Duff v Curto
Annotate this Case
Download PDF
Duff v Curto 2012 NY Slip Op 30264(U) January 25, 2012 Supreme Court, Suffolk County Docket Number: 19515-2009 Judge: Emily Pines Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER INO[X NUMRF:R;I9sllf2009 SUPREME COURT - STATE OF NEW YORK COMMERCIAL Prese1l1: DIVISION, PART 46, SUFFOLK COUNTY BON. EMILY PINES 1. s. Original Motion Date: Motion Submit Date: Motion Sequence No.: C. 09~22-20J 1 11-15-2011 002 MG [ ] FINAL f xl NON FINAL ____________________ .x Attorney for Plaintiff Depinto Names & Associates, LLP 445 Broad Hollow Road, Suite 200 Melville, New York 11747 GARY DUFF, individually and on behalf of Fairlea Court Holdings, Inc., Plaintiffs, -againstPETER CURTO, JR., Attorney for Defendants Anthony Conforti, Esq. Conforti & Waller, LLP 250 North Sea Road Southampton, New York 11968 Defendant. ______ ... x ORDERED that the motion by Defendant (motion sequence # 002) for partial summary judgment dismissing the tirst, second, third, fourth and sixth causes of action in Plaintiffs Complaint is granted. FACTUAL AND PROCEDURAL BACKGROUND This action was commenced by plaintiff Gary Duff ('<Duff'), a 50% member of Fairlea Court Holding LLC ("Fairlea"), individually and derivatively on behalf of Fairlea against Fairlea's other 50% member, defendant Peter Curto, Jr. C'Curto"). [* 2] According to the complaint, Fairlea was formed in 2006 for the sale and exclusive purpose of acquiring land at 19 Fairlea Court, North Haven, New York, to construct a singlet""<mlly home thereon. Duff claims that at the time Fairlea was formed he made a capital cmtribution of$300.000. He further claims that Fairlea's Operating Agreement ("Operating Agreement") required each member to provide 50% of the capital contributions to Fairlea in order to fund the purchase of the vacant land and the construction of the home. Duffalleges that Cu-to failed to make any capital contribution to Fairlea as required by the Operating Agreement. DufT also alleges that thereafter he made additional capital contributions to Fairlea totaling ap~roximately $173,000, because of Curto's failure to make his capital contribution. Duff funher claims that the proceeds from the sale of the property in 2009 were insufficient to cover the mortgage, construction loan and expenses, resulting in a shortfall ot'$50,000, which he paid as il.nadditional capital contribution to Fairlea. In the complaint, Duff asserts causes of action for breach of contract, negligent/intentional misrepresentation, unjust enrichment, conversion, and fraudulent inducement. By order dated January 20, 2010, this Court denied Curto's motion to dismiss the complaint pursuant to CPLR 3211(a)(I), (4), (5) and (7), stating, in relevant part: The defendant provided the Court with the Operating Agreement of Fairlea and argues that the defendant was under no obligation to make an initial capital contribution to Fairlea since there was no amount set forth opposite Curto's name on Schedule A. However, after reading the documents provided, the Court notes that there is a percentage of 50% listed next to each parties name in Schedule A without a figure for the initial cash contribution. The Court finds that the documentary evidence provided raises an issue of the parties intent in placing the 50% figure in the Agreement and does not definitively dispose of the plaintiff's claim (citation omitted). Curto now moves for summary judgment dismissing all causes of action, except the fifth cause of action ror conversion, In an affidavit in support of the motion, Curto states. among other things, that Dutfloaned Fairlea all necessary monies to the extent that the expenses were not runded by State Bank of Long Island. He provides a copy of Fairlea's Operating Agreement and notes thaI Exhibit A of the Operating Agreement docs not list any capital to be contributed by either member. Curto further states that no agreement exists between the parties to make capital contributions in any amount. Curto also provides an excerpt of Duffs deposition testimony wherein he admitted that he reported a recourse loan to Fairlea on Fairlea's 2008 tax Page 2 of 6 [* 3] return. Curto argues that the Operating Agreement conclusively refutes Duff's contention that Curto was required to