Mamdouh v Leger

[*1] Mamdouh v Leger 2011 NY Slip Op 52469(U) Decided on December 23, 2011 Supreme Court, Kings County Rivera, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 23, 2011
Supreme Court, Kings County

Georgy Mamdouh & NORAMA INC., Plaintiffs,

against

Trudy E. Leger, JAMES LEGER, JEM CONSULTING, SYNTHESIS, INC., GEORGE TZITZIKALAKIS, and DEBORAH TZITZIKALAKIS, Defendants.



28661/2005



Attorney for Plaintiffs

Anne McParland

3816 Review Place - 6C

Bronx, NY 10463

Attorney for Defendants Trudy E. Leger, James Leger and JEM Consulting

Dekajlo Law Offices

1900 Hempstead Turnpike

East Meadow, NY 11554

Attorney for Defendants Synthesis, Inc, George and Deborah Tzitzikalakis

Robert A. Sesti, Esq.

Sesti Law Firm PC

747 Third Avenue, 37th Floor

New York, NY 10017

(212) 888-5361

Francois A. Rivera, J.

By notice of motion filed on August 26, 2011, defendants Synthesis, Inc., George Tzitzikalakis and Deborah Tzitzikalakis (hereafter the "Synthesis defendants") move under motion sequence number ten, for an order dismissing the plaintiff's complaint pursuant to CPLR 3211(a)(3), (5) and (7). Plaintiffs oppose the motion.

[*2]BACKGROUND

Plaintiffs commenced this action as against defendants Trudy E. Leger, James Leger (hereafter "the Leger defendants") and JEM Consulting (hereafter "JEM") by filing a summons and complaint on September 16, 2005. A verified answer was filed on December 13, 2005. On July 27, 2011 plaintiffs filed an amended summons dated July 27, 2011 along with an amended verified complaint dated November 17, 2009, adding the Synthesis defendants to the plaintiffs' lawsuit. The Leger defendants and JEM filed an answer to the amended summons and complaint on August 9, 2011. The Synthesis defendants have not answered the plaintiffs' amended summons and complaint. To this date a note of issue has not been filed.

Plaintiff's amended complaint makes fifty-seven allegations of fact in support of eight purported cause of action sounding in professional malpractice, breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, personal injury and loss of society and consortium. The court notes that plaintiffs seek damages in the amount of five-million, one-hundred and fifty-thousand dollars from defendants for ten enumerated causes of action although only eight causes of action are delineated in the verified complaint. The causes of action that plaintiffs label as "eighth," "ninth" and "tenth" are referred to herein as "sixth," "seventh" and "eighth."

MOTION PAPERS

The Synthesis defendants' motion papers consist of a notice of motion, an attorney's affirmation, five exhibits labeled "A" through "E" and a separate memorandum of law. Exhibit "A" is a copy of plaintiffs' order to show cause filed on November 17, 2009 seeking leave to amend their summons and complaint. Exhibit "B" is a copy of an affidavit by the plaintiff originally annexed to the order to show cause dated November 17, 2009. Exhibit "C" is a copy of this court's order dated November 23, 2010 granting plaintiffs' request for leave to amend the summons and complaint. Exhibit "D" is a copy of this court's order dated May 20, 2011 ordering that plaintiffs' amended complaint is a nullity as it does not conform with the proposed amended complaint for which the plaintiffs' leave to amend was based upon. Exhibit "E" consists of a copy of the amended complaint served upon defendants on July 27, 2011 subsequent to this court granting plaintiffs' July 15, 2011 order to show cause seeking permission to do so.

Plaintiffs oppose defendants' motion by affirmation in opposition consisting of an attorney's affirmation, the unsworn affidavit of plaintiff Mamdouh and four exhibits labeled "A" through "D." Exhibit A consists of a copy of the transcript of this hearing of the instant case dated May 20, 2011. Exhibit B consists of an affirmation in opposition to the Synthesis defendants' March 10, 2011 motion to dismiss under motion sequence number eight. Exhibit C consists of a copy of the Synthesis defendants' March 10, 2011 motion to dismiss under motion sequence number eight. Exhibit D consists of a copy of the plaintiffs order to show cause filed on November 17, 2009.

The Synthesis defendants submitted a reply memorandum in support of their motion to dismiss consisting of an attorney's memorandum and one exhibit labeled "A." Exhibit A consists of a Workers' Compensation stipulation bearing Mamdouh's name, dated August 3, 2003.

