Bevilacqua v CRP/Extell Parcel I, L.P.

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Bevilacqua v CRP/Extell Parcel I, L.P. 2013 NY Slip Op 31487(U) July 9, 2013 Supreme Court, New York County Docket Number: 155615/2012 Judge: Ellen M. Coin 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. [*FILED: NEW YORK COUNTY CLERK 07/11/2013 1] INDEX NO. 155615/2012 NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 07/11/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY ELLEN M. COIN PART6 J.S.C. PRESENT: -S Justice Index Number: 155615/2012 BEVILACQUA, CHRIS INDEX NO. _ _ _ __ MOTION DATE _ _ __ vs CRP/EXTELL PARCEL I, L.P. MOTION SEQ. NO. _ __ Sequence Number: 003 DISMISS ACTION - The following papers, numbered 1 to _ _ , were read on this motion to/for _ _ _ _ _ _ _ _ _ _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits - Exhibits Answering Affidavits - Exhibits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s)._ _ _ _ __ I No(s). _ _ _ _ __ I No(s). _ _ _ _ __ Upon the foregoing papers, it is ordered that this motion is w u i= If) ::J -, g o w a:: a:: w u. w a:: ~U; -Jz 0 ::J u. I- U W ~ If) ~ w a:: (!) W Z ~ ~ W :f ~ 0 () u. Z ~ o Ii= a:: ~ ~ ,/ff,3 ~ Dated: _ _ _ _ _ __ ./ ,J.S.C. '=:'i..EN M. COIN ,.........l 1. CHECK ONE: ......................................................... ¢........... J CASE DISPOSED 2. CHECK AS APPROPRIATE: ........................... MOTION IS: ~! GRANTED = 3. CHECK IF APPROPRIATE: ................................................ ~ ; SETTLE ORDER :- : DO NOT POST DENIED . .. - 0 NON~~'1.'hlSPOSITION ~ GRANTED IN PART ::-: OTHER C SUBMIT ORDER n FIDUCIARY APPOINTMENT ~ REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK : lAS PART 63 -------------------------------------x Chris Bevilacqua, Plaintiff, Index Number:155615/2012 Submission Date: 3/13/13 Motion Sequence:003 DECISION AND ORDER -againstCRP/Extell Parcel I, L.P., CRP/Extell Parcel I GP, L.L.C., Gary Barnett, Gershon Barnett, Gershon Swiatycki, Stroock &, Stroock & Lavan LLP, as escrow agent, Defendants. ------------------------------------x Appearances: For Plaintiff Lazarowitz & Manganillo LLP By Marc J. Held, Esq. 2004 Ralph Avenue, Brooklyn, New York 11234 718-531-9700 For Defendants: Boies, Schiller & Flexner LLP By Jason Cyrulnik, Esq. 333 Main Street Armonk, New York 10504 914-749-8200 Papers considered in review of this motion: Papers Numbered Notice of Motion and Affidavits Annexed...... 1 Affirmation in Opposition . . . . . . . . . . . . . . . . . . . . __~2~_ Reply Memorandum of Law . . . . . . . . . . . . . . . . . . . . . . . __~3~_ ELLEN M. COIN, J.: Defendants move plaintiff's complaint. pursuant to CPLR §3211(a) to dismiss For the reasons set forth below, the motion is granted and the complaint is dismissed. Parties and Underlying Background Plaintiff alleges that on or about August 23, 2007, he entered into a purchase agreement Parcel I, L. P. (CRP) to (the First Agreement) purchase a with CRP /Extell residential condominium [* 3] apartment, Building) for a Unit lOB, (the First Apartment) located at 80 Riverside Boulevard, total Agreement, price he was of $3.5 million, required to make and an in a building New York, that New York, under initial (the the First down payment of $350,000 and an additional payment of $175,000 on the earlier of February 28, 2008 or 15 days after CRP presented an amendment to the Condominium Offering Plan for the Building (the Plan) declaring it effective (Complaint, CRP was the ~~ 3, 12, 22-24, 30). sponsor of the Plan, which filed with the ~~ Attorney General on or about August 11, CRP/Extell Parcel I GP, was CRP's general partner, Gershon Barnett, principals. L.L.C. (LLC) 2006 it (id., 3, 12). Gershon Swiatycki and Gary Barnett were CRP's Stroock & Stroock Lavan & (Stroock) was the escrow agent for the down payments and drafted the First Agreement and the Plan (id., ~~ Plaintiff 5-7, 26). states that he made the two payments totaling $525,000 (the Deposit) in accordance with the First Agreement, but that the closing for the First Apartment did not occur by September 1, 2008 as scheduled, but instead occurred on February 12, 2009 and that he was not offered a right to rescind the First Agreement (id., ~~ 2009, he entered into a contract termination agreement with CRP 25, 33-34, 36-40, 48). He further states that on March 5, (the Termination Agreement), which released the parties from their obligations under the First Agreement and that the parties entered 2 [* 4] into a second agreement (the Second Agreement) ·under which plaintiff agreed to buy a different apartment, Unit 12B (the Second Apartment), for the same price of $3.5 million with the Deposit transferred to the