notes, should be dismissed as a matter of law, because no agreement was reached with regard to the demand notes. They assert that Fred testified that he did not request such notes, and, therefore, defendants conclude, he rejected the notes.

After plaintiffs filed their motion for summary judgment, Nicholas and Live Oak moved for leave to further amend their Amended Answer to strike paragraphs 67 and 68 in the Answer which assert two "affirmative defenses." The first affirmative defense is that there is no privity of contract between plaintiffs and Live Oak or Sherman & Peabody (Answer, ¶ 67). The second affirmative defense, relied upon by plaintiffs in their motion for summary judgment, is that the loan was a personal one to Nicholas, and that he was solely and individually responsible for the repayment of the loan (Answer, ¶ 68). Nicholas and Live Oak contend that prior counsel to these defendants inadvertently incorporated these defenses into their Amended Answer and Cross Claims, which are unfavorable to the interests of the moving defendants. They urge that no significant prejudice will result to the parties, and, therefore, the amendment should be granted.

In opposition to the motion to amend, plaintiffs argue that this amendment is prejudicial, because discovery in this matter has been closed, and that they would have followed a different course in discovery if the admissions Nicholas now seeks to retract had not been part of the record. Moreover, they argue that this motion to amend was submitted after plaintiffs had already made their summary judgment motion relying on those admissions. They urge that the motion is untimely, particularly since the amendment does not rely upon new evidence, but upon something which Nicholas had known since the day this action was filed, and defendants fail to offer a reasonable excuse for the delay. Plaintiffs contend that if the court exercises its discretion and grants defendants leave to amend, sanctions in the form of costs and attorney's fees for the defense of this motion should be awarded to plaintiffs.

The motion for summary judgment is granted on the breach of contract claims (the eighth and ninth causes of action) as against defendant Nicholas, and denied as against defendant Live Oak, and the cross motion for summary judgment is granted only as to the third and tenth causes of action for fraud, and is otherwise denied. The branch of the cross motion for leave to amend the Amended Answer is denied. [*6]

I turn first to the cross motion for leave to amend, and then to the motions for summary judgment. A motion for leave to amend, pursuant to CPLR 3025 (b), is committed to the broad discretion of the trial court (Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959 [1983]; Oil Heat Institute of Long Island Ins. Trust v RMTS Associates, LLC, 4 AD3d 290 [1st Dept 2004]). In the absence of prejudice or surprise, leave to amend is freely granted (see CPLR 3025 [b]). Prejudice may be demonstrated where the opposing party is hindered in its preparation of its case, where there is a significant expansion of the claims, or where the amendment is sought after discovery has been completed (see e.g. Oil Heat Institute of Long Island Ins. Trust v RMTS Associates, LLC, 4 AD3d 290, supra [party hindered in preparation, and prevented from taking measure in support of its position]; Moon v Clear Channel Communications, Inc., 307 AD2d 628 [3d Dept 2003] [prejudice after the completion of discovery]; Thibeault v Palma, 266 AD2d 616 [3d Dept 1999] [significant expansion of claims with new theories]). In exercising its discretion, the court will consider whether the moving party offers a reasonable excuse for the delay in asserting the amendment, and how long that party was aware of the substance of the proposed amendment at the time it served the pleading it seeks to amend (see Oil Heat Institute of Long Island Ins. Trust v RMTS Associates, LLC, 4 AD3d at 293; see also Heller v Louis Provenzano, Inc., 303 AD2d 20 [1st Dept 2003] [motion denied where no explanation for inordinate delay]; Inwood Tower Inc. v Fireman's Fund Ins. Co., 290 AD2d 252 [1st Dept 2002 ] [same]; Hanford v Plaza Packaging Corp., 284 AD2d 179 [1st Dept 2001] [plaintiffs offered no excuse for long delay, sought amendment only after defendants moved for summary judgment, and proposed amendment was discoverable at time of original pleading]; Estate of Birdsall, 60 AD2d 522 [1st Dept 1977] [motion denied where facts were known at time of original answer, and leave was sought two years later]).

Under the circumstances here, leave to amend is denied. Defendant Nicholas was aware that he made an admission in paragraph 68 of his original answer that the "subject loan sought by him from plaintiff was a personal one and that [he] individually would be solely responsible for the repayment of the loan" in December 2004 when he filed that pleading. This admission was affirmed when defendants moved for leave to amend the answer, leaving that paragraph intact, which motion was granted in early June 2006. It was not until plaintiffs made this motion for summary judgment that Nicholas sought leave to amend, and delete that admission. It is incredible to believe that Nicholas made a mistake about this admission.