LAW AND APPLICATION

CPLR 3211(a)(3), (5) and (7) state in pertinent part, "Motion to dismiss cause of action. A party may move for judgment dismissing one or more causes of action asserted against him on [*3]the ground that: ... 3. the party asserting the cause of action has not legal capacity to sue; or... 5. the cause of action may not be maintained because of ... statute of limitations ... or... 7. the pleading fails to state a cause of action."

Before considering the movants' contention that plaintiff does not have the legal capacity to sue and has commenced the instant action untimely, the court deems it more efficient to first determine whether plaintiffs have made any cognizable claims.

"On a CPLR 3211 motion to dismiss, the court will accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Nonnon v. City of New York, 9 NY3d 825, 827, 874 N.E.2d 720, 722 [2009]; citing, Leon v. Martinez, 84 NY2d 83, 87-88, 638 N.E.2d 511, 513 [1994]).

The Appellate Division, Second Department, reasoned in Sokol v. Leader, 74 AD3d 1180, 904 N.Y.S.2d 153, [2d 2010], that: "On a motion made pursuant to CPLR 3211(a)(7) to dismiss a complaint, the burden never shifts to the non-moving party to rebut a defense asserted by the moving party. "CPLR 3211 allows [a] plaintiff to submit affidavits, but it does not oblige him [or her] to do so on penalty of dismissal."... Unless the motion is converted into one for summary judgment pursuant to CPLR 3211(c), "affidavits may be received for a limited purpose only, serving normally to remedy defects in the complaint," and such affidavits are not to be examined for the purpose of determining whether there is evidentiary support for the pleading.'... Thus, a plaintiff "will not be penalized because he has not made an evidentiary showing in support of his complaint."" (Id. at 1181. [internal citations omitted]).

The Court in Sokol further reasoned, that:

"[A] court is, of course, permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7) (see CPLR 3211[c]). If the court considers evidentiary material, the criterion then becomes "whether the proponent of the pleading has a cause of action, not whether he has stated one."... Yet, affidavits submitted by a defendant "will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that [the plaintiff] has no cause of action."... Indeed, a motion to dismiss pursuant to CPLR 3211(a)(7) must be denied "unless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it."" (Id. at 1181-1182. [internal citations omitted]). The court must ascertain, first, whether there are factual allegations which give the defendant and the court notice of the transactions or occurrences intended to be proved, and, second, whether those factual allegations allege any cognizable cause of action

In the instant motion neither plaintiff has offered an affidavit in opposition to the motion. Plaintiff Mamdouh did offer a letter explaining his position but it is unsworn and therefore has no probative value and will not be considered to remedy and deficiencies in the complaint.

The court will look at plaintiffs' first cause of action for professional malpractice; third cause of action for fraud; and fourth cause of action for negligent misrepresentation to determine whether there are factual allegations which give the defendant and the court notice of the transactions or occurrences intended to be proved.

"A claim of professional negligence requires proof that there was a departure from accepted standards of practice and that the departure was a proximate cause of the injury [*4](Georgetti v United Hosp. Med. Ctr., 204 AD2d 271, 272; see also, Estate of Burke v Repetti & Co., 255 AD2d 483; Stanski v Ezersky, 228 AD2d 311, 311-312, lv denied 89 NY2d 805; Post & Co. v Sidney Bitterman, Inc., 219 AD2d 214, 223)." (D.D. Hamilton Textiles, Inc. v. Estate of Mate, 269 AD2d 214, 215, 703 N.Y.S.2d 451, 453 [1d 2000]).

"Accounting malpractice ... contemplates a failure to exercise due care and proof of a material deviation from the recognized and accepted professional standards for accountants and auditors, generally measured by GAAP and GAAS promulgated by the American Institute of Certified Public Accountants, which proximately causes damage to plaintiff (see, Ackerman v Price Waterhouse, 84 NY2d 535, 541; Collins v Esserman & Pelter, supra at 754, 756; Estate of Burke v Repetti & Co., 255 AD2d 483; Post & Co. v Bitterman, 219 AD2d 214, 223; Metz v Coopers & Lybrand, supra at 624; see also, 1A NY PJI3d 2:154, at 691 [1998])." (Cumis Ins. Soc'y, Inc. v. Tooke, 293 AD2d 794,797-798, 739 N.Y.S.2d 489, 493 [3d 2002]).