contribute capital to Fairlea. Additionally, Curto argues that the existence of the Operating Agreement, a signed and fully integrated contract, precludes Duffs multiple theories of recovery on account of Curto's alleged failure to perform his obligations thereunder. In an affidavit in opposition to the motion, Duff states, among other things, that Curto assured him that he \vould match Duff's initial capital contribution to Fairlea, and that he relied on Curto's representation. Dufffurther alleges that section 3.1 of Fairlea 's Operating Agreement required he and Curto to contribute 50% of Fairlea's capitaL Section 3.1 of the Operating Agreement provides, in relevant part: Initial Contributions. Upon the execution of this Agreement, each Member shall contribute eash and/or property to the Company as set forth opposite their names in Exhibit "A". Exhibit A to the Operating Agreement has four columns. The first column has the parties names. The second column entitled "Initial Cash Contribution" is blank. The third column entitled "Description of Property Contributed and Adjusted Basis (AB), Liability Subject to (LS) and Agreed Valuc (AG) ofPropcrty" is also blank. The fourth column labeled "Percentages" lists "50%" for each orthe Members. Duff contends that this demonstrates that he and Curto were each responsible for an initial 50% cash contribution. Duff states he made an initial capital contribution but that Curto did not. Duff alleges that he made additional capital contributions to Fairlea totaling approximately $80,000, and that his company, Gary Duff Designs rendered services on the project valued at approximately $143,000. Thus, Duffcontends that he expended approximately $524,000 on the prqject, while Curto expended nothing. Notably, Duffs affidavit fails to address his deposition testimony that Fairlea's 2008 tax return listed a recourse loan to it by Duff. Duff argues that this Court's prior finding, in denying Curto's motion to dismiss., "that the documentary evidence provided raises an issue orthe parties intent in placing the 50% tigurc in the Agreement and does not definitively dispose of the plaintiffs claim," precludes summary judgment. He argues that the Operating Agreement is ambiguous and that a question of fact exists regarding its construction. Thus, Duff contends that Curto has failed to make a prima facie shmving of entitlement to summary judgment. Page 3 of 6 [* 4] In reply, Curto provides, among other things, copies of Fairlea's 2007 and 2008 tax rClurns both or which list a loan payable to Duff in the amount of $308,637 as a liability of Fairlea. Curto argues that the tax returns confirm that the funds advanced by Duff to Fairlea \Nere loans and not capital contributions. DISCUSSION A party moving for summary judgment has the burden of making a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence demonstrating the absence of any material issues offact (Winegradv. New York Univ. Med. etr., 64 NY2d 85,487 NYS2d 316 [1985]; Zuckerman v. City of New York, 49 NY2d 557,427 NYS2d 595 [1980]). Once a prima facie showing has been made by the movant, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial (see, Zayas v. Half Hollow Hills Cent. School Dist., 226 AD2d 713, 641 NYS2d 701 [2" Dept. 1996]). "[I]n detennining a motion for summary judgment, evidence must be viewed in the light most favorable to the nonmovant" (Pearson v Dix McBride, LLC, 63 AD3d 895 [2d Dept 2009]). Since summary judgment is the procedural equivalent or a trial, the motion should be denied ir there is any doubt as to the existence of a triable issue or when a material issue of fact is arguable (Salina v IPT Trucking, lnc., 203 AD2d 352 [2d Dept 1994]). A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself and there is no reasonable basis of difference of opinion (see GreenfIeld v Phillies Records, Inc., 98 NY2d 562, 569 l2002]. "A cardinal principle governing the construction of contracts is that the entire contract must be considered and, as between possible interpretations of an ambiguous term, that will be chosen which best accords with the sense ohhe remainder ofthe contract" (Metropolitan Life Ins Co, v Noble Lowndes Intern, Inc., 84 NY2d 430, 437 [1994] quoting Rentways Inc. v O'Neill Milk & Cream Co., 308 NY 342, 347 [1955]). I lere, as previously determined by the Court in denying Curto's earlier motion to dismiss pursuant to CPLR 3211(a)(1), the Opcrating Agrcement is ambiguous as to whether initial capital contributions were required by both Duff and Curto. The first sentence of section 3.1 of Page 4 of 6 [* 5] the Operating Agreement Member. ~crc However. appears, on its face, to mandate initial capital contributions by each Exhibit A does not set forth the amount of any such initial contribution. an agreement is ambiguous, the Court may consider extrinsic evidence of the parties- i nUnt (Tierney v Drago. 