Lax v Design Quest N.Y., Ltd.

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Lax v Design Quest N.Y., Ltd. 2012 NY Slip Op 33305(U) January 19, 2012 Sup Ct, NY County Docket Number: 105299/11 Judge: Manuel J. Mendez Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 1/25/2012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK- NEW YORK COUNTY PRESENT: MANUELJ.MENDEZ PART--=-13"'---_ Justice SUSAN and STEVEN LAX, Plalntlffe, -against- INDEX NO. MOTION DATE MOTION SEQ. NO. MOTION CAL. NO. 10§299111 11 -23-2011 001 DESIGN QUEST N.Y., LTD., RICHARD RUBENS, and BARBARA RUBENS, Defendants. The following papers, numbered 1 to _L_ were read on this motion to/for _,d=I..........,,~~=In_,,_ PAPERS NUMBERED 1-2 Notice of Motion/ Order to Show Cauae - Affidavits - Exhibits ... Answering Affidavits - Exhibits _ _croH motion Replylng Affidavits --------------F---1lt--tL1---iEr- Cross-Motion: ;..:.. en z 0 w en o:i t= a:: en (!) ::> z ~i 1-0 c ..J w ..J a:: 0 a:: u. WW u. ::c ~~ >o ..J u. ..J ::> u. l- o w CL en ~ ~ w en < 0 z 0 t= i Yes X No JAN 25 2012 Upon a reading of the foregoing cited papers, It Is Ordered that defendants' motion pursuant to CPLR §3211[a][7] and CPLR ~81srtMfiW~s this action for fallure to state a cause of action, Is granted. UN'ff CLERK'S OFFICE Defendants seek to dismiss the complaint pursuant to CPLR § 3211 [a][7] for failure to properly state a cause of action and CPLR §3016[b], for fallure to allege their claims of fraud. Plalntlffs asserted four causes of action In the complalnt, for breach of an oral contract, fraud, fraudulent concealment and for punitive damages (Def. Supp. Aff. Exh. E). Plalntlffs oppose the motion clalmlng that the parties entered Into an oral agreement with the lndlvldual defendants subsequent to entering Into a written agreement for Interior design. Plalntlffs also clalm that the defendants hired all the contractors, ordered materlals, scheduled, supervised and managed the renovation work performed, not just the Interior design work. Plalntlffs state that all the defendants were Involved In the fraudulent misrepresentation, that they were experienced In renovation and construction, although they never obtained a home Improvement llcense. They clalm defendants fraudulently llsted another entity, DL Restoration Company, as the general contractor on work permits when It never actually performed any work on the project. Plalntlffs seek punitive damages based on the reckless and dangerous plumblng work performed on the premises. A motion to dismiss pursuant to CPLR §3211 [a][7], requires a reading of the pleadlngs to determine whether a legally recognlzable cause of action can be Identified and It Is properly pied. A cause of action does not have to be skillfully prepared but It does have to present facts so that It can be Identified and establish a potentially meritorious clalm.(Laon v. Martinez, 84 N.Y. 2d 83, 614 N.Y.S., 2d 912, 638 N.E. 2d 511 [1994] and Guggenhelmer v. Glnzberg, 43 N.Y. 2d 268, 401 N.Y.S. 2d 182, 372 N.E. 2d 17, [1977]). Documentary evidence that contradicts the allegatlons, or pleadings that consist of bare legal concluslons will not be presumed to be true and are a basis for dlsmlssal (Morgenthow'& Latham v. Bank of New York Company, Inc., 305 A.O. 2d 74, 760 N.Y.S. 2d 438 [N.Y.A.D. 1 ¢t Dept.,2003]). [* 2] To establish a breach of contract claim, a party must allege, "(1) the existence of an agreement, (2) performance of the agreement by one party, (3) breach by the other party, and (4) damages"( Oppman v. IRMC Holdings, Inc., 14 Misc. 3d 1219(A), 836 N.Y.S.2d 494 [N.Y. Sup. Ct., 2007] citing to Noise In the Attic Productions, Inc. v. London Records, 10 A.O. 3d 303, 782 N.Y.S. 2d 1 [N.Y.A.D. 1 ¢t Dept., 2004] ). It Is wall settled that an action Involving a contract requires definiteness as to the terms of the agreement and, "the Intention of the parties to assume the obligations of the contract." A court that cannot determine what the actual agreement Is or whether It has been breached Is unable to formulate a remedy. If the terms of the contract are not definite then the court cannot Impose obllgatlons because the parties did not reach a binding agreement (Marlo v. McLaughlln, 288 A.O. 2d 97, 734 N.Y.S. 2d 4 [N.Y.A.D. 1 ¢t Dept. 2001]). A valid enforceable written contract governing, a specific subject matter prevents recovery events arising out of the same subject matter. In the absence of an express agreement, the rallef sought Is In "quasi contract" which Is not actually a contract but an obllgatlon, "Imposed to prevent a party's unjust enrichment." (Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y. 2d 382, 516 NE. 2d 190, 521 N.Y.S. 2d 653 [1987]). The parties entered Into a written contract on October 31, 2009, for interior design work to be performed at plalntlff's apartment, 240 Riverside Drive, Apartment 18A, New York, New York (Supp. Aff. Exh. A). The