"[M]alpractice is professional misfeasance toward one's client..." (Chase Sci. Research v. NIA Group, 96 NY2d 20, 24, 725 N.Y.S.2d 592, 593 [2001]). "Malpractice is the negligence of a professional toward a person for whom a service is rendered (1 Weinstein-Korn-Miller, NY Civ Prac P 214.24). A "profession" is an occupation generally associated with long-term educational requirements leading to an advanced degree, licensure evidencing qualifications met prior to engaging in the occupation, and control of the occupation by adherence to standards of conduct, ethics and malpractice liability (see, Matter of Rosenbloom v State Tax Commn., 44 AD2d 69, 71, lv denied 34 NY2d 518). [M]alpractice ... has traditionally been limited to such "learned professions" as law ... accountancy ... architecture ... and engineering..." (Santiago v. 1370 Broadway Assocs., L.P., 264 AD2d 624, 624-625, 695 N.Y.S.2d 326, 327 [1d 1999]). "[M]alpractice in the statutory sense describes the negligence of a professional toward the person for whom he rendered a service, and that an action for malpractice springs from the correlative rights and duties assumed by the parties through the relationship. On the other hand, the wrongful conduct of the professional in rendering services to his client resulting in injury to a party outside the relationship is simple negligence." (Cubito v. Kreisberg, 69 AD2d 738, 742, 419 N.Y.S.2d 578, 580 [2d 1979]).

"It is well-settled that "[a] claim for negligent misrepresentation requires the plaintiff to demonstrate (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information" (J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148, 831 N.Y.S.2d 364 [2007]; see also Parrott v Coopers & Lybrand, 95 NY2d 479, 483-484, 718 N.Y.S.2d 709 [2000])." (Mandarin Trading Ltd. v. Wildenstein, 2011 NY Slip Op 741, 16 NY3d 173, 180 [2011]).

"To establish a prima facie case for fraud, plaintiffs would have to prove that

"(1) defendant made a representation as to a material fact; (2) such representation was false; (3) defendant intended to deceive plaintiff; (4) plaintiff believed and justifiably relied upon the statement and was induced by it to engage in a certain course of conduct; and (5) as a result of such reliance plaintiff sustained pecuniary loss"..." (Ross v. Louise Wise Servs., Inc., 2007 NY Slip Op 3793, 8 NY3d 478, 488 [2007]).

"In order to establish accounting fraud, the plaintiff must show representation of material fact, falsity, scienter, reliance, and damages (see New York Univ. v. Continental Ins. Co., 87 [*5]NY2d 308, 318, 662 NE2d 763, 639 N.Y.S.2d 283 [1995])." (Barrett v. Freifeld, 64 AD3d 736, 738, 883 N.Y.S.2d 305, 307 [2d 2009]).

In the instant case, plaintiffs' allege that defendant Trudy Leger "was and still is an accountant," that defendant James Leger "was and still is a licensed accountant," and that defendant Deborah Tzitzkalakis "is a certified public accountant." However, plaintiffs also allege the "material fact" that "defendants are not Certified Public Accountants." Plaintiffs can not simply allege a fact, i.e. that defendants are professional accountants thereby preserving a claim of malpractice, while also alleging the opposite fact that defendants are not professional accountants. By doing so, neither the court nor the defendants have any way of knowing what fact or facts the plaintiffs are claiming to support their claim.

Accordingly, plaintiffs' causes of action for professional malpractice, for fraud premised upon defendants' alleged misrepresentation that they are Certified Public Accountants and for negligent misrepresentation premised upon defendants' alleged misrepresentation that they are Certified Public Accountants are dismissed for failure to state a cause of action.

The court now turns to plaintiffs' second cause of action for breach of contract. The Appellate Division, Second Department has stated that the essential elements of a breach of contract are "the existence of a contract, the plaintiff's performance pursuant to that contract, the defendants' breach of their obligations pursuant to the contract, and damages resulting from that breach." (Elisa Dreier Reporting Corp. v Global Naps Networks, Inc., 84 AD3d 122, 127 [2d 2011]).