Second Agreement (id., 62-69). ~~ Plaintiff further alleges that the closing date of May 29, 2009 was not met for the Second Apartment, that he was not offered rescission, that defendants therefore breached the Second Agreement by not returning the Deposit and that they breached the Martin Act by making false, misleading statements and material omissions in connection with their obligations under the Plan (id., 81). ~~ 77, 80- He seeks rescission of the Second Agreement and damages in the principal amount of the Deposit (id., On June 16, 2009, Attorney General for plaintiff filed 290). an application to the determination of the disposition of the down payment, seeking return of the Deposit [d] ) . On June ~ 22, 2010, the (motion, Attorney Ex. General A, item 13 issued a determination (the Determination), that denied rescission, finding , that "[b]y entering into the [Second] Agreement, [CRP] established a new contractual relationship [plaintiff] and [and plaintiff's] contention that any rights [to rescind] he may have had under the [First] Agreement Determination found lacks that merit n the (Determination Second Agreement's at 6). The merger clause barred parol evidence of purported statements made prior to the Second Agreement and that the Termination Agreement released any 3 [* 5] claims to rescission under the First Agreement (id. at 7). Plaintiff then brought a petition pursuant to CPLR Article 78 (the Special Proceeding) to challenge the Determination. By order dated April 12, 2011, this Court denied the petition, holding that in considering the Termination Agreement and the Second Agreement, the Attorney General "correctly determined that the down payment was not subject to return U (April 2011 'Order at 3). The court's records indicate that there was no appeal filed, but rather that on August 16, 2012, plaintiff commenced this action by filing a summons and complaint. Defendants seek dismissal based upon the res judicata and collateral estoppel effect of the April 2011 Order and the lack of any private right of action to enforce purported violations of General Business Law §352 and implementing regulations. Dismissal Standard In determining a motion to dismiss pursuant to CPLR 3211, the court must accept the facts as alleged in the complaint as true, accord them every possible favorable inference and determine whether the facts as alleged fit within any cognizable legal theory (Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 570-571 [2005]). Dismissal based upon documentary evidence is appropriate only where the "documentary evidence defense Martinez, to the asserted 84 NY2d 83, 88 submi tted claims [1994]). 4 as conclusively establishes a a lawu v matter However, of (Leon allegations that are [* 6] bare legal conclusions or are inherently incredible, or that are flatly contradicted by the documentary evidence, are not accorded such favorable inferences, and need not be accepted as true (Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1st Dept 1999], affd 94 NY2d 659 [2000]). Res Judicata and Collateral Estoppel "Under the doctrine of res judicata, a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. The rule applies not only to claims actually litigated but also to claims that could have been raised in the prior litigation [since] a party who has been given a full and fair opportunity to litigate a claim should not be allowed to do so again" (Matter of Hunter, 4 NY3d 260, 269 [2005] [citations omitted]). Under New York's "transactional analysis approach [to res judicata] ... once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" (O'Brien v Ci ty [1981] [citation omitted]; L.P., 86 AD3d 469, 474 In distinction of Syracuse, UBS Sec. 54 NY2d 353, 357 LLC v Highland Capital Mgt., [1st Dept 2011]). to "[c] ollateral estoppel, res judicata or or issue preclusion, claim preclusion, 'precludes a party from relitigating in a subsequent action or proceeding an issue 5 [* 7] clearly raised in a prior action or proceeding and decided against that party ... , whether or not the tribunals or causes of action are the same'" (Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999], quoting Ryan v New York Tel. Co., 62 NY2d 494, 500 " [1984)). action Collateral estoppel "applies if the issue in the second is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action" (id.; BDO Seidman LLP v Strategic Resources Corp., 70 AD3d 556, Inc., 560 [1st Dept 2010); Lumbermens Mut. Co. Cas. v 606 Rest., and collateral 31 AD3d 334, 334 [1st Dept 2006)). Moreover, "the doctrines of res judicata estoppel are applicable to give conclusive effect to the quasijudicial determinations of administrative agencies," including the Attorney General's determinations on the return of deposits held as part of real estate transactions, as well as Article 78 proceedings that review the same (Ryan, 62 NY2d at 499 [italics in original); Matter of CRP/Extell Parcel I, L.P. v Cuomo, Dept 2012); Alamo v McDaniel, 44 AD3d 101 AD3d 473, 474 [1st 149, 153-154 [1st Dept principles to this to plaintiff's 2007]). Applying plaintiff's the above complaint cannot argument 13 NYCRR §20. 