agreement provides that In exchange for design services, Design Quest NY, wlll charge a separate fee for fixtures and appliances and a design service fee of 36 percent. An exception was made for services concerning audio video equipment, speclal lighting systems, telephone and Intercom systems which Design Quest NY charged at 16 percent. The agreement Includes a separate billing provision for work performed by architects and/or designer and draftparsons utlllzad by Design Quest NY. Defendants claim that the agreement was extended to and Included both apartments which were to be combined Into one apartment. Defendants also claim they were not retained to perform general contractor work because DL Restoration Company was retained by the plalntlffs for that purpose. As proof that DL Restoration Company was retained as a general contractor on behalf of the plaintiff, the defendants provide a copy of the signed, sworn and certified Work Permit Application filed with the New York City Department of Buildings (Mot. Exh. C) and the actual Work Permit Issued to DL Restoration Company (Mot. Exh. B). Defendants also provide a notarized letter dated April 8, 2011 sent to the New York City Department of Bulldlngs seeking to replace their contractor DL Restoration Company with Homecrast Inc. (Mot. Exh. D). Defendants have establlshed that there was not a separate oral contract and there Is no basis for plaintiffs allegations that they ware retained as general contractors Instead of Interior designers. Plalntlffs are not able to state the date the oral contract was entered Into, or provide the specific terms of the oral agreement other than the defendants were to perform services and/or supervise the work and be reimbursed for the actual cost of the work plus a markup of 35% of the actual construction costs. Defendants' written contract Indicates they billed at 35% for design services which was separate from materlals and the services of lndlvlduals that were not Interior designers, for example architects. Plaintiffs have not provided sufficient proof that a second separate oral contract existed, they have not asserted any claims of oral modification of the written contract, or a cause of action asserting a quasi contract clalm. The first cause of action for breach of contract Is dismissed. A cause of action asserting fraud requires, "a representation of a materlal existing fact, falsity, sclenter, deception and Injury" (Channel Master Corporation v. Aluminum Limited Sales, Inc., 4 N.Y. 2d 403, 176 N.Y.S. 2d 269 [1958]) and Lama Holding v. Smith Barney, Inc., 88 N.Y. 2d 413, 688 N.E .. 2d 1370, 646 N.Y.S. 2d 76 [1996]). A party asserting [* 3] fraud Is required to meet the pleading requirements of CPLR §301 S[b], requiring partlcularlty and specificity In their clalms. General and conclusory allegatlons of fraud wlll not sustain the cause of action (Abraham! v. UPC Const. Co. Inc., 176 A.O. 2d 180, 674 N.Y.S. 2d 62 [N.Y.A.D. 1 ¢t Dept. 1991] and Polonetsky v. Better Homes Depot, Inc., 97 N.Y. 2d 46, 760 N.E .. 2d 1264, 735 N.E. 2d 479 [2001]). Plaintiffs allege in the complaint that the defendants fraudulently billed them for services that were not rendered, and misrepresented the Identities of the entitles that performed work at the premises. Plaintiffs also allege that the defendants committed fraud based on failure to disclose their lack of experience and unlicensed status as a general contractor (Supp. Aff. Exh. A). In support of the fraudulent billing allegations, plaintiffs provide an unsworn letter, dated February 7, 2011 from DL Restoration and Builders, Corp., Indicating they were not hired to do the work at Apartment #1 SC (Aff. In Opp., Exh. I). The complaint names other entities that were billed and "upon Information and belief" never provided services, Including NY Tiie, Master Plumbing and Heating Inc., Fred Smith Plumbing, Response Electric and Shava Electrical. The plalntlffs do not provide Invoices naming these entitles or any other proof to support the allegatlons that they were billed by the defendants for services that were not provided from these entitles. Plal'ntlffs also allege they were billed Inappropriately fpr materials and services, corrective work, shipping costs and unsupervised work but provide no Invoices or other proof to substantiate these claims. There are only two Invoices annexed to the opposition papers, they refer to demolition and construction services. There Is no Indication on the Invoices which entity provided the services (Aff. In Opp. Exhs. G & H) and they only name Design Quest NY. Defendants provided as proof that DL Restoration Company was retained as a general contractor on behalf of the plalntlff, a copy of the signed, sworn and certified Work Permit Appllcatlon flied with the New York City Department of Buildings (Mot. Exh. C) and a notarized letter dated Aprll 8, 2011 sent to