Plaintiffs' complaint fail to allege their own performance under the terms of the contract with the defendants. Furthermore, due to the ambiguities and inconsistent allegations of the complaint, the court cannot reasonably infer what performance was expected of the plaintiff and hence whether plaintiffs performed their end of the bargain. Accordingly, plaintiffs' cause of action for breach of contract is dismissed for failure to state a cause of action.

The court now turns to plaintiffs' fifth cause of action for breach of fiduciary duty.

"[T]he elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct" (Rut v Young Adult Inst., Inc, 74 AD3d 776, 777, 901 N.Y.S.2d 715; see Robert I. Gluck, M.D., LLC v Kenneth M. Kamler, M.D., LLC, 74 AD3d 1167, 904 N.Y.S.2d 151; Fitzpatrick House III, LLC v Neighborhood Youth & Family Servs., 55 AD3d 664, 868 N.Y.S.2d 212; Kurtzman v Bergstol, 40 AD3d 588, 590, 835 N.Y.S.2d 644). A cause of action sounding in breach of fiduciary duty must be pleaded with the particularity required by CPLR 3016(b) (see Chiu v Man Choi Chiu, 71 AD3d 621, 623, 896 N.Y.S.2d 132; Tsutsui v Barasch, 67 AD3d 896, 898, 892 N.Y.S.2d 400; Daly v Kochanowicz, 67 AD3d 78, 95, 884 N.Y.S.2d 144; DeRaffele v 210-220-230 Owners Corp., 33 AD3d 752, 823 N.Y.S.2d 202; Ozelkan v Tyree Bros. Envtl. Servs., Inc., 29 AD3d 877, 879, 815 N.Y.S.2d 265; Rasmussen v A.C.T. Envtl. Servs., 292 AD2d 710, 712, 739 N.Y.S.2d 220)." (Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 83 AD3d 804, 807-808, 921 N.Y.S.2d 260, 264 [2d 2011]).

CPLR 3016(b) states in pertinent part that "Where a cause of action or defense is based upon misrepresentation, fraud, mistake, wilful default, breach of trust or undue influence, the circumstances constituting the wrong shall be stated in detail." "Although there is certainly no requirement of "unassailable proof" at the pleading stage, the complaint must "allege the basic [*6]facts to establish the elements of the cause of action" (id. at 492). We therefore held that CPLR 3016 (b) is satisfied when the facts suffice to permit a "reasonable inference" of the alleged misconduct (id.). And, "in certain cases, less than plainly observable facts may be supplemented by the circumstances surrounding the alleged fraud"..." (Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 NY3d 553, 559, 883 N.Y.S.2d 147 [2009]; citing, Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 860 NYS2d 422 [2008]).

"As a general rule, accountants are not fiduciaries as to their clients (see Friedman v Anderson, 23 AD3d 163, 166, 803 N.Y.S.2d 514 [2005]; DG Liquidation v Anchin, Block & Anchin, 300 AD2d 70, 71, 750 N.Y.S.2d 753 [2002]; Nate B. & Frances Spingold Found. v Wallin, Simon, Black & Co., 184 AD2d 464, 465, 585 N.Y.S.2d 416 [1992]), except where the accountants are directly involved in managing the client's investments (see Bingham v Zolt, 66 F3d 553, 562 [1995], cert denied 517 US 1134 [1996]; Lavin v Kaufman, Greenhut, Lebowitz & Forman, 226 AD2d 107, 109, 640 N.Y.S.2d 57 [1996]; Kanev v Turk, 187 AD2d 395, 589 N.Y.S.2d 890 [1992])." (Caprer v. Nussbaum, 36 AD3d 176, 194, 825 N.Y.S.2d 55, 71 [2d 2006]).

"While it is true that the "[c]ourts do not generally regard the accountant-client relationship as a fiduciary one" (Fund of Funds v Andersen & Co., 545 F Supp 1314, 1356), where the allegations include knowledge and concealment of illegal acts and diversions of funds and failure to withdraw in the face of a conflict of interest, as in the case at bar, such a cause of action against an accountant will be permitted to stand." (Nate B. & Frances Spingold Foundation v. Wallin, Simon, Black & Company, 184 AD2d 464, 465-466, 585 N.Y.S.2d 416, 417 [1d 1992]; See also, Able Energy, Inc. v Marcum & Kliegman LLP, 2008 NY Slip Op 31363U, 2008 NY Misc. LEXIS 8901 [NY Cty. Sup. Crt., 2008];and, TKJ Management Corp. v Mark Mandel & Co. CPA's, 2008 NY Slip Op 30482U, 2008 NY Misc. LEXIS 7803 [NY Cty. Sup. Crt., 2008]).