3 General's mentioned (0) determinations stand. (3) (viii) (e) meaningless. 6 Contrary does not Instead case, render Attorney it allows an [* 8] aggrieved party to seek judicial review. proceeding ordinarily may follow. supersedes the writs common law CPLR Article 78 special "The of Article mandamus, 78 proceeding prohibition, and certiorari to review, supplying in replacement of all three of them a uniform device for challenging administrative agency in court." (Siegel, NY Prac §557 Plaintiff challenged the Determination, addi tional respondents activities the in the Special of an [5 th Ed]). and CRP and Stroock were Proceeding. LLC and the individual defendants were CRP's general partner and its principals (See Buechel v Bain, respectively and are thus in privity with it 275 AD2d 65, 73-74 [pt Dept 2000], aff'd 97 NY2d 295 [2001]]). While plaintiff sought a refund of the Deposit in the Special Proceeding, and in this action he seeks damages in the amount of the Deposit, res judicata applies "even if relief in the second action] [plaintiff is seeking based upon different theories or if seeking a different remedy" (O'Brien, 54 NY2d at 357;. UBS Sec., 86 AD3d at 474). between the Plaintiff has had "a same parties [or judgment on the merits parties in privity with them] involving the same subject matter" and may not now revisit the same (Matter of CRP/Extell Parcel I, Matter of Hunter, L.P., 101 AD3d at 474; see also 4 NY3d at 269; Sweeney v New York City Dept. of Health & Mental Hygiene, 91 AD3d 420, 421 [1st Dept], lv denied 19 NY3d 802 [2012]; Fogel v Oelmann, 7 AD3d 485, Parker, 93 NY2d at 349). 7 486 [2d Dept 2004]; [* 9] In sum, plaintiff had an opportunity to seek redress on his claim for the Deposit and the fact that he was unsuccessful does not give him the right to a second bite of the apple. Both res judicata and collateral estoppel seek "'to provide finality in the resolution of disputes' [and both] fairness mandate, to the parties litigation'" (Matter of Hunter, 'judicial economy as well as at some point, an end to 4 NY3d at 269-270, quoting Matter of Reilly v Reid, 45 NY2d 24, 28 [1978]; Sweeney, 91 AD3d at 421). Accordingly, defendants' motion to dismiss plaintiff's complaint is granted. The Martin Act General Business Law article 23-A (the Martin Act) is "New York's 'blue sky' law [enacted 'to create] a statutory mechanism in which the Attorney-General would have broad regulatory and remedial powers to prevent fraudulent securities practices by investigating and intervening at the first indication of possible securi ties fraud on the public, and, thereafter, if appropriate, to commence civil or criminal prosecution'" Ltd. Morgan Inv. Mgt. Inc., (Assured Guar. 18 NY3d 341, 349-350 [UK) [2011], v J.P. quoting CPC Intl. v McKesson Corp., 70 NY2d 268, 277 [1987]). "The Martin Act authorizes provisions the Attorney General implementing regulations to [and he] enforce its and 'bears sole responsibility for implementing and enforcing the Martin Act'; [consequently,] there is no private right of action under the statute" (Kerusa Co. 8 [* 10] LLC v [2009] W10Z/515 Real [internal Estate citations Ltd. 12 NY3d 236, Partnership, omitted]). While common law 244 fraud claims are not preempted, "[t]here is no private right of action where the fraud and misrepresentation relies entirely on alleged omissions in filings required by the Martin Act" (Berenger v 231 W. LLC, 93 AD3d 175, 184 [1st Dept 2012]). Plaintiff's allegations that defendants violated the Martin Act by omitting from the Plan and the Second Agreement the financial status and identities of all principals of the sponsor are barred by the Attorney General's "sole responsibility" to enforce the Martin Act (Kerusa, 12 NY3d at 244). The Court has considered plaintiff's remaining arguments and finds them without merit. In accordance with the foregoing, it is hereby ORDERED that defendants' motion to dismiss is granted and the complaint is dismissed with prej udice, disbursements, as taxed by the Clerk, together wi th costs and upon submission of an appropriate bill of costs; and it is further ORDERED that the Clerk is directed to enter judgment accordingly. Dated: ~ 1 , 2013 ENTER: Ellen M. Coin, A.J.S.C. 9

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