the New York City Department of Buildings seeking to replace their contractor DL Restoration Company with Homecrest Inc. (Mot. Exh. D). Plaintiffs do not substantiate their contentions that they changed the name of the general contractor after being threatened with legal action. A letter dated July 28, 2010, sent from Design Quest NY Ltd. to the Trump Corporation annexed to the opposition papers clearly states, " ... DL Restoration wlll be the general contractor.. "(Aff. In Opp. Exh. C). Plalntlffs have not provided sufficient proof that the defendants Intentionally held themselves out as a general contractor or did anything other than refer or assist the various service providers related to Interior design work. The second cause of action for fraud la dismissed. A cause of action asserting fraudulent concealment requires the plalntlff establish that , "(1 )defendant made a material false representatlon,(2) the defendant Intended to defraud the plalntlffs thereby (3) the plalntlffs reasonably relied upon the representation and (4) the plalntlff suffered damages as a result of their reliance," addltlonally, "plalntlff must set forth that the defendant had a duty to disclose material Information" (Swersky v. Dreyer & Traub, 219 A.O. 2d 321, 643 N.Y.S. 2d 33 [N.Y.A.D. 1 ¢t Dept., 1996]). Plalntlffs allege In the complaint that there was fraudulent concealment of actual costs In the Invoices (Supp. Aff. Exh. A). Plaintiffs do not provide copies of any Invoices that estabilsh lntentlonal misrepresentation of the bllls or any written correspondence requesting copies of the actual Invoices addressed to the defendants. Plalntlffs have felled to provide more than bare allegatlons and conclusions for their claims of fraudulent concealment. The third cause of action for fraudulent concealment Is dismissed. [* 4] A clalm for punitive damages related to fraud requires gross, wanton or wlllful fraud or other morally culpable conduct sufficient to justify an award for damages {Borkowski v. Borkowski, 39 N.Y. 2d 982, 356 N.E. 2d 287, 387 N.Y.S. 2d 233 [1976]). Punitive damages cannot be asserted as a separate cause of action because It constitutes an element of the total clalm for damages on underlylng causes of action {APS Food Sys. v. Ward Foods, 70 A.O. 2d 483,421 N.Y.S. 2d 223 [N.Y.A.D. 1 ¢t Dept. 1970]). Plaintiffs have asserted a cause of action for punitive damages. Defendants have established that the plaintiffs do not have a basis to maintain their claims of punitive damages based on their allegations of fraud. The fourth cause of action for punitive damages ls dismissed. A cause of action that states work was not performed In a skillful and professional manner or of negligent performance under the contract Is, 11 merely a restatement of contractual obllgatlon" and seeks to recover damages for breach of contract, not In negligence {Gordon v. Teramo, 308 A.O. 2d 432, 764 N.Y.S. 2d 144 [N.Y.A .. D. 2"d Dept., 2003] citing to, Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y. 2d 382, 616 NE. 2d 190, 621 N.Y.S. 2d 663 [1987]). The officers of a corporation may be held personally llable for torts committed on behalf of the corporation, but cannot be held personally llable on contracts that they did not bind themselves to lndlvldually {See, Newman v. Berkowitz, 50 A.O. 2d 479, 867 N.Y.S. 2d 75 [N.Y.A.D. 1 ¢t Dept., 2008] and Apollon Waterproofing & Restoration Corp., Inc. v. Bergassl, 241 A.O. 2d 347, 661 N.Y.S. 2d 997 [N.Y.A.D. 1 ¢t Dept. 1997]). The Individual defendants Richard Rubens and Barbara Rubens did not personally bind themselves to the written contract entered Into on behalf of the corporation. Although a corporate officer may be llable for fraud committed on behalf of the corporation the plaintiffs have not provided a basis to maintain those causes of action against any of the defendants. Upon review of all the papers submitted with this motion, this Court finds the plalntlffs have not sufflclently established a basis to maintain this action. The causes of action do not survive because potentially meritorious clalms were not asserted. Accordlngly, It Is ORDERED that the. motion pursuant to CPLR §3211 [a][7], and CPLR §3016[b] to dismiss this action for failure of plalntlffs to state a cause of action, Is granted, the case Is dismissed; and ltls further ORDERED, that the Clerk Is directed upon service of a copy of this Order with Notice of Entry to enter judgment dismissing the action, with prej114!c\- and with costs and disbursements to the defendant as taxed by the Clerk. ,.. I l eD This constitutes the decision and order of this court. JAN 25 2012 Dated: January 19, 2012 .....-----..... NEW~Q / '- COUN=A' RK 1 MANUELJ:MEtiDEZ CLERK1S O~Nn J.S.C. Check one: X FINAL DISPOSITION Check If appropriate: 0 MANUELJ. M NON-FINAL DISPOSITION D DO NOT POST 0 REFERENCE EZ J.S.C.

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