Inasmuch as the amended complaint is a jumbled array of incomprehensible and contradictory factual allegations, it fails to provide the defendants with even a "reasonable inference" as to whether a fiduciary relationship existed between the parties. Accordingly, plaintiffs' cause of action for breach of fiduciary duty is dismissed for failure to state a cause of action.

The court now turns to plaintiffs' sixth cause of action for fraud. Plaintiffs' sixth cause of action for fraud consists of the bare allegation that defendants induced plaintiff to open a corporation from which defendants proceeded to perform fraudulent transactions from. Plaintiffs fail to allege any facts with the specificity required by CPLR 3016(b) as to what material misrepresentation was made by defendants leading to the alleged fraud. (See, Ross v. Louise Wise Servs., Inc., 8 NY3d at488). Accordingly, plaintiffs' sixth cause of action for fraud is dismissed for failure to state a cause of action.

The court now turns to plaintiffs' seventh cause of action for personal injury. "Premises liability, as with liability for negligence generally, begins with duty (see Palka v Servicemaster Mgt. Servs. Corp., 83 NY2d 579, 584, N.Y.S.2d 817; Waters v New York City Hous. Auth., 69 NY2d 225, 228, 513 N.Y.S.2d 356; Forbes v Aaron, 81 AD3d 876, 877, 918 N.Y.S.2d 118)." (Alnashmi v Certified Analytical Group, Inc., __ AD3d ___, 929 N.Y.S.2d 620, 623 [2d 2011]). "In order to prevail in any action premised upon negligence, it must be established that defendant [*7]owed plaintiff a duty, that defendant, by act or omission, breached such duty, that such breach was the proximate cause of plaintiff's injuries, and that plaintiff sustained damages (Febesh v Elcejay Inn Corp., 157 AD2d 102, 555 N.Y.S.2d 46 [1d 1990])." (Salvador v New York Botanical Garden, 71 AD3d 422, 423, 895 N.Y.S.2d 410, 411 [1d 2010]).

Plaintiff Mamdouh fails to allege any fact that connects the ownership and/or control of the premises where his alleged injury occurred to the defendants. Plaintiff further fails to allege any fact suggesting that the defendants owed plaintiff a duty at the subject premises. As plaintiff fails to show any duty owed by the defendants, plaintiff fails as a matter of law to establish a prima facie breach on the part of the defendants responsible for his alleged personal injury. Accordingly, plaintiffs' cause of action for personal injury is dismissed for failure to state a cause of action.

The court now turns to plaintiffs' eighth cause of action for loss of consortium

"It has been observed that the "consortium plaintiff has suffered no direct injury of [his or] her own" (Maidman v Stagg, 82 AD2d 299, 305). Rather, the "right to recover is derived, both in a literal and legal sense, from the injury suffered by [a] spouse" (Maidman v Stagg, supra, at 305; see also, Cody v Village of Lake George, 177 AD2d 921, supra). Further, "[t]he consortium claim and the principal personal injury claim are closely interconnected; together they represent the total, compensable damagesdirect and indirectsuffered as a result of the plaintiff's injury" (Maidman v Stagg, supra, at 305; see also, Millington v Southeastern El. Co., 22 NY2d 498; Champagne v State Farm Mut. Auto. Ins. Co., 185 AD2d 835; cf., Daniels v Zelco, Inc., 159 AD2d 538)." (Buckley v. National Freight, 220 AD2d 155, 157, 644 N.Y.S.2d 809, 810 [2d 1996]).

A claim for loss of consortium is necessarily a derivative one, which must be based in an injury suffered by another plaintiff. As plaintiff Mamdouh is the sole human plaintiff in this action, his claim for loss of consortium can not be viewed as deriving from another plaintiff's injury. Accordingly, plaintiff's cause of action for loss of consortium is dismissed for failure to state a cause of action.

CONCLUSION

Plaintiffs' amended verified complaint dated July 27, 2011 is dismissed in its entirety.

The foregoing constitutes the decision and order of the court.

Enter:________________________________

J.S.C.

Enter Forthwith:________________________________

J.S.C.