Plaintiffs have demonstrated that they will suffer prejudice. This motion was made after discovery was completed, and after plaintiffs made their motion seeking summary judgment based in part on this admission. Plaintiffs have demonstrated that they would have conducted the depositions and discovery differently if they did not have this admission. In addition, Nicholas fails to offer any reasonable excuse for this long delay. The fact that he changed counsel during the course of this action, and that counsel did not focus on the admission until after it received the summary judgment motion papers, are not satisfactory excuses, particularly when the factual basis of the proposed amendment was known at the time of the original pleading in December 2004 (see Estate of Birdsall, 60 AD2d 522, supra). Accordingly, leave to further amend the answer is denied, and the summary judgment motions will be considered in light of the Complaint and Amended Answer.

The first issue to be addressed on the summary judgment motion and cross motion is which law is to be applied, New York or Massachusetts. Plaintiffs urge, in a footnote in their [*7]brief, that Massachusetts law applies to their breach of contract claims because plaintiffs are Massachusetts residents, the money was loaned out of an account in Massachusetts, and the damages were suffered there (Plaintiffs' Memorandum in Support, at 6, n 5). Defendants contend that they are not contesting this because the breach of contract laws between the two states are not in conflict (Defendants' Brief, at 12, n 5).

In determining which law is to be applied, the first issue to be determined is whether there is an actual conflict between the laws of the jurisdictions involved (Matter of Allstate Ins. Co. [Stolarz], 81 NY2d 219 [1993]; Elson v Defren, 283 AD2d 109 [1st Dept 2001]). Under Massachusetts law, to prove a breach of contract claim, the plaintiff must demonstrate that there was a valid contract, that the defendant breached its duties under the contractual agreement, and that the breach caused the plaintiff damage (see Zaniboni v Seminatore, 2005 WL 3721102, *7 [Mass Super 2005], citing Singarella v City of Boston, 342 Mass 385, 387 [1961]). In addition, the terms of the agreement are those terms to which the parties mutually assented, and where the contract is unambiguous, it is enforced according to its terms (id.). Similarly, under New York law, to establish a right to recover for breach of contract, a party must prove (1) the existence of a contract; (2) performance of the contract by the injured party; (3) breach by the other party; and (4) damages (Rexnord Holdings, Inc. v Bidermann, 21 F3d 522 [2d Cir 1994]; Noise In Attic Productions, Inc. v London Records, 10 AD3d 303 [1st Dept 2004]; Furia v Furia, 116 AD2d 694 [2d Dept 1986]; accord J & L American Enterprises, Ltd. v DSA Direct, LLC, 10 Misc 3d 1076 (A) [Sup Ct, NY County 2006]). Unambiguous contracts also are enforced according to their terms (Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470 [2004]). Because there is no conflict between New York and Massachusetts law, I will apply New York law.

Plaintiffs have made a prima facie demonstration of their right to summary judgment on the breach of contract claims as against defendant Nicholas, and Nicholas has failed to raise any triable issue of fact. Plaintiffs have presented proof that Nicholas borrowed $500,000.00 for a 30-day period, and agreed to pay interest on that loan of 20%, in the amount of $100,000.00, along with a 10% equity in the new company, which proof is not disputed (see N. Lattanzio Dep., at 106-07, 123). Plaintiffs showed that they wired the money to Nicholas, and that the loan was not repaid (see June 28, 2006 N. Lattanzio Aff., ¶¶ 5-9). They have demonstrated that Nicholas was the borrower by relying in part on Nicholas' admission in the Amended Answer (¶ 68) that the loan was a personal one for which he would be solely responsible for repaying. They have further demonstrated his obligation as borrower by documentary proof such as the numerous e-mails from Nicholas to Fred, in which Nicholas confirmed that he borrowed the money, $500,000.00, for 30 days, with $100,000.00 interest, and that he was responsible for repaying it (Exhibit D to Notice of Motion). Moreover, they have submitted several demand notes, signed by Nicholas, in which he clearly and unequivocally states that he promises to pay plaintiffs the principal amount of $500,000 together with interest at a rate of 20% per annum, not to be less than $100,000, from March 31, 2004 to the date the principal is repaid (Exhibit E to Notice of Motion; Exhibit A to Stein July 10, 2006 Affirm.; Exhibits A, B and C to Potter Aff.). Further, they show that Nicholas is jointly and severally liable on the loan, because the loan was to him and a group of investors (see Capparelli v Vitiritti, 228 AD2d 403 [2d Dept 1996] [co-makers on note are jointly and severally liable]).