38 AD3d 755, 757 [2d Dcpt 2007]). The evidence submiued by Curto in support of the instant motion made following the completion of discovery, affidavit, an excerpt of Duffs deposition recourse loan to Fairlea on Fairlea's retllrJlS, demonstrates, representations testimony including Curto's wherein he admitted that he reported a 2008 tax return, and copies of Fairlea's 2007 and 2008 tax as a matter of law that Duff loaned the funds to Fairlea. Duff's in l<'airlea's tax returns constitute an admission that the funds were a loan and not a c.pital contribution 20071). l'herefore, (see Acme American Repairs, lnc. v Uretsky, 39 AD3d 675, 677 [2d Dept that branch of Curto's motion lor summary judgment seeking dismissal of the first cause of action for breach of contract is granted. In the second cause of action, Duff alleges, among other things, that "[o]n numerous occasions, the plaintiff represented purchase and construction that he would make equal capital contributions of the subject premises." However, Duffs affidavit in opposition to the instant motion only mentions that Curto made such an assurance/representation execution of the Operating Agreement. toward the prior to the As Duff has presented no evidence of an oral promise made after the parties entered into the Operating Agreement, the merger clause in the Operating Agreement bars the second cause of action (see Cathy Daniels, Ltd. v Weingasl, _NYS2d_, 2012 NY Slip Op 00025 [I" Dept 2012]; Getty Refining and Marketing v Linden Maintenance Corp., 168 AD2d 480, 481 [2d Depl 1990]). summary judgment Therefore, that branch of Curto's motion for seeking dismissal of the second cause of action is granted. That branch ofeurto's motion forsulTImary judgment seeking dismissal of the third cause of action for negligent misrepresentation is granted. a separate claim of negligent misrepresentation of legal duties extraneous to and distinct A breach of contract does not give risc to unless the acts alleged are based upon breaches from the contract the third cause of action (RKB Enterprises fnc. v Ernst & Young, 182 AD2d 971, 972 [3d Dept 1992]). Here, Dufi' fails to allege the existence of any legal duty on the part of Curto separate and apart from the Operating Agreement. Additionally_ that branch of Curto's mOlion seeking summary judgment ICJUrthcause of action lor unjust enrichment dismissing the is granted since il is duplicative of the cause of Page 5 of 6 [* 6] action to recover damages for breach of contract (Cooper, Bamundo, Hecht & Longworth v Kuczinski. 14 A03d 644, 645 [2d Oept 2005]). avalid and enforceable "Recovery for unjust cnrichment is barrcd by contract" (Whitman Realty Group, Inc. v. Galano. 41 AD3d 590. 593l2d Ocpt 2007 I). Finally, that branch oreurto's sIxth cause of action is granted. contract motion for summary judgment "A fraud-based cause of action is duplicative claim 'when the only fraud alleged is that the defendant promised to perform undenhe contract''' Dept 2008J quoting First Banko/the of a breach of was not sincere when it (Manas v VMS Asscos., LLC, 53 AD3d 451, 453 [ISl Ams. v Motor Car Funding, Inc., 257 A02d 287, 291 [l" Dept 1999 J). Here, there is no evidence of any representation terms of the Operating Agreement. seeking dismissal of the Therefore, collateral or extraneous 10 the the cause of action for fraud must be dismissed as it is, in actuality, a cause of action for breach of contract (see Ka Foon La v Cur is, 29 AD3d 525 [2d Ocpt 2006]) This constitutes the DECISION and ORDER of the Court. Dated: January 25, 2012 Riverhead, New York [ 1 fINAL [x] NON FINAL Page 6 of 6
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