Defendant Nicholas' attempt to create a factual issue is transparent. His statements, in his affidavit in support, that he never indicated to Fred that this was a personal loan to him [*8](Affidavit of Nicholas Lattanzio in Opposition, dated June 28, 2006, ¶¶ 6, 8) are self serving and completely contradict his admission in his Amended Answer. His contemporaneous e-mails, as described above, never stated that only Sherman & Peabody was liable for the loan, but, instead, continuously reaffirmed his responsibility and obligation as a debtor on the loan. The fact that he allegedly agreed with his co-investors that the $500,000 from plaintiff Ambrose would be considered a loan to Sherman & Peabody, LLC, which would then loan the money to William Potter's company, PED, which merged together, and was the predecessor to defendant Sherman & Peabody, Inc. fails to raise an issue of fact, much less prove that the loan was only to Sherman & Peabody, Inc. His argument that somehow the documents effectuating the acquisition of the Meredith Note also prove that Sherman & Peabody, Inc., alone, was the debtor is unpersuasive. Those documents do not even mention the loan from plaintiffs. Fred's deposition testimony is not to the contrary. While Fred testified that Nicholas did not identify the borrower of the loan, and that plaintiffs made the loan to Nicholas and his group of investors, Fred also unequivocally stated that Nicholas guaranteed that he would repay the loan (Fred Lattanzio Dep., at 16-19, 30-31, 58-59). He explains, in his affidavit, that the loan was not meant to be a personal one with which Nicholas could do whatever he wanted; rather, it was intended to be a loan to Nicholas and his group of investors to purchase a company (F. Lattanzio Aff., ¶ 7). Fred states, again, that it was always clear that Nicholas would be personally liable for it (id., ¶ 8). Defendant Nicholas fails to raise a genuine issue of fact as to his liability as a debtor on the loan. Accordingly, summary judgment of liability is granted to plaintiffs against defendant Nicholas on their contract claims based on his failure to repay the loan (the eighth and ninth causes of action) for the full amount of the loan principal of $500,000, including interest of 20% from April 28, 2004, together with statutory interest, and a 10% equity interest in the new company, Sherman & Peabody, Inc., and summary judgment is denied to Nicholas on those claims.

Plaintiffs' claims against Live Oak, however, are not subject to summary judgment on behalf of either party. While, as discussed above, plaintiffs have presented undisputed proof of the terms of the loan, they fail to demonstrate, as a matter of law, that Live Oak was one of the group of investors that would be jointly and severally liable to the plaintiffs for the $500,000 loan. The facts that Live Oak was Nicholas' hedge fund, and that it admittedly invested $100,000 in the purchase of the Meredith Note, and, thus, in the purchase of the company, do not demonstrate that it was also a borrower on the $500,000 loan. Unlike with Nicholas, there are no documents, such as e-mails, supporting claims that Live Oak was the borrower, and no admission in the Amended Answer as to its obligation as a debtor. Fred states in his deposition that the loan was to Nicholas and a group of investors, but does not specify Live Oak as one of the group. Accordingly, there is no clear evidence that Live Oak was jointly and severally responsible. Instead, a factual issue is raised as to Live Oak's obligation on the loan. Thus, summary judgment is denied to all parties on the first and fourth causes of action.

The cross motion for summary judgment is granted only to the extent of dismissing the third and tenth causes of action for fraud. Both fraud claims are based on the identical allegations as the claims for breach of contract, alleging that Nicholas committed a fraud by failing to repay the loan to plaintiff Ambrose as promised (third cause of action), and failing to pay the finder's fee to plaintiff Fred as promised (tenth cause of action). They seek the same damages as the contract claims. These claims are merely restatements of the breach of contract claims, and allege no independent facts sufficient to give rise to tort liability (Jericho Group, Ltd. [*9]v Midtown Dev., L.P., 32 AD3d 294 [1st Dept 2006]; 767 Third Ave. LLC v Greble & Finger, LLP, 8 AD3d 75 [1st Dept 2004]; Barington Capital Group, L.P. v Arsenault, 281 AD2d 166 [1st Dept 2001]; Comtomark, Inc. v Satellite Communications Network, Inc., 116 AD2d 499 [1st Dept 1986]). Therefore, summary judgment is granted dismissing plaintiffs' fraud claims.Accordingly, it is

ORDERED that the motion is granted to the extent of granting partial summary judgment in favor of plaintiffs and against defendant Nicholas Lattanzio on the eighth and ninth causes of action in the Complaint in the amount of $500,000, together with interest at the rate of 20% per annum from the date of April 28, 2004, until the entry of judgment, as calculated by the Clerk of the Court, and thereafter at the statutory rate, and together with a 10% equity interest in Sherman & Peabody, Inc., together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; the eighth and ninth causes of action are severed, and the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that the motion for leave to amend is denied; and it is further

ORDERED that the cross motion for summary judgment is granted to the extent that the third and tenth causes of action of the Complaint are severed and dismissed; and it is further

ORDERED that the remainder of the action shall continue.

Dated: November 24, 2006

ENTER:

_____________________________

J.S.C.

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